FLUOROPHARMA MEDICAL, INC. - FORM 10-Q

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EX-32 - FLUOROPHARMA MEDICAL, INC.	cewm_ex32.htm
EX-31 - FLUOROPHARMA MEDICAL, INC.	cewm_ex31.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: September 30, 2009

Or

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

For the transition period from ____________ to _____________

Commission File Number: 333-147193

COMMERICAL E-WASTE MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)

Nevada		20-8325616
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

8950 E. Raintree Drive, Suite 200, Scottsdale, AZ		85260
(Address of principal executive offices)		(Zip Code)

(863) 673-8353
(Registrant's telephone number, including area code)


___________
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

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

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

Common Stock, $0.001 par value	11,000,000 shares
(Class)	(Outstanding as at November 16, 2009)

COMMERCIAL E-WASTE MANAGEMENT, INC.

Table of Contents

	Page

PART I – FINANCIAL INFORMATION	3
Unaudited Financial Statements	3
Condensed Balance Sheets	4
Condensed Statements of Operations	5
Condensed Statements of Cash Flows	6
Notes to Condensed Financial Statements	7
Management's Discussion and Analysis of Financial Condition and Results of Operation	10
Controls and Procedures	13
PART II – OTHER INFORMATION	15
Unregistered Sales of Equity Securities	15
Defaults Upon Senior Securities	15
Exhibits and Reports on Form 8-K	16
SIGNATURES	17

PART I – FINANCIAL INFORMATION

Unaudited Financial Statements

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission ("Commission"). While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes thereto, which are included in the Company's Annual Report on Form 10-K, filed with the Commission on March 30, 2009.

Commercial E-Waste Management, Inc.

Condensed Balance Sheets

	September 30,			December 31,
	2009			2008
	(unaudited)			(audited)

Current assets:
Cash	$	111		$	127
Inventory		-			4,449
Total current assets		111			4,576

Fixed assets, net of accumulated depreciation of $2,829
And $2,007 as of 9/30/09 and 12/31/08, respectively		2,648			3,470

Total assets	$	2,759		$	8,046

Liabilities and Stockholders’ (Deficit)

Current liabilities:
Accounts payable	$	2,496		$	2,496
Accrued interest		6,983			5,020
Notes payable		34,298			26,700
Sales tax payable		2,906			2,906
Total current liabilities		46,683			37,122

Total liabilities		46,683			37,122

Stockholders’ equity
Preferred stock, $0.001 par value, 100,000,000 shares
authorized, no shares issued and outstanding		-			-
Common stock, $0.001 par value, 100,000,000 shares
authorized, 11,000,000 shares issued and outstanding		11,000			11,000
Additional paid-in capital		49,675			49,375
(Deficit) accumulated during development stage		(104,599	)		(89,451	)
Total stockholders’ (deficit)		(43,924	)		(29,076	)

	$	2,759		$	8,046

The accompanying notes are an integral part of these financial statements.

Commercial E-Waste Management, Inc.

Condensed Statements of Operations

	For the three months ended						For the nine months ended
	September 30,						September 30,
	2009			2008			2009			2008


Revenue, net of returns and allowances	$	-		$	37,824		$	-		$	165,910
Cost of sales		-			4,918			-			16,804

Gross profit		-			32,906			-			149,106

Expenses:
Commissions		-			600			-			8,692
Commissions –related party		-			-			-			2,430
Depreciation expense		274			274			822			822
Executive compensation		-			-			120			-
General and administrative expenses		475			30,809			7,694			128,746
General and administrative expenses – related party		-			6,173			-			18,833
Total expenses		749			37,856			8,636			159,523

Other income and (expense):
Interest income		-			1			-			1
Impairment expense		-			-			(4,449	)		-
Interest expense		(662	)		(662	)		(1,963	)		(1,971	)
Total expenses		(662	)		(661	)		(6,421	)		(1,970	)

(Loss) before provision for income taxes		(1,411	)		(5,611	)		(15,048	)		(12,387	)

Provision for income taxes		-			-			(100	)		(100	)

Net income (loss)	$	(1,411	)	$	(5,611	)	$	(15,148	)	$	(12,487	)

Weighted average number of
common shares outstanding – basic and fully diluted		11,000,000			11,000,000			11,000,000			11,000,000

Net (loss) per share – basic and fully diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

The accompanying notes are an integral part of these financial statements.

Commercial E-Waste Management, Inc.

Condensed Statements of Cash Flows

	For the nine months ended
	September 30,
	2009			2008
Cash flows from operating activities
Net (loss)	$	(15,148	)	$	(12,487	)
Adjustments to reconcile net (loss) to
net cash (used) by operating activities:
Depreciation		822			822
Changes in operating assets and liabilities:
Decrease in accounts receivable		-			2,937
Increase in allowance for doubtful accounts		-			158
Decrease in inventory		4,449			5,278
(Decrease) in accounts payable		-			(2,872	)
Increase in accrued interest		1,963			1,970
Increase in sales tax payable		-			1,791
Net cash (used) by operating activities		(7,914	)		(2,403	)

Cash flows from investing activities
Purchase of fixed assets		-			-
Net cash provided by investing activities		-			-

Cash flows from financing activities
Donated capital		300			-
Proceeds from notes payable		7,598			1,500
Proceeds from notes payable – related party		-			(5,300	)
Net cash (used) provided by financing activities		7,898			(3,800	)

Net (decrease) in cash		(16	)		(6,203	)
Cash – beginning		127			6,556
Cash – ending	$	111		$	353

Supplemental disclosures:
Interest paid	$	-		$	-
Income taxes paid	$	100		$	100

The accompanying notes are an integral part of these financial statements.

Commercial E-Waste Management, Inc.

Notes to Condensed Financial Statements

Note 1 – Basis of presentation

The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these condensed interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2008 and notes thereto included in the Company's annual report on Form 10-K. The Company follows the same accounting policies in the preparation of interim reports.

Results of operations for the interim periods are not indicative of annual results.

Note 2 – History and organization of the company

The Company was organized January 25, 2007 (Date of Inception) under the laws of the State of Nevada, as Commercial E-Waste Management, Inc. The Company is authorized to issue up to 100,000,000 shares of its common stock with a par value of $0.001 per share and up to 100,000,000 shares of its preferred stock with a par value of $0.001 per share.

The business of the Company is to collect, refurbish, resell and/or recycle information technology assets and end of life equipment.

Note 3 - Going concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred a net loss of ($104,599) for the period from January 25, 2007 (inception) to September 30, 2009. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities.

The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty.

Commercial E-Waste Management, Inc.

Notes to Condensed Financial Statements

Note 4 – Fixed assets

Fixed assets as of September 30, 2009 and 2008, consisted of the following:

	September 30,
	2009			2008
Computer equipment	$	900		$	900
Furniture, fixtures and equipment		4,577			4,577

Accumulated depreciation		(2,829	)		(1,734	)
	$	2,648		$	3,743

During the three month periods ended September 30, 2009 and 2008, the Company recorded depreciation expense of $274 and $274, respectively.

Note 5 – Impairment of Inventory

During the nine months ended September 30, 2009, management conducted a thorough review of all existing inventory expected to be relocated to the Company’s Arizona offices. As a result, a provision for inventory losses of $4,449 was charged against operations to write down inventory to its net realizable value. This was based on the Company’s best estimates of product sales prices and customer demand patterns, and its plans to transition its products. It is at least reasonably possible that the estimates used by the Company to determine its provision for inventory losses will materially different from the actual amounts or results. These differences could result in materially higher than expected inventory provisions, which could have a materially adverse effect on the Company’s results of operations and financial condition in the near term.

Note 6 – Stockholders’ equity

The Company is authorized to issue 100,000,000 shares of its $0.001 par value common stock and 100,000,000 shares of its $.001 par value preferred stock.

On January 25, 2007 the Company issued 10,000,000 shares of its $0.001 par value common stock as founders’ shares to an officer and director in exchange for services rendered valued at $10,000.

On February 1, 2007, an officer and director of the Company donated cash in the amount of $60. The entire amount was donated, is not expected to be repaid and is considered to be additional paid-in capital.

Through September 30, 2007, the Company completed a private placement pursuant to Regulation D, Rule 506, of the Securities Act of 1933, as amended, whereby the Company sold an aggregate of 1,000,000 shares of its $0.001 par value common stock for total cash of $50,000.

On October 4, 2007, an officer and director of the Company donated cash in the amount of $5. The entire amount was donated, is not expected to be repaid and is considered to be additional paid-in capital.

During 2008, an officer and director of the Company donated cash in the amount of $310. The entire amount was donated, is not expected to be repaid and is considered to be additional paid-in capital.

During the nine months ended September 30, 2009, an officer and director of the Company donated cash in the amount of $300. The entire amount was donated, is not expected to be repaid and is considered to be additional paid-in capital.

As of September 30, 2009, there have been no other issuances of common stock.

Commercial E-Waste Management, Inc.

Notes to Condensed Financial Statements

Note 7 – Debt and interest expense

On February 2 2007, the Company conducted a private offering of debt securities, whereby it secured $25,000 in bridge loan financing from one non-affiliated entity. The aggregate principal amount and interest accrued thereupon is due February 2, 2008. The note bears an interest rate of 10.5%, calculated annually, and contains no prepayment penalty. During the three month periods ended September 30, 2009 and 2008, the Company recorded $662 and $662 in interest expense related to the note payable, respectively. Total accrued interest through September 30, 2009 is $6,983. The February 2, 2007, note payable for $25,000 was due February 2, 2008 and is now past due. The Company is currently in negotiations to extend the due date.

On September 9, 2007, the Company issued an aggregate of $9,000 in debt securities to an officer and director of the Company. The note bears no interest, is due and payable on September 1, 2009 and contains no prepayment penalty. Through September 30, 2009, the Company repaid $8,800 of the note. As of September 30, 2009, the balance owed is $200.

Through September 30, 2009, a non-affiliated third party loaned the Company $9,098. The note bears no interest and is due on demand.

Note 8 – Related party transactions

The Company issued 10,000,000 shares of its par value common stock as founders’ shares to an officer and director in exchange for services rendered in the amount of $10,000.

On September 9, 2007, the Company issued an aggregate of $9,000 in debt securities to an officer and director of the Company. The note bears no interest, is due and payable on September 1, 2009 and contains no prepayment penalty. Through June 30, 2008, the Company repaid $6,200 of the note. As of June 30, 2008, the balance owed is $2,800.

During 2008, an officer and director of the Company donated cash in the amount of $310. The entire amount was donated, is not expected to be repaid and is considered to be additional paid-in capital.

Through the three months ended September 30, 2009 and 2008, the Company paid a total of $0 and $6,773 to related parties for services rendered, respectively.

The Company does not lease or rent any property. Office services are provided without charge by an officer and director of the Company. Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.

Management's Discussion and Analysis of Financial Condition and Results of Operation

Forward-Looking Statements

This Quarterly Report contains forward-looking statements about Commercial E-Waste Management, Inc.’s business, financial condition and prospects that reflect management’s assumptions and beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. If any of our management’s assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, Commercial E-Waste Management’s actual results may differ materially from those indicated by the forward-looking statements.

The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, acceptance of our services, our ability to expand our customer base, managements’ ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry.

There may be other risks and circumstances that management may be unable to predict. When used in this Quarterly Report, words such as, "believes,""expects," "intends,""plans,""anticipates,""estimates" and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.

Overview

Commercial E-Waste Management, Inc. was incorporated in Nevada on January 25, 2007. We are an electronics waste management solution provider, specializing in the collection, retirement, storage and remarketing of excess, damaged or obsolete electronic assets, such as computer, telecommunications and other electronic office equipment. We are not a recycling or waste disposal company.

On December 15, 2008, we experienced a change on control, in which our former majority stockholder, Brenda Pfeifer, sold her entire position in our common stock, consisting of 10,000,000 shares, to Anna Chalmers in a private transaction. As a result of the change of control, we have moved our operations from Minnesota to Arizona, where Ms. Chalmers currently resides.

During the nine months ended September 30, 2009, we thoroughly evaluated all existing inventory at our former warehouse in Minnesota. Upon review, our management determined it prudent to write down inventory to its net realizable value. As a result, we recorded impairment to inventory in the amount of $4,449, or the entire previously existing inventory.

Results of Operation for the Quarter ended September 30, 2009 and 2008

Our management believes the effects of prolonged weakness in the general economy contributed to the deterioration of our business operations. Fewer businesses divesting outdated or fully-depreciated existing equipment and furniture, as well as fewer new business ventures being started, led to a decline in collection and equipment resale revenues. With the decline in collection, we had fewer products to resell as usable products or recyclable materials. Additionally, we have been transitioning our operations from Minnesota to our current domicile in Arizona. We no longer service prior clients, since we do not have a presence in Minnesota. As a result, year to year comparisons are not significant and are not a reliable indicator of future prospects.

Revenues, Cost of Goods Sold and Gross Profit

During the three months ended September 30, 2009, we did not generate any revenues, and, resultantly, no costs of sales were recognized.

Gross sales from providing our E-Waste collection services and sales of various end-of-life equipment we were paid to remove in the three months ended September 30, 2008 were $38,454. Less $330 in returns and allowances, as well as credits or discounts in the amount of $300, our net revenues during that period was $37,824. After deducting cost of goods sold in the amount of $3,645 and merchant fees associated with sales of $1,273, our gross profit for the three months ended September 30, 2008 was $32,906.

We have no long-term or guaranteed contracts in place with any customers and there can be no assurance that our major customers will continue to engage our services, or that we will be able to replace revenues from such customers with revenues from other customers.

As stated earlier, we experienced a change of control in December 2008. Our operations have been minimal since that time and are expected to continue to be minimal for the foreseeable future. There is no assurance that we will be able to resurrect operations to their prior level, if at all, and we may continue to experience a lack of revenues for the foreseeable future.

Operating Expenses

We incur various costs and expenses in the execution of our business. During the three months ended September 30, 2009, our expenses consisted of depreciation expense related to our computer equipment and furniture and fixtures, executive compensation paid to an officer and director, as well as general and administrative expenses, which consist of, but are not limited to, rent, office expenditures, labor costs and professional fees. Total operating expenses during the three months ended September 30, 2009 were $749, of which $274 was deprecation expense and $475 was attributable to general and administrative expenses.

In the year ago three months ended September 30, 2008, total operating expenditures were $37,856, consisting of the following:

Total commissions paid to our sales staff were $600, all of which was paid to non-related parties.

Depreciation expense related to our computer equipment and furniture and fixtures was $274.

Aggregate general and administrative expenses were $36,982, of which of which $6,173 was paid to related parties for services rendered.

Due to the change of control and relocation of our base of operations, year-to-year comparisons are not significant.

Interest Income and Expense

In the three months ended September 30, 2009, we did not generate interest income from any sources. In the comparable three month period ended September 30, 2008, we realized $1 in interest income, generated from a bank savings account we previously maintained.

During the nine months ended September 30, 2009, our management reviewed current inventory on hand at our prior Minnesota warehouse. Based on our management’s estimates of customer demand and the market for similar products, we determined it necessary to write down the inventory to its net realizable value. As a result, on September 30, 2009, we recorded a provision for inventory losses of $4,449, or significantly all inventory previously existing. We did not record any impairment to inventory during the three or nine month periods ended September 30, 2008.

On February 2, 2007, we secured bridge loan financing, through which we are able to borrow $25,000. The loan bears an interest rate of 10.5% per annum and was payable on or before February 2, 2008 and is currently past due. During the three months ended September 30, 2009 and 2008, we accrued interest expenses related to our $25,000 bridge loan payable in the amounts of $662 and $662, respectively. As of September 30, 2009, we recorded $6,983 in accrued interest related to the note payable, which is currently in default.

Our new management is working to restructure our debt obligations. However, there can be no guarantee that we will be able to do so under favorable conditions, if at all.

Net Loss

During the three months ended September 30, 2009 we recorded a net loss, in the amount of $1,411. In comparison, we realized a net loss during the three months ended September 30, 2008, in the amount of $5,611. We anticipate incurring ongoing operating losses for the foreseeable future and cannot predict when, if at all, we may expect these losses to plateau or narrow. We have no recurring or guaranteed source of revenues and cannot predict when, if ever, we will become profitable. There is significant uncertainty projecting future profitability due to our lack of operating history and absence of guaranteed revenue streams.

Cash and Liquidity

Since our inception, we have obtained capital through sales of our equity and debt securities, as follows:

On February 2, 2007, we secured a bridge loan for $25,000 at an interest rate of 10.5% per year. As of September 30, 2009, we have accrued interest in the aggregate amount of $6,983, related specifically to this loan, which is currently past due. No payments have been made to satisfy or reduce the amount due.

On June 30, 2007, we closed our private placement offering of common stock, whereby we sold an aggregate of 1,000,000 shares at a price per share of $0.05, for gross proceeds of $50,000.

On September 9, 2007, we issued a long term note payable in the amount of $9,000 to a former officer and director. As of September 30, 2009, we have repaid a total of $8,800 of this loan. No additional payments have been made to satisfy or reduce the amount due.

On August 20, 2008, a non-related third party entity loaned us $1,500. The loan was made without interest and is due upon demand. No payments have been made to satisfy or reduce the amount due.

During December 2008, a former officer and director donated cash in the amount of $310. The funds were considered donated and are not expected to be repaid.

During the nine months ended September 30, 2009, an officer and director donated cash in the amount of $300. The funds were considered donated and are not expected to be repaid.

During the nine months ended September 30, 2009, a non-related third party entity loaned us an aggregate of $9,098 to satisfy operational expenses. The loan was made without interest and is due upon demand. No payments have been made to satisfy or reduce the amount due.

We are in a precarious financial position and may be unable to maintain our operations through the fiscal year ended December 31, 2009, assuming our expenses remain relatively stable, of which there can be no guarantee. As of September 30, 2009, we had current assets of $111, compared to current liabilities in the amount of $46,683. We cannot guarantee that we will be able to satisfy any or all of our financial obligations. Our ability to fund our operating expenses and debt service requirements are in doubt, and we cannot guarantee that we will be able to satisfy such.

As a result of our lack of working capital, deterioration of sales and our inability to collect accounts receivable, Brenda Pfeifer, our former President, director and majority shareholder, could no longer support our continued operations. On December 15, 2008, we experienced a change on control whereby Mrs. Pfeifer sold her majority interest in our common stock, consisting of 10,000,000 shares, to Anna Chalmers in a private transaction. Concurrently, Mrs. Pfeifer resigned from the offices of President and Director and Mr. Eugene Pfeifer resigned from the offices of Secretary, Treasurer and Director. Ms. Chalmers was subsequently elected to fill all vacant positions. Mrs. Chalmers is in the process of restructuring our financial obligations and relocated our headquarters to Scottsdale, Arizona.

In consideration of our limited working capital and financial resources, our management believes that we require immediate additional financing, through offerings of our equity and/or debt securities, or derivation thereof. There are no formal or informal agreements to attain such financing. We can not assure you that any financing can be obtained or, if obtained, that it will be on reasonable terms. Without realization of additional capital, it would be unlikely for us to continue as a going concern.

Employees

Our management does not anticipate the need to hire additional full- or part- time employees over the next 12 months, as the services provided by our staff appear sufficient at this time. We do not expect to hire any additional employees over the next 12 months.

Miscellaneous

No development related expenses have been or will be paid to our affiliates.

Our management does not expect to incur research and development costs.

We do not have any off-balance sheet arrangements.

We currently do not own any significant plant or equipment that we would seek to sell in the near future.

We have not paid for expenses on behalf of our directors. Additionally, we believe that this fact shall not materially change.

We currently do not have any material contracts and or affiliations with third parties.

Controls and Procedures

Management’s Report On Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of September 30, 2009, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matter involving internal controls and procedures that our management considered to be a material weakness under the standards of the Public Company Accounting Oversight Board was:

Lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and

The aforementioned material weakness was identified by our Chief Executive Officer in connection with the review of our financial statements as of September 30, 2009. Management believes that the lack of a functioning audit committee did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Management’s Remediation Initiatives

In an effort to remediate the identified material weakness and enhance our internal controls, we plan to establish a formal audit committee of the Board of Directors. We are also seeking an at least one additional person to serve as an outside Director, as well as sit on the audit committee, thereby providing oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

Changes in internal controls over financial reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II – OTHER INFORMATION

Unregistered Sales of Equity Securities

On January 30, 2007, we issued 10,000,000 shares of our common stock to Brenda Pfeifer, our founding shareholder and an officer and our sole director. This sale of stock did not involve any public offering, general advertising or solicitation. The shares were issued in exchange for services performed by the founding shareholder on our behalf in the amount of $10,000. Mrs. Pfeifer received compensation in the form of common stock for performing services related to the formation and organization of our Company, including, but not limited to, designing and implementing a business plan and providing administrative office space for use by the Company; thus, these shares are considered to have been provided as founder’s shares. Additionally, the services are considered to have been donated, and have resultantly been expensed and recorded as a contribution to capital. At the time of the issuance, Mrs. Pfeifer had fair access to and was in possession of all available material information about our company, as is an officer and director of Commercial E-Waste Management, Inc. The shares bear a restrictive transfer legend. On the basis of these facts, we claim that the issuance of stock to our founding shareholder qualifies for the exemption from registration contained in Section 4(2) of the Securities Act of 1933.

In July 2007, we sold an aggregate of 1,000,000 shares of our common stock to 28 shareholders, all of whom are not affiliated with us. The shares were issued at a price of $0.05 per share for total gross cash proceeds in the amount of $50,000. There were no commissions or discounts and this was a best efforts, self-underwritten offering conducted by the issuer. The shares bear a restrictive transfer legend. This July 2007 transaction (a) involved no general solicitation, (b) involved less than thirty-five non-accredited purchasers and (c) relied on a detailed disclosure document to communicate to the investors all material facts about Commercial E-Waste Management, Inc. Each purchaser was given the opportunity to ask questions of us. Thus, we believe that the offering was exempt from registration under Regulation D, Rule 505 of the Securities Act of 1933, as amended.

Defaults Upon Senior Securities

On February 2, 2007, we secured bridge loan financing of $25,000 at a rate of 10.5% per annum. The loan was due in February 2008, and is currently in default. We recorded total interest expense in the amount of $6,983 through September 30, 2009. We cannot predict when, if ever, we will be able to remedy this debt obligation in full.

Exhibits and Reports on Form 8-K

Exhibit Number	Name and/or Identification of Exhibit

3	Articles of Incorporation & By-Laws

	(a) Articles of Incorporation (1)

	(b) By-Laws (1)

10	Material Contracts

	(a) Bridge Loan Agreement dated February 2, 2007 (2)

	(b) Promissory Note dated September 1, 2007 (2)

31	Rule 13a-14(a)/15d-14(a) Certifications

32	Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)

(1)

Incorporated by reference herein filed as exhibits to the Company’s Registration Statement on Form SB-2 filed on November 7, 2007.

(2)

Incorporated by reference herein filed as exhibits to the Company’s Registration Statement on Form SB-2/A filed on January 23, 2008.

SIGNATURES

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

COMMERCIAL E-WASTE MANAGEMENT, INC.
(Registrant)

Signature	Title	Date

/s/ Anna Chalmers	President and	November 16, 2009
Anna Chalmers	Chief Executive Officer

/s/ Anna Chalmers	Chief Financial Officer	November 16, 2009
Anna Chalmers

/s/ Anna Chalmers	Chief Accounting Officer	November 16, 2009
Anna Chalmers

Attached files

FLUOROPHARMA MEDICAL, INC. Reports

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