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 SEPTEMBER 30, 2009





OR




 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





Commission
file number: 333-151684




GMS CAPITAL
CORP.


(Exact
name of Registrant as specified in its charter)




Florida
                  
                  7372
                  
                  26-1094541(State
      or jurisdiction of
                    Incorporation
      or organization)
                  
                  (Primary
      Std. Industrial
                    Classification
      Code Number)
                  
                  (IRS
      Employer
                    ID
      Number)




3456 Melrose Ave., Montreal,
Quebec H4A2S1, Canada


(Address
of principal executive offices) (Zip Code)





Registrant’s
telephone number, including area code: 514-287-0103






Securities
registered under Section 12(b) of the Exchange Act:




None




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




Common
Stock, $0.001 par value per share




(Title of
Class)








Indicate
by check mark whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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. xYes oNo




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  ̈No x





Indicate
by check mark whether the registrant is a large accelerated file, 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
            oNon-accelerated
      filer
            o
            (Do
      not check if a smaller reporting company)
            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). oYes xNo




APPLICABLE ONLY TO CORPORATE
ISSUERS




State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practical date. As of November 23,2009,
there were 5,115,400 shares of the issuer's $.001 par value common stock
issued and outstanding.









TABLE OF
CONTENTS




PagePART
      I - FINANCIAL INFORMATIONItem 1.
                Condensed
      Consolidated Financial Statements:
                1Condensed
      Consolidated Balance Sheets as of September 30, 2009 (unaudited) and
      December 31, 2008
                1Condensed
      Consolidated Statements of Operations and Comprehensive Income (Loss) for
      the Nine Months Ended  September 30, 2009 and 2008
      (unaudited)
                2Condensed
      Consolidated Statements of Cash Flows for the Nine Months Ended September
      30, 2009 and 2008 (unaudited)
                3Notes
      to Condensed Consolidated Financial Statements (unaudited)
                4Item 2.
                Management
      Discussion and Analysis of Financial Condition and Results of
      Operations
                20Item
      3
                Quantitative
      and Qualitative Disclosures about Market Risk
                31Item 4.
                Control
      and Procedures
                32PART
      II - OTHER INFORMATION
                32Item 1.
                Legal
      Proceedings
                32Item 1A
                Risk
      Factors
                32Item 2.
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                33Item 3.
                Defaults
      its Upon Senior Securities
                33Item 4.
                Submission
      of Matters to a Vote of Security Holders
                33Item 5
                Other
      Information
                33Item 6.
                Exhibits
                33Signatures
                
                34











PART
I - FINANCIAL INFORMATION






ITEM 1.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
   INDEX
TO FINANCIAL STATEMENTS
  PageBalance
      Sheets as of September 30, 2009 (unaudited) and December 31,
      2008
                    
                    1Statements
      of Operations and Comprehensive Income (Loss)For
      the Nine and Three Months Ended September 30, 2009 and 2008
      (unaudited)
                    
                    2Statements
      of Cash Flows For the Nine Months EndedSeptember
      30, 2009 and 2008 (unaudited)
                    
                    3Notes
      to Financial Statements (unaudited)
                    
                    4
  
  GMS
      CAPITAL CORP.(FORMERLY
      DOING BUSINESS AS METRATECH RETAIL SYSTEMS, INC.)BALANCE
      SHEETSSEPTEMBER
      30, 2009 (UNAUDITED) AND DECEMBER 31, 2008ASSETS(IN
      US $)September
      30,
                                                                                      
                                                                                      
                                                                                      December
      31,2009
                                                                                      
                                                                                      
                                                                                      2008(unaudited)Current
      Assets:Cash
      and cash equivalents
                                                                                      
                                                                                      $
                                                                                      586
                                                                                      
                                                                                      
                                                                                      $
                                                                                      1,461Accounts
      receivable, net
                                                                                      
                                                                                      
                                                                                      4,792
                                                                                      
                                                                                      
                                                                                      
                                                                                      2,646Other
      current assets
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      1,053Total
      Current Assets
                                                                                      
                                                                                      
                                                                                      5,378
                                                                                      
                                                                                      
                                                                                      
                                                                                      5,160Fixed
      assets, net of depreciation
                                                                                      
                                                                                      
                                                                                      5,778
                                                                                      
                                                                                      
                                                                                      
                                                                                      10,371TOTAL
      ASSETS
                                                                                      
                                                                                      $
                                                                                      11,156
                                                                                      
                                                                                      
                                                                                      $
                                                                                      15,531LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)LIABILITIESCurrent
      Liabilities:Advances
      - Shareholders
                                                                                      
                                                                                      $
                                                                                      35,421
                                                                                      
                                                                                      
                                                                                      $
                                                                                      26,970Line
      of credit
                                                                                      
                                                                                      
                                                                                      6,166
                                                                                      
                                                                                      
                                                                                      
                                                                                      1,862Due
      to related companies
                                                                                      
                                                                                      
                                                                                      3,905
                                                                                      
                                                                                      
                                                                                      
                                                                                      1,240Accounts
      payable and accrued expenses
                                                                                      
                                                                                      
                                                                                      1,579
                                                                                      
                                                                                      
                                                                                      
                                                                                      -Total
      Current Liabilities
                                                                                      
                                                                                      
                                                                                      47,071
                                                                                      
                                                                                      
                                                                                      
                                                                                      30,072Total
      Liabilities
                                                                                      
                                                                                      
                                                                                      47,071
                                                                                      
                                                                                      
                                                                                      
                                                                                      30,072STOCKHOLDERS'
      EQUITY (DEFICIT)Common
      stock, $.001 Par Value; 125,000,000 shares authorizedand
      5,115,400 shares issued and outstanding, respectively
                                                                                      
                                                                                      
                                                                                      5,115
                                                                                      
                                                                                      
                                                                                      
                                                                                      5,115Additional
      paid-in capital
                                                                                      
                                                                                      
                                                                                      461,425
                                                                                      
                                                                                      
                                                                                      
                                                                                      461,425Accumulated
      deficit
                                                                                      
                                                                                      
                                                                                      (475,986
                                                                                      )
                                                                                      
                                                                                      
                                                                                      (454,865
                                                                                      )Accumulated
      other comprehensive income (loss)
                                                                                      
                                                                                      
                                                                                      (26,468
                                                                                      )
                                                                                      
                                                                                      
                                                                                      (26,216
                                                                                      )Total
      Stockholders' Equity (Deficit)
                                                                                      
                                                                                      
                                                                                      (35,914
                                                                                      )
                                                                                      
                                                                                      
                                                                                      (14,541
                                                                                      )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                                                                      
                                                                                      $
                                                                                      11,156
                                                                                      
                                                                                      
                                                                                      $
                                                                                      15,531
  The accompanying notes are
an integral part of the financial statements.
  1
 
  GMS
      CAPITAL CORP.(FORMERLY
      DOING BUSINESS AS METRATECH RETAIL SYSTEMS, INC.)STATEMENTS
      OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)FOR
      THE NINE AND THREE MONTHS ENDING SEPTEMBER 30, 2009 AND 2008
      (UNAUDITED)IN
      US $NINE
      MONTHS ENDED
                                                                          
                                                                          
                                                                          THREE
      MONTHS ENDED2009
                                                                          
                                                                          
                                                                          2008
                                                                          
                                                                          
                                                                          2009
                                                                          
                                                                          
                                                                          2008OPERATING
      REVENUESSales
                                                                          
                                                                          $
                                                                          25,303
                                                                          
                                                                          
                                                                          $
                                                                          35,728
                                                                          
                                                                          
                                                                          $
                                                                          16,357
                                                                          
                                                                          
                                                                          $
                                                                          19,521COST
      OF SALESPurchases
                                                                          
                                                                          
                                                                          23,003
                                                                          
                                                                          
                                                                          
                                                                          41,691
                                                                          
                                                                          
                                                                          
                                                                          13,226
                                                                          
                                                                          
                                                                          
                                                                          16,893Total
      Cost of Sales
                                                                          
                                                                          
                                                                          23,003
                                                                          
                                                                          
                                                                          
                                                                          41,691
                                                                          
                                                                          
                                                                          
                                                                          13,226
                                                                          
                                                                          
                                                                          
                                                                          16,893GROSS
      PROFIT (LOSS)
                                                                          
                                                                          
                                                                          2,300
                                                                          
                                                                          
                                                                          
                                                                          (5,963
                                                                          )
                                                                          
                                                                          
                                                                          3,131
                                                                          
                                                                          
                                                                          
                                                                          2,628OPERATING
      EXPENSESSelling,
      general and administrative
                                                                          
                                                                          
                                                                          17,256
                                                                          
                                                                          
                                                                          
                                                                          23,284
                                                                          
                                                                          
                                                                          
                                                                          4,970
                                                                          
                                                                          
                                                                          
                                                                          10,571Depreciation
                                                                          
                                                                          
                                                                          5,911
                                                                          
                                                                          
                                                                          
                                                                          7,390
                                                                          
                                                                          
                                                                          
                                                                          2,061
                                                                          
                                                                          
                                                                          
                                                                          1,880Total
      Operating Expenses
                                                                          
                                                                          
                                                                          23,167
                                                                          
                                                                          
                                                                          
                                                                          30,674
                                                                          
                                                                          
                                                                          
                                                                          7,031
                                                                          
                                                                          
                                                                          
                                                                          12,451LOSS
      BEFORE OTHER INCOME (EXPENSE)
                                                                          
                                                                          
                                                                          (20,867
                                                                          )
                                                                          
                                                                          
                                                                          (36,637
                                                                          )
                                                                          
                                                                          
                                                                          (3,900
                                                                          )
                                                                          
                                                                          
                                                                          (9,823
                                                                          )OTHER
      INCOME (EXPENSE)Interest
      expense
                                                                          
                                                                          
                                                                          (254
                                                                          )
                                                                          
                                                                          
                                                                          (2,356
                                                                          )
                                                                          
                                                                          
                                                                          (118
                                                                          )
                                                                          
                                                                          
                                                                          (16
                                                                          )Gain
      on asset disposal
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          7,809
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -Total
      Other Income (Expense)
                                                                          
                                                                          
                                                                          (254
                                                                          )
                                                                          
                                                                          
                                                                          5,453
                                                                          
                                                                          
                                                                          
                                                                          (118
                                                                          )
                                                                          
                                                                          
                                                                          (16
                                                                          )NET
      LOSS BEFORE PROVISIONFOR
      INCOME TAXES
                                                                          
                                                                          
                                                                          (21,121
                                                                          )
                                                                          
                                                                          
                                                                          (31,184
                                                                          )
                                                                          
                                                                          
                                                                          (4,018
                                                                          )
                                                                          
                                                                          
                                                                          (9,839
                                                                          )Provision
      for Income Taxes
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -
                                                                          
                                                                          
                                                                          
                                                                          -NET
      LOSS APPLICABLETO
      COMMON SHARES
                                                                          
                                                                          $
                                                                          (21,121
                                                                          )
                                                                          
                                                                          $
                                                                          (31,184
                                                                          )
                                                                          
                                                                          $
                                                                          (4,018
                                                                          )
                                                                          
                                                                          $
                                                                          (9,839
                                                                          )NET
      LOSS PER BASIC AND DILUTED SHARESBASIC
      AND DILUTED
                                                                          
                                                                          $
                                                                          (0.00
                                                                          )
                                                                          
                                                                          $
                                                                          (0.01
                                                                          )
                                                                          
                                                                          $
                                                                          (0.00
                                                                          )
                                                                          
                                                                          $
                                                                          (0.00
                                                                          )WEIGHTED
      AVERAGE NUMBER OF COMMONSHARES
      OUTSTANDING - BASIC AND DILUTED
                                                                          
                                                                          
                                                                          5,115,400
                                                                          
                                                                          
                                                                          
                                                                          5,115,400
                                                                          
                                                                          
                                                                          
                                                                          5,115,400
                                                                          
                                                                          
                                                                          
                                                                          5,115,400COMPREHENSIVE
      INCOME (LOSS)Net
      loss
                                                                          
                                                                          $
                                                                          (21,121
                                                                          )
                                                                          
                                                                          $
                                                                          (31,184
                                                                          )
                                                                          
                                                                          $
                                                                          (4,018
                                                                          )
                                                                          
                                                                          $
                                                                          (9,839
                                                                          )Other
      comprehensive income (loss)Currency
      translation adjustments
                                                                          
                                                                          
                                                                          (252
                                                                          )
                                                                          
                                                                          
                                                                          815
                                                                          
                                                                          
                                                                          
                                                                          (2,588
                                                                          )
                                                                          
                                                                          
                                                                          1,654Comprehensive
      income (loss)
                                                                          
                                                                          $
                                                                          (21,373
                                                                          )
                                                                          
                                                                          $
                                                                          (30,369
                                                                          )
                                                                          
                                                                          $
                                                                          (6,606
                                                                          )
                                                                          
                                                                          $
                                                                          (8,185
                                                                          )
  The accompanying notes are
an integral part of the financial statements.
 2
 
  GMS
      CAPITAL CORP.(FORMERLY
      DOING BUSINESS AS METRATECH RETAIL SYSTEMS, INC.)STATEMENTS
      OF CASH FLOWSFOR
      THE NINE MONTHS ENDING SEPTEMBER 30, 2009 AND 2008
    (UNAUDITED)IN
      US $2009
                                                                            
                                                                            
                                                                            2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
                                                                            
                                                                            $
                                                                            (21,121
                                                                            )
                                                                            
                                                                            $
                                                                            (31,184
                                                                            )Adjustments
      to reconcile net loss to net cash(used
      in) operating activities:Depreciation
                                                                            
                                                                            
                                                                            5,911
                                                                            
                                                                            
                                                                            
                                                                            7,390Gain
      on sale of disposition of assets
                                                                            
                                                                            
                                                                            -
                                                                            
                                                                            
                                                                            
                                                                            (7,809
                                                                            )Changes
      in assets and liabilities(Increase)
      decrease in accounts receivable
                                                                            
                                                                            
                                                                            (1,735
                                                                            )
                                                                            
                                                                            
                                                                            10,346Increase
      (decrease) in deferred revenue
                                                                            
                                                                            
                                                                            -
                                                                            
                                                                            
                                                                            
                                                                            (1,084
                                                                            )Increase
      (decrease) in accounts payable andand
      accrued expenses
                                                                            
                                                                            
                                                                            2,796
                                                                            
                                                                            
                                                                            
                                                                            (4,419
                                                                            )Total
      adjustments
                                                                            
                                                                            
                                                                            6,972
                                                                            
                                                                            
                                                                            
                                                                            4,424Net
      cash (used in) operating activities
                                                                            
                                                                            
                                                                            (14,149
                                                                            )
                                                                            
                                                                            
                                                                            (26,760
                                                                            )CASH
      FLOWS FROM INVESTING ACTIVITIES(Acquisitions)
      disposal of fixed assets
                                                                            
                                                                            
                                                                            (1,318
                                                                            )
                                                                            
                                                                            
                                                                            11,695Decrease
      in due to/from related parties
                                                                            
                                                                            
                                                                            2,581
                                                                            
                                                                            
                                                                            
                                                                            (3,126
                                                                            )Net
      cash provided by investing activities
                                                                            
                                                                            
                                                                            1,263
                                                                            
                                                                            
                                                                            
                                                                            8,569CASH
      FLOWS FROM FINANCING ACTIVITESRepayments
      of loan payable
                                                                            
                                                                            
                                                                            -
                                                                            
                                                                            
                                                                            
                                                                            (11,683
                                                                            )Proceeds
      from line of credit, net of repayments
                                                                            
                                                                            
                                                                            4,015
                                                                            
                                                                            
                                                                            
                                                                            (77
                                                                            )Proceeds
      from officers, net of repayments
                                                                            
                                                                            
                                                                            4,260
                                                                            
                                                                            
                                                                            
                                                                            23,732Net
      cash provided by (used in) financing activities
                                                                            
                                                                            
                                                                            8,275
                                                                            
                                                                            
                                                                            
                                                                            11,972Effect
      of foreign currency
                                                                            
                                                                            
                                                                            3,736
                                                                            
                                                                            
                                                                            
                                                                            1,458NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                                            
                                                                            
                                                                            (875
                                                                            )
                                                                            
                                                                            
                                                                            (4,761
                                                                            )CASH
      AND CASH EQUIVALENTS - BEGINNING OF YEAR
                                                                            
                                                                            
                                                                            1,461
                                                                            
                                                                            
                                                                            
                                                                            11,993CASH
      AND CASH EQUIVALENTS - END OF PERIOD
                                                                            
                                                                            $
                                                                            586
                                                                            
                                                                            
                                                                            $
                                                                            7,232CASH
      PAID DURING THE PERIOD FOR:Interest
      expense
                                                                            
                                                                            
                                                                            
                                                                            
                                                                            
                                                                            $
                                                                            2,356
  The accompanying notes are
an integral part of the financial statements.
 3
 
 GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
1-                ORGANIZATION AND BASIS OF
PRESENTATION
 
 The
unaudited financial statements included herein have been prepared, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission (“SEC”).  The financial statements and notes are presented
as permitted on Form 10-Q and do not contain information included in the
Company’s annual statements and notes.  Certain information and
footnote disclosure normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations,
although the Company believes that the disclosures are adequate to make the
information presented not misleading.  It is suggested that these
financial statements be read in conjunction with the December 31, 2008 10-K and
audited financial statements and the accompanying notes
thereto.  While management believes the procedures followed in
preparing these financial statements are reasonable, the accuracy of the amounts
are in some respects dependent upon the facts that will exist, and procedures
that will be accomplished by the Company later in the year.
 
 These
unaudited financial statements reflect all adjustments, including normal
recurring adjustments which, in the opinion of management, are necessary to
present fairly the operations and cash flows for the periods
presented.
 
 GMS
Capital Corp. (the “Company” or “GMS”), a Florida Corporation, was founded on
March 9, 2000 originally doing business as Metratech Retail Systems Inc., a
Canadian Corporation up until the reincorporation as GMS Capital Corp. in the
State of Florida on September 18, 2007, in order to develop and market inventory
management software for suppliers to major retailers, which enable suppliers to
forecast consumer demand for their products and to optimize their production and
inventory accordingly.
 
 The
Company's objective in the reincorporation in the state of Florida is to raise
capital through the issuance of stock on the public markets in the US once
achieving regulatory approval.  This capital raised will be utilized
to further the promotion of The Company's flagship software product,
ManageThePipe, a specialized inventory management software for small to medium
sized businesses who sell their products via large chain Retail sales outlets
known as “big box chains”.
 
 Prior to
its reincorporation as GMS, the Company had grown primarily in the Provinces of
Quebec and British Columbia, Canada through the installation of its software via
direct sales to customers.  While sales to date of the software have
occurred via a direct sales channel, the Company will look to add further
distribution channels to other sectors in the United States and Canada in the
coming year.
 
 4
  GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
1-                ORGANIZATION AND BASIS OF
PRESENTATION (UNAUDITED)
 
 Effective
July 1, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted
Accounting Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB
Accounting Standards Codification (the “Codification”) as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with U.S. GAAP. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative U.S. GAAP
for SEC registrants. All guidance contained in the Codification carries an equal
level of authority. The Codification superseded all existing non-SEC accounting
and reporting standards. All other non-grandfathered, non-SEC accounting
literature not included in the Codification is non-authoritative. The FASB will
not issue new standards in the form of Statements, FASB Positions or Emerging
Issue Task Force Abstracts. Instead, it will issue Accounting Standards Updates
(“ASUs”). The FASB will not consider ASUs as authoritative in their own right.
ASUs will serve only to update the Codification, provide background information
about the guidance and provide the bases for conclusions on the change(s) in the
Codification. References made to FASB guidance throughout this document have
been updated for the Codification.
 
 Going
Concern
 
 As shown
in the accompanying financial statements the Company has incurred a net loss of
($21,121) and ($31,184) for the nine months ended September 30, 2009 and 2008
and has an accumulated deficit of ($475,986) as of September 30,
2009.  The Company’s limited customer base exposes them to significant
risk of future revenues.  The Company has been searching for new
distribution channels to sell their software and services to provide additional
revenues to support their operations.  There is no guarantee that the
Company will be able to raise additional capital or generate the increase in
revenues sought.
 
 There can
be no assurance that management will be able to raise sufficient capital, under
terms satisfactory to the Company, if at all.
 
 Management
believes that the Company’s capital requirements will depend on many factors.
These factors include the increase in sales through its existing channel as well
as the Company’s ability to continue to expand its distribution
channels.
 
 The
financial statements do not include any adjustments relating to the carrying
amounts of recorded assets or the carrying amounts and classification of
recorded liabilities that may be required should the Company be unable to
continue as a going concern.
  5
 GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
2-                SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.  On an on-going basis, the Company
evaluates its estimates, including, but not limited to, those related to
investment tax credits, bad debts, income taxes and contingencies. The Company
bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results
could differ from those estimates.
 
 Cash and Cash
Equivalents
 
 The
Company considers all highly liquid debt instruments and other short-term
investments with an initial maturity of three months or less to be cash
equivalents.
  Comprehensive
Income
  The
Company adopted ASC 220-10, “Reporting Comprehensive Income,” (formerly SFAS No.
130). ASC 220-10 requires the reporting of comprehensive income in addition to
net income from operations.
  Comprehensive
income is a more inclusive financial reporting methodology that includes
disclosure of information that historically has not been recognized in the
calculation of net income.
 
 Fair Value of Financial
Instruments (other than Derivative Financial Instruments)
  The
carrying amounts reported in the balance sheets for cash and cash equivalents,
accounts receivable and accounts payable approximate fair value because of the
immediate or short-term maturity of these financial instruments.  For
the notes payable, the carrying amount reported is based upon the incremental
borrowing rates otherwise available to the Company for similar
borrowings.
  6
 
 GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
2-                SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
 
 Currency
Translation
  The
Company’s functional currency is the Canadian dollar, while the Company reports
its currency in the US dollar. The Company records these translation adjustments
as accumulated other comprehensive income (loss). Gains and losses from foreign
currency transactions are included in other income (expense) in the results of
operations. For the nine months ended September 30, 2009 and 2008, the Company
had translations gains (losses) of ($252) and $815, respectively.
  Research and
Development
 
 The
Company occasionally incurs costs on activities that relate to research and
development of new products. Research and development costs are expensed as
incurred. Certain of these costs are reduced by government grants and investment
tax credits where applicable.
 
 Revenue
Recognition
 
 The
Company generates revenue from the following primary sources: (1) licensing
software products; (2) providing customer technical support (referred to as
maintenance); and (3) providing professional services, such as consulting
and education.
 
 The
Company recognizes revenue pursuant to the requirements of ASC 450-10 and ASC
985-605, “Software Revenue Recognition.” In accordance with the ASC’s, the
Company begins to recognize revenue from licensing and supporting its software
products when all of the following criteria are met: (1) the Company has
evidence of an arrangement with a customer; (2) the Company delivers the
products; (3) license agreement terms are deemed fixed or determinable and free
of contingencies or uncertainties that may alter the agreement such that it may
not be complete and final; and (4) collection is probable.
 
 The
Company’s software licenses generally do not include acceptance provisions. An
acceptance provision allows a customer to test the software for a defined period
of time before committing to license the software. If a license agreement were
to include an acceptance provision, the Company would not record deferred
subscription value or recognize revenue until the earlier of the receipt of a
written customer acceptance or, if not notified by the customer to cancel the
license agreement, the expiration of the acceptance period.
 
 7
  GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
2-               
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
 
 Revenue Recognition(Continued)
 
 Under the
Company’s business model, software license agreements frequently include
flexible contractual provisions that, among other things, allow customers to
receive unspecified future software products for no additional fee. These
agreements combine the right to use the software products with maintenance for
the term of the agreement. Under these agreements, once all four of the above
noted revenue recognition criteria are met, the Company is required to recognize
revenue ratably over the term of the license agreement.
 
 Under the
Company’s business model, a relatively small percentage of the Company’s revenue
related to certain products is recognized on an up-front or perpetual basis once
all revenue recognition criteria are met in accordance with the ASC’s as
described above, and is reported in the “Software fees and other” line of the
statements of operations. License agreements pertaining to such products do not
include the right to receive unspecified future software products, and
maintenance is deferred and subsequently recognized over the term of the
maintenance period. In the event such license agreements are executed within
close proximity or in contemplation of other license agreements with the same
customer which are recognized on a subscription basis, the contracts may be
considered a single multi-element agreement, and as such all revenue is deferred
and recognized as “Subscription revenue” in the statements of
operations.
 
 Maintenance
revenue is derived from two primary sources: (1) combined license and
maintenance agreements recorded under the prior business model; and
(2) stand-alone maintenance agreements.
 
 Under the
prior business model, maintenance and license fees were generally combined into
a single license agreement. The maintenance portion was deferred and amortized
into revenue over the initial license agreement term. Certain of these license
agreements have not reached the end of their initial terms and, therefore,
continue to amortize. This amortization is recorded to the “Maintenance” line
item in the Statements of Operations. The deferred maintenance portion, which
was optional to the customer, was determined using its fair value based on
annual, fixed maintenance renewal rates stated in the agreement. For license
agreements entered into under the Company’s current business model, maintenance
and license fees continue to be combined; however, the maintenance is inclusive
for the entire term of the arrangement. The Company reports such combined fees
on the “Subscription revenue” line item in the statements of
operations.
 
 The
Company also records stand-alone maintenance revenue earned from customers who
elect optional maintenance. Revenue from such renewals is recognized on the
“Maintenance” line item in the statements of operations over the term of the
renewal agreement.
  8
 GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
2-                SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
 
 Revenue Recognition(Continued)
 
 The
“Deferred maintenance revenue” line item on the Company’s balance sheets
principally represents payments received in advance of maintenance services to
be rendered.
 
 Revenue
from professional service arrangements is generally recognized as the services
are performed. Revenue from committed professional services arrangements that
are sold as part of a software transaction is deferred and recognized on a
ratable basis over the life of the related software transaction. If it is not
probable that a project will be completed or the payment will be received,
revenue is deferred until the uncertainty is removed.
 
 Revenue
from sales to distributors, resellers, and value-added resellers (VARs)
commences when all four of the ASC revenue recognition criteria noted above are
met and when these entities sell the software product to their customers. This
is commonly referred to as the sell-through method. Revenue from the sale of
products to distributors, resellers and VARs under licenses that include the
right for the end-users to receive certain unspecified future software products
is recognized on a ratable basis.
 
 Accounts
Receivable
 
 The
Company conducts business and extends credit based on an evaluation of the
customers’ financial condition, generally without requiring
collateral.
 
 Exposure
to losses on receivables is expected to vary by customer due to the financial
condition of each customer. The Company monitors exposure to credit losses and
maintains allowances for anticipated losses considered necessary under the
circumstances. The Company has an allowance for doubtful accounts of $0 at
September 30, 2009 and December 31, 2008.
 
 Accounts
receivable are generally due within 30 days and collateral is not required.
Unbilled accounts receivable represents amounts due from customers for which
billing statements have not been generated and sent to the
customers.
 
 Income
Taxes
 
 The
Company accounts for income taxes utilizing the liability method of
accounting.  Under the liability method, deferred taxes are determined
based on differences between financial statement and tax bases of assets and
liabilities at enacted tax rates in effect in years in which differences are
expected to reverse.  Valuation allowances are established, when
necessary, to reduce deferred tax assets to amounts that are expected to be
realized.
  9
 GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
2-                SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)
 
 Advertising
Costs
 
 The
      Company expenses the costs associated with advertising as
      incurred.  Advertising expenses for the nine months ended
      September 30, 2009 and 2008 are included in general and administrative
      expenses in the statements of
operations.
 
 Fixed
      Assets
 
 Fixed
      assets are stated at cost.  Depreciation is computed using the
      straight-line method over the estimated useful lives of the assets;
      automobiles – 3 years, computer equipment – 3 years, furniture and
      fixtures – 5 years and leasehold improvements- 5
  years.
 
 When
assets are retired or otherwise disposed of, the costs and related accumulated
depreciation are removed from the accounts, and any resulting gain or loss is
recognized in income for the period.  The cost of maintenance and
repairs is charged to income as incurred; significant renewals and betterments
are capitalized.  Deduction is made for retirements resulting from
renewals or betterments.
 
 Impairment of Long-Lived
Assets
 
 Long-lived
assets, primarily fixed assets, are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of the assets might
not be recoverable. The Company does perform a periodic assessment of assets for
impairment in the absence of such information or indicators. Conditions that
would necessitate an impairment assessment include a significant decline in the
observable market value of an asset, a significant change in the extent or
manner in which an asset is used, or a significant adverse change that would
indicate that the carrying amount of an asset or group of assets is not
recoverable. For long-lived assets to be held and used, the Company recognizes
an impairment loss only if its carrying amount is not recoverable through its
undiscounted cash flows and measures the impairment loss based on the difference
between the carrying amount and estimated fair value.
 
 (Loss) Per Share of Common
Stock
 
 Basic net
(loss) per common share is computed using the weighted average number of common
shares outstanding.  Diluted earnings per share (EPS) includes
additional dilution from common stock equivalents, such as stock issuable
pursuant to the exercise of stock options and warrants.  Common stock
equivalents were not included in the computation of diluted earnings per share
when the Company reported a loss because to do so would be antidilutive for
periods presented.
 
 10
 GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
      2-
              SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES(CONTINUED)
 
 (Loss) Per Share of Common
Stock(Continued)
 
 The
following is a reconciliation of the computation for basic and diluted
EPS:
 
 September
      30,
                        
                        
                        September
      30,2009
                        
                        
                        2008Net
      (Loss)
                        
                        $
                        (21,121
                        )
                        
                        $
                        (31,184
                        )Weighted-average
      common sharesOutstanding
      (Basic)
                        
                        
                        5,115,400
                        
                        
                        
                        5,115,400Weighted-average
      common stockEquivalentsStock
      options
                        
                        
                        -
                        
                        
                        
                        -Warrants
                        
                        
                        -
                        
                        
                        
                        -Weighted-average
      common sharesOutstanding
      (Diluted)
                        
                        
                        5,115,400
                        
                        
                        
                        5,115,400
 
 The
Company has not issued options or warrants to purchase stock in these periods.
If there were options or warrants outstanding they would not be included in the
computation of diluted EPS because inclusion would have been
antidilutive.
 
 Stock-Based
Compensation
 
 In 2006,
the Company adopted the provisions of ASC 718-10 “Share Based Payments” for
its year ended December 31, 2008. The adoption of this principle had no effect
on the Company’s operations.
  11
 
 GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
      2-
              SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES(CONTINUED)
 
 Stock-Based
Compensation (Continued)
 
 The
Company has elected to use the modified–prospective approach method. Under that
transition method, the calculated expense in 2006 is equivalent to compensation
expense for all awards granted prior to, but not yet vested as of January 1,
2006, based on the grant-date fair values. Stock-based compensation expense for
all awards granted after January 1, 2006 is based on the grant-date fair values.
The Company recognizes these compensation costs, net of an estimated forfeiture
rate, on a pro rata basis over the requisite service period of each vesting
tranche of each award. The Company considers voluntary termination behavior as
well as trends of actual option forfeitures when estimating the forfeiture
rate.
 
 The
Company measures compensation expense for its non-employee stock-based
compensation under ASC 505-50, “Accounting for Equity Instruments
that are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services”.  The fair value of the option
issued is used to measure the transaction, as this is more reliable than the
fair value of the services received.  The fair value is measured at
the value of the Company’s common stock on the date that the commitment for
performance by the counterparty has been reached or the counterparty’s
performance is complete. The fair value of the equity instrument is charged
directly to compensation expense and additional paid-in capital.
 
 Segment
Information
 
 The
Company follows the provisions of ASC 280-10, “Disclosures about Segments of an
Enterprise and Related Information”. This standard requires that
companies disclose operating segments based on the manner in which management
disaggregates the Company in making internal operating decisions.
  12
 GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
      2-
              SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES(CONTINUED)
 
 Recent Accounting
Pronouncements
 
 In
September 2006, ASC issued 820, Fair Value Measurements. ASC
820 defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosure about fair
value measurements. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007. Early adoption is
encouraged. The adoption of ASC 820 is not expected to have a material impact on
the financial statements.
  In
February 2007, ASC issued 825-10, The Fair Value Option for Financial
Assets and Financial Liabilities – Including an amendment of ASC 320-10,
(“ASC 825-10”) which permits entities to choose to measure many financial
instruments and certain other items at fair value at specified election dates. A
business entity is required to report unrealized gains and losses on items for
which the fair value option has been elected in earnings at each subsequent
reporting date. This statement is expected to expand the use of fair value
measurement. ASC 825-10 is effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those fiscal
years.
  In
December 2007, the ASC issued ASC 810-10-65, Noncontrolling Interests in
Consolidated Financial Statements. ASC 810-10-65 establishes accounting
and reporting standards for ownership interests in subsidiaries held by parties
other than the parent, changes in a parent’s ownership of a noncontrolling
interest, calculation and disclosure of the consolidated net income attributable
to the parent and the noncontrolling interest, changes in a parent’s ownership
interest while the parent retains its controlling financial interest and fair
value measurement of any retained noncontrolling equity investment.
 
 ASC
810-10-65 is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal
years. Early adoption is prohibited. Management is determining the impact that
the adoption of ASC 810-10-65 will have on the Company’s financial position,
results of operations or cash flows.
 
 In
December 2007, the Company adopted ASC 805,Business Combinations
(“ASC 805”). ASC 805 retains the fundamental requirements that the
acquisition method of accounting be used for all business combinations and for
an acquirer to be identified for each business combination. ASC 805 defines the
acquirer as the entity that obtains control of one or more businesses in the
business combination and establishes the acquisition date as the date that the
acquirer achieves control.  ASC 805 will require an entity to record
separately from the business combination the direct costs, where previously
these costs were included in the total allocated cost of the
acquisition.  ASC 805 will require an entity to recognize the assets
acquired, liabilities assumed, and any non-controlling interest in the acquired
at the acquisition date, at their fair values as of that
date.
  13
  GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
      2-
              SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES(CONTINUED)
 
 Recent Accounting
Pronouncements (Continued)
 
 ASC 805
will require an entity to recognize as an asset or liability at fair value for
certain contingencies, either contractual or non-contractual, if certain
criteria are met.  Finally, ASC 805 will require an entity to
recognize contingent consideration at the date of acquisition, based on the fair
value at that date.  This will be effective for business combinations
completed on or after the first annual reporting period beginning on or after
December 15, 2008.  Early adoption is not permitted and the ASC is be
applied prospectively only.  Upon adoption of this ASC, there would be
no impact to the Company’s results of operations and financial condition for
acquisitions previously completed.  The adoption of ASC 805 is not
expected to have a material effect on the Company’s financial position, results
of operations or cash flows.
 
 In March
2008, ASC issued ASC 815, Disclosures about Derivative
Instruments and Hedging Activities”, (“ASC 815”). ASC 815 requires
enhanced disclosures about an entity’s derivative and hedging activities. These
enhanced disclosures will discuss: how and why an entity uses derivative
instruments; how derivative instruments and related hedged items are accounted
for and its related interpretations; and how derivative instruments and related
hedged items affect an entity’s financial position, financial performance, and
cash flows. ASC 815 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008. The Company does
not believe that ASC 815 will have an impact on their results of operations or
financial position.
 
 Effective
April 1, 2009, the Company adopted ASC 855, Subsequent Events (“ASC
855”). ASC 855 establishes general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued. It requires disclosure of the date
through which an entity has evaluated subsequent events and the basis for that
date – that is, whether that date represents the date the financial statements
were issued or were available to be issued. This disclosure should alert all
users of financial statements that an entity has not evaluated subsequent events
after that date in the set of financial statements being presented. Adoption of
ASC 855 did not have a material impact on the Company’s results of operations or
financial condition. The Company has evaluated subsequent events through October
26, 2009, the date the financial statements were issued.
  14
  GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
      2-
              SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES(CONTINUED)
 
 Recent Accounting
Pronouncements (Continued)
 
 Effective
July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value Measurement and
Disclosures (Topic 820) (“ASU 2009-05”). ASU 2009-05 provided amendments
to ASC 820-10, Fair Value
Measurements and Disclosures – Overall, for the fair value measurement of
liabilities. ASU 2009-05 provides clarification that in circumstances in which a
quoted market price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value using certain
techniques. ASU 2009-05 also clarifies that when estimating the fair value of a
liability, a reporting entity is not required to include a separate input or
adjustment to other inputs relating to the existence of a restriction that
prevents the transfer of a liability. ASU 2009-05 also clarifies that both a
quoted price in an active market for the identical liability at the measurement
date and the quoted price for the identical liability when traded as an asset in
an active market when no adjustments to the quoted price of the asset are
required for Level 1 fair value measurements. Adoption of ASU 2009-05 did not
have a material impact on the Company’s results of operations or financial
condition.
 
 Other
ASU’s that have been issued or proposed by the FASB ASC that do not require
adoption until a future date and are not expected to have a material impact on
the financial statements upon adoption.
  15
 GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
3-                FIXED
ASSETS
 
 Fixed
assets as of September 30, 2009 and December 31, 2008 were as
follows:
  Estimated
      Useful
              
              
              September
      30,
              
              
              December
      31,Lives (Years)
              
              
              2009
              
              
              2008Computer
      equipment
              
              
              3
              
              
              $
              1,318
              
              
              $
              0Office
      equipment
              
              
              5
              
              
              
              1,624
              
              
              
              1,624Leasehold
      improvements
              
              
              5
              
              
              
              13,994
              
              
              
              13,994TOTAL:
              
              
              
              16,936
              
              
              
              15,618Less:
      accumulated depreciation
              
              
              
              
              
              
              11,158
              
              
              
              5,246Property
      and equipment, net
              
              
              
              
              
              $
              5,778
              
              
              $
              10,371
 
 There was
$5,911 and $7,390 charged to operations for depreciation expense for the nine
months ended September 30, 2009 and 2008, respectively.
 
 NOTE
      4-
              OPERATING LINE OF
      CREDIT
 
 On June
13, 2008, the Company established an operating line of credit of CDN$15,000 with
a bank through a credit card, with the full outstanding amount guaranteed by a
Director.  The interest rate charged is a floating rate, bank prime
rate + 2%.  As of September 30, 2009, the interest rate was 8.75% with
an outstanding balance of $6,166. The Company recorded interest expense of $254
and $2,356 for the nine months ended September 30, 2009 and 2008,
respectively.
  16
 GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
5-                RELATED PARTY
LOANS
 
 The
Company has entered into related party loans with an officer of the
Company.  This loan is non-interest bearing and payable on
demand.  The amounts owed as of September 30, 2009 is
$25,506.
 
 The
Company has entered into related party loans with a company owned and controlled
by an officer of the Company.  This loan is non-interest bearing and
payable on demand.  The amounts owed as of September 30, 2009 is
$3,155.
 
 The
Company has entered into related party loans with a shareholder of the
Company.  This loan is non-interest bearing and payable on
demand.  The amounts owed as of September 30, 2009 is
$9,915.
 
 
 NOTE
6-                STOCKHOLDERS’ EQUITY
(DEFICIT)
 
 Common
Stock
 
 As of
September 30, 2009 and December 31, 2008, the Company has 125,000,000 shares of
common stock authorized with a par value of $0.01
 
 As of
September 30, 2009 and December 31, 2008, the Company has 5,115,400 shares of
common stock issued and outstanding.
 
 The
Company has not issued any shares in 2009 or 2008.
 
 The
Company issued 2,537,400 shares for services during 2007 valued at
$253,740.
 
 The
Company issued 2,578,000 shares in 2007 as replacement shares for the original
shares issued in Metratech Retail Systems, Inc. These shares were valued at
$212,800.
 
 17
  GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
7-                PROVISION FOR INCOME
TAXES
 
 Deferred
income taxes are determined using the liability method for the temporary
differences between the financial reporting basis and income tax basis of the
Company’s assets and liabilities.  Deferred income taxes are measured
based on the tax rates expected to be in effect when the temporary differences
are included in the Company’s tax return.  Deferred tax assets and
liabilities are recognized based on anticipated future tax consequences
attributable to differences between financial statement carrying amounts of
assets and liabilities and their respective tax bases.
 
 At
September 30, 2009, deferred tax assets consist of the
following:
 
 Net
      operating losses
                        
                        $
                        161,835Valuation
      allowance
                        
                        
                        (161,835
                        )$
                        -
 
 At
September 30, 2009, the Company had a net operating loss carryforward in the
amount of $475,986, available to offset future taxable income through
2029.  The Company established valuation allowances equal to the full
amount of the deferred tax assets due to the uncertainty of the utilization of
the operating losses in future periods.
 
 A
reconciliation of the Company’s effective tax rate as a percentage of income
before taxes and federal statutory rate for the nine months ended September 30,
2009 and 2008 is summarized as follows:
 2009
                        
                        2008Federal
      statutory rate
                        (34.0)%
                        
                        (34.0)%State
      income taxes, net of federal benefits
                        3.3
                        
                        3.3Valuation
      allowance
                        30.7
                        
                        30.70%
                        
                        0%
 18
 GMS
CAPITAL CORP.
 (FORMERLY
DOING BUSINESS AS METRATECH RETAIL SYSTEMS INC.)
 FINANCIAL
STATEMENTS
 FOR
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
 
 NOTE
8-                FAIR VALUE
MEASUREMENTS
 
 The
Company adopted certain provisions of ASC Topic 820. ASC 820 defines fair value,
provides a consistent framework for measuring fair value under generally
accepted accounting principles and expands fair value financial statement
disclosure requirements. ASC 820’s valuation techniques are based on observable
and unobservable inputs. Observable inputs reflect readily obtainable data from
independent sources, while unobservable inputs reflect our market assumptions.
ASC 820 classifies these inputs into the following hierarchy:
 
 Level 1
inputs: Quoted prices for identical instruments in active markets.
 
 Level 2
inputs: Quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; and
model-derived valuations whose inputs are observable or whose significant value
drivers are observable.
 
 Level 3
inputs: Instruments with primarily unobservable value drivers.
 
 The
following table represents the fair value hierarchy for those financial assets
and liabilities measured at fair value on a recurring basis as of September 30,
2009:
 
 Level
      1
                        Level
      2
                        Level
      3
                        TotalCash
      equivalents
                        586
                        -
                        -
                        586Total
      assets
                        586
                        -
                        -
                        586


19




ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS





PRELIMINARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS





You
should read the following discussion of our financial condition and operations
in conjunction with the consolidated financial statements and the related notes
included elsewhere in this quarterly report. This quarterly report contains
forward–looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These include statements about our expectations,
beliefs, intentions or strategies for the future, which we indicate by words or
phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,”
“our company believes,” “management believes” and similar language. The
forward–looking statements are based on our current expectations and are subject
to certain risks, uncertainties and assumptions, including our ability to
(1) obtain sufficient capital or a strategic business arrangement to fund
our expansion plans; (2) build the management and human resources
infrastructure necessary to support the growth of our business;
(3) competitive factors and developments beyond our control; and
(4) those other risk factors, uncertainties and assumptions that are set
forth in the discussion under the headings captioned “Business,” “Risk Factors,”
and “Management’s Discussion and Analysis”. Our actual results may differ
materially from results anticipated in these forward–looking statements. We base
the forward–looking statements on information currently available to us, and we
assume no obligation to update or revise them, whether as a result of new
information, future events or otherwise. In addition, our historical financial
performance is not necessarily indicative of the results that may be expected in
the future and we believe that such comparisons cannot be relied upon as
indicators of future performance.





The
following discussion and analysis should be read in conjunction with our
consolidated financial statements and the related notes thereto and other
financial information contained elsewhere in this Form 10–Q.





GENERAL
OVERVIEW





BACKGROUND




Company
Overview





GMS
Capital Corp. was incorporated in Canada on March 9, 2000 under the name
"Metratech Retail Systems Inc." for the development and sales of specialized
inventory management software.  The Company re-incorporated itself in
the State of Florida on September 18, 2007 and was subsequently renamed "GMS
Capital Corp." in order to raise capital on the US public markets to realize its
objectives of investing in its development and marketing plans.




20




The
details of the merger and re-incorporation are as follows:




The
2,578,000 issued and outstanding shares of Metratech Retail Systems Inc. were
converted to 2,578,000 shares of GMS Capital Corp.  Each shareholder
of the Company received one share of GMS Capital Corp. for every share of
Metratech Retail Systems Inc.  The three directors of Metratech Retail
Systems Inc., George Metrakos, Marcel Côté and Spiro Krallis were replaced by
George Metrakos on the board of directors of the newly incorporated
company.




On
October 1, 2007, the Company issued an additional 2,537,400 shares at a price of
$0.10 per share in order to compensate shareholders and external consultants to
perform the consulting work necessary to complete the company's
prospectus.




GMS
decided to reincorporate itself under the laws of the State of Florida in order
to take advantage of opportunities available to public entities in the
US.  The reincorporation saw existing shareholders receive the
equivalent number of shares in the Florida corporation as they held in the
company prior to reincorporation.  The reincorporation in no way has
changed the capital structure of the Company.





History
of Key Agreements




On July
10, 2000, founding shareholders entered into a term sheet for the partnership
agreement representing the ownership structure of Metratech Retail Systems
Inc.  While a final partnership agreement was never executed, the Term
sheet is enforceable against the parties.  The agreement outlined the
share structure to represent initial investments made by the founding
shareholders, along with roles and responsibilities of the President, Secretary
and CEO of the Corporation.




On April
1, 2000, the Company entered into a Non-Disclosure Agreement with MGA Concept, a
software development firm in Montreal, Canada which outlined the roles and
responsibilities of MGA Concept as it relates to their provision of software
programming services to the Company.  MGA Concept went on to provide
all the consulting services required by the Company to develop, test and deploy
its software.




On
October 16, 2000, George Metrakos, acting on behalf of the Company, entered into
an agreement with Junior Active Designs Inc., a supplier to Retailer Wal-Mart
Stores, in order to learn and record all of the requirements set forth by
Wal-Mart Stores with respect to the management of inventory within their Retail
Stores.  The Agreement outlined that all of the rights, title and
interest in any inventions, improvements, discoveries, processes, know-how and
trade secrets discovered by Mr. Metrakos as it pertained to any software
development at Junior Active Designs Inc. would be the property of George
Metrakos in order to utilize and transfer to Metratech Retail Systems Inc. for
its use in the development and marketing of its software.




Description
of Business




Principal
products or services and their markets




The
Company's software, known as "ManageThePipe", permits suppliers to major
retailers such as Wal-Mart to predict the amount of inventory required in the
near future in order to meet the sales demands for its products on retail store
shelves.  The software collects data such as production schedules,
shipping schedules, historic sales and current retail store inventories in order
to calculate an estimate of future inventory requirements for each item that a
supplier sells through major retailers such as Wal-Mart Stores.




21




Our
Company has invested in the research and development of our inventory management
software which collects data and performs forecast calculations. Our technology
consists of proprietary software programming however, we have no specific legal
entitlement that does not permit someone else from utilizing the same base
software languages in order to produce similar inventory management software
offerings.




Base
software languages are the language building blocks used by programmers to
translate the desired logic sequences into a message that the computer can
understand and execute.  An example of a logic sequence is “if the
user wishes to predict the future sales of their product based on historical
sales”, the software should calculate a forecast based on mathematical models
provided in its logic tables to calculate the forecasted values. The combination
and use of these building blocks is known as ‘software code”, and hence this
combination, created by the Company’s programmers, along with “off-the-shelf”
computer hardware (ie. Equipment that is readily available by computer companies
such as servers) is collectively referred to as “our technology and trade
secrets”.




We
therefore cannot be certain that others will not gain access to our technology.
In order to protect this proprietary technology, we hold non-disclosure and
confidentiality agreements and understandings with our employees, consultants,
re-sellers, distributors, wholesalers and technology partners. We cannot
guarantee that our technology and trade secrets will not be stolen, challenged,
invalidated or circumvented. If any of these were to occur, we would suffer from
a decreased competitive advantage, resulting in lower profitability due to
decreased sales.




The
Company offers the following products and services to customers utilizing its
ManageThePipe inventory management software:




·
            
            Installation
      and configuration of the software within the customer's computer
      network·
            
            Professional
      and consulting services to assist the customer to optimize their inventory
      to meet sales demands


·
            
            Maintenance
      services in order to assist the customer in ensuring daily importation of
      data from various sources into the ManageThePipe
  software·
            
            Software
      subscription fees for the use of the software on the premises of the
      customer.




Distribution
methods of the products or services




To date,
our Sales & Marketing expenses have been limited to commission-based sales
costs and minimal marketing expenses. As a result, there is very little brand
awareness for our products and services. We believe a strategic marketing
campaign is necessary to achieve the customer base growth that we anticipate due
to significant investments in customer acquisition. The bulk of this investment
is due to costs related to promoting our brand through advertising in different
media, along with analysis of new market segments and product placement
strategies.




The main
market segment where we will invest in Sales & Marketing is that of the
Canadian small to medium sized manufacturer or importer of goods that are sold
through retail stores to the general public.  These investments
include travel, participation in industry trade shows and print/on-line media
within industry publications and web sites.




Direct
Sales.




We
solicit customers directly in order to purchase our products and
services.  Upon acceptance of our offer, our customers sign a Service
Agreement.




22




Sales
Through a Value-Added Reseller.




A
Value-Added Reseller typically re-sells our software in combination with other
software also offered by the Value-Added Reseller, providing a customized and
complete solution for the customer.  Other software which is
compatible with the ManageThePipe software includes production planning
software, enterprise resource planning software and sales analysis
software.




In the
case of any sale, the Company enters into a services agreement with the
customer.





Status
of any publicly announced new product or service




ManageThePipe
software was in a pre-commercialization phase with the deployment of the first
version of the software at a garment manufacturing facility in July of
2002.  The software has since been deployed in numerous customer
facilities and is available for sale in its current state.




The
software installation, use and maintenance represent a first year investment of
$25,000 followed by yearly subscription fees of $12,000.




Competitive
Business Conditions




There are
numerous software products existing on the market which provide solutions to the
challenges of inventory management on retailer store shelves on a daily
basis.  They can be classified by the following
categories:




Larger,
established software companies for larger multinational companies:




The
following corporations involved in inventory management and are not a direct
competitors to The Company's software product, ManageThePipe: Demantra,
Viewlocity, Riverone, Verticalnet, Steelwedge and Evant.  These
companies, present in a wide range of industry sectors, produce completely
integrated software involved from sourcing of raw materials, delivery,
manufacturing, packaging and all other elements of production (known as
"end-to-end" software) of goods sold to consumers.  These complete
end-to-end softwares sell at a very high cost (+1M$), which require a high level
of integration.  ManageThePipe is focused solely on smaller to medium
sized companies who are Suppliers of Major Retailers.




Enterprise
Resource Planning Software (ERP)




ERP
systems (ex. SAP, JD Edwards, Manugistics, Navision, etc.) are primarily
internally focused back-office systems, that is that they are involved in
monitoring the daily transactions of a business, from invoicing, to production
of packing slips and delivery confirmations.  The result of such a
complex software is that it is cumbersome and has a long implementation cycle
inside the business.  A long implementation cycle means that the
business implementing an ERP solution have to consider at least six months of
time to integrate the software, transfer the company's existing operations into
the new software and provide sufficient training to employees.  Due to
this longer implementation time, these softwares are not competition to
ManageThePipe.




Direct
Competition to ManageThePipe:




The
following competitors sell to mid to large Suppliers of Major
Retailers:




Demand
Management Inc. (MO, USA) (www.demandsolutions.com) founded in
1985.


Thrive
Technologies (GA, USA) (www.thrivetech.com), founded in 2001.


Vendor
Managed Technologies (MI, USA) (www.vmtsoftware.com) Founded in
1998.




23




The
inventory management software industry is highly competitive, rapidly evolving
and subject to constant technological change and to intense marketing by
different providers of functionally similar services. Since there are few, if
any, substantial barriers to entry, we expect that new competitors are likely to
enter our markets. Most, if not all, of our competitors are significantly larger
and have substantially greater market presence and longer operating history as
well as greater financial, technical, operational, marketing, personnel and
other resources than we do.




Competitive
Advantages




Today,
Major Retailers such as Wal-Mart are relying on their suppliers to make
inventory replenishment decisions, that is deciding which stores should get
which products and at what quantity, in order to ensure that the retail shelves
remain adequately stocked to meet consumer demand.  As a result,
Suppliers utilize inventory management software and forecasting software in
order to assist them to make a decision about how much product to manufacture or
import, how much to stock in their warehouse and how much to ship to each
store.




We
believe that we have the following competitive advantages:




(1) 
Competitive Pricing




Our use
our proprietary software enables us to provide customers with competitive
pricing for their inventory management needs. Nonetheless, there can be no
assurance that we will be able to successfully compete with major software
suppliers in present and prospective markets. While there can be no assurances,
we believe that by offering competitive pricing we will be able to compete in
our present and prospective markets.




(2) 
Advantages of Equipment and Technology




We rely
on our own internally-developed software to meet the needs of our customers. We
will need to continue to select, invest in and develop new and enhanced
technology to remain competitive. Our future success will also depend on our
operational and financial ability to develop information technology solutions
that keep pace with evolving industry standards and changing client demands. Our
business is highly dependent on our software systems, the temporary or permanent
loss of which could materially and adversely affect our business.




Existing
and Probable Governmental Regulation




The
software industry is not a regulated industry.




Research
and Development




The
Company's Research and Development expenditures are directly related to its
Professional Service expenditures as required for client maintenance and
client-specific developments.  So far in the first nine months of
2009, the Company has spent $0 specifically on Research and Development outside
of client-specific requirements, and likewise $0 for the
same period in 2008.




Compliance
with Environmental Laws




We did
not incur any costs in connection with the compliance with any federal, state,
or local environmental laws.




24




CORPORATE
OFFICES





The
Company's executive offices are currently located at 3456 Melrose Ave. Montreal,
Quebec H4A 2S1 Canada.





EMPLOYEES





The
Company has no full time employees and has three part time
employees.





Critical Accounting Policies
and Estimates




Management's
Discussion and Analysis of Financial Conditions and Results of Operations are
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
When preparing our financial statements, we make estimates and judgments that
affect the reported amounts on our balance sheets and income statements, and our
related disclosure about contingent assets and liabilities. We continually
evaluate our estimates, including those related to revenue, allowance for
doubtful accounts, reserves for income taxes, and litigation. We base our
estimates on historical experience and on various other assumptions, which we
believe to be reasonable in order to form the basis for making judgments about
the carrying values of assets and liabilities that are not readily ascertained
from other sources. Actual results may deviate from these estimates if
alternative assumptions or condition are used.




Effective
July 1, 2009, the Company adopted the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted
Accounting Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB
Accounting Standards Codification (the “Codification”) as the source of
authoritative accounting principles recognized by the FASB to be applied by
nongovernmental entities in the preparation of financial statements in
conformity with U.S. GAAP. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative U.S. GAAP
for SEC registrants. All guidance contained in the Codification carries an equal
level of authority. The Codification superseded all existing non-SEC accounting
and reporting standards. All other non-grandfathered, non-SEC accounting
literature not included in the Codification is non-authoritative. The FASB will
not issue new standards in the form of Statements, FASB Positions or Emerging
Issue Task Force Abstracts. Instead, it will issue Accounting Standards Updates
(“ASUs”). The FASB will not consider ASUs as authoritative in their own right.
ASUs will serve only to update the Codification, provide background information
about the guidance and provide the bases for conclusions on the change(s) in the
Codification. References made to FASB guidance throughout this document have
been updated for the Codification.





Recent
Accounting Pronouncements




In
September 2006, ASC issued 820, Fair Value Measurements. ASC 820 defines fair
value, establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosure about fair value measurements.
This statement is effective for financial statements issued for fiscal years
beginning after November 15, 2007. Early adoption is encouraged. The adoption of
ASC 820 is not expected to have a material impact on the financial
statements.




In
February 2007, ASC issued 825-10, The Fair Value Option for Financial Assets and
Financial Liabilities – Including an amendment of ASC 320-10, (“ASC 825-10”)
which permits entities to choose to measure many financial instruments and
certain other items at fair value at specified election dates. A business entity
is required to report unrealized gains and losses on items for which the fair
value option has been elected in earnings at each subsequent reporting date.
This statement is expected to expand the use of fair value measurement. ASC
825-10 is effective for financial statements issued for fiscal years beginning
after November 15, 2007, and interim periods within those fiscal
years.




25




In
December 2007, the ASC issued ASC 810-10-65, Noncontrolling Interests in
Consolidated Financial Statements. ASC 810-10-65 establishes accounting and
reporting standards for ownership interests in subsidiaries held by parties
other than the parent, changes in a parent’s ownership of a noncontrolling
interest, calculation and disclosure of the consolidated net income attributable
to the parent and the noncontrolling interest, changes in a parent’s ownership
interest while the parent retains its controlling financial interest and fair
value measurement of any retained noncontrolling equity investment.




ASC
810-10-65 is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal
years. Early adoption is prohibited. Management is determining the impact that
the adoption of ASC 810-10-65 will have on the Company’s financial position,
results of operations or cash flows.




In
December 2007, the Company adopted ASC 805, Business Combinations (“ASC 805”).
ASC 805 retains the fundamental requirements that the acquisition method of
accounting be used for all business combinations and for an acquirer to be
identified for each business combination. ASC 805 defines the acquirer as the
entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control.  ASC 805 will require an entity to record separately
from the business combination the direct costs, where previously these costs
were included in the total allocated cost of the acquisition.  ASC 805
will require an entity to recognize the assets acquired, liabilities assumed,
and any non-controlling interest in the acquired at the acquisition date, at
their fair values as of that date.




ASC 805
will require an entity to recognize as an asset or liability at fair value for
certain contingencies, either contractual or non-contractual, if certain
criteria are met.  Finally, ASC 805 will require an entity to
recognize contingent consideration at the date of acquisition, based on the fair
value at that date.  This will be effective for business combinations
completed on or after the first annual reporting period beginning on or after
December 15, 2008.  Early adoption is not permitted and the ASC is be
applied prospectively only.  Upon adoption of this ASC, there would be
no impact to the Company’s results of operations and financial condition for
acquisitions previously completed.  The adoption of ASC 805 is not
expected to have a material effect on the Company’s financial position, results
of operations or cash flows.




In March
2008, ASC issued ASC 815, Disclosures about Derivative Instruments and Hedging
Activities”, (“ASC 815”). ASC 815 requires enhanced disclosures about an
entity’s derivative and hedging activities. These enhanced disclosures will
discuss: how and why an entity uses derivative instruments; how derivative
instruments and related hedged items are accounted for and its related
interpretations; and how derivative instruments and related hedged items affect
an entity’s financial position, financial performance, and cash flows. ASC 815
is effective for financial statements issued for fiscal years and interim
periods beginning after November 15, 2008. The Company does not believe that ASC
815 will have an impact on their results of operations or financial
position.




Effective
April 1, 2009, the Company adopted ASC 855, Subsequent Events (“ASC 855”). ASC
855 establishes general standards of accounting for and disclosure of events
that occur after the balance sheet date but before financial statements are
issued or are available to be issued. It requires disclosure of the date through
which an entity has evaluated subsequent events and the basis for that date –
that is, whether that date represents the date the financial statements were
issued or were available to be issued. This disclosure should alert all users of
financial statements that an entity has not evaluated subsequent events after
that date in the set of financial statements being presented. Adoption of ASC
855 did not have a material impact on the Company’s results of operations or
financial condition. The Company has evaluated subsequent events through October
26, 2009, the date the financial statements were issued.


26




Effective
July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value Measurement
and Disclosures (Topic 820) (“ASU 2009-05”). ASU 2009-05 provided amendments to
ASC 820-10, Fair Value Measurements and Disclosures – Overall, for the fair
value measurement of liabilities. ASU 2009-05 provides clarification that in
circumstances in which a quoted market price in an active market for the
identical liability is not available, a reporting entity is required to measure
fair value using certain techniques. ASU 2009-05 also clarifies that when
estimating the fair value of a liability, a reporting entity is not required to
include a separate input or adjustment to other inputs relating to the existence
of a restriction that prevents the transfer of a liability. ASU 2009-05 also
clarifies that both a quoted price in an active market for the identical
liability at the measurement date and the quoted price for the identical
liability when traded as an asset in an active market when no adjustments to the
quoted price of the asset are required for Level 1 fair value measurements.
Adoption of ASU 2009-05 did not have a material impact on the Company’s results
of operations or financial condition.




Other
ASU’s that have been issued or proposed by the FASB ASC that do not require
adoption until a future date and are not expected to have a material impact on
the financial statements upon adoption.




Convertible
Instruments




The
Company reviews the terms of convertible debt and equity securities for
indications requiring bifurcation, and separate accounting, for the embedded
conversion feature. Generally, embedded conversion features where the ability to
physical or net-share settle the conversion option is not within the control of
the Company are bifurcated and accounted for as a derivative financial
instrument. (See Derivative Financial Instruments below). Bifurcation of the
embedded derivative instrument requires allocation of the proceeds first to the
fair value of the embedded derivative instrument with the residual allocated to
the debt instrument. The resulting discount to the face value of the debt
instrument is amortized through periodic charges to interest expense using the
Effective Interest Method.




Derivative
Financial Instruments




The
Company generally does not use derivative financial instruments to hedge
exposures to cash-flow or market risks. However, certain other financial
instruments, such as warrants or options to acquire common stock and the
embedded conversion features of debt and preferred instruments that are indexed
to the Company's common stock, are classified as liabilities when either (a) the
holder possesses rights to net-cash settlement or (b) physical or net share
settlement is not within the control of the Company. In such instances, net-cash
settlement is assumed for financial accounting and reporting, even when the
terms of the underlying contracts do not provide for net-cash settlement. Such
financial instruments are initially recorded at fair value and subsequently
adjusted to fair value at the close of each reporting period.




Fixed
Assets




Fixed
assets are stated at cost. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets;





·
            Automobiles-
      3 years


·
            Computer
      equipment - 3 years


·
            Furniture
      and fixtures - 5 years.




When
assets are retired or otherwise disposed of, the costs and related accumulated
depreciation are removed from the accounts, and any resulting gain or loss is
recognized in income for the period. The cost of maintenance and repairs is
charged to income as incurred; significant renewals and betterments are
capitalized. Deduction is made for retirements resulting from renewals or
betterments.




27




Impairment
of Long-Lived Assets




Long-lived
assets, primarily fixed assets, are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of the assets might
not be recoverable. The Company does perform a periodic assessment of assets for
impairment in the absence of such information or indicators. Conditions that
would necessitate an impairment assessment include a significant decline in the
observable market value of an asset, a significant change in the extent or
manner in which an asset is used, or a significant adverse change that would
indicate that the carrying amount of an asset or group of assets is not
recoverable. For long-lived assets to be held and used, the Company recognizes
an impairment loss only if its carrying amount is not recoverable through its
undiscounted cash flows and measures the impairment loss based on the difference
between the carrying amount and estimated fair value.




Revenue
Recognition




The
Company generates revenue from the following primary sources: (1) licensing
software products; (2) providing customer technical support (referred to as
maintenance); and (3) providing professional services, such as consulting and
education.




The
Company recognizes revenue pursuant to the requirements of ASC 450-10 and ASC
985-605, “Software Revenue Recognition.” In accordance with the ASC’s, the
Company begins to recognize revenue from licensing and supporting its software
products when all of the following criteria are met: (1) the Company has
evidence of an arrangement with a customer; (2) the Company delivers the
products; (3) license agreement terms are deemed fixed or determinable and free
of contingencies or uncertainties that may alter the agreement such that it may
not be complete and final; and (4) collection is probable.




The
Company’s software licenses generally do not include acceptance provisions. An
acceptance provision allows a customer to test the software for a defined period
of time before committing to license the software. If a license agreement were
to include an acceptance provision, the Company would not record deferred
subscription value or recognize revenue until the earlier of the receipt of a
written customer acceptance or, if not notified by the customer to cancel the
license agreement, the expiration of the acceptance period.




Under the
Company’s business model, software license agreements frequently include
flexible contractual provisions that, among other things, allow customers to
receive unspecified future software products for no additional fee. These
agreements combine the right to use the software products with maintenance for
the term of the agreement. Under these agreements, once all four of the above
noted revenue recognition criteria are met, the Company is required to recognize
revenue ratably over the term of the license agreement.





Under the
Company’s business model, a relatively small percentage of the Company’s revenue
related to certain products is recognized on an up-front or perpetual basis once
all revenue recognition criteria are met in accordance with the ASC’s as
described above, and is reported in the “Software fees and other” line of the
statements of operations. License agreements pertaining to such products do not
include the right to receive unspecified future software products, and
maintenance is deferred and subsequently recognized over the term of the
maintenance period. In the event such license agreements are executed within
close proximity or in contemplation of other license agreements with the same
customer which are recognized on a subscription basis, the contracts may be
considered a single multi-element agreement, and as such all revenue is deferred
and recognized as “Subscription revenue” in the statements of
operations.




Maintenance
revenue is derived from two primary sources: (1) combined license and
maintenance agreements recorded under the prior business model; and (2)
stand-alone maintenance agreements.




28




Under the
prior business model, maintenance and license fees were generally combined into
a single license agreement. The maintenance portion was deferred and amortized
into revenue over the initial license agreement term. Certain of these license
agreements have not reached the end of their initial terms and, therefore,
continue to amortize. This amortization is recorded to the “Maintenance” line
item in the Statements of Operations. The deferred maintenance portion, which
was optional to the customer, was determined using its fair value based on
annual, fixed maintenance renewal rates stated in the agreement. For license
agreements entered into under the Company’s current business model, maintenance
and license fees continue to be combined; however, the maintenance is inclusive
for the entire term of the arrangement. The Company reports such combined fees
on the “Subscription revenue” line item in the Statements of
Operations.




The
Company also records stand-alone maintenance revenue earned from customers who
elect optional maintenance. Revenue from such renewals is recognized on the
“Maintenance” line item in the Statements of Operations over the term of the
renewal agreement.




The
“Deferred maintenance revenue” line item on the Company’s Balance Sheets
principally represents payments received in advance of maintenance services to
be rendered.




Revenue
from professional service arrangements is generally recognized as the services
are performed. Revenue from committed professional services arrangements that
are sold as part of a software transaction is deferred and recognized on a
ratable basis over the life of the related software transaction. If it is not
probable that a project will be completed or the payment will be received,
revenue is deferred until the uncertainty is removed.





Revenue
from sales to distributors, resellers, and value-added resellers (VARs)
commences when all four of the ASC revenue recognition criteria noted above are
met and when these entities sell the software product to their customers. This
is commonly referred to as the sell-through method. Revenue from the sale of
products to distributors, resellers and VARs under licenses that include the
right for the end-users to receive certain unspecified future software products
is recognized on a ratable basis.




Use
of Estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.  On an on-going basis, the Company
evaluates its estimates, including, but not limited to, those related to
investment tax credits, bad debts, income taxes and contingencies. The Company
bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results
could differ from those estimates.




Comprehensive
Income





The
Company adopted ASC 220-10, “Reporting Comprehensive Income,” (formerly SFAS No.
130). ASC 220-10 requires the reporting of comprehensive income in addition to
net income from operations.




Research
and Development




The
Company occasionally incurs costs on activities that relate to research and
development of new products. Research and development costs are expensed as
incurred. Certain of these costs are reduced by government grants and investment
tax credits where applicable.




Stock-Based
Compensation





In 2006,
the Company adopted the provisions of ASC 718-10 “Share Based Payments” for its
year ended December 31, 2008. The adoption of this principle had no effect on
the Company’s operations.




29




The
Company has elected to use the modified–prospective approach method. Under that
transition method, the calculated expense in 2006 is equivalent to compensation
expense for all awards granted prior to, but not yet vested as of January 1,
2006, based on the grant-date fair values. Stock-based compensation expense for
all awards granted after January 1, 2006 is based on the grant-date fair values.
The Company recognizes these compensation costs, net of an estimated forfeiture
rate, on a pro rata basis over the requisite service period of each vesting
tranche of each award. The Company considers voluntary termination behavior as
well as trends of actual option forfeitures when estimating the forfeiture
rate.




The Company measures compensation
expense for its non-employee stock-based compensation under ASC 505-50,
“Accounting for Equity Instruments that are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services”.  The
fair value of the option issued is used to measure the transaction, as this is
more reliable than the fair value of the services received.  The fair
value is measured at the value of the Company’s common stock on the date that
the commitment for performance by the counterparty has been reached or the
counterparty’s performance is complete. The fair value of the equity instrument
is charged directly to compensation expense and additional paid-in
capital.




Segment
Information





The
Company follows the provisions of ASC 280-10, “Disclosures about Segments of an
Enterprise and Related Information”. This standard requires that companies
disclose operating segments based on the manner in which management
disaggregates the Company in making internal operating decisions.




Results of Operations –Nine
and Three Months Ended September 30, 2009 Compared to Nine and
Three Months Ended September 30, 2008




The
Company recorded sales of $25,303 of which $7,853 was subscription revenue,
$8,451 was professional services and $8,999 was maintenance revenue for the nine
month period ending September 30, 2009 as compared to $35,728 of which $9,590
was subscription revenue, $20,064 was professional services and $6,074 was
maintenance revenue for the nine month period ending September 30,
2008.





The
Company recorded sales of $16,357 of which $3,645 was subscription revenue,
$6,925 was professional services and $5,787 was maintenance revenue for the
three month period ending September 30, 2009 as compared to $19,521 of which
$3,110 was subscription revenue, $10,337 was professional services and $6,074
was maintenance revenue for the three month period ending September 30,
2008.





The
Company’s total cost of sales were $23,003 for the nine month period ending
September 30, 2009 compared to $41,691 for the same period in
2008.  The reduced of costs of sales is associated with a reduction in
the costs of Professional services associated with the reduced
revenues.





The
Company’s total cost of sales were $13,226 for the three month period ending
September 30, 2009 compared to $16,893 for the same period in
2008.  The reduced of costs of sales is associated with the reduction
in revenue.





The
Company's total operating expenses before interest and income taxes were $23,167
for the nine month period ending September 30, 2009 compared to $30,674 for the
same period in 2008, primarily as a consequence of a decrease in selling,
general and administrative expenses from $23,284 to $17,256 as the company
reduced its expenses as it focused on delivering services to its existing client
base instead of marketing towards new sales channels.  Depreciation
expenses decreased from $7,390 in 2008 to $5,911 for the same period in 2009
since older equipment continues to depreciate to the end of its amortization
period.




30





The
Company's total operating expenses before interest and income taxes were $7,031
for the three month period ending September 30, 2009 compared to $12,451 for the
same period in 2008.  In particular, there was a decrease in
selling, general and administrative expenses from $10,571 to $4,970 particularly
due to the company spending less money attempting to acquire new clients while
it focuses on the growth from existing clients.  Depreciation expense
increased from $1,880 to $2,061 as the company acquired some new
equipment.




As a
result, the Company had a net income (loss) of ($21,121) for the nine month
period ending September 30, 2009 compared to a net income (loss) of ($31,184)
for the same period in 2008. The principal reasons for company’s net loss for
the nine month period ending September 30, 2009 as compared to the prior period
is because the company was unable to achieve the level of revenues required to
sustain its operating costs resulting in a higher net loss for the period,
however, the loss was not as substantial as the company was able to reduce its
expenditures so as to reduce the amount of overall income compared to the prior
period.




Plan
of Operations and Need for Additional Financing




The
Company's plan of operations for most of 2009 is to build a subscriber base of
suppliers to major retailers who purchase software on a monthly subscription
basis. Along with the subscription revenues, the Company will also sell
professional services, maintenance and software fees to the same
customers.




Liquidity
and Capital Resources




For the
period ending September 30, 2009:





On the
Company's balance sheet as of September 30, 2009, the Company had assets
consisting of cash in the amount of $586 and accounts receivable of
$4,792.  The Company has expended its cash in furtherance of its
business plan, including primarily expenditure of funds to pay legal and
accounting expenses, and to maintain service delivery to its
customers.  The balance sheet shows total liabilities of $47,071 of
which $35,421 consisted of advances from shareholders, $6,166 consisted of cash
expended on the Company`s operating line of credit, $3,905 of cash due to a
related company and $1,579 in accounts payable.  Consequently, the
Company's balance sheet as of September 30, 2009 reflects an accumulated deficit
of ($475,986) and a stockholders` equity of ($35,914).




The
Company used $14,149 of cash in operating activities in 2009 compared to a use
of $26,760 for the same period in 2008. This change was attributable in large
part to the reduction of net income due to a decrease in sales, that in 2008,
the Company recorded a gain on disposition of assets of $7,809, that there was a
decrease in accounts payable from $4,419 to an increase of $2,796, that accounts
receivable in 2008 showed a decrease of $10,346 compared to an increase of
$1,735 in 2009 and that there was a decrease in depreciation from $7,390 to
$5,911.





The
Company had net cash provided in investing activities of $1,263 in 2009 compared
to being provided $8,569 during 2008. This change was primarily attributable to
a decrease in the amounts received in 2009 due to the disposal of fixed assets
in 2008.





The
Company was provided $8,275 in cash from financing activities in 2009 compared
to a use of $11,972 for the same period in 2008. This change was primarily
attributable to the Company increasing its borrowing off of its credit line in
2009 order to sustain its operations due to its need for cash to sustain
operations during the period as compared to a slight repayment of its credit
line in 2008.





ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





Not
required.




31




ITEM 4.
CONTROL AND PROCEDURES.





Rules
adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002
require annual assessment of our internal control over financial reporting, and
attestation of this assessment by our company's independent registered public
accountants. The SEC extended the compliance dates for “non-accelerated filers,”
as defined by the SEC. The standards that must be met for management to assess
the internal control over financial reporting as effective are new and complex,
and require significant documentation, testing and possible remediation to meet
the detailed standards. We have not yet evaluated our internal controls over
financial reporting in order to allow management to report on, and our
independent auditors to attest to, our internal controls over financial
reporting, as will be required by Section 404 of the Sarbanes-Oxley Act of 2002
and the rules and regulations of the SEC. We have never performed the system and
process evaluation and testing required in an effort to comply with the
management assessment and auditor certification requirements of Section 404,
which will initially apply to us as of December 31, 2010.
Our lack of familiarity with Section 404 may unduly divert management’s
time and resources in executing the business plan. If, in the future, management
identifies one or more material weaknesses, or our external auditors are unable
to attest that our management’s report is fairly stated or to express an opinion
on the effectiveness of our internal controls, this could result in a loss of
investor confidence in our financial reports, have an adverse effect on our
stock price and/or subject us to sanctions or investigation by regulatory
authorities.




Changes
in Internal Controls




There
have been no changes in our internal controls over financial reporting or in
other factors that could materially affect, or are reasonably likely to affect,
our internal controls over financial reporting during the nine months ended
September 30, 2009. There have not been any significant changes in the Company’s
critical accounting policies identified since the Company filed its Form 10-K as
of December 31, 2008.






PART
II - OTHER INFORMATION




ITEM 1
- LEGAL PROCEEDINGS




During
the past five years, none of the following occurred with respect to a present or
former director or executive officer of the Company: (1) any bankruptcy petition
filed by or against any business of which such person was a general partner or
executive officer either at the time of the bankruptcy or within two years prior
to that time; (2) any conviction in a criminal proceeding or being subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses); (3) being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of any competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; and
(4) being found by a court of competent jurisdiction (in a civil action), the
SEC or the commodities futures trading commission to have violated a federal or
state securities or commodities law, and the judgment has not been reversed,
suspended or vacated.




We are not a party to any pending material legal proceedings and
are not aware of any threatened or contemplated proceeding by any governmental
authority against the Company.  Notwithstanding, from time to time,
the Company is subject to legal proceedings and claims in the ordinary course of
business, including employment-related and trade related claims.





ITEM 1A
- RISK FACTORS





We have
updated the risk factors previously disclosed in Part I, Item 1A of our
Annual Report on Form 10–K for the year ended December 31, 2008, which
was  filed with the Securities and Exchange Commission on March 18, 2009
(the “Fiscal 2008 10–K”). We believe there are no changes that constitute
material changes from the risk factors previously disclosed in the Fiscal 2008
10–K.




32




ITEM
2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




None.




ITEM 3 - DEFAULTS UPON SENIOR
SECURITES




There
have been no material defaults.




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




No
matters have been submitted to a vote of security holders during the period
covered by this report.




ITEM 5
- OTHER INFORMATION





None.




ITEM 6
- EXHIBITS




31.1
            
            Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act.31.2
            
            Certification
      of Principal Financial and Accounting Officer Pursuant to Section 302 of
      the Sarbanes-Oxley Act.32.1
            
            Certification
      of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
      Act.32.2
            
            Certification
      of Principal Financial and Accounting Officer Pursuant to Section 906 of
      the Sarbanes-Oxley Act.




33






SIGNATURES





Pursuant
to the requirements of Section 13 or 15(b) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Montreal, Quebec,
Canada.





Dated:
November
23, 2009




GMS
      CAPITAL CORP./s/
      George MetrakosGeorge
      Metrakos
                Chief
      Executive Officer and President




GMS
      CAPITAL CORP./s/
      George MetrakosGeorge
      Metrakos
                Principal
      Financial and Accounting Officer