UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: June 30, 2011

OR

¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from ________ to ___________

Commission file number:      0-22945

HELIOS AND MATHESON INFORMATION TECHNOLOGY INC.
  (Exact Name of Registrant as Specified in Its Charter)

Delaware
13-3169913
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
incorporation or organization)
 
   
200 Park Avenue South
(212) 979-8228
New York, New York 10003
(Registrant’s Telephone Number,
(Address of Principal Executive Offices)
Including Area Code)
 
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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.    Yes   x   No   ¨
 
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   x   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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer   ¨
Accelerated filer   ¨
Non-accelerated filer   ¨
Smaller reporting company   x
   
(Do not check if a smaller reporting company)
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes   ¨   No   x
 
As of August 12, 2011, there were 2,330,438 shares of common stock, $.01 par value per share, outstanding.

 
 
 

HELIOS AND MATHESON INFORMATION TECHNOLOGY INC.

INDEX

PART I. FINANCIAL INFORMATION
 
3
     
Item 1. Financial Statements
 
3
Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010
 
3
Consolidated Statement of Operations for the three and six months ended June 30, 2011 and 2010
 
4
Consolidated Statement of Cash Flows for the six months ended June 30, 2011 and 2010
 
5
Notes to Consolidated Financial Statements
 
6
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations
 
11
Item 3.  Quantitative and Qualitative Disclosures about Market Risk
 
15
Item 4.  Controls and Procedures
 
15
     
PART II.  OTHER INFORMATION
 
15
     
Item 1.  Legal Proceedings
 
15
Item 1A.  Risk Factors
 
15
Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds
 
15
Item 3.  Defaults Upon Senior Securities
 
15
Item 4.  Removed and Reserved
 
15
Item 5.  Other Information
 
15
Item 6.  Exhibits
 
16
     
SIGNATURES
  
17

 
2
 

Part I. Financial Information
Item 1. Financial Statements
 
HELIOS AND MATHESON INFORMATION TECHNOLOGY INC.
CONSOLIDATED BALANCE SHEETS

   
June 30,
   
December 31,
 
   
2011
   
2010
 
 
 
(unaudited)
       
ASSETS
           
Current Assets:
           
Cash and cash equivalents
  $ 1,640,547     $ 1,656,456  
Accounts receivable- less allowance for doubtful accounts of $125,589 at June 30, 2011, and $212,624 at December 31, 2010
    1,797,205       2,223,452  
Unbilled receivables
    82,470       -  
Security Deposit
    1,000,000       1,000,000  
Prepaid expenses and other current assets
    113,300       69,646  
Total current assets
    4,633,522       4,949,554  
Property and equipment, net
    31,448       44,613  
Deposits and other assets
    139,703       139,703  
Total assets
  $ 4,804,673     $ 5,133,870  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY
               
Current Liabilities:
               
Accounts payable and accrued expenses
  $ 1,223,843     $ 1,449,132  
Deferred revenue
    19,502       19,504  
Total current liabilities
    1,243,345       1,468,636  
Shareholders' equity:
               
Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued and outstanding as of June 30, 2011, and December 31, 2010
    -       -  
Common stock, $.01 par value; 30,000,000 shares authorized; 2,330,438 issued and outstanding as of June 30, 2011, and December 31, 2010
    23,304       23,304  
Paid-in capital
    37,855,740       37,855,740  
Accumulated other comprehensive Loss - foreign currency translation
    (13,374 )     (9,862 )
Accumulated deficit
    (34,304,342 )     (34,203,948 )
Total shareholders' equity
    3,561,327       3,665,234  
Total liabilities and shareholders' equity
  $ 4,804,673     $ 5,133,870  

See accompanying notes to consolidated financial statements.

 
3
 

 
HELIOS AND MATHESON INFORMATION TECHNOLOGY INC
CONSOLIDATED STATEMENTS OF OPERATIONS

   
Six Months Ended
   
Three Months Ended
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
   
(unaudited)
   
(unaudited)
   
(unaudited)
   
(unaudited)
 
                         
Revenues
  $ 6,239,077     $ 6,405,385     $ 2,990,065     $ 2,960,793  
Cost of revenues
    5,073,374       4,951,184       2,443,549       2,307,240  
Gross profit
    1,165,703       1,454,201       546,516       653,553  
Operating expenses:
                               
Selling, general & administrative
    1,243,112       2,208,019       518,460       1,062,570  
Depreciation & amortization
    13,165       31,047       6,347       14,201  
      1,256,277       2,239,066       524,807       1,076,771  
Income/(Loss) from operations
    (90,574 )     (784,865 )     21,709       (423,218 )
Other income:
                               
Interest income-net
    1,680       4,070       907       996  
      1,680       4,070       907       996  
Income/(Loss) before income taxes
    (88,894 )     (780,795 )     22,616       (422,222 )
Provision for income taxes
    11,500       9,000       6,000       4,500  
Net Income/(loss)
    (100,394 )     (789,795 )     16,616       (426,722 )
Other comprehensive loss - foreign currency adjustment
    (3,512 )     (1,973 )     (4,738 )     (1,359 )
Comprehensive Income/(loss)
  $ (103,906 )   $ (791,768 )   $ 11,878     $ (428,081 )
                                 
Basic and diluted Income/(loss) per share
  $ (0.04 )   $ (0.64 )   $ 0.01     $ (0.35 )

See accompanying notes to consolidated financial statements.

 
4
 

HELIOS AND MATHESON INFORMATION TECHNOLOGY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

   
Six Months Ended June 30,
 
   
2011
   
2010
 
   
(unaudited)
   
(unaudited)
 
Cash flows from operating activities:
           
Net loss
  $ (100,394 )   $ (789,795 )
Adjustments to reconcile net loss to net cash used in operating activities, net of acquired assets:
               
Depreciation and amortization
    13,165       31,068  
Provision for doubtful accounts
    (87,035 )     54,321  
Stock based compensation
    -       7,512  
Amortization of deferred financing cost
    -       7,500  
Changes in operating assets and liabilities:
               
Accounts receivable
    513,282       171,828  
Unbilled receivables
    (82,470 )     99,236  
Prepaid expenses and other current assets
    (43,654 )     33,224  
Accounts payable and accrued expenses
    (225,289 )     222,005  
Deferred revenue
    (2 )     (138,670 )
Net cash used in by operating activities
    (12,397 )     (301,771 )
                 
Cash flows from investing activities:
               
Sale/(Purchase) of property and equipment
    -       -  
Net cash provided by investing activities
    -       -  
                 
Cash flows from financing activities:
    -       -  
Net cash used in financing activities
    -       -  
Effect of foreign currency exchange rate changes on cash and cash equivalents
    (3,512 )     (1,974 )
Net decrease in cash and cash equivalents
    (15,909 )     (303,745 )
Cash and cash equivalents at beginning of period
    1,656,456       1,354,989  
Cash and cash equivalents at end of period
  $ 1,640,547     $ 1,051,244  
                 
Supplemental disclosure of cash flow information:
               
Cash paid during the period for interest
  $ -     $ -  
                 
Cash paid during the period for income taxes - net of refunds
  $ 4,433     $ 9,028  

See accompanying notes to consolidated financial statements

 
5
 

HELIOS AND MATHESON INFORMATION TECHNOLOGY INC.
Notes to Consolidated Financial Statements
(Unaudited)

1)
GENERAL:
 
These financial statements should be read in conjunction with the financial statements contained in Helios and Matheson Information Technology Inc.’s (“Helios and Matheson” or the “Company”) Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission (“SEC”) and the accompanying financial statements and related notes thereto. The accounting policies used in preparing these financial statements are the same as those described in the Company's Form 10-K for the year ended December 31, 2010. On May 2, 2011, the Company changed its name from Helios and Matheson North America Inc to Helios and Matheson Information Technology Inc.

2)
CONTROLLED COMPANY:
 
The Board of Directors has determined that Helios and Matheson meets the definition of a “Controlled Company” as defined by Rule 5615(c) of the NASDAQ Listing Rules. A “Controlled Company” is defined in Rule 5615(c) as a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company. Certain NASDAQ requirements do not apply to a “Controlled Company”, including requirements that: (i) a majority of its Board of Directors must be comprised of “independent” directors as defined in NASDAQ’s rules; and (ii) the compensation of officers and the nomination of directors be determined in accordance with specific rules, generally requiring determinations by committees comprised solely of independent directors or in meetings at which only the independent directors are present.

3)
INTERIM FINANCIAL STATEMENTS:
 
In the opinion of management, the accompanying unaudited consolidated financial statements contain all the adjustments necessary to present fairly the consolidated financial position as of June 30, 2011, the consolidated results of operations for the three and six month periods ended June 30, 2011 and 2010 and cash flows for the six month periods ended June 30, 2011 and 2010.

The consolidated balance sheet at December 31, 2010 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Form 10-K filed by the Company for the year ended December 31, 2010.

For the three month period ended June 30, 2011, the Company reported a net operating profit of approximately $22,000 and for the six month period ended June 30, 2011, the Company reported a net operating loss of ($91,000) and for the three and six month period ended June 30, 2010, the Company reported a net operating loss of approximately ($423,000) and ($785,000), respectively.  The Company continues to focus on revenue growth by expanding its existing client market share and its client base and by providing a Flexible Delivery Model to clients, which allows for dynamically configurable “right shoring” of service delivery based on client needs.  The Company also keeps a tight rein on discretionary expenditures and SG&A, which the Company believes will enhance its competitiveness.

In management's opinion, cash flows from operations combined with cash on hand will provide adequate flexibility for funding the Company's working capital obligations for the next twelve months.

4)
STOCK BASED COMPENSATION:
 
The Company has a stock based compensation plan, which is described as follows:

The Company’s Stock Option Plan (the “Plan”) provides for the grant of stock options that are either “incentive” or “non-qualified” for federal income tax purposes.  The Plan provides for the issuance of a maximum of 184,000 shares of common stock (subject to adjustment pursuant to customary anti-dilution provisions).  Stock options vest over a period of between one to four years.

The exercise price per share of a stock option is established by the Compensation Committee of the Board of Directors in its discretion but may not be less than the fair market value of a share of common stock as of the date of grant.  The aggregate fair market value of the shares of common stock with respect to which “incentive” stock options first become exercisable by an individual to whom an “incentive” stock option is granted during any calendar year may not exceed $100,000.
 
 
6
 
 
Stock options, subject to certain restrictions, may be exercisable any time after full vesting for a period not to exceed ten years from the date of grant.  Such period is established by the Company in its discretion on the date of grant.  Stock options terminate in connection with the termination of employment.

Information with respect to options under the Company’s Plan is as follows (after giving effect to a 1 for 2.5 reverse stock split, as discussed at Note 12):
 
         
Weighted
 
   
Number of
   
Average
 
   
Shares
   
Exercise Price
 
Balance - March 31, 2011
    13,700     $ 11.85  
Granted during 2nd Qtr 2011
    -       -  
Exercised during 2nd Qtr 2011
    -       -  
Forfeitures during 2nd Qtr 2011
    -       -  
Balance - June 30, 2011
    13,700     $ 11.85  

The following table summarizes the status of the stock options outstanding and exercisable at June 30, 2011:

 
Stock Options Outstanding
 
                     
Number of
 
       
Weighted
       
Weighted-
 
Stock
 
 
Exercise Price
   
Average
   
Number of
 
Remaining
 
Options
 
 
Range
   
Exercise Price
   
Options
 
Contractual Life
 
Exercisable
 
  $ 0.00 - $12.00     $ 8.08       5,700  
0.09 Years
    5,700  
  $ 12.00 - $24.00     $ 14.55       8,000  
5.84 years
    8,000  
                    13,700         13,700  
 
At June 30, 2011, 13,700 stock options were exercisable with a weighted average exercise price of $11.85.

 
7
 
 
5)
NET (LOSS)/INCOME PER SHARE :
 
The following table sets forth the computation of basic and diluted net (loss)/income per share for the six months and three months ended June 30, 2011 and 2010 (after giving effect to a 1 for 2.5 reverse stock split, as discussed at Note 12).

   
Six Months Ended
   
Three Months Ended
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
Numerator for basic net (loss)/Income per share
  
 
   
 
     
 
    
     
   
Net (loss)/Income
  $ (100,394 )   $ (789,795 )   $ 16,616     $ (426,722 )
Net (loss)/Income available to common stockholders
  $ (100,394 )   $ (789,795 )   $ 16,616     $ (426,722 )
                                 
Numerator for diluted net (loss)/Income per share
                               
Net (loss)/Income available to common stockholders & assumed conversion
  $ (100,394 )   $ (789,795 )   $ 16,616     $ (426,722 )
                                 
Denominator:
                               
Denominator for basic and diluted (loss)/Income per share - weighted-average shares
    2,330,438       1,234,545       2,330,438       1,234,545  
                                 
Basic and diluted (loss)/Income per share:
                               
Net (loss)/Income per share
  $ (0.04 )   $ (0.64 )   $ 0.01     $ (0.35 )

During the six month and three month periods ended June 30, 2011 and June 30, 2010, all options and warrants outstanding were excluded from the computation of net (loss)/income per share because the effect would have been anti-dilutive.
 
6)
CONCENTRATION OF CREDIT RISK:
 
The revenues of three customers represented approximately 43%, 18% and 13% of the revenues for the six month period ended June 30, 2011.  The revenue of two customers represented approximately 23% and 22% of revenues for the same period in 2010.  No other customer represented greater than 10% of the Company’s revenues for such periods.  The Company continues its effort to broaden its customer base.
 
7)
CONTRACTUAL OBLIGATIONS AND COMMITMENTS:
 
The Company’s commitments at June 30, 2011, are comprised of the following:

   
Payments Due by Period
 
Contractual Obligations
 
Total
   
Less Than 1 Year
   
1 - 3 Years
   
3 - 5 Years
   
More Than 5
Years
 
Operating Lease Obligations
                             
Rent (1)
    307,920       284,234       23,686       -       -  
Total
  $ 307,920     $ 284,234     $ 23,686     $ -     $ -  

(1) The Company has a New York facility with a lease term expiring July 31, 2012.

As of June 30, 2011, the Company does not have any “Off Balance Sheet Arrangements”.

 
8
 

8)
PROVISION FOR INCOME TAXES
 
The provision for income taxes as reflected in the consolidated statements of operations varies from the expected statutory rate primarily due to a provision for minimum state taxes and the recording of additional valuation allowance against deferred tax assets.  Internal Revenue Code Section 382 (the “Code”) places a limitation on the utilization of Federal net operating loss and other credit carry-forwards when an ownership change, as defined by the tax law, occurs.  Generally, this occurs when a greater than 50 percent change in ownership occurs.  During 2006, Helios and Matheson Information Technology Ltd (“Helios and Matheson Parent”) acquired a greater than 50 percent ownership of the Company.  Accordingly, the actual utilization of the net operating loss carry-forwards for tax purposes are limited annually under the Code to a percentage (currently about four and a half percent) of the fair market value of the Company at the date of this ownership change.  The Company did not generate taxable income during the six months ended June 30, 2011.  The Company maintains a valuation allowance against additional deferred tax assets arising from net operating loss carry-forwards since, in the opinion of management; it is more likely than not that some portion or all of the deferred tax assets will not be realized.

9)
TRANSACTIONS WITH RELATED PERSONS
 
In September 2010, the Company entered into a Memorandum of Understanding with Helios and Matheson Parent (the “HMIT MOU”) pursuant to which Helios and Matheson Parent has agreed to make available to the Company facilities of dedicated Off-shore Development Centers (“ODCs”) and also render services by way of support in technology, client engagement, management and in operating the ODCs for the Company. The amount paid or due to be paid to Helios and Matheson Parent for services rendered under the HMIT MOU was $95,696 for the three months ended June 30, 2011 and is included as a component of cost of revenue. All payments to Helios and Matheson Parent under the MOU are made after collections are received from clients.

10) 
LITIGATION
 
A. COGITO

The Company entered into a confidential settlement agreement with Cogito Ltd. and Cogito Software North America, Inc. which has resolved all outstanding issues between the parties in the matter before the Supreme Court of the State of New York.   A Stipulation of Discontinuance was filed in the Supreme Court of the State of New York on May 31, 2011. The Company entered into a confidential settlement agreement with Mark Schora which resolves all outstanding issues related to the action filed by the Company in New Jersey state court. A Stipulation of Dismissal with Prejudice was filed with the New Jersey state court on May 24, 2011.

Cogito Ltd. and Cogito Software North America, Inc. have specifically agreed to permanently and irrevocably release and discharge the Company from any and all liabilities, claims, causes of action, suits, debts, losses, costs and demands whatsoever in law or in equity, known or unknown which it ever had, now have, or hereinafter may have against the Company. The Company also has agreed to a Mutual General Releases and Covenants not to Sue Cogito Ltd., Cogito Software North America, Inc., Jonathan Gray, Mark Schora, Rosette Hapsis, Sally Fabian, and Dick Walther.

As a result of settlement, the Company has paid $14,776 to Cogito.

B. TORANCO-CLARK ASSOCIATES
 
On April 5, 2011, the Company filed a Complaint in the Superior Court of New Jersey, Union County against Toranco-Clark Associates LLC, its former landlord, for breach of its lease agreement in the amount of $22,000.  On June 17, 2011, Toranco-Clark Associates LLC filed a Counterclaim against the Company in the amount of $24,000 for alleged breach of the lease agreement. The ultimate outcome of this matter is uncertain at this time however management believes that it has valid grounds for its claim.

11) 
REVERSE STOCK SPLIT

On June 23, 2011, the Company effected a 1 for 2.5 reverse split of its Common stock. Post reverse split Company’s outstanding common stocks are 2,330,438 as compared to 5,826,088 before the reverse split.. As a result the stated capital on the balance sheet attributable to common stock is revised from $58,261 to $23,304, and the additional paid in capital is credited with $34,957. The per share net income or loss is retroactively increased for the three month periods ended June 30, 2011 and 2010 from $0.00 to $0.01 and from ($0.14) to ($0.36), respectively, and for the six month periods ended June 30, 2011 and 2010 from ($0.02) to ($0.04) and from ($0.26) to ($.64), respectively, because there are fewer shares of common stock outstanding. Also common stocks issuable upon exercise of outstanding options and reserved for future grants of exercisable options are reduced from 34,250 to 13,700 and 460,000 to 184,000, respectively. In lieu of issuing fractional shares, each holder of common stock entitled to a fraction of a share would have the number of shares rounded up to the nearest whole share. All other references to common stock have been adjusted for all periods presented.

 
9
 

12) 
SUBSEQUENT EVENTS
 
Management completed an analysis of all subsequent events occurring after June 30, 2011, the balance sheet date, through August 12, 2011, the date upon which the quarter-end consolidated financial statements were issued, and determined there were no disclosures necessary which have not been already disclosed elsewhere in these financial statements, except for the following:

On July 18, 2011, the Company received a letter from NASDAQ informing the Company that the NASDAQ Hearings Panel determined that the Company is now in compliance with NASDAQ Listing Rule 5550(a)(5), which requires a minimum market value of publicly held shares of $1,000,000, NASDAQ Listing Rule 5550 (a)(2), which requires the Company’s listed securities to have a minimum bid price of $1.00 per share, and NASDAQ Listing Rule 5550(a)(4), which requires the Company to have a minimum of 500,000 publicly held shares, and, therefore, NASDAQ will continue to list the Company’s common stock.

 
10
 

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

The following discussion and analysis of significant factors affecting the Company's operating results, liquidity and capital resources should be read in conjunction with the accompanying financial statements and related notes.

Statements included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this document that do not relate to present or historical conditions are “forward-looking statements” within the meaning of that term under Section 27A of the Securities Act of 1933, as amended, and under Section 21E of the Securities Exchange Act of 1934, as amended.  Additional oral or written forward-looking statements may be made by the Company from time to time, and such statements may be included in documents that are filed with the SEC.  Such forward-looking statements involve risks and uncertainties that could cause results or outcomes to differ materially from those expressed in such forward-looking statements. Words such as “believes,” “forecasts,” “intends,” “possible,” “expects,” “estimates,” “anticipates,” or “plans” and similar expressions are intended to identify forward-looking statements.  The Company cautions readers that results predicted by forward-looking statements, including, without limitation, those relating to the Company’s future business prospects, revenues, working capital, liquidity, capital needs, interest costs, and income are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements.  The important factors on which such statements are based include, but are not limited to, assumptions concerning the magnitude of the ongoing economic crisis, including its impact on the Company’s customers, demand trends in the information technology industry and the continuing needs of current and prospective customers for the Company’s services.

Overview
 
Since 1983, Helios and Matheson has provided high quality IT services and solutions to Fortune 1000 companies and other large organizations.  The Company is headquartered in New York City and has a second office in Bangalore, India.
 
The Company’s services include Application Value Management, Application Development, Integration, Independent Validation, Infrastructure and Information Management services. The Company believes that a philosophy of intense focus on client satisfaction, business aware solutions and guaranteed delivery provides tangible business value to its client base across banking, financial services, insurance, pharmaceutical and manufacturing/automotive verticals.

The Company is dedicated to providing a Flexible Delivery Model to its clients, which allows for dynamically configurable “right shoring” of service delivery based on client needs.
 
The Company also markets software products developed by independent software developers, although sales of these products represents less than 1% of Company’s revenue.
 
For the six months ended June 30, 2011, approximately 93% of the Company's consulting services revenues were generated from clients under time and materials engagements, as compared to approximately 89% for the six months ended June 30, 2010, with the remainder generated under fixed-price engagements.  The Company has established standard-billing guidelines for consulting services based on the types of services offered.  Actual billing rates are established on a project-by-project basis and may vary from the standard guidelines. The Company typically bills its clients for time and materials services on a weekly and monthly basis.  Arrangements for fixed-price engagements are made on a case-by-case basis. Consulting services revenues generated under time and materials engagements are recognized as those services are provided.  Revenues from fixed fee contracts are recorded when work is performed on the basis of the proportionate performance method, which is based on costs incurred to date relative to total estimated costs.

The Company's most significant operating cost is its personnel cost, which is included in cost of revenues.  For the six months ended June 30, 2011 and 2010, gross margins were 18.7% and 22.7% respectively.  The decrease in gross margin is primarily a result of a decrease in higher margin project revenue and software revenue. A significant number of the Company’s engagements are on a time and materials basis. While most of the Company's engagements allow for periodic price adjustments to address, among other things, increases in personnel costs, the current economic conditions do not allow much price adjustment flexibility.

The Company actively manages its personnel utilization rates by monitoring project requirements and timetables.  The Company’s utilization rate for the six months ending June 30, 2011 was approximately 99% as compared to 91% for the six months ending June 30, 2010.  As projects are completed, consultants either are re-deployed to new projects at the current client site or to new projects at another client site or are encouraged to participate in the Company’s training programs in order to expand their technical skill sets.

 
11
 
 
Critical Accounting Policies
 
The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results the Company reports in its consolidated financial statements.  The Company evaluates its estimates and judgments on an on-going basis.  Estimates are based on historical experience and on assumptions that the Company believes to be reasonable under the circumstances.  The Company’s experience and assumptions form the basis for its judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.  Actual results may vary from what is anticipated and different assumptions or estimates about the future could change reported results.  The Company believes the following accounting policies are the most critical to it, in that they are important to the portrayal of its financial statements and they require the most difficult, subjective or complex judgments in the preparation of the consolidated financial statements.
 
Revenue Recognition
 
Consulting revenues are recognized as services are provided.  The Company primarily provides consulting services under time and material contracts, whereby revenue is recognized as hours and costs are incurred.  Customers for consulting revenues are billed on a weekly or monthly basis.  Revenues from fixed fee contracts are recorded when work is performed on the basis of the proportionate performance method, which is based on costs incurred to date relative to total estimated costs.  Any anticipated contract losses are estimated and accrued at the time they become known and estimable.  Unbilled accounts receivables represent amounts recognized as revenue based on services performed in advance of customer billings.  Revenue from sales of software licenses is recognized upon delivery of the software to a customer because future obligations associated with such revenue are insignificant.
 
Allowance for Doubtful Accounts
 
The Company monitors its accounts receivable balances on a monthly basis to ensure that they are collectible.  On a quarterly basis, the Company uses its historical experience to accurately determine its accounts receivable reserve.  The Company’s allowance for doubtful accounts is an estimate based on specifically identified accounts as well as general reserves.  The Company evaluates specific accounts where it has information that the customer may have an inability to meet its financial obligations.  In these cases, management uses its judgment, based on the best available facts and circumstances, and records a specific reserve for that customer, against amounts due, to reduce the receivable to the amount that is expected to be collected.  These specific reserves are re-evaluated and adjusted as additional information is received that impacts the amount reserved.  The Company also establishes a general reserve for all customers based on a range of percentages applied to aging categories.  These percentages are based on historical collection and write-off experience.  If circumstances change, the Company’s estimate of the recoverability of amounts due the Company could be reduced or increased by a material amount.  Such a change in estimated recoverability would be accounted for in the period in which the facts that give rise to the change become known.
 
Valuation of Deferred Tax Assets
 
Deferred tax assets are reduced by a valuation allowance when, in the opinion of the Company, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The Company assesses the recoverability of deferred tax assets at least annually based upon the Company’s ability to generate sufficient future taxable income and the availability of effective tax planning strategies.
 
Stock Based Compensation
 
The Company uses the modified prospective application method as specified by the FASB whereby compensation cost is recognized over the remaining service period based on the grant-date fair value of those awards as calculated for pro forma disclosures as originally issued.

 
12
 

Results of Operations
 
The following table sets forth the percentage of revenues of certain items included in the Company’s Statements of Operations:
 
   
Six Months Ended
   
Three Months Ended
 
   
June 30,
   
June 30,
 
   
2011
   
2010
   
2011
   
2010
 
Revenues
    100.0 %     100.0 %     100.0 %     100.0 %
Cost of revenues
    81.3 %     77.3 %     81.7 %     77.9 %
Gross profit
    18.7 %     22.7 %     18.3 %     22.1 %
Operating expenses
    20.1 %     35.0 %     17.6 %     36.4 %
(Loss)/Income from operations
    ( 1.4 )%     ( 12.3 )%     0.7 %     ( 14.3 )%
(Loss)/Income before income taxes
    ( 1.4 )%     ( 12.2 )%     0.7 %     ( 14.3 )%
Net (loss)/Income
    ( 1.6 )%     ( 12.3 )%     0.5 %     ( 14.4 )%

Comparison of the Three Months Ended June 30, 2011 to the Three Months Ended June 30, 2010
 
Revenues.   Revenues for the three months ended June 30, 2011 and 2010 were approximately $3 million for both periods.
 
Gross Profit . Gross profit for the three months ended June 30, 2011 was $547,000 as compared to $654,000 for the three months ended June 30, 2010.  As a percentage of total revenues, gross margin for the three months ended June 30, 2011 was 18.3% compared to 22.1% for the three months ended June 30, 2010.  The gross margin decreased primarily as a result of a decrease in higher margin project revenue and software revenue.
 
Operating Expenses. Operating expenses are comprised of Selling, General and Administrative (“SG&A”) expenses and depreciation and amortization.  Operating expenses for the three months ended June 30, 2011 were $525,000 compared $1.1 million in operating expenses for the 2010 comparable period. The decrease in SG&A was associated with various cost reduction initiatives including, but not limited to, renegotiation of agreements with major vendors and process restructuring, leading to higher efficiency.
 
Taxes.   Tax provision for the three months ended June 30, 2011 was $6,000 compared to $4,500 for the three months ended June 30, 2010, and is comprised exclusively of minimum state taxes.
 
Net Income/(loss).   As a result of the above, the Company had net profit of $17,000 or $0.01 per basic and diluted share for the three months ended June 30, 2011, compared to a net loss of ($427,000) or ($0.35) per basic and diluted share for the three months ended June 30, 2010.
 
Comparison of the Six Months Ended June 30, 2011 to the Six Months Ended June 30, 2010
 
Revenues.   Revenues for the six months ended June 30, 2011 were $6.2 million compared to $6.4 million for the six months ended June 30, 2010.  The decrease is primarily attributable to a reduction of project revenue (fixed-price) and software revenue.
 
Gross Profit . Gross profit for the six months ended June 30, 2011 was $1.2 million as compared to $1.5 million for the six months ended June 30, 2010.  As a percentage of total revenues, gross margin for the six months ended June 30, 2011 was 18.7% compared to 22.7% for the six months ended June 30, 2010.  The gross margin decreased primarily as a result of a decrease in higher margin project revenue and software revenue.
 
Operating Expenses. Operating expenses are comprised of Selling, General and Administrative (“SG&A”) expenses and depreciation and amortization.  Operating expenses for the six months ended June 30, 2011 were $1.3 million compared to $2.2 million in operating expenses for the 2010 comparable period. The decrease in SG&A was associated with various cost reduction initiatives including, but not limited to, renegotiation of agreements with major vendors and process restructuring, leading to higher efficiency.
 
Taxes.   Tax provision for the six months ended June 30, 2011 was $11,500 compared to $9,000 for the six months ended June 30, 2010, and is comprised exclusively of minimum state taxes.

 
13
 

Net Income/(loss).   As a result of the above, the Company had net loss of ($100,000) or ($0.04) per basic and diluted share for the six months ended June 30, 2011 compared to a net loss of ($790,000) or ($0.64) per basic and diluted share for the six months ended June 30, 2010.
 
Liquidity and Capital Resources
 
The Company believes that its business, operating results and financial condition have been affected by the economic crisis and ongoing economic uncertainty which continue to impact the IT spending of its clients. A significant portion of the Company’s major customers are in the financial services industry and came under considerable pressure as a result of the unprecedented economic conditions in the financial markets.  Spending on IT consulting services is largely discretionary, and the Company has experienced a pushback of new assignments and high margin projects from existing clients. Yet, the Company’s operating loss and net loss in the six months ended June 30, 2011 were reduced to one eighth of the operating loss and net loss reported for the six months ended June 30, 2010 as a result of various cost control measures. The Company had an operating loss of ($91,000) and a net loss of ($100,000) for the six months ended June 30, 2011.  During the six months ended June 30, 2010, the Company had an operating loss of ($785,000) and net loss of ($790,000).
 
The Company's cash balances were approximately $1.6 million at June 30, 2011and at December 31, 2010.  Net cash used in operating activities for the six months ended June 30, 2011 was approximately ($12,000) compared to net cash used in operating activities of approximately ($302,000) for the six months ended June 30, 2010.
 
The Company's accounts receivable, less allowance for doubtful accounts, at June 30, 2011 and at December 31, 2010 were approximately $1.8 million and $2.2 million, respectively, representing 56 days of sales outstanding (“DSO”) for both periods. The Company believes that stable DSO of 56 days is consistent with favorable resolutions of a limited number of dated client disputes.  The accounts receivable at June 30, 2011 and December 31, 2010 included $82,000 and $0 of unbilled revenue respectively.  The Company has provided an allowance for doubtful accounts at the end of each of the periods presented.  After giving effect to this allowance, the Company does not anticipate any difficulty in collecting amounts due.
 
For the six month periods ended June 30, 2011 and June 30, 2010, there was no cash provided by investing or financing activities .
 
In management's opinion, cash flows from operations combined with cash on hand will provide adequate flexibility for funding the Company's working capital obligations for the next twelve months.
 
For the six months ended June 30, 2011 and 2010, there were no shares of common stock issued pursuant to the exercise of options granted under the Company’s stock option plan.
 
Off Balance Sheet Arrangements
 
As of June 30, 2011, the Company does not have any off balance sheet arrangements.

Contractual Obligations and Commitments
 
The Company’s commitments at June 30, 2011 are reflected and further detailed in the Contractual Obligation table located in Part I, Item 1, Note 7 of this Form 10-Q.
 
Inflation
 
The Company has not suffered material adverse affects from inflation in the past.  However, a substantial increase in the inflation rate in the future may adversely affect customers’ purchasing decisions, may increase the costs of borrowing or may have an adverse impact on the Company’s margins and overall cost structure.
 
Recent Accounting Pronouncements
 
None.

 
14
 

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Not Required.

Item 4.  Controls and Procedures

Evaluation of disclosure controls and procedures.   As of June 30, 2011, we carried out an evaluation, under the supervision of and with the participation of our President and Principal Executive Officer, Chief Operating Officer and our Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).  Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer , Chief Operating Officer and Principal Financial Officer, to allow timely decisions regarding required disclosures.  Based on that evaluation, our Principal Executive Officer , Chief Operating Officer and Principal Financial Officer have concluded that, as of June 30, 2011, our disclosure controls and procedures were effective.
 
Changes in internal control.   During the quarter covered by this report, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.
 
Part II.  Other Information

Item 1.  Legal Proceedings

The Company’s legal proceedings at June 30, 2011 have been disclosed in Part I, Item 1, Note 10 of this Form 10-Q.

Item 1A.  Risk Factors

Not Applicable.

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

None

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  [Removed and Reserved]

Item 5.  Other Information

None.

 
15
 

Item 6 .   Exhibits

(a)            Exhibits

3.1
 
Certificate of Incorporation of the Registrant, incorporated by reference to Exhibit 3.1 to the Form 10-K, as previously filed with the SEC on March 31, 2010.
     
3.2
 
Bylaws of Helios and Matheson Information Technology Inc., incorporated by reference to Exhibit 3.2 to the Form 10-K, as previously filed with the SEC on March 31, 2010.
     
3.3
 
Certificate of amendment of Certificate of Incorporation of Registrant, incorporated by reference to Exhibit 3.3 to the Form 10Q, as previously filed with the SEC on May 13, 2011.
     
3.4
 
Certificate of amendment of Certificate of Incorporation of Registrant.
     
31.1
 
Certification of Principal Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
     
31.2
 
Certification of Principal Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
     
31.3
 
Certification of Principal Operating Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
     
32.1
 
Certification of the Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
32.2
 
Certification of the Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
32.3
 
Certification of the Principal Operating Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
  
 

 
16
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HELIOS AND MATHESON INFORMATION TECHNOLOGY INC.

 
By:
/s/ Divya Ramachandran
 
Date: August 12, 2011
 
Divya Ramachandran
 
   
Chief Executive Officer and President
 
     
 
By:
/s/ Umesh Ahuja
 
Date: August 12, 2011
 
Umesh Ahuja
 
   
Chief Financial Officer and Secretary
 
     
 
By:
/s/ Suparna NR
 
Date: August 12, 2011
 
Suparna NR
 
   
Chief Operating Officer
 

 
17
 

Exhibit 3.4

Certificate of Amendment
of
Certificate of Incorporation
of
Helios and Matheson Information Technology Inc.

Under Section 242 of the Delaware General Corporation Law

Helios and Matheson Information Technology Inc., a corporation organized and existing under the laws of the state of Delaware (the “Corporation”), hereby certifies as follows:

The Certificate of Incorporation of the Corporation is hereby amended as follows:

Paragraph one (1) of Article Fourth is hereby amended as follows:

The total number of shares of stock which the corporation shall have authority to issue is thirty two million (32,000,000), of which two million (2,000,000) shares with a par value of one cent ($0.01) per share shall be designated as “Preferred Stock” and thirty million (30,000,000) share with a par value of one cent ($0.01) per share shall be designated as “Common Stock.” Each two and one-half (2.5) shares of Corporation’s Common Stock, par value one cent ($0.01) per share, issued and outstanding as of 5:00 p.m. eastern time on the date this Certificate of Amendment is filed with the Secretary of State of the State of Delaware shall be converted and reclassified into one (1) share of the Corporation’s Common Stock, par value $0.01 per share. Any fractional shares resulting from such conversion will be rounded up to the nearest whole number.

The forgoing amendment has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware by the vote of a majority of each class of outstanding stock of the corporation entitled to vote thereon.

IN WITNESS WHEREOF, I have signed this certificate this 23rd day of June 2011.

 
/s/ Divya Ramachandran
 
Divya Ramachandran
 
Chief Executive Officer
 
 
 
 

Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
 
I, Divya Ramachandran, the Principal Executive Officer of Helios and Matheson Information Technology Inc., certify that:
 
1.
I have reviewed this quarterly report on Form 10-Q of Helios and Matheson Information Technology Inc., the registrant;
 
2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
 
3.
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
 
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have:
 
 
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 
b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
 
c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 
d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
 
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
 
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date:     August 12, 2011
/s/ Divya Ramachandran
 
Name: Divya Ramachandran
Title: President and Chief Executive Officer
(Principal Executive Officer)

 
 
 

Exhibit 31.2
 
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
 
I, Umesh Ahuja, the Principal Financial Officer of Helios and Matheson Information Technology Inc., certify that:
 
1.
I have reviewed this quarterly report on Form 10-Q of Helios and Matheson Information Technology Inc., the registrant;
 
2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
 
3.
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
 
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have:
 
 
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 
b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
 
c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 
d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
 
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
 
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date:      August 12, 2011
/s/ Umesh Ahuja
 
Name: Umesh Ahuja
Title: Chief Financial Officer
(Principal Financial Officer)

 
 
 

Exhibit 31.3
 
CERTIFICATION OF PRINCIPAL OPERATING OFFICER
 
I, Suparna NR, the Principal Operating Officer of Helios and Matheson Information Technology Inc., certify that:
 
1.
I have reviewed this quarterly report on Form 10-Q of Helios and Matheson Information Technology Inc., the registrant;
 
2.
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
 
3.
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
 
4.
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)) for the registrant and have:
 
 
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
 
b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
 
c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
 
d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
 
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
 
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date:      August 12, 2011
/s/ Suparna NR
 
Name: Suparna NR
Title: Chief Operating Officer
(Principal Operating Officer)

 
 
 

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Quarterly Report on Form 10-Q of Helios and Matheson Information Technology Inc. for the period ending June 30, 2011, I, Divya Ramachandran, the Principal Executive Officer of Helios and Matheson Information Technology Inc., hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

 
(1)
such Quarterly Report on Form 10-Q for the period ending June 30, 2011 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 
(2)
the information contained in such Quarterly Report on Form 10-Q for the three month period ending June 30, 2011 fairly presents, in all material respects, the financial condition and results of operations of Helios and Matheson Information Technology Inc., on a consolidated basis.
 
Date:      August 12, 2011
/s/ Divya Ramachandran
 
Name: Divya Ramachandran
Title: President and Chief Executive Officer
(Principal Executive Officer)

A signed original of this written statement required by §906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document

 
 
 

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Quarterly Report on Form 10-Q of Helios and Matheson Information Technology Inc. for the period ending June 30, 2011, I, Umesh Ahuja, the Principal Financial Officer of Helios and Matheson Information Technology Inc., hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

 
(1)
such Quarterly Report on Form 10-Q for the period ending June 30, 2011 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 
(2)
the information contained in such Quarterly Report on Form 10-Q for the three month period ending June 30, 2011 fairly presents, in all material respects, the financial condition and results of operations of Helios and Matheson Information Technology Inc., on a consolidated basis.

Date:       August 12, 2011
/s/ Umesh Ahuja
 
Name: Umesh Ahuja
Title: Chief Financial Officer
(Principal Financial Officer)

A signed original of this written statement required by §906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document

 
 
 

Exhibit 32.3
CERTIFICATION OF PRINCIPAL OPERATING OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Quarterly Report on Form 10-Q of Helios and Matheson Information Technology Inc. for the period ending June 30, 2011, I, Suparna NR, the Principal Operating Officer of Helios and Matheson Information Technology Inc., hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

 
(1)
such Quarterly Report on Form 10-Q for the period ending June 30, 2011 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 
(2)
the information contained in such Quarterly Report on Form 10-Q for the three month period ending June 30, 2011 fairly presents, in all material respects, the financial condition and results of operations of Helios and Matheson Information Technology Inc., on a consolidated basis.

Date:       August 12, 2011
/s/ Suparna NR
 
Name: Suparna NR
Title: Chief Operating Officer
(Principal Operating Officer)

A signed original of this written statement required by §906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Form 10-Q or as a separate disclosure document