Certain statements contained in this prospectus, including statements regarding the anticipated development and expansion of our business, our intent, belief or current expectations, primarily with respect to the future operating performance of the Company and the services we expect to offer and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements, because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made.

Our core business was the development and installation of an intelligent, in-room computer platform and communications network, or the eRoomSystem, for the lodging industry. The eRoomSystem is a computerized platform and processor-based system designed to collect and control data. The eRoomSystem supports our fully automated and interactive eRoomServ refreshment centers, eRoomSafes, eRoomEnergy products, and the eRoomTray. In 2005, we commenced our diversification strategy of investing in third party emerging growth companies. To this end, we have made investments totaling $60,000, consisting of $10,000 in Identica Holdings Corporation and $50,000 in Aprecia, LLC. The investment in Aprecia has been written off as an unrealized loss. In addition, we have loaned Identica $150,000 in cash. The loan is secured by a security interest in all the assets of Identica and is evidenced by a promissory note. In consideration for making the loan, we were issued a warrant to purchase 1,000,000 shares of common stock of Identica, exercisable at $0.15 per share, at any time through May 20, 2010. We may make additional investments in promising emerging growth companies, and potentially acquire an operating company if the opportunity arises.

Our existing products interface with the hotel's property management system through our eRoomSystem communications network. The hotel's property management system posts usage of our products directly to the hotel guest's room account. The solutions offered by our eRoomSystem and related products have allowed us to install our products and services in several premier hotel chains, including Marriott International, Hilton Hotels and Carlson Hospitality Worldwide, in the United States and internationally.

One of the byproducts of our technology is the information we have collected since our first product installation. To date, we have collected several million room-nights of data. Through our eRoomSystem, we are able to collect information regarding the usage of our products on a real-time basis. We use this information to help our customers increase their operating efficiencies.

Description of Revenues

Historically, we have received most of our revenues from the sale or placement under a revenue-sharing program of our products in hotels. We expect that these revenues will account for a substantial majority of our revenues for the foreseeable future. In addition, we may receive revenues in the future upon the sale of securities received in consideration for investments made in third party companies in 2005 and 2006; however, the return on such investments is not assured.

We also generate revenues from maintenance and support services relating to our existing installed products. Our dependence on the lodging industry, including its guests, makes us extremely vulnerable to downturns in the lodging industry caused by the general economic environment. Such a downturn could result in fewer purchases by hotel guests of goods and services from our products installed in hotels, and accordingly lower revenues where our products are placed pursuant to a revenue sharing agreement. Time spent by individuals on travel and leisure is often discretionary for consumers and may be particularly affected by adverse trends in the general economy. The success of our operations depends, in part, upon discretionary consumer spending and economic conditions affecting disposable consumer income such as employment, wages and salaries, business conditions, interest rates, availability of credit and taxation.

Our revenue-sharing program provides us with a seven-year revenue stream under each revenue-sharing agreement. Because many of our customers in the lodging industry traditionally have limited capacity to finance the purchase of our products, we designed our revenue-sharing program accordingly. Through our revenue-sharing plan, we have installed our products at little or no upfront cost to our customers and share in the recurring revenues generated from sales of goods and services related to our products. We retain the ownership of the eRoomServ refreshment centers and eRoomSafes throughout the term of the revenue-sharing agreements and the right to re-deploy any systems returned to us upon the expiration or early termination of the revenue-sharing agreements. We have failed to place any products, either on a revenue sharing or sale basis in the prior three years, and we have no present intention of placing new products in the future. We do, however, intend to continue to service and maintain our existing installed product base for the remaining life of the contracts relating thereto.

Our revenues over the past few years have been fairly stable as we have focused on service and maintenance of our existing installed products and have not installed new products at hotels. Over time, our revenues relating to our installed products will decline as existing revenue sharing agreements conclude. Given the foregoing, in 2005 we commenced our diversification strategy to invest in emerging growth companies. To date we have invested in Identica Holdings Corporation, a company which has recently filed a registration statement with the Securities and Exchange Commission, and which is a distributor and integrator of next-generation biometric security solutions, including the TechSphere hand vascular pattern biometric technology. We continue to explore opportunities and perform due diligence on third parties with respect to additional potential investments. At this time, we have not reached a definitive agreement to make further investments. In addition, we may acquire an operating company in the future if the opportunity arises. Over time, we may realize revenues from the sale of securities purchased from Identica and other third party companies in the future, if applicable. The timing and return on such investments, however, cannot be assured.

We anticipate that we will receive more than 50% of the recurring revenues from the sale of goods and services generated by our currently installed eRoomServ refreshment centers, eRoomSafes and eRoomTray solutions under revenue-sharing agreements. Our customers receive the remainder of the recurring revenues.

No new products were installed during the years ended December 31, 2007 and 2006.

Sales revenue from our products is recognized upon completion of installation and acceptance by the customer. We do not, however, expect to generate meaningful sales revenue as such revenues are limited to the sales of replacement equipment and parts to hotel clients who previously purchased our products. Sales revenue from the placement of our eRoomServ refreshment centers and eRoomSafes under our revenue-sharing program are accounted for similar to an operating lease, with the revenues recognized as earned over the term of the agreement. In some instances, our revenue-sharing agreements provide for a guaranteed minimum daily payment by the hotel. We negotiated our portion of the revenues generated under our revenue-sharing program based upon the cost of the equipment installed and the estimated daily sales per unit for the specific customer.

We have entered into installation, maintenance and license agreements with most of our existing hotel customers. Installation, maintenance and license revenues are recognized as the services are performed, or pro rata over the service period. We defer all revenue paid in advance relating to future services and products not yet installed and accepted by our customers.

Our installation, maintenance and license agreements stipulate that we collect a maintenance fee per eRoomServ refreshment center per day, payable on a monthly basis. Our objective is to generate gross profit margins of approximately 50% from our maintenance-related revenues. We base this expectation on our historical cost of maintenance of approximately $0.04 per unit per day and, pursuant to our maintenance agreements, our projected receipt of generally not less than $0.08 per unit per day.

Description of Expenses

Cost of product sales consists primarily of production, shipping and installation costs. Cost of revenue-sharing arrangements consists primarily of depreciation of capitalized costs for the products placed in service. We capitalize the production, shipping, installation and sales commissions related to the eRoomServ refreshment centers, eRoomSafes, eRoomTrays and eRoomEnergy management products placed under revenue-sharing agreements. Cost of maintenance fee revenues primarily consists of expenses related to customer support and maintenance.

Selling, general and administrative expenses primarily consist of general and administrative expenses including professional fees, salaries and related costs for accounting, administration, finance, human resources, information systems and legal personnel.

Research and development expenses consist of payroll and related costs for hardware and software engineers, quality assurance specialists, management personnel, and the costs of materials used by our consultants in the maintenance of our existing installed products. As we have elected not to install new products at hotels, there was very little research and development expenses in fiscal year 2007.

In accordance with Financial Accounting Standards Board, or FASB, Statement of Financial Accounting Standards, or SFAS, No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed," development costs incurred in the research and development of new software products to be sold, leased or otherwise marketed are expensed as incurred until technological feasibility in the form of a working model has been established. Internally generated capitalizable software development costs have not been material to date. We have charged our software development costs to research and development expense in our consolidated statements of operations.

Results of Operations

The following table sets forth selected statement of operations data as a percentage of total revenues for the years indicated:

                                                 Fiscal Years ended December 31,
                                                    2007                 2006
Statement of Operations Data:
Revenue:
Revenue-sharing arrangements                              67.5 %               73.2 %
Maintenance fees                                          21.7                 20.9
Product sales                                             10.8                  5.9
Total revenue                                            100.0                100.0
Cost of revenue:
Revenue-sharing arrangements                              32.6                 33.6
Maintenance                                                5.0                  4.9
Product sales                                              2.4                  5.2
Total cost of revenue                                     40.0                 43.7
Gross margin                                              60.0                 56.3

Operating expenses:
Selling, general and administrative expense               35.2                 41.0
Research and development expense                           0.7                    -
Interest expense                                             -                  8.2
Interest and other income                                 (9.4 )               (5.0 )
Net operating expenses                                    26.5                 44.2
Income from operations                                    33.5 %               12.1 %
Other income (expense):
Gain on forgiveness of liabilities and debt                0.7                    -
Net income (loss)                                         34.2 %               12.1 %

Comparison of Years Ended December 31, 2007 and 2006

Revenues

Revenue Sharing Arrangements -- Our revenue from revenue-sharing arrangements was $792,281 in 2007 as compared to $979,470 for 2006, representing a decrease of $187,189, or 19.1%. The decrease in revenue from revenue-sharing arrangements was due to completion of a number of revenue-sharing agreements. During the years ended December 31, 2007 and 2006, we did not place additional products on a revenue sharing basis. During the year ended December 31, 2007, revenues from one customer accounted for 15% of our total revenues.

Maintenance Fee Revenue -- Our maintenance fee revenue was $254,428 for 2007 and $278,464 for 2006, representing a decrease of $24,036, or 8.6%. The decrease in maintenance fee revenue was due to a decreased number of products under revenue-sharing and maintenance contracts.

Product Sales -- Our revenue from product sales was $127,441 in 2007, as compared to $79,551 in 2006, representing an increase of $47,890, or 60.2%. The increase in revenue from product sales in 2007 was a result of the sales to hotels of their equipment upon completion of their revenue-sharing agreement.

Cost of Revenue

Cost of Revenue-Sharing Revenue -- Our cost of revenue-sharing revenue was $382,820 for 2007 and $449,815 for 2006, representing a decrease of $66,995, or 14.9%. The decrease in the cost of revenue-sharing revenue resulted from a decrease in depreciation expense due to the sale of equipment to customers upon completion of their revenue-sharing contract. The gross margin percentage on revenue-sharing revenue was 51.7% in 2007 as compared to 54.1% in 2006.

Cost of Maintenance Revenue -- Our cost of maintenance revenue was $58,349 for 2007 as compared to $64,365 for 2006, representing a decrease of $6,016, or 9.3%. The decrease in the cost of maintenance revenue was primarily due to the decrease in the number of bars under maintenance and revenue sharing contracts. The gross margin percentage on maintenance revenues was 77.1% in 2007 as compared to 76.9% in 2006.

Cost of Product Sales Revenue -- Our cost of product sales revenue was $28,431 for 2007 as compared to $70,085 for 2006, representing a decrease of $41,654, or 59.4%. The decrease was due to a lower remaining basis of the equipment sold in 2007 over those sold in 2006. The gross margin percentage on revenue from product sales revenue was 77.7% in 2007 as compared to 11.9% in 2006.

The changes and percent changes with respect to our revenues and our cost of revenue for the years ended December 31, 2007 and 2006 are as follows:

                                     For the Years Ended
                                        December 31,
                                                                            Percent
                                     2007          2006         Change      Change
REVENUE
Revenue-sharing arrangements      $   792,281   $   979,470   $ (187,189 )      19.1 %
Maintenance fees                      254,428       278,464      (24,036 )       8.6 %
Product sales                         127,441        79,551       47,890        60.2 %
Total Revenue                       1,174,150     1,337,485     (163,335 )      12.2 %

COST OF REVENUE
Revenue-sharing arrangements          382,820       449,815      (66,995 )      14.9 %
Maintenance                            58,349        64,365       (6,016 )       9.3 %
Product sales                          28,431        70,085      (41,654 )      59.4 %
Total Cost of Revenue             $   469,600   $   584,265   $ (114,665 )      19.6 %

GROSS MARGIN PERCENTAGE
Revenue-sharing arrangements             51.7 %        54.1 %
Maintenance                              77.1 %        76.9 %
Product sales                            77.7 %        11.9 %
Total Gross Margin Percentage              60 %        56.3 %

Although the preceding table summarizes the net changes and percent changes with respect to our revenues and our cost of revenue for the years ended December 31, 2007 and 2006, the trends contained therein are limited to a two-year comparison and should not be viewed as a definitive indication of our future results.

Operating Expenses

Selling, General and Administrative -- Selling, general and administrative expenses were $412,919 for 2007 and $548,421 for 2006, representing a decrease of $135,502, or 24.7%. Selling, general and administrative expenses represented 35.2% of our total revenues in 2007 and 41% of our total revenues in 2006. The decrease in selling, general and administrative expenses related to our continued reduction in fixed overhead expenses.

Research and Development Expenses -- Research and development expenses were $8,678 for 2007 and $0 for 2006, representing an increase of $8,678, or 100%. The increase in research and development expenses was due in part to a development project to provide replacement parts for a hotel customer. Research and development expenses represented 0.7% of our total revenue in 2007 and 0% of our total revenue in 2006.

Interest expense was $0 for 2007 as compared to $109,946 for 2006, a decrease of $109,946, or 100%. The decrease in interest expense was due to the payoff of AMRESCO in July 2006. Interest and other income in the amount of $110,768 was realized in 2007 as compared to $67,230 in 2006. Income from operations for 2007 was $393,721, as compared to $162,083 in 2006. The Company also realized a gain on forgiveness of liabilities and debt of $8,500 in 2007.

Net Income Attributable to Common Stockholders

We realized net income attributable to common stockholders of $402,221 in 2007, as compared to $162,083 in 2006. The $240,138 increase in net income was primarily due to the decrease in selling general and administrative expenses as well as the increase in interest income and decrease in interest expense.

Financing Arrangement with AMRESCO Leasing Corporation

Under the terms of a financing agreement with AMRESCO Leasing Corporation, (the "finance company"), the finance company had agreed to fund up to 150% of the Company's product costs for each eRoomServ refreshment center that had been in service for 90 days, subject to the related hotel customer meeting certain requirements and conditions during that period. As part of the financing agreement, the Company formed eRoomSystem SPE, Inc. ("SPE"), a wholly owned, consolidated subsidiary. SPE owns all of the eRoomServ refreshment centers funded by the finance company as well as the related revenue-sharing agreements. The finance company had a senior security interest in the eRoomServ refreshment centers financed under the financing agreement and the corresponding revenue sharing agreements. SPE was obligated to repay the amount borrowed under the terms of a note payable corresponding to each funding, pursuant to the financing agreement over seven years, plus interest, at a variable interest rate determined at the time of each funding.

The notes payable were repaid by the Company on July 14, 2006. SPE held payments from hotel customers in several restricted bank accounts for payment to the finance company and to the Company. The funds were released on July 18, 2006.

Liquidity and Capital Resources

At December 31, 2007, we had $2,353,972 of cash and working capital of $2,416,398, as compared to $1,480,720 of cash and working capital of $1,599,398 at December 31, 2006. In addition, our stockholders' equity was $3,029,941 at December 31, 2007 as compared to $2,664,563 at December 31, 2006, an increase of $365,378. The increase in cash, working capital and stockholders' equity reflects the continued decrease in cash used in our operations and reduction in fixed overhead expenses.

Our accumulated deficit decreased to $31,082,627 at December 31, 2007 as compared to $31,484,848 at December 31, 2006. The decrease in accumulated deficit is a direct result of our net income of $402,221 in the year ended December 31, 2007.

Net cash provided by operating activities for the year ended December 31, 2007 was $765,270, as compared to $683,126 of net cash provided by operating activities during the year ended December 31, 2006. The $82,144 increase in net cash provided by operating activities resulted primarily from the increase in net income in 2007.

Net cash provided by investing activities for the year ended December 31, 2007 was $107,982, as compared to net cash provided during the year ended December 31, 2006 of $190,329. The change resulted primarily from the proceeds of a note receivable which was received in 2006.

Net cash used in financing activities for the year ended December 31, 2007 was $0, as compared to $709,250 during the year ended December 31, 2006. The cash used in financing activities resulted from the payoff of the long-term debt relating to AMRESCO in 2006.

On October 1, 2003, the Company issued AMRESCO a warrant to purchase 400,000 shares of common stock, exercisable at $0.10 per share through October 1, 2008. If at anytime after December 31, 2007, the warrant has an intrinsic value greater than $300,000 based upon the then current trading price of the Company's common stock, then AMRESCO will have the right to "put" the warrant back to the Company in exchange for $200,000 payable in 12 equal consecutive monthly installments with the first payment to be made on the last day of the month in which the "put" occurs. Accordingly, the Company may be obligated to pay AMERSCO $200,000.

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements.

We currently believe that our cash on hand will provide sufficient capital resources and liquidity to fund our expected operating expenditures for the next twelve months.