DLD 10-Q 2011 Q3 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 endedSeptember 30, 2011

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)

4950 Yonge St. Suite 910, Toronto
Ontario, Canada M2N 6K1
(Address of principal executive offices) (Zip Code)

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

N/A
(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 November 9, 2011 was 100,000,000 shares of common stock, par value $0.001.

EWRX INTERNET SYSTEMS, INC.

FORM 10-Q

September 30, 2011

TABLE OF CONTENTS

	PART I— FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Controls and Procedures	15
	PART II— OTHER INFORMATION
Item 1.	Legal Proceedings	16
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	16
Item 4.	(Removed and Reserved)	16
Item 5.	Other Information	16
Item 6.	Exhibits	16
	SIGNATURES	17

i

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

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

CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2011

1

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

CONTENTS

CONDENSED BALANCE SHEETS AS OF SEPTEMBER 30, 2011 (UNAUDITED) AND AS OF DECEMBER 31, 2010	3
CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010 AND FOR THE PERIOD FROM JANUARY 1, 2002 (RE-ENTERING THE DEVELOPMENT STAGE) TO SEPTEMBER 30, 2011 (UNAUDITED)	4
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY FOR THE PERIOD JANUARY 1, 2002 (RE-ENTERING THE DEVELOPMENT STAGE) TO SEPTEMBER 30, 2011 (UNAUDITED)	5
CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010 AND FOR THE PERIOD FROM JANUARY 1, 2002 (RE-ENTERING THE DEVELOPMENT STAGE) TO SEPTEMBER 30, 2011 (UNAUDITED)	6
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)	7 - 12

2

EWRX INTERNET SYSTEMS, INC.

(a Development Stage Company)

Condensed Balance Sheets

		September 30			December 31
		2011			2010
		(Unaudited)
		$			$
ASSETS
Current Assets
Cash	$	1,302		$	335
Total Current Assets		1,302			335
Total Assets	$	1,302		$	335
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
Accounts payable and accrued liabilities	$	115,733		$	104,553
Note payable - related party		8,376			8,626
Advances payable - director		223,368			209,327
Total Liabilities		347,477			322,506
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		7,663,600			7,581,986
Accumulative deficit		(8,496,144	)		(8,496,144	)
Accumulated other comprehensive loss		(893	)		(893	)
Earnings accumulated during the development stage		387,262			492,880
Total Stockholders' Deficiency		(346,175	)		(322,171	)
Total Liabilities and Stockholders' Deficiency	$	1,302		$	335

(See accompanying notes to condensed unaudited financial statements)

3

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 Nine Months						Stage) to
		Ended September 30						Ended September 30						September 30
		2011			2010			2011			2010			2011
Operating Expenses
Entertainment		-		$	-		$	69		$	-		$	1,918
In kind contribution - services		18,000			18,000			54,000			54,000			342,000
Management fees		-			-			-			-			15,000
Office and General		4,879			694			6,301			4,113			49,511
Professional fees		3,838			2,138			17,305			16,140			241,727
Salary and Wages		-			-			-			-			28,000
Telephone		169			158			450			439			2,458
Travel		-			-			-			3,967			5,546
Total Operating
Expenses		26,886			20,990			78,125			78,659			686,160
Net Loss fromoperations		(26,886	)		(20,990	)		(78,125	)		(78,659	)		(686,160	)
Other (Expenses) Income
Foreign exchange (loss) gain		(7	)		(327	)		(306	)		(284	)		(7,927	)
Interest expense		(8,897	)		(8,647	)		(27,187	)		(24,960	)		(169,569	)
Forgiveness of debt		-			-			-			11,362			1,250,918
Total Other Income(Expenses)		(8,904	)		(8,974	)		(27,493	)		(13,882	)		1,073,422
Net income (loss)	$	(35,790	)	$	(29,964	)	$	(105,618	)	$	(92,541	)	$	387,262
Net income (loss) per
Share - Basic and Diluted	$	-		$	-		$	-		$	-
Weighted Average Number of Common Stockduring the period - Basic andDiluted		100,000,000			100,000,000			100,000,000			100,000,000

(See accompanying notes to condensed unaudited financial statements)

4

EWRX INTERNET SYSTEMS, INC.

(a Development Stage Company)

Condensed Statement of Changes in

Stockholders' Deficiency for the

Period January 1, 2002 (Re-entering

the Development Stage) to September 30, 2011

"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 for the nine months ended September 30, 2011													(105,618	)					(105,618	)
In kind contribution - interest	-		-		-		27,614			-			-			-			27,614
In kind contribution - services	-		-		-		54,000			-			-			-			54,000
Balance, September 30, 2011	100,000,000	$	100,000	$	-	$	7,663,600		$	(8,496,144	)	$	387,262		$	(893	)	$	(346,175	)

(See accompanying notes to condensed unaudited financial statements)

5

EWRX INTERNET SYSTEMS, INC.

(a Development Stage Company)

Condensed Statements of Cash Flows

"Unaudited"

								Period from
								January 1, 2002
								(Re-entering the
								Development
		For the Nine Months						Stage) to
		Ended September 30						September 30
		2011			2010			2011
Cash Flows from Operating Activities
Net (loss) income	$	(105,618	)	$	(92,541	)	$	387,262
Adjustments to reconcile net (loss) income to net cash used in operations
Non-cash item - expenses recovered		-			-			(1,142,152	)
In kind contribution services		54,000			54,000			342,000
Imputed interest on loans		27,614			24,960			133,884
Changes in operating assets and liabilities
Increase/(Decrease) in accounts payable and accrued liabilities		11,180			(12,819	)		26,094
Net Cash Used in Operating Activities		(12,824	)		(26,400	)		(252,912	)
Cash Flows from Financing Activities
Proceeds from issuance of common stock		-			-			38,700
Loans from related parties		-			93			68,718
Repayment of loans from directors		(411	)		-			(1,623	)
Repayment of loans from related parties		(250	)		-			(60,342	)
Advances from director		14,452			25,097			209,654
Net Cash Provided by Financing Activities		13,791			25,190			255,107
Effect of exchange rate changes on cash andcash equivalents		-			-			(893	)
Net increase (decrease) in cash		967			(1,210	)		1,302
Cash,beginning of period/year		335			3,593			-
Cash, end of period/year	$	1,302		$	2,383		$	1,302
Supplemental Information:
Cash paid for interest	$	-		$	-		$	36,476
Cash paid for taxes	$	-		$	-		$	-

(See accompanying notes to condensed unaudited financial statements)

6

EWRX INTERNET SYSTEMS, INC.

(a Development Stage Company)

Notes to Condensed Financial Statements

September 30, 2011

"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 comprehensives presentation of financial position and results of operations. The interim results for the period ended September 30, 2011 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 September 30, 2011 and December 31, 2010, the Company held $1,250 and $3 in US Funds at a Canadian bank respectively. In addition as of September 30, 2011 and December 31, 2010, the Company held $52 (translated to USD) and $332 (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. 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 nine months ended September 30, 2011 and 2010.

7

EWRX INTERNET SYSTEMS, INC.

(a Development Stage Company)

Notes to Condensed Financial Statements

September 30, 2011

"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 September 30, 2011 and 2010, 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
		ASU No. 2011-03; Reconsideration of Effective Control for Repurchase Agreements. In April, 2011, the FASB issued ASU No. 2011-03. The amendments in this ASU remove from the assessment of effective control the criterion relating to the transferor's ability to repurchase or redeem financial assets on substantially the agreed terms, even in the event of default by the transferee. The amendments in this ASU also eliminate the requirement to demonstrate that the transferor possesses adequate collateral to fund substantially all the cost of purchasing replacement financial assets.
		The guidance in this ASU is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations.
		ASU NO. 2011-04; Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.

8

EWRX INTERNET SYSTEMS, INC.

(a Development Stage Company)

Notes to Condensed Financial Statements

September 30, 2011

"Unaudited"

1.	Summary of Significant Accounting Policies and Organization (continued)
	(I)	Recent Accounting Pronouncements (continued)
		In May, 2011, the FASB issued ASU No. 2011-04. The amendments in this ASU generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted.
		The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations.
		ASU No. 2011-05; Amendments to Topic 220, Comprehensive Income. In June 2011, the FASB issued ASU No. 2011-05. Under the amendment in this ASU, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.
		The amendments in this ASU should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. Due to the recency of this pronouncement, the Company is evaluating its timing of adoption of ASU 2011-05, but will adopt the ASU retrospectively by the due date.
		On September 15, 2011, the FASB issued ASU 2011-08, Intangibles - Goodwill and Other, which simplifies how an entity is required to test goodwill for impairment. This ASU would allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under the ASU, an entity

9

EWRX INTERNET SYSTEMS, INC.

(a Development Stage Company)

Notes to Condensed Financial Statements

September 30, 2011

"Unaudited"

1.	Summary of Significant Accounting Policies and Organization (continued)
	(I)	Recent Accounting Pronouncements (continued) would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that is more likely than not that its fair value is less than its carrying amount. The ASU includes a number of factors to consider in conducting the qualitative assessment. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. This standard is not expected to have a material impact on the Company's reported results of operations or financial position.
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 $105,618 for the nine months ended September 30, 2011, a stockholders' deficiency and a working capital deficiency of $346,175 as of September 30, 2011, and cash used in operations from re-entering the development stage of $252,912. 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 advances granted by Jessica Q. Wang. Ms. Wang pays for certain administrative expenses and is reimbursed by the Company. These advances have no fixed terms of repayment, are unsecured, and bear no interest. During the nine months ended September 30, 2011, Ms.Wang advanced the company $14,452 for purposes of paying operating expenses on behalf of the Company and was repaid $411. During the nine months ended September 30, 2011 and 2010, the Company imputed interest on the advance from director of $26,673 and $24,022, respectively. As of September 30, 2011 and December 31, 2010, the Company has loans from Ms. Wang with an outstanding balance of $223,368 and $209,327 respectively.

10

EWRX INTERNET SYSTEMS, INC.

(a Development Stage Company)

Notes to Condensed Financial Statements

September 30, 2011

"Unaudited"

3.	Related Party Transactions (continued)
	As of September 30, 2011, 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 $8,376. These loans have no fixed terms of repayment, are unsecured, and bear no interest. During the nine months ended September 30, 2011 and 2010, the Company imputed interest on the note payable - related party of $941 and $938, respectively.
	On the above two transactions, the Company imputed interest at a rate of 16.67% which is comparable to past borrowings. (See Note 4(d))
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 September 30, 2011, 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.

11

EWRX INTERNET SYSTEMS, INC.

(a Development Stage Company)

Notes to Condensed Financial Statements

September 30, 2011

"Unaudited"

4. Stockholders' Deficiency (continued)

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 $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.

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. (See Note 3)

During nine months ending September 30, 2011 the Company recorded additional paid-in capital of $54,000 for the fair value of services provided to the Company by its president.

During nine months ending September 30, 2011, the Company recorded additional paid-in capital of $27,614 for the imputed interest on the advances from a director and note payable - related party.

(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.

5.	Subsequent Event
	Subsequent to September 30, 2011, a director advanced $4,520 to the Company to pay operating expenses. The advance has no fixed term of repayment, is unsecured and bears no interest.

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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. All of our efforts are now focused on finding such an acquisition candidate, although we do not currently have any candidates identified and we have only had very preliminary negotiations regarding potential candidates.

Results of Operations

The Company has been in a state of reorganization and development over the past two years. We have been unsuccessful in executing our business plan and therefore have been forced to cease operating. 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 and has been forced to cease operating.

We expected to be able to generate revenue and launch our product, Instant Recall, but this has been unsuccessful.

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. Although, we may be in a position in the future to re-launch our operations, 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.

Liquidity and Capital Resources

The Company’s primary source of liquidity as of September 30, 2011 is cash on hand. Cash on hand as of September 30, 2011 was $1,302. Current assets totaled $1,302 on September 30, 2011. Current liabilities were $347,477 on September 30, 2011.

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. However, 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

ASU No. 2011-03; Reconsideration of Effective Control for Repurchase Agreements. In April, 2011, the FASB issued ASU No. 2011-03. The amendments in this ASU remove from the assessment of effective control the criterion relating to the transferor’s ability to repurchase or redeem financial assets on substantially the agreed terms, even in the event of default by the transferee. The amendments in this ASU also eliminate the requirement to demonstrate that the transferor possesses adequate collateral to fund substantially all the cost of purchasing replacement financial assets.

The guidance in this ASU is effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations.

ASU No. 2011-04; Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. In May, 2011, the FASB issued ASU No. 2011-04. The amendments in this ASU generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This ASU results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted.

The Company will adopt the methodologies prescribed by this ASU by the date required, and does not anticipate that the ASU will have a material effect on its financial position or results of operations.

ASU No. 2011-05; Amendments to Topic 220, Comprehensive Income. In June, 2011, the FASB issued ASU No. 2011-05. Under the amendments in this ASU, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. The amendments in this ASU do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income.

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The amendments in this ASU should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. Due to the recency of this pronouncement, the Company is evaluating its timing of adoption of ASU 2011-05, but will adopt the ASU retrospectively by the due date.

On September 15, 2011, the FASB issued ASU 2011-08, Intangibles – Goodwill and Other, which simplifies how an entity is required to test goodwill for impairment. This ASU would allow an entity to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under the ASU, an entity would not be required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. The ASU includes a number of factors to consider in conducting the qualitative assessment. The ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. This standard is not expected to have a material impact on the Company’s reported results of operations or 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 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.

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.

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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. (Removed & Reserved)

Item 5. Other Information

None.

Item 6. Exhibits

31.1	Certification of Chief Executive Officer and Chief Financial 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 and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes Oxley Act of 2002

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SIGNATURES

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

	EWRX INTERNET SYSTEMS, INC.
Date: November 9, 2011	By:/s/ Jessica Q. Wang
	Jessica Q. Wang
	Chief Executive Officer and
	Principal Accounting Officer
	(Duly Authorized Officer and Principal Executive Officer)