DLD 10-Q 2009 Q1 Quarterly report

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 endedMarch 31, 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)

(416) 298-9606
(Issuer Telephone number)

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 [   ]    No [X]

The number of shares outstanding of the Registrant’s common stock as of May 20, 2009 was 100,000,000 shares of common stock.

EWRX INTERNET SYSTEMS, INC.

FORM 10-Q

March 31, 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

MARCH 31, 2009

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

CONTENTS

CONDENSED BALANCE SHEETS AS OF MARCH 31, 2009 (UNAUDITED) AND AS OF DECEMBER 31, 2008 (AUDITED)	1
CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY 1, 2002 (RE-ENTERING THE DEVELOPMENT STAGE) TO MARCH 31, 2009 (UNAUDITED)	2
CONDENSED STATEMENTS OF STOCKHOLDERS' DEFICIENCY FOR THE PERIOD JANUARY 1, 2002 (RE-ENTERING THE DEVELOPMENT STAGE)THROUGH TO MARCH 31, 2009 (UNAUDITED)	3
CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY 1, 2002 (RE-ENTERING THE DEVELOPMENT STAGE) TO MARCH 31, 2009 (UNAUDITED)	4
NOTES TO CONDENSED FINANCIAL STATEMENTS	5 - 9

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Condensed Balance Sheets

		March 31			December 31
		2009			2008
		(Unaudited)
ASSETS
Current Assets
Cash	$	399		$	2,700
Prepaid expenses		80			-
Total Current Assets		479			2,700
Total Assets	$	479		$	2,700
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
Accounts payable	$	98,954		$	98,954
Accrued liabilities		23,627			20,318
Note payable - related party		8,363			8,170
Advances from director		159,566			157,133
Total Current Liabilities		290,510			284,575
Commitments and Contingencies
Stockholders' Deficiency
Preferred stock, $0.01 par value per share, 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		7,399,779			7,375,017
Accumulative deficit		(8,496,144	)		(8,496,144	)
Earnings accumulated during the development stage		706,334			739,252
Total Stockholders' Deficiency		(290,031	)		(281,875	)
Total Liabilities and Stockholders' Deficiency	$	479		$	2,700

1

(The accompanying notes are an integral part of these condensed financial statements)

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Condensed Statements of Operations
(UNAUDITED)

								January 1, 2002
								Development
		For the Three Months Ended						Stage)
		March 31						to March 31
		2009			2008			2009
Entertainment	$	-		$	498		$	1,849
In kind contribution services		18,000			15,000			162,000
Management fees		-			-			15,000
Office and general		485			924			33,488
Professional fees		7,246			7,900			195,886
Telephone		121			149			1,023
Travel		-			-			1,540
Salary and Wages		-			-			28,000
Total Operating Expenses		25,852			24,471			438,786
Net Loss from operations		(25,852	)		(24,471	)		(438,786	)
Other (Expenses) Income
Foreign exchange (loss)/gain		(304	)		569			(8,261	)
Interest expense		(6,762	)		(6,575	)		(86,175	)
Forgiveness of debt		-			-			1,239,556
Total Other (Expenses) Income		(7,066	)		(6,006	)		1,145,120
Loss from investment in limited
partnership
Net (loss) income	$	(32,918	)	$	(30,477	)	$	706,334
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

2

(The accompanying notes are an integral part of these condensed financial statements)

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)
Statements of Stockholders' Deficiency
Years Ended March 31, 2009 and 2006, and the
Period from Re-entering the Development Stage
(January 1, 2001) Through to March 31, 2009

											Earnings
											Accumulated
					Additional						During the			Total
	Number of		Capital		Paid-in			Accumulated			Development			Stockholders'
	Shares		Stock		Capital			Deficit			Stage			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	-		-		-			-			(32,918	)		(32,918	)
In kind contribution - interest	-		-		6,762			-			-			6,762
In kind contribution - services	-		-		18,000			-			-			18,000
Balance,March 31, 2009 (Unaudited)	100,000,000	$	100,000	$	7,399,779		$	(8,496,144	)	$	706,334		$	(290,031	)

3

(The accompanying notes are an integral part of these condensed financial statements)

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Condensed Statements of Cash Flows
(UNAUDITED)

								January 1, 2002,
								(Re-entering the
								Development
		For the Three Months Ended						Stage)
		March 31						to March 31
		2009			2008			2009
Cash Flows from Operating Activities
Net (loss) income	$	(32,918	)	$	(460	)	$	706,334
Adjustments to reconcile net income/loss to net
cash used in operations
-In kind contribution - services		18,000			-			162,000
-Imputed interest on loans		6,762			-			50,063
-Expenses recovered		-			-			(1,142,152	)
Changes in operating assets and liabilities
Increase/(Decrease) in accounts payable		-			-			9,315
Increase/(Decrease) in accrued liabilities		3,309			-			23,627
Increase/(Decrease) in prepaid expenses		(80	)		-			(80	)
Net Cash (Used in) Operating Activities		(4,927	)		(460	)		(190,893	)
Cash Flows from Financing Activities
Proceeds from issuance of common stock		-			-			38,700
Loans from related parties		-			-			66,462
Repayment of loans from directors		-			-			(780	)
Repayment of loans from related parties		193			-			(58,099	)
Advances from directors		2,433			572			145,009
Net Cash Provided by Financing Activities		2,626			572			191,292
Net (decrease) increase in cash		(2,301	)		112			399
Cash,beginning of period/year		2,700			270			-
Cash, end of period/year	$	399		$	382		$	399
Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	-		$	36,476

4

(The accompanying notes are an integral part of these condensed financial statements)

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
March 31, 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
		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 three months ended March 31, 2009 and 2008.
	(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.

5

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
March 31, 2009
(UNAUDITED)

1.	Summary of Significant Accounting Policies and Organization (continued)
	(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 Financial Accounting Standards No.128, "Earnings per Share." As of March 31, 2009 and 2008, respectively, there were no common share equivalents outstanding.
	(G)	Income Taxes
		The Company accounts for income taxes under the Statement of Financial Accounting Standards No.109, "Accounting for Income Taxes" ("Statement 109"). Under Statement 109, 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 Statement 109, 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 2007, the FASB issued SFAS No.160, "Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No.51." This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent's ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS No.160 affects those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. SFAS No.160 is effective for fiscal years and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement did not have a material effect on the Company's financial statements.
		In March 2008, the FASB issued SFAS No.161, "Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No.133" (SFAS 161). This statement is intended to improve transparency in financial reporting by requiring enhanced

6

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
March 31, 2009
(UNAUDITED)

1.	Summary of Significant Accounting Policies and Organization (continued)
	(I)	Recent Accounting Pronouncements (continued)
		disclosures of an entity's derivative instruments and hedging activities and their effects on the entity's financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133) as well as related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. The adoption of this statement did not have a material effect on the Company's financial statements.
		In May 2008, the FASB issued SFAS No.162, "The Hierarchy of Generally Accepted Accounting Principles." SFAS No.162 identifies the sources of accounting principles and provides entities with a framework for selecting the principles used in preparation of financial statements that are presented in conformity with GAAP. The current GAAP hierarchy has been criticized because it is directed to the auditor rather than the entity, it is complex, and it ranks FASB Statements of Financial Accounting Concepts, which are subject to the same level of due process as FASB Statements of Financial Accounting Standards, below industry practices that are widely recognized as generally accepted but that are not subject to due process. The Board believes the GAAP hierarchy should be directed to entities because it is the entity (not its auditors) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. SFAS 162 is effective 60 days following the SEC's approval of PCAOB Auditing Standard No.6, Evaluating Consistency of Financial Statements (AS/6). The adoption of FASB 162 is not expected to have a material impact on the Company's financial position.
		In May 2008, the FASB issued SFAS No.163, "Accounting for Financial Guarantee Insurance Contracts - an interpretation of FASB Statement No.60." Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No.60, Accounting and Reporting by Insurance Enterprises. This results in inconsistencies in the recognition and measurement of claim liabilities. This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of FASB 163 did not have a material impact on the Company's financial position.

7

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
March 31, 2009
(UNAUDITED)

1.	Summary of Significant Accounting Policies and Organization (continued)
	(J)	Reclassification
		Certain amounts from prior periods have been reclassified to conform to the current year presentation.

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 $32,918 for the three months ended March 31, 2009, a stockholder's deficiency and a working capital deficiency of $290,031, and cash used in operations from re-entering the development stage of $190,893. 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 three months of 2009, Ms.Wang has advanced the company $2,433 for purposes of paying operating expenses on behalf of the Company.
	During the three months ended March 31, 2009 and 2008, the company imputed interest in the advance from director of $6,504 and $-, respectively. As at March 31, 2009 the company has loans from Ms. Wang with an outstanding balance of $159,566.
	As of March 31, 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 $8,363. These loans have no fixed terms or repayment, are unsecured, and bear no interest.
	During the three months ended March 31, 2009 and 2008 the company imputed interest on the note payable-related party of $258 and $-, respectively.
	On the above two transactions, the Company imputed interest at a rate of 16.67% which is comparable to past borrowing.

8

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
March 31, 2009
(UNAUDITED)

4.	Stockholders' Deficiency
	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 March 31, 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.
		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 $18,000 for the fair value of services provided to the Company by its president.
		During 2009, the Company recorded additional paid-in capital of $6,762 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.

9

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-K. 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 third 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 later part of 2009.

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 March 31, 2009 is our cash on hand. Our cash on hand as of March 31, 2009 was $399. Our current assets totaled $479 on March 31, 2009. Our current liabilities were $290,510 on March 31, 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 December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”. This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that

clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. SFAS No. 160 affects those entities that have an outstanding non-controlling interest in one or more subsidiaries or that deconsolidate a subsidiary. SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement did not have a material effect on the Company's financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (SFAS 161). This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133) as well as related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. The adoption of this statement did not have a material effect on the Company's Financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and provides entities with a framework for selecting the principles used in preparation of financial statements that are presented in conformity with GAAP. The current GAAP hierarchy has been criticized because it is directed to the auditor rather than the entity, it is complex, and it ranks FASB Statements of Financial Accounting Concepts, which are subject to the same level of due process as FASB Statements of Financial Accounting Standards, below industry practices that are widely recognized as generally accepted but that are not subject to due process. The Board believes the GAAP hierarchy should be directed to entities because it is the entity (not its auditors) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. SFAS 162 is effective 60 days following the SEC’s approval of PCAOB Auditing Standard No. 6, Evaluating Consistency of Financial Statements (AS/6). The adoption of FASB 162 is not expected to have a material impact on the Company’s financial position.

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. This results in inconsistencies in the recognition and measurement of claim liabilities. This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements. SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of FASB 163 did not have a material impact on the Company’s financial position.

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.

Currently we are not aware of any litigation pending or threatened by or against the Company.

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: May 20, 2009	By:	/s/ Jessica Q. Wang
		Jessica Q. Wang
		Chief Executive Officer and
		Principal Accounting Officer