UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549





FORM
10-Q





[X]
            Quarterly
      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934For
      the quarterly period ended October 31,
      2009[  ]
            Transition
      Report pursuant to 13 or 15(d) of the Securities Exchange Act of
      1934For
      the transition period  to__________Commission
      File Number:  333-151252


Hotel Management Systems,
Inc.


(Exact
name of small business issuer as specified in its charter)





Nevada
            26-2477977(State
      or other jurisdiction of incorporation or organization)
            (IRS
      Employer Identification No.)








440 Waterwheel Falls Dr., Henderson, NV
      89015(Address
      of principal executive offices)





(702) 335-4531(Issuer’s
      telephone number)_____________________________________________________________(Former
      name, former address and former fiscal year, if changed since last
      report)


Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days [X]
Yes    [ ] No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.





[ ] Large
accelerated
filer                                                      [
] Accelerated filer


[ ]
Non-accelerated
filer                                                      [X]
Smaller reporting company





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). [X] Yes   [ ] No





State the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date:  7,000,000 common shares as of
December 14, 2009.





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 (§ 229.405 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]








Table of Contents







TABLE OF
      CONTENTS
            PagePART I – FINANCIAL INFORMATIONItem 1:
            Financial Statements
            3Item 2:
            Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
            4Item 3:
            Quantitative and Qualitative Disclosures About Market
      Risk
            10Item 4T:
            Controls and Procedures
            10PART II – OTHER INFORMATIONItem 1:
            Legal Proceedings
            11Item 1A:
            Risk Factors
            11Item
      2:
            Unregistered Sales of Equity Securities and Use of
      Proceeds
            11Item 3:
            Defaults Upon Senior Securities
            11Item 4:
            Submission of Matters to a Vote of Security
      Holders
            11Item 5:
            Other Information
            11Item 6:
            Exhibits
            12




2
 Table of Contents





PART
I - FINANCIAL INFORMATION





Item1.                           Financial
Statements





Our
      financial statements included in this Form 10-Q are as
      follows:F-1
            Balance
      Sheets as of October 31, 2009 (unaudited) and April 30, 2009
      (audited)F-2
              
              F-3
            Statements
      of Operations for the three and six months ended October 31, 2009 and
      October 31, 2008 and from Inception on April 15, 2008 through October 31,
      2009 (unaudited);
              
              Statement
      of Stockholders’ Deficit from inception on April 15, 2008 through October
      31, 2009 (unaudited);F-4
            Statements
      of Cash Flows for the six months ended October 31, 2009 and October 31,
      2008 and from Inception on April 15, 2008 through October 31, 2009
      (unaudited);F-5
            Notes
      to Financial Statements;








These
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America for interim financial
information and the SEC instructions to Form 10-Q.  In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included.  Operating results for the interim period ended October
31, 2009 are not necessarily indicative of the results that can be expected for
the full year.


3
 Table of Contents






HOTEL
      MANAGEMENT SYSTEMS, INC.(A
      Development Stage Company)Balance
      SheetsOctober
      31,
              
              
              April
      30,2009
              
              
              2009(unaudited)
              
              
              (audited)ASSETSCURRENT
      ASSETSCash
      in bank
              
              $
              11,678
              
              
              $
              19,281TOTAL
      CURRENT ASSETS
              
              
              11,678
              
              
              
              19,281TOTAL
      ASSETS
              
              $
              11,678
              
              
              $
              19,281LIABILITIES AND STOCKHOLDERS'
      DEFICITCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
              
              $
              51,265
              
              
              $
              35,826TOTAL
      CURRENT LIABILITIES
              
              
              51,265
              
              
              
              35,826TOTAL
      LIABILITIES
              
              
              51,265
              
              
              
              35,826STOCKHOLDERS'
      DEFICITPreferred
      stock: $0.001 par value; 10,000,000shares
      authorized, no shares issued and outstanding
              
              
              -
              
              
              
              -Common
      stock: $0.001 par value;90,000,000
      shares authorized, 7,000,000shares
      issued and outstanding
              
              
              7,000
              
              
              
              7,000Additional
      paid in capital
              
              
              19,229
              
              
              
              19,229Deficit
      accumulated during the development stage
              
              
              (65,816
              )
              
              
              (42,774
              )TOTAL
      STOCKHOLDERS' DEFICIT
              
              
              (39,587
              )
              
              
              (16,545
              )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              11,678
              
              
              $
              19,281
   The
accompanying notes are an integral part of these financial
statements






F-1
 Table of Contents


HOTEL
      MANAGEMENT SYSTEMS, INC.(A
      Development Stage Company)Statements
      of Operations(Unaudited)From
      Inceptionon
      April 15,For
      the Three Months Ended
              
              
              For
      the Six Months Ended
              
              
              2008
      throughOctober
      31,
              
              
              October
      31,
              
              
              October
      31,2009
              
              
              2008
              
              
              2009
              
              
              2008
              
              
              2009REVENUES
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -COST
      OF SALES
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -GROSS
      MARGIN
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -OPERATING
      EXPENSESGeneral
      and administrative
              
              
              20,707
              
              
              
              1,930
              
              
              
              23,042
              
              
              
              5,689
              
              
              
              65,816TOTAL
      OPERATING EXPENSES
              
              
              20,707
              
              
              
              1,930
              
              
              
              23,042
              
              
              
              5,689
              
              
              
              65,816NET
      LOSS
              
              $
              (20,707
              )
              
              $
              (1,930
              )
              
              $
              (23,042
              )
              
              $
              (5,689
              )
              
              $
              (65,816
              )BASIC
      LOSS PER SHARE
              
              $
              (0.00
              )
              
              $
              (0.00
              )
              
              $
              (0.00
              )
              
              $
              (0.00
              )Weighted
      Average SharesOutstanding
              
              
              7,000,000
              
              
              
              7,000,000
              
              
              
              7,000,000
              
              
              
              7,000,000
 
   The
accompanying notes are an integral part of these financial
statements









F-2
 Table of Contents








HOTEL
      MANAGEMENT SYSTEMS, INC(A
      Development Stage Company)Statements
      of Stockholders' Deficit(Unaudited)DeficitAccumulatedDuring
      the
              
              
              TotalCommon
      Stock
              
              
              Additional
      Paid
              
              
              Development
              
              
              Stockholders'Shares
              
              
              Amount
              
              
              in
      Capital
              
              
              Stage
              
              
              DeficitBalance
      April 15, 2008
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Shares
      issued for cashat
      $0.001 per shareon
      April 24, 2008
              
              
              5,500,000
              
              
              
              5,500
              
              
              
              -
              
              
              
              -
              
              
              
              5,500Net
      loss for the periodended
      April 30, 2008
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Balance
      April 30, 2008
              
              
              5,500,000
              
              
              
              5,500
              
              
              
              -
              
              
              
              -
              
              
              
              5,500Shares
      issued for cashat
      $0.01 per shareon
      June 23, 2008
              
              
              1,500,000
              
              
              
              1,500
              
              
              
              13,500
              
              
              
              -
              
              
              
              15,000Contributed
      capital
              
              
              -
              
              
              
              -
              
              
              
              5,729
              
              
              
              -
              
              
              
              5,729Net
      loss for the year endedApril
      30, 2009
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (42,774
              )
              
              
              (42,774
              )Balance,
      April 30, 2009
              
              
              7,000,000
              
              
              
              7,000
              
              
              
              19,229
              
              
              
              (42,774
              )
              
              
              (16,545
              )Net
      loss for the six monthsended
      October 31, 2009
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (23,042
              )
              
              
              (23,042
              )Balance,
      October  31, 2009
              
              
              7,000,000
              
              
              $
              7,000
              
              
              $
              19,229
              
              
              $
              (65,816
              )
              
              $
              (39,587
              )






The
accompanying notes are an integral part of these financial
statements





F-3
 Table of Contents





HOTEL
      MANAGEMENT SYSTEMS, INC.(A
      Development Stage Company)Statements
      of Cash Flows(Unaudited)Since
      Inceptionon
      April 15,For
      the Six Months Ended
                
                
                2008
      throughOctober
      31,
                
                
                October
      31,2009
                
                
                2008
                
                
                2009OPERATING
      ACTIVITIESNet
      loss
                
                $
                (23,042
                )
                
                $
                (5,689
                )
                
                $
                (65,816
                )Adjustments
      to reconcile net income tonet
      cash provided by operating activities:Contributed
      expenses
                
                
                -
                
                
                
                -
                
                
                
                -Changes
      in operating assets and liabilities:Increase
      (decrease) in accounts payable
                
                
                15,439
                
                
                
                4,500
                
                
                
                51,265NET
      CASH USED IN OPERATING ACTIVITES
                
                
                (7,603
                )
                
                
                (1,189
                )
                
                
                (14,551
                )INVESTING
      ACTIVITIESProperty
      and equipment purchased
                
                
                -
                
                
                
                -
                
                
                
                -NET
      CASH USED IN INVESTING ACTIVITIES
                
                
                -
                
                
                
                -
                
                
                
                -FINANCING
      ACTIVITIESProceeds
      from common stock issued
                
                
                -
                
                
                
                15,000
                
                
                
                20,500Contributed
      capital
                
                
                -
                
                
                
                -
                
                
                
                5,729NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                
                
                -
                
                
                
                15,000
                
                
                
                26,229NET
      (DECREASE) INCREASE IN CASH
                
                
                (7,603
                )
                
                
                13,811
                
                
                
                11,678CASH
      - Beginning of period
                
                
                19,281
                
                
                
                5,500
                
                
                
                -CASH
      - End of period
                
                $
                11,678
                
                
                $
                19,311
                
                
                $
                11,678SUPPLEMENTAL
      CASH FLOW DISCLOSURE:CASH
      PAID FOR:Interest
                
                $
                -
                
                
                $
                -
                
                
                $
                -Income
      taxes
                
                $
                -
                
                
                $
                -
                
                
                $
                -NON
      CASH FINANCING ACTIVITIES:
                
                $
                -
                
                
                $
                -
                
                
                $
                -
 
 
 
 The
accompanying notes are an integral part of these financial
statements.








F-4
 Table of Contents
 HOTEL
MANAGEMENT SYSTEMS, INC.
 (A
Development Stage Company)
 Notes to
Financial Statements
 October
31, 2009
  
 
 NOTE
1 - CONDENSED FINANCIAL STATEMENTS
 
 The
accompanying financial statements have been prepared by the Company without
audit.  In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to make the financial statements
not misleading and to present fairly the financial position, results of
operations, and cash flows at October 31, 2009, and for all periods presented
herein, have been made.
 
 Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted.  It is
suggested that these condensed financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's April 30,
2009 audited financial statements.  The results of operations for the
periods ended October 31, 2009 and 2008 are not necessarily indicative of the
operating results for the full years.
 
 NOTE
2 - GOING CONCERN
 
 The
Company's financial statements are prepared using generally accepted accounting
principles in the United States of America applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. The Company has not yet
 Established
an ongoing source of revenues sufficient to cover its operating costs and allow
it to continue as a going concern. The ability of the Company to continue as a
going concern is dependent on the Company obtaining adequate capital to fund
operating losses until it becomes profitable. If the Company is unable to obtain
adequate capital, it could be forced to cease operations.
 
 In order
to continue as a going concern, the Company will need, among other things,
additional capital resources. Management's plan is to obtain such resources for
the Company by obtaining capital from management and significant shareholders
sufficient to meet its minimal operating expenses and seeking equity and/or debt
financing. However management cannot provide any assurances that the Company
will be successful in accomplishing any of its plans.
 
 The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going
concern.
 
 NOTE 3 –
SIGNIFICANT ACCOUNTING POLICIES
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 F-5
 Table of Contents
 HOTEL
MANAGEMENT SYSTEMS, INC.
 (A
Development Stage Company)
 Notes to
Financial Statements
 October
31, 2009
 
 
 NOTE 3 –
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Recent Accounting
Pronouncements
 
 In May
2009, the FASB issued SFAS 165 (ASC 855-10) entitled “Subsequent
Events”.  Companies are now required to disclose the date through
which subsequent events have been evaluated by management. Public entities (as
defined) must conduct the evaluation as of the date the financial statements are
issued, and provide disclosure that such date was used for this evaluation. SFAS
165 (ASC 855-10) provides that financial statements are considered “issued” when
they are widely distributed for general use and reliance in a form and format
that complies with GAAP. SFAS 165 (ASC 855-10) is effective for interim and
annual periods ending after June 15, 2009 and must be applied prospectively. The
adoption of SFAS 165 (ASC 855-10) during the quarter ended October 31, 2009 did
not have a significant effect on the Company’s financial statements as of that
date or for the quarter or year-to-date period then ended. In connection with
preparing the accompanying unaudited financial statements as of October 31, 2009
and for the quarter and six month period ended October 31, 2009, management
evaluated subsequent events through the date that such financial statements were
issued (filed with the SEC).
 
 In June
2009, the FASB issued SFAS 168, The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles. (“SFAS 168” pr ASC
105-10) SFAS 168 (ASC 105-10) establishes the Codification as the sole source of
authoritative accounting principles recognized by the FASB to be applied by all
nongovernmental entities in the preparation of financial statements in
conformity with GAAP. SFAS 168 (ASC 105-10) was prospectively effective for
financial statements issued for fiscal years ending on or after September 15,
2009 and interim periods within those fiscal years. The adoption of SFAS 168
(ASC 105-10) on July 1, 2009 did not impact the Company’s results of operations
or financial condition. The Codification did not change GAAP, however, it did
change the way GAAP is organized and presented. As a result, these changes
impact how companies reference GAAP in their financial statements and in their
significant accounting policies. The Company implemented the Codification in
this Report by providing references to the Codification topics alongside
references to the corresponding standards.
 
 With the
exception of the pronouncements noted above, no other accounting standards or
interpretations issued or recently adopted are expected to have a material
impact on the Company’s financial position, operations or cash
flows.
 
 NOTE 3 –
SUBSEQUENT EVENTS
 
 In
accordance with SFAS 165 (ASC 855-10) The Company’s management reviewed all
material events through December 14, 2009 and there are no material subsequent
events to report.


F-6
 Table of Contents





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





Forward-Looking
Statements





Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of
1934.   These forward-looking statements generally are identified
by the words “believes,” “project,” “expects,” “anticipates,” “estimates,”
“intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions.  We intend
such forward-looking statements to be covered by the safe-harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and are including this statement for purposes of complying with
those safe-harbor provisions.  Forward-looking statements are based on
current expectations and assumptions that are subject to risks and uncertainties
which may cause actual results to differ materially from the forward-looking
statements. Our ability to predict results or the actual effect of future plans
or strategies is inherently uncertain.  Factors which could have a
material adverse affect on our operations and future prospects on a consolidated
basis include, but are not limited to: changes in economic conditions,
legislative/regulatory changes, availability of capital, interest rates,
competition, and generally accepted accounting principles. These risks and
uncertainties should also be considered in evaluating forward-looking statements
and undue reliance should not be placed on such statements.  We
undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or
otherwise.  Further information concerning our business, including
additional factors that could materially affect our financial results, is
included herein and in our other filings with the SEC.





Company
Overview and Plan of Operation





We were
incorporated as Hotel Management Systems, Inc. on April 15, 2008 in the State of
Nevada for the purpose of developing, perfecting, and marketing a proprietary
hotel management software known as “Hotel Management Tool.”





The
“Hotel Management Tool” software offers hotel operators a single software
platform which integrates all major aspects of the day-to-day management of
their enterprise.  Although the HMT is fully customizable and able to
incorporate additional modules, our standard version will feature three basic
modules that deal with those hotel operating functions which can be most easily
improved by the use of our software platform: Product and Supplies Management,
Employee Data, and Employment Counseling and Reporting.





Product and Supplies
Management





This module of the HMT software will
allow hotel management to track and manage its inventory of supplies and in-room
products like shampoo, soap, and similar items.  All of the supplies
and in-room products commonly used by the hotel can be input into a database
which will contain any necessary item or catalog numbers for each individual
product.  The hotel’s management will also input unit cost and a
desired minimum and maximum quantity of hand for each product.  On a
daily or other periodic basis, the hotel’s employees will then record inventory
through the use of a count worksheet.  The hotel’s quantity on hand is
then updated in a separate screen.  As the minimum quantity on hand is
approached, the HMT will know which products to re-order and in what quantity to
order them and will produce the appropriate product order.\








4
 Table of Contents








Employee Data
Management





This module of the HMT software will
allow for easy maintenance of a complete and user-friendly employee
database.  Through a series of screens, the employee’s personal
information, contact and emergency information, and work-related information can
be easily input and maintained by management.





Employment Counseling and
Reporting





The third standard module to be
included in the HMT software will allow hotel management to accurately record
and track employee disciplinary incidents and any related counseling sessions
with employees through a user-friendly data screen. In the event that an
employee must be terminated, a full record and evaluation of the employee’s
attendance, cooperation, initiative, job knowledge, and over work quality can be
easily input by management.  The HMT will then generate a written
report that can be given to the employee.  The employee will sign a
receipt of the report, which can be stored in the hotel’s permanent
records.





Additional Standard
Features





Together with the standard set of
functions summarized above, the HMT offers some important standard
features:





·
            Self-updating:  The
      HMT automatically checks for newer versions of the software, available
      upgrades, and software updates.  The software is updated
      automatically on a continuous basis, ensuring maximum performance and user
      satisfaction.





·
            Tiered
      Security:  The HMT features a tiered security system with
      a separate login and set of security credentials for each employee of the
      hotel who will be using the program.  Management can easily
      structure these security credentials to allow different levels and types
      of access to the HMT’s different functions depending upon the level of
      each employee’s security
credentials.





·
            Fully
      Scalable:  The HMT is fully scalable, which means that
      its capacity can grow and expand with the customer’s
      business.  The software can easily add additional capacity and
      new features and can accommodate more robust database systems as the
      customer’s business operations become larger and more
    complex.








5
 Table of Contents








Customization and Additional
Modules Available





In addition to the 3 standard modules
described above, the HMT can easily accommodate additional segments dealing with
different aspects of the hotel and motel business.  The core of the
program is designed to operate as hub, with different sets of functions that can
be added or subtracted to the core system like spokes on a
wheel.  Nearly every operating hotel already uses some type of
reservation software and some type of employee timekeeping
software.  Once they have begun using our standard product, however,
many customers may desire a more total and cost-effective integration of their
operations.  Additional modules that are ready to add-on to the HMT at
the customer’s request include the following:





·
            Room
      inventory and reservations system





·
            Employee
      scheduling





·
            Employee
      timekeeping and payroll





·
            Online
      product ordering from key suppliers





Pricing
and Revenue Model





Our
intended pricing structure will feature a base purchase price for the standard
version of the HMT software, with an extra charge for each additional module
requested by the customer.  We will also charge a small monthly
license fee for all maintenance and updates of the software and for storage of
the customer’s data:





Standard
version:                                           $1,500





Each additional
module:                                $500-$1,000
depending on specifications





Monthly
fee


Including data
storage:                                 
$20 per month per site





Monthly fee
if


Customer stores own
data:                            $8
per month per site





The
customer’s ongoing contract for maintenance, updates, and data storage will be
renewable annually at the option of the customer.  Larger customers
will substantial data storage needs or complex customizations may be charged
higher fees.  We believe this pricing model will position us well to
compete for the business of smaller hotel and motel operators (i.e.: those with
ten or fewer sites) who may be looking for a flexible and effective management
software solution at lower price than that typically charged by larger
competitors in the field.







6
 Table of Contents








Competition





The field
of hotel management software is flooded with an array of options which focus
primarily on room reservations and room inventory management.  We will
face several larger and more established competitors.  In addition,
many larger hotel and motel chains use proprietary systems built-for-hire to
suit their particular operations.  We intend to focus our efforts on
small independent hotels, motels, inns, and bed-and-breakfast
properties.  We believe or HMT software will be well-positioned to
compete for the business of these operators because of the following
advantages:





·
            Our
      software is fully scalable.  A hotel or motel owner can purchase
      a basic product for relatively low cost that will be able to grow with the
      enterprise if and when it expands.





·
            Our
      software is able to integrate all functions of the enterprise, not just
      reservations and room inventory management.  We believe this
      all-in-one capability will appeal to smaller customers with limited staff
      and resources for managing and integrating different functions of the
      enterprise by hand or through the use of multiple software
      products.





·
            We
      are a small company that will be focused on responsive and timely customer
      service.





Plan
of Operations





The HMT
software has been in development for over a year and has been extensively used
and tested at a medium-sized motel in Las Vegas, Nevada.  Following
exposure of the product to the challenges of real-world use in an active
environment, we made certain changes and improvements and development of the
product is essentially complete at this time.





Our
initial marketing plan is to launch a direct mail-based marketing campaign
focused on independent hotel and motel operators with small to medium-sized
properties and fewer than 10 locations, as well as bed-and-breakfast inns and
similar small independent operations. Our planned mailer will feature a complete
graphical description of the HMT software as well as a demonstration CD that
will show the potential customer how the software will function.  The
planned mailer will be followed-up with a phone call and on-site demonstrations
for those customers who are interested.  We have been conducting
market research and building a database of properties to target with our
mailer.  Although we had originally planned to launch our direct mail
campaign in the third quarter of our current fiscal year, certain unexpected
demands on the time of our sole officer and director, John Baumbauer, have cause
us to delay our plans.  Our current hope is that we may begin our
marketing campaign by early 2010.





As we
pursue our planned operations, our sole officer and director, John Baumbauer,
will provide his time to the business at no charge. Mr. Baumbauer will be
responsible for all administrative duties as well as overseeing the final
development and perfection of the HMT software, developing our sales and
marketing information material, researching potential customers, and performing
on-site product demonstrations and follow-up customer relations. As we have
limited financial resources, Mr. Baumbauer can only dedicate a portion of his
time to attending the needs of the business.





To the
extent that Mr. Baumbauer’s outside professional duties not related to the
company continue to make extraordinary demands on his time, our pace of
operational development may continue to be adversely affected.





We do not
have plans to purchase any significant equipment or change the number of our
employees during the next twelve months.





We have
no employees other than our president and CEO, Mr. Baumbauer.











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Results
of Operations for the three and six months ended October 31, 2009





We did
not earn any revenues from inception on April 15, 2008 through the period ending
October 31, 2009. We are presently in the development stage of our business and
we can provide no assurance that we will produce significant revenues or, if
revenues are earned, that we will be profitable.





We
incurred operating expenses and net losses in the amount of $20,707 during the
three months ended October 31, 2009, compared to operating expenses and net
losses in the amount of $1,930 during the three months ended October 31,
2008.  We incurred operating expenses and net losses in the amount of
$23,042 during the six months ended October 31, 2009, compared to operating
expenses and net losses in the amount of $5,689 during the six months ended
October 31, 2008. We have incurred total operating expenses and net losses of
$65,816 from our inception on April 15, 2008 through the period ending October
31, 2009.  Our operating expenses from inception through October 31,
2009 consisted of general and administrative expenses.  Our losses are
attributable to our operating expenses combined with a lack of any revenues
during our current stage of development. We anticipate our operating expenses
will increase as we continue with our plan of operations.





Liquidity
and Capital Resources





As of
October 31, 2009, we had cash of $11,678 and a working capital deficit of
$39,587. Our cash on hand is unlikely to cover our anticipated expenses for
the entire fiscal year beginning May 1, 2009 and will not be sufficient to
pay any significant unanticipated expenses. We currently do not have any
operations and we have no income. We will require additional financing to
sustain our business operations for any significant period of time beyond the
fiscal year beginning May 1, 2009. We currently do not have any arrangements for
financing and we may not be able to obtain financing when required.





We have
not attained profitable operations and may be dependent upon obtaining financing
to pursue our long-term business plan. For these reasons our auditors stated in
their report that they have substantial doubt we will be able to continue as a
going concern.





Off
Balance Sheet Arrangements





As of
October 31, 2009, there were no off balance sheet arrangements.





Going
Concern





Our
financial statements have been prepared on a going concern basis. We have a
working capital deficit of $39,587 as of October 31, 2009 and have accumulated a
deficit of $65,816 since inception. Our ability to continue as a going concern
is dependent upon our ability to generate profitable operations in the future
and/or to obtain the necessary financing to meet our obligations and repay our
liabilities arising from normal business operations when they come due. The
outcome of these matters cannot be predicted with any certainty at this time.
These factors raise substantial doubt that we will be able to continue as a
going concern. Management plans to continue to provide for our capital needs by
the issuance of common stock and related party advances.











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Critical
Accounting Policies





In
December 2001, the SEC requested that all registrants list their most “critical
accounting polices” in the Management Discussion and Analysis. The SEC indicated
that a “critical accounting policy” is one which is both important to the
portrayal of a company’s financial condition and results, and requires
management’s most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain. There are no critical accounting policies for the company as this
time.





Recently Issued Accounting
Pronouncements





In May
2009, the FASB issued SFAS 165 (ASC 855-10) entitled “Subsequent
Events”.  Companies are now required to disclose the date through
which subsequent events have been evaluated by management. Public entities (as
defined) must conduct the evaluation as of the date the financial statements are
issued, and provide disclosure that such date was used for this evaluation. SFAS
165 (ASC 855-10) provides that financial statements are considered “issued” when
they are widely distributed for general use and reliance in a form and format
that complies with GAAP. SFAS 165 (ASC 855-10) is effective for interim and
annual periods ending after June 15, 2009 and must be applied prospectively. The
adoption of SFAS 165 (ASC 855-10) during the quarter ended October 31, 2009 did
not have a significant effect on the Company’s financial statements as of that
date or for the quarter or year-to-date period then ended. In connection with
preparing the accompanying unaudited financial statements as of October 31, 2009
and for the quarter and six month period ended October 31, 2009, management
evaluated subsequent events through the date that such financial statements were
issued (filed with the SEC).





In June
2009, the FASB issued SFAS 168, The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles. (“SFAS 168” pr ASC
105-10) SFAS 168 (ASC 105-10) establishes the Codification as the sole source of
authoritative accounting principles recognized by the FASB to be applied by all
nongovernmental entities in the preparation of financial statements in
conformity with GAAP. SFAS 168 (ASC 105-10) was prospectively effective for
financial statements issued for fiscal years ending on or after September 15,
2009 and interim periods within those fiscal years. The adoption of SFAS 168
(ASC 105-10) on July 1, 2009 did not impact the Company’s results of operations
or financial condition. The Codification did not change GAAP, however, it did
change the way GAAP is organized and presented. As a result, these changes
impact how companies reference GAAP in their financial statements and in their
significant accounting policies. The Company implemented the Codification in
this Report by providing references to the Codification topics alongside
references to the corresponding standards.





With the
exception of the pronouncements noted above, no other accounting standards or
interpretations issued or recently adopted are expected to have a material
impact on the Company’s financial position, operations or cash
flows.








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Item 3.     Quantitative and Qualitative
Disclosures About Market Risk





A smaller
reporting company is not required to provide the information required by this
Item.





Item 4T.  Controls and Procedures





We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of October 31, 2009.  This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and our Chief Financial Officer, Mr. John
Baumbauer.  Based upon that evaluation, our Chief Executive Officer
and Chief Financial Officer concluded that, as of October 31, 2009, our
disclosure controls and procedures are effective.  There have been no
changes in our internal controls over financial reporting during the quarter
ended October 31, 2009.





Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.





Limitations on the
Effectiveness of Internal Controls





Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level.  Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.











10
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PART
II – OTHER INFORMATION





Item1.     Legal
Proceedings





We are
not a party to any pending legal proceeding. We are not aware of any pending
legal proceeding to which any of our officers, directors, or any beneficial
holders of 5% or more of our voting securities are adverse to us or have a
material interest adverse to us.





Item 1A.  Risk Factors





A smaller
reporting company is not required to provide the information required by this
Item.





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





None





Item 3.     Defaults upon Senior
Securities





None





Item 4.     Submission of Matters to a
Vote of Security Holders





No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended October
31, 2009.





Item 5.     Other
Information





None.





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Item 6.      Exhibits





Exhibit
              Number
            Description
      of Exhibit3.1
            Articles
      of Incorporation (1)3.2
            ByLaws
      (1)31.1
            Certification of Chief Executive Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
            Certification of Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
            Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of
  2002


(1)
            Previously
      included as an exhibit to the Registration Statement on Form S-1 filed
      with the Securities and Exchange Commission on May 29,
    2008.








SIGNATURES





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





Hotel
      Management Systems, Inc.Date:
            December
      14, 2009By:  /s/John
      Baumbauer
              John
      Baumbauer
              Title:Chief
      Executive Officer and
Director














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