U.S.
SECURITIES AND EXCHANGE


COMMISSION


Washington,
D.C. 20549




FORM
10-K




x ANNUAL REPORT
UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934




For the
fiscal year ended December 31, 2008




o TRANSITION REPORT
UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934




Commission
File No. 000-26213




ROOMLINX,
INC.




(Exact
name of registrant as specified in its charter)


Nevada
            
            83-0401552(State
      or other jurisdiction of
            
            (I.R.S.
      Employerincorporation
      or organization)
            
            Identification
      No.)




2150 W.
6th
Avenue, Unit H, Broomfield, CO 80020


(Address
of principal executive offices)




(303)
544-1111


(Registrant’s
telephone number)




Securities
registered under Section 12(b) of the Act: None




Securities
registered under Section 12(g) of the Act:




(i)
Common Stock, $.001 Par Value;
and          (ii) Class A
Preferred Stock, $.20 Par Value.







Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. YES x  NO o




Indicate by check mark if
the registrant is not required to file reports pursuant to section 13 or Section
15(d) of the Act. YES o NO x




Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. YES x  NO o




Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of the registrant’s
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this form 10K. x




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule12b-2 of the Exchange Act.


Large accelerated
      filer o
            Accelerated filer
      oNon-accelerated
      filer o
            Smaller reporting
      company x




Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.)
YES o NO x




The
aggregate market value of the registrant’s common shares held by non-affiliates
as of December 31, 2008 was $1,989,069 based upon the closing price of these
shares as reported on that date. (For purposes of this calculation only, all of
the registrant’s directors and executive officers are deemed affiliates of the
registrant.)




As of
March 24, 2009, the registrant’s issued and outstanding shares were as follows:
159,901,195 shares common stock, 720,000 shares of Class A Preferred Stock, and
1,000 shares of Series C Preferred Stock.


2




TABLE
OF CONTENTS


PART
      IItem
      1.
              Business
              
              5Item
      1A.
              Risk
      Factors
              
              13Item
      1B.
              Unresolved
      Staff Comments
              
              13Item
      2.
              Properties
              
              13Item
      3.
              Legal
      Proceedings
              
              13Item
      4.
              Submission
      of Matters to a Vote of Security Holders
              
              13PART
      IIItem
      5.
              Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
              
              15Item
      6.
              Selected
      Financial Data
              
              21Item
      7.
              Managements
      Discussion and Analysis of Financial Condition and Results of
      Operation
              
              21Item
      7A.
              Quantitative
      and Qualitative Disclosures About Market Risk
              
              30Item
      8.
              Financial
      Statements and Supplementary Data
              
              31Item
      9.
              Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
              
              55Item
      9A.
              Controls
      and Procedures
              
              55Item
      9B.
              Other
      Information
              
              56PART
      IIIItem
      10.
              Directors,
      Executive Officers and Corporate Governance
              
              56Item
      11.
              Executive
      Compensation
              
              59Item
      12.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
              
              61


3




Item
      13.
                Certain
      Relationships and Related Transactions, and Director
      Independence
                
                62Item
      14.
                Principle
      Accounting Fees and Services
                
                64PART
      IVItem
      15.
                Exhibits,
      Financial Statement Schedules
                
                64Signatures
                
                66Exhibit
      Index


4




PART
I




ITEM
1. BUSINESS




ORGANIZATIONAL
HISTORY/RECENT MANAGEMENT DEVELOPMENTS




This Form
10-K for the year ended December 31, 2008 is being filed on or about March 30,
2009.




On
December 27, 2005, our stock was removed from listing from the OTC Bulletin
Board as a result of our failure to timely file our Form 10-QSB for the quarter
ended September 30, 2005. Since such date, our stock has traded only on the
“Pink Sheets”.




On April
14, 2008, we issued to Creative Hospitality Associates (“CHA”) a Warrant
pursuant to a sales agent agreement with CHA (the “Agreement”).




The
Warrant is initially exercisable for Series B Preferred Stock. At such time as
we have a sufficient number of shares of common stock authorized to permit the
exercise of the Warrant for common stock (the “Triggering Event”), As of March
5, 2009 the Warrant is exercisable for common stock and not Series B Preferred
Stock. The maximum number of shares of common stock for which the Warrant is
ultimately exercisable for is 15,000,000 and the ultimate exercise price per
share of common stock for which the Warrant is exercisable is $0.02 per share,
each of which is subject to adjustment and the conditions contained in the
Warrant. The Warrant becomes ultimately exercisable for such 15,000,000 shares
of common stock pursuant to a vesting schedule as set forth in the Warrant that
provides that the Warrant becomes ultimately exercisable for 500,000 shares of
common stock with each 1,000 rooms in a hotel or other property that CHA or its
affiliate introduces to us and in which our Media and Entertainment System is
installed. As of December 31, 2008 we have installed 10 rooms at the Country Inn
& Suites in Merrillville, IN which are associated with this
warrant.




On July
31, 2008 we entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with an Investor Group, and certain affiliated trusts (collectively,
the “Investors”), pursuant to which we simultaneously sold and issued to the
Investors an aggregate of $2,500,000 of Series C Preferred Stock (“Series C
Stock”). In connection with the Purchase Agreement, the Registrant also issued
Warrants to the Investors for the purchase of additional shares of Series C
Stock or common stock and entered into a Registration Rights Agreement with the
Investors.




On July
31, 2008 Peter Bordes and Herbert Hunt resigned from the Board of Directors and
Judson Just and Christopher Blisard were appointed to serve as Directors of
Roomlinx to fill the vacancies on the Board of Directors created by the
resignations, each to serve as a Director until the next annual meeting of
shareholders and until his successor has been elected and
qualified.


5




RECENT
DEVELOPMENTS




On
January 1, 2008, the Board approved issuance of 1,437,041 shares of our common
stock at $0.025 per share, as interest for the period October 1 through December
31, 2007, pursuant to the clauses outlined in the convertible debenture
agreements of June 11, 2007.




On April
1, 2008, the Board approved issuance of 1,386,885 shares of our common stock at
$0.025 per share, as interest for the period January 1 through March 31, 2008,
pursuant to the clauses outlined in the convertible debenture agreements of June
11, 2007.




All of
the shares of common stock approved for issuance in connection with interest
payments on the debentures as provided above were issued in the second quarter
of 2008.




On July
1, 2008, the Board approved issuance of 1,402,302 shares of our common stock at
$0.025 per share, as interest for the period April 1 through June 30, 2008,
pursuant to the clauses outlined in the convertible debenture agreements of June
11, 2007.




On July
15, 2008 Aaron Dobrinsky exercised 4,000,000 options on a cashless basis
resulting in the net issuance of 2,571,429 shares of common stock.




On July
31, 2008 we entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with Matthew Hulsizer and Jennifer Just, jointly, and certain
affiliated trusts (collectively, the “Investors”), pursuant to which we
simultaneously sold and issued to the Investors an aggregate of $2,500,000 of
Series C Preferred Stock (“Series C Stock”). In connection with the Purchase
Agreement, the Registrant also issued warrants to the Investors for the purchase
of additional shares of Series C Stock or common stock and entered into a
Registration Rights Agreement with the Investors.




On August
19, 2008 the Company issued 1,200,000 shares as Board of Director compensation
for the year ended December 31, 2007. 800,000 of the shares were issued to Peter
Bordes and 400,000 of the shares were issued to Herbert Hunt. The shares were
valued at $0.025 per share for a fair market value of $30,000. This compensation
had been accrued for in 2007.




On
October 1, 2008, the Board approved issuance of and the Company issued 1,417,707
shares of our common stock, valued at $0.025 per share for accrued interest of
$35,443 for the period July 1 through September 30, 2008, pursuant to the
clauses outlined in the convertible debenture agreements of June 11,
2007.




On
January 2, 2009, the Board approved issuance of and the Company issued 1,417,707
shares of our common stock, valued at $0.025 per share for accrued interest of
$35,443 for the period October 1 through December 31, 2008, pursuant to the
clauses outlined in the convertible debenture agreements of June 11,
2007.


6




On March
5, 2009 the annual meeting of the stockholders of Roomlinx, Inc. (the “Company”)
was held. The Report of the Inspector of Election showed that: (i) Messrs.
Wasik, Just and Blisard were elected as Directors until the next Annual Meeting
and until their successors have been elected and qualified; (ii) the amendment
to the Company’s Long Term Incentive Plan to increase the number of shares of
Common Stock available for issuance there under from 25,000,000 to 120,000,000
had been approved; (iii) the amendment and restatement of the Company’s Articles
of Incorporation to increase the number of authorized shares of the Company’s
Common Stock from 245,000,000 to 1,500,000,000 had been approved; (iv) the
amendment of the Company’s Articles of Incorporation effecting a 1-for-200
reverse stock split of the Company’s Common Stock and a simultaneous decrease in
the number of authorized shares of the Company’s Common Stock to 200,000,000 was
not; and (v) the appointment of Stark Winter Schenkein & Co., LLP as
independent auditors of the Company for the fiscal year ended December 31, 2008
was ratified.




GENERAL




We focus
our business on providing in-room media and entertainment solutions along with
wired networking solutions and Wireless Fidelity networking solutions, also
known as Wi-Fi, for high speed internet access to hotels, resorts, and time
share properties. As of December 31, 2008, our current customer base consisted
of approximately 134 hotels and 22,391 guest and meeting rooms.




Our wired
and wireless networking solution offers easy to use access, providing instant
and seamless connections for laptop users from anywhere throughout a property,
including guest rooms, meeting rooms, back office and public areas, over a
high-speed connection that is up to 300 times faster than a standard dial-up
modem. Users on this network have access to home and corporate email accounts
and Virtual Private Networks, also known as VPNs. These users have flexible
billing options, choosing from any one of free service, flat rate, time-based
usage or unlimited. In addition these users can expand the service to include
value-added services such as wireless point of sale, maintenance, check-in and
internet telephony services.




As of
June, 2008 we completed the development of the Roomlinx in-room media and
entertainment product. The new Roomlinx product provides premium applications
for internet-based business and entertainment media to venues serving the
visitor-based market such as hotels, resorts, and time share
properties.




The
Roomlinx internet based media and entertainment offering includes a broad range
of content and features to satisfy guests while maximizing revenue opportunities
for the hotelier. The solution includes movies, gaming, international and US
television programming, music and news; local travel and concierge information;
and business productivity tools that include desktop applications, conferencing
and printing applications.


7




We
believe we will generate revenue through:


1.
              Ongoing
      Connectivity Service and Support Contracts2.
              Delivery
      of Content and Advertising3.
              Delivery
      of Business and Entertainment applications4.
              E-commerce5.
              The
      development of customizable software
programs




OUR
SERVICES




Currently
we offer the following services to our customers:


v
              site-specific
      determination of needs and requirements;v
              design
      and installation of the wireless or wired network;v
              customized
      development, design and installation of a media and entertainment
      system;v
              IP-based
      delivery of on-demand high-definition and standard-definition programming
      including Hollywood, Adult, and specialty content.v
              delivery
      of television programming via satellite (Direct TV or Dish
      Networks)v
              delivery
      of an electronic television programming guide (EPG) viewed via the
      televisionv
              full
      maintenance and support of the network and media and entertainment
      system;v
              technical
      support to assist guests and hotel staff 24 hours a day, 7 days a week,
      365 days a year;v
              hotel
      staff and management training;v
              marketing
      assistance and continuous network and system monitoring to ensure high
      quality of service.v
              advertising
      sales and advertising sales
support




The main
services we currently offer are the installation and servicing of wired and
wireless networks and the development and installation of our media and
entertainment system for hotels.




Our
strategy is to focus our resources on delivering a wide range of communications
and information services to the hospitality industry. In addition, we plan to
enter, either organically, or through partnerships with current providers, the
sale of our services to other hospitality, recreational and both public and
private facilities.




The
networks that we install can supply the hotel with all of the internet
requirements to the hotel’s back office, guest rooms, restaurants, lobbies,
convention center and meeting rooms over the internal local area network (LAN).
For convention centers requiring a high-speed connection for their booths and
meeting areas, our wireless local area network (WLAN) product enables portable
and mobile computer users to seamlessly access the Internet from anywhere within
the convention center. Users access the Internet without any modification to
their computer and can walk freely about the premises while still being
connected to the network.


8




When we
commence service to a new hotel property, we install hardware in the hotel and
integrate that hardware into the hotel’s billing server. We give the client
hotel property two options in acquiring our high-speed Internet services: the
hotel can buy the system and pay us a monthly service fee to maintain technical
support (usually on a per room per month basis), or the hotel can lease-to-own
the system with a third party and pay us a monthly service fee. We also obtain
fee income by enabling “meeting rooms” for our hotel customers.




We
generally have the first right of refusal to provide all wireless services to
the hotel as well as to provide value added services over the installed network.
We believe that we will increase sales by offering our new in-room media and
entertainment solution to our current wired and wireless internet customer base.
Roomlinx’ goal is to be the sole source solution for in-room technology,
redefining how the hotel guests access traditional free-to-guest television,
contemporary web content, premium, pre-release, and high-definition material,
along with business tools and information specific to the property and their
stay. We currently deliver this via our user-friendly, streamlined interface
displayed on a sleek, flat-panel HD LCD television and powered by our Roomlinx
media console. We believe we have truly converged the television and personal
computer into one offing in hotel rooms.




We
believe that the potential market for our services is largely underserved,
providing us with opportunities for additional growth. Subject to capital
constraints, we intend to leverage the “Roomlinx” brand and distribution to
offer a wider portfolio of products and services.




We seek
to deepen penetration within our installed customer base and expand the breadth
of our overall customer base by distinguishing our current and future offerings
with value-added solutions through increased marketing activities.




OUR
STRATEGY




Our short
term strategies include the following:


v
            We
      are seeking to grow the number of rooms installed with our new media and
      entertainment system;v
            We
      are seeking to make our new media and entertainment product our core
      competency and focus on quality service and highly-profitable
      opportunities;v
            We
      are seeking to grow the number of rooms under management. We can improve
      our margins through the recurring revenues that we receive from rooms
      under management;v
            We
      are seeking to attain preferred vendor status or become a brand standard
      with premier hotel chains. Our hotel customers include many of the
      country’s most highly regarded hotel chains. If we are successful in
      attaining preferred vendor status or becoming a brand standard, we will be
      able to expand our services to cover the applicable chain’s site
      map;


9




v
              We
      are seeking to leverage our core competency by expanding the markets we
      serve beyond hospitality to the home market;v
              We
      hope to expand the IP-based services that we offer to
    include:v
              voice
      over the Internet (VoIP) availability;v
              IP-based
      television programming;v
              Grow
      our IP-based advertising through the LCD television and
      laptop;v
              Grow
      our IP-based E-Commerce through the LCD television;v
              wireless
      video on demand (VOD) availability; andv
              Managed
      technical services, to provide special technical services to
      users.v
              Grow
      our custom software development
revenues




Our
longer term strategies include the following:


v
            We
      hope to be able to offer our media and entertainment solution to
      consumers;v
            We
      hope to capture those consumers as they use our product in the hotel
      rooms;v
            We
      have begun to consider expansion into the Caribbean and European hotel
      industries; and,v
            We
      have begun to consider other infrastructure and value added services to
      include in our media and entertainment
product.




Ultimately,
we hope to position ourselves as our customers’ central in-room communications,
entertainment and media provider. However, we cannot assure our investors that
we will be successful in attaining these goals or that we will not pursue other
strategies when opportunities arise. Among other things, capital constraints and
competition, among other factors, may preclude us from attaining our
goals.




SALES
AND MARKETING




SALES




As of
March 5, 2009, our direct sales force consisted of 3 persons and our channel
sales program consisted of 1 master sales agent and 5 sales agents. While we
will always require a small in-house team of direct sales representatives, we
believe that if we are to grow the scale of our operations, it will be necessary
for us to develop a channel sales program utilizing sales agents and re-sellers.
As a result, our direct sales are supplemented by strategic alliances with
communication marketing companies and communication providers. These
organizations already have preferred access to customers, which may give us an
advantage in the marketplace. These sales representatives are paid on a
commission basis. We provide sales training and packaged marketing materials to
our independent representatives in order to obtain optimum installation
contracts.




There are
four succinct areas of outsource marketing in the hospitality sector that we
concentrate our sales efforts on:


10




v
                    Hospitality
      Consultants - This group sells consulting services to hotel ownership and
      management groups. For the most part, they have strong relationships with
      the aforementioned groups to provide consulting
  expertise.v
                    Independent
      Communication Sales Representatives, and Representative Organizations –
      this group sells communication products into the hotel industry. Because
      they sell multiple lines of communication services to hotels, they have
      direct contact with the Information Systems director. These services save
      money for the hotels as well as providing them with additional income to
      the hotel, and as such they have good access to the decision-maker in this
      market.v
                    Wholesale
      Equipment Suppliers, Equipment Installers in the Hospitality Market - This
      group sells and installs central phone systems - also know as PBX systems
      - voice mail systems, property management systems and software related
      services directly into the hotel market. Since these services are directly
      related to both the income and marketing sides of the hospitality area, we
      believe that their access to this clientele is very
  good.v
                    The
      Hotel Interconnect Individual or Companies - This group handles the
      installation and the maintenance for the independent communications sales
      representative and interconnect
companies.




Typically,
at least one and often all three of the above groups interact with the hotel
industry on a daily basis. This provides us with a valuable source of sales and
marketing personnel with direct contact into the industry.




MARKETING




We
typically deploy a marketing mix consisting of grass roots marketing by joining
industry specific affiliations such as HTNG (Hotel Technology Next Generation)
and AHLA (American Hotel and Lodging Association) direct mail, internet direct
response, print ads in periodicals aimed at hospitality industry, and tradeshow
sponsorship and support.




OPERATIONS




We have
built a foundation on which to achieve growth with minimal fixed expenditures.
We have achieved this by building the infrastructure and quality controls to
outsource the following functions: system integration, bandwidth provisioning,
system deployment, and technical support and service.




For our
high speed wired and wireless offering we act as a service provider that
aggregates the products and services required to install wireless high-speed
networks and deploys them through a delivery infrastructure that combines
in-house technical and RF (radio frequency) experts with select system
integrators in the customer’s area. After installation we seek to manage the
network under a long-term contract.




For our
Media and Entertainment System offering we control the development of the
product in-house allowing us to have ultimate control of response time and
customer requests for product customization and version updates. We outsource
the installation and support functions except for the project management and
pro-active monitoring of our technical components in the field.


11




COMPETITION




Wired
and Wireless High-Speed Internet Offering




The
market for our services has leveled off. Our competitors may use the same
products and services in competition with us. With time and capital, it would be
possible for competitors to replicate our services and offer similar services at
a lower price. We expect that we will compete primarily on the basis of the
functionality, breadth, quality and price of our services. Our current and
potential competitors include:




- Other
wireless high-speed internet access providers, such as I-Bahn, Guest-Tek,
Wayport, and LodgeNet;




- Other
internal information technology departments of large companies.




Many of
our existing and potential competitors may have greater financial, technical,
marketing and distribution resources than we do. Additionally, many of these
companies have greater name recognition and more established relationships with
our target customers. In addition, we have established strategic relationships
with a few of our potential competitors. In the event such companies decide to
compete directly with us, such relationships would likely be terminated, which
could have an adverse effect on our business.




Media
and Entertainment Offering




The
market for our services is in its infancy. Due to technological advances we
believe many of the larger companies will not be able to react quickly in
duplicating our offering. Current competition consists of players offering
portions of our offering, such as video on demand and internet access; these
competitors include:




-
LodgeNet, SuiteLinq, KoolKonnect, NXTV, Activision, and Total
Vision,




RESEARCH
AND DEVELOPMENT




We seek
to continually enhance the features and performance of our existing products and
services. In addition, we are continuing to evaluate new products to meet our
customers’ expectations of ongoing innovation and enhancements.




Our
ability to meet our customers’ expectations depends on a number of factors,
including our ability to identify and respond to emerging technological trends
in our target markets, develop and maintain competitive products, enhance our
existing products by adding features and functionality that differentiate them
from those of our competitors and offering products on a timely basis and at
competitive prices. Consequently, we have made, and we intend to continue to
make, investments in research and development.


12




EMPLOYEES




As of
March 5, 2009 we had a total of 18 full-time personnel and 2 part-time
personnel. None of our employees are covered by a collective bargaining
agreement. We believe that our relations with our employees are
good.




ITEM
1A. RISK FACTORS




Not
Applicable




ITEM
1B. Unresolved Staff Comments




None




ITEM
2. PROPERTY




We lease
our principal offices, which are located at 2150 West 6th Avenue,
Unit H, Broomfield, CO 80020, consisting of approximately 3,200 square feet.
Lease terms? Additionally, we rent offices located in Vancouver, British
Columbia, Canada consisting of approximately 560 square feet that we lease until
May 2009.




ITEM
3. LEGAL PROCEEDINGS




No
material legal proceedings to which the Company (or any officer or director of
the Company, or any affiliate or owner of record or beneficially of more than
five percent of the Common Stock, to management’s knowledge) is party to or to
which the property of the Company is subject is pending, and no such material
proceeding is known by management of the Company to be
contemplated.




ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS




The
annual meeting of the stockholders of Roomlinx, Inc. (the “Company”) was held on
March 5, 2009 at the offices of the Company, 2150 W. 6th Ave.,
Unit H, Broomfield, CO 80020.




More than
50% of the Company’s shares of Common Stock (treating convertible Preferred
Stock on an “as converted” to Common Stock basis) were represented in person or
by proxy, being a majority of the shares entitled to vote required by the
Company’s By-laws for a quorum.




The
purposes of the meeting were:


1.
                  To
      elect Directors to hold office until the next Annual Meeting and until
      their successors are elected and qualified.2.
                  To
      approve an amendment to the Company’s Long Term Incentive Plan to increase
      the number of shares of Common Stock available for issuance there under
      from 25,000,000 to
120,000,000.




13




3.
                      To
      approve the amendment and restatement of the Company’s Articles of
      Incorporation to increase the number of authorized shares of the Company’s
      Common Stock from 245,000,000 to 1,500,000,000.4.
                      To
      approve the amendment of the Company’s Articles of Incorporation effecting
      a 1-for-200 reverse stock split of the Company’s Common Stock and a
      simultaneous decrease in the number of authorized shares of the Company’s
      Common Stock to 200,000,000.5.
                      To
      ratify the appointment of Stark Winter Schenkein & Co., LLP as
      independent auditors of the Company for the fiscal year ended December 31,
      2008.6.
                      To
      consider and act upon such other business as may properly come before the
      meeting.




The
number of shares issued, outstanding and entitled to vote at the meeting was
259,901,195 shares of Common Stock and Series C Preferred Stock convertible into
Common Stock. The number of stockholders present at the meeting held 192,842,880
shares of Common Stock and Series C Preferred Stock convertible into Common
Stock, constituting a quorum. The number of votes being cast for, against, and
abstaining on each matter are as follows:




MATTER
                                                                  
                                                                  
                                                                  
                                                                  VOTES
                                                                    FOR
                                                                  
                                                                  
                                                                  VOTES
                                                                    AGAINST/
                                                                    WITHHELD
                                                                  
                                                                  
                                                                  VOTES
                                                                    ABSTAININGTo
      elect the following Directors to hold office until the next Annual Meeting
      and until their successors are elected and qualified:Michael
      S. Wasik
                                                                  
                                                                  
                                                                  191,677,270
                                                                  
                                                                  
                                                                  1,165,610
                                                                  
                                                                  
                                                                  —Judson
      Just
                                                                  
                                                                  
                                                                  191,675,270
                                                                  
                                                                  
                                                                  1,167,610
                                                                  
                                                                  
                                                                  —Christopher
      Blisard
                                                                  
                                                                  
                                                                  191,675,270
                                                                  
                                                                  
                                                                  1,167,610
                                                                  
                                                                  
                                                                  —To
      approve an amendment to the Company’s Long Term Incentive Plan to increase
      the number of shares of Common Stock available for issuance there under
      from 25,000,000 to 120,000,000
                                                                  
                                                                  
                                                                  143,784,123
                                                                  
                                                                  
                                                                  4,978,771
                                                                  
                                                                  
                                                                  44,079,986To
      approve the amendment and restatement of the Company’s Articles of
      Incorporation to increase the number of authorized shares of the Company’s
      Common Stock from 245,000,000 to 1,500,000,000
                                                                  
                                                                  
                                                                  180,528,171
                                                                  
                                                                  
                                                                  11,576,498
                                                                  
                                                                  
                                                                  738,211To
      approve the amendment of the Company’s Articles of Incorporation effecting
      a 1-for-200 reverse stock split of the Company’s Common Stock and a
      simultaneous decrease in the number of authorized shares of the Company’s
      Common Stock to 200,000,000
                                                                  
                                                                  
                                                                  48,232,992
                                                                  
                                                                  
                                                                  144,178,182
                                                                  
                                                                  
                                                                  431,706To
      ratify the appointment of Stark Winter Schenkein & Co., LLP as
      independent auditors of the Company for the fiscal year ended December 31,
      2008
                                                                  
                                                                  
                                                                  191,141,664
                                                                  
                                                                  
                                                                  1,615,114
                                                                  
                                                                  
                                                                  86,102


14




The
Report of the Inspector of Election showed that: (i) Messrs. Wasik, Just and
Blisard had been elected as Directors until the next Annual Meeting and until
their successors have been elected and qualified; (ii) the amendment to the
Company’s Long Term Incentive Plan to increase the number of shares of Common
Stock available for issuance there under from 25,000,000 to 120,000,00 had been
approved; (iii) the amendment and restatement of the Company’s Articles of
Incorporation to increase the number of authorized shares of the Company’s
Common Stock from 245,000,000 to 1,500,000,000 had been approved; (iv) the
amendment of the Company’s Articles of Incorporation effecting a 1-for-200
reverse stock split of the Company’s Common Stock and a simultaneous decrease in
the number of authorized shares of the Company’s Common Stock to 200,000,000 had
NOT
been approved; and (v) the appointment of Stark Winter Schenkein & Co., LLP
as independent auditors of the Company for the fiscal year ended December 31,
2008 had been ratified.




PART
II




ITEM
5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS




Our
common stock trades on the OTC-Bulletin Board under the symbol “RMLX”. Our Class
A Preferred Stock trades on the OTC-Bulletin Board under the symbol “RMLXP”. For
the periods indicated, the following table sets forth the high and low bid
quotations for our Common Stock and Class A Preferred Stock as reported by the
National Quotation Bureau, Inc. The quotations represent inter-dealer quotations
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.


SYMBOL
                  
                  TIME
      PERIOD
                  
                  LOW
                  
                  
                  HIGHRMLX.PK
                  
                  January
      1 - March 31, 2006
                  
                  $
                  0.01
                  
                  
                  $
                  0.03April
      1 - June 30, 2006
                  
                  $
                  0.02
                  
                  
                  $
                  0.05July
      1 - September 30, 2006
                  
                  $
                  0.01
                  
                  
                  $
                  0.03October
      1 - December 31, 2006
                  
                  $
                  0.01
                  
                  
                  $
                  0.04January
      1 - March 31, 2007
                  
                  $
                  0.02
                  
                  
                  $
                  0.05April
      1 – June 30, 2007
                  
                  $
                  0.02
                  
                  
                  $
                  0.04July
      1 – September 30, 2007
                  
                  $
                  0.01
                  
                  
                  $
                  0.04October
      1 – December 31, 2007
                  
                  $
                  0.01
                  
                  
                  $
                  0.03January
      1, - March 31, 2008
                  
                  $
                  0.02
                  
                  
                  $
                  0.03April
      1, - June 30, 2008
                  
                  $
                  0.02
                  
                  
                  $
                  0.03July
      1, - September 30, 2008
                  
                  $
                  0.01
                  
                  
                  $
                  0.03October
      1, - December 31, 2008
                  
                  $
                  0.01
                  
                  
                  $
                  0.02RMLXP
                  
                  January
      1 - March 31, 2006
                  
                  $
                  0.01
                  
                  
                  $
                  0.07April
      1 - June 30, 2006
                  
                  $
                  0.01
                  
                  
                  $
                  0.05July
      1 - September 30, 2006
                  
                  $
                  0.02
                  
                  
                  $
                  0.05October
      1 - December 31, 2006
                  
                  $
                  0.02
                  
                  
                  $
                  0.15January
      1 - March 31, 2007
                  
                  $
                  0.07
                  
                  
                  $
                  0.07April
      1 – June 30, 2007
                  
                  $
                  0.02
                  
                  
                  $
                  0.07July
      1 – September 30, 2007
                  
                  $
                  0.03
                  
                  
                  $
                  0.05October
      1 – December 31, 2007
                  
                  $
                  0.08
                  
                  
                  $
                  0.08January
      1 – March 31, 2008
                  
                  $
                  0.08
                  
                  
                  $
                  0.08April
      1 – June 30, 2008
                  
                  $
                  0.09
                  
                  
                  $
                  0.12July
      1 – September 30, 2008
                  
                  $
                  0.12
                  
                  
                  $
                  0.13October
      1, - December 31, 2008
                  
                  $
                  0.02
                  
                  
                  $
                  0.10




15


The
closing bid for our Common Stock on the OTC-Bulletin Board on March 24, 2009 was
$0.015. As of March 24, 2009, 159,901,195 shares of Common Stock were issued and
outstanding which were held of record by 287 persons. As of March 24, 2009,
720,000 shares of Class A Preferred Stock were issued and outstanding which were
held of record by 2 persons. As of March 24, 2009 1,000 shares of Series C
Preferred Stock were issued and outstanding which were held of record by 2
persons; these shares will convert to common shares upon notification to the
shareholders.




The
Company has not paid any cash dividends on its stock. There are no restrictions
currently in effect which preclude the Company from declaring dividends.
However, dividends may not be paid on the common stock while there are accrued
but unpaid dividends on the Class A Preferred Stock, which bears a 9% cumulative
dividend, and on the Series C Preferred Stock, which bears a 6% cumulative
dividend through March10, 2009. As of December 31, 2008 accrued but unpaid Class
A Preferred Stock dividends aggregated $133,320, and accrued but unpaid Series C
Preferred Stock dividends aggregated $62,500. It is the current intention of the
Company to retain any earnings in the foreseeable future to finance the growth
and development of its business and not pay dividends on the common
stock.




RECENT
SALES OF UNREGISTERED SECURITIES




On May 4,
2007, the Registrant’s Board of Directors authorized and approved the following
compensation package for each of Peter Bordes and Herbert Hunt for their
services as independent directors of the Registrant for 2007: (i) the payment of
the sum of $20,000 on December 31, 2007 so long as they are serving as an
independent director of the Registrant on such date, and (ii) the grant of
Non-Qualified Stock Options under the Registrant’s Long Term Incentive Plan for
the purchase of up to 500,000 shares of the Registrant’s Common Stock at an
exercise price equal to the May 4, 2007 closing trading price of the
Registrant’s Common Stock, namely $.025 per share, vesting in full on December
31, 2007, so long as they are serving as an independent director of the
Registrant on such date. Such compensation was also offered to Mr. Woody McGee;
however, Mr. McGee resigned from the Board of Directors prior to December 31,
2007.


16




On June
11, 2007 and June 13, 2007, we entered into a Securities Purchase Agreement with
certain investors, pursuant to which we sold an aggregate of $2,350,000 of
Convertible Debentures due May 2012 and pursuant to which the investors
were given the option to purchase additional convertible debentures as of
December 13, 2007, all of such options expired unexercised. The Convertible
Debentures were initially convertible into Series B Preferred Stock, which
Series B Preferred Stock would not have been convertible into Common Stock until
such time as the Company has sufficient number of shares of Common Stock
authorized to permit the conversion of the Convertible Debentures into Common
Stock, as of March 5, 2009 the Convertible Debentures are convertible into
Common Stock and not Series B Preferred Stock. The ultimate conversion price
into shares of Common Stock of the Convertible Debentures is $0.02 per share,
subject to certain restrictions contained in the Convertible Debentures. The
interest on the convertible debentures is six percent (6%) payable quarterly
either in cash or, at the Company’s election, in shares of the Company’s Series
B Preferred Stock prior to the Triggering Event or shares of the Company’s
Common Stock thereafter at Two and One-Half Cents ($.025) per share of Common
Stock or a 10% discounted stock price from the average market price for the 20
business days preceding the interest payment date, whichever is greater. As of
March 5, 2009, interest has been settled in shares of our common
stock.




On June
20, 2007, we issued warrants to four individuals for investor relations and
business development services rendered, which are exercisable initially for
shares of Series B Preferred Stock and are ultimately exercisable for the number
of shares of common stock and for the exercise prices per share of common stock
set forth below once we have sufficient shares of common stock available for
issuance upon exercise. The warrants vest immediately and have a five year
term.


1,962,500
      shares with an exercise price of $0.02500,000
      shares with an exercise price of $0.02500,000
      shares with an exercise price of $0.027,000,000
      shares with an exercise price of $0.03




On August
6, 2007, we issued 7,500,000 shares of our common stock, as compensation for
investor relations, legal, and business development services rendered to, or the
settlement of obligations owed by, the Company.




On
November 5, 2007, the Registrant’s Board of Directors approved the grant, under
the Registrant’s Long-Term Incentive Plan, of an aggregate of 1,450,000
Incentive Stock Options and an aggregate of 800,000 Non-Qualified Stock Options.
Such options were issued at an exercise price of $0.015 per share and vest
one-third (1/3) on each of the first three anniversaries of the employment
date




On
October 1, 2007, the Board approved issuance of 1,699,726 shares of our common
stock, as interest for the third quarter of 2007, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.




On
January 1, 2008, the Board approved issuance of 1,437,041 shares of our common
stock, as interest for the fourth quarter of 2007, pursuant to the clauses
outlined in the convertible debenture agreements of June 11,
2007.


17




On April
1, 2008, the Board approved issuance of 1,386,885 shares of our common stock, as
interest for the first quarter of 2008, pursuant to the clauses outlined in the
convertible debenture agreements of June 11, 2007.




All of
the shares of common stock approved for issuance in connection with interest
payments on the debentures as provided above were issued in the second quarter
of 2008.




On April
14, 2008, we issued to Creative Hospitality Associates (“CHA”) a Warrant
pursuant to a sales agent agreement with CHA (the “Agreement”).




The
Warrant is initially exercisable for Series B Preferred Stock. At such time as
we have a sufficient number of shares of Common Stock authorized to permit the
exercise of the Warrant for Common Stock (the “Triggering Event”), As of March
5, 2009 the Warrant will be exercisable for Common Stock and not Series B
Preferred Stock. The maximum number of shares of Common Stock for which the
Warrant is ultimately exercisable for is 15,000,000 and the ultimate exercise
price per share of Common Stock for which the Warrant is exercisable is $0.02
per share, each of which is subject to adjustment and the conditions contained
in the Warrant. The Warrant becomes ultimately exercisable for such 15,000,000
shares of Common Stock pursuant to a vesting schedule as set forth in the
Warrant that provides that the Warrant becomes ultimately exercisable for
500,000 shares of Common Stock with each 1,000 rooms in a hotel or other
property that CHA or its affiliate introduces to us and in which our Media and
Entertainment System is installed.




On May
15, 2008, the Registrant’s Board of Directors approved the grant to employees
and consultants, under the Registrant’s Long-Term Incentive Plan, of an
aggregate of 100,000 Incentive Stock Options and an aggregate of 100,000
Non-Qualified Stock Options. Such options were issued at an exercise price of
$0.017 per share and vest one-third (1/3) on each of the first three
anniversaries of the employment date.




On July
1, 2008, the Board approved issuance of 1,402,302 shares of our common stock, as
interest for the period April 1 through June 30, 2008, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.




On July
15, 2008 Aaron Dobrinsky exercised 4,000,000 options on a cashless basis
resulting in the net issuance of 2,571,429 shares of common stock




On July
21, 2008, the Registrant’s Board of Directors approved the grant, under the
Registrant’s Long-Term Incentive Plan, of an aggregate of 400,000 Incentive
Stock Options and an aggregate of 600,000 Non-Qualified Stock Options. Such
options were issued at an exercise price of $0.02 per share and vest one-third
(1/3) on each of the first three anniversaries of the employment
date.




Each of
the foregoing issuances was a private issuance and exempt from registration
under Section 4(2) of the Securities Act.


18




On July
31, 2008 we entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with an Investor Group, and certain affiliated trusts (collectively,
the “Investors”), pursuant to which we simultaneously sold and issued to the
Investors an aggregate of $2,500,000 of Series C Preferred Stock (“Series C
Stock”). In connection with the Purchase Agreement, the Registrant also issued
Warrants to the Investors for the purchase of additional shares of Series C
Stock or Common Stock and entered into a Registration Rights Agreement with the
Investors.




Each
share of Series C Stock is convertible into such number of shares of Common
Stock as is determined by dividing $2,500 by the initial conversion price of
$0.025 per share (or 100,000 shares of Common Stock for each share of Series C
Stock converted). However, the Series C Stock is not convertible into Common
Stock until such time as the Company has a sufficient number of shares of Common
Stock authorized to permit the conversion of all of the Series C Stock into
Common Stock, As of March 5, 2009 the Series C Stock will automatically convert
into Common Stock.




The
Series C Stock accrues dividends at an annual rate of 6% per year, payable
quarterly, either in cash or, at the Registrant’s election, shares of the
Registrant’s capital stock through March 5, 2009. There are no redemption rights
associated with the Series C Stock. Each holder of Series C stock is entitled to
voting rights on an “as converted” to Common Stock basis together with the
holders of Common Stock.




Pursuant
to the Purchase Agreement, the Investors also received (i) Series C-1 Warrants
to purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $4,000 per share of Series C Stock, and (ii) Series C-2 Warrants to
purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $6,000 per share of Series C Stock. The Warrants are immediately
exercisable and expire on the third anniversary of their date of issuance. As of
March 5, 2009 the Company has a sufficient number of shares of Common Stock
authorized to permit the conversion of all Series C Stock into Common Stock,
each Warrant will no longer be exercisable for shares of Series C Stock but
instead will be exercisable for the number of shares of Common Stock into which
the Series C Stock that the Warrant could have been exercised for prior thereto
would have been convertible into, at an initial exercise price of $.04 per share
of Common Stock under the Series C-1 Warrants and at initial exercise price of
$.06 per share of Common Stock under the Series C-2 Warrants. The initial
exercise prices are subject to adjustment as set forth in the Warrants, forms of
which are attached hereto as Exhibits 3.2 and 3.3 and are incorporated herein by
reference.




In
connection with the Purchase Agreement, the Registrant entered into a
Registration Rights Agreement (a copy of which is attached hereto as Exhibit
10.2 and incorporated herein by reference). Pursuant to the Registration Rights
Agreement, the Registrant is obligated to register for resale under the
Securities Act the shares of Common Stock issuable upon conversion of the Series
C Stock and exercise of the Warrants beginning by April 30,
2009.


19




On August
19, 2008, the Registrant’s Board of Directors approved the grant, under the
Registrant’s Long-Term Incentive Plan, of an aggregate of 300,000 Incentive
Stock Options. Such options were issued at an exercise price of $0.012 per share
and vest one-third (1/3) on each of the first three anniversaries of the grant
date.




On August
19, 2008, the Company issued 1,200,000 shares as Board of Director compensation
for the year ended December 31, 2008. 800,000 of the shares were issued to Peter
Bordes and 400,000 of the shares were issued to Herbert Hunt. The shares were
valued at $0.025 per share for a fair market value of $30,000. This compensation
was accrued for in 2007.




On August
19, 2008, the Company granted under our Long-Term Incentive Plan, an aggregate
of 500,000 Non-Qualified Stock Options (“NQOs”). The NQOs were granted to
Christopher Blisard with respect to his service as a member of the Board of
Directors during 2009 and vest on December 31, 2009. The options were issued at
an exercise price of $0.012 per share, representing the closing price of the
Company’s common stock on such date.




On
October 1, 2008, the Board approved issuance of and the Company issued 1,417,707
shares of our common stock, valued at $0.025 per share for accrued interest of
$35,443 for the period July 1 through September 30, 2008, pursuant to the
clauses outlined in the convertible debenture agreements of June 11,
2007.




On
October 31, 2008, the Registrant’s Board of Directors approved the grant of an
aggregate of 200,000 Incentive Stock Options and an aggregate of 100,000
Non-Qualified Stock Options. Such options were issued at an exercise price of
$0.017 per share and vest one-third (1/3) on each of the first three
anniversaries of the employment date.




On
January 2, 2009, the Board approved issuance of and the Company issued 1,417,707
shares of our common stock, valued at $0.025 per share for accrued interest of
$35,443 for the period October 1 through December 31, 2008, pursuant to the
clauses outlined in the convertible debenture agreements of June 11,
2007.




On
February 23, 2009, the Registrant’s Board of Directors approved the grant of an
aggregate of 350,000 Incentive Stock Options and an aggregate of 200,000
Non-Qualified Stock Options. Such options were issued at an exercise price of
$0.01 per share and vest one-third (1/3) on each of the first three
anniversaries of the grant date.




On
February 23, 2009, the Registrant’s Board of Directors approved the grant of an
aggregate of 1,200,000 Non-Qualified Stock Options. Such options were issued at
an exercise price of $0.01 per share and vest in 12 equal installments over 12
months.


20




ITEM
6. SELECTED FINANCIAL DATA




Not
required.




ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS




GENERAL




Roomlinx,
Inc., a Nevada corporation (“We,” “Us” or the “Company”), provides two core
products and services:




1. Wired
networking solutions and wireless fidelity networking solutions, also known as
Wi-Fi, for high speed internet access to hotels, resorts, and, timeshare, events
locations. The Company installs and creates services that address the
productivity and communications needs of hotel guests, convention center
exhibitors and corporate apartment customers. We specialize in providing
advanced Wi-Fi wireless services such as the wireless standards known as
802.11a/b/g.




Hotel
customers sign long-term service agreements, where we provide the maintenance
for the networks, as well as the right to provide value added services over the
network.




We derive
our revenues primarily from the installation of the wired and wireless networks
we provide to hotels, resorts, and time share properties. We derive additional
revenue from the maintenance of these networks. Customers typically pay a
one-time fee for the installation of the network and then pay monthly
maintenance fees for the upkeep and support of the network. During 2008 we made
a fundamental change in our business model pertaining to our on-site support. We
are no longer including on-site support in the base price for maintenance; these
services are either billed for at the time of service or the base price is
increased.




2.
In-room media and entertainment solutions for hotels, resorts, and time share
properties. The Company develops software and integrates hardware to facilitate
the distribution of entertainment, business applications, national and local
advertising, and content. The content consists of high definition and standard
definition adult, Hollywood, and specialty programming, music, internet based
television programming, digital global newspapers, global radio and television
stations, business applications (allowing the guest to use Microsoft Office
programs), and hotel-specific services and advice.




The
Company provides proprietary software an LCD television (optional), a media
console (consisting of a DVD player, CD burner, and numerous input jacks for the
hotel guest), a wireless keyboard with built-in mouse, and a remote
control.




The
Company installs and supports these components.


21




Hotel
customers sign long-term service agreements, where we provide the maintenance
for the networks, as well as the right to provide value added services over the
network.




We derive
our revenues primarily from selling our proprietary hardware and software to
hotels, resorts and time share locations as well as delivering content and
providing security and support of the media and entertainment product. We derive
additional revenue from the rental of movies, printing service, advertising and
sale of products through our system. We began marketing this product in
September 2007. Since June 2007, we have invested significant capital to develop
our software, integrate our hardware, and develop significant product and
content partnerships.




We have
incurred operating losses since our inception. We will need to increase our
installation and maintenance revenues and improve our gross margins to become
profitable and sustain profitability on a quarterly and annual basis. We
recently completed development of our Media and Entertainment solution and have
commenced marketing it. There is no assurance that we will be successful in our
efforts. We are not able to predict with any certainty when, if ever, we will
attain profitable operations.




We have
successfully completed the installation of three properties, and have signed
contracts to install an additional six. We will complete our pilot programs in
the first quarter of 2009, with a select service property in the Denver
Technological Center, managed and owned by a large hotel corporation, and with a
full service hotel located in Chicago, IL, which is also owned by a large hotel
corporation.




Management’s
Discussion and Analysis (MD&A) is designed to provide the reader of the
financial statements with a narrative discussion of our results of operations;
financial position; liquidity and capital resources; critical accounting
policies and significant estimates; and the impact of recently issued accounting
standards. Our MD&A is presented in five sections:


●
            Critical
      Accounting Policies●
            Results
      of Operations●
            Recent
      Accounting Pronouncements●
            Financial
      Condition●
            Forward-Looking
      Statements




This
discussion should be read in conjunction with our consolidated financial
statements and accompanying Notes included in this report and in the 2008 annual
report on Form 10-K, as well as our reports on Form 8-K and other SEC
filings.




CRITICAL
ACCOUNTING POLICIES AND ESTIMATES




Management’s
Discussion and Analysis of Financial Condition and Results of Operations discuss
our financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires management to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and
the related disclosures of contingent assets and liabilities. On an on-going
basis, management evaluates its estimates and judgments, including those related
to revenue recognition, allowance for doubtful accounts and property and
equipment valuation. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates
under different assumptions and conditions.




22




Management
believes the following critical accounting policies, among others, affect its
more significant judgments and estimates used in the preparation of its
consolidated financial statements.




Our
system sales and installation revenue primarily consists of wired and wireless
network equipment and installation fees associated with the network and is
recognized as revenue when the installation is completed and the customer has
accepted such installation.




Our
service, maintenance and usage revenue, which primarily consists of monthly
maintenance fees related to the upkeep of the network, is recognized on a
monthly basis as services are provided.




Media and
Entertainment product revenue primarily consists of media and entertainment
equipment purchases, installation of that equipment, software and content
license fees, and maintenance fees related to the upkeep of the system. Revenue
on the equipment and installations is recognized when the installation is
complete and the customer has accepted such installation. Revenue on the service
and maintenance is recognized as invoiced per the individual
contracts.




We
estimate the collectability of our trade receivables. A considerable amount of
judgment is required in assessing the ultimate realization of these receivables,
including analysis of historical collection rates and the current
credit-worthiness of significant customers.




Work in
progress represents the cost of hardware, software, and labor which has been
incurred by us for installation at our customers’ facilities, but has not been
accepted by the customer.




We
capitalize and subsequently depreciate our property and equipment over the
estimated useful life of the asset. In assessing the recoverability of our
long-lived assets, including goodwill, we must make certain assumptions
regarding the useful life and contribution to the estimated future cash flows.
If such assumptions change in the future, we may be required to record
impairment charges for these assets not previously recorded.


23




Since
inception, we have accumulated substantial net operating loss carry forwards for
tax purposes. There are statutory limitations on our ability to realize any
future benefit from these potential tax assets and we are uncertain as to
whether we will ever utilize the tax loss carry forwards. Accordingly, we have
recorded a valuation allowance to offset the deferred tax asset.




The
Company follows SFAS No. 123(R), “Share-Based Payment,” which requires us to
provide compensation costs for our stock option plans determined in accordance
with the fair value based method prescribed in SFAS No. 123(R). We estimate the
fair value of each stock option at the grant date by using the Black-Scholes
option-pricing model and provide for expense recognition over the service
period, if any, of the stock option.




In
connection with the sale of debt or equity instruments, we may sell options or
warrants to purchase our common stock. In certain circumstances, these options
or warrants may be classified as derivative liabilities, rather than as equity.
Additionally, the debt or equity instruments may contain embedded derivative
instruments, such as conversion options, which in certain circumstances may be
required to be bifurcated from the associated host instrument and accounted for
separately as a derivative instrument liability.




The
identification of, and accounting for, derivative instruments is complex. Our
derivative instrument liabilities are re-valued at the end of each reporting
period, with changes in the fair value of the derivative liability recorded as
charges or credits to income, in the period in which the changes occur. For
options, warrants and bifurcated conversion options that are accounted for as
derivative instrument liabilities, we determine the fair value of these
instruments using the Cox-Ross-Rubinstein binomial option pricing model. That
model requires assumptions related to the remaining term of the instruments and
risk-free rates of return, our current common stock price and expected dividend
yield, and the expected volatility of our common stock price over the life of
the instruments. The identification of, and accounting for, derivative
instruments and the assumptions used to value them can significantly affect our
financial statements.




RESULTS
OF OPERATIONS




YEAR
ENDED DECEMBER 31, 2008 COMPARED TO YEAR ENDED DECEMBER 31, 2007




For the
year ended December 31, 2008, we reported net loss of $(1,805,745), or $(0.01)
per share, compared to net income of $403,555, or $0.00 per share for 2007. Our
loss from operations for 2008 was $(1,807,223), a decline in operating results
of $(1,063,181) compared to the operating loss of $(744,042) that we reported
for 2007; $617,543 of this operating loss in 2008 is due to two non-cash items;
stock compensation and depreciation compared to $544,310 in 2007. As discussed
below, we began investing significant capital in the design, production, and
marketing of our new media and entertainment product. That increase in costs was
a primary factor in the results.


24




System
sales and installation revenue. System sales and installation revenue
decreased 24% to $712,609 during the year ended December 31, 2008 from $934,125
during the year ended December 31, 2007. We completed upgrades on ten existing
customers, installations on four new customers and completed a large equipment
sale during 2008, compared to eight new installations and thirteen upgrades
during 2007. This component of our revenue stream is dependent upon the
acquisition of new customers and the upgrade needs of existing customers, which
can vary from year to year. Our shift in focus away from the HSIA product and
services to the Media and Entertainment products and services was also an
attributing factor in this decrease.




Service,
maintenance and usage revenue. Service, maintenance and usage revenue
decreased 12% to $1,150,368 for the year ended December 31, 2008 from $1,307,125
for the year ended December 31, 2007. The decrease was due to a decrease in the
number of customers we service on a recurring basis to a total of 139 customers
compared to 157 customers as of December 31, 2007.




Media
and entertainment revenue. During the 4th quarter
of 2008 we began recording revenues on our new Media and Entertainment product.
Our media and entertainment revenues for the year ended December 31, 2008 were
$333,735. We completed two installations into revenue generating properties
generating revenues of $167,452 and billed services to these properties in the
amount of $5,269. We also completed installations of Free-to-Guest television
programming into four of our existing properties generating revenue of
$161,014.




Backlog.
As of December 31, 2008, we had contracts for four new Media and Entertainment
related projects, three of which we anticipate will be completed during the
first quarter of 2009. As of December 31, 2008, there were 19 service contracts
scheduled to conclude during 2009. As of March 1, 2009 approximately 80% of
those customers continued their service with us.




Cost
of system sales and installation. Cost of system sales and installation
decreased 13% to $460,911 for the year ended December 31, 2008 from $531,719 for
the year ended December 31, 2007. The decrease was primarily attributable to the
decreased corresponding revenue during the year. The average cost of an
installation or upgrade project increased 30% from $25,320 in 2007 to $32,922 in
2008. Our margin on installations decreased to 35% in 2008 from 43% in 2007.
Competitive market conditions are a cause for the declining margins and a reason
for Roomlinx’s shift in focus from HSIA products and services to media and
entertainment products and services.




Cost
of service, maintenance and usage. Cost of service, maintenance and usage
decreased 10% to $962,510 for the year ended December 31, 2008 from $1,072,325
for the year ended December 31, 2007. The decrease is mainly attributable to the
reduced number of rooms being supported.


25




Costs
of media and entertainment. The costs of the Media and Entertainment
product were $312,552 for the year ended December, 31, 2008. Our costs on the
Media and Entertainment installations was $154,202 giving us a profit margin of
8%, our costs on Media & Entertainment services was $2,336 giving us a
profit margin of 56%, and our costs on Free-To-Guest television Programming were
$157,014 giving us a profit margin of 2%.




Sales
and marketing. Sales and marketing expense increased by $112,537 to
$343,726 during the year ended December 31, 2008 from $231,189 for the year
ended December 31, 2007. During 2008, we continued marketing our new media and
entertainment product. Our personnel related costs increased $51,382 to $269,824
in 2008 from $218,442 in 2007; our travel expenses increased $13,678 to $23,300
in 2008 from $9,621 in 2007; and our advertising and tradeshow expenses
increased $47,476 to $50,602 in 2008 from $3,126 in
2007.




Product
development. In June 2007, we created a new department to handle the
majority of the design, production, and promotion of our new media and
entertainment product. This new department incurred costs of $587,377 during the
year ended December 31, 2008, compared to $271,880 during the year ended
December 31, 2007. These costs included $488,266 in labor and personnel expense
in 2008 compared to $136,375 in 2007, and $99,111 in equipment, supplies and
testing costs in 2008 compared to $135,505 in 2007.




General
and administrative. General and administrative expense increased by
$440,002 to $1,306,410 for the year ended December 31, 2008 from $866,408 for
the year ended December 31, 2007. During 2008, personnel related costs increased
$45,663 to $272,589 in 2008 from $226,926 in 2007; office related costs such as
rent, telephone, insurance and supplies increased $19,654 to $128,648 in 2008
from $108,994 in 2007; travel expenses increased by $2,467 to $11,641 in 2008
from $9,174 in 2007; professional fees, SEC fees, and investor relations fees
increased by $79,436 to $232,135 in 2008 from $152,699 in 2007; and
uncollectible debt increased $39,556 to $74,303 in 2008 from $34,747 in 2007.
For the year ended December 31, 2008, the Company recorded $587,094 of stock
compensation compared to $333,869 for the year ended December 31,
2007.




Depreciation
of property and equipment. Depreciation of property and equipment
increased to $30,449 for the year ended December 31, 2008 as compared to $11,771
for the year ended December 31, 2007. This increase is attributable to the
Company purchasing capital assets for our new media and entertainment
product.




Interest
expense. Interest expense decreased $30,090 or 16% to $153,477 for the
year ended December 31, 2008 as compared to $183,567 for the year ended December
31, 2007. The decrease is attributable to the decrease in the principal balance
of outstanding debt due to the settlement and or payoff of notes payable and
convertible debentures, offset by the addition of the 2007 convertible
debentures which had a lower interest rate.


26




Financing
expenses. In 2008 financing expenses decreased 96% to $15,000, compared
to the $402,207 in 2007. 2008 Financing fees consisted of legal fees relating to
the establishment and issuance of the Series C Preferred Stock. 2007 finance
charges consisted of legal and brokerage fees related to the sale of the
convertible debentures.




Derivative
instruments expense, net. Derivative instruments income of $143,404
represents the net unrealized (non-cash) change during the year ended December
31, 2008, in the fair value of our derivative instrument liabilities related to
certain embedded derivatives in our convertible debt that have been bifurcated
and accounted for separately.




Foreign
exchange gain (loss). A portion of the Company’s business is denominated
in Canadian currency and the Company regularly converts Canadian denominated
transactions into US dollars. Foreign transactions resulted in a loss of $18,837
for the year ended December 31, 2008 compared to a loss of $11,540 for the year
ended December 31, 2007. The amount of gain (loss) will vary based upon the
volume of foreign currency denominated transactions and fluctuations in the
value of the Canadian dollar vis-à-vis the US dollar. It is not expected that
the foreign exchange gains (losses) will have a significant impact on the
Company in the future.




Income
from discharge of indebtedness. During 2007, the Company negotiated the
discharge of indebtedness in the amount of $1,472,122. This amount was comprised
of $550,000 of convertible debentures, $37,500 of notes payable, $457,192 of
accrued interest and penalties, $418,418 of capital lease obligations and $9,012
of accounts payable and accrued expenses. For the year ended December 31, 2008,
the Company recorded $3,275 of income from the discharge of accounts
payable.




FINANCIAL
CONDITION




LIQUIDITY
& CAPITAL RESOURCES




Since our
inception, we financed our operations primarily through private placements of
equity securities, convertible debentures and stockholder loans, which provided
aggregate net proceeds of approximately $12,540,000 through December 31,
2008.




As of
December 31, 2008 we had $1,941,215 in cash and cash equivalents, which amount
is sufficient to fund operating activities and continue investing in our new
media and entertainment product through 2009 and into 2010.




As of
December 31, 2008, we had working capital of $1,585,489, comprised of current
assets of $2,527,204 and current liabilities of $941,715. Our working capital at
December 31, 2007 was $625,730. Our working capital position improved during the
year primarily because of the funding received through the sales of Series C
Preferred Stock.


27




Net cash
used by operating activities was $1,082,777 for the year ended December 31, 2008
as compared to $515,459 for the year ended December 31, 2007. The change was
primarily due to purchasing equipment for the new media and entertainment
product.




Net cash
used by investing activities was $378,673 for the year ended December 31, 2008
as compared to $48,813 during the year ended December 31, 2007. During 2008, we
invested $104,513 in expenditures for capital assets and $274,160 in notes
receivable, as compared to $48,813 in expenditures for capital assets during
2007.




Net cash
provided by financing activities was $2,487,500 for the year ended December 31,
2008 as compared to $1,334,897 for the year ended December 31, 2007. During
2008, we received cash proceeds of $2,500,000 from the issuance of Series C
Preferred Stock. We used a portion of these proceeds to settle the debt
outstanding on other notes payable ($12,500). During 2007, we received cash
proceeds from the sale of convertible debentures in the aggregate amount of
$2,300,000, and used cash of $965,103 for principal payments.




Several
years ago, the Company entered into a series of capital lease transactions with
a third party lessor in Canada. The Company ceased making payments to the lessor
and abandoned the assets under capital leases. The lessor has not demanded that
the Company make additional payments and the Company believes that it has
meritorious defenses against any claims by the lessor. The Company has attempted
to negotiate a settlement with the lessor but has been unable to obtain an
unconditional release. During 2007, the Company wrote off the remaining
liability on the leases in the amount of $418,418.




As of
December 31, 2008, our primary financial commitments consisted of $2,912,525
recorded as current and long-term liabilities plus future obligations under
operating leases. Total future payments under operating leases were $103,274 at
December 31, 2008, including $51,153 due during 2009.




On July
31, 2008 we entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with an investor group, and certain affiliated trusts (collectively,
the “Investors”), pursuant to which we simultaneously sold and issued to the
Investors an aggregate of $2,500,000 of Series C Preferred Stock (“Series C
Stock”). In connection with the Purchase Agreement, the Registrant also issued
Warrants to the Investors for the purchase of additional shares of Series C
Stock or Common Stock and entered into a Registration Rights Agreement with the
Investors.




Each
share of Series C Stock is convertible into such number of shares of Common
Stock as is determined by dividing $2,500 by the initial conversion price of
$0.025 per share (or 100,000 shares of Common Stock for each share of Series C
Stock converted). As of March 5, 2009 the Company has a sufficient number of
shares of Common Stock authorized to permit the conversion of all of the Series
C Stock into Common Stock, the Series C Stock will automatically convert into
Common Stock.


28




The
Series C Stock accrues dividends at an annual rate of 6% per year, payable
quarterly, either in cash or, at the Registrant’s election, shares of the
Registrant’s capital stock through March 5, 2009. There are no redemption rights
associated with the Series C Stock. Each holder of Series C stock is entitled to
voting rights on an “as converted” to Common Stock basis together with the
holders of Common Stock.




Pursuant
to the Purchase Agreement, the Investors also received (i) Series C-1 Warrants
to purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $4,000 per share of Series C Stock, and (ii) Series C-2 Warrants to
purchase an aggregate of 200 shares of Series C Stock, at an initial exercise
price of $6,000 per share of Series C Stock. The Warrants are immediately
exercisable and expire on the third anniversary of their date of issuance. As of
March 5, 2009 the Company has a sufficient number of shares of Common Stock
authorized to permit the conversion of all Series C Stock into Common Stock,
each Warrant will no longer be exercisable for shares of Series C Stock but
instead will be exercisable for the number of shares of Common Stock into which
the Series C Stock that the Warrant could have been exercised for prior thereto
would have been convertible into, at an initial exercise price of $.04 per share
of Common Stock under the Series C-1 Warrants and at initial exercise price of
$.06 per share of Common Stock under the Series C-2 Warrants. The initial
exercise prices are subject to adjustment as set forth in the Warrants, forms of
which are attached hereto as Exhibits 3.2 and 3.3 and are incorporated herein by
reference.




In
connection with the Purchase Agreement, the Registrant entered into a
Registration Rights Agreement (a copy of which is attached hereto as Exhibit
10.2 and incorporated herein by reference). Pursuant to the Registration Rights
Agreement, the Registrant is obligated to register for resale under the
Securities Act the shares of Common Stock issuable upon conversion of the Series
C Stock and exercise of the Warrants beginning by April 30, 2009.




FORWARD-LOOKING
STATEMENTS




The
statements contained in this annual report (including our statements regarding
future revenue) that are not based on historical fact are “forward- looking
statements” within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. Forward- looking statements may be identified by the use of
forward-looking terminology such as “may,” “will,” “expect,” “estimate,”
“anticipate,” “continue,” or similar terms, variations of such terms or the
negative of those terms. Such forward-looking statements involve risks and
uncertainties, including, but not limited to: (i) our history of unprofitable
operations, both with respect to our core business and the business previously
performed by Arc Communications, (ii) the significant operating losses that we
have incurred to date, (iii) our lack of liquidity and need for additional
capital which we may not be able to obtain on favorable terms or at all, (iv)
the “going concern” qualification that accompanies our financial statements,
which, among other things, may make it more difficult for us to raise the
additional capital that we require in order to remain in business, (v) the fact
that we have been required to operate with a working capital deficit, which
limits our operating flexibility and opportunities (vi) the substantially
greater resources available to many of our competitors, (vii) our expectation
that we will continue to operate at a loss for the foreseeable future, (viii)
our lack of capital, which substantially restricts our flexibility and
opportunity to increase our revenues, (ix) the importance to us that our
offerings remain technologically advanced if we are to attract new customers and
maintain existing customers, (x) our dependence on certain key employees and key
suppliers, (xi) risks associated with potential intellectual property claims and
(xii) the impact on our business and industry of general economic conditions and
regulatory developments. Such risks and others are more fully described in the
“Risk Factors” set forth in Exhibit 99.1 to this Annual Report. Our actual
results could differ materially from the results expressed in, or implied by,
such forward- looking statements.


29




Item
7A. Quantitative
and Qualitative Disclosures about Market Risk




We are
exposed to risk from potential changes in the U.S./Canadian currency exchange
rates as they relate to our services and purchases for our Canadian
customers.




Foreign
exchange gain / (loss)




Foreign
transactions resulted in a loss of $18,837 for the year ended December 31, 2008
compared to a loss of $11,540 for the year ended December 31, 2007. The amount
of gain (loss) will vary based upon the volume of foreign currency denominated
transactions and fluctuations in the value of the Canadian dollar vis-à-vis the
US dollar.




Translation
of Financial Results




Because
we translate a portion of our financial results from Canadian dollars to U.S.
dollars, fluctuations in the value of the Canadian dollar have a direct affect
on our reported consolidated results. We do not hedge against the possible
impact of this risk. A 10 percent adverse change in the foreign currency
exchange rate would not have a significant impact on our consolidated results of
operations or financial position.


30




ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




Shareholders
and Board of Directors


Roomlinx,
Inc.




We have
audited the accompanying consolidated balance sheets of Roomlinx, Inc. as of
December 31, 2008 and 2007, and the related consolidated statements of
operations, stockholders’ (deficit), and cash flows for the years then ended.
These financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial statements based
on our audits.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.




In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Roomlinx, Inc. as of December 31,
2008 and 2007, and the results of its operations, and its cash flows for the
years then ended, in conformity with accounting principles generally accepted in
the United States of America.








Denver,
Colorado


March 24,
2009






31




Roomlinx,
Inc.


CONSOLIDATED
BALANCE SHEETS


December31,


2008
              
              
              2007ASSETSCurrent
      assets:Cash
      and cash equivalents
              
              $
              1,941,215
              
              
              $
              915,165Accounts
      receivable, net
              
              
              258,538
              
              
              
              358,794Lease
      Receivable (current portion)
              
              
              48,578
              
              
              
              —Prepaid
      and other current assets
              
              
              29,979
              
              
              
              37,721Work
      in progress
              
              
              173,964
              
              
              
              382Inventory
              
              
              74,930
              
              
              
              —Total
      current assets
              
              
              2,527,204
              
              
              
              1,312,062Property
      and equipment, net
              
              
              123,886
              
              
              
              49,822Lease
      receivable, non-current
              
              
              225,582
              
              
              
              —Total
      assets
              
              $
              2,876,672
              
              
              $
              1,361,884LIABILITIES
      AND STOCKHOLDERS’ (DEFICIT)Current
      liabilities:Accounts
      payable and accrued expenses
              
              $
              434,171
              
              
              $
              399,782Officer
      and stockholder note payable
              
              
              —
              
              
              
              12,500Accrued
      interest
              
              
              35,443
              
              
              
              35,926Deferred
      revenue
              
              
              472,101
              
              
              
              238,124Total
      current liabilities
              
              
              941,715
              
              
              
              686,332Convertible
      debentures
              
              
              1,970,810
              
              
              
              2,101,352Stockholders’
      (deficit):Preferred
      stock - $0.20 par value, 5,000,000 shares authorized:Class
      A - 720,000 shares authorized, issued and outstanding
              
              
              144,000
              
              
              
              144,000Series
      B - 2,000,000 shares authorized; none issued and
    outstanding
              
              
              —
              
              
              
              —Series
      C - 1,400 shares authorized; 1,000 issued and outstanding
              
              
              200
              
              
              
              —Common
      stock - $0.001 par value, 245,000,000 shares authorized:158,483,488
      and 149,068,107 shares issued and outstanding,
respectively
              
              
              158,483
              
              
              
              149,068Additional
      paid-in capital
              
              
              23,109,501
              
              
              
              19,860,924Accumulated
      (deficit)
              
              
              (23,448,037
              )
              
              
              (21,579,792
              )Total
      stockholders’ (deficit)
              
              
              (35,853
              )
              
              
              (1,425,800
              )Total
      liabilities and stockholders’ (deficit)
              
              $
              2,876,672
              
              
              $
              1,361,884




The
accompanying notes are an integral part of these consolidated financial
statements.


32




Roomlinx,
Inc.


CONSOLIDATED
STATEMENTS OF OPERATIONS


for
the Years ended December 31, 2008 and 2007


2008
                                            
                                            
                                            2007RevenuesSystem
      sales and installation
                                            
                                            $
                                            712,609
                                            
                                            
                                            $
                                            934,125Service,
      maintenance and usage
                                            
                                            
                                            1,150,368
                                            
                                            
                                            
                                            1,307,125Media
      and entertainment
                                            
                                            
                                            333,735
                                            
                                            
                                            
                                            —2,196,712
                                            
                                            
                                            
                                            2,241,250Costs
      and expensesSystem
      sales and installation
                                            
                                            
                                            460,911
                                            
                                            
                                            
                                            531,719Service,
      maintenance and usage
                                            
                                            
                                            962,510
                                            
                                            
                                            
                                            1,072,325Media
      and entertainment
                                            
                                            
                                            312,552
                                            
                                            
                                            
                                            —Sales
      and marketing
                                            
                                            
                                            343,726
                                            
                                            
                                            
                                            231,189Product
      development
                                            
                                            
                                            587,377
                                            
                                            
                                            
                                            271,880General
      and administrative
                                            
                                            
                                            1,306,410
                                            
                                            
                                            
                                            866,408Depreciation
                                            
                                            
                                            30,449
                                            
                                            
                                            
                                            11,7714,003,935
                                            
                                            
                                            
                                            2,985,292Operating
      (loss)
                                            
                                            
                                            (1,807,223
                                            )
                                            
                                            
                                            (744,042
                                            )Other
      income (expense)Interest
      expense
                                            
                                            
                                            (153,477
                                            )
                                            
                                            
                                            (183,567
                                            )Financing
      expense
                                            
                                            
                                            (15,000
                                            )
                                            
                                            
                                            (402,207
                                            )Derivative
      income
                                            
                                            
                                            143,404
                                            
                                            
                                            
                                            252,681Foreign
      currency gain (loss)
                                            
                                            
                                            (18,837
                                            )
                                            
                                            
                                            (11,540
                                            )Other
      income
                                            
                                            
                                            42,113
                                            
                                            
                                            
                                            20,108Income
      from discharge of indebtedness
                                            
                                            
                                            3,275
                                            
                                            
                                            
                                            1,472,1221,478
                                            
                                            
                                            
                                            1,147,597Income
      (loss) before income taxes
                                            
                                            
                                            (1,805,745
                                            )
                                            
                                            
                                            403,555Provision
      for income taxes
                                            
                                            
                                            —
                                            
                                            
                                            
                                            —Net
      income (loss)
                                            
                                            
                                            (1,805,745
                                            )
                                            
                                            $
                                            403,555Series
      C Preferred dividend
                                            
                                            
                                            62,500
                                            
                                            
                                            
                                            —Net
      Income (loss) available to common shareholders
                                            
                                            $
                                            (1,868,245
                                            )
                                            
                                            $
                                            403,555Net
      Income (loss) per common share:Basic
      and diluted
                                            
                                            $
                                            (0.01
                                            )
                                            
                                            $
                                            0.00Weighted
      average shares outstanding:Basic
                                            
                                            
                                            154,253,528
                                            
                                            
                                            
                                            143,337,901Diluted
                                            
                                            
                                            154,253,528
                                            
                                            
                                            
                                            260,189,054




The
accompanying notes are an integral part of these consolidated financial
statements.


33
  Roomlinx,
Inc.
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 for
the Year Ended December 31, 2008 and 2007
 2008
                    
                    
                    2007Cash
      flows from operating activities:Net
      income(loss)
                    
                    $
                    (1,805,745
                    )
                    
                    $
                    403,555Adjustments
      to reconcile net income (loss) to net cash used by operating
      activities:Depreciation
                    
                    
                    30,449
                    
                    
                    
                    11,771Amortization
      of debt discount
                    
                    
                    —
                    
                    
                    
                    150,000Income
      from discharge of indebtedness
                    
                    
                    (3,275
                    )
                    
                    
                    (1,472,122
                    )Derivative
      (income) expense
                    
                    
                    (143,404
                    )
                    
                    
                    (256,714
                    )Derivative
      carrying value increse
                    
                    
                    12,862
                    
                    
                    
                    4,033Common
      stock and options issued as compensation
                    
                    
                    48,639
                    
                    
                    
                    240,947Warrants
      issued as compensation
                    
                    
                    538,455
                    
                    
                    
                    220,799Non-cash
      interest expense
                    
                    
                    141,098
                    
                    
                    
                    135,151Changes
      in operating assets and liabilities:Accounts
      receivable
                    
                    
                    100,256
                    
                    
                    
                    128,289Inventory
                    
                    
                    (74,930
                    )
                    
                    
                    —Work
      in process
                    
                    
                    (173,582
                    )
                    
                    
                    29,073Prepaid
      and other current assets
                    
                    
                    7,742
                    
                    
                    
                    (13,332
                    )Accounts
      payable and accrued expenses
                    
                    
                    5,164
                    
                    
                    
                    (151,806
                    )Deferred
      revenue
                    
                    
                    233,977
                    
                    
                    
                    (73,688
                    )Accrued
      interest
                    
                    
                    (483
                    )
                    
                    
                    101,526Obligations
      under capital lease
                    
                    
                    —
                    
                    
                    
                    27,059Total
      adjustments
                    
                    
                    722,968
                    
                    
                    
                    (919,014
                    )Net
      cash (used in) operating activities
                    
                    $
                    (1,082,777
                    )
                    
                    $
                    (515,459
                    )Cash
      flows from investing activities:Lease receivable
                    
                    
                    (274,160
                    )
                    
                    
                    —Purchase
      of property and equipment
                    
                    
                    (104,513
                    )
                    
                    
                    (48,813
                    )Net
      cash (used in) investing activities
                    
                    $
                    (378,673
                    )
                    
                    $
                    (48,813
                    )Cash
      flows from financing activities:Cash
      proceeds from convertible debentures
                    
                    
                    —
                    
                    
                    
                    2,300,000Cash
      proceeds from sale of Series C Preferred Stock
                    
                    
                    2,500,000Principal
      payments on convertible debenture
                    
                    
                    —
                    
                    
                    
                    (550,000
                    )Principal
      payments on notes payable
                    
                    
                    —
                    
                    
                    
                    (277,500
                    )Principal
      payments on officer and stockholder notes payable
                    
                    
                    (12,500
                    )
                    
                    
                    (137,603
                    )Net
      cash provided by financing activities
                    
                    
                    2,487,500
                    
                    
                    
                    1,334,897Net
      increase (decrease) in cash and equivalents
                    
                    
                    1,026,050
                    
                    
                    
                    770,625Cash
      and equivalents at beginning of period
                    
                    
                    915,165
                    
                    
                    
                    144,540Cash
      and equivalents at end of period
                    
                    $
                    1,941,215
                    
                    
                    $
                    915,165Supplemental
      Cash Flow InformationCash
      paid for interest
                    
                    $
                    —
                    
                    
                    $
                    16,603Cash
      paid for income taxes
                    
                    $
                    —
                    
                    
                    $
                    —Non-cash
      investing and financing activities:Accrued
      expenses converted to stock
                    
                    $
                    30,000
                    
                    
                    $
                    —Notes
      payable converted to convertible debentures
                    
                    $
                    —
                    
                    
                    $
                    50,000Accounts
      payable and accrued expenses forgiven
                    
                    $
                    3,275
                    
                    
                    $
                    9,012Convertible
      debt forgiven
                    
                    $
                    —
                    
                    
                    $
                    550,000Notes
      payable forgiven
                    
                    $
                    —
                    
                    
                    $
                    37,500Interest
      and penalties forgiven
                    
                    $
                    —
                    
                    
                    $
                    457,192Shareholder
      paybles forgiven
                    
                    $
                    —
                    
                    
                    $
                    3,000Shareholder
      notes forgiven
                    
                    $
                    —
                    
                    
                    $
                    137,397Shareholder
      interest and penalties forgiven
                    
                    $
                    —
                    
                    
                    $
                    104,553Capital
      lease forgiven
                    
                    $
                    —
                    
                    
                    $
                    418,418Series
      C Preferred Stock Dividend
                    
                    $
                    62,500
                    
                    
                    $
                    —Cashless
      option Exercise
                    
                    $
                    2,571
                    
                    
                    $
                    —
  The
accompanying notes are an integral part of these consolidated financial
statements.
  34
  Roomlinx,
Inc.
 CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS’ (DEFICIT)
 For
the years ended December 31, 2008 and 2007
 Preferred
      Stock A
                      
                      
                      Preferred
      Stock C
                      
                      
                      Common
      Stock
                      
                      
                      Additional
                        Paid
      - in
                        Capital
                      
                      
                      
                      
                      
                      Total
                        Stockholders’
                        (Deficit)Number
      of
                        Shares
                      
                      
                      Amount
                      
                      
                      Number
      of
                        Shares
                      
                      
                      Amount
                      
                      
                      Number
      of
                        Shares
                      
                      
                      Amount
                      
                      
                      Accumulated
                        (Deficit)Balance,
      December 31, 2006
                      
                      
                      720,000
                      
                      
                      $
                      144,000
                      
                      
                      
                      —
                      
                      
                      $
                      —
                      
                      
                      
                      139,868,381
                      
                      
                      $
                      139,868
                      
                      
                      $
                      19,032,310
                      
                      
                      $
                      (21,983,347
                      )
                      
                      $
                      (2,667,169
                      )Shares
      issued for services at $0.03 per share
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      7,500,000
                      
                      
                      
                      7,500
                      
                      
                      
                      217,500
                      
                      
                      
                      —
                      
                      
                      
                      225,000Shares
      issued for interest at $0.02 per share
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      1,699,726
                      
                      
                      
                      1,700
                      
                      
                      
                      32,295
                      
                      
                      
                      —
                      
                      
                      
                      33,995Options
      granted at $0.025 per share
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      15,947
                      
                      
                      
                      —
                      
                      
                      
                      15,947Warrants
      granted at $0.02 per share
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      66,415
                      
                      
                      
                      —
                      
                      
                      
                      66,415Warrants
      granted at $0.03 per share
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      154,384
                      
                      
                      
                      —
                      
                      
                      
                      154,384Amortization
      of deferred compensation
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      97,123
                      
                      
                      
                      —
                      
                      
                      
                      97,123Discharge
      of related party debt
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      244,950
                      
                      
                      
                      —
                      
                      
                      
                      244,950Net
      income
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      403,555
                      
                      
                      
                      403,555Balance,
      December 31, 2007
                      
                      
                      720,000
                      
                      
                      $
                      144,000
                      
                      
                      
                      —
                      
                      
                      $
                      —
                      
                      
                      
                      149,068,107
                      
                      
                      $
                      149,068
                      
                      
                      $
                      19,860,924
                      
                      
                      $
                      (21,579,792
                      )
                      
                      $
                      (1,425,800
                      )Issuance
      of Series C Preferred Stock
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      1,000
                      
                      
                      
                      200
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      2,499,800
                      
                      
                      
                      —
                      
                      
                      
                      2,500,000Shares
      issued for interest at $0.02 per share
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      5,643,947
                      
                      
                      
                      5,644
                      
                      
                      
                      135,454
                      
                      
                      
                      —
                      
                      
                      
                      141,098Shares
      issued for settlement of accrued expenses
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      1,200,000
                      
                      
                      
                      1,200
                      
                      
                      
                      28,800
                      
                      
                      
                      —
                      
                      
                      
                      30,000Options
      exercised at $.001 per share
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      2,571,429
                      
                      
                      
                      2,571
                      
                      
                      
                      (2,571
                      )
                      
                      
                      —
                      
                      
                      
                      —Warrants
      granted at $0.04 per share
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      280,317
                      
                      
                      
                      —
                      
                      
                      
                      280,317Warrants
      granted at $0.06 per share
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      258,138
                      
                      
                      
                      —
                      
                      
                      
                      258,138Amortization
      of deferred compensation
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      48,639
                      
                      
                      
                      —
                      
                      
                      
                      48,639Series
      C Dividend Accrual
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      (62,500
                      )
                      
                      
                      (62,500
                      )Net
      loss
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      (1,805,745
                      )
                      
                      
                      (1,805,745
                      )Balance,
      December 31, 2008
                      
                      
                      720,000
                      
                      
                      $
                      144,000
                      
                      
                      
                      1,000
                      
                      
                      $
                      200
                      
                      
                      
                      158,483,483
                      
                      
                      $
                      158,483
                      
                      
                      $
                      23,109,501
                      
                      
                      $
                      (23,448,037
                      )
                      
                      $
                      (35,853
                      )
  The
accompanying notes are an integral part of these consolidated financial
statements.
  35


Roomlinx,
Inc,
 Notes
to Consolidated Financial Statements
 December
31, 2008 and 2007
  1.    
Overview and Summary of Significant Accounting Policies
  Description
of Business:
  Roomlinx,
Inc. (the “Company”) is incorporated under the laws of the state of Nevada. The
Company sells, installs and services in-room media and entertainment solutions
for hotels, resorts, and time share properties. The Company develops software
and integrates hardware to facilitate the distribution of Hollywood, adult, and
specialty content, business applications, national and local advertising, and
concierge services. The Company also sells, installs and services hardware for
wired networking solutions and wireless fidelity networking solutions, also
known as Wi-Fi, for high-speed internet access to hotels, resorts, and time
share locations.. The Company installs and creates services that address the
productivity and communications needs of hotel, resort and time share guests The
Company utilizes third party contractors to install such hardware and
software.
  Basis of Consolidation: The
consolidated financial statements include the accounts of the Company and its
wholly owned subsidiary, SuiteSpeed, Inc. All significant intercompany accounts
and transactions have been eliminated in consolidation.
  Reclassification: Certain
amounts in the 2007 financial statements have been reclassified to conform to
the current year presentation.
  Cash and Cash Equivalents: The
Company considers cash in banks, deposits in transit, and highly-liquid debt
instruments purchased with original maturities of three months or less to be
cash and cash equivalents.
  Inventory: Inventory,
principally large order quantity items needed for media and entertainment
installations, is stated at the lower of cost (first-in, first-out) basis or
market. Inventory is recorded net of any reserve for excess and
obsolescence.
  Work in Progress: Work in
progress represents the cost of equipment and third party installation related
to installations which were not completed prior to year-end.
  Property and Equipment: All
items of property and equipment are carried at cost not in excess of their
estimated net realizable value. Normal maintenance and repairs are charged to
earnings, while expenditures for major maintenance and betterments are
capitalized. Gains or losses on disposition are recognized in
operations.
  Depreciation: Depreciation of
property and equipment is computed using straight-line methods over the
estimated economic lives, as follows:
  36
 Leasehold
      improvements
                
                4
      yearsOffice
      furniture and equipment
                
                5
      to 7 yearsComputer
      hardware and software
                
                3
      to 5 years




Stock Option Plans: The
Company follows SFAS No. 123(R), “Share-Based Payments,” which requires us to
provide compensation costs for our stock option plans determined in accordance
with the fair value based method prescribed in SFAS No. 123(R). We estimate the
fair value of each stock option at the grant date by using the Black-Scholes
option-pricing model and provide for expense recognition over the service
period, if any, of the stock option.




Per Share Amounts: The Company
computes net income per share under the provisions of SFAS No. 128, “Earnings
per Share” (SFAS 128). Under the provisions of SFAS 128, basic net income per
share is computed by dividing the Company’s net income for the period by the
weighted-average number of shares of common stock outstanding during the period.
Diluted net income per share excludes potential common shares if the effect is
anti-dilutive. Diluted net income (loss) per share is determined in the same
manner as basic net income per share except that the number of shares is
increased assuming exercise of dilutive stock options and warrants using the
treasury stock method and shares issuable upon conversion of convertible debt
and adding back to net income the related interest expense.




Income Taxes:The Company
accounts for income taxes under SFAS 109, “Accounting for Income Taxes”.
Temporary differences are differences between the tax basis of assets and
liabilities and their reported amounts in the financial statements that will
result in taxable or deductible amounts in future years. Under this method,
deferred tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse. A valuation allowance is recorded when the ultimate
realization of a deferred tax asset is considered to be unlikely.




Use of Estimates: The
preparation of the Company’s consolidated financial statements in conformity
with generally accepted accounting principles requires the Company’s management
to make estimates and assumptions that affect the amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.




Revenue Recognition: Revenue
is recognized when all applicable recognition criteria have been met, which
generally include (a) persuasive evidence of an existing arrangement; (b) fixed
or determinable price; (c) delivery has occurred or service has been rendered;
and (d) collectability of the sales price is reasonably
assured.


37




The
Company derives its revenue from the sale and installation of Wi-Fi wireless
networking solutions, media and entertainment products, and the service,
maintenance, and usage of those products. Sales and installation revenue is
recognized upon delivery, installation and customer acceptance. Revenue from
installations in progress is deferred until the installation is complete.
Service and maintenance contract revenue is recognized ratably over the
contractual period. Usage fees are recognized under specific customer contracts
as services are rendered.




Deferred Revenue: Deferred
revenue is primarily comprised of advanced billings and customer deposits for
installations, service and usage.




Fair Value of Financial
Instruments: SFAS 107, “Disclosures About Fair Value of Financial
Instruments,” requires disclosure of fair value information about financial
instruments. Fair value estimates discussed herein are based upon certain market
assumptions and pertinent information available to management as of December 31,
2008.




The
respective carrying values of certain on-balance-sheet financial instruments
approximate their fair values. These financial instruments include cash and cash
equivalents, accounts receivable, leases receivable, accounts payable, notes
payable and accrued expenses, and convertible debentures. Fair values were
assumed to approximate carrying values for these financial instruments since
they are either short term in nature and their carrying amounts approximate fair
value, or they are receivable or payable on demand, or they bear appropriate
interest rates.




Concentration of Credit Risk:
The Company’s operating cash balances are maintained in financial institutions
and periodically exceed federally insured limits. The Company believes that the
financial strength of these institutions mitigates the underlying risk of loss.
To date, these concentrations of credit risk have not had a significant impact
on the Company’s financial position or results of operations.




Accounts Receivable:Accounts
receivables are uncollateralized customer obligations due under normal trade
terms requiring payment within 30 days from the invoice date. Accounts
receivable are stated at the amount billed to the customer. Interest at a rate
of 18% per annum is billed on the 1st of the
month on delinquent customers. Accounts receivable in excess of 30 days old are
considered delinquent. Outstanding customer invoices are periodically assessed
for collectability.




The
carrying amount of accounts receivable is reduced by a valuation allowance that
reflects the Company’s best estimate of the amounts that may not be collected.
This estimate is based on an assessment of current creditworthiness and payment
history. Our review of the outstanding balances as of December 31, 2008
indicated that a valuation allowance was required. The gross accounts receivable
balance was reduced by $43,782 for doubtful collections. The gross accounts
receivable balance was reduced by $59,840 for doubtful collections in
2007.


38




At
December 31, 2008, one customer accounted for 12% of the accounts receivable
balance. At December 31, 2007 four customers accounted for 38% of the accounts
receivable balance.




Leases Receivable: At December
31, 2008, Roomlinx had three Lease receivables with certain hotel
companies.




Installation
revenue is recognized in full at the completion of the installation and is
offset by the costs related to that installation. At the same time, a lease
receivable is created for the customer at a predetermined rate of interest and
term. The customer makes monthly payments on the note. The principal portion of
the payment is applied to the lease and the interest portion of the payment is
applied to the interest accrual.




The
equipment remains the property of Roomlinx during the term of the lease. At the
end of the lease, title immediately transfers to the customer or the customer is
eligible to purchase the equipment at a bargain rate (usually one
dollar).




The
company has various lease receivables maturing through 2014. Future minimum
lease payments for each of the years through lease maturity are as
follows:


Year
                              
                              Principle
      Payments
                              
                              
                              Interest
      Payments2009
                              
                              $
                              45,452
                              
                              
                              $
                              23,5382010
                              
                              $
                              50,368
                              
                              
                              $
                              19,3332011
                              
                              $
                              55,302
                              
                              
                              $
                              14,3992012
                              
                              $
                              60,719
                              
                              
                              $
                              8,9822013
                              
                              $
                              61,574
                              
                              
                              $
                              3,0342014
                              
                              $
                              743
                              
                              
                              $
                              6$
                              274,160
                              
                              
                              $
                              69,291




Foreign Operations: The
Company operates in the United States of America and in Canada; Canadian
operations are immaterial and are not a segment. As with all types of
international business operations, currency fluctuations, exchange controls,
restrictions on foreign investment, changes to tax regimes, and political action
could impact the Company’s financial condition or results of
operations.




Foreign Currency Translation:
The US Dollar is the functional currency of the Company. Assets and liabilities
denominated in foreign currencies are re-measured into US Dollars and the
resulting gains and (losses) are included in the consolidated statement of
operations as a component of other income (expense).




Advertising Costs: Advertising
costs are expensed as incurred. During 2008 and 2007, advertising costs were
$50,602 and $3,125, respectively.


39




Segments: The Company applies
SFAS No. 131, “Disclosures about Segments of an Enterprise and Related
Information,” and considers its business activities to constitute a single
segment.




Derivative financial
instruments: We do not use derivative instruments to hedge exposures to
cash flow, market, or foreign currency risks.




We review
the terms of convertible debt instruments we issue to determine whether there
are embedded derivative instruments, including the embedded conversion option,
that are required to be bifurcated and accounted for separately as a derivative
financial instrument. In circumstances where the convertible instrument contains
more than one embedded derivative instrument, including the conversion option,
that is required to be bifurcated, the bifurcated derivative instruments are
accounted for as a single, compound derivative instrument. Also, in connection
with the sale of convertible debt, we may issue freestanding options or warrants
that may, depending on their terms, be accounted for as derivative instrument
liabilities, rather than as equity. We may also issue options or warrants to
non-employees in connection with consulting or other services they
provide.




When the
ability to physical or net-share settle the conversion option or the exercise of
the freestanding options or warrants is deemed to be not within the control of
the company or if the conversion option, options or warrants are not indexed
only to the underlying common stock, the embedded conversion option or
freestanding options or warrants may be required to be accounted for as a
derivative financial instrument liability.




Derivative
financial instruments are initially measured at their fair value. For derivative
financial instruments that are accounted for as liabilities, the derivative
instrument is initially recorded at its fair value and is then re-valued at each
reporting date, with changes in the fair value reported as charges or credits to
income. For option-based derivative financial instruments, we use the
Cox-Ross-Rubinstein binomial model to value the derivative instruments. To the
extent that the initial fair values of the freestanding and/or bifurcated
derivative instrument liabilities exceed the total proceeds received, an
immediate charge to income is recognized, in order to initially record the
derivative instrument liabilities at their fair value.




The
discount from the face value of the convertible debt instruments resulting from
allocating some or all of the proceeds to derivative instruments, together with
the stated interest on the instrument, is amortized over the life of the
instrument through periodic charges to income, using the effective interest
method.




Certain
instruments, including convertible debt and freestanding options or warrants
issued, may be subject to registration rights agreements, which may impose
penalties for failure to register the underlying common stock by a defined date.
Any such penalties are accounted for in accordance with FAS 5 and are accrued
when they are deemed probable. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as
equity, is re-assessed periodically, including at the end of each reporting
period. If re-classification is required, the fair value of the derivative
instrument, as of the determination date, is re-classified. Any previous charges
or credits to income for changes in the fair value of the derivative instrument
are not reversed. Derivative instrument liabilities are classified in the
balance sheet as current or non-current based on whether or not net-cash
settlement of the derivative instrument could be required within 12 months of
the balance sheet date.


40




Recent Pronouncements: Various
standard setting bodies have issued accounting pronouncements that have not yet
been adopted by the Company. A brief discussion of the pronouncement is
presented in the following paragraphs. The Company is currently evaluating the
potential future impact on its financial statements from the implementation of
these new standards.




In
February 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff
Position (FSP) FSP No. 157-2, “Effective Date of FASB Statement No. 157” (FSP
No. 157-2). FSP No. 157-2 defers the effective date of SFAS No. 157 to fiscal
years beginning after December 15, 2008, and interim periods within those fiscal
years, for all non-financial assets and liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually). Examples of items within the scope of FSP No. 157-2
are non-financial assets and non-financial liabilities initially measured at
fair value in a business combination (but not measured at fair value in
subsequent periods), and long-lived assets, such as property, plant and
equipment and intangible assets measured at fair value for an impairment
assessment under SFAS No. 144, “Accounting for the Impairment or Disposal of
Long-Lived Assets.”




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
Combinations (“SFAS 141R”). This statement replaces SFAS 141, Business
Combinations. The statement provides guidance for how the acquirer recognizes
and measures the identifiable assets acquired, liabilities assumed and any
non-controlling interest in the acquiree. SFAS 141R provides for how the
acquirer recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase. The statement determines what
information to disclose to enable users to be able to evaluate the nature and
financial effects of the business combination. The provisions of SFAS 141R are
effective as of January 1, 2009 and do not allow early adoption.




In
December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in
Consolidated Financial Statements (SFAS 160), which becomes effective on January
1, 2009. This standard establishes accounting and reporting standards for
ownership interests in subsidiaries held by parties other than the parent, the
amount of consolidated net income attributable to the parent and to the
non-controlling interest, changes in a parent’s ownership interest and the
valuation of retained non-controlling equity investments when a subsidiary is
deconsolidated. The Statement also establishes reporting requirements that
provide sufficient disclosures to clearly identify and distinguish between the
interests of the parent and the interests of the non-controlling
owners.


41




In March
2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities – an Amendment of FASB Statement No. 133 (SFAS 161), which
becomes effective on November 15, 2008. This standard changes the disclosure
requirements for derivative instruments and hedging activities. Entities are
required to provide enhanced disclosures about (a) how and why an entity uses
derivative instruments, (b) how derivative instruments and related hedged items
are accounted for under SFAS 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows.




In April
2008, the FASB issued FASB Staff Position (FSP) FSP 142-3, “Determination of the
Useful Life of Intangible Assets.” This FSP amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under FASB Statement No. 142,
“Goodwill and Other Intangible Assets.” The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under
Statement 142 and the period of expected cash flows used to measure the fair
value of the asset under FASB Statement No. 141 (Revised 2007), “Business
Combinations,” and other U.S. generally accepted accounting principles (GAAP).
This FSP is effective for financial statements issued for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal
years.




In May
2008, the FASB issued FASB Staff Position (FSP) No. APB 14-1 “Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)” (FSP APB 14-1). FSP APB 14-1 requires the
issuer of certain convertible debt instruments that may be settled in cash (or
other assets) on conversion to separately account for the liability (debt) and
equity (conversion option) components of the instrument in a manner that
reflects the issuer’s non-convertible debt borrowing rate. FSP APB 14-1 is
effective for fiscal years beginning after December 15, 2008 on a retroactive
basis and will be adopted by the Company in the first quarter of fiscal
2009.




In May
2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles (SFAS 162), which becomes effective upon approval by the
SEC. This standard sets forth the sources of accounting principles and provides
entities with a framework for selecting the principles used in the preparation
of financial statements that are presented in conformity with GAAP. It is not
expected to change any of our current accounting principles or
practices.




In May
2008, the FASB issued FAS 163 (“FAS 163”), “Accounting for Financial Guarantee
Insurance Contracts – an interpretation of FASB Statement No. 60.” This
statement interprets Statement 60 and amends existing accounting pronouncements
to clarify their application to the financial guarantee insurance contracts
included within the scope of this Statement.


42




2.    
Property and Equipment




At
December 31, 2008, property and equipment consisted of the
following:


Computer
      equipment and software
                  
                  $
                  444,783Leasehold
      improvements, office furniture and equipment
                  
                  
                  39,017Subtotal
                  
                  
                  483,800Accumulated
      depreciation
                  
                  
                  (359,914
                  )Total
                  
                  $
                  123,886




At
December 31, 2007, property and equipment consisted of the
following:


Computer
      equipment and software
                
                $
                340,470Leasehold
      improvements, office furniture and equipment
                
                
                38,817Subtotal
                
                
                379,287Accumulated
      depreciation
                
                
                (329,465
                )Total
                
                $
                49,822




Depreciation
expense for the years ended December 31, 2008 and 2007 was $30,449 and $11,771,
respectively.




3.    
Officer and Stockholder Notes Payable




From
November 2004 through January 2005, the Company received proceeds of $320,000 in
exchange for 10% promissory notes maturing six months from the date of issuance.
During 2005, the Company repaid $40,000 of the notes. The Company was not able
to retire the remaining balance of the promissory notes as scheduled and was in
default of the repayment terms. During 2007, interest and penalties of $104,553
and principal of $137,397 were forgiven, and the notes were settled for
$142,603, of which $12,500 was paid on September 4, 2008.




On August
11, 2006, the Company borrowed $7,500 from Peter Bordes. Principal and interest
at 10% were due upon receipt of funding. The note was repaid in June,
2007.




4.    
Notes Payable




As part
of the SuiteSpeed merger, Roomlinx assumed a $300,000 promissory note payable to
the First National Bank of Colorado; the note bore interest at the rate of the
prime plus 1% and was payable in monthly principal installments of $10,000 with
the entire remaining balance due on or before September 1, 2006. The due date of
the note was subsequently extended. The balance of the note, $140,000, was paid
in full on June 12, 2007.


43




During
2005, the Company borrowed $75,000 from an individual. The borrowing bore
interest at 10% and was due on demand. In June of 2007, interest and penalties
of $12,228 were forgiven, and the note was settled for $37,500.




On
December 28, 2006 the Company issued three bridge notes in the principal amounts
of $50,000 each, and 3 warrants to purchase 1.3 million shares of common stock
to each lender with an exercise price of $0.03 per share. On June 10, 2007, two
of the three bridge notes were paid back in full, and one of them converted into
the convertible debentures dated June 11, 2007.




5.    
Convertible Debentures




On June
11, 2007 and June 13, 2007, the Company sold an aggregate of $2,350,000
principal amount of Convertible Debentures due May 2012 (the “Convertible
Debentures”) to a number of investors pursuant to a Securities Purchase
Agreement (the “June Purchase Agreement”). $2,300,000 of the debentures were
purchased with cash and $50,000 was converted from a note payable.




The
Convertible Debentures are initially convertible into Series B Preferred Stock,
which Series B Preferred Stock will not be convertible into Common Stock until
such time as the Company has sufficient number of shares of Common Stock
authorized to permit the conversion of the Convertible Debentures into Common
Stock, at which time the Convertible Debentures will automatically be
convertible into Common Stock and not Series B Preferred Stock. The conversion
price into shares of Common Stock of the Convertible Debentures is $0.02 per
share, subject to certain standard anti-dilution adjustments. In the event that
the Convertible Debentures are not repaid when due, the conversion price will be
reduced to $0.01 per share. Because this potential reduction in the conversion
price effectively indexes the return to the investors to a factor other than the
underlying value of our common stock, the embedded conversion option has been
bifurcated and accounted for separately as a derivative instrument
liability.




Pursuant
to the June Purchase Agreement, each purchaser also received an option,
exercisable for a six month period from the Closing under the Purchase
Agreement, to purchase additional Convertible Debentures (“Additional
Convertible Debentures”) in an amount up to 50% of the original amount of
Convertible Debentures purchased. This option has also been accounted for as a
derivative instrument liability. All such options have expired
unexercised.




The
Convertible Debentures bear interest at an annual rate of 6%, payable quarterly,
either in cash or, at the Company’s election, in shares of our capital stock at
two and one-half cents ($.025) per share of common stock or a 10% discounted
stock price from the average market price for the 20 business days preceding the
interest payment date, whichever is greater. All interest to date has been
settled in shares of common stock.


44




Pursuant
to the terms of the June Purchase Agreement, we are obligated to register the
shares of Common Stock issuable on conversion of the Convertible Debentures
within one year of the Closing under the June Purchase Agreement or as soon as
our Common Stock is listed on the Over-the-Counter Bulletin Board, whichever is
sooner. The June Purchase Agreement does not provide for any specific penalties
for not complying with this requirement, which has not yet been met. At December
31, 2008, the Company has not accrued any penalties that may ultimately be paid,
as it does not believe any penalties are probable as of that date.




On March
3, 2005, the Company completed a privately placed bridge financing of
convertible debentures (“Debentures”) and warrants. The Debentures were issued
in the aggregate principal amount of $1,100,000 to 17 investors; bore interest
at 11% per annum; and were due on the earlier of September 2, 2005, or the date
that the Company completes a subsequent financing with gross cash proceeds of at
least $1,000,000. The Company was unable to retire the Debentures as scheduled
on September 2, 2005 and was in default of the repayment terms. In June 2007,
interest and penalties of $444,964 were forgiven and the debentures were settled
for $550,000.




6.    
Derivative Financial Instruments




As
discussed above, the embedded conversion option in our Convertible Debentures
and options issued to the investors to acquire additional debentures have been
accounted for as derivative instrument liabilities.




We use
the Cox-Ross-Rubinstein binomial model to value warrants, and the embedded
conversion option components of any bifurcated embedded derivative instruments
that are recorded as derivative liabilities. See Note 5 related to embedded
derivative instruments that have been bifurcated from our Convertible Debentures
and the options to acquire additional Convertible Debentures held by the
investors. The options and conversion options can be exercised by the holders at
any time. The options held by the investors to acquire additional Convertible
Debentures expired in December 2007.




In
valuing the embedded conversion option components of the bifurcated embedded
derivative instruments and the options, at the time they were issued and at
December 31, 2007, we used the market price of our common stock on the date of
valuation, an expected dividend yield of 0%, an estimated volatility of 250%
based on a review of our historical volatility and the remaining period to the
expiration date of the option or repayment date of the convertible debt
instrument. The risk-free rate of return used was 4.23%, based on constant
maturity rates published by the U.S. Federal Reserve, applicable to the
remaining life of the options.




In
valuing the embedded conversion option components of the bifurcated embedded
derivative instruments and the options, at the time they were issued and at
December 31, 2008, we used the market price of our common stock on the date of
valuation, an expected dividend yield of 0%, an estimated volatility of 250%
based on a review of our historical volatility and the remaining period to the
expiration date of the option or repayment date of the convertible debt
instrument. The risk-free rate of return used was 1.11%, based on constant
maturity rates published by the U.S. Federal Reserve, applicable to the
remaining life of the options.


45




At
December 31, 2008, the following derivative liabilities were
outstanding:


Issue
      Date
                                
                                Expiry
      Date
                                
                                Instrument
                                
                                Conversion/
                                  Exercise
      Price
                                  Per
      Share
                                
                                
                                Value
      –
                                  Issue
      Date
                                
                                
                                Value
      -
                                  December
                                  31,
      2008June
      2007
                                
                                May
      2012
                                
                                $2,350,000Convertible
      Debentures
                                
                                $
                                0.02
                                
                                
                                $
                                2,338,899
                                
                                
                                $
                                1,953,915June
      2007
                                
                                
                                
                                Convertible
      DebenturesCarrying
      Amount
                                
                                
                                
                                
                                
                                
                                —
                                
                                
                                
                                16,895June
      2007
                                
                                December
      2007
                                
                                Option
      to acquire$1,175,000Convertible
      Debentures
                                
                                $
                                0.03
                                
                                
                                
                                431,264
                                
                                
                                
                                —Total
      derivative financial instruments
                                
                                
                                
                                
                                
                                $
                                2,770,163
                                
                                
                                $
                                1,970,810




7.    
Commitments and Contingencies




Operating Leases:The Company
leases its office facilities under various operating lease agreements having
expiration dates through 2011. Future minimum lease payments for each of the
years through lease expiration are as follows:


Year2009
                  
                  $
                  51,1532010
                  
                  
                  35,7552011
                  
                  
                  16,366$
                  103,274




Capital Lease Obligations:
Several years ago, the Company entered into a series of capital lease
transactions with a third party lessor in Canada. The Company ceased making
payments to the lessor and abandoned the assets under capital leases. The lessor
has not demanded that the Company make additional payments and the Company
believes that it has meritorious defenses against any claims by the lessor. The
Company has attempted to negotiate a settlement with the lessor but has been
unable to obtain an unconditional release.




For
accounting purposes, the Company determined that it should continue to report
the capital lease obligation as a liability until it either obtains an
unconditional release or the statute of limitations bars collection actions
against the Company. Accordingly due to statute of limitations, the Company
recorded income from discharge of indebtedness in the amount of $418,418 during
2007.


46




8.    
Income Taxes




At
December 31, 2008, the Company has tax loss carry forwards approximating
$6,300,000 that expire at various dates through 2028. The principal difference
between the net loss for book purposes and the net loss for income tax purposes
relates to expenses that are not deductible for tax purposes, including
reorganization costs, impairment of goodwill, stock issued for services and
amortization of debt discount.




The tax
effects of temporary differences that give rise to significant portions of the
deferred tax assets and deferred tax liabilities at December 31, 2008, are
presented below:


Deferred
      tax assets:Net
      operating loss carry forward
                  
                  $
                  2,345,104Less:
      valuation allowance
                  
                  
                  (2,345,104
                  )Net
      deferred tax asset
                  
                  $
                  —




At this
time, the Company is unable to determine if it will be able to benefit from its
deferred tax asset. There are limitations on the utilization of net operating
loss carry forwards, including a requirement that losses be offset against
future taxable income, if any. In addition, there are limitations imposed by
certain transactions which are deemed to be ownership changes. Accordingly, a
valuation allowance has been established for the entire deferred tax asset. The
increase in the valuation allowance was approximately $540,000 during
2008.




A
reconciliation of the tax provision for 2008 and 2007 at statutory rates is
comprised of the following components:


2008
                
                2007Tax
      at statutory rates
                
                $
                (635,814
                )
                $
                288,578Valuation
      allowance
                
                
                635,814
                
                
                (288,578
                )Tax
      provision
                
                $
                —
                
                $
                —


47




9.    
Stockholders’ (Deficit)




Preferred Stock: The Company
has authorized 5,000,000 preferred shares with a $0.20 par value. There are
three designations of the class of preferred shares: Class A, Series B, and
Series C Preferred Stock. The Class A preferred stock is entitled to receive
cumulative annual dividends at the rate of 9%, payable in either cash or
additional shares of Class A Preferred Stock, at the option of the Company. The
Series B Preferred Stock is not entitled to any dividends. The Series C stock
accrues dividends at an annual rate of 6% per year, payable quarterly, either in
cash or, at the Company’s election, shares of common stock through March 5,
2009. As of December 31, 2008, there were 720,000 shares of Class A Preferred
Stock, no shares of Series B Preferred Stock, and 1,000 shares of Series C
Preferred Stock issued and outstanding. Class A dividends accrued and unpaid as
of December 31, 2008, were $133,320; these dividends have not been declared by
the board so they are not included in accrued expenses. Series C dividends
accrued and unpaid as of December 31, 2008, were $62,500 and are included in
accrued expenses.




On July
28, 2008, the Company’s board of directors approved the designation of 1,400
shares of Series C Preferred Stock. The Series C preferred stock accrues
dividends at an annual rate of 6% per year, payable quarterly, either in cash
or, at the Company’s election, shares of common stock through March 5, 2009.
There are no redemption rights associated with the Series C Stock. Each holder
of Series C stock is entitled to voting rights on an “as converted” to common
stock basis together with the holders of common stock.




On July
31, 2008 we entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with an investor group, and certain affiliated trusts (collectively,
the “Investors”), pursuant to which we simultaneously sold and issued to the
Investors an aggregate of $2,500,000 of Series C Preferred Stock (“Series C
Stock”). In connection with the Purchase Agreement, we also issued 40,000,000
warrants to the Investors for the purchase of additional shares of Series C
Stock or Common Stock and entered into a Registration Rights Agreement with the
Investors.




Each
share of Series C Stock is convertible into such number of shares of Common
Stock as is determined by dividing $2,500 by the initial conversion price of
$0.025 per share (or 100,000 shares of Common Stock for each share of Series C
Stock converted). As of March 5, 2009 the Company has a sufficient number of
shares of Common Stock authorized to permit the conversion of all of the Series
C Stock into Common Stock, therefore the Series C Stock will automatically
convert into Common Stock.




In
connection with the Purchase Agreement, we entered into a Registration Rights
Agreement. Pursuant to the Registration Rights Agreement, the Company is
obligated to register for resale under the Securities Act the shares of Common
Stock issuable upon conversion of the Series C Stock and exercise of the
Warrants beginning by April 30, 2009.




Common Stock: As of December
31, 2008 the Company has authorized 245,000,000 shares of $0.001 par value
common stock. As of December 31, 2008, there were 158,483,488 shares of common
stock issued and outstanding. As of March 5, 2009 the company amended and
restated the Company’s Articles of Incorporation to increase the number of
authorized shares of the Company’s Common Stock from 245,000,000 to
1,500,000,000.


48




On
January 1, 2008, the Board approved issuance of 1,437,048 shares of our common
stock, valued at $0.025 per share for accrued interest of $35,926 for the fourth
quarter of 2007, pursuant to the clauses outlined in the convertible debenture
agreements of June 11, 2007.




On April
1, 2008, the Board approved issuance of 1,386,890 shares of our common stock,
valued at $0.025 per share for accrued interest of $34,672 for the first quarter
of 2008, pursuant to the clauses outlined in the convertible debenture
agreements of June 11, 2007.




On July
1, 2008, the Board approved issuance of 1,402,302 shares of our common stock,
valued at $0.025 per share for accrued interest of $35,057 for the period April
1 through June 30, 2008, pursuant to the clauses outlined in the convertible
debenture agreements of June 11, 2007.




On July
15, 2008 Aaron Dobrinsky exercised 4,000,000 options at $0.01 per share on a
cashless basis resulting in the net issuance of 2,571,429 shares of common
stock.




On August
19, 2008, the Company issued 1,200,000 shares as Board of Director compensation
for the year ended December 31, 2007. 800,000 of the shares were issued to Peter
Bordes and 400,000 of the shares were issued to Herbert Hunt. The shares were
valued at $0.025 per share for a fair market value of $30,000. This compensation
was accrued for in 2007.




On
October 1, 2008, the Board approved issuance of 1,417,707 shares of our common
stock, valued at $0.025 per share for accrued interest of $35,443 for the period
July 1 through September 30, 2008, pursuant to the clauses outlined in the
convertible debenture agreements of June 11, 2007.




On August
6, 2007 the Company issued 7,500,000 shares of its common stock, with
restrictive legends, to consultants and/or advisors as compensation for services
rendered to the Company and settlement of payables. The shares were valued at
$0.03 per share based on the closing price of $0.03 per share for a fair market
value of $225,000.




On
October 1, 2007 the Board approved issuance of 1,699,726 shares of our common
stock, valued at $0.025 per share for accrued interest of $33,995 for the period
June 11 through September 30, 2007, pursuant to the clauses outlined in the
convertible debenture agreements of June 11, 2007.




Warrants: On April 14, 2008,
we issued to Creative Hospitality Associates (“CHA”) a Warrant pursuant to a
sales agent Agreement with CHA (the “Agreement”).


49




The
Warrant is initially exercisable for Series B Preferred Stock. At such time as
we have a sufficient number of shares of Common Stock authorized to permit the
exercise of the Warrant for Common Stock (the “Triggering Event”), As of March
5, 2009 the Warrant will automatically be exercisable for Common Stock and not
Series B Preferred Stock. The maximum number of shares of Common Stock for which
the Warrant is ultimately exercisable for is 15,000,000 and the ultimate
exercise price per share of Common Stock for which the Warrant is exercisable is
$0.02 per share, each of which is subject to adjustment and the conditions
contained in the Warrant. The Warrant becomes ultimately exercisable for such
15,000,000 shares of Common Stock pursuant to a vesting schedule as set forth in
the Warrant that provides that the Warrant becomes ultimately exercisable for
500,000 shares of Common Stock with each 1,000 rooms in a hotel or other
property that CHA or its affiliate introduces to us and in which our Media and
Entertainment System is installed.




On July
31, 2008, Pursuant to the Purchase Agreement above, the Company issued (i)
Series C-1 Warrants to purchase an aggregate of 200 shares of Series C Stock, at
an initial exercise price of $4,000 per share of Series C Stock, and (ii) Series
C-2 Warrants to purchase an aggregate of 200 shares of Series C Stock, at an
initial exercise price of $6,000 per share of Series C Stock. The Warrants are
immediately exercisable and expire on the third anniversary of their date of
issuance. At such time as the Company has a sufficient number of shares of
Common Stock authorized to permit the conversion of all Series C Stock into
Common Stock, As of March 5, 2009 each Warrant will no longer be exercisable for
shares of Series C Stock but instead will be exercisable for the number of
shares of Common Stock into which the Series C Stock that the Warrant could have
been exercised for prior thereto would have been convertible into, at an initial
exercise price of $.04 per share of Common Stock under the Series C-1 Warrants
and at initial exercise price of $.06 per share of Common Stock under the Series
C-2 Warrants.




On June
11, 2007, the Company issued warrants to purchase 2,962,500 shares of common
stock for services rendered in connection with convertible debentures. These
warrants have an exercise price of $0.02 per share, are immediately exercisable,
and expire five years from the date of issue.




On June
11, 2007, the Company issued warrants to purchase 7,000,000 shares of common
stock for services rendered in connection with convertible debentures. These
warrants have an exercise price of $0.03 per share, are immediately exercisable,
and expire five years from the date of issue.


50


On
December 31, 2008, the Company had the following outstanding
warrants:




Exercise
                                Price
                              
                              Number
      of Shares
                              
                              Remaining
                                Contractual
                                Life
      (in
                                years)
                              
                              Exercise
      Price
      times Number
      of Shares
                              
                              Weighted
                                Average
                                Exercise
                                Price
                              
                              Aggregate
                                Intrinsic
                                Value$
                              0.020
                              
                              
                              15,000,000
                              
                              4.25
                              
                              
                              $
                              300,000
                              
                              
                              
                              
                              $
                              —$
                              0.020
                              
                              
                              2,962,500
                              
                              3.50
                              
                              
                              
                              59,250
                              
                              
                              
                              
                              
                              —$
                              0.030
                              
                              
                              7,000,000
                              
                              3.50
                              
                              
                              
                              210,000
                              
                              
                              
                              
                              
                              —$
                              0.030
                              
                              
                              3,900,000
                              
                              3.00
                              
                              
                              
                              117,000
                              
                              
                              
                              
                              
                              —$
                              0.040
                              
                              
                              20,000,000
                              
                              2.50
                              
                              
                              
                              800,000
                              
                              
                              
                              
                              
                              —$
                              0.060
                              
                              
                              20,000,000
                              
                              2.50
                              
                              
                              
                              1,200,000
                              
                              
                              
                              
                              
                              —$
                              0.075
                              
                              
                              10,963,333
                              
                              1.25
                              
                              
                              
                              822,250
                              
                              
                              
                              
                              
                              —79,825,833
                              
                              
                              
                              
                              $
                              3,508,500
                              
                              $
                              0.044
                              
                              $
                              —





Warrants
                
                Number
      of Shares
                
                
                Weighted
                  Average
                  Exercise
      Price
                
                
                Remaining
                  Contractual
                  Life
      (in
                  years)
                
                
                Aggregate
                  Intrinsic
                  ValueOutstanding
      at January 1, 2007
                
                
                22,880,000
                
                
                $
                0.093Issued
                
                
                9,962,500
                
                
                
                0.027Exercised
                
                
                —
                
                
                
                —Expired
      / Cancelled
                
                
                (8,016,667
                )
                
                
                0.148Outstanding
      at December 31, 2007
                
                
                24,825,833
                
                
                $
                0.049Issued
                
                
                55,000,000
                
                
                
                0.042Exercised
                
                
                —
                
                
                
                —Expired
      / Cancelled
                
                
                —
                
                
                
                —Outstanding
      at December 31, 2008
                
                
                79,825,833
                
                
                $
                0.044
                
                
                
                2.87
                
                
                $
                —Exercisable
      at December 31, 2008
                
                
                64,825,833
                
                
                $
                0.050
                
                
                
                2.75
                
                
                $
                —




The
Company recorded compensation expense of $538,455 in connection with the
warrants granted during the year ended December 31, 2008.




The fair
value of the warrants granted during the quarter ended September 30, 2008, was
estimated on the date of grant utilizing the Black-Scholes option pricing model
with the following weighted average assumptions for grants: expected life of
warrants of 3 years, expected volatility of 140%, risk-free interest rate of
2.8% and no dividend yield. The weighted average fair value at the date of grant
for warrants granted during the quarter ended September 30, 2008, approximated
$0.013 per warrant.




The fair
value of the warrants granted during the quarter ended June 30, 2008, was
estimated on the date of grant utilizing the Black-Scholes option pricing model
with the following weighted average assumptions for grants: expected life of
warrants of 5 years, expected volatility of 144%, risk-free interest rate of 4%
and no dividend yield. The weighted average fair value at the date of grant for
warrants granted during the quarter ended June 30, 2008, approximated $0.018 per
warrant.


51




The
Company recorded compensation expense of $220,799 in connection with warrants
granted during the year ended December 31, 2007. The fair value of the warrant
grants was estimated on the date of grant utilizing the Black-Scholes option
pricing model with the following weighted average assumptions for grants during
the year ended December 31, 2007: expected life of warrants of 5 years, expected
volatility of 157%, risk-free interest rate of 4% and no dividend yield. The
weighted average fair value at the date of grant for warrants granted during the
year ended December 31, 2007, approximated $.022 per warrant.




Options: The Company adopted a
long term incentive stock option plan (the “Stock Option Plan”). The Stock
Option Plan provides for the issuance of 25,000,000 shares of common stock upon
exercise of options which may be granted pursuant to the Stock Option Plan. As
of December 31, 2008, options to purchase 20,150,000 shares were outstanding.
The options vest as determined by the Board of Directors and are exercisable for
a period of no more than 10 years. On of March 5, 2009 the Company approved an
amendment to the Company’s Long Term Incentive Plan to increase the number of
shares of Common Stock available for issuance there under from 25,000,000 to
120,000,000.




On May
15, 2008, the Board of Directors approved the grant to employees and
consultants, under the Registrant’s Long-Term Incentive Plan, of an aggregate of
100,000 Incentive Stock Options and an aggregate of 100,000 Non-Qualified Stock
Options. Such options were issued at an exercise price of $0.017 per share, vest
one-third (1/3) on each of the first three anniversaries of the employment date,
and expire 7 years from the date of grant.




On July
15, 2008 Aaron Dobrinsky exercised 4,000,000 options at $0.01 per share on a
cashless basis resulting in the net issuance of 2,571,429 shares of common
stock.




On July
21, 2008, the Board of Directors approved the grant of an aggregate of 400,000
Incentive Stock Options and an aggregate of 600,000 Non-Qualified Stock Options.
Such options were issued at an exercise price of $0.02 per share, vest one-third
(1/3) on each of the first three anniversaries of the employment date, and
expire 7 years from the date of grant.




On August
19, 2008, the Board of Directors approved the grant of an aggregate of 300,000
Incentive Stock Options. Such options were issued at an exercise price of $0.012
per share, vest one-third (1/3) on each of the first three anniversaries of the
grant date, and expire 7 years form the date of grant.




On August
19, 2008, the Company granted an aggregate of 500,000 Non-Qualified Stock
Options (“NQOs”). The NQOs were granted to Christopher Blisard with respect to
his service as a member of the Board of Directors during 2008 and 2009 and vest
on December 31, 2009. The options were issued at an exercise price of $0.012 per
share, representing the closing price of the Company’s common stock on such
date, and they expire 7 years from the date of grant.


52




On
October 31, 2008, the Registrant’s Board of Directors approved the grant of an
aggregate of 200,000 Incentive Stock Options and an aggregate of 100,000
Non-Qualified Stock Options. Such options were issued at an exercise price of
$0.017 per share, vest one-third (1/3) on each of the first three anniversaries
of the employment date and expire 7 years from the date of grant.




In May
2007, the Company granted under our Long-Term Incentive Plan, an aggregate of
2,000,000 Non-Qualified Stock Options (“NQOs”). 500,000 of the NQOs were granted
to each of Woody McGee, Peter Bordes and Herbert Hunt with respect to their
service as members of the Board of Directors during 2007 the options vested on
December 31, 2007 and expire 7 years from the date of grant. Woody McGee did not
complete the year of service and his 500,000 options expired upon his
resignation date of October 12, 2007. 500,000 of the NQOs were granted to John
McClure with respect to his service as a consultant for 2007 and vested on
December 31, 2007. John McClure did not complete his year of service and his
500,000 options expired upon his termination date of August 31, 2007. All of
these options were issued at an exercise price of $0.025 per share, representing
the closing price of the Company’s common stock on such date.




In
November 2007, the Company granted under our Long-Term Incentive Plan, an
aggregate of 1,450,000 Incentive Stock Options (“ISOs”) to employees and an
aggregate of 800,000 Non-Qualified Stock Options (“NQOs”) to consultants. The
options were issued at an exercise price of $0.015 per share, representing the
closing price of the company’s stock on such date, vest over three years with
one-third vesting on the first anniversary of employment with the Company and an
additional one-third vesting on each of the following two anniversaries thereof,
and they expire 7 years from the date of grant.




On
December 31, 2008, the Company had the following outstanding
Options:




Exercise
      Price
                
                
                Number
      of Shares
                
                Remaining
                  Contractual
                  Life
      (in
                  years)
                
                
                Exercise
                  Price
      times
                  Number
      of
                  Shares
                
                
                Weighted
                  Average
                  Exercise
      Price
                
                
                Aggregate
      Intrinsic Value$
                0.026
                
                
                1,000,000
                
                3.61
                
                
                $
                26,000
                
                
                
                
                $
                —$
                0.100
                
                
                500,000
                
                1.07
                
                
                
                50,000
                
                
                
                
                
                —$
                0.020
                
                
                13,500,000
                
                4.89
                
                
                
                270,000
                
                
                
                
                
                —$
                0.025
                
                
                1,000,000
                
                5.34
                
                
                
                25,000
                
                
                
                
                
                —$
                0.015
                
                
                1,950,000
                
                5.86
                
                
                
                29,250
                
                
                
                
                
                3,900$
                0.017
                
                
                100,000
                
                6.37
                
                
                
                1,700
                
                
                
                
                
                —$
                0.020
                
                
                1,000,000
                
                6.56
                
                
                
                20,000
                
                
                
                
                
                —$
                0.012
                
                
                800,000
                
                6.64
                
                
                
                9,600
                
                
                
                
                
                4,000$
                0.017
                
                
                300,000
                
                6.84
                
                
                
                5,100
                
                
                
                
                
                —20,150,000
                
                
                
                
                $
                436,650
                
                $
                0.022
                
                $
                7,900


53





Options
                
                Number
      of Shares
                
                
                Weighted
                  Average
                  Exercise
      Price
                
                
                Weighted
                  Average
                  Remaining
                  Contractual
                  Life
      (in years)
                
                
                Aggregate
                  Intrinsic
                  ValueOutstanding
      at January 1, 2007
                
                
                24,400,000
                
                
                $
                0.025Granted
                
                
                4,250,000
                
                
                
                0.020Exercised
                
                
                —
                
                
                
                —Expired
      / Cancelled
                
                
                (4,900,000
                )
                
                
                0.024Outstanding
      at December 31, 2007
                
                
                23,750,000
                
                
                $
                0.022Granted
                
                
                2,300,000
                
                
                
                0.017Exercised
                
                
                (4,000,000
                )
                
                
                0.010Expired
      / Cancelled
                
                
                (1,900,000
                )
                
                
                0.040Outstanding
      at December 31, 2008
                
                
                20,150,000
                
                
                $
                0.022
                
                
                
                4.74
                
                
                $
                7,900Vested
      at December 31, 2008
                
                
                16,644,166
                
                
                $
                0.023
                
                
                
                5.04
                
                
                $
                —Exercisable
      at December 31, 2008
                
                
                16,644,166
                
                
                $
                0.023
                
                
                
                5.04
                
                
                $
                —




The
Company recorded deferred compensation expense of $4,769 in connection with
options granted during the quarter ended December 31, 2008. The fair value of
the option grants was estimated on the date of grant utilizing the Black-Scholes
option pricing model with the following weighted average assumptions for grants:
expected life of options of 7 years, expected volatility of 139%, risk-free
interest rate of 0.5% and no dividend yield. The weighted average fair value at
the date of grant for options granted during the quarter ended December 31,
2008, averaged $0.016 per option.




The
Company recorded deferred compensation expense of $28,025 in connection with
options granted during the quarter ended September 30, 2008. The fair value of
the option grants was estimated on the date of grant utilizing the Black-Scholes
option pricing model with the following weighted average assumptions for grants:
expected life of options of 7 years, expected volatility of 142%, risk-free
interest rate of 4% and no dividend yield. The weighted average fair value at
the date of grant for options granted during the quarter ended September 30,
2008, averaged $0.016 per option.




The
Company recorded deferred compensation expense of $3,230 in connection with
options granted during the quarter ended June 30, 2008. The fair value of the
option grants was estimated on the date of grant utilizing the Black-Scholes
option pricing model with the following weighted average assumptions for grants:
expected life of options of 7 years, expected volatility of 144%, risk-free
interest rate of 4% and no dividend yield. The weighted average fair value at
the date of grant for options granted during the quarter ended June 30, 2008,
approximated $0.016 per option.


54




The
Company recorded compensation expense of $69,148 in connection with options
granted during the year ended December 31, 2007. $53,201 was recorded as
deferred compensation to be expensed in future periods. The fair value of the
option grants was estimated on the date of grant utilizing the Black-Scholes
option pricing model with the following weighted average assumptions for grants
during the year ended December 31, 2007: expected life of options of 7 years,
expected volatility of 148%, risk-free interest rate of 4% and no dividend
yield. The weighted average fair value at the date of grant for options granted
during the year ended December 31, 2007, approximated $0.016 per
option.




10.    
Subsequent Events




On
January 2, 2009, the Board approved and issued 1,417,707 shares of our common
stock, as interest for the fourth quarter of 2008, pursuant to the clauses
outlined in the convertible debenture agreements of June 11, 2007.




On
February 23, 2009, the Company’s Board of Directors approved the grant of an
aggregate of 350,000 Incentive Stock Options and an aggregate of 200,000
Non-Qualified Stock Options. Such options were issued at an exercise price of
$0.01 per share and vest one-third (1/3) on each of the first three
anniversaries of the grant date.




On
February 23, 2009, the Registrant’s Board of Directors approved the grant of an
aggregate of 1,200,000 Non-Qualified Stock Options. Such options were issued at
an exercise price of $0.01 per share and vest in 12 equal installments over 12
months.




On March
5, 2009, the stockholders approved an amendment to the Company’s Long Term
Incentive Plan to increase the number of shares of Common Stock available for
issuance there under from 25,000,000 to 120,000,000 and an amendment and
restatement of the Company’s Articles of Incorporation to increase the number of
authorized shares of the Company’s Common Stock from 245,000,000 to
1,500,000,000.




ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.




There
have been no changes in our accountants during the past fiscal year, and we have
not had any disagreements with our accountants for the period June 13, 2006
through December 31, 2008.




Effective
June 13, 2006, we engaged Stark Winter Schenkein & Co., LLP, Denver,
Colorado (“SWS”), as our principal independent accountants. Neither we (nor
anyone on our behalf) consulted SWS regarding the application of accounting
principles to a specific completed or contemplated transaction, or the type of
audit opinion that might be rendered on our financial statements prior to their
agreement.




ITEM
9A. CONTROLS AND PROCEDURES
  (a)
Management’s Evaluation of Disclosure Controls and Procedures
  As of the
end of the period covered by this Annual Report, we carried out an evaluation,
under the supervision and with the participation of our Chief Executive Officer
and Chief Financial Officer/Principal Accounting Officer, of the effectiveness
of the design and operation of our disclosure controls and procedures. Based
upon this evaluation, our Chief Executive Officer and Chief Financial
Officer/Principal Accounting Officer have concluded that information required to
be disclosed is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission’s rules and forms,
and is accumulated and communicated to management, including our Chief Executive
Officer and Chief Financial Officer/Principal Accounting Officer, to allow for
timely decisions regarding required disclosure of material information required
to be disclosed in the reports that we file or submit under the Exchange Act.
Our disclosure controls and procedures are designed to provide reasonable
assurance of achieving these objectives and our Chief Executive Officer and
Chief Financial Officer/Principal Accounting Officer have concluded that our
disclosure controls and procedures are effective to a reasonable assurance level
of achieving such objectives. However, it should be noted that the design of any
system of controls is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions,
regardless of how remote.




55




(b)
Management’s Report on Internal Control over Financial Reporting
  Our
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934, as amended. The Company’s
internal control over financial reporting is designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles. The Company’s internal control over financial
reporting includes those policies and procedures that:
  (i)
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the
Company;
  (ii)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being made
only in accordance with authorizations of our management and directors;
and
  (iii)
provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s assets that could
have a material effect on the financial statements.
  Because
of the inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
  Management
assessed the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2008. In making this assessment, management used
the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission in Internal Control-Integrated Framework. Management’s
assessment included an evaluation of the design of our internal control over
financial reporting and testing of the operational effectiveness of these
controls.
  Based on
this assessment, management has concluded that as of December 31, 2008, our
internal control over financial reporting was effective to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with U.S. generally
accepted accounting principles.
  This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the Company’s registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only management’s report
in this annual report.
  (c)
Changes in Internal Control over Financial Reporting
  There
were no changes in our internal control over financial reporting during our
fiscal quarter ended December 31, 2008 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.


ITEM
9B. OTHER INFORMATION




None




PART
III




ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, AND COROPORATE GOVERNANCE




The
following table sets forth the names, positions and ages of our executive
officers and directors as of December 31, 2008. All of our directors serve until
the next annual meeting of stockholders or until their successors are elected
and qualify. Officers are elected by the board of directors and their terms of
offices are, except to the extent governed by employment contracts, at the
discretion of the board of directors. There is no family relationship between
any director, executive officer or person nominated or chosen by the Company to
become a director or executive officer.




Name
                  
                  
                  Age
                  
                  PositionMichael
      S. Wasik
                  
                  39
                  
                  Chief
      Executive Officer, Chief Financial Officer, and
ChairmanJudson
      Just
                  
                  38
                  
                  DirectorChristopher
      Blisard
                  
                  41
                  
                  Director




56




Michael
S. Wasik has served as the Company’s chief executive officer, chief financial
officer, and member of the Board of Directors since November 2, 2005. Mr. Wasik
founded SuiteSpeed, Inc., a wired and wireless high speed internet service
provider, in 2002 and served as its Chairman and Chief Executive Officer from
its inception in 2002 until August 2005, when SuiteSpeed was merged into
Roomlinx. Prior to forming SuiteSpeed Inc, from November 1997 to January 2002,
Mr. Wasik founded TRG Inc, and served as President and Chairman of TRG Inc. a
technical consulting company.




Judson P.
Just, CFA has spent the last nine years with PEAK6 Investments, LP as a
Portfolio Manager, Analyst, Trader and Manager of the founding family’s Family
Office. Established in 1997, PEAK6 Investments, LP is a leading financial
institution in Chicago with an established track record of success in
proprietary trading. Recently recognized as one of ‘Chicago’s Best and Brightest
Employers to Work For,’ the company is also rapidly expanding its commercial
focus to include innovative initiatives in the online media, retail options
brokerage and asset management. Judson is also a Board member for Solution
BioSciences, an animal health technology company; and Vassol Inc., the developer
of NOVA® the first commercially available technology to measure actual blood
flow rates in individual vessels using MRA/MRI scanners. Prior to PEAK6, Judson
spent six years as a Trader for Heartland Funds, a specialist in small cap
equities.




Christopher
T. Blisard, one of the founders of Sage Canyon Advisors, currently serves as one
of its Managing Directors. A life-long entrepreneur, Mr. Blisard has 21 years of
operational, business development and leadership experience to this
position.




In
addition to Sage Canyon Advisors, Mr. Blisard serves as the Chief Operating
Officer of Circadence Corporation, a Boulder, Colorado-based industry-leading
provider of wide area network (WAN) optimization technology to the US Government
and commercial enterprises, a position he has held since 1999. Mr. Blisard has
been fundamental in creating a number of strategic partnerships for Circadence
with prominent industry leaders such as Hewlett-Packard, Accenture, Dell, CSK
Ventures (Hitachi), Microsoft, Deutsche Telekom, Global Crossing, and Pacific
Century CyberWorks Japan (PCCWJ). His leadership has also been vital to the
development of significant business relationships within the defense and
security industry including the Department of Defense, the four major military
branches, Northrop Grumman, L3, and others.




Mr.
Blisard is a founder and Chairman of the Board of VirtualArmor, located in
Greenwood Village, Colorado. VirtualArmor offers businesses the professional
services needed to secure network infrastructure. Additionally, Mr. Blisard is a
founder of VivID Technologies, LLC, located in Tupelo, Mississippi. VivID
Technologies provides radio frequency identification (RFID) and sensor-based
solutions to the industry and defense markets, including the US Army and US
Marine Corps.




Mr.
Blisard is a founder and serves on the Board of QuantaLife, located in
Livermore, California. QuantaLife, Inc. was formed in January, 2008, to develop,
manufacture and commercialize advanced digital polymerase chain reaction (PCR)
technologies for the life science research, clinical diagnostics, industrial
testing, pharmacogenetics and biodefense markets. The system will focus on the
amplification and detection of nucleic acid in less than five minutes,
representing up to an order of magnitude improvement over commercial real-time
PCR (rtPCR) systems. Since its conception in 1998, rtPCR has exponentially
replaced other bioassay techniques and now serves as the principal nucleic acid
diagnostic tool. Quantum PCR indeed represents a fundamental advancement in PCR
technology with the introduction of quantum microfluidics.


57




Previously,
Mr. Blisard was involved in a number of other successful enterprises, including:
VR•1, Inc., one of the most successful massively multi-player online simulation
and gaming companies prior to its sale to Pacific Century CyberWorks Japan in
2001; Online Network Enterprises (ONE), an Internet Service Provider acquired by
Rocky Mountain Internet (RMI) in 1997; SolarTech Enterprises LLC, a designer and
developer of patented chemical ultraviolet sensors, winner of the USWest New
Venture Fund and the recipient of two National Cancer Institute research grants;
Armor Holdings, Inc. (formerly ABA), a top supplier of human safety and survival
systems to all branches of the U.S. military and major aerospace and defense
prime contractors; and GCCTechnologies, an innovator in combining reliable
hardware and revolutionary software to produce high-performance computer
peripherals.




Mr.
Blisard also served on the Board of Directors for the Mile High Chapter of the
National Defense Industrial Association (NDIA). To stay current with trends and
developments within the defense and security industry, Mr. Blisard is a member
of the NDIA and the Association of the United States Army (AUSA).




AUDIT
COMMITTEE




The
Company has an Audit Committee of the Board of Directors, the current members of
which are Judson Just and Christopher Blisard. The Board of Directors has
delegated to the Audit Committee the following principal duties: (i) reviewing
with the independent outside auditors the plans and results of the audit
engagement; (ii) reviewing the adequacy of the internal accounting controls and
procedures; (iii) monitoring and evaluating the financial statements and
financial reporting process; (iv) reviewing the independence of the auditors;
and (v) reviewing the auditors’ fees. As contemplated by the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated by the Securities and Exchange
Commission there under, the Audit Committee has assumed direct responsibility
for the appointment, compensation, retention and oversight of our independent
auditors in accordance with the timetable established with the Securities and
Exchange Commission. The Audit Committee has been established in accordance with
the provisions of the Sarbanes-Oxley Act.




AUDIT
COMMITTEE FINANCIAL EXPERT




Judson
Just is the Company’s Audit Committee Financial Expert.. Mr. Just, as a CFA, is
a portfolio manager and a financial expert.




CODE
OF ETHICS




The
Company has adopted a code of ethics that applies to the Company’s chief
executive officer, chief financial officer, principal accounting officer or
controller and persons performing similar functions. The Company shall provide
to any person, without charge, upon request, a copy of such request. Any such
request may be made by sending a written request for such code of ethics
to:


Roomlinx,
Inc., 2150 W. 6th Ave
Unit H Broomfield, CO 80020, Attn.: Michael S. Wasik, Chief Executive
Officer.


58




SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE




Section
16(a) of the Exchange Act, and the rules and regulations of the SEC there under
requires our directors, executive officers and persons who own beneficially more
than 10% of our common stock to file reports of ownership and changes in
ownership of such stock with the SEC. Based solely upon a review of such
reports, we believe that all our directors, executive officers and 10%
stockholders complied with all applicable Section 16(a) filing requirements
during the last fiscal year.




ITEM
11. EXECUTIVE COMPENSATION




EXECUTIVE
AND DIRECTOR COMPENSATION


Summary Compensation
Table




The
following table sets forth the cash and non-cash compensation for awarded to or
earned by (i) each individual serving as our chief executive officer during the
fiscal year ended December 31, 2008 and (ii) each other individual that served
as an executive officer at the conclusion of the fiscal year ended December 31,
2008 and who received in excess of $100,000 in the form of salary and bonus
during such fiscal year (collectively, the “named executive
officers”).




Name
      &
                              Principal
                              Position
                            
                            Year
                            
                            Salary
                              ($)
                            
                            Bonus
                              ($)
                            
                            Stock
                              Awards
                              ($)
                            
                            Option
                              Awards
                              ($)
                            
                            Non-Equity
                              Incentive
      Plan
                              Compensation
                              ($)
                            
                            Nonqualified
                              Deferred
                              Compensation
                              Earnings
      ($)
                            
                            All
      Other
                              Compensation
                              ($)
                            
                            Total
                              ($)Michael
      S.* (1)Wasik
                            
                            2008
                            
                            150,000
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            150,000CEO
      and CFO
                            
                            2007
                            
                            148,000
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            148,000




Executive Employment
Agreements




On August
10, 2005 (“the Effective Date”), we entered into an employment agreement with
Mr. Michael Wasik for Mr. Wasik to serve initially as Executive Vice President
and now as our chief executive officer. The following is a summary of the
material terms of the agreement.




59




Term. The
initial term of the agreement was two years from the date of the agreement.
Accordingly, the agreement has expired.




Compensation.
Mr. Wasik’s
initial annual base salary under the agreement was $150,000. Mr. Wasik also was
eligible to receive such bonuses as may be determined by the Board of
Compensation Committee.




Stock
Options. Under the agreement, Roomlinx granted to Mr. Wasik a stock option (the
“Wasik Option”) under the Roomlinx, Inc. Long-Term Incentive Plan (the “Plan”)
for the purchase of an aggregate of 1,000,000 shares of common stock of Roomlinx
common stock at an option price equal to $0.026 per share. Such options vested
immediately upon grant on August 10, 2005.




Outstanding Equity Awards At
Fiscal Year-End Table (Fiscal Year-End December 31, 2008)




Option
      Awards
                                  
                                  Stock
      AwardsName
                                  
                                  Number
      of
                                    Securities
                                    Underlying
                                    Unexercised
                                    Options
      (#)
                                    Exercisable
                                  
                                  Number
      of
                                    Securities
                                    Underlying
                                    Unexercised
                                    Options
      (#)
                                    Unexercisable
                                  
                                  Equity
                                    Incentive
                                    Plan
                                    Awards:
                                    Number
      of
                                    Securities
                                    Underlying
                                    Unexercised
                                    Unearned
                                    Options
      (#)
                                  
                                  Option
                                    Exercise
                                    Price
      ($)
                                  
                                  Estimated
                                    Per
      Share
                                    Market
                                    Value
      at
                                    Grant
      Date
                                    if
      Greater
                                    than
                                    Exercise
                                    Price
      ($)
                                  
                                  Option
                                    Expiration
                                    Date
                                  
                                  Number
      of
                                    Shares
      or
                                    Units
      of
                                    Stock
      That
                                    Have
      Not
                                    Vested
      (#)
                                  
                                  Market
                                    Value
      of
                                    Shares
      or
                                    Units
      of
                                    Stock
      That
                                    Have
      Not
                                    Vested
      ($)
                                  
                                  Equity
                                    Incentive
                                    Plan
                                    Awards:
                                    Number
      of
                                    Unearned
                                    Shares,
                                    Units
      or
                                    Other
      Rights
                                    That
      Have
                                    Not
      Vested
                                    (#)
                                  
                                  Equity
                                    Incentive
                                    Plan
                                    Awards:
                                    Market
      or
                                    Payout
                                    Value
      of
                                    Unearned
                                    Shares,
                                    Units
      or
                                    Other
      Rights
                                    That
      Have
                                    Not
      Vested
                                    ($)Michael
      S. Wasik
                                  
                                  
                                  
                                  
                                  
                                  1,000,000
                                  
                                  
                                  1,000,000
                                  
                                  
                                  0.026
                                  
                                  
                                  
                                  
                                  
                                  8/10/2012Michael
      S. Wasik
                                  
                                  
                                  
                                  
                                  
                                  10,000,000
                                  
                                  
                                  10,000,000
                                  
                                  
                                  0.020
                                  
                                  
                                  
                                  
                                  
                                  11/20/2013




Director Compensation Table
– Fiscal Year-End December 31, 2008


Name
                            
                            Fees
                              Earned
                              or
      Paid
                              in
      Cash
                              ($)
                            
                            Stock
                              Awards
                              ($)
                            
                            Option
                              Awards
      ($)
                            
                            Non-Equity
                              Incentive
      Plan
                              Compensation
                              ($)
                            
                            Nonqualified
                              Deferred
                              Compensation
                              Earnings
      ($)
                            
                            All
      Other
                              Compensation
                              ($)
                            
                            Total
      ($)Michael
      S. Wasik
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            0Herbert
      Hunt
                            
                            
                            10,000
                            
                            
                            10,000
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            20,000Peter
      Bordes
                            
                            
                            
                            
                            
                            20,000
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            20,000Judson
      Just
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            0Christopher
      Blisard
                            
                            
                            
                            
                            
                            
                            
                            
                            6,000
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            6,000


60




ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS




The
following tables set forth certain information regarding the beneficial
ownership of our common stock and preferred stock as of December 31, 2008, by
(i) each person who is known by us to be the beneficial owner of more than 5% of
our outstanding common stock or preferred stock; (ii) each of our directors and
executive officers; and (iii) all of our directors and executive officers as a
group. In determining the number and percentage of shares beneficially owned by
each person, shares that may be acquired by such person under options or
warrants exercisable within 60 days of December 31, 2008 are deemed beneficially
owned by such person and are deemed outstanding for purposes of determining the
total number of outstanding shares for such person and are not deemed
outstanding for such purpose for all other stockholders.




COMMON
AND PREFERRED CLASS A STOCK


Name
      and Address
                          
                          Percent*
                          
                          Number
      of Shares
                            Beneficially
      OwnedCommon
                          
                          Preferred
      AMichael
      S. Wasik**
                          
                          
                          13.94
                          %
                          
                          36,233,566
                          
                          
                          0Judson
      Just ***
                          
                          
                          .05
                          %
                          
                          120,000
                          
                          
                          0Christopher
      Blisard ****
                          
                          
                          1.07
                          %
                          
                          2,792,084
                          
                          
                          0Matthew
      Hulsizer & Jennifer Just Jointly*****
                          
                          
                          38.48
                          %
                          
                          100,000,000
                          
                          
                          0All
      directors and current executive officers as a group (5
      persons)
                          
                          
                          15.06
                          %
                          
                          39,145,650




*
                Based
      on 259,901,195 shares of Common Stock, and 720,000 shares of Class A
      Preferred Stock outstanding as of March 5, 2009.**
                Includes
      120,000 shares owned by Mr. Just.***
                Includes
      2,292,084 shares owned by Mr. Blisard and options to purchase 500,000
      shares at $0.012 per share, which vest on December 31, 2009 and expire on
      December 31, 2015****
                Includes
      100,000,000 shares owned by Matthew Hulsizer and Jennifer Just jointly;
      these shares were converted from the Series C Preferred Shares on March 5,
      2009.


61




ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS




From
November 2004 through January 2005, the Company received proceeds of $320,000 in
exchange for 10% promissory notes from shareholders and related parties,
maturing six months from the date of issuance. During 2005, the Company repaid
$40,000 of the notes. The Company was not able to retire the remaining balance
of the promissory notes as scheduled and was in default of the repayment terms.
During 2007, interest and penalties of $104,553 and principal of $137,397 were
forgiven, and the notes were settled for $142,603, of which $12,500 was paid
September 4, 2008.




On August
10, 2005, the Registrant issued to Michael Wasik, who is now the President and
Chief Executive Officer, a total of 25,233,566 shares of Common Stock in
connection with the merger of SuiteSpeed, Inc. with the Registrant and the
cancellation of certain liabilities of SuiteSpeed, Inc. to Mr.
Wasik.




On August
10, 2005, the Registrant’s Board of Directors approved the grant, under the
Registrant’s Long-Term Incentive Plan, of an aggregate of 1,000,000 Incentive
Stock Options (“ISOs”) to Mr. Wasik, which vested immediately.




On August
11, 2006, the Company borrowed $7,500 from Peter Bordes. Principal and interest
at 10% were due upon receipt of funding. The note was repaid in June,
2007.




On
November 20, 2006, the Registrant’s Board of Directors agreed to issue, based on
the closing price of the Registrant’s Common Stock on November 20, 2006 (later
determined to be $0.02 per share), (i) to each of Peter Bordes and Herbert Hunt
shares of the Registrant’s Common Stock having an aggregate value of $60,000 as
payment in full of their respective Board compensation owed to them for the
three-year period 2004 – 2006 and (ii) to Mr. Dobrinsky shares of the
Corporation’s Common Stock having an aggregate value of $20,000 as payment in
full of his respective Board compensation owed to him for 2006.




In
November 2006, the Company granted under our Long-Term Incentive Plan, an
aggregate of 12,300,000 Incentive Stock Options (“ISOs”) and an aggregate of
3,600,000 Non-Qualified Stock Options (“NQOs”). 10,000,000 of the ISOs were
granted to Michael S. Wasik, the Company’s President, Chief Executive Officer
and Chief Financial Officer, of which (i) 6,000,000 vested immediately and (ii)
4,000,000 vest over three years with one-third vesting on the first anniversary
of Mr. Wasik’s employment with the Company and an additional one-third vesting
on each of the following two anniversaries thereof. The remaining 2,300,000
incentive stock options were issued to employees. 1,000,000 of the NQOs were
granted to each of Peter Bordes and Herbert Hunt with respect to their service
as members of the Board of Directors during 2005 and 2006 and vested
immediately. 500,000 of the NQOs were granted to Aaron Dobrinsky with respect to
his service as a member of the Board of Directors during 2006 and vested
immediately. All of these options were issued at an exercise price of $0.02 per
share, representing the closing price of the Company’s common stock on such
date. The remaining 1,100,000 non-qualified stock options were issued to
consultants.


62




On May 4,
2007, the Registrant’s Board of Directors authorized and approved the following
compensation package for each of Peter Bordes and Herbert Hunt for their
services as independent directors of the Registrant for 2007: (i) the payment of
the sum of $20,000 on December 31, 2007 so long as they are serving as an
independent director of the Registrant on such date, and (ii) the grant of
Non-Qualified Stock Options under the Registrant’s Long Term Incentive Plan for
the purchase of up to 500,000 shares of the Registrant’s Common Stock at an
exercise price equal to the May 4, 2007 closing trading price of the
Registrant’s Common Stock, namely $.025 per share, vesting in full on December
31, 2007, so long as they are serving as an independent director of the
Registrant on such date. Such compensation was also offered to Mr. Woody McGee;
however, Mr. McGee resigned from the Board of Directors prior to December 31,
2007.




On August
19, 2008 the Company granted under our Long-Term Incentive Plan, an aggregate of
500,000 Non-Qualified Stock Options (“NQOs”). The NQOs were granted to
Christopher Blisard with respect to his service as a member of the Board of
Directors during 2009 and vest on December 31, 2009. The options were issued at
an exercise price of $0.012 per share, representing the closing price of the
Company’s common stock on such date.




On August
19, 2008 the Company issued 1,200,000 shares as Board of Director compensation
for the year ended December 31, 2007. 800,000 of the shares were issued to Peter
Bordes and 400,000 of the shares were issued to Herbert Hunt. The shares were
valued at $0.025 per share for a fair market value of $30,000. This compensation
was accrued for in 2007.




On
October 31, 2008, the Registrant’s Board of Directors approved the grant of an
aggregate of 200,000 Incentive Stock Options and an aggregate of 100,000
Non-Qualified Stock Options. Such options were issued at an exercise price of
$0.017 per share and vest one-third (1/3) on each of the first three
anniversaries of the employment date.




On
January 2, 2009, the Board approved issuance of and the Company issued 1,417,707
shares of our common stock, valued at $0.025 per share for accrued interest of
$35,443 for the period October 1 through December 31, 2008, pursuant to the
clauses outlined in the convertible debenture agreements of June 11,
2007.




On
February 23, 2009, the Registrant’s Board of Directors approved the grant of an
aggregate of 350,000 Incentive Stock Options and an aggregate of 200,000
Non-Qualified Stock Options. Such options were issued at an exercise price of
$0.01 per share and vest one-third (1/3) on each of the first three
anniversaries of the grant date.




On
February 23, 2009, the Registrant’s Board of Directors approved the grant of an
aggregate of 1,200,000 Non-Qualified Stock Options. Such options were issued at
an exercise price of $0.01 per share and vest in 12 equal installments over 12
months.


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ITEM 14. PRINCIPAL ACCOUNTANT FEES
AND SERVICES.




AUDIT
FEES




The
aggregate fees for professional services rendered by Stark Winter Schenkein
& Co LLP for the audit of the annual consolidated financial statements of
Roomlinx, Inc. for the fiscal year ended December 31, 2008, and for the reviews
of the financial statements included in Roomlinx, Inc. Quarterly Reports on Form
10-QSB for the fiscal year ended December 31, 2008, were $38,000.




The
aggregate fees for professional services rendered by Stark Winter Schenkein
& Co LLP for the audit of the annual consolidated financial statements of
Roomlinx, Inc. for the fiscal year ended December 31, 2007, and for the reviews
of the financial statements included in Roomlinx, Inc. Quarterly Reports on Form
10-QSB for the fiscal year ended December 31, 2007, were $35,000.




AUDIT
RELATED FEES, TAX FEES AND ALL OTHER FEES




Stark
Winter Schenkein & Co LLP did not receive fees for services to the Company
for the fiscal year ended December 31, 2008 or 2007 other than the fees for
services described under “Audit Fees.”




BOARD
OF DIRECTORS ADMINISTRATION OF THE ENGAGEMENT




Before
Stark Winter Schenkein & Co LLC was engaged by the Company for the 2008
audit, Stark Winter Schenkein & Co LLC’s engagement and engagement letter
were approved by the Company’s Board of Directors.




PART
IV




ITEM
15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES




(a) The
following Exhibits are filed with this report or incorporated by
reference:




3.1
Amended and Restated Articles of Incorporation of the registrant is incorporated
by reference to Exhibit 3.1 to the registrant’s 8k filed on March 10,
2009.




3.2
Amended and Restated By-Laws of the registrant is incorporated by reference to
Exhibit 3.1 to the registrant’s Quarterly Report on Form 10-QSB for the quarter
ended June 30, 2004.


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4.1 Form
of convertible debenture issued pursuant to the Securities Purchase Agreement
described in Exhibit 10.10 is incorporated by reference to Exhibit 4.1 to the
registrant’s Current Report on Form 8-K filed with the SEC on June 14,
2007.




4.2 Form
of Unregistered Sales of Equity Securities Agreement with Creative Hospitality
Associates, as part of a sales agent agreement, is incorporated by reference to
Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on
April 16, 2008.




10.1
Roomlinx, Inc. Long Term Incentive Plan is incorporated by reference to Annex A
to the definitive proxy statement filed by the registrant. with the SEC on
January 30, 2009




10.3
Employment agreement between the registrant and Michael Wasik is incorporated by
reference to Exhibit 10.2 of the registrant’s current report on Form 8-K filed
with the SEC on August 16, 2005.




10.4
Separation Agreement dated April 26, 2006 between the Company and Mr. Aaron
Dobrinsky is incorporated by reference to Section 10.1 of the registrant’s Form
10-QSB for the quarter ended September 30, 2005.




10.5
Securities Purchase Agreement dated as of June 11, 2007, by and among the
registrant and the Investors named therein is incorporated by reference to
Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC
on June 14, 2007.




10.6
Agreement and Plan of Merger, dated as of August 10, 2005 by and among the
registrant, SS-R Acquisition Corp. and SuiteSpeed, Inc., incorporated by
reference to Exhibit 10.1 of the registrant’s current report on Form 8-K filed
with the SEC on August 16, 2005.




* 31.1
Certification of the chief executive officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002




* 31.2
Certification of the chief financial officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002




* 32.1
Certification of the chief executive officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002




* 32.2
Certification of the chief financial officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002


65




Signatures




Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


Roomlinx,
      Inc.By:
              /s/
      Michael S. WasikMichael
      S. WasikChief
      Executive OfficerDate:
              3/30/09




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.


By:
                                          /s/
      Michael S. WasikMichael
      S. WasikChairman
      of the Board of DirectorsDate:
                                          3/30/09By:
                                          /s/
      Judson JustJudson
      JustDirectorDate:
                                          3/30/09
  By:
                                        /s/
      Christopher BlisardChristopher
      BlisardDirectorDate:
                                        3/30/09






66