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

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

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

For the transition period from ______ to______.

EWRX INTERNET SYSTEMS, INC.
(Exact name of registrant as specified in the Charter)

NEVADA 000-27195 98-0117139
(State or other jurisdiction of (Commission File No.) (IRS Employee Identification No.)
incorporation or organization)    

4950 Yonge St. Suite 910, Toronto
Ontario, Canada M2N 6K1
(Address of Principal Executive Offices) (Zip Code)

(416) 298-9606
(Registrants Telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web
site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes [   ]    No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer or a smaller reporting company filer. See definition of “accelerated filer” and “large accelerated filer” in Rule
12b-2 of the Exchange Act. (Check one):

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

(Do not check if a smaller reporting company)

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

The number of shares outstanding of the Registrant’s common stock as of November 12, 2009 was 100,000,000
shares of common stock.


EWRX INTERNET SYSTEMS, INC.

FORM 10-Q

September 30, 2009

TABLE OF CONTENTS

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


PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements


 

 

 

 

 

 

 

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

FINANCIAL STATEMENTS

SEPTEMBER 30, 2009


EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

 

 

CONTENTS

 

 

  Page
   
CONDENSED BALANCE SHEETS AS OF SEPTEMBER 30, 2009 (UNAUDITED) AND AS OF DECEMBER 31, 2008 (AUDITED) 1
   
CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY 1, 2002 (RE-ENTERING THE DEVELOPMENT STAGE) TO SEPTEMBER 30, 2009 (UNAUDITED) 2
   
CONDENSED STATEMENTS OF STOCKHOLDERS' DEFICIENCY FOR THE PERIOD JANUARY 1, 2002 (RE-ENTERING THE DEVELOPMENT STAGE)THROUGH TO SEPTEMBER 30, 2009 (UNAUDITED) 3
   
CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY 1, 2002 (RE-ENTERING THE DEVELOPMENT STAGE) TO SEPTEMBER 30, 2009 (UNAUDITED) 4
   
NOTES TO CONDENSED FINANCIAL STATEMENTS 5 - 10


EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Condensed Balance Sheets

    September 30     December 31  
    2009     2008  
    (Unaudited)        
                                                                                                                         ASSETS            
             
Current Assets            
Cash $  5,734   $  2,700  
Total Current Assets   5,734     2,700  
             
Total Assets $  5,734   $  2,700  
             
             
LIABILITIES AND STOCKHOLDERS' DEFICIENCY   
             
Current Liabilities            
             
Accounts payable $  98,954   $  98,954  
Accrued expenses   17,788     20,318  
Note payable - related parties   8,170     8,170  
Advances payable - director   178,986     157,133  
Total Current Liabilities   303,898     284,575  
             
Commitments and Contingencies   -     -  
             
             
Stockholders' Deficiency            
             
Preferred stock, $0.01 par value, 500,000 shares authorized,            
none issued and outstanding   -     -  
             
Common stock, $0.001 par value, 100,000,000 shares            
authorized, shares issued and outstanding   100,000     100,000  
Additional paid - in capital   7,450,806     7,375,017  
Accumulative deficit   (8,496,144 )   (8,496,144 )
Accumulated other comprehensive loss   (893 )   -  
Earnings accumulated during the development stage   648,067     739,252  
             
Total Stockholders' Deficiency   (298,164 )   (281,875 )
             
Total Liabilities and Stockholders' Deficiency $  5,734   $  2,700  

1

(See accompanying notes to condensed financial statements)


EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Condensed Statements of Operations

"UNAUDITED"

                            For the Period    
                            from  
                            (Re-entering the    
                            January 1, 2002    
                            Development    
    For the Three Months Ended     For the Nine Months Ended     Stage)  
    September 30     September 30     to September 30  
    2009     2008     2009     2008     2009  
                               
Operating Expenses                              
                               
Entertainment $  -   $ 139   $  -   $ 715   $ 1,849  
In kind contribution                              
services   18,000     15,000     54,000     45,000     198,000  
Management fees   -     -     -     -     15,000  
Office and general   1,161     943     3,301     3,583     36,304  
Professional fees   2,521     5,584     12,788     17,784     201,428  
Telephone   94     64     312     362     1,214  
Travel   -     -     -     30     1,540  
Salary and Wages   -     -     -     -     28,000  
Total Operating                              
Expenses   21,776     21,730     70,401     67,474     483,335  
                               
Net Loss from                              
     Operations   (21,776 )   (21,730 )   (70,401 )   (67,474 )   (483,335 )
                               
Other (Expenses) Income                              
Foreign exchange                              
               (loss) gain   778     (572 )   1,022     (51 )   (6,935 )
                               
Interest expense   (7,773 )   (6,052 )   (21,806 )   (17,684 )   (101,219 )
Forgiveness of debt   -     -     -     -     1,239,556  
Total Other (Expenses)                              
Income   (6,995 )   (6,624 )   (20,784 )   (17,735 )   1,131,402  
                               
Net (loss) income $ (28,771 ) $ (28,354 ) $  (91,185 ) $  (85,209 ) $ 648,067  
Net (loss) income per                              
     Share - Basic and                              
     Diluted $  -   $ -   $  -   $ -        
                               
Weighted average number of shares outstanding                          
     during the period - Basic and Diluted   100,000,000     100,000,000     100,000,000     100,000,000        

2

(See accompanying notes to condensed financial statements)


EWRX INTERNET SYSTEMS INC
(A Development Stage Company)
Statements of Stockholders' Deficiency
Years Ended September 30, 2009 and 2006, and the
Period from Re-entering the Development Stage
(January 1, 2001) Through to September 30, 2009

                            Earnings              
                            Accumulated     Accumulated        
                Additional           During the     Other     Total  
    Number of     Capital     Paid-in     Accumulated     Development     Comprehensive     Stockholders'  
    Shares     Stock     Capital     Deficit     Stage     Loss     Deficiency  
                                           
Balance, December 31, 2001   20,704,140   $  20,704   $  6,967,848   $ (8,496,144 ) $  -   $  -   $  (1,507,592 )
Stock issued on                                          
   settlement of debt   1,276,227     1,276     197,872     -     -     -     199,148  
Stock issued on                                       -  
   Flashback purchase   3,700,000     3,700     -     -     -     -     3,700  
Stock issued on                                       -  
 private placement   445,900     446     44,144     -     -     -     44,590  
Finance fee   -     -     (9,590 )   -     -     -     (9,590 )
Net loss   -     -     -     -     (71,799 )   -     (71,799 )
Balance, December 31, 2002   26,126,267     26,126     7,200,274     (8,496,144 )   (71,799 )   -     (1,341,543 )
Stock issued on                                       -  
   settlement of debt   40,000,000     40,000     -     -     -     -     40,000  
Net loss   -     -     -     -     (19,342 )   -     (19,342 )
Balance, December 31, 2003   66,126,267     66,126     7,200,274     (8,496,144 )   (91,141 )   -     (1,320,885 )
Stock issued on                                       -  
   settlement of debt   33,873,733     33,874     (12,558 )   -     -     -     21,316  
Net income   -     -     -     -     1,030,812     -     1,030,812  
Balance, December 31, 2004   100,000,000     100,000     7,187,716     (8,496,144 )   939,671     -     (268,757 )
Net loss   -     -     -     -     (19,163 )   -     (19,163 )
Balance, December 31, 2005   100,000,000     100,000     7,187,716     (8,496,144 )   920,508     -     (287,920 )
Net income   -     -     -     -     62,506     -     62,506  
Balance, December 31, 2006   100,000,000     100,000     7,187,716     (8,496,144 )   983,014     -     (225,414 )
In kind contribution - interest   -     -     19,184     -     -     -     19,184  
In kind contribution - services   -     -     72,000     -     -     -     72,000  
Net loss   -     -     -     -     (112,224 )   -     (112,224 )
Balance, December 31, 2007   100,000,000     100,000     7,278,900     (8,496,144 )   870,790     -     (246,454 )
In kind contribution - interest   -     -     24,117     -     -     -     24,117  
In kind contribution - services   -     -     72,000     -     -     -     72,000  
Net loss   -     -     -     -     (131,538 )   -     (131,538 )
Balance, December 31, 2008   100,000,000     100,000     7,375,017     (8,496,144 )   739,252     -     (281,875 )
Net loss   -     -     -     -     (91,185 )   -     (91,185 )
Foreign currency translation adjustment   -     -     -     -     -     (893 )   (893 )
Total comprehensive loss                                       (92,078 )
                                           
In kind contribution - interest   -     -     21,789     -     -     -     21,789  
In kind contribution - services   -     -     54,000     -     -     -     54,000  
Balance, September 30, 2009 (UNAUDITED   100,000,000   $  100,000   $  7,450,806   $ (8,496,144 ) $  648,067   $  (893 ) $  (298,164 )

3

(See accompanying notes to condensed financial statements)


EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Condensed Statements of Cash Flows

"UNAUDITED"

                Period from  
                January 1, 2002,    
                (Re-entering the    
                Development  
    For the Nine Months Ended     Stage)  
    September 30     to September 30    
    2009     2008     2009  
                   
Cash Flows from Operating Activities                  
       Net (loss) income $  (91,185 ) $ (85,209 ) $  648,067  
       Adjustments to reconcile net income/loss to net                  
               cash used in operations                  
             Non cash item -Expenses recovered   -     -     (1,142,152 )
             In kind contribution - services   54,000     45,000     198,000  
             Imputed interest on loans   21,789     17,658     65,090  
       Changes in operating assets and liabilities                  
               Increase/ (Decrease) in accounts payable   -     865     9,315  
               Increase/ (Decrease) in accrued liabilities   (2,530 )   463     17,788  
               Increase/ (Decrease) in prepaid expenses   -     (723 )   -  
Net Cash provided by (Used in) Operating                  
       Activities   (17,926 )   (21,946 )   (203,892 )
                   
Cash Flows from Financing Activities                  
       Proceeds from issuance of common stock   -     -     38,700  
       Loans from related parties   -     -     66,462  
       Repayment of loans from directors   -     (288 )   (780 )
       Repayment of loans from related parties   -     (4,865 )   (60,092 )
       Advances from directors   21,853     26,710     164,429  
Net Cash Provided by Financing Activities   21,853     21,557     208,719  
                   
Effect of exchange rate changes on cash and                  
               cash equivalents   (893 )   -     907  
                   
Net increase (decrease) in cash   3,034     (389 )   5,734  
Cash, beginning of period/year   2,700     3,268     -  
                   
Cash, end of period/year $  5,734   $    2,879   $  5,734  
                   
 Supplemental disclosure of cash flow information:                  
                   
           Cash paid for interest $  -   $    -   $  36,476  
           Cash paid for taxes $  -   $  -   $  -  

4

(See accompanying notes to condensed financial statements)


EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
September 30, 2009
(UNAUDITED)

1.

Summary of Significant Accounting Policies and Organization

     
(A)

Basis of Presentation and Organization

     

EWRX Internet Systems, Inc. (the Company) was incorporated on June 25, 1997 in the State of Nevada. The Company re-entered the development stage on January 1, 2002. The company intends to be in the business of development and marketing of computer software.

     

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.

     

It is management's opinion, however that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statements presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.

     

Activities since re-entering the development stage have been comprised mainly of administrative matters.

     
(B)

Cash and Cash Equivalents

     

For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.

     
(C)

Use of Estimates

     

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenue and expenses during the reported period. Actual results could differ from those estimates.

     
(D)

Revenue Recognition

     

The Company recognizes revenue on arrangements in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification No. 605, Revenue Recognition. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is assured. The company had no revenue for the nine months ended September 30, 2009 and 2008.

5


EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
September 30, 2009
(UNAUDITED)

1.

Summary of Significant Accounting Policies and Organization (continued)

     
(E)

Fair Value of Financial Instruments

     

The carrying amounts of the company's financial instruments including accounts payable and accrued liabilities approximate their fair value due to the relatively short period to maturity for these instruments.

     
(F)

Income / (Loss) Per Share

     

Basic and diluted net loss per common share is computed based upon the weighted average common shares outstanding as defined by FASB Accounting Standards Codification No. 260, Earnings per Share. As of September 30, 2009 and 2008, respectively, there were no common share equivalents outstanding.

     
(G)

Income Taxes

     

The Company accounts for income taxes under FASB Accounting Standards Codification No. 740, Income Taxes. Under FASB Accounting Standards Codification No. 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB Accounting Standards Codification No. 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

     
(H)

Business Segments

     

The Company operates in one segment and therefore segment information is not presented.

     
(I)

Recent Accounting Pronouncements

     

In May 2009, the FASB issued FASB Accounting Standards Codification No. 855, Subsequent Events. FASB Accounting Standards Codification No. 855 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. FASB Accounting Standards Codification No. 855 sets forth (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) he circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. FASB Accounting Standards Codification No. 855 is effective for interim or annual financial periods ending after September 15, 2009. The adoption of this FASB Accounting Standards Codification No. 855 did not have a material effect on the Company’s financial statements.

5


EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
September 30, 2009
(UNAUDITED)

1.

Summary of Significant Accounting Policies and Organization (continued)


 

In June 2009, the FASB issued FASB Accounting Standards Codification No. 860, Transfers and Servicing. FASB Accounting Standards Codification No. 860 improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. FASB Accounting Standards Codification No. 860 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption that FASB Accounting Standards Codification No. 860 will have on its financial statements.

     
 

In June 2009, the FASB issued FASB Accounting Standards Codification No. 810, Consolidation. FASB Accounting Standards Codification No. 810 improves financial reporting by enterprises involved with variable interest entities. FASB Accounting Standards Codification No. 810 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption of FASB Accounting Standards Codification No. 810 will have on its financial statements.

     

In June 2009, the FASB issued FASB Accounting Standards Codification No. 105, Generally Accepted Accounting Principles. The FASB Accounting Standards Codification (“Codification”) will be the single source of authoritative nongovernmental U.S. generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. FASB Accounting Standards Codification No. 105 is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in FASB Accounting Standards Codification No. 105. All other accounting literature not included in the Codification is nonauthoritative. The Codification is effective for us in the third quarter of 2009. The adoption of this guidance only affected how specific references to GAAP literature have been disclosed in the notes to the Company's financial statements; it did not result in any impact on the Company's results of operations, financial condition, or cash flows.

     
  (J)

Reclassification

     
 

Certain amounts from prior periods have been reclassified to conform to the current year presentation.

6


EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
September 30, 2009
(UNAUDITED)

1.

Summary of Significant Accounting Policies and Organization (continued)

     
(K)

Comprehensive Income

     

FASB Accounting Standards Codification No. 220, Comprehensive Income establishes rules for reporting and displaying of comprehensive income and its components. Comprehensive income is the sum of the net loss as reported in the statements of operations and other comprehensive income transactions. Other comprehensive income transactions that currently apply to the Company result from changes in exchange rates used in translating the amount owed to a related party. Comprehensive loss as of September 30, 2009 and 2008 is not shown net of taxes because the Company's deferred tax asset has been fully offset by a valuation allowance.

     

Comprehensive loss consisted of the following for the nine months ended September 30, 2009 and 2008:


      Nine Months Ended September 30,  
      2009     2008  
               
  Net loss $  (91,185 ) $  (28,354 )
                     Other comprehensive loss:            
                         Foreign currency translation adjustment   (893 )   667  
                     Comprehensive loss   (92,078 )   (27,687 )

2.

Going Concern

   

As reflected in the accompanying audited financial statements, the Company is in the development stage with no operations, a net loss of $91,185 for the nine months ended September 30, 2009, a stockholder's deficiency and a working capital deficiency of $298,164, and cash used in operations from re-entering the development stage of $203,892. This raises substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern has been, and remains, dependent on advances from its stockholders and the Company's ability to raise additional capital. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

   
3.

Related Party Transactions

   

Advances from director represent an advance granted by Jessica Q. Wang. Ms. Wang pays for certain administrative expenses and is reimbursed by the Company. These advances have no fixed terms or repayment, are unsecured, and bear no interest. During the first nine months of 2009, Ms.Wang has advanced the company $21,853 for purposes of paying operating expenses on behalf of the Company.

   

During the nine months ended September 30, 2009 and 2008, the company imputed interest in the advance from director of $20,938 and $-, respectively. As of September 30, 2009, the Company has loans from Ms. Wang with an outstanding balance of $178,986.

8


EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
September 30, 2009
(UNAUDITED)

3.

Related Party Transactions (continued)

   

As of September 30, 2009, the Company has loans from Navitax Technology, Inc., a company which is controlled by one of the stockholders of the Company, with an outstanding balance of $8,170. These loans have no fixed terms or repayment, are unsecured, and bear no interest.

   

During the nine months ended September 30, 2009 and 2008 the Company imputed interest on the note payable-related party of $851 and $-, respectively.

   

On the above two transactions, the Company imputed interest at a rate of 16.67% which is comparable to past borrowing.

   
4.

Stockholders' Deficiency


  (A)

Common Stock Issued for Purchase of Software

     
 

During 2002, the Company issued 3,700,000 shares of common stock in association with the purchase of computer software. In association with the purchase of the software, the Company has agreed to pay the seller a royalty fee of 7% of gross sales. As of September 30, 2009, the Company has not made any sales of the software that would result in the payment of a royalty fee.

     
  (B)

Common Stock Issued for Debt

     
 

During 2002, the Company issued 1,276,227 shares of common stock in order to settle debt amounting to $199,148. ($0.1560 per share)

     
 

During 2003, the Company issued 40,000,000 shares of common stock in order to settle debt amounting to $40,000. ($0.0010 per share)

     
 

During 2004, the Company issued 33,873,733 shares of common stock in order to settle debt amounting to $21,316. ($0.0006 per share)

     
  (C)

Common Stock Issued for Cash

     
 

During 2002, the company issued 445,900 shares of common stock for $44,590 in conjunction with a private placement offer less a finance fee of $9,590 for a net cash value of $35,000. ($0.0785 per share)

     
  (D)

In-kind Contribution

     
 

During 2007, the Company recorded additional paid-in capital of $72,000 for the fair value of services provided to the Company by its president.

     
 

During 2007, the Company recorded additional paid-in capital of $19,184 for the imputed interest on loans.

     
 

During 2008, the Company recorded additional paid-in capital of $72,000 for the fair value of services provided to the Company by its president.

9


EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
September 30, 2009
(UNAUDITED)

4.

Stockholders' Deficiency (continued)


 

During 2008, the Company recorded additional paid-in capital of $24,117 for the imputed interest on loans.

     
 

During 2009, the Company recorded additional paid-in capital of $54,000 for the fair value of services provided to the Company by its president.

     
 

During 2009, the Company recorded additional paid-in capital of $21,789 for the imputed interest on loans.

     
  (E)

Amendment to Articles of Incorporation

     
 

During 1999, the Company amended its Articles of Incorporation to change the name of the corporation and provide for an increase in its authorized share capital. The name of the Company was changed from Europa Resources, Inc. to EWRX Internet Systems, Inc. The authorized capital stock increased to 100,000,000 common shares at a par value of $0.001 per share.


5.

Subsequent Events

   

In October of 2009, the Company received an advance from their director in the amount of $1,264.

   

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through November 5, 2009, the date the financial statements were available to be issued.

10


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

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Form 10-Q. The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

(a) Plan of Operation

Over the next 12 to 15 months, the Company plans to develop the marketing of their software “Instant Recall” to the OEM markets in North America. The Company has developed significant interest in its product to date and intends to capitalize on that interest, while exploring new and expanded opportunities. The Company has also developed substantial business contacts and relationships in China. Several complimentary products and opportunities exist in this market that would be of interest to EWRX in its pursuit of developing an expanded line of software products to round out its product line.

Although, the Company will be in need of financing to carry out its plan of operation, it intends to raise the capital needed to accomplish its business plan from interested parties, management and existing shareholders. While raising capital is always subject to many uncertainties, we believe that, with the demand anticipated for our product, financing will be available to meet our requirements. It is not anticipated that we will have to invest any further significant funds, or support any substantial funding on research or development for Instant Recall. The Company operations do not require manufacturing of any kind and therefore we do not anticipate any need to purchase equipment of any significance.

Our need for any change in staffing is not anticipated for the immediate future. We will however require some paid and full time staff as the marketing and sales efforts begin to take shape. It is expected that clerical and office personnel will be required after the fourth quarter of 2009. We will, as required, employ a senior sales person to respond to clients requirements for service. Other sales and marketing personnel will be acquired as the sales dictate.

(b) Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The Company has been in a state of reorganization and development over the past two years. We believe that this period was important to the business operations because it provided time for consolidation and integration into the market. The Company continues to experience financial deficiencies that have been a source of constant concern over this and previous periods in its operations. As a result the Company has been unable to reach some of the goals that had been set for its development.

The Company believes it is now in a position to begin to capitalize on its previous experience. We are looking forward to a very productive and stimulating period of development. Not only do we have great expectations for our product Instant Recall, but also for the prospects of additional software and other business developments from our contacts in Hong Kong and China. These relationships will also help the Company address its financial goals and objectives, both from an earnings standpoint as well as from an investment standpoint.

The Company has over the last several months, successfully established relationships as anticipated above) with Chinese Business leaders in major corporations. These contacts have product and technology of interest to EWRX. In addition, they may also have the financial ability to assist EWRX in its requirements.


It is anticipated that we will be in a position to determine the extent to which these developments will affect EWRX by the early part of 2010.

We are looking forward to these discussions and the business relationships that they represent, both from a financial as well as a technological standpoint.

The marketplace is in a state of flux, and, continues to require constant evaluation in terms of opportunity and reward because needs change and competition for the opportunity is always present. Over the last two years, the Company has been consolidating its business operations, developing its software and preparing for the opportunities that it believes are now present. The global markets are expanding at an unprecedented pace and the Company believes that it is in the right place at the right time to take advantage of these conditions. Of course there are always uncertainties and unexpected developments to contend with, and there can be no assurance that the Company will be able to overcome all of the circumstances confronting it. The Company will, however, do everything possible to meet these challenges and realize its goals. EWRX financial requirements over the next fiscal year are dependent, to a major extent, on the speed at which development occurs in the emerging markets. We will continue to monitor this situation closely. As our situation matures, the requirements will become clearer.

REASON FOR MANAGEMENT PROCEEDING WITH ITS EFFORTS TO REGISTER UNDER THE EXCHANGE ACT AND ESTIMATE OF COST OF COMPLIANCE

The Management and Board of Directors of EWRX desires to register EWRX under the Exchange act because they intend to use this status to attract certain business enterprises and for potential investment and capital raising purposes. Unfortunately, EWRX has been hampered in its attempt to become compliant due to the circumstances that the Company has found itself in over the past 18 months.

EWRX estimates that it will incur approximately $35,000 to $50,000 per annum to remain compliant. Most recently, these costs have been borne by the principles and Management will continue to do so until such time as the Company is in a position to carry that responsibility through sales of its products and services or funding from investment.

Liquidity and Capital Resources

Our primary source of liquidity as of September 30, 2009 is our cash on hand. Our cash on hand as of September 30, 2009 was $5,734. Our current assets totaled $5,734 on September 30, 2009. Our current liabilities were $303,898 on September 30, 2009.

We will continue to evaluate alternative sources of capital to meet our requirements, including other asset or debt financing, issuing equity securities and entering into financing arrangements. There can be no assurance, however, that any of the contemplated financing arrangements described herein will be available and, if available, can be obtained on terms favorable to us.

We currently do not have enough cash to satisfy our minimum cash requirements for the next twelve months. We are going to rely on loans from our officers and directors to meet the short term cash requirements. However, the present state of our liquidity and capital resources raises substantial doubt about our ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.

Critical Accounting Policies

The Company’s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an


impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

While all these significant accounting policies impact its financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.

Recent Accounting Pronouncements

In May 2009, the FASB issued FASB Accounting Standards Codification No. 855, Subsequent Events. FASB Accounting Standards Codification No. 855 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. FASB Accounting Standards Codification No. 855 sets forth (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) he circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. FASB Accounting Standards Codification No. 855 is effective for interim or annual financial periods ending after September 15, 2009. The adoption of this FASB Accounting Standards Codification No. 855 did not have a material effect on the Company’s financial statements.

In June 2009, the FASB issued FASB Accounting Standards Codification No. 860, Transfers and Servicing. FASB Accounting Standards Codification No. 860 improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. FASB Accounting Standards Codification No. 860 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption that FASB Accounting Standards Codification No. 860 will have on its financial statements.

In June 2009, the FASB issued FASB Accounting Standards Codification No. 810, Consolidation. FASB Accounting Standards Codification No. 810 improves financial reporting by enterprises involved with variable interest entities. FASB Accounting Standards Codification No. 810 is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. The Company is evaluating the impact the adoption of FASB Accounting Standards Codification No. 810 will have on its financial statements.

In June 2009, the FASB issued FASB Accounting Standards Codification No. 105, Generally Accepted Accounting Principles. The FASB Accounting Standards Codification (“Codification”) will be the single source of authoritative nongovernmental U.S. generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. FASB Accounting Standards Codification No. 105 is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in FASB Accounting Standards Codification No. 105. All other accounting literature not included in the Codification is nonauthoritative. The Codification is effective for us in the third quarter of 2009. The adoption of this guidance only affected how specific references to GAAP literature have been disclosed in the notes to the Company's financial statements; it did not result in any impact on the Company's results of operations, financial condition, or cash flows.


Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Item 3. Quantitative and Qualitative Disclosures about Market Risks

Not applicable because we are a smaller reporting company.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”),of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There have been no changes in the Company’s internal control over financial reporting during the latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.


PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors

Not applicable because we are a smaller reporting company.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

31.1

Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer and Chief Financial Officer

   
32.1

Section 1350 Certification of Chief Executive Officer and Chief Financial Officer



SIGNATURES

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

  EWRX INTERNET SYSTEMS, INC.
     
     
     
Date: November 13, 2009 By: /s/ Jessica Q. Wang
    Jessica Q. Wang
    Chief Executive Officer and
    Principal Accounting Officer