Troika Media Group, Inc. - FORM 10-Q

Attached files

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EX-32.1 - EXHIBIT 32.1 - Troika Media Group, Inc.	ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - Troika Media Group, Inc.	ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2011

o Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from______________ to _______________

Commission File Number: 000-26213

ROOMLINX, INC.

(Exact name of registrant as specified in its charter)

Nevada 83-0401552

(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

2150 W. 6th Ave., Unit H Broomfield, Colorado 80020

(Address of principal executive offices)

(303) 544-1111

(Issuer's telephone number)

Indicate by check mark whether the registrant (1) 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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

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 Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o

Non-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 Exchange Act).

Yes o No x

The number of shares outstanding of the Issuer's common stock as of May 13, 2011, was 5,113,423.

ROOMLINX, INC.

INDEX

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Balance Sheets as of March 31, 2011 (unaudited) and December 31, 2010

Consolidated Statements of Operations for the Three Months Ended March 31, 2011 and 2010 (unaudited)

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2011 and 2010 (unaudited)

Notes to Consolidated Financial Statements (unaudited)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

General

Critical Accounting Policies

Results of Operations

Recent Accounting Pronouncements

Financial Condition

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 3. Defaults Upon Senior Securities

Item 4. (Removed and Reserved)

Item 5. Other Information

Item 6. Exhibits

Signatures

PART I. FINANCIAL INFORMATION

Roomlinx, Inc.

CONSOLIDATED BALANCE SHEETS


	Unaudited
	March 31,			December 31,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	170,489		$	314,368
Accounts receivable, net		995,158			853,000
Leases receivable, current portion		469,406			446,329
Prepaid and other current assets		129,981			135,422
Inventory		751,748			892,501
Total current assets		2,516,782			2,641,620

Property and equipment, net		2,533,702			2,665,565
Leases receivable, non-current		1,697,247			1,486,939
Total assets	$	6,747,731		$	6,794,124


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	904,792		$	956,408
Accrued interest		9,120			9,927
Capital lease, current portion		10,557			10,361
Notes payable, current portion		57,348			66,581
Deferred revenue		217,242			136,530
Total current liabilities		1,199,059			1,179,807

Capital lease, non-current		2,765			5,479
Notes payable, non-current		44,294			59,286
Line of credit, net of discount		1,394,283			1,195,938

Total liabilities		2,640,401			2,440,510

Stockholders' equity:
Preferred stock - $0.20 par value, 5,000,000 shares authorized:
Class A - 720,000 shares authorized, issued and outstanding		144,000			144,000
Common stock - $0.001 par value, 200,000,000 shares authorized:
5,021,415 and 4,958,915 shares issued and outstanding, respectively		5,021			4,959
Additional paid-in capital		31,948,287			31,672,378
Accumulated (deficit)		(28,071,103	)		(27,533,736	)
Accumulated other comprehensive income		16,922			-
		4,043,127			4,287,601
Non-controlling interest		64,203			66,013
Total stockholders' equity		4,107,330			4,353,614
Total liabilities and stockholders' equity	$	6,747,731		$	6,794,124

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

Roomlinx, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

for the three months ended March 31, 2011 and 2010

Unaudited


	2011			2010

Revenues:
Hospitality	$	1,200,032		$	393,215
Residential		223,140			-
Total		1,423,172			393,215

Cost of goods sold
Hospitality		807,114			237,651
Residential		154,027			-
Total		961,141			237,651
Gross profit		462,031			155,564

Operating expenses:
Operations		231,977			162,868
Product development		215,727			70,553
General and administrative		378,284			277,078
Depreciation		174,460			23,406
		1,000,448			533,905
Operating (loss)		(538,417	)		(378,341	)

Non-operating income (expense):
Interest expense		(31,550	)		(10,754	)
Financing expense		(28,193	)		-
Foreign currency (loss)		(3,550	)		(1,103	)
Interest income		64,578			13,962
Other income (expense)		(235	)		-
		1,050			2,105

(Loss) before non-controlling interest and income taxes		(537,367	)		(376,236	)

Non-controlling interest		(1,810	)		-
Provision for income taxes		-			-

Net (loss)		(539,177	)		(376,236	)

Other comprehensive income:
Currency translation gain		16,922			-

Net comprehensive (loss)	$	(522,255	)	$	(376,236	)

Net (loss) per common share:
Basic and diluted	$	(0.11	)	$	(0.10	)

Weighted average shares outstanding:
Basic and diluted		4,979,748			3,871,903

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

Roomlinx, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2011 and 2010

Unaudited


	2011			2010

Cash flows from operating activities:
Net (loss)	$	(539,177	)	$	(376,236	)

Adjustments to reconcile net (loss) to net cash
(used by) operating activities:
Depreciation		174,460			23,406
Debt discount		(61,655	)		-
Common stock, warrants, and options issued as compensation		150,971			46,978
Provision for uncollectible accounts		(5,940	)		(8,232	)
Changes in operating assets and liabilities:
Accounts receivable		(136,219	)		249,079
Prepaid and other current assets		5,441			(5,565	)
Inventory		159,794			(4,181	)
Accounts payable and accrued expenses		(40,278	)		(80,171	)
Accrued interest		(807	)		(6,189	)
Deferred revenue		80,712			(25,427	)
Total adjustments		326,479			189,698

Net cash (used by) operating activities		(212,698	)		(186,538	)

Cash flows from investing activities:
Leases receivable		(338,780	)		-
Payments received on leases receivable		105,395			22,016
Purchase of property and equipment		(72,975	)		-

Net cash provided by (used by) investing activities		(306,360	)		22,016

Cash flows from financing activities:
Proceeds from warrant exercise		125,000			-
Proceeds from line of credit		260,000			-
Payments on capital lease payable		(2,518	)		(2,341	)
Payments on notes payable		(24,225	)		-

Net cash provided by (used by) financing activities		358,257			(2,341	)

Effects of foreign currency translation		16,922			-

Net (decrease) in cash and equivalents		(143,879	)		(166,863	)

Cash and equivalents at beginning of period		314,368			656,080

Cash and equivalents at end of period	$	170,489		$	489,217

Supplemental Cash Flow Information
Cash paid for interest	$	30,890		$	7,545
Cash paid for income taxes	$	-		$	-

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

Roomlinx, Inc.

Notes to Consolidated Financial Statements

March 31, 2011

(Unaudited)

1. Organization and Nature of Business

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; including its proprietary Interactive TV platform, internet, and free to guest and on demand programming. Roomlinx also sells, installs and services telephone, internet, and television services for residential consumers. 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, as well as residential consumers. The Company may utilize third party contractors to install such hardware and software.

Basis of Presentation: The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. They do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments considered necessary for a fair presentation, have been included in the accompanying unaudited financial statements. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the financial statements and notes thereto, included in the Company's Form 10-K as of and for the year ended December 31, 2010.

Basis of Consolidation: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Cardinal Hospitality, Ltd. and its 50% owned subsidiary Arista Communications, LLC. All intercompany accounts and transactions have been eliminated in consolidation.

Direct Subsidiaries of Roomlinx, Inc.	% of Ownership	Date Acquired
Cardinal Hospitality, Ltd.	100%	10/1/2010
Arista Communications, LLC	50%	10/1/2010

Reclassification: Certain amounts in the 2010 financial statements have been reclassified to conform to the current year presentation.

Segments: We operate and prepare our financial reports based on two segments; Hospitality and Residential. We have determined these segments based on the location, design, and end user of our products.

Hospitality: Our Hospitality segment includes hotels, resorts, and timeshare properties in the United States, Canada, and Other Foreign. As of December 31, 2010, Other Foreign included Mexico and Aruba. The products offered under our hospitality segment include the installation of, and the support and service of, high-speed internet access networks, proprietary Interactive TV platform, free to guest programming, and on-demand movie programming, as well as advertising and e-commerce products.

Residential: Our residential segment includes multi-dwelling unit customers and business customers (non-hospitality) in the United States. The products offered include the installation of, and the support and service of, telephone, internet, and television services.

Non-Controlling Interest: The Company has adopted standards that govern the accounting for, and reporting of, noncontrolling interests in partially-owned consolidated subsidiaries. Specifically, the guidance requires that: (a) noncontrolling (previously referred to as minority) interest be reported as a component of members’ equity; (b) net income attributable to the parent and to the noncontrolling interest be separately identified in the consolidated statement of operations; (c) changes in a parent’s ownership interest while the parent retains its controlling interest be accounted for as equity transactions; (d) any retained noncontrolling equity investment upon the deconsolidation of the subsidiary be initially measured at fair value; and (e) sufficient disclosures are provided that clearly identify and distinguish between the interest of the parent and the interest of the noncontrolling owners.

We allocate earnings and losses of the subsidiary to the noncontrolling interest based on its ownership percentage. Equity attributable to the noncontrolling interest of $64,203 is included as a separate component of equity as of March 31, 2011. Loss allocated to the noncontrolling interest for the period ended March 31, 2011, was $1,810.

Foreign Operations: The Company operates in the United States of America, Mexico, Aruba, and Canada. 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).

Per Share Amounts: The Company computes earnings per share by dividing net income (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the period. Dilutive common stock equivalents consist of shares issuable upon the exercise of the Company's stock options and warrants. Potentially dilutive securities, purchase stock options and warrants, are excluded from the calculation when their inclusion would be anti-dilutive, such as periods when a net loss is reported or when the exercise price of the instrument exceeds the fair market value.

All common shares and share prices reflected in the financial statements and in the discussions below reflect the effect of the 1-for-100 reverse stock split approved on May 28, 2010.

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.

Recently Adopted Accounting Standards: The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the SEC, and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on US GAAP and the impact on the Company.

ASU No. 2010-06 amended existing disclosure requirements about fair value measurements by adding required disclosures about items transferring into and out of levels 1 and 2 in the fair value hierarchy; adding separate disclosures about purchase, sales, issuances, and settlements relative to level 3 measurements; and clarifying, among other things, the existing fair value disclosures about the level of disaggregation. The final provisions of this ASU were adopted during the period ended March 31, 2011, and its adoption had no impact on the Company’s consolidated financial position, results of operations or cash flows.

ASU No. 2009-13 provided guidance on whether multiple deliverables exist, how the deliverables should be separated and how the consideration should be allocated to one or more units of accounting. This update established a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable is based on vendor-specific objective evidence, if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific or third-party evidence is available. The Company adopted this ASU effective January 1, 2011. The adoption of this ASU did not have a material impact on our consolidated results of operations or cash flows.

ASU No. 2010-13 clarified the classification of an employee share based payment award with an exercise price denominated in the currency of a market in which the underlying security trades. The Company adopted this ASU effective January 1, 2011. The adoption of this ASU did not have a material impact on our consolidated results of operations or cash flows.

ASU 2010-20 provided financial statement users with greater transparency about an entity’s allowance for credit losses and the credit quality of its financing receivables. The Company adopted this ASU effective January 1, 2011. The adoption of this ASU did not have a material impact on our consolidated results of operations or cash flows.

ASU 2010-29, “Business Combinations,” requires a public entity that prepares comparative financial statements to disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The adoption of this ASU did not have a material impact on our consolidated results of operations or cash flows.

ASU 2010-28, “Intangibles – Goodwill and Other,” modifies the two-step goodwill impairment testing process for entities that have a reporting unit with a zero or negative carrying amount. For those reporting units, an entity is required to perform step 2 of the goodwill impairment test if it is more likely than not that goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative factors indicating that an impairment exists. The adoption of this ASU did not have a material impact on our consolidated results of operations or cash flows.

Recently Issued Accounting Standards: There were various accounting standard updates recently issued, most of which were applicable to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

2. Acquisition of Canadian Communications, LLC

On October 1, 2010, the Company acquired 100% of the membership interests of Canadian Communications, LLC, a Colorado limited liability company for aggregate consideration of $500,000 in cash and the issuance of 270,000 shares of Roomlinx’s common stock, par value $0.001 per share, of which 79,000 are being held back as security for the sellers’ indemnification obligations. The stock was valued at $2.70 per share, or $1,215,000. Roomlinx, Canadian, Peyton Communications, LLC, Garneau Alliance LLC, Peyton Holdings Corporation and Ed Garneau entered into a Unit Purchase Agreement dated as of October 1, 2010 providing for the above described transaction.

The Purchase Agreement contains customary representations, warranties and covenants. Except for certain limited matters (including tax matters), the indemnification obligation of the former members of Canadian for breaches of Canadian’s representations and warranties will be subject to a $10,000 aggregate deductible and an aggregate cap of the Holdback Shares. Representations and warranties will generally survive for two years after closing, subject to a longer survival period for certain limited matters (including tax matters).

The acquisition of Canadian Communications, LLC involved the acquisition of five entities. Canadian Communications, LLC owned Cardinal Connect, LLC and Cardinal Broadband, LLC directly and they owned Cardinal Hospitality, Ltd indirectly through Cardinal Connect, LLC. A 50% joint venture interest in Arista Communications, LLC was also owned indirectly through Cardinal Broadband, LLC.

Following the acquisition, the separate entities of Canadian Communication, LLC, Cardinal Connect, LLC, and Cardinal Broadband, LLC were consolidated into Roomlinx, with the intention of formally dissolving the entities in 2011. Canadian Communications, LLC and Cardinal Connect, LLC now operate as Roomlinx, Inc. and Cardinal Broadband, LLC operates as a division of Roomlinx. The Company maintains the separate entity of Cardinal Hospitality, Ltd as a subsidiary of Roomlinx, Inc. and Arista Communications, LLC, remains a 50% joint venture interest.

3. Lease Receivable

As of March 31, 2011, the Company had $2,166,653 in lease receivables, compared to $1,933,268 at December 31, 2010. During the three months ended March 31, 2011 the company added $338,780 in lease receivables and received payments of $105,395 on their lease receivables, compared to nothing added and $22,017 in payments received during the same period in 2010.

Future minimum receipts on lease receivables are as follows:

	Total
Less than 1 Year	$	469,406
1 to 3 Years		1,494,627
3 to 5 Years		202,620
	$	2,166,653

During the three months ended March 31, 2011, the Company entered into two lease receivables for an aggregate amount of $338,780. The terms on both leases are 60 months, the interest rate is 9.5%, and the aggregate monthly payments are $7,115.

4. Notes Payable

As part of the acquisition of Canadian Communications on October 1, 2010, the Company assumed a note payable to Compass Bank with a balance of $19,650. The note bears interest at the prime rate plus 2% requires monthly payments of approximately $3,000, and is due June 5, 2012. The balance of this note was $10,875 at December 31, 2010. This note was repaid in its entirety during the three months ended March 31, 2011.

As part of the acquisition of Canadian Communications on October 1, 2010, the Company assumed a note payable to CDF Funding, LLC with a balance of $110,019. The note bears interest at 12%, requires monthly payments of $4,996, and is due November 1, 2012. The current portion of this liability was $51,901 and the long-term portion was $38,216 at March 31, 2011 for a total balance of $90,117.

As part of the acquisition of Canadian Communications on October 1, 2010, the Company assumed a note payable to Falcon Networks with a balance of $13,624. The note bears interest at 11%, requires monthly payments of $537, and is due March 1, 2013. The current portion of this liability was $5,447 and the long-term portion was $6,078 at March 31, 2011 for a total balance of $11,525.

At March 31, 2011, future minimum payments are as follows:

Year	Total
2011	$	38,279
2012		61,780
2013		1,582
	$	101,642

5. Line of Credit

On June 5, 2009, the Company, entered into a Revolving Credit, Security and Warrant Purchase Agreement (the “Credit Agreement") with Cenfin LLC, a Delaware limited liability company (“Cenfin”), pursuant to which Cenfin agreed to make revolving loans to Roomlinx from time to time in a maximum outstanding amount of $5,000,000 and pursuant to which, upon the making of each such Revolving Loan, Roomlinx will issue to Cenfin a Revolving Credit Note evidencing such Revolving Loan and a Warrant to purchase a number of shares of Roomlinx Common Stock equal to 50% of the principal amount funded in respect of such Revolving Loan divided by $2.00 per share. Each Revolving Credit Note will bear interest at a rate of 9% per annum and mature on the fifth anniversary of its issuance. Each Warrant will be exercisable for a three year period from its issuance at an initial exercise price of $2.00 per share.

On March 10, 2010 the Credit Agreement was amended to increase the aggregate revolving credit commitment to $25,000,000 and expand the permitted use of proceeds to include certain capital expenditures. The rest of the terms remained in accordance with the original agreement.

On July 30, 2010, with effect as of July 15, 2010, the Company and Cenfin LLC entered into a Second Amendment to Revolving Credit, Security and Warrant Purchase Agreement (the “Amendment”). The Amendment changed (1) the interest rate under the Credit Agreement to the Federal Funds Rate plus 5% and (2) the strike price of warrants issued in connection with any draws of the line of credit after the first $5,000,000 of borrowings after July 15, 2010 from $2.00 per share to the fair market value of the Company’s common stock on the date of such draw. The interest rate payable on amounts drawn under this Agreement will be set on July 15 of each year, but will be adjusted in the event the Federal Funds Rate increases by more than 1% in any six month period, but such an adjustment may only occur once per year.

At March 31, 2011, the Company had drawn $1,956,000 on the line of credit, with draws of $260,000 during the three months ended March 31, 2011. These advances will be repaid at various dates between 2014 and 2016. At March 31, 2011, the balance on the line of credit is reduced by a discount in the amount of $561,717 (see Note 5). The line of credit is subject to certain financial and non-financial covenants; the Company was in compliance with all covenants as of March 31, 2011.

Future minimum payments for the line of credit are as follows:

Year	Total
3 to 5 years		464,000
5 years and later		1,492,000
	$	1,956,000

6. Stockholders' Equity

All common shares and share prices reflected in the financial statements and in the discussions below reflect the effect of the 1-for-100 reverse stock split approved on May 28, 2010 and affected on July 29, 2010.

Preferred Stock: The Company has authorized 5,000,000 preferred shares with a $0.20 par value, of which 720,000 shares have been designated as Class A 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. As of March 31, 2011, there were 720,000 shares of Class A Preferred Stock issued and outstanding. Class A dividends accrued and unpaid as of March 31, 2011, were $162,480; these dividends have not been declared by the board of directors so they are not included in accrued expenses.

Common Stock: The Company has authorized 200,000,000 shares of $0.001 par value common stock. As of March 31, 2011, there were 5,021,415 shares of common stock issued and outstanding.

On March 3, 2011, 62,500 warrants were exercised at $2.00 per share, for an aggregate of $125,000, in accordance with the Credit Agreement entered into on June 5, 2009.

Warrants:

On March 3, 2011 65,000 warrants were granted, pursuant to the clauses outlined in the Credit Agreement dated June 5, 2009. Such warrants were issued at an exercise price of $2.00 per share and vest immediately; the warrants expire 3 years from the date of issuance.

As noted above, on March 3, 2011, 62,500 warrants were exercised at $2.00 per share, for an aggregate of $125,000, in accordance with the Credit Agreement entered into on June 5, 2009.

On March 31, 2011, 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
$	2.00		65,000	2.92	$	130,000			$	-
$	4.50		32,800	4.64		147,600				-
$	2.30		3,750	1.65		8,625				-
$	3.00		70,000	1.20		210,000				-
$	3.00		39,000	0.75		117,000				-
$	6.00		200,000	0.31		1,200,000				-
$	4.00		200,000	0.31		800,000				-
			610,550		$	2,613,225	$	4.28	$	-

Warrants	Number of Shares			Weighted Average Exercise Price		Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2011		608,050		$	4.29
Issued		65,000			1.92
Exercised		(62,500	)		2.00
Expired/Cancelled		-			-
Outstanding at March 31, 2011		610,550		$	4.28	$	1.66	$	-
Exerciseable at March 31, 2011		610,550		$	4.28	$	1.66	$	-

The fair value of the warrants granted March 3, 2011 was $137,291. The fair value of the warrant grant 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 125%, risk-free interest rate of 1.18% and no dividend yield. The weighted average fair value at the date of grant for warrants granted March 3, 2011, averaged $2.11 per warrant. In accordance with ASC Topic 815, “Derivatives and Hedging,” the Company recorded a debt discount of $89,848 in connection with this warrant grant.

Options: The Company adopted a long term incentive stock option plan (the "Stock Option Plan"). The Stock Option Plan provides for the issuance of up to 1,200,000 shares of common stock upon exercise of options which may be granted pursuant to the Stock Option Plan. As of March 31, 2011, options to purchase 369,257 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 March 31, 2011, 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
$ 3.75		10,500		6.64	$	39,375			$	-
$ 4.50		40,000		6.51		180,000				-
$ 4.80		2,500		6.47		12,000				-
$ 3.10		20,757		6.04		64,347				-
$ 2.50		2,500		5.28		6,250				-
$ 3.30		100,000		5.19		330,000				-
$ 1.00		16,500		4.90		16,500				16,500
$ 1.70		2,000		4.59		3,400				600
$ 1.20		8,000		4.39		9,600				6,400
$ 2.00		7,000		4.31		14,000				-
$ 1.50		9,500		3.61		14,250				4,750
$ 2.50		10,000		3.10		25,000				-
$ 2.00		130,000		2.64		260,000				-
$ 2.60		10,000		1.36		26,000				-
		369,257			$	1,000,722	$	2.71	$	28,250

Options	Number of Shares			Weighted Average Exercise Price		Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2011		371,255		$	2.64
Issued		-			-
Exercised		-			-
Expired/Cancelled		(2,000	)		4.54
Outstanding at March 31, 2011		369,257		$	2.71		4.90	$	28,250
Vested & Exerciseable at March 31, 2011		238,333		$	2.21		3.86	$	25,750

Deferred Stock Compensation: The Company records deferred stock compensation on unvested warrants and options upon issuance. This deferred stock compensation is amortized as the warrants and options vest. At March 31, 2011 the balance in deferred stock compensation was $305,060, compared to $374,658 at December 31, 2010. The Company amortized $61,124 in deferred stock compensation during the three months ended March 31, 2011 compared to $46,978 amortized during the same period in 2010.

7. Related Party Transactions

As of March 31, 2011, a shareholder owned approximately 37.7% of the Company’s outstanding Common Stock. This shareholder is the owner of Cenfin, LLC. The Company has been in a credit agreement with Cenfin, LLC since June 2009 (See Note 4).

8. Subsequent Events

On April 7, 2011, an aggregate of 30,000 shares of common stock was awarded to Judson Just and Jay Copppletta for services rendered as independent directors of Roomlinx, Inc. The aggregate value of the stock on the date of issuance was $60,000 based on the closing price of the stock for that day.

On April 18, 2011, an aggregate of 62,008 shares of common stock was awarded to employees of Roomlinx, Inc. in accordance with 2010 employee incentive plan. The aggregate value of the stock on the date of issuance was $111,614 based on the closing price of the stock for that day.

On April 26, 2011, the Company received $200,000 from their revolving line of credit, pursuant to the clauses in the credit agreement from June 2009 (See note 4).

On April 26, 2011, 50,000 warrants were granted, pursuant to the clauses outlined in the Credit Agreement dated June 5, 2009. Such warrants were issued at an exercise price of $2.00 per share and vest immediately; the warrants expire 3 years from the date of issuance.

All material subsequent events from the balance sheet date through the date of issuance of this report have been disclosed above.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and the consolidated financial statements and related notes thereto included in our December 31, 2010 Annual Report on Form 10-K, filed with the SEC and with the unaudited interim financial statements and related notes thereto presented in this Quarterly Report on Form 10-Q, as well as our reports on Form 8-K and other SEC filings.

FORWARD-LOOKING STATEMENTS

This report contains or incorporates forward-looking statements within the meaning of the federal securities laws that involve risks and uncertainties. We develop forward-looking statements by combining currently available information with our beliefs and assumptions. These statements relate to future events, including our future performance, and management’s expectations, beliefs, intentions, plans or projections relating to the future and some of these statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “seeks,” “future,” “continue,” “contemplate,” “would,” “will,” “may,” “should,” and the negative or other variations of those terms or comparable terminology or by discussion of strategy, plans, opportunities or intentions. As a result, actual results, performance or achievements may vary materially from those anticipated by the forward-looking statements. These statements include, among others:

- statements concerning the benefits that we expect will result from our business activities and results of exploration that we contemplate or have completed, such as increased revenues; and

- statements of our expectations, beliefs, future plans and strategies, anticipated developments and other matters that are not historical facts.

Among the factors that could cause actual results, performance or achievements to differ materially from those indicated by such forward-looking statements are:

•

the risk that we will not achieve the strategic benefits of the acquisition of Canadian Communications;

•

the volume and timing of systems sales and installations, the length of sales cycles and the installation process and the possibility that our products will not achieve or sustain market acceptance;

•

the timing, cost and success or failure of new product and service introductions, development and product upgrade releases;

•

competitive pressures including product offerings, pricing and promotional activities;

•

errors or similar problems in our products;

•

the outcome of any legal proceeding that has been or may be instituted against us and others;

•

our ability to attract and retain qualified personnel;

•

maintaining our intellectual property rights and litigation involving intellectual property rights;

•

legislative, regulatory and economic developments;

•

risks related to third-party suppliers and our ability to obtain, use or successfully integrate third-party licensed technology;

•

breach of our security by third parties; and

•

those factors discussed in “Risk Factors” in our periodic filings with the Securities and Exchange Commission (the “SEC”).

We make these statements under the protection afforded by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Because forward-looking statements are subject to assumptions and uncertainties, actual results, performance or achievements may differ materially from those expressed or implied by such forward-looking statements. Stockholders are cautioned not to place undue reliance on such statements, which speak only as of the date such statements are made. Except to the extent required by applicable law or regulation, Roomlinx undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

GENERAL

Overview

Roomlinx, Inc., a Nevada corporation ("we," "us" or the "Company"), provides three core products and services:

In-room media and entertainment.

We provide in-room media and entertainment products and services for hotels, resorts, and time share properties. Products and services included within our in-room media and entertainment offering include our proprietary Interactive TV platform, Satellite TV programming, and on-demand movies.

The Company develops proprietary software and integrates hardware to facilitate the distribution of its Interactive TV platform. The Interactive TV platform includes business applications, national and local advertising, and on demand content. The content consists of high definition and standard definition Hollywood, adult, 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 such as the ability to order room service on the television or laptop.

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

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 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 products. We derive additional revenue from the rental of movies, 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. Our hotel satellite television programming products provide for delivery and viewing of high definition and standard definition television programming for hotels, resorts, and time share properties. The Company installs and provides services that address the entertainment and information needs of hotel guests and resort guests. We specialize in providing advanced high definition equipment for delivering digital television programming such as ESPN, HBO, Starz, and other specialty and local channels.

We derive revenues from the installation of the programming equipment we provide to hotels, resorts, and timeshare properties. We derive additional revenue from the television programming fees we provide to hotels, resorts, and timeshare properties. Customers typically pay a one-time fee for the installation of the equipment and then pay monthly programming fees for delivery of a specific TV channel lineup.

Wired Networking Solutions and Wireless Fidelity Networking Solutions.

We provide wired networking solutions and wireless fidelity networking solutions, also known as Wi-Fi, for high speed internet access at hotels, resorts, and timeshare locations. The Company installs and creates services that address the productivity and communications needs of hotel, resort, and timeshare guests. We specialize in providing advanced Wi-Fi wireless services such as the wireless standards known as 802.11a/b/g/n/i.

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 revenues from the installation of the wired and wireless networks we provide to hotels, resorts, and timeshare 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.

Residential Media and Communications:

Our products provide residential and business customers telecommunication services including telephone, satellite television, and wired and wireless internet access.

Telephone service is provided through traditional, analog “twisted pair” lines, as well as digital Voice Over Internet Protocol. Analog phone service is typically provided via an Interconnection agreement with Qwest Communications, which allows the Company to resell Qwest service through their wholesale and retail accounts with Qwest. VOIP service is provided at properties where the Company maintains a broadband internet service to the end customer, allowing the Company to provide digital phone service (VOIP) over the same lines as their internet service.

Television service is typically provided via the Company’s agreements with DISH Networks and DirecTv. Most television service to customers is provided via a head-end distribution system, or an L-Band digital distribution system. Television service is offered in high definition whenever possible.

Internet service is provided via both wired and wireless network design. The Company provisions and manages broadband access to their customers through both wholesale and resale methods. Wholesale methods exist when the Company owns and controls the internet circuit and resale methods exist when the Company uses an affiliated third party to provide the internet circuit.

We derive revenues through installations and delivery of telephone service and internet access, which is billed on a monthly basis, and delivery of television service which is billed by the satellite provider with monthly commissions paid to the Company by the provider. We also derive revenues from management fees for the management of affiliated communication systems.

Trends and Business Outlook

Our goal is to be the leading provider of all facets of in-room hotel, resort and timeshare entertainment, programming and internet connectivity. We believe that we are developing the scale, capacity, and reach to respond to customers’ needs quickly and that our product offerings differentiate us from other market participants in terms of usability, technical innovation and breadth of offerings. Over the past year, we have taken significant steps towards these goals. In the second quarter of 2010, we began to see the benefits of many of these decisions and investments, such as our success in being selected by a major hotel chain from among other industry participants. These successes continued in the first quarter of 2011 and we remain optimistic that our products and offerings will continue to gain acceptance in the marketplace.

We believe there has been a fundamental shift in the way people communicate and from where they get their content. This shift is affecting guest habits within the hotel room. Hotel guests are getting their content from the internet or alternative, mobile sources like computers and smartphones. Roomlinx developed the Interactive TV platform to embrace these changing habits and allow guests easy access to their content, work, and the internet via the in-room flat panel LCD. We have seen strong usage of the Interactive TV platform at our current hotel installations and we believe there is even greater ability to monetize our Interactive TV platform as we increase hotel penetration and usage. We believe our Interactive TV platform creates a true differentiation for Roomlinx and we will continue to invest in product enhancements and Interactive TV sales and marketing efforts.

Although our current results demonstrate the initial success of our efforts, general economic conditions and market uncertainty may still negatively affect our financial results in future periods. We anticipate that the rate of new orders may vary significantly from quarter to quarter. Consequently, if anticipated sales and shipments in any quarter do not occur when expected, expenses and inventory levels could be disproportionately high, and our operating results for that quarter and future quarters may be adversely affected. Further, given the lag between the incurrence of expenses in connection with sales “wins” and the resulting revenue stream, we anticipate that, while we will see organic growth that positions us for future profitability, our costs of sales and other operating expenses will exceed our revenues in the near term. We have incurred operating losses since our inception.

Our acquisition of Canadian Communications, LLC will be a further driver of sales growth and fill out the Company’s product and service offerings. We will continue to look for additional acquisitions that will enhance our market penetration within the hotel sector, increase profits, and offer product synergies.

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.

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.

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 wired and wireless network 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.

Television programming revenue primarily consists of equipment purchases, installation of the equipment, and television programming fees. Revenue on the equipment and installations is recognized when the installation is complete and the customer has accepted such installation. Revenue on the programming fees are recognized as invoiced per the individual contracts.

Residential revenue primarily consists of telephone, internet, and television set-up and services as well as residual commissions on these products. Customers are billed and revenue is recognized as the set-up is completed and for the period of service being sold.

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.

Inventory includes materials on-hand at our warehouses as well as 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.

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 provides compensation costs for our stock option plans determined in accordance with the fair value based method to 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.

RESULTS OF OPERATIONS

As noted above, on October 1, 2010, Roomlinx acquired Canadian Communications LLC and its subsidiaries. The operating results of Canadian Communications LLC and its subsidiaries are included in the accompanying discussion and analysis and consolidated statements of operations for periods subsequent to the completion of the acquisition, October 1, 2010.

THREE MONTHS ENDED MARCH 31, 2011 COMPARED TO THREE MONTHS ENDED MARCH 31, 2010

Our revenues for the three months ended March 31, 2011 were $1,423,172, an increase of $1,029,957, or 262%, over our $393,215 in revenues for the three months ended March 31, 2010. Of this increase, $536,199 is due to increased installations, hardware sales, and recurring revenue streams of our media and entertainment products. The remaining increase of $493,758 is attributable to the revenue streams from Canadian Communications, LLC.

Our cost of goods sold for the three months ended March 31, 2011 was $961,141 an increase of $723,490, or 304%, over our $237,651 cost of goods sold for the three months ended March 31, 2010. Of this increase, $359,393 is attributable to the increased cost of goods sold associated with the revenue streams we acquired from Canadian Communications, LLC. The remaining increase of $364,097 is due to the organic increased sales mentioned above.

Our gross profit for the three months ended March 31, 2011 was $462,031, an increase of $306,467, or 197%, over the $155,564 gross profit for the three months ended March 31, 2010. Of this increase, $134,365 is attributable to the acquisition of Canadian Communications. The remaining increase of $327,666 is primarily due to the increased organic revenues discussed above, partially offset by increased cost of goods sold.

Hospitality

Our Hospitality segment includes hotel and meeting rooms in the following geographic segments: United States, Canada, and Other Foreign. As of March 31, 2011, Other Foreign included Mexico and Aruba. The products offered under our hospitality segment include the installation of, and the support and service of, high-speed internet access, interactive TV services, free to guest programming, and on-demand programming, as well as advertising and e-commerce products.

United States: Our US Hospitality revenues for the three months ended March 31, 2011 were $886,371, an increase of $554,999, or 167%, over the $331,372 in revenue for the three months ended March 31, 2010. This increase is primarily due to increased installations, hardware sales, and recurring revenue streams of our media and entertainment products.

Our US Hospitality cost of goods sold for the three months ended March 31, 2011 was $604,123, an increase of $411,127, or 213%, over the $192,996 in cost of goods sold for the three months ended March 31, 2010. This increase is primarily attributable to the increased media and entertainment sales mentioned above.

The gross profit associated with our US Hospitality business was $282,248 for the three months ended March 31, 2011; an increase of $143,572, or 104%, over the $138,676 in gross profit for the three months ended March 31, 2010. This increase is attributable to the increase in US sales partially offset by increased cost of goods sold mentioned above.

Canada: Our Canadian hospitality revenues for the three months ended March 31, 2011 were $264,992, an increase of $227,244, or 602%, over the $37,748 in revenue for the three months ended March 31, 2010. $238,571, or 105%, of this increase is attributable to Video-On-Demand revenue stream we acquired with the acquisition of Canadian Communications, LLC. There was a decrease in hardware sales of $11,327 that slightly offset this increase.

Our Canadian hospitality cost of goods sold for the three months ended March 31, 2011 was $184,193, an increase of $153,995, or 510%, over the $30,198 in cost of goods sold for the three months ended March 31, 2010. $165,991, or 108%, of this increase, is attributable to the Video-On-Demand business acquired through the acquisition of Canadian Communications, LLC. The cost of goods sold related to the other services to Canadian hotels was reduced by $11,996, thereby reducing the total increase.

The gross profit associated with our Canadian hospitality revenue streams was $80,799 for the three months ended March 31, 2011; an increase of $73,249, or 970%, over the $7,550 in gross profit for the three months ended March 31, 2010. This increase is primarily attributable to the increased Video-On-Demand and hardware sales mentioned above.

Foreign: Our foreign hospitality revenues for the three months ended March 31, 2011 were $48,669, an increase of $24,574, or 102%, over the $24,095 in revenue for the three months ended March 31, 2010. $20,104, or 82%, of this increase is attributable to Video-On-Demand business acquired through the acquisition of Canadian Communications, LLC. The remaining increase of $4,470 is primarily due to increased recurring revenue streams of our Interactive TV platform.

Our foreign cost of goods sold for the three months ended March 31, 2011 was $18,798, an increase of $4,341, or 30%, over the $14,457 in cost of goods sold for the three months ended March 31, 2010. There was an increase of $15,781 that is attributable to the Video-On-Demand revenue stream we acquired with the acquisition of Canadian Communications, LLC. This increase was partially offset by a decrease of $11,440 related to the other services to foreign hotels.

The gross profit associated with our foreign hospitality revenue streams was $29,871 for the three months ended March 31, 2011, an increase of $20,233, or 210%, over the $9,638 in gross profit for the three months ended March 31, 2010. This increase is primarily attributable to the increased Interactive TV and Video-On-Demand sales mentioned above.

Residential

Our residential segment includes multi-dwelling unit and business customers in the United States. The products offered include the installation of, and the support and service of, telephone, internet, and television services.

Our residential revenues for the three months ended March 31, 2011 were $223,140; our cost of goods sold for the period same period were $154,027; and our gross profit for the same period was $69,113. This revenue stream is entirely attributable to the acquisition of Canadian Communications, LLC which was not effective for the three months ended March 31, 2010.

Operational Expenses

Our operating expenses for the three months ended March 31, 2011 were $1,114,248 compared to $533,905 for the three months ended March 31, 2010; an increase of $580,343, or 109%. This increase was primarily due to the growth of our Company throughout 2010, including personnel expenses and office expenses. Part of this growth included the acquisition of Canadian Communications, as well as our current preparations to build a strong foundation to support the large growth opportunity believed to exist over the next eighteen months.

Our operations department expenses increased $69,109 to $231,977 in the three months ended March 31, 2011 compared to the same period in 2010. This increase is primarily due to increased personnel expenses. Personnel expenses increased $80,908. These increases were partially offset by a decrease in office expense of $15,690. These increases are an example of our efforts to create a strong support foundation in order to support the growth opportunities as we begin to work with large hotel groups.

Our product development department expenses increased $145,174 to $215,727 in the three months ended March 31, 2011 compared to same period in 2010. This increase is primarily due to increased personnel costs and equipment expenses. Personnel expenses increased $108,154 and equipment expenses increased $18,812. During 2010 we brought in a Chief Technical Officer in order to properly lay out our product roadmap and begin to create stronger documentation and procedures. This allows us to continue to enhance our media and entertainment product offerings in order to accommodate the growing customer demands. These demands have included integration of internet apps such as Netflix and Hulu, as well as a development effort that includes the integration of Free-to-Guest TV programming into our exiting Interactive TV platform.

Our general and administrative expenses increased $101,206 to $378,284 in the three months ended March 31, 2011 compared to the same period in 2010. This increase is primarily due to the increase in personnel, professional services, and stock compensation expense. Personnel related and professional service expenses increased approximately $87,454, and stock compensation expense increased approximately $14,146. The increases are another example of our efforts to create a strong support foundation in order to support the anticipated growth opportunities as we begin to work with large hotel groups. Part of the 2011 increase in professional services the Company incurred were onetime expenses related to the acquisition of Canadian Communications which made up approximately $22,000 of the increase in professional services.

Depreciation expense for the three months ended March 31, 2011 and 2010 was $174,460 and $23,406, respectively. The increase is primarily a result of the depreciable property acquired in the Canadian Communications, LLC acquisition.

Our operating loss increased to $538,417 during the three months ended March 31, 2011 compared to $378,341 during the three months ended March 31, 2010; an increase of $160,076. This 42% increase is attributable to the increase in our operating expenses discussed above.

Non-Operating

For the three months ended March 31, 2011, our non-operating income increased to $64,578 compared to $13,962 during the three months ended March 31, 2010. This increase is primarily due to an increase in interest income pertaining to the equipment leases to our customers.

Our non-operating expenses for the three months ended March 31, 2011 increased to $63,528 from $11,857 during the three months ended March 31, 2010. Our interest expense for the three months ended March 31, 2011 was $31,550 compared to $10,754 for the three months ended March 31, 2010, an increase of 193%. This increase is primarily attributable to the increased balance on our line of credit. We incurred financing expenses of $28,193 for the three months ended March 31, 2011. These financing expenses are the debt discount expense for the warrants issued in association to the draws on our line of credit, there were no finance expenses incurred in the three months ended March 31, 2010. Our foreign currency loss was $3,550 for the three months ended March 31, 2011 as compared to $1,103 for the three months ended March 31, 2010. This decrease is due to the fluctuations in the value of the foreign currency.

For the three months ended March 31, 2011, we reported a net loss of $539,177, compared to a net loss of $376,236 for the three months ended March 31, 2010. The increases in operating and non-operating expenses, discussed above, are primary factors in these results.

FINANCIAL CONDITION

LIQUIDITY & CAPITAL RESOURCES

As of March 31, 2011 we had $170,489 in cash and cash equivalents, which amount, in addition to the credit facility provided by Cenfin, LLC, is sufficient to fund operating activities, new product installations, and to continue investing in our new media and entertainment product through 2011. Working capital at March 31, 2011 was $1,317,723.

Operating Activities

Net cash used by operating activities was $212,698 for the three months ended March 31, 2011 as compared to $186,538 used for the three months ended March 31, 2010. Our net receivables, as of March 31, 2011, increased by $777,391, or 357% compared to the same period in 2010, our inventory increased by $506,812 or 207%, our prepaid and other current assets increased by $90,120 or 226%, our accounts payable and accrued expenses increased by $649,918 or 255%, our deferred revenue increased by $42,192 or 24% and our accrued interest increased by $9,120or 100%.

Investing Activities

Net cash used by investing activities was $306,360 for the three months ended March 31, 2011 as compared to $22,016 received from investing activities the three months ended March 31, 2010. Our investments in lease receivables, as of March 31, 2011, increased $233,385, or 12% as compared to the same period in 2010.

Financing Activities

Net cash provided by financing activities was $358,257 for the three months ended March 31, 2011; this increase in financing of $360,598 was primarily a combination of $125,000 in stock purchases and $260,000 in draws on our line of credit, offset by payments made on our lease and notes payable. Our cash used by financing for the three months ended March 31, 2010 was $2,341, which was attributable to payments on our lease.

Contractual Obligations

We have operating and capital lease commitments, note payable commitments, and a line of credit commitment. The following table summarizes these commitments at March 31, 2011:

	Total		Less than 1 year		1 - 3 years		3 - 5 Years
Operating Lease Obligation	$	184,376	$	43,668	$	140,708	$	-
Capital Lease Obligation		13,322		7,843		5,479		-
Notes Payable		101,643		38,279		63,363		-
Line of Credit		1,956,000		-		464,000		1,492,000
Total	$	2,255,341	$	89,790	$	673,550	$	1,492,000

Item 3. 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 $3,550 for the three months ended March 31, 2011 compared to a loss of $1,103 for the three months ended March 31, 2010. 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 directly affect on our reported consolidated results. We do not hedge against the possible impact of this risk. A ten percent adverse change in the foreign currency exchange rate would not have a significant impact on our consolidated results of operations or financial position.

Item 4. Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

As of March 31, 2011, our management, including our Chief Executive Officer and Chief Financial Officer, have reviewed and evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b). Based on their review and evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective. 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.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our fiscal quarter ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On March 3, 2011, 62,500 warrants were exercised at $2.00 per share, for an aggregate of $125,000, in accordance with the Credit Agreement entered into on June 5, 2009.

Item 3. Defaults Upon Senior Securities

None.

Item 4. (Removed and Reserved)

Item 5. Other Information

None

Item 6. Exhibits

31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the Chief Executive and Chief Financial Officers.

32.1 Certification of the Chief Executive and Chief Financial Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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. Wasik
	Michael S. Wasik
	Chief Executive Officer

	Date: May 16, 2011

	By: /s/ Edouard Garneau
	Edouard Garneau
	Chief Financial Officer

	Date: May 16, 2011

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. Wasik
	Michael S. Wasik
	Chief Executive Officer

	Date: May 16, 2011

	By: /s/ Edouard Garneau
	Edouard Garneau
	Chief Financial Officer

	Date: May 16, 2011

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