UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549


_______________





FORM 10-Q


_______________





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





For the quarterly period ended December 31, 2010





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





For the transition period from ______to______.





EUROPA ACQUISITION III, INC.


(Exact name of registrant as specified in Charter





Nevada

000-54039

27-3819635(State or other jurisdiction of

incorporation or organization)

(Commission File No.)

(IRS Employee Identification No.)





100 Europa Drive, Suite 455


Chapel Hill, North Carolina 27517


(Address of Principal Executive Offices)


_______________





(919) 933-2720


(Issuer Telephone number)


_______________





(Former Name or Former Address if Changed Since Last Report)





Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes x No o





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 o No o





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 o     Accelerated Filer o     Non-Accelerated Filer o     Smaller Reporting Company x





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





State the number of shares outstanding of each of the issuer’s classes of common equity, as of January 13, 2011: 100,000 shares of common stock.











EUROPA ACQUISITION III, INC.





FORM 10-Q





December 31, 2010





INDEX








PART I-- FINANCIAL INFORMATION





Item 1.
Financial StatementsItem 2.
Management’s Discussion and Analysis or Plan of OperationItem 3
Quantitative and Qualitative Disclosures About Market RiskItem 4T
Control and Procedures





PART II-- OTHER INFORMATION





Item 1
Legal ProceedingsItem 1A
Risk FactorsItem 2.
Unregistered Sales of Equity Securities and Use of ProceedsItem 3.
Defaults Upon Senior SecuritiesItem 4.
(Removed & Reserved)Item 5.
Other InformationItem 6.
Exhibits





SIGNATURE










EUROPA ACQUISITION III, INC.
 (A DEVELOPMENT STAGE COMPANY)
 
 CONTENTS
 
 
 PAGE
1
CONDENSED BALANCE SHEETS AS OF DECEMBER 31, 2010 (UNAUDITED) AND JUNE 30, 2010PAGE
2
CONDENSED STATEMENT OF OPERATIONS FOR THE THREE AND SIX MONTH PERIODS ENDING DECEMBER 31, 2010 AND THE PERIOD JUNE 29, 2010 (INCEPTION) TO DECEMBER 31, 2010 (UNAUDITED)PAGE
3
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY FOR THE PERIOD FROM JUNE 29, 2010 (INCEPTION) TO DECEMBER 31, 2010 (UNAUDITED)PAGE
4
CONDENSED STATEMENT OF CASH FLOWS FOR THE SIX MONTH PERIOD ENDING DECEMBER 31, 2010 (UNAUDITED) AND THE PERIOD JUNE 29, 2010 (INCEPTION) TO DECEMBER 31, 2010 (UNAUDITED)PAGES
5- 7
CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
  
  Europa Acquisition III, Inc.(A Development Stage Company)Condensed Balance SheetsDecember 31, 2010


June 30, 2010ASSETS

(Unaudited)Total Assets

$
-


$
-LIABILITIES AND STOCKHOLDERS' DEFICIENCYCurrent LiabilitiesAccounts Payable

$
4,913


$
1,250Loan Payable Related Party


2,112



-Total Liabilities


7,025



1,250Commitments and Contingencies


-



-Stockholders' DeficiencyPreferred stock, $0.001 par value; 10,000,000 shares authorized,none issued  and outstanding


-



-Common stock, $0.001 par value; 100,000,000 shares authorized, 100,000


100



100and 100,000 issued and outstanding respectivelyAdditional paid-in capital


900



900Deficit accumulated during the development stage


(8,025
)


(2,250
)Total Stockholders' Deficiency


(7,025
)


(1,250
)Total Liabilities and Stockholders' Deficiency

$
-


$
-
  
  1
 Europa Acquisition III, Inc.(A Development Stage Company)Condensed Statement of Operations(Unaudited)For The Six


For The Three


For the Period from June 29, 2010Months Ended

December 31,

2010


Months Ended

December 31,

2010


(Inception) to December 31,

2010Operating ExpensesProfessional fees

$
5,775


$
913


$
7,025General and administrative


-



-



1,000Total Operating Expenses


5,775



913



8,025LOSS FROM OPERATIONS BEFORE INCOME TAXES


(5,775
)


(913
)


(8,025
)Provision for Income Taxes


-



-



-NET LOSS

$
(5,775
)

$
(913
)

$
(8,025
)Net Loss Per Share  - Basic and Diluted

$
(0.06
)

$
(0.01
)Weighted average number of shares outstandingduring the period - Basic and Diluted


100,000



100,000
  
  2
  Europa Acquisition III, Inc.(A Development Stage Company)Condensed Statement of Changes in Stockholders' DeficiencyFor the Period from June 29, 2010 (Inception) to December 31, 2010(Unaudited)DeficitPreferred Stock


Common stock


Additional


accumulated during


Totalpaid-in


development


Stockholders'Shares


Amount


Shares


Amount


capital


stage


DeficiencyCommon stock issued for services to founder ($0.01/share)


-


$
-



100,000


$
100


$
900


$
-


$
1,000Net loss for the one day period ending June 30, 2010


-



-



-



-



-



(2,250
)


(2,250
)Balance, June 30, 2010


-



-



100,000



100



900



(2,250
)


(1,250
)Net loss for the six months ending December 31, 2010


-



-



-



-



-



(5,775
)


(5,775
)Balance, December 31, 2010


-


$
-



100,000


$
100


$
900


$
(8,025
)

$
(7,025
)
  
  3
  Europa Acquisition III, Inc.(A Development Stage Company)Condensed Statement of Cash Flows(Unaudited)For the Period fromFor The Six

Months Ended


June 29, 2010 (Inception) toDecember 31,

2010


December 31,

2010Cash Flows From Operating Activities:Net Loss

$
(5,775
)

$
(8,025
)Adjustments to reconcile net loss to net cash used in operationsCommon stock issued for services


-



1,000Changes in operating assets and liabilities:Increase in accounts payable and accrued expenses


3,663



4,913Net Cash Used In Operating Activities


(2,112
)


(2,112
)Cash Flows From Financing Activities:Increase in loan payable - related party


2,112



2,112Net Cash Provided by Financing Activities


2,112



2,112Net Increase in Cash


-



-Cash at Beginning of Period


-



-Cash at End of Period

$
-


$
-Supplemental disclosure of cash flow information:Cash paid for interest

$
-


$
-Cash paid for taxes

$
-


$
-
    4
  EUROPA ACQUISITION III, INC.
 (A DEVELOPMENT STAGE COMPANY)
 CONDENSED NOTES TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2010
 (UNAUDITED)
  NOT E 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
 
 (A) Basis of Presentation
 
 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.
 
 (B) Organization
 
 Europa Acquisition III, Inc. (a development stage company) (the "Company") was incorporated under the laws of the State of Nevada on June 30, 2010. The Company was organized to provide business services and financing to emerging growth entities.
 
 The Company was formed to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. It has been in the developmental stage since inception and has no operations to date. It will attempt to locate and negotiate with a business entity for the combination of that target company with us. The combination will normally take the form of a merger, stock- for-stock exchange or stock-for-assets exchange. In most instances, the target company will wish to structure the business combination to be within the definition of a tax-free reorganization under Section 351 or Section 368 of the Internal Revenue Code of 1986, as amended. No assurances can be given that it will be successful in locating or negotiating with any target company.
 
 Activities during the development stage include developing the business plan and raising capital.
 
 (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 revenues and expenses during the reported period.  Actual results could differ from those estimates.
  5
  EUROPA ACQUISITION III, INC.
 (A DEVELOPMENT STAGE COMPANY)
 CONDENSED NOTES TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2010
 (UNAUDITED)
 (D) Cash and Cash Equivalents
 
 The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents.  At December 31, 2010 and June 30, 2010, the Company had no cash equivalents.
 
 (E) 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 December 31, 2010, there were no common share equivalents outstanding.
 
 (F) Income Taxes
 
 The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”).  Under ASC 740-10-25, 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 ASC 740-10-25, 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.
 
 (G) Business Segments
 
 The Company operates in one segment and therefore segment information is not presented.
 
 (H) Revenue Recognition
 
 The Company will recognize revenue on arrangements in accordance with FASB ASC No. 605, “Revenue Recognition”.  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.
 
 (I)Fair Value of Financial Instruments
 
 The carrying amount reported in the balance sheet for accounts payable and loan payable related party approximate fair value based on the short-term maturity of these instruments.
  6
  EUROPA ACQUISITION III, INC.
 (A DEVELOPMENT STAGE COMPANY)
 CONDENSED NOTES TO FINANCIAL STATEMENTS
 AS OF DECEMBER 31, 2010
 (UNAUDITED)
 NOTE 2  STOCKHOLDERS’ DEFICIENCY
 
 (A) Stock Issued for Services
 
 On  June 30, 2010, the Company issued 100,000 shares of common stock to its founders having a fair value of $1,000 ($0.01/share) in exchange for services provided (See Note 3).
  NOTE 3           RELATED PARTY TRANSACTION
  On June 30, 2010, the Company issued 100,000 shares of common stock to its founders having a fair value of $1,000 ($0.01/share) in exchange for services provided (See Note 2).
 
 During the six month period ending December 31, 2010, Europa Capital (a related party) paid $2112 in legal expenses and filing fees on behalf of the Company. These amounts are recorded as a related party loan payable. The amounts are unsecured, non interest bearing and due on demand.
 
 NOTE 4           GOING CONCERN
 
 As reflected in the accompanying unaudited condensed financial statements, the Company is in the development stage with limited operations.  The Company has a net loss of $8025 from inception and a working capital and stockholders’ deficiency of $7025 at December 31, 2010 and used $2112 cash in operations from inception. This 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.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.  Management intends to provide the Company with additional loans as needed and is seeking a merger target to implement its strategic plans. Management feels these actions provide the opportunity for the Company to continue as a going concern.




7




Item 2.     Management’s Discussion and Analysis or Plan of Operation





The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.





Plan of Operation





We were organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings.  We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.





We do not currently engage in any business activities that provide cash flow. The costs of investigating and analyzing business combinations for the next 12 months and beyond such time will be paid with money in our treasury or with additional amounts, as necessary, to be loaned to or invested in us by our stockholders, management or other investors.





During the next 12 months we anticipate incurring costs related to:





(i)
filing of Exchange Act reports, and





(ii)
consummating an acquisition.





We believe we will be able to meet these costs through use of funds in our treasury and additional amounts, as necessary, to be loaned by or invested in us by our stockholders, management or other investors.





We are in the development stage and have negative working capital, negative stockholders’ equity and have not earned any revenues from operations to date. These conditions raise substantial doubt about our ability to continue as a going concern. We are currently devoting our efforts to locating merger candidates. Our ability to continue as a going concern is dependent upon our ability to develop additional sources of capital, locate and complete a merger with another company, and ultimately, achieve profitable operations.





We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.





Our officers and directors have not had any preliminary contact or discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.





Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.





We anticipate that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital which we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.





8




Results of Operation





We have not had any operating income since inception.  For the three and six months ended December 31, 2010 we incurred a net loss of $913 and $5,775 and since inception we have incurred a net loss of $8,025. Expenses from inception were comprised of costs mainly associated with legal, accounting and office expense.





Liquidity and Capital Resources





At December 31, 2010, we had no capital resources and we will need additional capital to continue operations for the next twelve months.  We intend to rely upon the issuance of common stock and loans from shareholders to fund administrative expenses pending acquisition of an operating company.  However, our shareholders are under no obligation to provide such funding.





Management anticipates seeking out a target company through solicitation. Such solicitation may include newspaper or magazine advertisements, mailings and other distributions to law firms, accounting firms, investment bankers, financial advisors and similar persons, the use of one or more World Wide Web sites and similar methods. No estimate can be made as to the number of persons who will be contacted or solicited. Management may engage in such solicitation directly or may employ one or more other entities to conduct or assist in such solicitation. Management and its affiliates will pay referral fees to consultants and others who refer target businesses for mergers into public companies in which management and its affiliates have an interest. Payments are made if a business combination occurs, and may consist of cash or a portion of the stock in the Company retained by management and its affiliates, or both.





As reflected in the accompanying unaudited condensed financial statements, the Company has a net loss of $8,025 from inception and a working capital and stockholders’ deficiency of $7,025 at December 31, 2010, and used $2,112 cash in operations from inception. This 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. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.





Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern





Peter Reichard will supervise the search for target companies as potential candidates for a business combination. Peter Reichard will pay, at his own expense, any costs he incurs in supervising the search for a target company. Peter Reichard may enter into agreements with other consultants to assist in locating a target company and may share stock received by it or cash resulting from the sale of its securities with such other consultants. Peter Reichard controls us and therefore has the authority to enter into any agreement binding us. Peter Reichard as an officer, director and shareholder can authorize any such agreement binding us.





During the six month period ending December 31, 2010, Europa Capital (a related party) paid $2112 in legal expenses and filing fees on behalf of the Company.  This will be recorded as a related party loan payable on the financial statements.





Critical Accounting Policies





We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management's judgment in their application.





The Company accounts for income taxes under FASB Codification Topic 740-10-25 (“ASC 740-10-25”).  Under ASC 740-10-25, 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 ASC 740-10-25, 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.




9




Off Balance Sheet Transactions





None.





Item 3.     Quantitative and Qualitative Disclosures About Market Risk





The Company is subject to certain market risks, including changes in interest rates and currency exchange rates.  The Company does not undertake any specific actions to limit those exposures.





Item 4T.  Controls and Procedures





10





a)   Evaluation of Disclosure Controls. 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”) (the Company’s principal financial and accounting officer), 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.





(b)   Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.




11




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





None





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





(a)   Exhibits





31.1 Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002





32.1 Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002





12





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.











Europa Acquisition III, Inc.Date: January 13, 2011
By:
/s/ Peter ReichardPeter ReichardPresident and Director