DLD 10-Q 2010 Q2 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 endedJune 30, 2010

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

For the transition period from ______to______.

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

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

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

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

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

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

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

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

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

The number of shares outstanding of the Registrant’s common stock as of August 12, 2010 was 100,000,000 shares of common stock, par value $0.001.

EWRX INTERNET SYSTEMS, INC.

FORM 10-Q

June 30, 2010

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.	(Removed and Reserved)
Item 5.	Other Information
Item 6.	Exhibits
	SIGNATURES

PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

CONDENSED UNAUDITED
FINANCIAL STATEMENTS

JUNE 30, 2010

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

CONTENTS

CONDENSED BALANCE SHEETS AS OF JUNE 30, 2010
(UNAUDITED) AND AS OF DECEMBER 31, 2009	1
CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE
AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009 AND FOR
THE PERIOD FROM JANUARY 1, 2002 (RE-ENTERING THE
DEVELOPMENT STAGE) TO JUNE 30, 2010 (UNAUDITED)	2
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD JANUARY 1, 2002 (RE-ENTERING THE
DEVELOPMENT STAGE) TO JUNE 30, 2010 (UNAUDITED)	3
CONDENSED STATEMENTS OF CASH FLOWS FOR THE SIX
MONTHS ENDED JUNE 30, 2010 AND 2009 AND FOR
THE PERIOD FROM JANUARY 1, 2002 (RE-ENTERING THE
DEVELOPMENT STAGE) TO JUNE 30, 2010 (UNAUDITED)	4
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)	5 - 9

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Condensed Balance Sheets

		June 30			December 31
		2010			2009
		(Unaudited)
ASSETS
Current Assets
Cash	$	2,865		$	3,593
Total Current Assets		2,865		��	3,593
Total Assets	$	2,865		$	3,593
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
Accounts payable	$	97,292		$	98,954
Accrued expenses		17,692			24,168
Note payable - related parties		8,223			8,349
Advances payable - director		198,029			180,157
Total Liabilities		321,236			311,628
Commitments and Contingencies		-			-
Stockholders' Deficiency
Preferred stock, $0.01 par value, 500,000 shares authorized, none issued and outstanding		-			-
Common stock, $0.001 par value, 100,000,000 shares authorized, 100,000,000 shares issued and outstanding		100,000			100,000
Additional paid - in capital		7,528,502			7,476,261
Accumulative deficit		(8,496,144	)		(8,496,144	)
Accumulated other comprehensive loss		(893	)		(893	)
Earnings accumulated during the development stage		550,164			612,741
Total Stockholders' Deficiency		(318,371	)		(308,035	)
Total Liabilities and Stockholders' Deficiency	$	2,865		$	3,593

1

(See accompanying notes to condensed financial statements)

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Condensed Statements of Operations

"UNAUDITED"

														For the Period
														from
														January 1, 2002
														(Re-entering the
														Development
		For the Three Months Ended						For the Six Months Ended						Stage)
		June 30						June 30						to June 30
		2010			2009			2010			2009			2010
Operating Expenses
Entertainment	$	-		$	-		$	-		$	-		$	1,849
In kind contribution services		18,000			18,000			36,000			36,000			252,000
Management fees		-			-			-			-			15,000
Office and general		2,210			1,655			3,419			2,140			41,627
Professional fees		5,358			3,021			14,002			10,267			222,998
Salary and wages		-			-			-			-			28,000
Telephone		151			97			281			218			1,697
Travel		-			-			3,967			-			5,546
Total Operating
Expenses		25,719			22,773			57,669			48,625			568,717
Net Loss from Operations		(25,719	)		(22,773	)		(57,669	)		(48,625	)		(568,717	)
Other Income (Expenses) Income
Foreign exchange (loss) gain		303			548			43			244			(7,067	)
Interest expense		(8,361	)		(7,271	)		(16,313	)		(14,033	)		(124,970	)
Forgiveness of debt		-			-			11,362			-			1,250,918
Total Other Income
(Expenses)		(8,058	)		(6,723	)		(4,908	)		(13,789	)		1,118,881
Net (loss) income	$	(33,777	)	$	(29,496	)	$	(62,577	)	$	(62,414	)	$	550,164
Net income (loss) per Share - Basic and Diluted	$	-		$	-		$	-		$	-
Weighted average number of shares outstanding during the period - Basic and Diluted		100,000,000			100,000,000			100,000,000			100,000,000

2

(See accompanying notes to condensed financial statements)

EWRX INTERNET SYSTEMS INC.
(A Development Stage Company)

Condensed Statements of Changes in Stockholders' Deficiency
for the period (January 1, 2002) Re-entering the Development
Stage Through to June 30, 2010
(Unaudited)

														Earnings
														Accumulated			Accumulated
	Preferred Stock			Common Stock				Additional						During the			Other			Total
	Number of			Number of				Paid-in			Accumulated			Development			Comprehensive			Stockholders'
	Shares		Par	Shares		Par		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														(62,577	)					(62,577	)
In kind contribution - interest	-		-	-		-		16,241			-			-			-			16,241
In kind contribution - services	-		-	-		-		36,000			-			-			-			36,000
Balance, June 30, 2010	-	$	-	100,000,000	$	100,000	$	7,528,502		$	(8,496,144	)	$	550,164		$	(893	)	$	(318,371	)

(See accompanying notes to condensed financial statements)

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Condensed Statements of Cash Flows

"UNAUDITED"

								Period from
								January 1, 2002,
								(Re-entering the
								Development
		For the Six Months Ended						Stage)
		June 30						to June 30
		2010			2009			2010
Cash Flows from Operating Activities
Net (loss) income	$	(62,577	)	$	(62,414	)	$	550,164
Adjustments to reconcile net income/loss to net                cash used in operations
Non cash item -Expenses recovered		-			-			(1,142,152	)
In kind contribution - services		36,000			36,000			252,000
Imputed interest on loans		16,241			14,033			88,786
Changes in operating assets and liabilities
Increase/(Decrease) in accounts payable		(1,662	)		-			7,653
Increase/(Decrease) in accrued liabilities		(6,476	)		6,440			17,692
Net Cash Used in Operating Activities		(18,474	)		(5,941	)		(225,857	)
Cash Flows from Financing Activities
Proceeds from issuance of common stock		-			-			38,700
Loans from related parties		(126	)		-			68,640
Repayment of loans from directors		-			-			(741	)
Repayment of loans from related parties		-			-			(60,417	)
Advances from directors		17,872			14,299			183,433
Net Cash Provided by Financing Activities		17,746			14,299			229,615
Effect of exchange rate changes on cash andcash equivalents		-			(327	)		(893	)
Net (decrease) increase in cash		(728	)		8,031			2,865
Cash,beginning of period/year		3,593			2,700			-
Cash, end of period/year	$	2,865		$	10,731		$	2,865
Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	-		$	36,476
Cash paid for taxes	$	-		$	-		$	-

4

(See accompanying notes to condensed financial statements)

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
June 30, 2010
(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, 2010 are not necessarily indicative of results for the full fiscal 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.
(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 six months ended June 30, 2010 and 2009.
(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
June 30, 2010
(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 FASB Accounting Standards Codification Topic 260, Earnings per Share. As of June 30, 2010 and 2009, 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 October 2009, the Financial Accounting Standards Board ("FASB") issued an Accounting Standard Update ("ASU") No.2009-13, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services separately rather than as a combined unit and modifies the manner in which the transaction consideration is allocated across the separately identified deliverables. The ASU significantly expands the disclosure requirements for multiple-deliverable revenue arrangements. The ASU will be effective for the first annual reporting period beginning on or after June 15, 2010, and may be applied retrospectively for all periods presented or prospectively to arrangements entered into or materially modified after the adoption date. Early adoption is permitted, provided that the guidance is retroactively applied to the beginning of the year of adoption. The Company does not expect the adoption of ASU No.2009-13 to have any effect on its financial statements upon its required adoption on January 1, 2011.

6

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
June 30, 2010
(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.
(K)	Comprehensive Income
	FASB Accounting Standards Codification Topic 220, Comprehensive Income establishes rules for reporting and displaying of comprehensive income and its components. Comprehensive income is the sum of the net loss as reported in the statements of operations and other comprehensive income transactions. Other comprehensive income transactions that currently apply to the Company result from changes in exchange rates used in translating the amount owed to a related party. Comprehensive loss as of June 30, 2010 and 2009 is not shown net of taxes because the Company's deferred tax asset has been fully offset by a valuation allowance.
	Comprehensive loss consisted of the following for the six months ended June 30, 2010 and 2009:

		Six Months Ended June 30,
		2010			2009
Net loss	$	(62,577	)	$	(62,414	)
Other comprehensive loss:
Foreign currency translation adjustment		0			(327	)
Comprehensive loss	$	(62,577	)	$	(62,741	)

2.

Going Concern

As reflected in the accompanying unaudited financial statements, the Company is in the development stage with no operations, a net loss of $(62,577) for the six months ended June 30, 2010, a stockholder's deficiency and a working capital deficiency of $(318,371), and cash used in operations from re-entering the development stage of $(225,857). 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.

7

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
June 30, 2010
(UNAUDITED)

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 six months of 2010, Ms.Wang has advanced the company $17,872 for purposes of paying operating expenses on behalf of the Company. During the six months ended June 30, 2010 and 2009, the Company imputed interest on the advance from director of $15,629 and $13,495, respectively. As of June 30, 2010 and December 31, 2009, the Company has loans from Ms. Wang with an outstanding balance of $198,029 and $180,157 respectively.
	As of June 30, 2010, 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 $8,223. These loans have no fixed terms or repayment, are unsecured, and bear no interest. During the six months ended June 30, 2010 and 2009 the Company imputed interest on the note payable-related party of $612 and $538, respectively.
	On the above two transactions, the Company imputed interest at a rate of 16.67% which is comparable to past borrowing.
4.	Stockholders' Deficiency
	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 June 30, 2010, 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)

8

EWRX INTERNET SYSTEMS INC
(A Development Stage Company)

Notes to Condensed Financial Statements
June 30, 2010
(UNAUDITED)

4. Stockholders' Deficiency (continued)

(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 $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 six months ending June 30, 2010, 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, 2010, the Company recorded additional paid-in capital of $16,241 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 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.

(a) Plan of Operations

Over the next 12 to 15 months, EWRX Internet Systems, Inc. (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 the Company 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.

The Company does not anticipate any staffing changes for the immediate future. The Company 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 2010. The Company 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 the Company. In addition, they may also have the financial ability to assist the Company 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 2010.

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

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

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

The Management and Board of Directors of the Company desire to register the Company under the Exchange Act because they intend to use this status to attract certain business enterprises and for potential investment and capital raising purposes. The Company estimates that it will incur expenses of 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

The Company’s primary source of liquidity as of June 30, 2010 is cash on hand. Cash on hand as of June 30, 2010 was $2,865. Current assets totaled $2,865 on June 30, 2010. Current liabilities were $321,236 on June 30, 2010.

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.

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 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 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 October 2009, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standard Update (“ASU”) No. 2009-13, which addresses the accounting for multiple-deliverable arrangements to enable vendors to account for products or services separately rather than as a combined unit and modifies the manner in which the transaction consideration is allocated across the separately identified deliverables. The ASU significantly expands the disclosure requirements for multiple-deliverable revenue arrangements. The ASU will be effective for the first annual reporting period beginning on or after June 15, 2010, and may be applied retrospectively for all periods presented or prospectively to arrangements entered into or materially modified after the adoption date. Early adoption is permitted, provided that the guidance is retroactively applied to the beginning of the year of adoption. The Company does not expect the adoption of ASU No. 2009-13 to have any effect on its financial statements upon its required adoption on January 1, 2011.

Off-Balance Sheet Arrangements

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

Item 3. Quantitative and Qualitative Disclosures about Market Risks

Not applicable because we are a smaller reporting company.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

Changes in Internal Controls

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

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

Not applicable because we are a smaller reporting company.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. (Removed & Reserved)

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: August 16, 2010	By:	/s/ Jessica Q. Wang
		Jessica Q. Wang
		Chief Executive Officer and
		Principal Accounting Officer