**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-Q**




**For
      Annual and Transition Reports pursuant to Section 13 or 15(d) of
      the**


**Securities
      Exchange Act of 1934 (Mark One)**




**x**
            **Quarterly
                Report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934**




**For
      the nine months ended**


**September
      30, 2008**




**o**
            **Transition
                Report pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934**




**Commission
      File Number 1-11248**




**SUNRISE
      ENERGY RESOURSES, INC.**


(Name
      of
      Registrant as specified in its charter)




**Delaware**
            **84-0938688**(State
                or other jurisdiction of incorporation
                or organization)
            (I.R.S.
                Employer
                Identification
                Number)950
                Third Avenue, Suite 501New
                York, New York
            10022(Address
                of principal executive office)
            (Zip
                Code)




**Registrant’s
      telephone number, including area code: (917) 463-4210**




Securities
      registered pursuant to Section 12(b) of the Act: None





Securities
      registered pursuant to Section 12(g) of the Act: Common stock




Check
      weather the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act o




Note
      -
      Checking the box above will not relieve any registrant required to file reports
      pursuant to Section 13 or 15(d) of the Exchange Act from their obligations
      under
      those Sections.




Check
      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 o




Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of Registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part II of this Form 10-Q or any amendment to
      this
      Form 10-Q. 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.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act.




Large accelerated filero
            Accelerated fileroNon-accelerated filero
            Smaller reporting companyx


(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 o   No x




State
      issuer’s revenues for its most recent fiscal year: $2,767,432




As
      of
      November 13, 2008, the Registrant had 23,402,687 shares of common stock $.001
      par value issued and outstanding.




Transitional
      Small Business Disclosure Format (Check one): Yes o; No x









**SUNRISE
      ENERGY RESOURCES, INC.**




**FORM
      10-Q**


**TABLE
      OF CONTENTS**




Page**PART
                  I. FINANCIAL INFORMATION**Financial
                  Statements (unaudited)Item
                  1.Consolidated
                  Balance Sheets - September 30, 2008 and December 31, 2007
              2Consolidated
                  Statements of Operations and Comprehensive Loss - for the nine
                  months
                  ended September 30, 2008 and 2007
              3Consolidated
                  Statements of Changes in Stockholder’s Equity (Capital Deficit) -
                  September 30, 2008 and December 31, 2007
              4Consolidated
                  Statements of Cash Flows - for the nine months ended September
                  30, 2008
                  and 2007
              5Notes
                  to Unaudited Consolidated Financial Statements
              7Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              26Item
                  3.
              Quantitative
                  and Qualitative Disclosures About Market Risk
              33Item
                  4.
              Controls
                  and Procedures
              34**PART
                  II. OTHER INFORMATION**Item
                  1.
              Legal
                  Proceedings
              36Item
                  1A.
              Risk
                  Factors
              36Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              36Item
                  3.
              Defaults
                  upon Senior Securities
              36Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              36Item
                  5.
              Other
                  Information
              36Item
                  6.
              Exhibits
                  and Reports on Form 8-K
              36**SIGNATURES**
              36
  **PART
          I.**
  **SUNRISE
          ENERGY RESOURCES INC.**


**CONSOLIDATED
      BALANCE SHEETS**


**(Expressed
      in US Dollars)**








**September
                30,**
              **2008**
            
            **December
                31,**
              **2007**ASSETS
            
            **(UNAUDITED)**CURRENT
                ASSETSCash
                and cash equivalents
            
            $
            10,245
            
            $
            11,915Accounts
                receivable - related party
            
            
            190,235
            
            
            165,492Other
                accounts receivable and prepayments
            
            
            696,194
            
            
            991,538Inventories
            
            
            88,027
            
            
            38,550Taxes
                receivable
            
            
            2,164,140
            
            
            1,735,119Other
                current assets
            
            
            
            
            
            -Total
                current assets
            
            
            3,148,841
            
            
            2,942,614NONCURRENT
                ASSETSProperty,
                plant and equipment, net
            
            
            11,200,822
            
            
            9,590,275Lease/concession
                acquisition costof
                Pari
            
            
            67,321
            
            
            107,714Long-term
                financial investments
            
            
            3,648
            
            
            77,534Deferred
                tax asset
            
            
            73,690
            
            
            75,777**TOTAL
                ASSETS**
            
            **$**
            **14,494,322**
            
            **$**
            **12,793,914**LIABILITIES
                AND STOCKHOLDERS' EQUITYCURRENT
                LIABILITIESAccounts
                payable
            
            $
            91,068
            
            $
            180,584Accounts
                payable - related party
            
            
            3,389,015
            
            
            1,898,070Taxes
                payable
            
            
            409,704
            
            
            430,831Short
                term notes payable
            
            
            290,872
            
            
            815,533Other
                accounts payable and accruals
            
            
            1,282,559
            
            
            765,695Other
                accounts payable - related party
            
            
            275,091
            
            
            275,091Prepayments
                for oil and gas
            
            
            616,291
            
            
            412,228Interest
                payable
            
            
            189,591
            
            
            219,710Interest
                payable - related party
            
            
            103,703
            
            
            99,095Profit
                interest payable
            
            
            18,697
            
            
            17,998Total
                current liabilities
            
            
            6,666,591
            
            
            5,114,835Long
                term notes payable
            
            
            5,767,131
            
            
            5,363,872Long-term
                payable to related party
            
            
            1,205,900
            
            
            1,205,900Commitments
                and Contingencies (Note 24)STOCKHOLDERS’
                EQUITYCommon
                Stock, $.001 par value, 75,000,000 authorized, 23,402,687 and 21,704,682
                issued and outstanding as of September 30, 2008 and December 31,
                2007
            
            
            23,403
            
            
            21,705Additional
                Paid in Capital
            
            
            6,339,660
            
            
            4,643,353Retained
                earnings (Accumulated deficit)
            
            
            (5,808,823
            )
            
            (3,523,559
            )Accumulated
                other comprehensive (loss) - foreign currency
            
            
            300,460
            
            
            (32,192
            )Total
                stockholders' equity (deficit)
            
            
            854,700
            
            
            1,109,307**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            
            **$**
            **14,494,322**
            
            **$**
            **12,793,914**


The
        accompanying notes are an integral part of the consolidated financial
        statements.
  2




**SUNRISE
      ENERGY RESOURCES INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**


**(Expressed
      in US Dollars except share amounts)**


**UNAUDITED**








**For
                the three months ended**
            
            **For
                the nine months ended****September
                30,**
            
            **September
                30,****2008**
            
            **2007**
            
            **2008**
            
            **2007**REVENUESProduced
                oil & gas
            
            $
            438,223
            
            $
            807,032
            
            $
            1,903,441
            
            $
            1,879,906Purchased
                oil & gas
            
            
            1,054
            
            
            267,110
            
            
            125,909
            
            
            389,790Total
            
            
            439,277
            
            
            1,074,142
            
            
            2,029,350
            
            
            2,269,696COST
                OF SALES
            
            
            (1,574
            )
            
            (260,002
            )
            
            (187,991
            )
            
            (354,525
            )437,703
            
            
            814,140
            
            
            1,841,359
            
            
            1,915,171Operating
                expenses
            
            
            (431,094
            )
            
            (477,531
            )
            
            (1,294,822
            )
            
            (1,246,430
            )Depreciation
                and Depletion expense
            
            
            (421,312
            )
            
            (200,773
            )
            
            (1,468,736
            )
            
            (341,663
            )Other
                operating income (expenses), net
            
            
            9,542
            
            
            27,447
            
            
            (3,817
            )
            
            231,151Sales,
                general and administrative expenses
            
            
            (300,029
            )
            
            (334,890
            )
            
            (947,460
            )
            
            (887,055
            )OPERATING
                LOSS
            
            
            (705,190
            )
            
            (171,608
            )
            
            (1,873,476
            )
            
            (328,826
            )OTHER
                INCOME (EXPENSE)Interest
                expense, net
            
            
            (144,073
            )
            
            (275,758
            )
            
            (349,817
            )
            
            (687,095
            )PSA
                working interest expense
            
            
            
            
            
            
            
            
            
            
            
            (41,193
            )Foreign
                exchange loss
            
            
            (17,513
            )
            
            (7,039
            )
            
            (23,725
            )
            
            (24,479
            )Other
                income (expense)
            
            
            (16,146
            )
            
            
            
            
            (33,244
            )
            
            (72,380
            )LOSS
                BEFORE TAX
            
            
            (882,922
            )
            
            (454,406
            )
            
            (2,280,262
            )
            
            (1,153,973
            )INCOME
                TAX
            
            
            4,564
            
            
            (3,814
            )
            
            (5,002
            )
            
            (41,019
            )NET
                LOSS
            
            
            (878,358
            )
            
            (458,219
            )
            
            (2,285,264
            )
            
            (1,194,992
            )Translation
                gain on foreign entities
            
            
            (31,698
            )
            
            
            
            
            332,652TOTAL
                COMPREHENSIVE LOSS
            
            $
            (910,056
            )
            $
            (458,219
            )
            $
            (1,952,612
            )
            $
            (1,194,992
            )BASIC
                NET LOSS  PER SHARE
            
            
            (0.04
            )
            $
            (0.02
            )
            $
            (0.10
            )
            $
            (0.07
            )WEIGHTED
                AVERAGE COMMON SHARES OUTSTANDING
            
            
            23,362,687
            
            
            19,186,447
            
            
            22,553,685
            
            
            18,191,767


The
        accompanying notes are an integral part of the consolidated financial
        statements.




3




**SUNRISE
      ENERGY RESOURCES INC.**


**CONSOLIDATED
      STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY**


**(CAPITAL
      DEFICIT)**


**(Expressed
      in US Dollars except share amounts)**


**UNAUDITED**


**Common
                      Stock****Shares**
                
                **Amount**
                
                **Additional**
                    **Paid-in**
                    **Capital**
                
                **Retained
                      Earnings (****Accumulated**
                      **Deficit)**
                
                **Accumulated**
                      **Other******C**omprehensive**
                        **Income**
                
                **Total
                        Stockholder's**
                      **Equity**
                      **(Capital
                        Deficit)****BALANCE,
                    DECEMBER 31, 2006**
                
                
                **17,161,014**
                
                **$**
                **17,161**
                
                **$**
                **80,824**
                
                **$**
                **(1,520,742**
                **)**
                **$**
                **(32,192**
                **)**
                **$**
                **(1,454,949**
                **)**Private
                    placement of shares
                
                
                4,493,668
                
                
                4,494
                
                
                4,435,079
                
                
                
                
                
                
                
                
                4,439,573Shares
                    issued for services
                
                
                50,000
                
                
                50
                
                
                127,450
                
                
                
                
                
                
                
                
                127,500Net
                    loss for the year
                
                
                
                
                
                
                
                
                
                
                
                (2,002,817
                )
                
                
                
                
                (2,002,817
                )**BALANCE,
                    DECEMBER 31, 2007**
                
                
                **21,704,682**
                
                
                **21,705**
                
                
                **4,643,353**
                
                
                **(3,523,559**
                **)**
                
                **(
                    32,192**
                **)**
                
                **1,109,307**Private
                    placement of shares
                
                
                1,698,005
                
                
                1,698
                
                
                1,696,307
                
                
                
                
                
                
                
                
                1,698,005Net
                    loss for nine months
                
                
                
                
                
                
                
                
                
                
                
                (2,285,264
                )
                
                
                
                
                (2,285,264
                )Other
                    comprehensive income for nine months
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                332,652
                
                
                332,652**BALANCE,
                    SEPTEMBER 30, 2008**
                
                
                **23,402,687**
                
                **$**
                **23,403**
                
                **$**
                **6,339,660**
                
                **$**
                **(5,808,823**
                **)**
                **$**
                **300,460**
                
                **$**
                **854,700**
 The
            accompanying notes are an integral part of the consolidated financial
            statements.
  4


**SUNRISE
      ENERGY RESOURCES INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**(Expressed
      in US Dollars)**


**UNAUDITED**





**For
                  the nine months ended**
                **September
                  30,****2008**
              
              **2007****CASH
                  (USED IN) PROVIDED BY OPERATING ACTIVITIES:**Net
                  loss
              
              $
              (2,285,264
              )
              $
              (1,194,992
              )Adjustments
                  to reconcile net loss to net cash in operating activities:Depreciation
                  expense
              
              
              1,468,736
              
              
              341,663Provision
                  for doubtful accountsDeferred
                  tax (gain)
              
              
              2,087
              
              
              (3,182
              )Net
                  imputed interest expense (income)
              
              
              
              
              
              308,597Ammortization
                  of shares issued for services
              
              
              
              
              
              56,602Other
                  non-monetary expenses
              
              
              73,889
              
              
              237,678Changes
                  in assets and liabilities:Decrease
                  (increase) in accounts receivable
              
              
              (24,743
              )
              
              (98,223
              )(Increase)
                  in other accounts receivable and prepayments
              
              
              295,344
              
              
              91,130(Increase)
                  in inventories
              
              
              (49,478
              )
              
              329,832(Increase)
                  decrease in taxes receivable
              
              
              (429,021
              )
              
              (721,336
              )(Decrease)
                  increase in accounts payable
              
              
              1,401,430
              
              
              708,884Increase
                  in taxes payable
              
              
              (21,128
              )
              
              223,378Increase
                  in other accounts payable and accruals
              
              
              516,861
              
              
              (312,052
              )(Decrease)
                  increase in prepayments for oil and gas
              
              
              204,063
              
              
              (262,672
              )Increase
                  in dividend payable
              
              
              700
              
              
              (40,949
              )Increase
                  in interest payable
              
              
              377,749
              
              
              325,686NET
                  CASH FLOW FROM OPERATING ACTIVITIES
              
              
              1,531,225
              
              
              (9,956
              )**CASH
                  PROVIDED BY FINANCING ACTIVITIES:**Senior
                  short term loan/notes received
              
              
              
              
              
              2,285,425Short
                  term notes repaid
              
              
              (524,661
              )
              
              (1,110,342
              )Long
                  term loans receivedProceeds
                  from share issuance
              
              
              1,698,005
              
              
              2,807,496Promissory
                  notes issued
              
              
              
              
              
              856,200Short
                  term loans repaidNET
                  CASHFLOW FROM FINANCING ACTIVITIES
              
              
              1,173,344
              
              
              4,838,779**CASH
                  USED IN INVESTING ACTIVITIES**Purchase
                  of property, plant and equipment
              
              
              (3,038,891
              )
              
              (4,906,852
              )Long
                  term investments purchased
              
              
              
              
              
              (74,023
              )NET
                  CASH FLOW FROM INVESTING ACTIVITIES
              
              
              (3,038,891
              )
              
              (4,980,875
              )**EFFECT
                  OF EXCHANGE RATE CHANGES**
              
              
              332,652
              
              
              **-****INCREASE
                  (DECREASE) IN CASH**
              
              
              (1,670
              )
              
              (152,052
              )**CASH,
                  at the beginning of the period**
              
              
              11,915
              
              
              203,146**CASH,
                  at the end of the period**
              
              $
              10,245
              
              $
              51,094





The
        accompanying notes are an integral part of the consolidated financial
        statements.
  5
  **SUNRISE
        ENERGY RESOURCES INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**SUPPLEMENTAL
      INFORMATION**


**(Expressed
      in US Dollars)**


**UNAUDITED**




**Nine
                  Months Ended**
                **September
                  30,****2008**
            
            **2007**Cash
                paid for:****Income
                taxes
            
            $
            26,129
            
            $
            (46,153
            )Non-cash
                investing and financing transactions:****Issuance
                of common stock to Dutchess Private Equity Fund for placement agency
                services
            
            $
            -
            
            $
            127,500****Issuance
                of promissory Note as payment for services to MI SWACO
            
            
            
            
            $
            237,677




The
          accompanying notes are an integral part of the consolidated financial
          statements.
  6
 
  **NOTES
            TO THE CONSOLIDATED STATEMENTS
            (UNAUDITED)**




**1. 
      NATURE OF BUSINESS**




All
      operating activities of Sunrise Energy Resources Inc. are conducted through
      its
      wholly owned Ukrainian subsidiaries, TOV Energy-Servicing Company Esko Pivnich
      (“Esko Pivnich” or “EP”) and Pari (“Pari”) both formed as Ukrainian Closed Joint
      Stock Companies (CJSC). Esko Pivnich and Pari are engaged in oil and gas
      exploration and development in the country of Ukraine.  During
      the nine months of 2008 the Company’s revenues were derived exclusively from
      Esko Pivnich’s activities on Karaikozovsk lease in Eastern Ukraine where the
      Company was producing from 3 wells internally labeled #2, #3 and #21. Well
      #21
      of Karaikozovsk property was put into production on September 1, 2007 and was
      not operational prior to that date.




Until
      July 31, 2007, Esko Pivnich’s involvement in wells #2 and #3 of Karaikozovsk
      lease was governed by joint activity agreements (JAA). On that date the
      effective JAA #35/970-SD was superseded by a Lease Agreement # 4/1220-OR that
      entered into effect on August 1, 2007. In accordance with the lease agreement,
      the Company’s wholly owned subsidiary Esko Pivnich shall pay Okhtirkaneftegas an
      equivalent of approximately $20,000 per month at the prevailing exchange rate
      for the usage of all facilities at Karaikozovsk property that are owned by
      Okhtirkaneftegas including Wells #2 and #3. The above flat fee does not depend
      upon the amount of hydrocarbons actually produced from the above wells.




Since
      2000, Esko Pivnich has been a party to the following joint activity and lease
      agreements with regard to Karaikozovsk property.


**JAA/**
                **Lease
                  Agreement**
              
              **Counterparty**
              
              **Status**
              
              **EP
                  Capital**
                **Contribution*,**
                **%**
              
              **EP
                  Profit**
                **Share*,**
                **%**JAA
                  # 01-SD dated April 26, 2000
              
              Poltavaneftegazgeologiya
              
              Superceded
                  by PSA # 35/970-SD.
              
              100%
              
              60%JAA
                  # 35/970-SD dated August 19, 2004
              
              Okhtyrkaneftogaz
              
              Terminated
                  on July 31, 2007 and superceded by Lease Agreement effective from
                  August
                  1, 2007.
              
              80%
              
              80%Lease
                  Agreement # 4/1220-OR dated August 1, 2007
              
              Okhtyrkaneftogaz
              
              In
                  effect
              
              100%
              
              100%




*
      Esko
      Pivnich’s capital constribution and profit share were applicable only to Wells
      #2 and #3 of Karaikozovsk lease. Well #21 of Karaikozovsk lease has been 100%
      financed by Esko Pivnich. Accordingly, 100% of profits or losses from Well
      #21
      accrue to Esko Pivnich. The Company is not a party to any joint activity or
      other agreements with respect to remaining properties. In the event, the
      Company’s subsidiaries do not enter into joint activity agreements, the
      Company’s subsidiaries shall be responsible for 100% of the capital expenditures
      on such properties and, accordingly, 100% of the profits or losses from wells
      drilled on these properties shall accrue to the Company.




7


In
      addition to selling oil and gas produced from its Karaikozovsk lease, during
      the
      periods presented, the Company purchased oil and gas from third parties. The
      purchased hydrocarbons were subsequently resold to third parties in order to
      enable Esko Pivnich to fulfill its monthly delivery obligations.




Sunrise
      Energy Resources Inc. currently has its headquarters at the following address:
      950 Third Avenue, Suite 501, New York, New York 10022.




Esko
      Pivnich and Pari conduct their operations from a Kiev office located at the
      following address: 10a Rileeva St., Kiev, Ukraine.





As
      of
      September 30, 2008 the company employed 50 people.





**2.**  **PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS**





***Basis
      of Presentation***  ***-*** The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with U.S. generally accepted accounting principles
      (“GAAP”) for interim financial information and with the instructions to Form
      10-Q. Accordingly, they do not include all of the information and footnotes
      required by GAAP for complete financial statements. In the opinion of
      management, all adjustments (consisting of normal recurring adjustments)
      considered necessary for a fair presentation have been included. Operating
      results for the nine months period ended September 30, 2008 are not indicative
      of the results that may be expected for the year ending December 31,
      2008.





As
      contemplated by the Securities and Exchange Commission (SEC) under Rules of
      Regulation S-B, the accompanying financial statements and related footnotes
      have
      been condensed and do not contain certain information that will be included
      in
      the Company’s annual financial statements and footnotes thereto. For further
      information, refer to the Company’s audited consolidated financial statements
      and related footnotes thereto included in the Company’s annual report on Form
      10-KSB for the year ended December 31, 2007.




***Going
      concern -*** The
      Company’s consolidated financial statements have been presented on the basis
      that it is a going concern, which contemplates the realization of assets and
      satisfaction of liabilities in the normal course of business. As shown in the
      consolidated financial statements, the Company incurred a net loss of $2,285,264
      during the nine months ended September 30, 2008, and, as of September 30, 2008
      the Company's current liabilities exceeded its current assets by $3,517,750.
      Additionally, in order to fully develop the area covered by its licenses, the
      Company would require substantial amounts in additional funding.




In
      view
      of the matters described in the preceding paragraph, recoverability of a
      substantial portion of the recorded asset amounts shown in the accompanying
      balance sheet is dependent upon continued operations of the Company, which
      in
      turn is dependent upon the Company’s ability to meet its financing requirements
      on a continuing basis. The Company’s ability to meet such financing requirements
      will be subject primarily to the Company’s capability to raise additional funds
      by way of additional equity and other investments into the Company, to maintain
      present financing, and to succeed in its future operations. The consolidated
      financial statements do not include any adjustments relating to the
      recoverability and classification of recorded asset amounts or amounts and
      classification of liabilities that might be necessary should the Company be
      unable to continue in operations or meet its obligations on a timely
      basis.




Management
      has taken the following steps to revise its operating and financial
      requirements, which it believes are sufficient to provide the Company with
      the
      ability to continue in operations.




·  The
      Company plans to continue raising additional equity capital and considers such
      contributions as significant source of funding for the development of its
      Licenses.




·  Based
      on
      its expected production capabilities from the expenditures that will be made
      as
      a result of equity and debt financing, the Company believes that it can generate
      adequate cash flows to support its operations.




·  Nevertheless,
      additional funding requirements may be necessary before the Company is able
      to
      rely solely on the production from the licensed properties for the Company’s
      cash flow requirements.




8


***Use
      of Estimates and Assumptions***  ***-*** The
      preparation of consolidated financial statements in conformity with US GAAP
      requires management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities, revenues and expenses and the disclosure
      of
      contingent assets and liabilities. Due to the inherent uncertainty in making
      those estimates, actual results reported in future periods could differ from
      such estimates.





***Functional
      and Reporting Currency -*** The
      reporting currency of the accompanying consolidated financial statements is
      the
      US dollars. Ukrainian entities use Ukrainian Hrivna (UAH) as their functional
      currency since most of their revenues and operating expenses are denominated
      in
      Ukrainian Hrivnas. The Ukrainian Hrivna is not a fully convertible currency
      outside of Ukraine. The translation of Hrivna denominated assets and liabilities
      into US dollars for the purpose of these consolidated financial statements
      does
      not indicate that the Company could or will in the future realize or settle
      in
      US dollars the translated values of these assets and
      liabilities.





The
      prevailing exchange rates as at September 30, 2008 and December 31, 2007 were
      approximately 1 U.S. dollar to 4.8610 and 5.0500 Ukrainian Hrivnas. For the
      periods ended September 30, 2008 and 2007, the average exchange rate for 1U.S.
      dollar was 4.9639 and 5.0500 Ukrainian Hrivnas.




**3.** **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES**





***Basis
      of Consolidation -*** The
      consolidated financial statements incorporate the financial statements of
      Sunrise Energy Resources Inc. and other enterprises, where the Company, directly
      or indirectly exercises control. Control is achieved where the Company has
      the
      power to govern the financial and operating policies of an investee enterprise
      so as to obtain benefits from its activities.





All
      significant intercompany transactions, balances and unrealized gains (losses)
      on
      transactions are eliminated on consolidation.





***Revenue
      Recognition*** **** ***-*** **** For
      revenue from product sales, the Company recognizes revenue in accordance with
      SEC Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial
      Statements” (“SAB 104”). SAB 104 requires that four basic criteria must be met
      before revenue can be recognized: (1) persuasive evidence of an arrangement
      exists; (2) delivery has occurred; (3) the selling price is fixed and
      determinable; and (4) collectibility is reasonably assured.





Criterion
      (1) is met as every delivery is covered by a separate contract and the title
      passes to the customer only upon customer’s acceptance at point of destination,
      which is in compliance with criterion (2). Determination of criteria (3) and
      (4)
      are based on management's judgments regarding the fixed nature of the selling
      prices of the products delivered and the collectibility of those amounts.
      Provisions for discounts and rebates to customers, estimated returns and
      allowances, and other adjustments are provided for in the same period the
      related sales are recorded. The Company defers any revenue for which the product
      has not been delivered and accepted by its customers. In accordance with the
      Company’s standard contract terms, once delivered and accepted the product
      cannot be returned and no claims can be presented to the Company. The Company
      recognizes revenue on gross basis.





The
      Company has revenues from the sale of petroleum products produced from the
      properties for which the Company has production activities (Note 4) and from
      products purchased from third parties. At present, the Company has been unable
      to estimate the quantity of its proved reserves. We are working with our
      petroleum engineering consultants to complete our reserve report.




***Property,
      Plant and Equipment*** - As
      of the
      date of the financial statements with the exception of Well #21 of Karaikozovsk
      license, most assets capitalized are directly related to in-process drilling
      costs, above ground storage, distribution and production facilities. The Company
      has adopted the policy of accounting for oil and gas properties using the
      successful efforts method of accounting whereby property acquisitions,
      successful exploratory wells, all development costs, and support equipment
      and
      facilities are capitalized. Unsuccessful exploratory wells are expensed when
      a
      well is determined non-productive. Other exploratory expenditures, including
      geological and geophysical costs are expensed as incurred. Depreciation,
      depletion and amortization of capitalized costs is calculated based on useful
      economic life of the resulting assets. Capitalized Lease/Concession acquisition
      costs are depreciated over the life of the related drilling rights.




9


Production
      and related overhead costs are expensed as incurred. Depreciation of assets
      not
      directly associated with oil production and certain workover costs on properties
      has been calculated on a straight-line basis over the economic lives of such
      assets, estimated to be in the following ranges:




Property
                and Equipment
            2
                yearsWell
                #21drilling costs, casing and tubing
            Over
                the remaining life of the exploration licenseOther
                Oil&Gas Equipment
            10-12
                yearsStorage
                tanks
            10
                yearsAbove
                ground pipelines and flowlines
            20
                yearsOffice
                Equipment
            5
                yearsComputer
                Equipment
            3
                years




The
      gain
      or loss arising on the disposal or retirement of an asset is determined as
      the
      difference between the sales proceeds and the carrying amount of the asset
      and
      is recognized in the income statement.




Well
      #21
      of Karaikozovsk property was placed into production on September 1, 2007 from
      the gas producing horizon Visean-15. Since the commencement of production,
      a
      total of approximately 449,271 MMCF of natural gas and 8,575 BBLS of condensate
      have been produced from the well. The well is currently producing on a 6mm
      choke. All produced gas is being sold to the Company’s customers through the
      regional pipeline connection secured by the Company. While the well was being
      logged, 2 other commercially viable producing horizons were discovered in
      addition to the currently producing Visean-15 producing horizon. The Company’s
      geologists estimate the useful economic life of the well as 3-5 years. Since
      the
      well is currently undergoing testing, the Company’s geologists have not yet been
      able to obtain a more accurate estimate of the reserves of Well #21 which are
      required in order to apply the units of production method. Once the extensive
      testing of the well is completed and the Company’s geologists are able to
      accurately estimate the remaining producible reserves the Company will start
      applying the units of production method. Until that time, the Company determined
      the most appropriate procedure to deplete the drilling costs, as well as the
      costs of casing and tubing over the remaining life of the exploration license
      for Karaikozovsk property which expires in July 2, 2009. Consequently, the
      above
      well costs are being expensed over the period from September 1, 2007 to June
      30,
      2009. Once the reserve data has been obtained, we will adjust this calculation
      to comply with actual production and reserves.




In
      accordance with SFAS 144, we test our long-lived assets for impairment by
      comparing the carrying value of the assets with the undiscounted expected
      cashflows from the investments. In the event, the aggregate undiscounted
      expected cashflows from the investments are below the carrying value of the
      above investments, the unamortized costs of such fixed assets will be reduced
      to
      their fair value. Simultaneously, we will recognize the impairment loss as
      the
      amount by which the fair value of the investments exceeds their carrying
      value.




We
      assess
      unproved properties on an annual basis to determine whether they have been
      impaired. If we drill a dry hole on a property and elect to abstain from further
      drilling on this property, the above property will be deemed impaired and we
      will recognize the impairment loss. Costs related to infrastructure are
      evaluated by the management based on continuing valuation and future benefit
      to
      the Company. If such assets are determined to have lost value, we will recognize
      impairment at the time.




***Leasing***  ***-*** Leases
      are classified as finance leases whenever the terms of the lease transfer
      substantially all the risk and rewards of ownership to the lessee. All other
      leases are classified as operating leases.





There
      were no assets held under financial leases. Operating leases are expensed in
      the
      period in which they are incurred.




10




***Inventories***  ***-*** Inventories are stated at the lower of cost or net realizable value. Cost
      comprises direct cost of extracted oil and gas, its transportation and handling
      physically in the pipelines or storages prior to the delivery for sale.





Cost
      is
      calculated using weighted average method. Net realizable value represents the
      estimated selling price less all estimated costs to completion and costs to
      be
      incurred in marketing, selling and distribution.





***Accounts
      Receivable -*** Accounts
      receivable are stated at their net realizable value after deducting provisions
      for uncollectible amounts.





***Cash
      and Cash Equivalents -*** Cash
      include petty cash and cash held on current bank accounts. Cash equivalents
      include short-term investments with an original maturity of three months or
      less
      that are readily convertible to known amount of cash which are subject to
      insignificant risk of changes in value. Cash and cash equivalents as of
      September 30, 2008 and December 31, 2007 consisted mainly of the UAH and USD
      denominated current accounts.




***Loans
      and Other Borrowings***  ***-*** All
      loans and borrowings are recorded at the proceeds received, net of direct issue
      costs.




***Borrowing
      Costs***  ***-*** Borrowing costs are recognized as an expense in the period in which they are
      incurred.





***Trade
      and Other Payables***  ***-*** Liabilities for trade and other amounts payable are stated at their nominal
      value.





***Value
      added tax on purchases and sales -*** Value
      added taxes (VAT) related to sales is payable to the Ukrainian tax authorities
      upon collection of receivables from customers. VAT on purchases is offset
      against VAT collected from sales. The tax authorities permit the settlement
      of
      VAT on a net basis. VAT related to sales and purchases which have not been
      settled at the balance sheet date, (VAT deferred) is recognized in the balance
      sheet on a gross basis and disclosed separately as a current asset and
      liability. Where provision has been made against debtors deemed to be
      uncollectible bad debt expense is recorded for the gross amount of the debtor,
      including VAT. The related VAT deferred liability is maintained until the debtor
      is settled or until the debtor is written off for statutory accounting
      purposes.





***Income
      Taxes***  ***-*** Income
      tax has been computed based on the results for the year as adjusted for items
      that are non-assessable or non-tax deductible.





The
      Company has adopted Financial Accounting Standards No. 109 (“SFAS 109”), under
      which the deferred tax is accounted for using the balance sheet liability method
      in respect of temporary differences arising from differences between the
      carrying amount of assets and liabilities in the consolidated financial
      statements and the corresponding tax basis used in the computation of taxable
      profit. Deferred tax liabilities are generally recognized for all taxable
      temporary differences and deferred tax assets are recognized to the extent
      that
      it is probable that taxable profits will be available against which deductible
      temporary differences can be utilized. Deferred tax assets and liabilities
      are
      offset when they relate to income taxes levied by the same taxation authority
      and the Company intends to settle its tax assets and liabilities on a net
      basis.





Deferred
      tax is calculated at rates that are expected to apply to the period when the
      asset is realized or the liability is settled. It is charged or credited to
      the
      income statement, except when it relates to items credited or charged directly
      to equity, in which case the deferred tax is also dealt with in
      equity.





***Fair
      Value of Financial Instruments*** - SFAS
      No. 107, “Disclosures About Fair Value of Financial Instruments,” requires
      disclosure of the fair value of certain financial instruments. Unless
      otherwise noted, it is management’s opinion that the Company is not exposed to
      significant interest, currency or credit risks arising from these financial
      instruments. The fair value of financial instruments approximate their carrying
      values due to the immediate or short term maturity of these financial
      instruments.




11




***Earnings
      (Loss) per Share -*** Earnings
      (loss) per share are computed in accordance with SFAS No. 128, "Earnings Per
      Share". Basic earnings (loss) per share are calculated by dividing the net
      income (loss) available to common stockholders by the weighted average number
      of
      shares outstanding during the year. Diluted earnings per share reflect the
      potential dilution of securities that could share in earnings of an entity.
      In a
      loss year, dilutive common equivalent shares are excluded from the loss per
      share calculation as the effect would be anti-dilutive.




***Comprehensive
      Income (Loss) -*** Statement
      of SFAS 130, “Reporting Comprehensive Income,” establishes standards for
      reporting and displaying of comprehensive income, its components and accumulated
      balances. Comprehensive income (loss) is defined to include all changes in
      equity except those resulting from investments by owners and distributions
      to
      owners. Among other disclosures, SFAS 130 requires that all items that are
      required to be recognized under current accounting standards as components
      of
      comprehensive income (loss) be reported in a financial statement that is
      displayed with the same prominence as other financial statements. Foreign
      exchange translation gains and losses of the Company are reflected in
      Comprehensive gains and losses.




***Retirement
      Benefit Costs***  ***-*** The
      operating divisions of the Company situated in Ukraine contribute to the state
      pension, medical and social insurance and employment funds on behalf of all
      its
      current employees. Any related expenses are recognized in the income statement
      as incurred.




***Segment
      Reporting***  ***-*** The
      Company’s business operations are located in Ukraine and relate primarily to
      exploration and development of crude oil and natural gas properties. Therefore,
      business activities are subject to the same risks and returns and addressed
      in
      the consolidated financial statements of the Company as one reportable
      segment.




**4.**  **JOINT
      ACTIVITY AND LEASE AGREEMENTS**




***JAA
      # 01-SD dated April 26, 2000***




In
      August
      2000 Esko Pivnich together with the state owned geological enterprise
      Poltavaneftegasgeologiya executed a joint activity agreement (“JAA”) to start
      exploration and development of Karaikozovsk field located in Krasnokutsk area
      of
      Kharkov region. Under the terms of JAA Poltavaneftegasgeologiya acted as the
      holder of the main geological and exploration licenses to develop Karaikozovsk
      field and Esko Pivnich acted as an investor into the JAA. Esko Pivnich’s total
      contribution into PSA #01-SD amounted to $596,188.




In
      November 2000 a subsidiary of JSC Ukrneft, Okhtirkaneftegas, was admitted into
      the JAA. Okhtirkaneftegas owned two wells on Karaikozovsk block, the operational
      usage of which was contributed into the JAA. Also, Okhtirkaneftegas made a
      commitment to render to JAA certain exploration and capital repair services
      at
      market rates.




In
      May
      2003, due to the expiration of geological and exploration licenses held by
      Poltavaneftegasgeologiya, all exploration and development activities on
      Karaikozovsk’s field were temporarily suspended.




***JAA
      # 35/970-SD dated August 19, 2004***




In
      2004
      Esko Pivnich filed an application with the Ukrainian State Committee for Mineral
      Resources to continue the exploration and development of Karaikozovsk field
      and
      in July 2004 the Esko Pivnich obtained the exploration license for Karikozovsk
      lease for the period of 5 years.  In
      accordance with the terms of JAA #35/970 Esko Pivnich was liable to finance
      80%
      of the capital expenditures while Oktyrkanaftogaz was liable to finance 20%
      of
      the capital expenditures required to maintain and operate Wells #2 and #3.
      Esko
      Pivnich and Okhtyrkanaftogaz participated in the resulting profits (losses)
      from
      Wells #2 and #3 in the same proportions. JAA #35/970 only concerned Wells #2
      and
      #3 of Karaikozovsk property which were originally owned by Okhtyrkaneftegas
      and
      did not apply to Well #21 or any other facilities such as the gathering,
      separation and storage facility and a pipeline both financed solely by Esko
      Pivnich. JAA #35/970 was terminated on July 31, 2007 and was superseded by
      well
      lease agreement # 4/1220-OR.




12




***Lease
      Agreement # 4/1220-OR dated August 1, 2007***




In
      accordance with the agreement, the Company’s wholly owned subsidiary Esko
      Pivnich shall pay Okhtirkaneftegas an equivalent of approximately $20,000 per
      month at the prevailing exchange rate for the usage of all facilities located
      on
      Karaikozovsk block including Wells #2 and #3 that are owned by
      Okhtirkaneftegas.




**5.** **ACCOUNTS
      RECEIVABLE, related party**




Accounts
      receivable as of September 30, 2008 and December 31, 2007 consisted of $190,235
      and $165,492, respectively. The amounts due from CJSC Infox at December 31,
      2007
      resulted mainly from several crude oil shipments which took place during 2003
      and 2004.




**6.** **OTHER
      ACCOUNTS RECEIVABLE AND PREPAYMENTS**




Other
      accounts receivable and prepayments as of September 30, 2008 and December
      31 **,** 2007
      consisted of the following:





**9/30/2008**
            
            **12/31/2007**Vixen
                JLM
            
            $
            133,703
            
            $
            128,699Ukrzaccordonneftegasabudinvest
            
            
            
            
            
            178,218Zond
            
            
            
            
            
            144,554SDCH
            
            
            152,702
            
            
            139,066Ukrnadraservice
            
            
            116,355
            
            
            110,950Poltavaneftegasgeologia
            
            
            
            
            
            79,678Ukrfinresource2004
            
            
            87,152
            
            
            62,919Svako
            
            
            60,324
            
            
            44,146Georesource
            
            
            61,716Other
            
            
            84,242
            
            
            103,308**Other
                accounts receivable and prepayments, net of provision fordoubtful
                accounts of $48,755**
            
            **$**
            **696,194**
            
            **$**
            **991,538**




$116,355
      due from Ukrnadraservice was related to the prepayment for construction work
      on
      Well #1 of Peremyshlyansk property. The advance paid to Vixen JLM relates to
      a
      prepayment for well casings while the amount due from SDCH related to excess
      production tubing sold to the above company.




**7. 
      INVENTORIES**




Inventories
      as of as of September 30, 2008 and December 31, 2007 consisted of the
      following:





**9/30/2008**
            
            **12/31/2007**At
                realizable value
            
            $
            88,027
            
            $
            38,550**Total**
            
            **$**
            **88,027**
            
            **$**
            **38,550**




Inventories
      of crude oil as of September 30, 2008 and December 31, 2007 represented 321and
      103 bbls of crude oil produced. Inventories of condensate as of September 30,
      2008 and December 31, 2007 represented 348 and 635 bbls of condensate
      produced.




13




**8. 
      TAXES RECEIVABLE**




Taxes
      receivable as of September 30, 2008 and December 31, 2007 consisted of the
      following:





**9/30/2008**
            
            **12/31/2007**VAT
                receivable
            
            $
            1,504,668
            
            $
            1,733,991Other
                prepaid tax
            
            
            659,472
            
            
            1,128**Total**
            
            **$**
            **2,164,140**
            
            **$**
            **1,735,119**




Taxes
      receivable balances are represented by VAT receivable and other advance tax
      payments. VAT receivable was discounted at 15% annual rate based on average
      six
      months turnover period.




**9.** **PROPERTY,
      PLANT AND EQUIPMENT**




Property,
      plant and equipment as of September 30, 2008 and December 31, 2007 consisted
      of
      the following:




**9/30/2008**
            
            **12/31/2007**Well
                capital repair costs and capitalized work-over costs
            
            $
            835,180
            
            $
            415,414Owned
                producing wells (drilling costs and below ground
                infrastructure)
            
            
            3,171,191
            
            
            3,045,691Separation
                facilities and other above-ground infrastructure
            
            
            3,427,442
            
            
            3,406,434Construction
                in progress
            
            
            6,621,857
            
            
            4,327,825Office
                equipment
            
            
            51,921
            
            
            47,95614,107,591
            
            
            11,243,320Accumulated
                Depreciation and Depletion
            
            
            (2,906,769
            )
            
            (1,653,045
            )**Net
                Book Value**
            
            **$**
            **11,200,822**
            
            **$**
            **9,590,275**




14




**10.** **LONG-TERM
      FINANCIAL INVESTMENT**




As
      at
      September 30, 2008 and December 31, 2007, long-term investments included the
      following:




**9/30/2008**
            
            **12/31/2007**Ukrnafta
                shares
            
            $
            2,057
            
            $
            1,980Investment
                into JAA with Galateya Ltd. on Chukvinsk lease
            
            
            1,591
            
            
            75,554**Total**
            
            **$**
            **3,648**
            
            **$**
            **77,534**




The
      investment into a Joint Activity Agreement on Chukvinsk block with Galateya
      Ltd.
      was made by Pari, a wholly owned subsidiary of the Company in the form of pipes
      for future wells to be drilled on the property. Since the investment was made
      and no activity has taken place in the Joint Activity Agreement the pipes were
      expensed during the period. Other long-term investments represented 10 common
      shares of JSC “Ukrnafta” accounted for at cost, which approximates their fair
      market value.




**11. 
      INCOME TAX**




The
      Company’s provision for income tax for the periods ended September 30, 2008 and
      December 31, 2007 was as follows:





**9/30/2008**
            
            **12/31/2007**Current
                tax
            
            $
            73
            
            $
            42,812Deferred
                tax loss (gain)
            
            
            4,929
            
            
            (3,360
            )**Total
                income tax expense (benefit)**
            
            **$**
            **5,002**
            
            **$**
            **39,452**




Deferred
      taxes reflect the net tax effects of temporary differences between the carrying
      amounts of assets and liabilities for financial reporting purposes and the
      amounts used for tax purposes.




The
      change for the periods ended September 30, 2008 and December 31, 2007 in the
      Company’s deferred tax position is as follows:






**9/30/2008**
            
            **12/31/2007**Net
                asset at the beginning of the period
            
            $
            75,777
            
            $
            72,417Charged
                to income for the period
            
            
            (2,087
            )
            
            3,360**Net
                asset at the end of the period**
            
            **$**
            **73,690**
            
            **$**
            **75,777**




15




The
      tax
      effect on any substantial temporary differences, which give rise to the deferred
      tax assets as at September
      30, 2008 and December 31, 2007 is presented below:





**9/30/2008**
            
            **12/31/2007****Temporary
                differences that give rise to deferred tax assets**Provision
                for doubtful receivables
            
            $
            48,755
            
            $
            46,931Valuation
                of VAT receivable
            
            
            108,640
            
            
            125,770Low
                value items written off
            
            
            657
            
            
            663Difference
                in depreciable value of property, plant and equipment due to expensing
                in
                prior period allowed by Ukrainian law
            
            
            136,708
            
            
            129,379**Total**
            
            **$**
            **294,760**
            
            **$**
            **302,743**




The
      deferred tax assets as at September 30, 2008 and December 31, 2007, calculated
      at effective Ukrainian income tax rate of 25%, consists of the
      following:





**9/30/2008**
            
            **12/31/2007****Deferred
                tax assets**Provision
                for doubtful receivables
            
            $
            12,189
            
            $
            11,733Valuation
                of VAT receivable
            
            
            27,160
            
            
            31,533Low
                value items written off
            
            
            164
            
            
            166Difference
                in depreciable value of property, plant and equipment due to expensing
                in
                prior period under Ukrainian low
            
            
            34,177
            
            
            32,345**Total**
            
            **$**
            **73,690**
            
            **$**
            **75,777**





The
      taxation charge for the respective period is different from that which would
      be
      obtained by applying the Ukrainian statutory income tax rate to the net loss
      before income tax. Below is a reconciliation of theoretical income tax at 25%
      to
      the actual benefit recorded in the Company’s income statement:





**9/30/2008**
            
            **12/31/2007**(Loss)
                before income tax and minority interest
            
            $
            (2,285,264
            )
            $
            (2,002,817
            )Theoretical
                income tax benefit at statutory rate of 25%
            
            
            571,316
            
            
            500,704Adjustments
                due to:Tax
                effect of (expenses) that are not deductible in determining taxable
                profit
            
            
            (576,318
            )
            
            (540,156
            )**Income
                tax**
            
            **$**
            **(5,002**
            **)**
            **$**
            **(39,452**
            **)**




As
      of
      September 30, 2008 and December 31, 2007 the Company had no loss carry forward
      for Ukrainian statutory income tax purposes. For United States income tax
      purposes, as of September 30, 2008 the Company has a net operating loss carry
      forward of approximately $2,642,162 which expires in 2028. As a result, the
      company has a deferred tax asset of approximately $898,335 which is fully
      reserved because of the uncertainty of realization.




16




**12. 
      ACCOUNTS PAYABLE**




Accounts
      payable as of September 30, 2008 and December 31, 2007 consisted of the
      following:





**9/30/2008**
            
            **12/31/2007****Accounts
                payable**Okhtyrkaneftegas
            
            $
            91,068
            
            $
            180,58491,068
            
            
            180,584CJSC
                Infox, related party
            
            
            3,389,015
            
            
            1,898,070**Total**
            
            **$**
            **3,480,083**
            
            **$**
            **2,078,654**




Third
      parties accounts payable balances as of September 30, 2008 were comprised of
      payable to Okhtirkaneftegas for services in the amount of $91,068.




The
      amount of $3,389,015 payable to the related party, CJSC Infox, as of September
      30, 2008, is related to well drilling and repair services, provided to EP by
      third party service companies and paid by CJSC Infox on behalf of the
      Company.




**13. 
      TAXES PAYABLE**




Taxes
      payable as of September 30, 2008 and December 31, 2007 consisted of the
      following:




**9/30/2008**
            
            **12/31/2007**VAT
            
            $
            375,186
            
            $
            376,690Exploration
                tax
            
            
            10,088
            
            
            22,469Profit
                tax
            
            
            380Resource
                Tax
            
            
            12,029
            
            
            21,966Social
                insurance
            
            
            7,275
            
            
            6,147Personal
                income tax
            
            
            2,267
            
            
            2,375Other
                taxes
            
            
            2,479
            
            
            1,184**Total**
            
            **$**
            **409,704**
            
            **$**
            **430,831**




All
      of
      the above amounts were current.




**14.  SHORT
      TERM NOTES PAYABLE**




**MI
      SWACO Note**




On
      July
      5, 2007 Pari, the Company’s wholly owned subsidiary issued interest free notes
      to MI SWACO Ukraine as payment for services having face value of $246,919.
      The
      notes were due on July 10, 2008. The Company is negotiating with MI SWACO to
      extend the settlement date of the notes to 2009.




**Other
      promissory notes**




Short
      term promissory notes outstanding as of September 30, 2008 and December 31,
      2007, issued in November 2002 at no interest, were payable by
      November 5, 2005. These notes in the amounts of $14,812 and $5,548,
      are payable to Astark and Sipay, respectively. As of September 30, 2008 the
      holders of the notes had not called for the repayment of the respective amounts.
      Any valuation adjustment due to the lack of interest has not been calculated,
      however, such amounts, if any, are not considered to have a material effect
      on
      these financial statements.




17




**15.  OTHER
      ACCOUNTS PAYABLE AND ACCRUALS**




Other
      accounts payable and accruals as of September 30, 2008 and December 31, 2007
      consisted of the following:




**9/30/2008**
            
            **12/31/2007**Naftoservice
            
            $
            515,376
            
            $
            -ZakhidUkrGeology
            
            
            155,314
            
            
            101,126Poltavaneftegasgeologiya
            
            
            121,005Montazhtransgas
            
            
            
            
            
            203,982Ukrgeophisyca
            
            
            67,677
            
            
            62,917Fort
                Trade PP
            
            
            48,138
            
            
            46,337Other
            
            
            375,049
            
            
            351,333**Total**
            
            
            **1,282,559**
            
            
            **765,695****Related
                parties**Advances
                from shareholders
            
            
            275,091
            
            
            275,091**275,091**
            
            
            **275,091****Total**
            
            **$**
            **1,557,650**
            
            **$**
            **1,040,786**




The
      amount of $515,376 due to Naftoservice was related to a supply of casing pipe
      to
      the Company’s Rogan property. The amount of $155,314 due to Zakhidukrgeologiya
      was related to drilling services of the exploration Well #1 of Peremyshlyansk
      property. Other accounts payable and accruals as of December 31, 2007 mostly
      consisted of geological and exploration works, as well as payroll, short term
      advances to employees and other prepayments for repair and construction
      services. The amount of $275,091 represents advances from shareholders with
      no
      specific terms paid to the Company during 2005 and 2006.




Other
      accounts payable and accruals as of September 30, 2008 mostly consisted of
      non-recurring geological research, geological and exploration works, as well
      as
      payroll, short term advances to employees and other prepayments for repair
      and
      constructions services.




**16.  PREPAYMENTS
      FOR OIL, GAS AND NATURAL GAS LIQUIDS**




Prepayments
      for oil, gas and natural gas liquids as of September 30, 2008 and December
      31,
      2007 represented cash advances received from the Company’s customers in respect
      of future oil deliveries. The above advances consisted of:




**9/30/2008**
            
            **12/31/2007**Ukrnedraresourse
            
            $
            606,005
            
            $
            229,417Angronafta
            
            
            
            
            
            19,802Luksor
            
            
            
            
            
            148,515Other
                prepayments
            
            
            10,286
            
            
            14,494**Prepayments
                for oil and gas**
            
            **$**
            **616,291**
            
            **$**
            **412,228**




18
 
  **17.  INTEREST
        PAYABLE**
  Interest
        payable as of September 30, 2008 and December, 31 2007, consisted of the
        following:




**9/30/2008**
            
            **12/31/2007**Convertible
                notes
            
            $
            167,115
            
            $
            219,710**Related
                parties**Long
                term loan - Zaccam Trading, related Party
            
            
            103,703
            
            
            76,619Interest
                accrued on advances received from former shareholders
            
            
            22,476
            
            
            22,476Subtotal
                related parties
            
            
            126,179
            
            
            99,095**Total**
            
            **$**
            **293,294**
            
            **$**
            **318,805**




Long
      term
      loan from Zaccam Trading, a related party, at 3% per annum (Note 19) was
      obtained in 2005.




**18. 
      PROFIT INTEREST PAYABLE**




As
      of
      September 30, 2008 and December 31, 2007, profit interest of $18,697 and $17,998
      was payable to Poltavaneftegasgeologiya and represents an amount that was
      accrued and partially paid by the Company in respect to profits earned during
      2002, and is calculated in accordance with PSA # 01-SD dated April 26, 2000.




**19.** **LONG
      TERM PAYABLE**




Long
      term
      payables as of September 30, 2008 consisted of the following:





**Lender/Note**
            
            **Coupon**
              **Rate**
            
            **Conv.**
              **Price**
                **$/share**
            
            **Issue
                date/**
              **Effective**
                **Date**
            
            **Due**
              **not
                earlier**
                **than**
            
            **9/30/2008**Fort
                Trade
            
            
            
            
            
            
            
            
            Nov-
                2004
            
            
            Nov-
                2009
            
            $
            483,440483,440**Millington
                Solutions Ltd.**CD-1001
            
            
            10
            %
            $
            2.20
            
            
            03/30/2006
            
            
            03/30/2009
            
            
            1,109,811ÑD-1009
            
            
            10
            %
            $
            2.20
            
            
            06/06/2006
            
            
            06/06/2009
            
            
            2,404,116CD-1011
            
            
            6
            %
            $
            1.40
            
            
            07/25/2006
            
            
            07/25/2009
            
            
            863,794CD-1013
            
            
            7
            %
            $
            3.00
            
            
            02/01/2007
            
            
            02/01/2010
            
            
            905,9695,283,691Fort
                Trade and Millington Solutions Ltd.
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            5,767,131**Related
                parties**Zaccam
                Trading, Ltd.
            
            
            
            
            
            
            
            
            03/5/2005
            
            
            03/5/2015
            
            
            1,205,9001,205,900**Total**
            
            
            
            
            
            
            
            
            
            
            
            
            
            **$**
            **6,973,031**




19




**Fort
      Trade**




As
      of
      September 30, 2008 and December 31, 2007, the amount of $483,440 represented
      interest free note payable for geological and research services rendered by
      Fort
      Trade during 2004.




**Millington
      Solutions**




Effective
      March 30 and June 6, 2006, Sunrise Energy Resources, Inc. executed a Convertible
      Note Subscription Agreement with Millington Solutions Limited to complete a
      $1.0
      million and $2.0 million, respectively, private placement financing in the
      form
      of 10% convertible notes. Each tranche will mature in 3 years of the receipt
      of
      funds. The coupon is accrued at the rate of 10% per annum on the unconverted
      amount and is payable annually on each 12 month anniversary of each tranche
      until conversion or maturity. The Notes can be converted into Common shares
      of
      the Company at a conversion price of $2.20 at the holder's option at any time
      before the maturity date of each tranche. For Notes converted between interest
      due dates, the interest would accrue pro-rata and would be paid in the form
      of
      additional shares of the Company's Common stock. The number of such additional
      shares shall be calculated at the same conversion price.




On
      July
      25, 2006 the Company executed a Convertible Note Subscription Agreement with
      Millington Solutions Limited for the total amount of $1.0 million with 6% ñoupon and the
      conversion price of $1.40 per share. All other terms were identical to the
      Convertible Note Subscription Agreements that were signed on March 30 and June
      6, 2006. On February 1, 2007, the Company executed Convertible Note Subscription
      Agreement with Millington Solutions Limited for the total amount of $1.0 million
      with 7% ñoupon and the conversion price of $3.00 per share. All other terms were
      identical to the Convertible Note Su bscription
      Agreements that were signed on March 30 and June 6, 2006. On March 15, 2007
      the
      Company and Millington Solutions Ltd. agreed that interest accrued under the
      Convertible Debenture Note agreements CD-1001, CD-1009, CD-1011 and CD-1013
      (“the Notes”) may be at the Company’s election paid when due in accordance with
      the Convertible Debenture Note terms; or fully or partially capitalized. In
      the
      event, the Company elects to capitalize the accrued interests under the Notes,
      the accrued interest shall be added to the outstanding principal. Following
      such
      election, the interest in subsequent periods shall accrue on the increased
      principal balance at the rate provided by each Convertible Debenture Note
      agreement. The increased outstanding principal may be converted into the
      Company’s shares of common stock in accordance with the terms of each
      Convertible Debenture Note. On March 20, 2007, the Company elected to capitalize
      the interest payments on CD-1001 and CD-1009 due on the first annual anniversary
      of each tranche. On July 10, 2007, the Company elected to capitalize the
      interest payments on CD-1011 due on the first annual anniversary of each
      tranche. In addition, on January 31, 2008 the Company elected to capitalize
      the
      interest payments on CD-1013 due on the first annual anniversary of each
      tranche. On March 20, 2008, the Company elected to capitalize the interest
      payments on CD-1001 and CD-1009 due on the second annual anniversary of each
      tranche. On July 10, 2008, the Company elected to capitalize the interest
      payments on CD-1011 due on the second annual anniversary of each
      tranche.




Millington
      Solutions was duly notified of the Borrower’s election and the Lender’s
      acknowledgement of the above election is kept on the Company’s file.




**Zaccam
      Trading Ltd. (a related party)**




Long
      term
      payable to Zaccam Trading, Ltd., a related party, represents uncollateralized
      credit line facility with the limit of $5,000,000 bearing 3% per annum accruing
      on outstanding principal and payable annually.




**20.** **MILLINGTON
      CONVERTIBLE DEBENTURE VALUATION**




The
      management believes that apart from the embedded conversion option the
      convertible debentures (“the Convertible Notes”) issued by the Company to
      Millington Solutions Ltd. the Company does not have any other embedded
      derivatives. As can be seen from the following table, at the time of issuance,
      all embedded conversion features were far out of the money:




20




**Convertible
                Note**
            
            **Coupon**
              **Rate**
            
            **Conv.**
              **Price**
                **$/share**
            
            **Maximum**
              **Price***
            
            **Average**
              **Price***
            
            **Negative**
              **Intrinsic**
              **Value****
            
            **First**
              **Tranche**
                **Date**
            
            **Last**
              **Tranche**
                **Date**CD-1001
            
            
            10
            %
            $
            2.20
            
            $
            0.85
            
            $
            0.85
            
            
            (61
            %)
            
            4/5/2006
            
            
            5/30/2006ÑD-1009
            
            
            10
            %
            $
            2.20
            
            $
            1.00
            
            $
            0.73
            
            
            (55
            %)
            
            6/18/2006
            
            
            10/1/2006CD-1011
            
            
            6
            %
            $
            1.40
            
            $
            1.00
            
            $
            0.83
            
            
            (29
            %)
            
            9/21/2006
            
            
            1/26/2007CD-1013
            
            
            7
            %
            $
            3.00
            
            $
            2.50
            
            $
            2.65
            
            
            (17
            %)
            
            2/12/2007
            
            
            6/22/2007




*
      Highest
      and average closing prices on the date of receipt of funds under each tranche
      during the period between the first and the last tranche of each
      Note.


**
      Negative intrinsic value is calculated as discount from the conversion
      price.




The
      Company believes that upon issuance the Convertible Debenture was issued at
      fair
      value for the following reasons:




·
              the
                  conversion feature was far out of the money and was designed as
                  compensation to the investor for a relatively low coupon
                  rate;·
              there
                  were no warrants attached to the Millington Convertible
                  Notes;·
              in
                  the event of conversion, the Company had sufficient authorized
                  shares to
                  cover the conversions;·
              All
                  tranches of CD-1001, CD-1009, CD-1011and CD-1013 were originally
                  issued
                  with the conversion feature being out of the money. Despite having
                  been in
                  the money during July-August of 2007, none of the tranches of CD-1001,
                  CD-1009 and CD-1011 have been converted as of the date of this
                  filing
                  primarily due to the limited liquidity of the stock.
  Due
        to
        the above reasons, the Company believes that the conversion feature does
        not
        require separate accounting from the host contract as a derivative instrument
        pursuant to the provisions of SFAS No. 133, “Accounting for Derivative
        Instruments and Hedging Activities” (“SFAS 133”). Alternatively, if the Company
        elected to comply with SFAS
        No. 155 ,
        “Accounting for Certain Hybrid Financial Instruments — an amendment of FASB
        Statements No. 133 and 140, the Company would need to measure the
        debentures in their entirety at fair value with changes in fair value recorded
        as either a gain or a loss in the consolidated statement of operations under
        the
        caption “Change in fair value of convertible debt instrument”.
  Fair
        value of the Convertible Notes comprising the value of the straight bond
        plus
        the value of embedded call option may be determined by Black-Scholes option
        pricing model. The use of the above formula requires certain assumptions
        that
        are subject to significant management judgment.
  The
        volatility of the common stock is estimated using a combination of historical
        and implied volatility, as discussed in SEC Staff Accounting Bulletin
        No. 107. By using this combination, the Company is taking into
        consideration the historical realized volatility, as well as factoring in
        estimates of future volatility that the Company believes will differ from
        historical volatility as a result of the market performance of the common
        stock,
        the volume of activity of the underlying shares, the availability of actively
        traded common stock options, and overall market conditions.
  The
        risk-free interest rate used in the Black-Scholes option pricing model is
        determined by looking at historical U.S. Treasury zero-coupon bond issues
        with
        terms equal to the expected terms of the equity awards. In addition, an expected
        dividend yield of zero is used in the option valuation model, because the
        Company does not expect to pay any cash dividends in the foreseeable
        future.
  For
        the
        period from March 1, 2007 to September 30, 2008 during the periods of relatively
        high liquidity the observed daily volatility of stock prices was 1.67%. In
        addition, the annualized risk-free rate of 5% was assumed. Using the above
        base
        assumptions, and assuming that the convertibles would be outstanding for
        3 years
        before they are converted i.e. no early conversion, the fair value at the
        time
        of issuance of the conversion feature of the convertible debentures that
        were
        outstanding on September 30, 2008 would be $199,582. The fair value of the
        conversion feature embedded in the same convertible debentures on September
        30,
        2008 given the closing price of $0.08 on that date would amount to $0. To
        comply
        with SFAS No. 155, the Company would need to record a profit of $199,582
        from
        change in fair value of convertible debt instrument and a reduction the carrying
        value of the convertible debentures in the liabilities’ section of the Company’s
        balance sheet by the same amount. The Company believes that recording imaginary
        and estimated gains or losses would cause the financial statements to be
        misleading.
  21
  **21.  SHAREHOLDERS’
        EQUITY**
  During
        the first 9 months of 2008, the Company raised $1,698,005 from private
        placements of 1,698,005 shares Company’s unregistered stock to non-US investors
        in reliance on Regulation S as promulgated under the Securities Act of
        1933.
  No
        dividends were declared or paid by the Company during the periods ended
        September 30, 2008 and December 31, 2007.
  **22.  LOSS
        PER COMMON SHARE**
  Basic
        net
        loss per common share has been computed based on the weighted-average number
        of
        shares of common stock outstanding during the applicable period. In accordance
        with SFAS No. 128 *“Earnings
        per share”* ,
        diluted
        net income per common share is computed based on the weighted-average number
        of
        shares of common stock and common stock equivalents outstanding during the
        applicable period, as if all potentially dilutive securites were converted
        into
        common stock. However, according to paragraph 16 of SFAS No. 128, no potential
        common shares shall be included in the computation of any diluted per share
        amount when a loss from continuing operations exists.





**Nine
                Months Ended**
                **September
                  30,****2008**
            
            **2007**(Unaudited)
              (in
                US dollars, except
              per
                share amounts)Net
                loss attributable to common stockholders
            
            $
            (2,285,264
            )
            $
            (1,194,992
            )Weighted
                average common shares outstanding, basic
            
            
            22,553,685
            
            
            18,191,767Loss
                per common share, basic
            
            $
            (0.10
            )
            $
            (0.07
            )Weighted
                average common shares outstanding, diluted
            
            
            22,553,685
            
            
            18,191,767Loss
                per common share, diluted
            
            $
            (0.10
            )
            $
            (0.07
            )




**23.  RELATED
      PARTIES**




Related
      parties include shareholders and entities under common ownership. Transactions
      with related parties are performed on terms that are comparable to those
      available to unrelated parties. For details of related party balances
      outstanding as of September 30, 2008 and December 31, 2007 see Notes 5, 12,
      15,
      17 and 19.




Our
      related parties include CJSC Infox and Zaccam Trading, Ltd. During the period
      ended September 30, 2008 we received $1,490,945 from CJSC Infox to finance
      wells
      repair services. A total of $ 3,389,015 was due
      to the related party, CJSC Infox on September 30, 2008.




As
      of
      September 30, 2008, the outstanding amount of $190,235receivable from CJSC
      Infox, related party, was primarily related to several crude oil shipments
      which
      took place in 2004 and 2003.




22


**24.  COMMITMENTS
      AND CONTINGENCIES**




***Licenses’
      commitments***




During
      2005 the Company received geological and exploration license agreements to
      develop Karaikozovsk’s, Rogan and Rakitnyansk fields. The following amounts of
      investments are to be incurred under the terms of those agreements during the
      periods indicated in the table below:




**Period**
            
            **Amount**
                **To
                  be invested**
            
            **Amount**
                **invested**
            
            **Remaining
                Investment**Rogan
                field
            
            
            2005-2009
            
            $
            2,922,772
            
            $
            147,926
            
            $
            2,774,846Rakitnyansk
                field
            
            
            2005-2009
            
            
            3,938,614
            
            
            575,107
            
            
            3,363,507Karaikozovsk
                field
            
            
            2005-2009
            
            
            4,241,584
            
            
            8,231,325
            
            
            -**Total**
            
            
            
            
            **$**
            **11,102,970**
            
            **$**
            **8,954,358**
            
            **$**
            **6,138,353**




***Pari
      -*** During
      2004 Pari received geological and exploration license agreements to develop
      the
      Peremishlyansk, Chukvinsk, Scheremetivsk, Niklovitsk and Pilipivsk fields.
      The
      following amounts of investments are to be incurred under the terms of those
      agreements:





**Period**
            
            **Amount**
                **To
                  be invested******
            
            **Amount**
                **Invested**
            
            **Remaining**
                **Investment**Peremishlyansk
                field
            
            
            2004-2009
            
            $
            2,336,634
            
            $
            3,963,162
            
            $
            -Chukvinsk
                field
            
            
            2004-2009
            
            
            1,544,554
            
            
            5,776
            
            
            1,538,778Scheremetivsk
                field
            
            
            2004-2009
            
            
            712,872
            
            
            -
            
            
            712,872Niklovitsk
                field
            
            
            2004-2009
            
            
            594,059
            
            
            17,780
            
            
            576,279Pilipivsk
                field
            
            
            2004-2009
            
            
            475,248
            
            
            -
            
            
            475,248**Total**
            
            
            
            
            **$**
            **5,663,367**
            
            **$**
            **3,986,718**
            
            **$**
            **3,303,177**




***Environmental
      remediation -*** Under
      Ukrainian law, the Company is obligated to meet certain environmental
      remediation obligations related to its oil and gas production activities. This
      amount cannot be estimated at this time but is considered not to be a material
      amount.




***Lease
      commitments -*** The
      Company leases office space on a yearly basis and the rent is disclosed in
      other
      notes. The Company’s future lease commitments as of September 30, 2008 are as
      follows:




**2008**Office
                rent
            
            $
            26,568**$**
            **26,568**




***Litigation***  ***-*** The
      Company has been and continues to be the subject of legal proceedings and
      adjudications from time to time. Management believes that the resolution of
      all
      business matters which will have a material impact on the Company’s financial
      position or operating results have been recorded.




***Ukrainian
      Tax and Regulatory Environment***  ***-*** The
      government of Ukraine continues to reform the business and commercial
      infrastructure in its transition to a market economy. As a result laws and
      regulations affecting businesses continue to change rapidly. These changes
      are
      characterized by poor drafting, different interpretations and arbitrary
      application by the authorities. In particular taxes are subject to review and
      investigation by a number of authorities enabled by law to impose fines and
      penalties. While the Company believes it has provided adequately for all tax
      liabilities based on its understanding of the tax legislation, the above facts
      may create tax risks for the Company.




23




**25. 
      RISK MANAGEMENT POLICIES**




Management
      of risk is an essential element of the Company’s operations. The main risks
      inherent to the Company’s operations are those related to credit risk exposures,
      market movements in foreign exchange rates and in interest rates. A description
      of the Company’s risk management policies in relation to those risks is provided
      below.




***Credit
      risk*** **** ***-*** **** The
      Company is exposed to credit risk which is the risk that one party to a
      financial instrument will fail to discharge an obligation and cause the other
      party to incur a financial loss.




The
      Company structures the levels of credit risk it undertakes by placing limits
      on
      the amount assigned or transacted in relation to a particular customer, or
      groups of customers. Limits on the level of credit risk by customer are approved
      quarterly by the Credit Committee.




Our
      sales
      to customers in excess of 5% were as follows:




**9/30/2008**
            
            **12/31/2007**Agrotemp
                (oil produced)
            
            $
            -
            
            $
            217,947Vlad
                Nafta (oil produced)
            
            
            73,179
            
            
            45,116Naftagasservice
                (oil produced)
            
            
            77,307Ukrtatnafta
                (oil produced)
            
            
            -
            
            
            189,769Ukrnedraresource
                (gas produced)
            
            
            1,473,485
            
            
            237,862Ukrfinresource
                2004 (gas produced)
            
            
            
            
            
            379,377UkrtransZAT
                UtecsVlad
                nafta (condensate produced)
            
            
            87,897
            
            
            190,585Angronafta
                (condensate produced)
            
            
            
            
            
            83,081Luksor
                (gas resold)Naftoimpex
                (oil produced)
            
            
            
            
            
            385,542Agronafta
                (oil produced)
            
            
            
            
            
            84,193Azov
                oil company (oil produced)
            
            
            
            
            
            135,215Ukrgasenergo
                (oil produced)
            
            
            
            
            
            263,366Luksor
                (gas resold)
            
            
            125,909Ukrfinresourse
                2004 (gas resold)
            
            
            
            
            
            262,991Azov
                oil company (oil resold)
            
            
            
            
            
            126,799Other
            
            
            191,573
            
            
            165,589Total
            
            **$**
            **2,029,350**
            
            **$**
            **2,767,432**




***Currency
      risk -*** Currency
      risk is defined as the risk that the value of a financial instrument will
      fluctuate due to changes in foreign exchange rates.




The
      Credit Committee sets limits on the level of exposure to a single currency
      (primarily Ukrainian Hrivna and US Dollar), by entities and in


total.




***Interest
      rate risk -*** Interest
      rate risk arises from the possibility that changes in interest rates will affect
      the value of a financial instrument.




Currently,
      the Company’s approach to the interest risk limitation is borrowing at fixed
      rates and for short periods.




24
 
  **26.  CONCENTRATION
        OF BUSINESS RISK**
  The
        Company’s operating activities are limited to Ukraine. Laws and regulations
        affecting businesses operating in Ukraine are subject to rapid changes and
        the
        Company’s assets and operations could be at risk due to negative changes in the
        political and business environments.
  **27.** **SUBSEQUENT
        EVENTS**
  None.
  25
 
  **MANAGEMENT’S
          DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
          OPERATIONS**
  **Discussion
          and Analysis of Financial Condition**
  **Introduction**
  The
          following discussion and analysis addresses changes in our financial condition
          and results of operations during the periods ended September 30, 2008 and
          2007.
  Management’s
          key objectives for nine months period of 2008 were:


·
            Finish
                drilling Well #1 of Peremyshlyansk property in Western Ukraine;


·
            Transfer
                Well #3 of Karaikozovsk property to produce from the gas horizon
                Visean
                14;




We
      believe that these key objectives were achieved during the nine months period
      of
      2008, however Well #3 requires extensive water isolation measures in order
      to
      commence commercial production from this Well. Further, Well #1 of
      Peremyshlyansk property has not been tested as of the date of this report.
      Our
      2008 strategy includes acquiring 2-D seismic for Rogan field and re-testing
      Well
      #1 of Rakitnyansk property.




**Current
      Activities**




During
      the nine months of 2008, our production was limited to Wells #2, #3 and #21
      of
      Karaikozovsk lease.  During the period we produced 2,824 BBLS of oil from
      Well #2 and 323,411 MCF of natural gas from Wells #21, #2 and Well #3. In
      addition, we produced 1,732 BBLS of condensate from Well #21 and Well #3 during
      the period.




26




**Results
      of Operations**




Oil
      and gas production and revenue




**Nine
                  Months Ended**
                **September
                  30,****2008**
            
            **2007**(Unaudited)
              (in
                US dollars, except
              production
                amounts)RevenuesRevenue
                from sales of produced oil
            
            $
            211,351
            
            $
            1,409,797Revenue
                from sales of resold gas
            
            
            125,909
            
            
            262,990Revenue
                from sales of produced condensate
            
            
            163,165
            
            
            243,764Revenue
                from sales of resold oil
            
            
            
            
            
            126,801Revenue
                from sales of produced gas
            
            
            1,528,925
            
            
            226,344Revenue,
                net
            
            $
            2,029,350
            
            $
            2,269,696Oil
                sales, bblsProduced
                oil
            
            
            2,814
            
            
            27,229Resold
                oil
            
            
            
            
            
            2,4472,814
            
            
            29,676Gas
                sales, mcfProduced
                gas
            
            
            322,665
            
            
            73,860Resold
                gas
            
            
            
            
            
            63,000322,665
            
            
            136,860Condensate
                sales, bblsProduced
                condensate
            
            
            1,726
            
            
            4,458Average
                daily productionOil,
                bopd
            
            
            10.5
            
            
            101Gas,
                mcfpd
            
            
            2,000
            
            
            2,462Condensate,
                bopd
            
            
            6.4
            
            
            149Average
                selling prices****Oil,
                $/BBL
            
            
            75.1
            
            
            51.8Gas,
                $/MCF
            
            
            4.7
            
            
            3.3Condensate,
                $/BBL
            
            
            94.5
            
            
            54.7




27
 
  All
        sales
        agreements were short-term in nature, with the extension option by mutual
        agreement of the parties. Our crude oil and condensate is sold at wellhead
        while
        the natural gas is sold at the measuring mode of Bogodukhov-Stepove pipeline.
        We
        recognize revenue from the sale of oil when the purchaser takes delivery
        of the
        oil at the field. We recognize revenue from the sale of gas upon pumping
        the gas
        into Bogodukhov-Stepove pipeline. The company did not incur any material
        transportation expenses.




The
      crude
      oil and condensate inventory balances as of September 30, 2008 amounted to
      321
      and 348 Bbls, respectively.




Operating
      expense




The
      $48,392 increase in operating expense from $1,246,430 during the first 9 months
      of 2007 to $1,294,822 during the first 9 months of 2008 was due to higher
      production rates and higher well stimulation costs. The above increase was
      partially compensated by a higher absorption of fixed production overheads
      resulting from the commencement of gas production.




Exploration




An
      exploration expense, which includes geological and geophysical expense and
      the
      cost of unsuccessful exploratory wells, is recorded as an expense in the period
      incurred under the successful efforts method of accounting. During the periods
      ended September 30, 2008 and 2007 we incurred $180,415 and $202,931,
      respectively in exploration expenses. During the 9 months of 2007, the main
      component of the exploration expense was Well #21 of Karaikozovsk property
      while
      during the respective period of 2008 the main component was the seismic and
      other geological studies of the Company’s Rogan and Peremyshlyansk
      leases.




Depreciation,
      depletion and amortization




Depreciation,
      depletion and amortization (“DD&A”) of oil and gas properties is calculated
      under units of production method, following the successful efforts method of
      accounting, as described in Note 1 of the Notes to Consolidated Financial
      Statements.  As
      at the
      date of this report an independent reserve engineering study is being
      obtained.




Well
      #21
      costs, oil and gas production equipment and workover costs were the main
      contributor into the increase in depreciation and depletion expense from
      $341,663 for the period ended September 30, 2007 to $1,468,736 for the period
      ended September 30, 2008.




28




Sales,
      general and administrative expenses




Sales,
      general and administrative expenses for the period ended September 30, 2008
      increased to $947,460 from $887,055 in the period ended September 30, 2007
      mainly due to the increase in payroll and related taxes to $418,445 (2007:
      $342,778).




Interest
      expense




Interest
      expense went down to $349,817 during the period ended September 30, 2008 from
      $687,095 during the period ended September 30, 2007. The reduction was primarily
      caused by the retirement of Dutchess Notes in February of 2008.




**Liquidity
      and Capital Resources**




Since
      inception, we have financed our operations from private sources. We anticipate
      continuing losses in the near future while Esko Pivnich and Pari establish
      steady production of oil and gas in Ukraine. As at September 30, 2008, the
      Company had total current assets of $3,148,841 and total current liabilities
      of
      $6,666,591, respectively. As at September 30, 2008, the Company had cash
      balances of $10,245 and a working capital deficit of $3,517,750,
      respectively.




We
      are
      currently discussing various financing options with private investors, including
      with certain of the Company’s shareholders, however, no assurance can be given
      as to if, when and under what terms such new financing may be received by the
      Company. Failure to timely receive such financing may cause us to significantly
      curtail or altogether suspend our capital expenditure program. This may, in
      turn, have material adverse effect on our production activities.




Cash
      flow




The
      cash
      provided by operating activities during the periods ended September 30, 2008
      significantly increased to $1,531,225 compared to the outflow of $(9,956) in
      the
      same period of 2007. As a result of the higher depreciation, depletion and
      amortization charged in nine months of 2008 of $1,468,736 as compared to
      $341,663 during nine months of 2007, we incurred a slightly lower cash loss
      of
      ($816,528) in the nine months of 2008 vis-à-vis ($853,329) in the nine months of
      2007. The following other key factors contributed into the increase in the
      operating cashflow: increase in other accounts payable and accruals by $828,913
      to $516,861 during 9 months of 2008 from $(312,052) during the same period
      of
      2007, increase in accounts payable and accruals by $692,546 to $1,401,430 during
      9 months of 2008 from $708,884 during the same period of 2007 and increase
      in
      prepayments for oil and gas of $204,063 during 9 months of 2008 compared to
      a
      reduction of $(262,672) during the same period of 2007.




During
      the nine months ended September 30, 2008 cash provided by financing activities
      in the amount of $1,173,344 resulted from the proceeds from the private equity
      financing of 1,698,005 which was partially offset by the repayment of the
      Dutchess Note.




During
      the nine months ended September 30, 2008, the Company incurred capital
      expenditures of $3,038,891 most of which represented drilling costs of Well
      #1
      of Peremyshlyansk property while during the nine months ended September 30,
      2007, the capital expenditures amounted to $4,906,852 which represented the
      drilling costs of Well #21 of Karaikozovsk property, separator, pipeline and
      other related infrastructure.




29




Cash
      Requirements




The
      Company anticipates it will require approximately $10,000,000 in the remainder
      of 2008 and 2009 to implement its capital expenditure program for the properties
      covered by the licenses, construction of infrastructure for Karaikozovsk, Rogan
      and Rakitnyansk leases, as well as casing and testing of Well#1 on
      Peremyshlyansk property. The Company believes it will be able to raise these
      funds through equity, debt and convertible debt financing; however, there is
      no
      assurance that such funds will be raised and no certainty as to when such funds
      may be raised or on what terms.




**Income
      Taxes, Net Operating Losses and Tax Credits**




Currently,
      the Company is liable for Ukrainian income tax at a rate of 25% of the pre-tax
      earnings as defined by applicable tax regulations under the Ukrainian income
      tax
      legislation. The taxation system in Ukraine is evolving as the central
      government transforms itself from a command to a market-oriented economy. Based
      on current tax law and the United States — Ukraine income tax treaty, the income
      tax paid in Ukraine may be credited against the Company’s tax liability when
      determining the Company’s US income taxes payable, if any.




**Critical
      Accounting Policies and Recent Accounting Pronouncements**




We
      have
      identified the policies below as critical to our business operations and the
      understanding of our financial statements. The impact of these policies and
      associated risks are discussed throughout Management’s Discussion and Analysis
      where such policies affect our reported and expected financial results. A
      complete discussion of our accounting policies is included in Note 3 of the
      Notes to Consolidated Financial Statements.




**Going
      Concern**




The
      Company’s consolidated financial statements have been presented on the basis
      that it is a going concern, which contemplates the realization of assets and
      satisfaction of liabilities in the normal course of business. As shown in the
      consolidated financial statements, the Company incurred a net loss of $2,285,264
      during the period ended September 30, 2008, and, as of September 30, 2008,
      the
      Company’s current liabilities exceeded its current assets by $3,517,750.
      Additionally, to fully develop the area covered by the Licenses, the Company
      needs substantial additional funding.




In
      view
      of the matters described in the preceding paragraph, recoverability of a
      substantial portion of the assets shown in the accompanying balance sheet is
      dependent upon continued operations of the Company, which in turn is dependent
      upon the Company’s ability to meet its financing requirements on a continuing
      basis. For the Company to meet its financing requirements, it would have to
      raise additional funds, primarily by way of equity contributions, and to succeed
      in its future operations. The consolidated financial statements do not include
      any adjustments relating to the recoverability and classification of recorded
      asset amounts or amounts and classification of liabilities that might be
      necessary should the Company be unable to continue its operations.




Management
      has taken the following steps to revise its operating and financial
      requirements, which it believes are sufficient to provide the Company with
      the
      ability to continue in its operations as a going concern:




o
            
            The
                Company plans to continue to raise additional capital in the equity,
                debt
                and convertible debt markets as significant source of funding its
                development of the properties covered by the Licenses.





o
            
            Based
                on its expected production capabilities from the expenditures that
                will be
                made as a result of equity and debt financing, the Company believes
                that
                it could generate adequate cash flow.o
            
            Additional
                funding requirements may also be necessary before the Company is
                able to
                rely solely on the cash flow resulting from the production achieved
                on its
                licensed properties.




Accordingly,
      our independent auditors included an explanatory paragraph in their report
      on
      the December 31, 2007 consolidated financial statements expressing concerns
      about our ability to continue as a going concern. Our financial statements
      contain additional note disclosures describing the circumstances that lead
      to
      this disclosure by our independent auditors.




30
 
  Functional
        and Reporting Currency
  The
        reporting currency of the accompanying consolidated financial statements
        is the
        US dollars. Ukrainian entities use Ukrainian Hrivna (UAH) as their functional
        currency since most of their revenues and operating expenses are denominated
        in
        Ukrainian Hrivnas. The Ukrainian Hrivna is not a fully convertible currency
        outside of Ukraine. The translation of Hrivna denominated assets and liabilities
        into US dollars for the purpose of these consolidated financial statements
        does
        not indicate that the Company could or will in the future realize or settle
        in
        US dollars the translated values of these assets and liabilities.




The
      prevailing exchange rates as at September 30, 2008 and December 31, 2007 were
      approximately 1 U.S. dollar to UAH4.8610 and UAH5.0500. For the periods
      ended September 30, 2008 and 2007, the average exchange rate for 1 U.S. dollar
      UAH4.9639 and UAH5.0500, respectively.




Principles
      of Consolidation




The
      consolidated financial statements incorporate the financial statements of
      Sunrise Energy Resources Inc. and other enterprises, where the Company, directly
      or indirectly exercises control. Control is achieved where the Company has
      the
      power to govern the financial and operating policies of an invested enterprise
      so as to obtain benefits from its activities.




All
      significant intercompany transactions, balances and unrealized gains (losses)
      on
      transactions are eliminated on consolidation.




Use
      of
      Estimates




The
      preparation of financial statements in accordance with United States generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosures of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period. Actual results could materially differ from these
      estimates.




Oil
      and Gas Reserve Information




As
      of
      September 30, 2008, we have not been able to estimate the quantity of proved
      reserves within the meaning of Rule 4-10(a) of Regulation S-X. The Company
      has
      hired independent geologists to review the reserves.




**S** uccessful
      Efforts Method of Accounting




Once
      we
      finalize the reserve estimate that is currently underway, we will follow the
      successful efforts method of accounting for our investments in oil and gas
      properties, as more fully described in Note 3 of the Notes to Consolidated
      Financial Statements. This accounting method has a pervasive effect on our
      reported financial position and results of operations.




31




Revenue
      Recognition




For
      revenue from product sales, the Company recognizes revenue in accordance with
      SEC Staff Accounting Bulletin No. 104, “Revenue Recognition in Financial
      Statements” (“SAB 104”). SAB 104 requires that four basic criteria must be met
      before revenue can be recognized: (1) persuasive evidence of an arrangement
      exists; (2) delivery has occurred; (3) the selling price is fixed and
      determinable; and (4) collectibility is reasonably assured.




Criterion
      (1) is met as every delivery is covered by a separate contract and the title
      passes to the customer only upon customer’s acceptance at point of destination,
      which is in compliance with criterion (2). Determination of criteria (3) and
      (4)
      are based on management’s judgments regarding the fixed nature of the selling
      prices of the products delivered and the collectibility of those amounts.
      Provisions for discounts and rebates to customers, and other adjustments are
      provided for in the same period the related sales are recorded. The Company
      defers any revenue for which the product has not been delivered and accepted
      by
      its customers. In accordance with the Company’s standard contract terms, once
      delivered and accepted the product cannot be returned and no claims can be
      presented to the Company. The Company recognizes revenue on gross
      basis.




32
 
  **ITEM
        3. Quantitative and Qualitative Disclosures about Market
        Risk**
  **Oil
        and Gas prices**
  The
        demand for, and price of, oil and gas is highly dependent on a variety of
        factors, including international supply and demand, the level of consumer
        demand, weather conditions, the price and availability of alternative fuels,
        actions taken by governments and international cartels, and global economic
        and
        political developments. International oil prices have fluctuated widely in
        recent years and may continue to fluctuate significantly in the future. The
        Company believes it may benefit significantly due to the recent changes in
        the
        Ukrainian market for gas. In addition, and although not foreseen, the Ukrainian
        government may oblige domestic producers to sell oil or gas to the state
        or
        domestic purchasers at prices well below international levels for indeterminate
        periods of time.
  **Currency
        Exchange Risk** ****
  Domestic
        sales of oil and gas in Ukraine are made in local currency (Hryvna) and then
        converted to US$. The US$ - Hryvna exchange rate may move adversely to affect
        oil and gas prices. In addition, there can be no assurance that the Ukrainian
        authorities may not introduce price stabilization mechanisms which adversely
        affect oil and gas prices in US$ terms for Esko Pivnich and Pari. While many
        of
        Sunrise’s financial obligations are denominated in United States dollars, a
        number of foreign currency effects may arise from exchange rate movements.
        Sunrise does not engage in active speculative hedging to minimize exchange
        rate
        risk.
  **Disclosure
        regarding Forward-Looking Statements**
  This
        quarterly Report contains forward looking statements (as such term is defined
        in
        the Private Securities Litigation Reform Act of 1995). All statements, other
        than statements of historical fact, contained in this report are forward
        looking
        statements, including, without limitation, statements regarding the future
        financial position, business strategy, proposed acquisitions, budgets,
        litigation, projected costs and plans and objectives of or involving Sunrise
        or
        its subsidiaries. Sunrise Shareholders can identify many of these statements
        by
        looking for words such as “believe”, “expects”, “will”, “intends”, “projects”,
“anticipates”, “estimates”, “continues” or similar words or the negative
        thereof. There can be no assurance that the plans, intentions or expectations
        upon which these forward looking statements are based will occur. Forward
        looking statements are subject to risks, uncertainties and assumptions,
        including those discussed elsewhere in this report. Although Sunrise believes
        that the plans, intentions and expectations represented in such forward looking
        statements are reasonable, there can be no assurance that such plans, intentions
        and expectations will prove to be correct. Some of the risks which could
        affect
        future results and could cause results to differ materially from those expressed
        in the forward looking statements contained herein include: risks inherent
        in
        the future prices for oil and natural gas, political and regulatory risks,
        risks
        inherent in currency exchange rates, risks inherent in the prices for services
        and government fiscal regimes and the risk that actual results will vary
        from
        the results forecasted and such variations may be material.
  The
        information contained in this report, including the information set forth
        under
“Risk Factors”, identifies additional factors that could affect the operating
        results and performance of Sunrise. We urge you to carefully consider those
        factors.
  The
        forward looking statements contained herein are expressly qualified in their
        entirety by this cautionary statement. The forward looking statements included
        in this Report are made as at the date of this Quarterly Report and Sunrise
        undertakes no obligation to publicly update such forward looking statements
        to
        reflect new information, subsequent events or otherwise.
  As
        used
        in this annual report, the terms “we”, “us”, “our”, “Company” and “Sunrise”
means Sunrise Energy Resources, Inc. and its consolidated subsidiaries, unless
        otherwise indicated.
  All
        dollar amounts refer to US dollars unless otherwise indicated.
  The
        above
        discussion should be read in conjunction with our financial statements and
        the
        related notes that appear elsewhere in this quarterly report.
  33
  **ITEM
        4. CONTROLS AND PROCEDURES**
 **Evaluation
          of Disclosure Controls and Procedures**
 
 Disclosure
          controls and procedures are controls and other procedures that are designed
          to
          ensure that information required to be disclosed in our reports filed or
          submitted under the Exchange Act is recorded, processed, summarized and
          reported, within the time periods specified in the Securities and Exchange
          Commission’s rules and forms. Disclosure controls and procedures include,
          without limitation, controls and procedures designed to ensure that information
          required to be disclosed in our reports filed under the Exchange Act is
          accumulated and communicated to management, including our Chief Executive
          Officer and Chief Financial Officer, to allow timely decisions regarding
          required disclosure.
 
 We
          carried out an evaluation of the effectiveness of the design and operation
          of
          our disclosure controls and procedures (as defined in Exchange Act Rules
          13a-15(e) and 15d-15(e)) as of December 31, 2007. Based upon that evaluation,
          our Directors, Chief Executive and Chief Financial Officer, concluded that
          our
          disclosure controls and procedures were not effective. That conclusion
          was
          reached because of our failure to file the required Management’s Annual Report
          on Internal Control over Financial Reporting in our Annual Report on Form
          10-KSB
          when it was filed on March 31, 2008. Management has made changes to our
          disclosure controls and procedures in an effort to ensure that all requirements
          of the Exchange Act are met in future disclosure documents.
 
 **Management’s
          Report on Internal Controls and Procedures**
 
 Management
          of the Company is responsible for establishing and maintaining adequate
          internal
          control over financial reporting (as defined in Section 13a-15(f) of the
          Securities Exchange Act of 1934, as amended). Internal control over financial
          reporting is a process designed by, or under the supervision of, the Company’s
          CEO and the company’s CFO to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of the Company’s
          financial statements for external reporting purposes in conformity with
          U.S.
          generally accepted accounting principles and include those policies and
          procedures that (i) pertain to the maintenance of records that in reasonable
          detail accurately and fairly reflect the transactions and disposition of
          the
          assets of the company; (ii) provide reasonable assurance that transactions
          are
          recorded as necessary to permit preparation of financial statements in
          accordance with generally accepted accounting principles, and that receipts
          and
          expenditures of the Company are being made only in accordance with
          authorizations of management and directors of the Company; and (iii) provide
          reasonable assurance regarding prevention or timely detection of unauthorized
          acquisition, use or disposition of the Company’s assets that could have a
          material effect on the financial statements.
 
 As
          of
          December 31, 2007, management conducted an assessment of the effectiveness
          of
          the Company’s internal control over financial reporting based on the framework
          established in Internal Control—Integrated Framework issued by the Committee of
          Sponsoring Organizations of the Treadway Commission (COSO). Based on the
          criteria established by COSO, management concluded that the Company’s internal
          control over financial reporting was not effective as of December 31, 2007,
          as a
          result of the identification of the material weakness described
          below.
 
 A
          material weakness is a deficiency or combination of deficiencies in internal
          control over financial reporting, such that there is a reasonable possibility
          that a material misstatement of the annual or interim financial statements
          will
          not be prevented or detected on a timely basis.
  34
 
 The
          Company’s management has identified a material weakness in the effectiveness of
          internal control over financial reporting arising from a shortage of adequately
          qualified staff in the accounting department. As a result, the
          reported US GAAP accounts included small clerical errors which were not
          timely
          discovered. The above errors were subsequently discovered and corrected
          in Form
          10-KSB/A filings. No particular disclosure has been materially affected
          by the
          above weakness.
 
 We
          intend
          to continue providing a US GAAP training to our staff and to streamline
          processes and procedures of preparing the US GAAP accounts. These steps
          would
          enable us to prepare the accounts in advance and ensure that more time
          is
          available for review and amendments. This would also help us improve the
          completeness and accuracy of the financial statements. We are also reviewing
          the
          possibility of hiring more qualified staff in our accounting department.
          However, due to budget constraints it may be unfeasible to recruit sufficient
          resources to completely correct the deficiency at this time.
 
 Our
          management does not expect that our disclosure controls and procedures
          or our
          internal control over financial reporting will prevent or detect all errors
          and
          all fraud. A control system, no matter how well designed and operated,
          can
          provide only reasonable, not absolute, assurance that the control system’s
          objectives will be met. Further, the design of a control system must reflect
          the
          fact that there are resource constraints, and the benefits of controls
          must be
          considered relative to their costs. Because of the inherent limitations
          in all
          control systems, no evaluation of controls can provide absolute assurance
          that
          all control issues and instances of fraud, if any, within the Company have
          been
          detected. These inherent limitations include the realities that judgments
          in
          decision-making can be faulty, and that breakdowns can occur because of
          simple
          error or mistake. Controls can also be circumvented by the individual acts
          of
          some person, by collusion of two or more people, or by management override
          of
          the controls. Over time, controls may become inadequate because of changes
          in
          conditions or deterioration in the degree of compliance with associated
          policies
          or procedures. Because of the inherent limitations in a cost-effective
          control
          system, misstatements due to error or fraud may occur and not be
          detected.
  This
          annual report did not include an attestation report of the company’s registered
          public accounting firm regarding internal control over financial reporting.
          Management’s report was not subject to attestation by the company’s registered
          public accounting firm pursuant to temporary rules of the Securities Exchange
          Commission that permit the company to provide only management’s report in this
          annual report.
 
 **Conclusion**
 
 The
          above
          identified material weakness did not result in material audit adjustments
          to our
          2007 financial statements. We intend to continue training our staff in
          US GAAP
          to reduce the likelihood of an error and to afford us more time for review
          and
          amendment of financial reports. However, based on our current size and
          size of
          operations, we do not believe it is economically feasible to fully remediate
          this weakness. We cannot assure you that, as circumstances change, any
          additional material weakness will not be identified.
 
 **Changes
          in internal control over financial reporting**
 
 The
          Company’s principal executive officers and principal financial officer have
          concluded that there were no changes in the Company’s internal controls over the
          financial reporting or disclosure controls and procedures or in other factors
          during the last quarter that have materially affected or are reasonably
          likely
          to materially affect these controls as of the end of the period covered
          by this
          report based on such evaluation.
  35
  **PART
        II - OTHER INFORMATION**
  **ITEM 1.
        LEGAL PROCEEDINGS**
  There
        are
        no outstanding legal proceedings material to the Company to which the Company
        or
        any of its assets are subject, nor are there any such proceedings known to
        be
        contemplated. Management believes that the resolution of all business matters
        which would have a material impact on the Company’s financial position or
        operating results have been recorded.
  **Item
        1A. Risk Factors**
  In
        addition to the other information set forth in this Quarterly Report, you
        should
        carefully consider the risks discussed in our 2008 Annual Report on Form
        10-KSB,
        as amended, including Risk Factors of Part I, which risks could materially
        affect our business, financial condition or future results. These risks are
        not
        the only risks facing our Company. Additional risks and uncertainties not
        currently known to us or that we currently deem to be immaterial also may
        materially adversely affect our business, financial condition or future
        results.
  **Item
        2. Unregistered Sales of Equity Securities and Use of
        Proceeds**





During
      the first 9 months of 2008, the Company raised $1,698,005 from private
      placements of 1,698,005 shares Company’s unregistered stock to non-US investors
      in reliance on Regulation S as promulgated under the Securities Act of 1933.
      The
      proceeds from this offering were used for working capital and general corporate
      purposes.




**Item
      3. Defaults upon Senior Securities**





None





**Item
      4. Submission of Matters to a Vote of Security Holders**





None





**Item
      5. Other Information**





None




**Item
      6. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES AND REPORTS ON FORM
      8-K**




***Reports
      on Form 8-K***




The
      following Consolidated Financial Statements pertaining to Sunrise Energy
      Resources are filed as part of this quarterly report:




Consolidated
      Balance Sheets as of September 30, 2008  and
      December 31, 2007




Consolidated
      Statements of Changes in Stockholders’ Equity (Capital Deficit) for the nine
      months ended September 30, 2008




Consolidated
      Statements of Operations and Comprehensive Loss for the nine months September
      30, 2008 and 2007.




Notes
      to
      the Consolidated Financial Statements for the periods ended September 30,
      2008  and
      December 31, 2007


**Exhibit**
                **Number******
              
              **Description******
              
              **Incorporation
                  by Reference******31.1
              
              Rule
                  13a-14(a) Certification of Chief
              
              Filed
                  HerewithExecutive
                  Officer31.2
              
              Rule
                  13a-14(a) Certification of Chief
              
              Filed
                  HerewithFinancial
                  Officer32.1
              
              Section
                  1350 Certification of Chief
              
              Filed
                  HerewithExecutive
                  Officer32.2
              
              Section
                  1350 Certification of Chief
              
              Filed
                  HerewithFinancial
                  Officer
  **SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the Registrant caused
      this
      report to be signed on its behalf by the undersigned thereunto duly
      authorized.


Sunrise
                Energy Resources, Inc.Date: November
              14, 2008
            
            /s/ Konstantin
              TsirulnikovKonstantin
                TsirulnikovPresident
                and Chief Executive Officer




36