BTCS Inc. - Quarter Report: 2008 October (Form 10-Q)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
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[X]
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Quarterly
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
the quarterly period ended October 31,
2008
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[ ]
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Transition
Report pursuant to 13 or 15(d) of the Securities Exchange Act of
1934
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For
the transition period to __________
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Commission
File Number: 333-151252
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Hotel Management Systems,
Inc.
(Exact
name of small business issuer as specified in its charter)
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Nevada
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26-2477977
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(State
or other jurisdiction of incorporation or organization)
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(IRS
Employer Identification No.)
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8600 Starboard Dr.,
#1214, Las Vegas, Nevada 89117
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(Address
of principal executive offices)
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(702)
335-4531
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(Issuer’s
telephone number)
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8600 Starboard Dr.,
#1143, Las Vegas, Nevada 89117
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(Former
name, former address and former fiscal year, if changed since last
report)
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Check
whether the issuer (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 issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days [X]
Yes [ ] No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
[ ] Large
accelerated
filer [
] Accelerated filer
[ ]
Non-accelerated
filer [X]
Smaller reporting company
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). [X] Yes [ ] No
State the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date: 7,000,000 common shares as of
December 11, 2008.
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Page
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PART I – FINANCIAL
INFORMATION
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| Controls and Procedures | ||
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PART II – OTHER
INFORMATION
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PART
I - FINANCIAL INFORMATION
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Our
unaudited financial statements included in this Form 10-Q are as
follows:
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| F-3 | |
These
unaudited financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and the SEC instructions to Form 10-Q. In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the interim
period ended October 31, 2008 are not necessarily indicative of the results that
can be expected for the full year.
HOTEL MANAGEMENT SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
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October
31,
2008
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April
30,
2008
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(unaudited)
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ASSETS
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CURRENT
ASSETS
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Cash
in bank
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$ | 19,311 | $ | 5,500 | |
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Prepaid
expenses
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- | - | |||
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TOTAL
CURRENT ASSETS
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19,311 | 5,500 | |||
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TOTAL
ASSETS
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$ | 19,311 | $ | 5,500 | |
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LIABILITIES
& STOCKHOLDERS' EQUITY
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|||||
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CURRENT
LIABILITIES
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Accounts
payable and accrued expenses
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$ | 4,500 | $ | - | |
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TOTAL
CURRENT LIABILITIES
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4,500 | - | |||
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LONG-TERM
DEBT
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|||||
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Note
payable related party
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- | - | |||
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TOTAL
LIABILITIES
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4,500 | - | |||
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STOCKHOLDERS'
EQUITY
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Preferred
stock: $0.001 par value; 10,000,000 shares authorized, no shares issued
and outstanding
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- | - | |||
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Common
stock: $0.001 par value; 90,000,000 shares authorized, 7,000,000 and
5,500,000 shares issued and outstanding
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7,000 | 5,500 | |||
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Additional
paid in capital
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13,500 | - | |||
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Deficit
accumulated during the development stage
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(5,689) | - | |||
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TOTAL
STOCKHOLDERS' EQUITY
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14,811 | 5,500 | |||
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TOTAL
LIABILITIES & STOCKHOLDERS' EQUITY
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$ | 19,311 | $ | 5,500 | |
The accompanying notes are an integral part of these
financial statements.
HOTEL MANAGEMENT SYSTEMS,
INC.
(A DEVELOPMENT STAGE
COMPANY)
(unaudited)
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For
the Three Months
Ended |
For
the Six Months
EndedOctober
31, 2008 |
From
Inception
On
April 15,
2008
through
October
31, 2008 |
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REVENUES
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$ | - | $ | - | $ | - | ||
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COST
OF SALES
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- | - | - | |||||
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GROSS
MARGIN
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- | - | - | |||||
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OPERATING
EXPENSES
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General
and administrative
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1,930 | 5,689 | 5,689 | |||||
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TOTAL
OPERATING EXPENSES
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1,930 | 5,689 | 5,689 | |||||
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NET
LOSS
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$ | (1,930) | $ | (5,689) | $ | (5,689) | ||
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BASIC
LOSS PER SHARE
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$ | (0.00) | $ | (0.00) | ||||
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Weighted
Average Shares Outstanding
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7,000,000 | 6,551,630 | ||||||
The accompanying notes are an integral part of these
financial statements.
HOTEL MANAGEMENT SYSTEMS,
INC.
(A DEVELOPMENT STAGE
COMPANY)
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Common
Stock
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Additional
Paid
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Accumulated
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Total Stockholders' |
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Shares
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Amount
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in
Capital
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Deficit
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Equity
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Balance
April 15, 2008
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- | $ | - | $ | - | $ | - | $ | - | ||||
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Shares
issued for cash at $0.001 per share on April 24,
2008
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5,500,000 | 5,500 | - | - | 5,500 | ||||||||
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Net
loss for the period ended April 30,
2008
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- | - | - | - | - | ||||||||
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Balance
April 30, 2008
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5,500,000 | 5,500 | - | - | 5,500 | ||||||||
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Shares
issued for cash at $0.001 per share on
June 23, 2008 (unaudited)
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1,500,000 | 1,500 | 13,500 | - | 15,000 | ||||||||
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Net
loss for the six months ended October 31,
2008 (unaudited)
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- | - | - | (5,689) | (5,689) | ||||||||
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Balance
October 31, 2008 (unaudited)
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7,000,000 | $ | 7,000 | $ | 13,500 | $ | (5,689) | $ | 14,811 | ||||
The accompanying notes are an integral part of these
financial statements.
HOTEL MANAGEMENT SYSTEMS,
INC.
(A DEVELOPMENT STAGE
COMPANY)
(unaudited)
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For
the Six
Months
Ended
October
31, 2008 |
From
Inception
On
April 15,
2008
through
October
31, 2008 |
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OPERATING
ACTIVITIES
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Net
loss
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$ | (5,689) | $ | (5,689) | |
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Adjustments
to reconcile net income to
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|||||
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net
cash provided by operating activities:
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Contributed
expenses
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- | - | |||
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Changes
in operating assets and liabilities:
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(Increase)
decrease in prepaid expenses
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- | - | |||
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Increase
(decrease) in accounts payable
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4,500 | 4,500 | |||
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NET
CASH USED IN OPERATING ACTIVITES
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(1,189) | (1,189) | |||
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INVESTING
ACTIVITIES
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|||||
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Property
and equipment purchased
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- | - | |||
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NET
CASH USED IN INVESTING ACTIVITIES
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- | - | |||
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FINANCING
ACTIVITIES
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Proceeds
from common stock issued
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15,000 | 20,500 | |||
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Increase
in notes payable-related parties
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- | - | |||
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NET
CASH PROVIDED BY FINANCING ACTIVITIES
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15,000 | 20,500 | |||
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NET
INCREASE IN CASH
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13,811 | 19,311 | |||
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CASH
- Beginning of period
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5,500 | - | |||
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CASH
- End of period
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$ | 19,311 | $ | 19,311 | |
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SUPPLEMENTAL
CASH FLOW DISCLOSURE:
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CASH
PAID FOR:
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Interest
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$ | - | $ | - | |
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Income
taxes
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$ | - | $ | - | |
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NON
CASH FINANCING ACTIVITIES:
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$ | - | $ | - | |
The accompanying notes are an integral part of these
financial statements.
HOTEL MANAGEMENT SYSTEMS, INC.
October 31, 2008 and April 30, 2008
NOTE
1 – CONDENSED FINANCIAL STATEMENTS
The
accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations, and cash flows at October 31, 2008 and for all
periods presented herein, have been made.
Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted. It is
suggested that these condensed financial statements be read in conjunction with
the financial statements and notes thereto included in the Company’s April 30,
2008 audited financial statements. The results of operations for the
periods ended October 31, 2008 and 2007 are not necessarily indicative of the
operating results for the full years.
NOTE
2 - GOING CONCERN
The
Company’s financial statements are prepared using generally accepted accounting
principles in the United States of America applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The Company has not yet established an ongoing source
of revenues sufficient to cover its operating costs and allow it to continue as
a going concern. The ability of the Company to continue as a going concern is
dependent on the Company obtaining adequate capital to fund operating losses
until it becomes profitable. If the Company is unable to obtain adequate
capital, it could be forced to cease operations.
In
order to continue as a going concern, the Company will need, among other things,
additional capital resources. Management’s plan is to obtain such resources for
the Company by obtaining capital from management and significant shareholders
sufficient to meet its minimal operating expenses and seeking equity and/or debt
financing. However management cannot provide any assurances that the Company
will be successful in accomplishing any of its plans.
The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going
concern.
HOTEL MANAGEMENT SYSTEMS, INC.
Notes to Financial Statements
October 31, 2008 and April 30, 2008
NOTE
3 – SIGNIFICANT ACCOUNTING POLICIES
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and 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.
Recent
Accounting Pronouncements
In May 2008, the
Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for
Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No.
60”. SFAS No. 163 clarifies
how Statement 60 applies to financial guarantee insurance contracts, including
the recognition and measurement of premium revenue and claims
liabilities. This statement also requires expanded disclosures about financial
guarantee insurance contracts. SFAS No. 163 is effective for fiscal years
beginning on or after December 15, 2008, and interim periods within those years.
SFAS No. 163 has no effect on the Company’s financial position, statements of
operations, or cash flows at this time.
In
May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162,
“The
Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 sets
forth the level of authority to a given accounting pronouncement or document by
category. Where there might be conflicting guidance between two categories, the
more authoritative category will prevail. SFAS No. 162 will become effective 60
days after the SEC approves the PCAOB’s amendments to AU Section 411 of the
AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.
Forward-Looking
Statements
Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of
1934. These forward-looking statements generally are identified
by the words “believes,” “project,” “expects,” “anticipates,” “estimates,”
“intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions. We intend
such forward-looking statements to be covered by the safe-harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and are including this statement for purposes of complying with
those safe-harbor provisions. Forward-looking statements are based on
current expectations and assumptions that are subject to risks and uncertainties
which may cause actual results to differ materially from the forward-looking
statements. Our ability to predict results or the actual effect of future plans
or strategies is inherently uncertain. Factors which could have a
material adverse affect on our operations and future prospects on a consolidated
basis include, but are not limited to: changes in economic conditions,
legislative/regulatory changes, availability of capital, interest rates,
competition, and generally accepted accounting principles. These risks and
uncertainties should also be considered in evaluating forward-looking statements
and undue reliance should not be placed on such statements. We
undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or
otherwise. Further information concerning our business, including
additional factors that could materially affect our financial results, is
included herein and in our other filings with the SEC.
Company
Overview and Plan of Operation
We were
incorporated as Hotel Management Systems, Inc. on April 15, 2008 in the State of
Nevada for the purpose of developing, perfecting, and marketing a proprietary
hotel management software known as “Hotel Management Tool.”
The
“Hotel Management Tool” software offers hotel operators a single software
platform which integrates all major aspects of the day-to-day management of
their enterprise. Although the HMT is fully customizable and able to
incorporate additional modules, our standard version will feature three basic
modules that deal with those hotel operating functions which can be most easily
improved by the use of our software platform: Product and Supplies Management,
Employee Data, and Employment Counseling and Reporting.
Product and Supplies
Management
This module of the HMT software will
allow hotel management to track and manage its inventory of supplies and in-room
products like shampoo, soap, and similar items. All of the supplies
and in-room products commonly used by the hotel can be input into a database
which will contain any necessary item or catalog numbers for each individual
product. The hotel’s
management
will also input unit cost and a desired minimum and maximum quantity of hand for
each product. On a daily or other periodic basis, the hotel’s
employees will then record inventory through the use of a count
worksheet. The hotel’s quantity on hand is then updated in a separate
screen. As the minimum quantity on hand is approached, the HMT will
know which products to re-order and in what quantity to order them and will
produce the appropriate product order.\
Employee Data
Management
This module of the HMT software will
allow for easy maintenance of a complete and user-friendly employee
database. Through a series of screens, the employee’s personal
information, contact and emergency information, and work-related information can
be easily input and maintained by management.
Employment Counseling and
Reporting
The third standard module to be
included in the HMT software will allow hotel management to accurately record
and track employee disciplinary incidents and any related counseling sessions
with employees through a user-friendly data screen. In the event that an
employee must be terminated, a full record and evaluation of the employee’s
attendance, cooperation, initiative, job knowledge, and over work quality can be
easily input by management. The HMT will then generate a written
report that can be given to the employee. The employee will sign a
receipt of the report, which can be stored in the hotel’s permanent
records.
Additional Standard
Features
Together with the standard set of
functions summarized above, the HMT offers some important standard
features:
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·
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Self-updating: The
HMT automatically checks for newer versions of the software, available
upgrades, and software updates. The software is updated
automatically on a continuous basis, ensuring maximum performance and user
satisfaction.
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·
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Tiered
Security: The HMT features a tiered security system with
a separate login and set of security credentials for each employee of the
hotel who will be using the program. Management can easily
structure these security credentials to allow different levels and types
of access to the HMT’s different functions depending upon the level of
each employee’s security
credentials.
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·
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Fully
Scalable: The HMT is fully scalable, which means that
its capacity can grow and expand with the customer’s
business. The software can easily add additional capacity and
new features and can accommodate more robust database systems as the
customer’s business operations become larger and more
complex.
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Customization and Additional
Modules Available
In addition to the 3 standard modules
described above, the HMT can easily accommodate additional segments dealing with
different aspects of the hotel and motel business. The core of the
program is designed to operate as hub, with different sets of functions that can
be added or
subtracted
to the core system like spokes on a wheel. Nearly every operating
hotel already uses some type of reservation software and some type of employee
timekeeping software. Once they have begun using our standard
product, however, many customers may desire a more total and cost-effective
integration of their operations. Additional modules that are ready to
add-on to the HMT at the customer’s request include the following:
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·
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Room
inventory and reservations system
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·
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Employee
scheduling
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·
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Employee
timekeeping and payroll
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·
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Online
product ordering from key suppliers
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Pricing
and Revenue Model
Our
intended pricing structure will feature a base purchase price for the standard
version of the HMT software, with an extra charge for each additional module
requested by the customer. We will also charge a small monthly
license fee for all maintenance and updates of the software and for storage of
the customer’s data:
| Standard version: | $1,500 |
| Each additional module: | $500-$1,000 depending on specifications |
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Monthly fee
Including data
storage:
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$20 per month per site |
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Monthly fee if
Customer stores own
data:
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$8 per month per site |
The
customer’s ongoing contract for maintenance, updates, and data storage will be
renewable annually at the option of the customer. Larger customers
will substantial data storage needs or complex customizations may be charged
higher fees. We believe this pricing model will position us well to
compete for the business of smaller hotel and motel operators (i.e.: those with
ten or fewer sites) who may be looking for a flexible and effective management
software solution at lower price than that typically charged by larger
competitors in the field.
Competition
The field
of hotel management software is flooded with an array of options which focus
primarily on room reservations and room inventory management. We will
face several larger and more established competitors. In addition,
many larger hotel and motel chains use proprietary systems built-for-hire to
suit their particular operations. We intend to focus our efforts on
small independent hotels, motels, inns, and bed-and-breakfast
properties. We believe or HMT software will be well-positioned to
compete for the business of these operators because of the following
advantages:
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·
|
Our
software is fully scalable. A hotel or motel owner can purchase
a basic product for relatively low cost that will be able to grow with the
enterprise if and when it expands.
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·
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Our
software is able to integrate all functions of the enterprise, not just
reservations and room inventory management. We believe this
all-in-one capability will appeal to smaller customers with limited staff
and resources for managing and integrating different functions of the
enterprise by hand or through the use of multiple software
products.
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|
·
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We
are a small company that will be focused on responsive and timely customer
service.
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Plan
of Operations
The HMT
software has been in development for approximately one year. During
this time, the product has been used and tested at a medium-sized motel in Las
Vegas, Nevada. As the product continues to be exposed to the
challenges of real-world use in an active environment, we are able to make
changes and improvements and to discover and remedy any remaining
problems. Development of the product is essentially complete at this
time.
Initial
Marketing Campaign
In the
third quarter of our current fiscal year, we plan to launch a direct mail-based
marketing campaign focused on independent hotel and motel operators with small
to medium-sized properties and fewer than 10 locations, as well as
bed-and-breakfast inns and similar small independent operations. Our mailer will
feature a complete graphical description of the HMT software as well as a
demonstration CD that will show the potential customer how the software will
function. The mailer will be followed-up with a phone call and
on-site demonstrations for those customers who are interested. We are
currently conducting market research and building a database of properties to
target with our mailer.
During
the first year of operations, our sole officer and director, John Baumbauer,
will provide his time to the business at no charge. Mr. Baumbauer will be
responsible for all administrative duties as well as overseeing the final
development and perfection of the HMT software, developing our sales and
marketing information material, researching potential customers, and performing
on-site product demonstrations and follow-up customer relations. As we have
limited financial resources, Mr. Baumbauer has committed to dedicating
approximately 15-20 hours a week in order to attend to needs of the
business.
Operational
Benchmarks For the Fiscal Year Beginning May 1, 2008
During
our first full fiscal year, we plan to achieve the following operational
goals:
|
Time
|
Objective
|
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· By
end of second quarter
|
Complete
final development and perfection of HMT software; continue to build
database of target customers and work on design of direct mail marketing
materials
|
|
· By
end of third quarter
|
Complete
database of target customers and complete development of direct mail
marketing materials; launch direct mail marketing
campaign
|
|
· By
end of fourth quarter
|
Begin
generating revenues from product sales and ongoing licensing
fees
|
Expense
Budget For The Fiscal Year Beginning May 1, 2008
| Expenses incidental to testing and perfection of software | $ | 1,000 |
| Cost of planned direct mail marketing campaign | $ | 10,000 |
| Travel and related for live customer demonstrations and other site visits | $ | 5,000 |
| Total | $ | 16,000 |
We do not
have plans to purchase any significant equipment or change the number of our
employees during the next twelve months.
We have
no employees other than our president and CEO, Mr. Baumbauer.
Results
of Operations for the three months ended July 31, 2008
We did
not earn any revenues from inception on April 15, 2008 through the period ending
October 31, 2008. We are presently in the development stage of our business and
we can provide no assurance that we will produce significant revenues or, if
revenues are earned, that we will be profitable.
We
incurred operating expenses and net losses in the amount of $1,930 during the
three months ended October 31, 2008 and in the amount of $5,689 during the six
months ended October 31, 2008. We have incurred total operating
expenses and net losses of $5,689 from our inception on April 15, 2008 through
the period ending October 31, 2008. Our operating expenses from
inception through October 31, 2008 consisted of general and administrative
expenses. Our losses are attributable to our operating expenses
combined with a lack of any revenues during our current stage of development. We
anticipate our operating expenses will increase as we continue with our plan of
operations.
Liquidity
and Capital Resources
As of
October 31, 2008, we had cash of $19,311 and working capital of $14,811. Our
cash on hand will allow us to cover our anticipated expenses for the fiscal year
beginning May 1, 2008, but may not be sufficient to fund operations beyond the
current fiscal year and will not be sufficient to pay any significant
unanticipated expenses. We currently do not have any operations and we have no
income. We will require additional financing to sustain our business operations
for any significant period of time beyond the fiscal year beginning May 1, 2008.
We currently do not have any arrangements for financing and we may not be able
to obtain financing when required.
We have
not attained profitable operations and may be dependent upon obtaining financing
to pursue our long-term business plan. For these reasons our auditors stated in
their report that they have substantial doubt we will be able to continue as a
going concern.
Off
Balance Sheet Arrangements
As of
October 31, 2008, there were no off balance sheet arrangements.
Going
Concern
Our
financial statements have been prepared on a going concern basis. We have a
working capital of $14,811 as of October 31, 2008 and have accumulated a deficit
of $5,689 since inception. Our ability to continue as a going concern is
dependent upon our ability to generate profitable operations in the future
and/or to obtain the necessary financing to meet our obligations and repay our
liabilities arising from normal business operations when they come due. The
outcome of these matters cannot be predicted with any certainty at this time.
These factors raise substantial doubt that we will be able to continue as a
going concern. Management plans to continue to provide for our capital needs by
the issuance of common stock and related party advances.
Critical
Accounting Policies
In
December 2001, the SEC requested that all registrants list their most “critical
accounting polices” in the Management Discussion and Analysis. The SEC indicated
that a “critical accounting policy” is one which is both important to the
portrayal of a company’s financial condition and results, and requires
management’s most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain. There are no critical accounting policies for the company as this
time.
Recently Issued Accounting
Pronouncements
In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
which defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 does not require any new fair value
measurements, but provides guidance on how to measure fair value by
providing
a fair value hierarchy used to classify the source of the information. This
statement is effective for us beginning January 1, 2008. The Company is
currently assessing the potential impact that adoption of SFAS No. 157
would have on the financial statements.
In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. SFAS No. 159 gives the
irrevocable option to carry many financial assets and liabilities at fair
values, with changes in fair value recognized in earnings. SFAS No. 159 is
effective beginning January 1, 2008, although early adoption is permitted.
The Company is currently assessing the potential impact that adoption of SFAS
No. 159 will have on the financial statements.
The FASB
has revised SFAS No. 141. This revised statement establishes uniform
treatment for all acquisitions. It defines the acquiring
company. The statement further requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquired at the acquisition date, measured at their fair market values as of
that date. It requires the acquirer in a business combination
achieved in stages to recognize the identifiable assets and liabilities, as well
as the non-controlling interest in the acquired, at the full amounts of their
fair values. This changes the way that minority interest is recorded and
modified as a parent’s interest in a subsidiary changes over
time. This statement also makes corresponding significant amendments
to other standards that related to business combinations, namely, 109, 142 and
various EITF’s. This statement applies prospectively to 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,
2008. The Company believes the implementation of this standard will
have no effect on our financial statements.
A smaller
reporting company is not required to provide the information required by this
Item.
We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of October 31, 2008. This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and our Chief Financial Officer, Mr. John
Baumbauer. Based upon that evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that, as of October 31, 2008, our
disclosure controls and procedures are effective. There have been no
changes in our internal controls over financial reporting during the quarter
ended October 31, 2008.
Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
Limitations on the
Effectiveness of Internal Controls
Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also 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. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.
PART
II – OTHER INFORMATION
We are
not a party to any pending legal proceeding. We are not aware of any pending
legal proceeding to which any of our officers, directors, or any beneficial
holders of 5% or more of our voting securities are adverse to us or have a
material interest adverse to us.
A smaller
reporting company is not required to provide the information required by this
Item.
None
None
No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended October
31, 2008.
Effective
December 11, 2008, our address has changed as a result of moving to a different
suite within our building complex. Our new address is 8600 Starboard
Dr., #1214, Las Vegas, Nevada 89117.
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Exhibit
Number
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Description
of Exhibit
|
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3.1
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Articles
of Incorporation (1)
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3.2
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ByLaws
(1)
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|
(1)
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Previously
included as an exhibit to the Registration Statement on Form S-1 filed
with the Securities and Exchange Commission on May 29,
2008.
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SIGNATURES
In
accordance with the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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Hotel
Management Systems, Inc.
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Date:
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December
12, 2008
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By: /s/John
Baumbauer
John
Baumbauer
Title: Chief
Executive Officer and
Director
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