UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
HOTEL MANAGEMENT SYSTEMS,
INC.
(Exact
name of Registrant as specified in its charter)
| Nevada |
7372
|
26-2477977
|
| (State or other jurisdiction of incorporation or organization) |
(Primary Standard
Industrial Classification Code Number)
|
(I.R.S. Employer
Identification Number)
|
| 8600 Starboard Dr., #1143, Las Vegas, Nevada |
89117
|
|
| (Name and address of principal executive offices) |
(Zip
Code)
|
|
|
Registrant's
telephone number, including area code:
(702)
335-4531
|
||
|
Approximate
date of commencement of proposed sale to the public:
|
As soon as practicable after
the effective date of this Registration Statement
.
|
If any of
the securities being registered on the Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box |X|
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.|__|
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering.|__|
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering.|__|
If
delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box.|__|
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
|__| Smaller
reporting company |X|
CALCULATION
OF REGISTRATION FEE
|
TITLE
OF EACH
CLASS
OF
|
AMOUNT
TO BE
REGISTERED
|
PROPOSED
MAXIMUM
|
PROPOSED
MAXIMUM
|
AMOUNT
OF
REGISTRATION
FEE
|
|
Common
Stock
|
1,500,000
|
0.01
|
$15,000
|
$0.59
|
| (1) |
This
price was arbitrarily determined by Hotel Management Systems,
Inc.
|
| (2) |
Estimated
solely for the purpose of calculating the registration fee in accordance
with Rule 457(a) under the Securities
Act.
|
THE
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
COPIES
OF COMMUNICATIONS TO:
Hotel
Management Systems, Inc.
Attn: John
Baumbauer, President and CEO
8600
Starboard Dr., #1143, Las Vegas, Nevada 89117
Ph: (702)
335-4531
PROSPECTUS
HOTEL
MANAGEMENT SYSTEMS, INC.
1,500,000
SHARES
OF COMMON STOCK
INITIAL
PUBLIC OFFERING
___________________
SUBJECT
TO COMPLETION, Dated May 29, 2008
This
prospectus relates to our offering of 1,500,000 new shares of our common stock
at an offering price of $0.01 per share. The offering will commence promptly
after the date of this prospectus and close no later than 120 days after the
date of this prospectus. However, we may extend the offering for up to 90 days
following the 120 day offering period. We will pay all expenses incurred in this
offering. The shares are being offered by us on a “best efforts” basis and there
can be no assurance that all or any of the shares offered will be
subscribed. If less than the maximum proceeds are available to us,
our development and prospects could be adversely affected. There is
no minimum offering required for this offering to close. All funds received as a
result of this offering will be immediately available to us for our general
business purposes. The Maximum Offering amount is 1,500,000 shares
($15,000).
The
offering is a self-underwritten offering; there will be no underwriter involved
in the sale of these securities. We intend to offer the securities through our
officers and Directors, who will not be paid any commission for such
sales.
|
Offering
Price
|
Underwriting
Discounts and
Commissions
|
Proceeds
to
Company
|
|
|
Per
Share
|
$0.01
|
None
|
$0.01
|
|
Total
(maximum offering)
|
$15,000
|
None
|
$15,000
|
Our
common stock is presently not traded on any market or securities
exchange. The sales price to the public is fixed at $0.01 per share
until such time as the shares of our common stock are traded on the NASD
Over-The-Counter Bulletin Board. Although we intend to apply for
quotation of our common stock on the NASD Over-The-Counter Bulletin Board
through a market maker, public trading of our common stock may never
materialize. If our common stock becomes traded on the NASD
Over-The-Counter Bulletin Board, then the sale price to the public will vary
according to prevailing market prices or privately negotiated prices by the
selling shareholders.
The
purchase of the securities offered through this prospectus involves a high
degree of risk. See section entitled “Risk Factors” starting on page
9.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
The
information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. The prospectus is
not an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not
permitted.
The
Date of This Prospectus is: May 29, 2008
Hotel
Management Systems, Inc.
The
Company
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.”
We are a
development stage company and have not generated any revenues to date. As of
April 30, 2008, we had $5,500 in current assets and no current liabilities.
Accordingly, we had working capital of $5,500 as of April 30, 2008. Our current
working capital is not sufficient to enable us to implement our business plan as
set forth in this prospectus. For these and other reasons, our independent
auditors have raised substantial doubt about our ability to continue as a going
concern. Accordingly, we will require additional financing, including the equity
funding sought in this prospectus.
We are
offering for sale to investors a maximum of 1,500,000 shares of our common stock
at an offering price of $0.01 per share (the “Offering”). Our business plan is
to use the proceeds of this offering for the development and marketing of the
Hotel Management Tool software product. However, our management has retained
discretion to use the proceeds of the Offering for other uses. The minimum
investment amount for a single investor is $250 for 25,000
shares. The shares are being offered by us on a “best efforts” basis
and there can be no assurance that all or any of the shares offered will be
subscribed. If less than the maximum proceeds are available to us,
our development and prospects could be adversely affected. There is
no minimum offering required for this offering to close. The proceeds of this
offering will be immediately available to us for our general business purposes.
The Maximum Offering amount is 1,500,000 shares ($15,000).
Our
principal executive offices are located at 8600 Starboard Dr., #1143, Las Vegas,
NV 89117. Our phone number is (702) 335-4531.
Our
fiscal year end is April 30.
The
Offering
|
Securities
Being Offered
|
Up
to 1,500,000 shares of our common stock.
|
|
Offering
Price
|
The
offering price of the common stock is $0.01 per share. There is
no public market for our common stock. We cannot give any
assurance that the shares offered will have a market value, or that they
can be resold at the offered price if and when an active secondary market
might develop, or that a public market for our securities may be sustained
even if developed. The absence of a public market for our stock
will make it difficult to sell your shares in our stock.
We
intend to apply to the NASD over-the-counter bulletin board, through a
market maker that is a licensed broker dealer, to allow the trading of our
common stock upon our becoming a reporting entity under the Securities
Exchange Act of 1934. If our common stock becomes so traded and a market
for the stock develops, the actual price of stock will be determined by
prevailing market prices at the time of sale or by private transactions
negotiated by the selling shareholders. The offering price
would thus be determined by market factors and the independent decisions
of the selling shareholders.
|
|
Minimum
Number of Shares
To
Be Sold in This Offering
|
n/a
|
| Maximum Number of Shares To Be Sold in This Offering | 1,500,000 |
|
Securities
Issued and to be Issued
|
5,500,000
shares of our common stock are issued and outstanding as of the date of
this prospectus. Our sole officer and director, Mr. John Baumbauer, owns
an aggregate of 100% of the common shares of our company and therefore
have substantial control. Upon the completion of this offering,
our officers and directors will own an aggregate of approximately 78.57%
of the issued and outstanding shares of our common stock if the maximum
number of shares is sold.
|
| Number of Shares Outstanding After The Offering If All The Shares Are Sold |
7,000,000
|
|
Use
of Proceeds
|
If
we are successful at selling all the shares we are offering, our proceeds
from this offering will be approximately $15,000. We intend to use these
proceeds to execute our business plan.
|
|
Offering
Period
|
The
shares are being offered for a period up to 120 days after the date of
this Prospectus, unless extended by us for an additional 90
days.
|
Summary
Financial Information
|
Balance Sheet Data
|
Fiscal
Year Ended
April
30, 2008 (audited)
|
|
| Cash | $ | 5,500 |
| Total Assets | 5,500 | |
|
Liabilities
|
0 | |
|
Total
Stockholder’s Equity (Deficit)
|
5,500 | |
|
|
||
|
Statement of Operations
|
||
|
Revenue
|
$ | 0 |
|
Net
Profit (Loss) for Reporting Period
|
0 | |
You
should consider each of the following risk factors and any other information set
forth herein and in our reports filed with the SEC, including our financial
statements and related notes, in evaluating our business and prospects. The
risks and uncertainties described below are not the only ones that impact on our
operations and business. Additional risks and uncertainties not presently known
to us, or that we currently consider immaterial, may also impair our business or
operations. If any of the following risks actually occur, our business and
financial results or prospects could be harmed. In that case, the value of the
Common Stock could decline.
We have
only recently completed the initial version of our “Hotel Management Tool”
software and have only recently begun to demonstrate and test the software in a
live hotel operation. Extensive testing and perfection of the
software has yet to occur, and we have not yet begun to market our
system to
hotel and motel operators. As a result, we have no way to evaluate
the likelihood that we will be able to operate the business
successfully. We were incorporated on April 15, 2008, and to date
have been involved primarily in organizational and early planning
activities. We have not earned any revenues as of the date of this
prospectus, and thus face a high risk of business failure.
We
currently do not have any active operations and we have no income. Our business
plan calls for expenses related to software testing and perfection, marketing,
and other start-up costs. We currently do not have any arrangements for
financing and we may not be able to obtain financing when required. Obtaining
additional financing beyond the initial equity financing sought through this
offering will be subject to a number of factors, including our ability to show
strong early revenues and a growing rate of adoption of our software system in
the market. These factors may make the most desirable timing, amount, and terms
or conditions of additional financing unavailable to us.
Prior to
our earning significant revenues, we anticipate that we will incur increased
operating expenses. We expect to incur continuing losses into the
foreseeable future. Our accumulated deficit will continue to increase
as we continue to incur losses. We may not be able to earn profits or
continue operations if we are unable to generate significant
revenues. There is no history upon which to base any assumption as to
the likelihood that we will be successful, and we may not be able to generate
any operating revenues or ever achieve profitable operations. If we
are unsuccessful in addressing these risks, our business will most likely
fail.
We have
earned no revenue since our inception, which makes it difficult to evaluate
whether we will operate profitably. We have not attained profitable
operations and are dependent upon obtaining financing or generating revenue from
operations to continue operations for the next twelve months. As of April 30,
2008, we had cash in the amount of $5,500. Our future is dependent upon our
ability to obtain financing or upon future profitable operations. We
are currently seeking equity financing through this offering. We reserve the
right to seek additional funds through private placements of our common stock
and/or through debt financing. Our ability to raise additional financing is
unknown. We do not have any formal commitments or arrangements for the
advancement or loan of funds. For these reasons, our auditors stated in their
report that they have substantial doubt we will be able to continue as a going
concern. As a result, there is an increased risk that you could lose the entire
amount of your investment in our company.
The
shares are being offered by us on a "best efforts" basis without benefit of a
private placement agent. However, we reserve the right to enter into agreement
with one or more broker-dealers to
sell the
shares, with such broker-dealers receiving sales commissions of up to 10% of the
price of the shares. We can provide no assurance that this Offering will be
completely sold out. If less than the maximum proceeds are available, our
business plans and prospects could be adversely affected.
Our
future financial performance depends on our successful and timely development,
introduction and market acceptance of our new software product, together with
additional upgrades and improvements. The lifecycle of our product is difficult
to predict because the market for our product is characterized by rapid
technological change, changing customer needs and evolving industry standards.
The introduction of products or computer systems employing new technologies and
emerging industry standards could render our product obsolete and unmarketable,
or cause customers to defer orders for our product.
In
addition, our software must be highly scalable, or able to accommodate
substantial increases in the number of users. If our customers cannot
successfully implement large-scale deployments, or if they determine that our
products cannot accommodate large-scale deployments, we could experience
customer dissatisfaction and find it more difficult to obtain new customers or
to sell additional products to our existing customers.
The size
of a new customer’s initial order may be relatively small and may include a
limited number of user licenses. In order to grow revenues, we will
depend on sales of additional user licenses to our existing customers as well as
sales of new licenses to new customers. Therefore, it is important that our
customers are satisfied with their initial product implementations and that they
believe that expanded use of the product they purchased will provide them with
additional benefits.
Our
products may integrate with many different disparate systems operated by our
customers. As a result, although we do not typically perform special or custom
coding or connections to other systems, data migrations and integration with our
customers’ systems require integration with the existing computer systems and
software programs used by our customers. If this integration proves to be
complex, time consuming or expensive, or causes delays in the deployment of our
products, customers may become dissatisfied with our products, resulting in
reduced sales, decreased revenues and damage to our reputation.
The
market for hospitality management software is intensely competitive and we
expect competition to increase in the future. We will compete with large
and small companies that provide products and services that are similar in some
aspects to our products and services. These companies may develop new
technologies in the future that are perceived as more effective or cost
efficient
than the technologies developed by us. Some of these companies also have
longer operating histories, greater name recognition, access to larger customer
bases and significantly greater financial, technical and marketing resources
than we do. As a result, they may be able to adapt more quickly to new or
emerging technologies and changes in customer requirements or to devote greater
resources to the promotion and sale of their products than we will. In
addition, they may have established or may establish financial or strategic
relationships among themselves, with existing or potential customers, resellers
or other third parties and rapidly acquire significant market share. If we
cannot compete effectively, we may experience future price reductions, reduced
gross margins and loss of market share, any of which will materially adversely
affect our business, operating results and financial condition.
To
attract customers we may have to develop a brand identity and increase awareness
of our technology and product. To increase brand awareness, we expect to
significantly increase our expenditures for marketing initiatives. However,
these activities may not result in significant revenue and, even if they do, any
revenue may not offset the expenses incurred in building brand recognition.
Moreover, despite these efforts, we may not be able to increase awareness of our
brand, which would have a material adverse effect on our results of
operations.
The
hospitality management software industry is characterized by technological
advances, changes in customer requirements, frequent new product introductions
and enhancements and evolving industry standards in computer hardware and
software technology. As a result, we must continually change and improve
our products in response to changes in operating systems, application software,
computer and communications hardware, networking software, programming tools and
computer language technology. The introduction of products embodying new
technologies and the emergence of new industry standards may render existing
products obsolete or unmarketable. Our future operating results will depend upon
our ability to enhance our current product and to develop and introduce new
products on a timely basis that address the increasingly sophisticated needs of
our customers and that keep pace with technological developments, new
competitive product offerings and emerging industry standards. If we do
not respond adequately to the need to develop and introduce new products or
enhancements of our existing product in a timely manner in response to changing
market conditions or customer requirements, our operating results may be
materially diminished.
Software
products occasionally contain errors or defects, especially when they are first
introduced or when new versions are released. We cannot be certain that our
product is currently or will be completely free of defects and errors. We could
lose revenue as a result of product defects or errors, including defects
contained in third-party products that enable our products to work. In addition,
the
discovery of a defect or error in a new version or product may result in the
following consequences, among others:
|
•
|
delayed
shipping of the product;
|
|
|
|
|
•
|
delay
in or failure to ever achieve market acceptance;
|
|
•
|
diversion
of development resources;
|
|
|
|
|
•
|
damage
to our reputation;
|
|
•
|
product
liability claims; and
|
|
•
|
increased
service and warranty costs.
|
If we are
unable to develop a product that is free of defects or errors or if our product
is not able to scale across an enterprise or is perceived to be too complex to
scale across an enterprise, our business, results of operations and financial
condition could be harmed.
Because
our software product is designed for use by hotels and motels, economic
conditions affecting the travel and tourism industry in general may have a
substantial effect on our customers’ willingness to invest in new software
products like ours. Consumer demand for travel and lodging is particularly
sensitive to downturns in the economy. Changes in consumer preferences or
discretionary consumer spending brought about by factors such as fears of
war, future acts of terrorism, general economic conditions, disposable
consumer income, fears of recession and changes in consumer confidence in
the economy could reduce customer demand for lodging and travel
services. A significant downturn in the lodging and tourism industry
could adversely affect our ability to successfully market and sell our new hotel
management software system to hotel and motel operators.
Mr.
Baumbauer, our sole officer and director, devotes 15 to 20 hours per week to our
business affairs. We do not have an employment agreement with Mr. Baumbauer, nor
do we maintain a key man life insurance policy for him. Currently, we do not
have any full or part-time employees. If the demands of our business
require the full business time of Mr. Baumbauer, it is possible that
he may not be able to devote sufficient time to the management of our
business, as and when needed. If our management is unable to devote a
sufficient amount of time to manage our operations, our business will
fail.
Mr.
Baumbauer is our president, chief financial officer and sole
director. He currently owns 100% of the outstanding shares of our
common stock, and, upon completion of this offering, will own 78.57% of our
outstanding common stock if the maximum number of shares are
sold. Accordingly, he will have a significant influence in
determining the outcome of all corporate transactions or other matters,
including mergers, consolidations and the sale of all or substantially all of
our assets, and also the power to prevent or cause a change in control. While we
have no current plans with regard to any merger, consolidation or sale of
substantially all of our assets, the interests of Mr. Baumbauer may still differ
from the interests of the other stockholders.
Our ability
to compete will depend upon our proprietary software technology. We rely on
trade secret and copyright laws to protect our intellectual property. Despite
our efforts to protect our intellectual property, a third party could copy or
otherwise obtain our software or other proprietary information without
authorization, or could develop software competitive to ours. Our means of
protecting our proprietary rights may not be adequate and our competitors may
independently develop similar technology or duplicate our product.
We may
have to resort to litigation to enforce our intellectual property rights, to
protect our trade secrets or know-how, or to determine their scope, validity or
enforceability. Enforcing or defending our proprietary technology could be
expensive, could cause the diversion of our resources, and may not prove
successful. Our protective measures may prove inadequate to protect our
proprietary rights, and any failure to enforce or protect our rights could cause
us to lose a valuable asset.
The
software industry is characterized by the existence of a large number of
patents, trademarks and copyrights, and by frequent litigation based upon
allegations of infringement or other violations of intellectual property rights.
We may be constrained by the intellectual property of others. Any
claims, regardless of their merit, could be time-consuming and distracting to
management, result in costly litigation or settlement, cause product development
or release delays or require us to enter into costly royalty or licensing
agreements.
The
Sarbanes-Oxley Act of 2002 was enacted in response to public concerns regarding
corporate accountability in connection with recent accounting scandals. The
stated goals of the Sarbanes-Oxley Act are to increase corporate responsibility,
to provide for enhanced penalties for accounting and auditing improprieties at
publicly traded companies, and to protect investors by improving the accuracy
and reliability of corporate disclosures pursuant to the securities laws. The
Sarbanes-Oxley Act generally applies to all companies that file or are required
to file periodic reports with the SEC, under the Securities Exchange Act of
1934. Upon becoming a public company, we will be required to comply
with the Sarbanes-Oxley Act and it is costly to remain in compliance with the
federal securities regulations. Additionally, we may be unable to
attract and retain qualified officers, directors and members of board committees
required to provide for our effective management as a result of Sarbanes-Oxley
Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a
series of rules and regulations by the SEC that increase responsibilities and
liabilities of directors and executive officers. The perceived increased
personal risk associated with these recent changes may make it more costly or
deter qualified individuals from accepting these roles. Significant
costs incurred as a result of becoming a public company could divert the use of
finances from our operations resulting in our inability to achieve
profitability.
Prior to
this offering, there has been no public market for our securities and there can
be no assurance that an active trading market for the securities offered herein
will develop after this offering, or, if developed, be sustained. We anticipate
that, upon completion of this offering, the common stock will be eligible for
quotation on the OTC Bulletin Board. If for any reason, however, our securities
are not eligible for initial or continued quotation on the OTC Bulletin Board or
a public trading market does not develop, purchasers of the common stock may
have difficulty selling their securities should they desire to do so and
purchasers of our common stock may lose their entire investment if they are
unable to sell our securities.
In
addition to the "penny stock" rules described below, the NASD has adopted rules
that require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for
that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the NASD
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. The NASD requirements make it
more difficult for broker-dealers to recommend that their
customers
buy our common stock, which may have the effect of reducing the level of trading
activity in our common stock. As a result, fewer broker-dealers may be willing
to make a market in our common stock, reducing a stockholder's ability to resell
shares of our common stock.
The
initial public offering price of the common stock was determined by us
arbitrarily. The price is not based on our financial condition and prospects,
market prices of similar securities of comparable publicly traded companies,
certain financial and operating information of companies engaged in similar
activities to ours, or general conditions of the securities market. The price
may not be indicative of the market price, if any, for the common stock in the
trading market after this offering. The market price of the securities offered
herein, if any, may decline below the initial public offering price. The stock
market has experienced extreme price and volume fluctuations. In the past,
securities class action litigation has often been instituted against various
companies following periods of volatility in the market price of their
securities. If instituted against us, regardless of the outcome, such litigation
would result in substantial costs and a diversion of management's attention and
resources, which would increase our operating expenses and affect our financial
condition and business operations.
If you
purchase shares of our common stock sold in this offering, you may not be able
to resell the shares in any state unless and until the shares of our common
stock are qualified for secondary trading under the applicable securities laws
of such state or there is confirmation that an exemption, such as listing in
certain recognized securities manuals, is available for secondary trading in
such state. There can be no assurance that we will be successful in registering
or qualifying our common stock for secondary trading, or identifying an
available exemption for secondary trading in our common stock in every state. If
we fail to register or qualify, or to obtain or verify an exemption for the
secondary trading of, our common stock in any particular state, the shares of
common stock could not be offered or sold to, or purchased by, a resident of
that state. In the event that a significant number of states refuse to permit
secondary trading in our common stock, the market for the common stock will be
limited which could drive down the market price of our common stock and reduce
the liquidity of the shares of our common stock and a stockholder's ability to
resell shares of our common stock at all or at current market prices, which
could increase a stockholder's risk of losing some or all of his
investment.
Our board
of directors may determine to authorize and issue shares of preferred stock in
the future. Our board of directors has the power to establish the dividend
rates, liquidation preferences, voting rights, redemption and conversion terms
and privileges with respect to any series of preferred stock. The issuance of
any shares of preferred stock having rights superior to those of the common
stock may
result in a decrease in the value or market price of the common stock. Holders
of preferred stock may have the right to receive dividends, certain preferences
in liquidation and conversion rights. The issuance of preferred stock could,
under certain circumstances, have the effect of delaying, deferring or
preventing a change in control of us without further vote or action by the
stockholders and may adversely affect the voting and other rights of the holders
of common stock.
Short
selling occurs when a person sells shares of stock which the person does not yet
own and promises to buy stock in the future to cover the sale. The general
objective of the person selling the shares short is to make a profit by buying
the shares later, at a lower price, to cover the sale. Significant amounts of
short selling, or the perception that a significant amount of short sales could
occur, could depress the market price of our common stock. In contrast,
purchases to cover a short position may have the effect of preventing or
retarding a decline in the market price of our common stock, and together with
the imposition of the penalty bid, may stabilize, maintain or otherwise affect
the market price of our common stock. As a result, the price of our common stock
may be higher than the price that otherwise might exist in the open market. If
these activities are commenced, they may be discontinued at any time. These
transactions may be effected on over-the-counter bulletin board or any other
available markets or exchanges. Such short selling if it were to occur could
impact the value of our stock in an extreme and volatile manner to the detriment
of our shareholders.
We have
never declared or paid any cash dividends on our common stock. We currently
intend to retain future earnings, if any, to finance the expansion of our
business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future. Our payment of any future dividends will be at the
discretion of our board of directors after taking into account various factors,
including but not limited to our financial condition, operating results, cash
needs, growth plans and the terms of any credit agreements that we may be a
party to at the time. Accordingly, investors must rely on sales of their own
common stock after price appreciation, which may never occur, as the only way to
realize their investment. Investors seeking cash dividends should not purchase
our common stock.
Broker-dealer
practices in connection with transactions in “penny stocks” are regulated by
penny stock rules adopted by the Securities and Exchange Commission. Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on some national securities exchanges or quoted on
Nasdaq). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk
disclosure
document that provides information about penny stocks and the nature and level
of risks in the penny stock market. The broker-dealer also must provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and,
if the broker-dealer is the sole market maker, the broker-dealer must disclose
this fact and the broker-dealer’s presumed control over the market, and monthly
account statements showing the market value of each penny stock held in the
customer’s account. In addition, broker-dealers who sell these securities to
persons other than established customers and “accredited investors” must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser’s written agreement to the transaction.
Consequently, these requirements may have the effect of reducing the level of
trading activity, if any, in the secondary market for a security subject to the
penny stock rules, and investors in our common stock may find it difficult to
sell their shares.
In the
event that our shares are quoted on the over-the-counter bulletin board,
we will be required
order to remain current in our filings with the SEC in order for shares of our
common stock to be eligible for quotation on the over-the-counter bulletin
board. In the event that we become delinquent in our required filings with the
SEC, quotation of our common stock will be terminated following a 30 day grace
period if we do not make our required filing during that time. If our shares are
not eligible for quotation on the over-the-counter bulletin board, investors in
our common stock may find it difficult to sell their shares.
This
prospectus contains forward-looking statements that involve risks and
uncertainties. We use words such as anticipate, believe, plan,
expect, future, intend and similar expressions to identify such forward-looking
statements. The actual results could differ materially from our
forward-looking statements. Our actual results are most likely to
differ materially from those anticipated in these forward-looking statements for
many reasons, including the risks faced by us described in this Risk Factors
section and elsewhere in this prospectus.
The net
proceeds to us from the sale of up to 1,500,000 shares of common stock offered
at a public offering price of $0.01 per share will vary depending upon the total
number of shares sold. The following table summarizes the anticipated
application of the proceeds we will receive from this Offering if the maximum
number of shares is sold:
|
Amount
Assuming Maximum Offering
|
Percent
of Maximum
|
|||
|
GROSS
OFFERING
|
$ | 15,000 | 100.0% | |
|
Commission
1
|
$ | 0 | 0.0% | |
|
Net
Proceeds
|
$ | 15,000 | 100.0% | |
|
USE
OF NET PROCEEDS
|
||||
|
Product
Development and Marketing
2
|
$ | 10,000 | 66.67% | |
|
General
and Administrative
3
|
$ | 5,000 | 33.33% | |
|
TOTAL
APPLICATION OF NET PROCEEDS
|
$ | 15,000 | 100.0% | |
1
Commissions
: Shares
will be offered and sold by us without special compensation or other
remuneration for such efforts. We do not plan to enter into agreements with
finders or securities broker-dealers who are members of the National Association
of Securities Dealers whereby the finders or broker-dealers would be involved in
the sale of the Shares to the investors. Shares will be sold directly by us, and
no fee or commission will be paid.
2
Product Development and
Marketing
: We intend to use between approximately $10,000 of the net
proceeds of this Offering to further develop and perfect our Hotel Management
Tool software and to market the new product to hotel and motel
operators.
3
General and
Administrative
: A portion of the proceeds will be used to pay
general administrative expenses such as legal, accounting, phone, gasoline,
office supplies, and other general overhead items.
The $0.01
per share offering price of our common stock was arbitrarily chosen by
management. There is no relationship between this price and our assets,
earnings, book value or any other objective criteria of value. We intend to
apply to the NASD over-the-counter bulletin board for the quotation of our
common stock upon our becoming a reporting entity under the Securities Exchange
Act of 1934. If our common stock becomes so traded and a market for
the stock develops, the actual price of stock will be determined by prevailing
market prices at the time of sale or by private transactions negotiated by the
selling shareholders. The offering price would thus be determined by
market factors and the independent decisions of the selling
shareholders.
Purchasers
of our securities in this offering will experience immediate and substantial
dilution in the net tangible book value of their common stock from the initial
public offering price.
The
historical net tangible book value as of April 30, 2008 was $5,500 or $0.001 per
share. Historical net tangible book value per share of common stock is equal to
our total tangible assets less total liabilities, divided by the number of
shares of common stock outstanding as of April 30,
2008. Adjusted to give effect to the receipt of net proceeds
from the sale of the maximum of 1,500,000 shares of common stock for $15,000,
net tangible book value will be approximately $0.003 per share. This
will represent an immediate increase of approximately $0.002 per share to
existing
stockholders and an immediate and substantial dilution of approximately $0.007
per share, or approximately 70%, to new investors purchasing our securities in
this offering. Dilution in pro forma net tangible book value per share
represents the difference between the amount per share paid by purchasers of
shares of our common stock in this offering and the pro forma net tangible book
value per share of our common stock immediately following this
offering.
The
following table sets forth as of April 30, 2008, the number of shares of common
stock purchased from us and the total consideration paid by our existing
stockholders and by new investors in this offering if new investors purchase the
maximum offering, assuming a purchase price in this offering of $0.01 per share
of common stock.
|
Number
|
Percent
|
Amount
|
|
|
Existing
Stockholders
|
5,500,000
|
78.57%
|
$5,500
|
|
New
Investors
|
1,500,000
|
21.43%
|
$15,000
|
|
Total
|
7,000,000
|
100.00%
|
$20,500
|
There
Is No Current Market for Our Shares of Common Stock
There is
currently no market for our shares. We cannot give you any assurance that the
shares you purchase will ever have a market or that if a market for our shares
ever develops, that you will be able to sell your shares. In addition, even if a
public market for our shares develops, there is no assurance that a secondary
public market will be sustained.
The
shares you purchase are not traded or listed on any exchange. After the
effective date of the registration statement, we intend to have a market maker
file an application with the National Association of Securities Dealers, Inc. to
have our common stock quoted on the OTC Bulletin Board. We currently have no
market maker who is willing to list quotations for our stock. Further, even
assuming we do locate such a market maker, it could take several months before
the market maker’s listing application for our shares is approved.
The OTC
Bulletin Board is maintained by the National Association of Securities Dealers.
The securities traded on the Bulletin Board are not listed or traded on the
floor of an organized national or regional stock exchange. Instead, these
securities transactions are conducted through a telephone and computer network
connecting dealers in stocks. Over-the-counter stocks are traditionally smaller
companies that do not meet the financial and other listing requirements of a
regional or national stock exchange.
Even if
our shares are quoted on the OTC Bulletin Board, a purchaser of our shares may
not be able to resell the shares. Broker-dealers may be discouraged from
effecting transactions in our shares because they will be considered penny
stocks and will be subject to the penny stock rules. Rules 15g-1 through 15g-9
promulgated under the Securities Exchange Act of 1934, as amended, impose sales
practice and disclosure requirements on NASD brokers-dealers who make a market
in a "penny stock." A penny stock generally includes any non-NASDAQ equity
security that has a market price of less than $5.00 per share. Under the penny
stock regulations, a broker-dealer selling penny stock to anyone other than an
established customer or "accredited investor" (generally, an individual with net
worth in excess of $1,000,000 or an annual income exceeding $200,000, or
$300,000 together with his or her spouse) must make a special suitability
determination for the purchaser and must receive the purchaser's written consent
to the transaction prior to sale, unless the broker-dealer or the transactions
is otherwise exempt. In addition, the penny stock regulations require the
broker-dealer to deliver, prior to any transaction involving a penny stock, a
disclosure schedule prepared by the Commission relating to the penny stock
market, unless the broker-dealer or the transaction is otherwise exempt. A
broker-dealer is also required to disclose commissions payable to the
broker-dealer and the registered representative and current quotations for the
securities. Finally, a broker-dealer is required to send monthly statements
disclosing recent price information with respect to the penny stock held in a
customer's account and information with respect to the limited market in penny
stocks.
The
additional sales practice and disclosure requirements imposed upon
brokers-dealers may discourage broker-dealers from effecting transactions in our
shares, which could severely limit the market liquidity of the shares and impede
the sale of our shares in the secondary market, assuming one
develops.
The
Offering will be Sold by Our Officers and Directors
We are
offering up to a total of 1,500,000 shares of common stock. The offering price
is $0.01 per share. The offering will be for a period of 120 days from the
effective date and may be extended for an additional 90 days if we choose to do
so. In our sole discretion, we have the right to terminate the offering at any
time, even before we have sold the 1,500,000 shares. There are no specific
events which might trigger our decision to terminate the offering.
The
shares are being offered by us on a “best efforts” basis and there can be no
assurance that all or any of the shares offered will be
subscribed. If less than the maximum proceeds are available to us,
our development and prospects could be adversely affected. There is
no minimum offering required for this offering to close. All funds received as a
result of this offering will be immediately available to us for our general
business purposes.
We cannot
assure you that all or any of the shares offered under this prospectus will be
sold. No one has committed to purchase any of the shares offered. Therefore, we
may sell only a nominal amount of shares, in which case our ability to execute
our business plan might be negatively impacted. We reserve the right to withdraw
or cancel this offering and to accept or reject any subscription in whole or in
part, for any reason or for no reason. Subscriptions will be accepted or
rejected promptly. All monies from rejected subscriptions will be returned
immediately by us to the subscriber, without interest or deductions.
Certificates for shares purchased will be issued and
distributed
by our transfer agent promptly after a subscription is accepted and "good funds"
are received in our account.
If it
turns out that we have not raised enough money to effectuate our business plan,
we will try to raise additional funds from a second public offering, a private
placement or loans. At the present time, we have not made any plans to raise
additional money and there is no assurance that we would be able to raise
additional money in the future. If we need additional money and are not
successful, we will have to suspend or cease operations.
We will
sell the shares in this offering through our officers and Directors. The
officers and Directors engaged in the sale of the securities will receive no
commission from the sale of the shares nor will they register as broker-dealers
pursuant to Section 15 of the Securities Exchange Act of 1934 in reliance upon
Rule 3(a) 4-1. Rule 3(a) 4-1 sets forth those conditions under which a person
associated with an issuer may participate in the offering of the issuer's
securities and not be deemed to be a broker-dealer. Our officers and Directors
satisfy the requirements of Rule 3(a) 4-1 in that:
|
1.
|
They
are not subject to a statutory disqualification, as that term is defined
in Section 3(a)(39) of the Act, at the time of his or her participation;
and
|
|
2.
|
They
are not compensated in connection with their participation by the payment
of commissions or other remuneration based either directly or indirectly
on transactions in securities; and
|
|
3.
|
They
are not, at the time of their participation, an associated person of a
broker- dealer; and
|
|
4.
|
They
meet the conditions of Paragraph (a)(4)(ii) of Rule 3(a)4-1 of the
Exchange Act, in that they (A) primarily perform, or are intended
primarily to perform at the end of the offering, substantial duties for or
on behalf of the issuer otherwise than in connection with transactions in
securities; and (B) are not brokers or dealers, or an associated person of
a broker or dealer, within the preceding twelve (12) months; and (C) do
not participate in selling and offering of securities for any issuer more
than once every twelve (12) months other than in reliance on Paragraphs
(a)(4)(i) or (a)(4)(iii).
|
As long
as we satisfy all of these conditions, we are comfortable that we will be able
to satisfy the requirements of Rule 3(a)4-1 of the Exchange Act notwithstanding
that a portion of the proceeds from this offering will be used to pay the
salaries of our officers and Directors.
As our
officers and Directors will sell the shares being offered pursuant to this
offering, Regulation M prohibits the Company and its officers and Directors from
certain types of trading activities during the time of distribution of our
securities. Specifically, Regulation M prohibits our officers and Directors from
bidding for or purchasing any common stock or attempting to induce any other
person to purchase any common stock, until the distribution of our securities
pursuant to this offering has ended.
We have
no intention of inviting broker-dealer participation in this
offering.
Offering
Period and Expiration Date
This
offering will commence on the effective date of this prospectus, as determined
by the Securities and Exchange Commission and continue for a period of 120 days.
We may extend the offering for an additional 90 days unless the offering is
completed or otherwise terminated by us. Funds received from investors will be
counted towards the minimum subscription amount only if the form of payment,
such as a check, clears the banking system and represents immediately available
funds held by us prior to the termination of the 120-day subscription period, or
prior to the termination of the extended subscription period if extended by our
Board of Directors.
Procedures
for Subscribing
If you
decide to subscribe for any shares in this offering, you must deliver a check or
certified funds for acceptance or rejection. The minimum investment amount for a
single investor is $250 for 25,000 shares. All checks for subscriptions must be
made payable to "Hotel Management Systems, Inc.”
Right
to Reject Subscriptions
We
maintain the right to accept or reject subscriptions in whole or in part, for
any reason or for no reason. All monies from rejected subscriptions will be
returned immediately by us to subscriber, without interest or
deductions. Subscriptions for securities will be accepted or rejected within 48
hours of our having received them.
Our
authorized capital stock consists of 90,000,000 shares of common stock, with a
par value of $0.001 per share, and 10,000 shares of preferred stock, par value
$0.001 per share. As of May 15, 2008, there were 5,500,000
shares of our common stock issued and outstanding. Our shares are
currently held by one (1) stockholder of record. We have not issued any shares
of preferred stock.
Common
Stock
Our
common stock is entitled to one vote per share on all matters submitted to a
vote of the stockholders, including the election of directors. Except as
otherwise required by law or provided in any resolution adopted by our board of
directors with respect to any series of preferred stock, the holders of our
common stock will possess all voting power. Generally, all matters to be voted
on by stockholders must be approved by a majority (or, in the case of election
of directors, by a plurality) of the votes entitled to be cast by all shares of
our common stock that are present in person or represented by proxy, subject to
any voting rights granted to holders of any preferred stock. Holders of our
common stock representing fifty percent (50%) of our capital stock issued,
outstanding and entitled to vote, represented in person or by proxy, are
necessary to constitute a quorum at any meeting of our
stockholders. A vote by the holders of a majority of our outstanding
shares is required to effectuate certain fundamental corporate changes such as
liquidation, merger
or an
amendment to our Articles of Incorporation. Our Articles of Incorporation do not
provide for cumulative voting in the election of directors.
Subject
to any preferential rights of any outstanding series of preferred stock created
by our board of directors from time to time, the holders of shares of
our common stock will be entitled to such cash dividends as may be declared from
time to time by our board of directors from funds available
therefore.
Subject
to any preferential rights of any outstanding series of preferred stock created
from time to time by our board of directors, upon liquidation, dissolution or
winding up, the holders of shares of our common stock will be entitled to
receive pro rata all assets available for distribution to such
holders.
In the
event of any merger or consolidation with or into another company in connection
with which shares of our common stock are converted into or exchangeable for
shares of stock, other securities or property (including cash), all holders of
our common stock will be entitled to receive the same kind and amount of shares
of stock and other securities and property (including cash). Holders of our
common stock have no pre-emptive rights, no conversion rights and there are no
redemption provisions applicable to our common stock.
Preferred
Stock
Our board
of directors may become authorized to authorize preferred shares of stock and to
divide the authorized shares of our preferred stock into one or more series,
each of which must be so designated as to distinguish the shares of each series
of preferred stock from the shares of all other series and classes. Our board of
directors is authorized, within any limitations prescribed by law and our
articles of incorporation, to fix and determine the designations, rights,
qualifications, preferences, limitations and terms of the shares of any series
of preferred stock including, but not limited to, the following:
|
1.
|
The
number of shares constituting that series and the distinctive designation
of that series, which may be by distinguishing number, letter or
title;
|
|
2.
|
The
dividend rate on the shares of that series, whether dividends will be
cumulative, and if so, from which date(s), and the relative rights of
priority, if any, of payment of dividends on shares of that
series;
|
|
3.
|
Whether
that series will have voting rights, in addition to the voting rights
provided by law, and, if so, the terms of such voting
rights;
|
|
4.
|
Whether
that series will have conversion privileges, and, if so, the terms and
conditions of such conversion, including provision for adjustment of the
conversion rate in such events as the Board of Directors
determines;
|
|
5.
|
Whether
or not the shares of that series will be redeemable, and, if so, the terms
and conditions of such redemption, including the date or date upon or
after which they are redeemable, and the amount per share payable in case
of redemption, which amount may vary under different conditions and at
different redemption dates;
|
|
6.
|
Whether
that series will have a sinking fund for the redemption or purchase of
shares of that series, and, if so, the terms and amount of such sinking
fund;
|
|
7.
|
The
rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the corporation, and
the relative rights of priority, if any, of payment of shares of that
series;
|
|
8.
|
Any
other relative rights, preferences and limitations of that
series
|
Provisions
in Our Articles of Incorporation and By-Laws That Would Delay, Defer or Prevent
a Change in Control
Our
articles of incorporation authorize our board of directors to issue a class of
preferred stock commonly known as a "blank check" preferred stock. Specifically,
the preferred stock may be issued from time to time by the board of directors as
shares of one (1) or more classes or series. Our board of directors, subject to
the provisions of our Articles of Incorporation and limitations imposed by law,
is authorized to adopt resolutions; to issue the shares; to fix the number of
shares; to change the number of shares constituting any series; and to provide
for or change the following: the voting powers; designations; preferences; and
relative, participating, optional or other special rights, qualifications,
limitations or restrictions, including the following: dividend rights, including
whether dividends are cumulative; dividend rates; terms of redemption, including
sinking fund
provisions;
redemption prices; conversion rights and liquidation preferences of the shares
constituting any class or series of the preferred stock.
In each
such case, we will not need any further action or vote by our shareholders. One
of the effects of undesignated preferred stock may be to enable the board of
directors to render more difficult or to discourage an attempt to obtain control
of us by means of a tender offer, proxy contest, merger or otherwise, and
thereby to protect the continuity of our management. The issuance of shares of
preferred stock pursuant to the board of director's authority described above
may adversely affect the rights of holders of common stock. For example,
preferred stock issued by us may rank prior to the common stock as to dividend
rights, liquidation preference or both, may have full or limited voting rights
and may be convertible into shares of common stock. Accordingly, the issuance of
shares of preferred stock may discourage bids for the common stock at a premium
or may otherwise adversely affect the market price of the common
stock.
Dividend
Policy
We have
never declared or paid any cash dividends on our common stock. We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
Share
Purchase Warrants
We have
not issued and do not have outstanding any warrants to purchase shares of our
common stock.
Options
We have
not issued and do not have outstanding any options to purchase shares of our
common stock.
Convertible
Securities
We have
not issued and do not have outstanding any securities convertible into shares of
our common stock or any rights convertible or exchangeable into shares of our
common stock.
Nevada
Anti-Takeover Laws
Nevada
Revised Statutes sections 78.378 to 78.379 provide state regulation over the
acquisition of a controlling interest in certain Nevada corporations unless the
articles of incorporation or bylaws of the corporation provide that the
provisions of these sections do not apply. Our articles of
incorporation and bylaws do not state that these provisions do not
apply. The statute creates a number of restrictions on the ability of
a person or entity to acquire control of a Nevada company by setting down
certain rules of conduct and voting restrictions in any acquisition attempt,
among other things. The statute is limited to corporations that are organized in
the state of Nevada and that have 200 or more stockholders, at least 100 of whom
are stockholders of record and residents of the
State of
Nevada; and does business in the State of Nevada directly or through an
affiliated corporation. Because of these conditions, the statute currently does
not apply to our company.
No expert
or counsel named in this prospectus as having prepared or certified any part of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis, or had, or
is to receive, in connection with the offering, a substantial interest, direct
or indirect, in the registrant or any of its parents or subsidiaries. Nor was
any such person connected with the registrant or any of its parents or
subsidiaries as a promoter, managing or principal underwriter, voting trustee,
director, officer, or employee.
Marvin
Longabaugh, Esq., our independent legal counsel, has provided an opinion on the
validity of our common stock.
Moore
& Associates, Chtd., Certified Public Accountants, has audited our financial
statements included in this prospectus and registration statement to the extent
and for the periods set forth in their audit report. Moore &
Associates, Chtd. has presented their report with respect to our audited
financial statements. The report of Moore & Associates, Chtd. is
included in reliance upon their authority as experts in accounting and
auditing.
Principal
Place of Business
Our
principal offices are located at 8600 Starboard Dr., #1143 Las Vegas, Nevada
89117.
Company
Overview
We were
incorporated as “Hotel Management Systems” on April 15, 2008, in the State of
Nevada for the purpose of developing, perfecting and marketing our proprietary
software program, the “Hotel Management Tool” or “HMT.” Our HMT
software is designed to allow hotel or motel operators and their employees to
manage the day-to-day operations of their business through a single system which
coordinates the various operational functions of the enterprise. Ours
is a scalable application that can grow with the customer’s business by adding
additional capacity and accommodating more robust data base systems as the
user’s operations expand. The product offers a tiered security system, is
self-updating, and is fully customizable to the specific needs of the
customer.
Our
founder and executive officer, John Baumbauer, has been developing HMT over the
past year. Currently, the product is being tested and demonstrated at
a motel in Las Vegas, Nevada. As the product continues to be used in
a real-world environment, we are able to make incremental improvements, develop
additional features, and remedy any bugs or glitches which are
discovered.
Through
this offering, we are seeking funding for the purpose of completing the
development and perfection of our unique software and for launching an initial
marketing campaign targeted to small hotel and motel operators.
The
“Hotel Management Tool” Software
The
“Hotel Management Tool” software offers hotel operators a single software
platform which integrates all major aspects of the day-to-day management of
their enterprise. Although the HMT is fully customizable and able to
incorporate additional modules, our standard version will feature three basic
modules that deal with those hotel operating functions which can be most easily
improved by the use of our software platform: Product and Supplies Management,
Employee Data, and Employment Counseling and Reporting.
Product and Supplies
Management
This module of the HMT software will
allow hotel management to track and manage its inventory of supplies and in-room
products like shampoo, soap, and similar items. All of the supplies
and in-room products commonly used by the hotel can be input into a database
which will contain any necessary item or catalog numbers for each individual
product. The hotel’s management will also input unit cost and a
desired minimum and maximum quantity of hand for each product:
On a
daily or other periodic basis, the hotel’s employees will then record inventory
through the use of a count worksheet:
The
hotel’s quantity on hand is then updated in a separate screen. As the
minimum quantity on
hand is approached, the HMT will know which products to re-order and
in what quantity to order them and will produce the appropriate product
order:
Employee Data
Management
This module of the HMT software will
allow for easy maintenance of a complete and user-friendly employee
database. Through a series of screens, the employee’s personal
information, contact and emergency information, and work-related information can
be easily input and maintained by management:
Employment Counseling and
Reporting
The third standard module to be
included in the HMT software will allow hotel management to accurately record
and track employee disciplinary incidents and any related counseling sessions
with employees through a user-friendly data screen:
In the
event that an employee must be terminated, a full record and evaluation of the
employee’s attendance, cooperation, initiative, job knowledge, and over work
quality can be easily input by management. The HMT will then generate
a written report that can be given to the employee. The employee will
sign a receipt of the report, which can be stored in the hotel’s permanent
records:
Additional Standard
Features
Together with the standard set of
functions summarized above, the HMT offers some important standard
features:
|
·
|
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.
|
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.
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.
|
Intellectual
Property
We have
applied for copyright registration of the HMT software and we intend to
aggressively assert our rights under trade secret, unfair competition, trademark
and copyright laws to protect our intellectual property, including software
design, proprietary software code and related technologies, product research and
concepts and recognized trademarks. These rights will be protected
through
the
acquisition of copyright and trademark registrations, the maintenance
of trade secrets, the development of trade dress, and, where appropriate,
litigation against those who are, in our opinion, infringing these
rights.
While
there can be no assurance that registered trademarks and copyrights will protect
our proprietary information, we intend to assert our intellectual property
rights against any infringer. Although any assertion of our rights can result in
a substantial cost to, and diversion of effort by, our company, management
believes that the protection of our intellectual property rights is a key
component of our operating strategy.
Regulatory
Matters
We are
unaware of and do not anticipate having to expend significant resources to
comply with any governmental regulations applicable to our planned operations.
We are subject to the laws and regulations which are generally applicable to
business operations, such as business licensing requirements, income taxes and
payroll taxes.
Employees
We have
no other employees other than our sole officer and director, John Baumbauer. Mr.
Baumbauer is our President, CEO, CFO, and sole member of the Board of
Directors. Mr. Baumbauer oversees all responsibilities in the
areas of corporate administration, product development, and marketing. As our
planned operations commence and as we begin to generate revenues, we may expand
our current management in the future to retain skilled directors, officers, and
employees with experience relevant to our business focus.
Environmental
Laws
We have
not incurred and do not anticipate incurring any expenses associated with
environmental laws.
We do not own any real
property. We maintain our corporate office at
8600 Starboard
Dr., #1143 Las Vegas, Nevada 89117.
We are
not currently a party to any legal proceedings. 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.
Our agent
for service of process in Nevada is John Baumbauer, 8600 Starboard Dr., #1143
Las Vegas, Nevada 89117.
No
Public Market for Common Stock
There is
presently no public market for our common stock. We anticipate making
an application for trading of our common stock on the NASD over the counter
bulletin board upon the effectiveness of the registration statement of which
this prospectus forms a part. We can provide no assurance that our
shares will be traded on the bulletin board, or if traded, that a public market
will materialize.
The
Securities Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted on the
NASDAQ system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or
system. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock, to deliver a standardized risk disclosure document
prepared by the Commission, that: (a) contains a description of the nature and
level of risk in the market for penny stocks in both public offerings and
secondary trading;(b) contains a description of the broker's or dealer's duties
to the customer and of the rights and remedies available to the customer with
respect to a violation to such duties or other requirements of Securities' laws;
(c) contains a brief, clear, narrative description of a dealer market, including
bid and ask prices for penny stocks and the significance of the spread between
the bid and ask price;(d) contains a toll-free telephone number for
inquiries on disciplinary actions;(e) defines significant terms in the
disclosure document or in the conduct of trading in penny stocks; and;(f)
contains such other information and is in such form, including language, type,
size and format, as the Commission shall require by rule or
regulation.
The
broker-dealer also must provide, prior to effecting any transaction in a penny
stock, the customer with; (a) bid and offer quotations for the penny stock;(b)
the compensation of the broker-dealer and its salesperson in the transaction;(c)
the number of shares to which such bid and ask prices apply, or other comparable
information relating to the depth and liquidity of the market for such stock;
and (d) a monthly account statements showing the market value of each penny
stock held in the customer's account.
In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability
statement.
These
disclosure requirements may have the effect of reducing the trading activity in
the secondary market for our stock if it becomes subject to these penny stock
rules. Therefore, because our common stock is subject to the penny stock rules,
stockholders may have difficulty selling those securities.
Holders
of Our Common Stock
Currently,
we have one (1) holder of record of our common stock.
Rule
144 Shares
None of
our common stock is currently available for resale to the public under Rule
144.
In
general, under Rule 144 as currently in effect, a person who has beneficially
owned shares of a company's common stock for at least one year is entitled to
sell within any three month period a number of shares that does not exceed the
greater of:
|
1.
|
one
percent of the number of shares of the company's common stock then
outstanding; or
|
|
2.
|
the
average weekly trading volume of the company's common stock during the
four calendar weeks preceding the filing of a notice on form 144 with
respect to the sale.
|
Sales
under Rule 144 are also subject to manner of sale provisions and notice
requirements and to the availability of current public information about the
company.
Under
Rule 144(k), a person who is not one of the company's affiliates at any time
during the three months preceding a sale, and who has beneficially owned the
shares proposed to be sold for at least two years, is entitled to sell shares
without complying with the manner of sale, public information, volume limitation
or notice provisions of Rule 144.
Stock
Option Grants
To date,
we have not granted any stock options.
Dividends
There are
no restrictions in our articles of incorporation or bylaws that prevent us from
declaring dividends. The Nevada Revised Statutes, however, do
prohibit us from declaring dividends where after giving effect to the
distribution of the dividend:
|
1.
|
we
would not be able to pay our debts as they become due in the usual course
of business, or;
|
|
2.
|
our
total assets would be less than the sum of our total liabilities plus the
amount that would be needed to satisfy the rights of shareholders who have
preferential rights superior to those receiving the
distribution.
|
We have
not declared any dividends and we do not plan to declare any dividends in the
foreseeable future.
Index to
Financial Statements:
|
Audited
Financial Statements:
|
|
| F-1 | Auditor's Report |
MOORE
& ASSOCIATES, CHARTERED
ACCOUNTANTS
AND ADVISORS
PCAOB
REGISTERED
To the
Board of Directors
Hotel
Management Systems, Inc.
(A
Development Stage Company)
We have
audited the accompanying balance sheet of Hotel Management Systems, Inc. (A
Development Stage Company) as of April 30, 2008, and the related statements of
operations, stockholders’ equity and cash flows from inception on April 15, 2008
through April 30, 2008. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Hotel Management Systems, Inc. (A
Development Stage Company) as of April 30, 2008, and the related statements of
operations, stockholders’ equity and cash flows from inception on April 15, 2008
through April 30, 2008, in conformity with accounting principles generally
accepted in the United States of America.
The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company has no revenues as of April 30, 2008, which raises
substantial doubt about its ability to continue as a going concern. Management’s
plans concerning these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/
Moore & Associates,
Chartered
Moore
& Associates Chartered
Las
Vegas, Nevada
May 23,
2008
2675
S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7499 Fax (702)
253-7501
HOTEL
MANAGEMENT SYSTEMS, INC.
(A DEVELOPMENT STAGE COMPANY)
The accompanying notes are
an integral part of these financial statements.
HOTEL
MANAGEMENT SYSTEMS, INC.
(A DEVELOPMENT STAGE
COMPANY)
|
From
Inception
On
April 15,
2008
through
|
||
|
REVENUES
|
$ | - |
|
COST
OF SALES
|
- | |
|
GROSS
MARGIN
|
- | |
|
OPERATING
EXPENSES
|
||
|
General
and administrative
|
- | |
|
TOTAL
OPERATING EXPENSES
|
- | |
|
NET
INCOME
|
$ | - |
|
BASIC
LOSS PER SHARE
|
$ | - |
|
Weighted
Average Shares
Outstanding
|
5,500,000 | |
The accompanying notes are
an integral part of these financial statements.
HOTEL
MANAGEMENT SYSTEMS, INC.
(A DEVELOPMENT STAGE
COMPANY)
|
Common
Stock
|
Additional
Paid
|
Accumulated
|
Total
Stockholders'
|
||||||||||
|
Shares
|
Amount
|
in
Capital
|
Deficit
|
Equity
|
|||||||||
|
Balance
April 15, 2008
|
- | $ | - | $ | - | $ | - | $ | - | ||||
|
Shares
issued for cash
at $0.001 per share
|
5,500,000 | 5,500 | - | - | 5,500 | ||||||||
|
Net
loss for the period
ended April 30, 2008
|
- | - | - | - | - | ||||||||
|
Balance
April 30, 2008
|
5,500,000 | $ | 5,500 | $ | - | $ | - | $ | 5,500 | ||||
The accompanying notes are
an integral part of these financial statements.
HOTEL
MANAGEMENT SYSTEMS, INC.
(A DEVELOPMENT STAGE
COMPANY)
The accompanying notes are
an integral part of these financial statements.
1.
Summary
of Significant Accounting
Policies
Nature
of Business
Hotel
Management Systems, Inc. (the Company) was incorporated in the State of Nevada
on April 15, 2008. The Company is engaged in the principal business activity of
providing hotel management software. The Company has not realized
significant revenues to date and therefore is classified as a development stage
company.
Use of
Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ
from those estimates.
Basic
(Loss) per Common Share
Basic
(loss) per share is calculated by dividing the Company’s net loss applicable to
common shareholders by the weighted average number of common shares during the
period. Diluted earnings per share is calculated by dividing the Company’s net
income available to common shareholders by the diluted weighted average number
of shares outstanding during the year. The diluted weighted average number of
shares outstanding is the basic weighted number of shares adjusted for any
potentially dilutive debt or equity. There are no such common stock equivalents
outstanding as of April 30, 2008.
|
|
(Loss)
|
Shares
|
Basic (Loss) Per
Share
|
||||
|
(Numerator)
|
(Denominator)
|
Amount
|
|||||
|
For
the Period Ended
|
$ | - | 5,500,000 | $ | 0.00 | ||
Revenue
Recognition
The
Company recognizes revenue when products are fully delivered or services have
been provided and collection is reasonably assured.
Comprehensive
Income
The
Company has no component of other comprehensive income. Accordingly, net income
equals comprehensive income for the periods ended April 30, 2008.
Advertising
Costs
The
Company’s policy regarding advertising is to expense advertising when incurred.
The Company had not incurred any advertising expense as of April 30,
2008.
1.
Summary of Significant Accounting Policies
(Continued)
Cash
and Cash Equivalents
For
purposes of the Statement of Cash Flows, the Company considers all highly liquid
instruments purchased with a maturity of three months or less to be cash
equivalents to the extent the funds are not being held for investment
purposes.
Income
Taxes
The
Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109
Requires
the use of an asset and liability approach in accounting for income taxes.
Deferred tax assets and liabilities are recorded based on the differences
between the financial statement and tax bases of assets and liabilities and the
tax rates in effect when these differences are expected to reverse. The
Company’s predecessor operated as entity exempt from Federal and State income
taxes.
SFAS
No. 109 requires the reduction of deferred tax assets by a valuation allowance
if, based on the weight of available evidence, it is more likely than not that
some or all of the deferred tax assets will not be realized.
The
provision for income taxes differs from the amounts which would be provided by
applying the statutory federal income tax rate to net loss before provision for
income taxes for the following reasons:
|
|
April
30,
2008
|
|
|
Income
tax expense at statutory rate
|
$ | 0 |
|
Common
stock issued for
services
|
0 | |
| Valuation allowance | 0 | |
| Income tax expense per books | $ | 0 |
Net
deferred tax assets consist of the following components as of:
|
|
April
30,
2008
|
|
|
NOL
Carryover
|
$ | 0 |
|
Valuation
allowance
|
0 | |
|
Net
deferred tax asset
|
$ | 0 |
Due
to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carry forwards for federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur net operating
loss carry forwards may be limited as to use in future years.
1.
Summary of Significant Accounting
Policies (Continued)
Impairment
of Long-Lived Assets
The
Company continually monitors events and changes in circumstances that could
indicate carrying amounts of long-lived assets may not be recoverable. When such
events or changes in circumstances are present, the Company assesses the
recoverability of long-lived assets by determining whether the carrying value of
such assets will be recovered through undiscounted expected future cash flows.
If the total of the future cash flows is less than the carrying amount of those
assets, the Company recognizes an impairment loss based on the excess of the
carrying amount over the fair value of the assets. Assets to be disposed of are
reported at the lower of the carrying amount or the fair value less costs to
sell.
Accounting
Basis
The
basis is accounting principles generally accepted in the United States of
America. The Company has adopted a March 31 fiscal year
end.
Inventory
The
Company accounts for inventory of raw materials and finished goods on a cost
basis. The inventory is maintained on a first in- first out (FIFO)
basis.
Stock-based
compensation.
As
of April 30, 2008, the Company has not issued any share-based payments to its
employees.
The
Company adopted SFAS No. 123-R effective January 1, 2006 using the
modified prospective method. Under this transition method, stock compensation
expense includes compensation expense for all stock-based compensation awards
granted on or after January 1,2006, based on the grant-date fair value
estimated in accordance with the provisions of SFAS No. 123-R.
Recent
Accounting Pronouncements
In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
which defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles, and expands disclosures about fair
value measurements. SFAS No. 157 does not require any new fair value
measurements, but provides guidance on how to measure fair value by providing a
fair value hierarchy used to classify the source of the information. This
statement is effective for us beginning January 1, 2008. The Company is
currently assessing the potential impact that adoption of SFAS No. 157
would have on the financial statements.
In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for
Financial Assets and Financial Liabilities. SFAS No. 159 gives the
irrevocable option to carry many financial assets and liabilities at fair
values, with changes in fair value recognized in earnings. SFAS No. 159 is
effective beginning January 1, 2008, although early
1.
Summary of Significant
Accounting Policies (Continued)
Recent Accounting
Pronouncements (Continued)
adoption
is permitted. The Company is currently assessing the potential impact that
adoption of SFAS No. 159 will have on the financial
statements.
The FASB
has revised SFAS No. 141. This revised statement establishes uniform
treatment for all acquisitions. It defines the acquiring
company. The statement further requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquired at the acquisition date, measured at their fair market values as of
that date. It requires the acquirer in a business combination
achieved in stages to recognize the identifiable assets and liabilities, as well
as the non-controlling interest in the acquired, at the full amounts of their
fair values. This changes the way that minority interest is recorded and
modified as a parent’s interest in a subsidiary changes over
time. This statement also makes corresponding significant amendments
to other standards that related to business combinations, namely, 109, 142 and
various EITF’s. This statement applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15,
2008. The Company believes the implementation of this standard will
have no effect on our financial statements.
2.
COMMON
STOCK
On April
24, 2008, the Company received $5,500 from its founders for 5,500,000 shares of
its common stock.
3.
GOING
CONCERN
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate continuation of the
Company as a going concern. However, the Company has no revenues as
of April 30, 2008. The Company currently has limited
liquidity, and has not completed its efforts to establish a stabilized source of
revenues sufficient to cover operating costs over an extended period of
time.
Management
anticipates that the Company will be dependent, for the near future, on
additional investment capital to fund operating expenses The Company intends to
position itself so that it may be able to raise additional funds through the
capital markets. In light of management’s efforts, there are no assurances that
the Company will be successful in this or any of its endeavors or become
financially viable and continue as a going concern.
4.
SOFTWARE LICENSE
AGREEMENT
On April
24, 2008, the Company entered into a software license for hotel management
software known as “Hotel Management Tool.” The software is non royalty paying
and can be cancelled by either party at any time.
Forward-Looking
Statements
Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words “believes,”
“project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,”
“may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and
similar expressions. We intend such forward-looking statements to be covered by
the safe-harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of complying with those safe-harbor provisions.
Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties which may cause actual results to
differ materially from the forward-looking statements. Our ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse affect on our operations
and future prospects on a consolidated basis include, but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of
capital, interest rates, competition, and generally accepted accounting
principles. These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Further information concerning our business, including
additional factors that could materially affect our financial results, is
included herein and in our other filings with the SEC.
Final
Product Development
The HMT
software has been in development for approximately one
year. Currently, the product is being used and tested at a
medium-sized motel in Las Vegas, Nevada. As the product continues to
be exposed to the challenges of real-world use in an active environment, we are
able to make changes and improvements and to discover and remedy any remaining
problems.
We
anticipate that an additional three to six months of testing and demonstration
will be necessary to perfect the software and make it ready for sale to
customers.
Initial
Marketing Campaign
Near the
start of the third quarter of our current fiscal year, we plan to launch a
direct mail-based marketing campaign focused on independent hotel and motel
operators with small to medium-sized properties and fewer than 10 locations, as
well as bed-and-breakfast inns and similar small independent operations. Our
mailer will feature a complete graphical description of the HMT software as well
as a demonstration CD that will show the potential customer how the software
will function. The mailer will be followed-up with a phone call and
on-site demonstrations for those
customers
who are interested. We are currently conducting market research and
building a database of properties to target with our mailer.
During
the first year of operations, our sole officer and director, John
Baumbauer, will provide his time to the business at no charge. Mr.
Baumbauer will be responsible for all administrative duties as well as
overseeing the final development and perfection of the HMT software, developing
our sales and marketing information material, researching potential customers,
and performing on-site product demonstrations and follow-up customer relations.
As we have limited financial resources, Mr. Baumbauer has committed to
dedicating approximately 15-20 hours a week in order to attend to needs of the
business.
Operational
Benchmarks For the Fiscal Year Beginning May 1, 2008
During
our first full fiscal year, we plan to achieve the following operational
goals:
|
Time
|
Objective
|
|
·
By
end of second quarter
|
Complete
final development and perfection of HMT software; continue to build
database of target customers and work on design of direct mail marketing
materials
|
|
·
By
end of third quarter
|
Complete
database of target customers and complete development of direct mail
marketing materials; launch direct mail marketing
campaign
|
|
·
By
end of fourth quarter
|
Begin
generating revenues from product sales and ongoing licensing
fees
|
Expense
Budget For The Fiscal Year Beginning May 1, 2008
| Expenses incidental to testing and perfection of software | $ | 1,000 |
| Cost of planned direct mail marketing campaign | $ | 10,000 |
| Travel and related for live customer demonstrations and other site visits | $ | 5,000 |
|
Total
|
$ | 16,000 |
Significant
Equipment
We do not
intend to purchase any significant equipment for the next twelve
months.
Results
of Operations for the Period from April 15, 2008 (Date of Inception) until April
30, 2008
We
generated no revenue and incurred no expenses for the period from April 15, 2008
(Date of Inception) until April 30, 2008. We, therefore, recorded no
net loss and no net profit for the period from April 15, 2008 (Date of
Inception) until April 30, 2008. We expect that our operating expenses will
increase as we undertake our plan of operations.
Liquidity
and Capital Resources
As of
April 30, 2008, we had total current assets of $5,500, consisting entirely of
Cash. We had no current liabilities as of April 30,
2008. Accordingly, we had working capital of $5,500 as of April 30,
2008.
Operating
activities used no cash and generated no cash for the period from April 15, 2008
(Date of Inception) until April 30, 2008. Financing Activities during the period
from April 15, 2008 (Date of Inception) until April 30, 2008, generated $5,500
in cash.
As
outlined above, we expect to spend between approximately $15,000 and $20,000 to
implement our business plan over the coming year. As of April 30,
2008, we had $5,500 in cash. The success of our business plan
therefore depends on raising funds through the current offering. If
the maximum offering is sold, we should have sufficient cash to carry out our
business plan for the next fiscal year. If substantially less than
the maximum offering is sold, however, our ability to execute on our immediate
business plan will be impaired. Our ability to operate beyond
the next 12 months is contingent upon us obtaining additional financing and/or
upon realizing significant revenues during the current fiscal year. We intend to
fund operations through debt and/or equity financing arrangements, which may be
insufficient to fund our capital expenditures, working capital, or other cash
requirements. We do not have any formal commitments or arrangements for the
sales of stock or the advancement or loan of funds at this time. There can be no
assurance that such additional financing will be available to us on acceptable
terms, or at all.
Going
Concern
As
discussed in the notes to our financial statements, we have no established
source of revenue. This has raised substantial doubt for our auditors
about our ability to continue as a going concern. Without realization
of additional capital, it would be unlikely for us to continue as a going
concern.
Our
activities to date have been supported by equity
financing. Management continues to seek funding from its
shareholders and other qualified investors to pursue its business
plan.
Off
Balance Sheet Arrangements
As of
April 30, 2008, there were no off balance sheet arrangements.
We have
had no changes in or disagreements with our accountants.
Our
executive officers and directors and their respective ages as of May 15, 2008
are as follows:
|
Name
|
Age
|
Position(s)
and Office(s) Held
|
|
John
Baumbauer
|
25
|
President,
Chief Executive Officer, Chief Financial Officer, and
Director
|
Set forth
below is a brief description of the background and business experience of each
of our current executive officers and directors.
John Baumbauer.
Mr.
Baumbauer is the creator of the HMT software and is our President, CEO, and sole
director. Mr. Baumbauer has worked in the computer programming field
for over 14 years and is proficient in the Visual Basic, Visual Basic .NET, C,
C++, PASCAL, and COBOL programming languages. He has several years of
experience using Visual Studio and Microsoft Visual Basic 6, developing SQL
Procedures and DTS packages, and building custom/to-order computer
systems. Mr. Baumbauer is also skilled with regard to networking,
software and hardware installation and troubleshooting, and installation,
troubleshooting, and usage of Windows 3.1/95/98/NT4/2000/XP/Vista. He
is also experienced with Microsoft Word 97/2000/2003/2007, Microsoft Access
97/2000/2003/2007, Microsoft Excel 97/2000/2003/2007, SQL 6.5, 7.0, 2000 and
2005, and MySQL. In addition to the HMT software, Mr. Baumbauer has
also designed a finance program, a rental program, a contract program, a mailing
list program, inventory systems, and a customer service program.
Directors
Our
bylaws authorize no less than one (1) director. We currently have one
Director.
Term
of Office
Our
Directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors
and hold office until removed by the board.
Significant
Employees
We have
no significant employees other than our officers and directors.
Compensation
Discussion and Analysis
The
Company presently not does have employment agreements with any of its named
executive officers and it has not established a system of executive compensation
or any fixed policies regarding compensation of executive
officers. Due to financial constraints typical of those faced by
a
development stage business, the company has not paid any cash and/or stock
compensation to its named executive officers
Our sole
executive officer holds substantial ownership in the Company and is motivated by
a strong entrepreneurial interest in developing our operations and potential
revenue base to the best of his ability. As our business and
operations expand and mature, we expect to develop a formal system of
compensation designed to attract, retain and motivate talented
executives.
Summary
Compensation Table
The table
below summarizes all compensation awarded to, earned by, or paid to each named
executive officer for our last two completed fiscal years for all services
rendered to us.
|
SUMMARY
COMPENSATION TABLE
|
|||||||||
|
Name
and
principal
position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|
John
Baumbauer, President, CEO, CFO, and director
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Narrative
Disclosure to the Summary Compensation Table
Our named
executive officer does not currently receive any compensation from the Company
for his service as an officer of the Company.
Outstanding
Equity Awards At Fiscal Year-end Table
The table
below summarizes all unexercised options, stock that has not vested, and equity
incentive plan awards for each named executive officer outstanding as of the end
of our last completed fiscal year.
|
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
|
|||||||||
|
OPTION
AWARDS
|
STOCK
AWARDS
|
||||||||
|
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or
Shares
of
Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Shares
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Shares
or
Other
Rights
That
Have
Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of
Unearned
Shares,
Shares
or
Other
Rights
That
Have
Not
Vested
(#)
|
|
John
Baumbauer
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Compensation
of Directors Table
The table
below summarizes all compensation paid to our directors for our last completed
fiscal year.
|
DIRECTOR
COMPENSATION
|
|||||||
|
Name
|
Fees
Earned or
Paid
in
Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Non-Qualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|
John
Baumbauer
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Narrative
Disclosure to the Director Compensation Table
Our
directors do not currently receive any compensation from the Company for their
service as members of the Board of Directors of the Company.
The
following table sets forth, as of May 15, 2008, the beneficial ownership of our
common stock by each executive officer and director, by each person known by us
to beneficially own more than 5% of the our common stock and by the executive
officers and directors as a group. Except as
otherwise
indicated, all shares are owned directly and the percentage shown is based on
5,500,000 shares of common stock issued and outstanding on May 15,
2008.
|
Title of class
|
Name
and address
of beneficial owner
|
Amount
of
beneficial ownership
|
Percent
of class
|
|
Common
|
John
Baumbauer
8600
Starboard Dr., #1143
Las
Vegas, Nevada 89117
|
5,500,000
|
100%
|
|
Common
|
Total
all executive officers and directors
|
5,500,000
|
100%
|
|
Common
|
5%
Shareholders
|
||
|
None
|
As used
in this table, "beneficial ownership" means the sole or shared power to vote, or
to direct the voting of, a security, or the sole or shared investment power with
respect to a security (i.e., the power to dispose of, or to direct the
disposition of, a security). In addition, for purposes of this table, a person
is deemed, as of any date, to have "beneficial ownership" of any security that
such person has the right to acquire within 60 days after such
date.
The
persons named above have full voting and investment power with respect to the
shares indicated. Under the rules of the Securities and Exchange
Commission, a person (or group of persons) is deemed to be a "beneficial owner"
of a security if he or she, directly or indirectly, has or shares the power to
vote or to direct the voting of such security, or the power to dispose of or to
direct the disposition of such security. Accordingly, more than one
person may be deemed to be a beneficial owner of the same security. A person is
also deemed to be a beneficial owner of any security, which that person has the
right to acquire within 60 days, such as options or warrants to purchase our
common stock.
Securities
Authorized for Issuance Under Equity Compensation Plans
Equity
Compensation Plans as of May 15, 2008
|
A
|
B
|
C
|
|
|
Plan
Category
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and right
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(A))
|
|
Equity
compensation plans approved by security
holders
(1)
|
-
|
-
|
-
|
|
Equity
compensation plans not approved by security holders
(1)
|
-
|
-
|
-
|
|
Total
|
-
|
-
|
-
|
(1)
To date, we have not adopted a stock
option plan and have not issued any options.
In
accordance with the provisions in our articles of incorporation, we will
indemnify an officer, director, or former officer or director, to the full
extent permitted by law.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 (the
"Act") may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by us of expenses incurred or paid by a
director, officer or controlling person of us in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
Except as
set forth below, none of our directors or executive officers, nor any proposed
nominee for election as a director, nor any person who beneficially owns,
directly or indirectly, shares carrying more than 5% of the voting rights
attached to all of our outstanding shares, nor any members of the immediate
family (including spouse, parents, children, siblings, and in-laws) of any of
the foregoing persons has any material interest, direct or indirect, in any
transaction since our incorporation or in any presently proposed transaction
which, in either case, has or will materially affect us:
1. On
April 24, 2008, we entered into a Software License Agreement with our President
and CEO, John Baumbauer. Under this agreement, Mr. Baumbauer has
granted us an exclusive, royalty-free license to make, use, sell, develop,
distribute, and/or sublicense for sale and/or distribution the “Hotel Management
Tool” software.
We have
filed a registration statement on form S-1 under the Securities Act of 1933 with
the Securities and Exchange Commission with respect to the shares of our common
stock offered through this prospectus. This prospectus is filed as a
part of that registration statement, but does not contain all of the information
contained in the registration statement and exhibits. Statements made
in the registration statement are summaries of the material terms of the
referenced contracts, agreements or documents of the company. We
refer you to our registration statement and each exhibit attached to it for a
more detailed description of matters involving the company, and the statements
we have made in this prospectus are qualified in their entirety by reference to
these additional materials. You may inspect the registration
statement, exhibits and schedules filed with the Securities and Exchange
Commission at the Commission's principal office in Washington,
D.C. Copies of all or any part of the registration statement may be
obtained from the Public Reference Section of the Securities and Exchange
Commission, 100 F. Street, N.E. Washington, D.C. 20549. Please Call
the Commission at 1-800-SEC-0330 for further information on the operation of the
public reference rooms. The Securities and Exchange Commission also
maintains a Web Site at http://www.sec.gov that contains reports, proxy
Statements and information regarding registrants that files electronically with
the Commission. Our registration statement and the referenced
exhibits can also be found on this site.
If we are
not required to provide an annual report to our security holders, we intend to
still voluntarily do so when otherwise due, and will attach audited financial
statements with such report.
Until
________________, all dealers that effect transactions in these securities
whether or not participating in this offering may be required to deliver a
prospectus. This is in addition to the dealers' obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
Part
II
Information
Not Required In the Prospectus
The
estimated costs of this offering are as follows:
|
Securities
and Exchange Commission registration fee
|
$ | 0.59 |
|
Federal
Taxes
|
$ | 0 |
|
State
Taxes and Fees
|
$ | 100 |
|
Listing
Fees
|
$ | 0 |
|
Printing
and Engraving Fees
|
$ | 250 |
|
Transfer
Agent Fees
|
$ | 1,000 |
|
Accounting
fees and expenses
|
$ | 1,500 |
|
Legal
fees and expenses
|
$ | 3,000 |
|
Total
|
$ | 8,100.59 |
All
amounts are estimates, other than the Commission's registration
fee.
We are
paying all expenses of the offering listed above. No portion of these
expenses will be borne by the selling shareholders. The selling
shareholders, however, will pay any other expenses incurred in selling their
common stock, including any brokerage commissions or costs of sale.
Our
officers and directors are indemnified as provided by the Nevada Revised
Statutes and our bylaws.
Under the
governing Nevada statutes, director immunity from liability to a company or its
shareholders for monetary liabilities applies automatically unless it is
specifically limited by a company's articles of incorporation. Our
articles of incorporation do not contain any limiting language regarding
director immunity from liability. Excepted from this immunity
are:
|
1.
|
a
willful failure to deal fairly with the company or its shareholders in
connection with a matter in which the director has a material conflict of
interest;
|
|
2.
|
a
violation of criminal law (unless the director had reasonable cause to
believe that his or her conduct was lawful or no reasonable cause to
believe that his or her conduct was
unlawful);
|
|
3.
|
a
transaction from which the director derived an improper personal profit;
and
|
|
4.
|
willful
misconduct.
|
Our
bylaws provide that we will indemnify our directors and officers to the fullest
extent not prohibited by Nevada law; provided, however, that we may modify the
extent of such indemnification by individual contracts with our directors and
officers; and, provided, further, that we shall not be required to indemnify any
director or officer in connection with any proceeding (or part thereof)
initiated by such person unless:
|
1.
|
such
indemnification is expressly required to be made by
law;
|
|
2.
|
the
proceeding was authorized by our Board of
Directors;
|
|
3.
|
such
indemnification is provided by us, in our sole discretion, pursuant to the
powers vested us under Nevada law;
or;
|
|
4.
|
such
indemnification is required to be made pursuant to the
bylaws.
|
Our
bylaws provide that we will advance to any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or officer, of the company, or
is or was serving at the request of the company as a director or executive
officer of another company, partnership, joint venture, trust or other
enterprise, prior to the final disposition of the proceeding, promptly following
request therefore, all expenses incurred by any
director
or officer in connection with such proceeding upon receipt of an undertaking by
or on behalf of such person to repay said amounts if it should be determined
ultimately that such person is not entitled to be indemnified under our bylaws
or otherwise.
Our
bylaws provide that no advance shall be made by us to an officer of the company,
except by reason of the fact that such officer is or was a director of the
company in which event this paragraph shall not apply, in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, if a
determination is reasonably and promptly made: (a) by the board of directors by
a majority vote of a quorum consisting of directors who were not parties to the
proceeding, or (b) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, that the facts known to the decision-making party at the time
such determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the company.
We closed
an issue of 5,500,000 shares of common stock on April 24, 2008 to John
Baumbauer, our president, CEO, CFO, and sole director. Mr. Baumbauer acquired
these shares in exchange for $5,500 at a price of $0.001 per share. These shares
were issued pursuant to Section 4(2) of the Securities Act of 1933 and are
restricted shares as defined in the Securities Act. We did not engage
in any general solicitation or advertising.
The
undersigned registrant hereby undertakes:
1. To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(a) to
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(b)
to reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the registration
statement; and Notwithstanding the forgoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation From the low or high end of
the estimated maximum offering range may be reflected in the form of prospects
filed with the Commission pursuant to
Rule 424(b)
if, in
the aggregate, the changes in the volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.;
and
(c)
to include any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material
change to such information in the registration statement.
2. That,
for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
3. To
remove from registration by means of a post-effective amendment any of the
securities being registered hereby which remain unsold at the termination of the
offering.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to our directors, officers and controlling persons pursuant to the
provisions above, or otherwise, we been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933, and is, therefore,
unenforceable.
In the
event that a claim for indemnification against such liabilities, other than the
payment by us of expenses incurred or paid by one of our directors, officers, or
controlling persons in the successful
defense
of any action, suit or proceeding, is asserted by one of our directors,
officers, or controlling persons in connection with the securities being
registered, we will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification is against public policy as expressed
in the Securities Act of 1933, and we will be governed by the final adjudication
of such issue.
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and authorized this registration statement
to be signed on its behalf by the undersigned, in Las Vegas, Nevada, on May 29,
2008.
| HOTEL MANAGEMENT SYSTEMS, INC. | |
| By: /s/ John Baumbauer | |
|
John
Baumbauer
|
|
|
Chief
Executive Officer Chief Financial Officer, Principal Accounting Officer,
and
sole Director
|
