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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 June 30, 2012

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: 000-27195

EWRX INTERNET SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

NEVADA 98-0117139
(State or other jurisdiction of (I.R.S. Employee Identification No.)
incorporation or organization)  

25 Fordham Drive
Buffalo, New York 14216
(Address of principal executive offices) (Zip Code)

(716) 698-1972
(Registrants telephone number, including area code)

4950 Yonge St. Suite 910, Toronto
Ontario, Canada M2N 6K1
(Former name, former address and former fiscal year, if changed since last report)

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 [X]

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 August 10, 2012 was 100,000,000 shares of common stock, par value $0.001.


EWRX INTERNET SYSTEMS, INC.

FORM 10-Q

June 30, 2012

TABLE OF CONTENTS

  PART I— FINANCIAL INFORMATION  
     
Item 1. Financial Statements 3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
Item 4. Controls and Procedures 16
     
  PART II— OTHER INFORMATION  
Item 1. Legal Proceedings 17
Item 1A. Risk Factors 17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 17
Item 3. Defaults Upon Senior Securities 17
Item 4. Mine Safety Disclosures 17
Item 5. Other Information 17
Item 6. Exhibits 18
     
  SIGNATURES 18

2


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

 

EWRX INTERNET SYSTEMS, INC.
(A Development Stage Company)

CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2012

3


EWRX INTERNET SYSTEMS, INC.
(A Development Stage Company)

CONTENTS

4



EWRX INTERNET SYSTEMS, INC.
(A Development Stage Company)
 
Condensed Balance Sheets

    June 30     December 31  
    2012     2011  
    (Unaudited)        
     
                                                                                                                         ASSETS            
             
             
Current Assets            
Cash $  464   $  431  
Total Current Assets   464     431  
             
Total Assets $  464   $  431  
             
             
             
LIABILITIES AND STOCKHOLDERS' DEFICIENCY   
             
             
Current Liabilities            
Accounts payable and accrued liabilities $  27,573   $  19,180  
Note payable - related party   8,828     8,538  
Total Liabilities   36,401     27,718  
             
             
Commitments and Contingencies   -     -  
             
Stockholders' Deficiency            
Preferred stock, $0.01 par value per share, 500,000 shares
authorized, none and none issued and outstanding
respectively
 

-
   

-
 
Common stock, $0.001 par value; 200,000,000 shares
authorized, 100,000,000 and 100,000,000 shares issued
and outstanding, respectively
 

100,000
   

100,000
 
Additional paid - in capital   7,962,862     7,919,230  
Accumulated deficit   (8,496,144 )   (8,496,144 )
Accumulated other comprehensive loss   (893 )   (893 )
Earnings accumulated during the development stage   398,238     450,520  
Total Stockholders' Deficiency   (35,937 )   (27,287 )
             
Total Liabilities and Stockholders' Deficiency $  464   $  431  

(See accompanying notes to condensed unaudited financial statements)

5



EWRX INTERNET SYSTEMS, INC.
(A Development Stage Company)
Condensed Statements of Operations
"Unaudited"

                                                    For the Period from  
                          January 1, 2002    
                            (Re-entering the   
                            Development   
    For the Three Months     For the Six Months     Stage)  
    Ended June 30     Ended June 30     to June 30  
    2012     2011     2012     2011     2012  
Operating Expenses                              
                               
Entertainment $  -   $  69   $  -   $  69   $  1,918  
In kind contribution - services   18,000     18,000     36,000     36,000     396,000  
Management fees   -     -     -     -     15,000  
Office and General   3,676     650     3,826     1,422     55,096  
Professional fees   7,553     6,422     12,691     13,467     258,652  
Salary and Wages   -     -     -     -     28,000  
Telephone   -     169     -     281     2,631  
Travel   -     -     -     -     5,546  
Total Operating Expenses   29,229     25,310     52,517     51,239     762,843  
                               
Net Loss from operations   (29,229 )   (25,310 )   (52,517 )   (51,239 )   (762,843 )
                               
Other (Expenses) Income                              
                               
Foreign exchange (loss) gain   (19 )   (41 )   (52 )   (299 )   (8,036 )
                               
Interest expense   (782 )   (9,131 )   (1,375 )   (18,290 )   (180,757 )
Forgiveness of debt   1,662     -     1,662     -     1,349,874  
                               
Total Other Income (Expenses)   861     (9,172 )   235     (18,589 )   1,161,081  
                               
Net (loss) income $  (28,368 )  $ (34,482 ) $  (52,282 ) $  (69,828 ) $  398,238  
Net income (loss) per Share - Basic and Diluted $  -   $ -   $  -   $  -      
                               
Weighted Average Number of Common Stock during the period - Basic and Diluted   100,000,000     100,000,000     100,000,000     100,000,000      

(See accompanying notes to condensed unaudited financial statements)

6



EWRX INTERNET SYSTEMS INC.
(A Development Stage Company)
 
Statement of Changes in Stockholders' Deficiency
for the period (January 1, 2002) Re-entering the Development
Stage Through to June 30, 2012
"Unaudited"

                                  Earnings              
                                  Accumulated     Accumulated        
                      Additional           During the     Other     Total  
    Number of     Capital     Preferred     Paid-in     Accumulated     Development     Comprehensive     Stockholders'  
    Shares     Stock     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   -     -     -     -     -     (126,511 )   -     (126,511 )
Foreign currency translation adjustment   -     -     -     -     -     -     (893 )   (893 )
Total comprehensive loss                                             (127,404 )
In kind contribution - interest   -     -     -     29,244     -     -     -     29,244  
In kind contribution - services   -     -     -     72,000     -     -     -     72,000  
Balance, December 31, 2009   100,000,000     100,000     -     7,476,261     (8,496,144 )   612,741     (893 )   (308,035 )
Net loss                                 (119,861 )         (119,861 )
In kind contribution - interest   -     -     -     33,725     -     -     -     33,725  
In kind contribution - services   -     -     -     72,000     -     -     -     72,000  
Balance, December 31, 2010   100,000,000   $  100,000     -   $  7,581,986   $ (8,496,144 ) $  492,880   $  (893 ) $  (322,171 )
Net loss                                 (42,360 )         (42,360 )
In kind contribution - interest   -     -     -     37,215     -     -     -     37,215  
In kind contribution - services   -     -     -     72,000     -     -     -     72,000  
Forgiveness of debt officer   -     -     -     228,029     -     -     -     228,029  
Balance, December 31, 2011   100,000,000   $  100,000     -   $  7,919,230   $ (8,496,144 ) $  450,520   $  (893 ) $  (27,287 )
Net loss                                 (23,914 )         (23,914 )
In kind contribution - interest   -     -     -     370     -     -     -     370  
In kind contribution - services   -     -     -     18,000     -     -     -     18,000  
Balance, March 31, 2012   100,000,000     100,000     -     7,937,600     (8,496,144 )   426,606     (893 )   (32,831 )
Net loss                                 (28,368 )         (28,368 )
In kind contribution - interest   -     -     -     536     -     -     -     536  
In kind contribution - services   -     -     -     18,000     -     -     -     18,000  
Forgiveness of debt officer                     6,726                       6,726  
 Balance, June 30, 2012   100,000,000     100,000     -     7,962,862       (8,496,144 )   398,238     (893 )  

 (35,937

(See accompanying notes to condensed unaudited financial statements)

7



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 Six Months     Stage) to  
    Ended June 30     June 30  
    2012     2011     2012  
                   
Cash Flows from Operating Activities                  
       Net (loss) income $  (52,282 ) $  (69,828 ) $  398,238  
      Adjustments to reconcile net (loss) income to net cash used in operations            
               Non-cash item - expenses recovered   -     -     (1,142,152 )
               Forgiveness of debt   -     -     (97,294 )
               In kind contribution services   36,000     36,000     396,000  
               Imputed interest on loans   906     18,182     144,391  
       Changes in operating assets and liabilities                  
               Increase/(Decrease) in accounts payable and accrued liabilities   8,393     8,070     35,228  
Net Cash Used in Operating Activities   (6,983 )   (7,576 )   (265,589 )
                   
Cash Flows from Financing Activities                  
       Settlement of debt by director   -     -     19,113  
       Proceeds from issuance of common stock   -     -     38,700  
       Loans from related parties   -     331     68,718  
       Repayment of loans from directors   -     (411 )   (1,623 )
       Repayment of loans from related parties   -     -     (60,092 )
       Advances from director   6,726     8,329     201,928  
Net Cash Provided by Financing Activities   6,726     8,249     266,744  
                   
Effect of exchange rate changes on cash and cash equivalents   290     -     (691 )
                   
Net increase in cash   33     673     464  
Cash, beginning of period/year   431     335     -  
                   
Cash, end of period/year $  464   $  1,008   $  464  
                   
Supplemental Information:                  
           Cash paid for interest $  -   $  -   $  36,476  
           Cash paid for taxes $  -   $  -   $  -  

Supplemental disclosure of non-cash Investing and Financing activities:
During the six months ended June 30, 2012, the company's principal officer forgave loans of $6,726. The forgiveness was treated as contributed capital from the principal officer.

(See accompanying notes to condensed unaudited financial statements)

8



EWRX INTERNET SYSTEMS, INC.
(A Development Stage Company)
 
Notes to Condensed Financial Statements
June 30, 2012
"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 of the information necessary for a comprehensive presentation of financial position and results of operations. The interim results for the period ended June 30, 2012 are not necessarily indicative of results for the full year. 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.

     

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. Cash includes deposits at foreign financial institutions which are not covered by FDIC.

     

As of June 30, 2012 and December 31, 2011, the Company held $404 and $103 in US Funds at a Canadian bank respectively. In addition as of June 30, 2012 and December 31, 2011, the Company held $60 (translated to USD) and $328 (translated to USD) of Canadian Fund in a Canadian bank, respectively.

     
(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. Significant estimates include the valuation of deferred taxes and the valuation of in kind contribution of services and interest. Actual results could differ from those estimates.

     
(D)

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 six months ended June 30, 2012 and 2011.

9



EWRX INTERNET SYSTEMS, INC.
(A Development Stage Company)
 
Notes to Condensed Financial Statements
June 30, 2012
"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 Topic 260, Earnings per Share. As of June 30, 2012 and 2011, respectively, there were no common share equivalents outstanding.

     
(G)

Income Taxes

The Company accounts for income taxes under the FASB Accounting Standards Codification Topic 740, Income taxes. Under Topic 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 Topic 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 December 2011, FASB issued Accounting Standards Update 2011-11, Balance Sheet - Disclosures about Offsetting Assets and Liabilities to enhance disclosure requirements relating to the offsetting of assets and liabilities on an entity's balance sheet. The update requires enhanced disclosures regarding assets and liabilities that are presented net or gross in the statement of financial position when the right of offset exists, or that are subject to an enforceable master netting arrangement. The new disclosure requirements relating to this update are retrospective and effective for annual and interim periods beginning on or after January 1, 2013. The update only requires additional disclosures, as such, we do not expect that the adoption of this standard will impact on our results of operations, cash flows or financial condition.

10



EWRX INTERNET SYSTEMS, INC.
(A Development Stage Company)
 
Notes to Condensed Financial Statements
June 30, 2012
"Unaudited"

2.

Going Concern

   

As reflected in the accompanying unaudited condensed financial statements, the Company is in the development stage with no operations, a net loss of $52,282 for the six months ended June 30, 2012, a stockholders' deficiency and a working capital deficiency of $35,937 as of June 30, 2012, and cash used in operations from re-entering the development stage of $265,589. 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

   

As of June 30, 2012, the Company has loans from Navitex Technology, Inc., a company which is controlled by one of the stockholders of the Company, with an outstanding balance of $8,828. These loans have no fixed terms of repayment, are unsecured, and bear no interest. During the three months ended June 30, 2012 and 2011, the Company imputed interest on these loans of $906 and $651, respectively.

   

On the above transaction, the Company imputed interest at a rate of 16.67% which is comparable to past borrowings.

   

In June 30, 2012 the officer and director forgave $6,726 of advances. The total forgiveness of debt was recorded as additional paid in capital in 2012. (See Note 4(d)).

11



EWRX INTERNET SYSTEMS, INC.
(A Development Stage Company)
 
Notes to Condensed Financial Statements
June 30, 2012
"Unaudited"

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. Additionally, the Company has agreed to pay the seller a royalty fee of 7% of gross sales. As of June 30, 2012, 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 from related party.

     

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.

     

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

     

During 2009, the Company recorded additional paid-in capital of $72,000 for the fair value of services provided to the Company by its president.

     

During 2009, the Company recorded additional paid-in capital of $29,244 for the imputed interest on loans from related party.

12



EWRX INTERNET SYSTEMS, INC.
(A Development Stage Company)
 
Notes to Condensed Financial Statements
June 30, 2012
"Unaudited"

4.

Stockholders' Deficiency (continued)


 

During 2010, the Company recorded additional paid-in capital of $72,000 for the fair value of services provided to the Company by its president.

     
 

During 2010, the Company recorded additional paid-in capital of $33,725 for the imputed interest on loans from related parties.

     
 

During 2011, the Company recorded additional paid-in capital of $72,000 for fair value of services provided by the Company by its president.

     
 

During 2011, the Company recorded additional paid-in capital of $37,215 for the imputed interest on loans from related parties.

     
 

In December 2011, the officer and director forgave $228,029 of advances. The total forgiveness of debt was recorded as additional paid in capital in 2011.

     
 

During six months ending June 30, 2012 the Company recorded additional paid-in capital of $36,000 for the fair value of services provided to the Company by its president.

     
 

During six months ending June 30, 2012, the Company recorded additional paid-in capital of $906 for the imputed interest on the advances from a director and note payable - related party.

     
 

In June 30, 2012, the officer and director forgave $6,726 of advances. The total forgiveness of debt was recorded as additional paid in capital in 2012. (See Note 3)

     
  (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.

     
 

During 2009, the Company amended its Articles of Incorporation to increase the authorized capital stock to 200,000,000 common shares at a par value of $0.001 per share.

13



EWRX INTERNET SYSTEMS, INC.
(A Development Stage Company)
 
Notes to Condensed Financial Statements
June 30, 2012

5.

Forgiveness Debt

   

The Company has certain accounts payables which have been outstanding since 2005 when the Company became dormant. The company policy has been to write off these debts as they become unenforceable, generally after the six year statute of limitations has been reached.

   

During June 30, 2012, the company has written off $1,662 in accounts payable and recorded them as Forgiveness of Debt in other expenses.

   
6.

Subsequent Event

   

During July 2012, the principal stockholder and former President of the Company contributed $26,464 of capital to the company to pay-off certain accounts payable and accrued expenses. In addition, the former president forgave notes payable of $8,828.

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

The following discussion should be read in conjunction with the Financial Statements and Notes thereto appearing elsewhere in this Quarterly Report on 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 Quarterly Report. 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 Quarterly Report.

Plan of Operations

Since we formally ceased operations, we have had no business or operations. Recently, our management determined that it was in the best interests of our shareholders to seek an operating company to acquire. On July 3, 2012, our majority shareholder entered into a Common Stock Purchase Agreement with International Dianliandian Shops Network Science & Technology Corporation, a New York Corporation, Mr. Fenglin Wang, Dr. Wenyi Yu, Mr. Wenyong Wang, Ms. Fang Wang, Mr. Jihuai Bao and Mr. Fang Cheng for the sale of Seventy Five Million Nine Hundred Twenty Three Thousand Seven Hundred Thirty Three (75,923,733) shares of our Common Stock, representing approximately 75.92% of our issued and outstanding common shares (the “Change of Control”). Pursuant to the Change of Control, our officers and directors resigned and new officers and directors were appointed. The new management is working to acquire a company that focuses on exporting US made products to China via an online shopping service platform.

Results of Operations

The Company has been in a state of reorganization and development over the past two years. We were unsuccessful in executing our business plan and therefore were forced to cease operating and enter into the Change of Control transaction. The Company continues to experience financial deficiencies that have been a source of constant concern over this and previous periods in its operations.

Liquidity and Capital Resources

The Company’s primary source of liquidity as of June 30, 2012 is cash on hand. Cash on hand as of June 30, 2012 was $464. Current assets totaled $464 on June 30, 2012. Total liabilities were $36,401 on June 30, 2012.

The Company 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 the Company.

The Company currently does not have enough cash to satisfy its minimum cash requirements for the next twelve months. The Company is going to rely on loans from our officers and directors to meet the short term cash requirements. The present state of the Company’s liquidity and capital resources raises substantial doubt about its 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.

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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 of 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 our 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 condensed financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. 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 December 2011, FASB issued Accounting Standards Update 2011-11, Balance Sheet - Disclosures about Offsetting Assets and Liabilities” to enhance disclosure requirements relating to the offsetting of assets and liabilities on an entity's balance sheet. The update requires enhanced disclosures regarding assets and liabilities that are presented net or gross in the statement of financial position when the right of offset exists, or that are subject to an enforceable master netting arrangement. The new disclosure requirements relating to this update are retrospective and effective for annual and interim periods beginning on or after January 1, 2013. The update only requires additional disclosures, as such, we do not expect that the adoption of this standard will have a material impact on our results of operations, cash flows or financial condition.

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 Risk

Not applicable because we are a smaller reporting company.

Item 4. 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.

16


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. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On July 3, 2012, our majority shareholder entered into a Common Stock Purchase Agreement with International Dianliandian Shops Network Science & Technology Corporation, a New York Corporation, Mr. Fenglin Wang, Dr. Wenyi Yu, Mr. Wenyong Wang, Ms. Fang Wang, Mr. Jihuai Bao and Mr. Fang Cheng for the purchase of Seventy Five Million Nine Hundred Twenty Three Thousand Seven Hundred Thirty Three (75,923,733) shares of Common Stock, par value $0.001, of EWRX Internet Systems Inc., (“EWRX” or “Registrant”), representing approximately 75.92% of the Registrant’s issued and outstanding common shares (the “Change of Control”). In connection with this agreement, Ms. Jessica Wang, Mr. Elwin Cathcart and Mr. Stanley Kwan resigned from their positions as officers and directors of the Company and appointed the following individuals as Officers:

  • Mr. Fenglin Wang, President
  • Ms. Keren Zhao, Chief Executive Officer

Additionally, the following 4 individuals were appointed as directors:

  • Mr. Fenglin Wang
  • Dr. Wenyi Yu
  • Mr. Wenyong Wang
  • Ms. Fang Wang

17


For an additional discussion of the Change of Control, please refer to the Current Report on Form 8-K that was filed with the Securities and Exchange Commission on EDGAR on July 23, 2012.

Item 6. Exhibits

31.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of Sarbanes Oxley Act of 2002
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002
   
101.INS* XBRL Instance Document
101.SCH* XBRL Taxonomy Schedule
101.CAL* XBRL Taxonomy Calculation Linkbase
101.DEF* XBRL Taxonomy Definition Linkbase
101.LAB* XBRL Taxonomy Label Linkbase
101.PRE* XBRL Taxonomy Presentation Linkbase

In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed.

* Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

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

  EWRX INTERNET SYSTEMS, INC.
   
Date: August 13, 2012 By: /s/ Keren Zhao
             Keren Zhao
             Chief Executive Officer and interim
             Principal Accounting Officer
             (Duly Authorized Officer and Principal Executive
             Officer)

18