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 three months ended




March
31, 2010




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
            
            (I.R.S.
      Employerincorporation
      or organization)
            
            Identification
      Number)





570
      Seventh Avenue, Suite 800New
      York, New York
            
            10018(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 filer o                                                                                      Accelerated
filer o


Non-accelerated
filer   o                                         
                                           Smaller
reporting company o


(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: $Nil




As of May
14, 2010, the Registrant had 23,690,037 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




PagePART
      I. FINANCIAL INFORMATION
              3Financial
      Statements (unaudited)Item
      1.
              
              
              3Balance
      Sheets – March 31, 2010 and December 31, 2009
              3Statements
      of Operations and Comprehensive Loss - for the three months ended March
      31, 2010 and 2009
              4Statements
      of Changes in Stockholder’s Equity (Capital Deficit) – March 31, 2010 and
      December 31, 2009
              5Statements
      of Cash Flows - for the three months ended March 31, 2010 and
      2009
              6Notes
      to the Unaudited Financial Statements
              8Item
      2.
              
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              12Item
      3.
              
              Quantitative
      and Qualitative Disclosures about Market Risk
              14Item
      4.
              
              Controls
      and Procedures
              14PART
      II.
              
              OTHER
      INFORMATION
              17Item
      1.
              
              Legal
      Proceedings
              17Item
      1A.
              
              Risk
      Factors
              17Item
      2.
              
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              17Item
      3.
              
              Defaults
      upon Senior Securities
              17Item
      4.
              
              Submission
      of Matters to a Vote of Security Holders
              17Item
      5.
              
              Other
      Information
              17Item
      6.
              
              Exhibits
      and Reports on Form 8-K
              17SIGNATURES
              18





2




PART
I.




SUNRISE
ENERGY RESOURCES INC.


BALANCE
SHEETS


(Expressed
in US Dollars)





March
      31,
              2010
              (UNAUDITED)
            
            
            December
      31,
              2009ASSETSCURRENT
      ASSETSCash
      and cash equivalents
            
            $
            -
            
            
            $
            38Other
      current assetsTOTAL
      ASSETS
            
            $
            -
            
            
            $
            38LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESOther
      accounts payable – related party
            
            
            384,532
            
            
            
            382,365Interest
      payable – related party
            
            
            22,476
            
            
            
            22,476Other
      accounts payable
            
            
            32,276
            
            
            
            28,276Total
      current liabilities
            
            
            439,284
            
            
            
            433,117STOCKHOLDERS’
      EQUITYCommon
      Stock, $.001 par value, 75,000,000 authorized, 23,690,037 issued and
      outstanding as of March 31, 2010 and December 31, 2009
            
            
            23,690
            
            
            
            23,690Additional
      Paid in Capital
            
            
            6,626,723
            
            
            
            6,626,723Retained
      earnings (Accumulated deficit)
            
            
            (7,089,697
            )
            
            
            (7,083,492
            )Total
      stockholders' equity (deficit)
            
            
            (439,284
            )
            
            
            (433,079
            )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
            
            $
            -
            
            
            $
            38




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




3




SUNRISE
ENERGY RESOURCES INC.


STATEMENTS
OF OPERATIONS AND COMPREHENSIVE LOSS


(Expressed
in US Dollars except share amounts)


UNAUDITED





For
      the three months endedMarch
      31,2010
            
            
            2009OPERATING
      EXPENSESSales,
      general and administrative expenses
            
            $
            (6,205
            )
            
            $
            (177,507
            )OPERATING
      LOSS
            
            
            (6,205
            )
            
            
            (177,507
            )OTHER
      INCOME (EXPENSE)Interest
      expense, net
            
            
            -
            
            
            
            (116,507
            )Loss
      from continuing operations
            
            
            (6,205
            )
            
            
            (293,630
            )DISCONTINUED
      OPERATIONSGain
      on disposal of discontinued segment
            
            
            
            
            
            
            3,302,948Income/(Loss)
      from discontinued operations
            
            
            (6,205
            )
            
            
            3,302,948NET
      INCOME/(LOSS)
            
            
            (6,205
            )
            
            
            3,009,318TOTAL
      COMPREHENSIVE INCOME/(LOSS)
            
            $
            (6,205
            )
            
            $
            3,009,318BASIC  NET
      LOSS  PER SHARE
            
            $
            (0.00
            )
            
            $
            0.13WEIGHTED
      AVERAGE COMMON SHARES OUTSTANDING
            
            
            23,690,037
            
            
            
            23,616,187


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




4




SUNRISE
ENERGY RESOURCES INC.


STATEMENTS
OF CHANGES IN STOCKHOLDERS’ EQUITY


(CAPITAL
DEFICIT)


(Expressed
in US Dollars except share amounts)


UNAUDITED





TotalRetained
            
            
            Accumulated
            
            
            Stockholder'sCommon
            
            
            Additional
            
            
            Earnings
            
            
            Other
            
            
            EquityStock
            
            
            Paid-in
            
            
            (Accumulated
            
            
            Comprehensive
            
            
            (CapitalShares
            
            
            Amount
            
            
            Capital
            
            
            Deficit)
            
            
            (Loss)
            
            
            Deficit)BALANCE,
      DECEMBER 31, 2008
            
            
            23,542,337
            
            
            $
            23,542
            
            
            $
            6,479,170
            
            
            $
            (9,972,957
            )
            
            $
            (1,428,853
            )
            
            $
            (4,899,098
            )Private
      placement of shares
            
            
            147,700
            
            
            
            148
            
            
            
            147,553
            
            
            
            
            
            
            
            
            
            
            
            147,701Net
      loss for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,889,465
            
            
            
            
            
            
            
            2,889,465Comprehensive
      loss for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,428,853
            
            
            
            1,428,853BALANCE,
      DECEMBER 31, 2009
            
            
            23,690,037
            
            
            $
            23,690
            
            
            $
            6,626,723
            
            
            $
            (7,083,492
            )
            
            $
            -
            
            
            $
            (433,079
            )Net
      loss for the three months
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (6,205
            )
            
            
            
            
            
            
            (6,205
            )BALANCE,
      MARCH 31, 2010
            
            
            23,690,037
            
            
            $
            23,690
            
            
            $
            6,626,722
            
            
            $
            (7,089,697
            )
            
            $
            -
            
            
            $
            (439,284
            )




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




5




SUNRISE
ENERGY RESOURCES INC.


STATEMENTS
OF CASH FLOWS


(Expressed
in US Dollars)


UNAUDITED





For
      the three months ended
              March
      31,2010
            
            
            2009CASH
      (USED IN) PROVIDED BY  OPERATING ACTIVITIES:Net
      loss
            
            $
            (6,205
            )
            
            $
            3,009,318Adjustments
      to reconcile net loss to net cash in operating activities:Gain
      on disposal of discontinued segment
            
            
            
            
            
            
            (3,302,948
            )Increase
      in other accounts payable and accruals
            
            
            6,167
            
            
            
            14,995Increase
      in interest payable
            
            
            
            
            
            
            116,123NET
      CASH FLOW FROM OPERATING ACTIVITIES
            
            
            (38
            )
            
            
            (162,512
            )CASH
      PROVIDED BY FINANCING ACTIVITIES:Proceeds
      from share issuance
            
            
            
            
            
            
            147,700NET
      CASHFLOW FROM FINANCING ACTIVITIES
            
            
            -
            
            
            
            147,700CASH
      USED IN INVESTING ACTIVITIES
            
            
            -
            
            
            
            -INCREASE
      (DECREASE) IN CASH
            
            
            (38
            )
            
            
            (14,812
            )CASH,
      at the beginning of the period
            
            
            38
            
            
            
            17,428CASH,
      at the end of the period
            
            $
            -
            
            
            $
            2,616




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




6




SUNRISE
ENERGY RESOURCES INC.


STATEMENTS
OF CASH FLOWS


SUPPLEMENTAL
INFORMATION


(Expressed
in US Dollars)


UNAUDITED





Three
      Months EndedMarch
      31,2010
            
            
            2009Cash
      paid for:Income
      taxes
            
            $
            -
            
            
            $
            -Non-cash
      investing and financing transactions:
            
            $
            -
            
            
            $
            -




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




7




NOTES
TO THE FINANCIAL STATEMENTS (UNAUDITED)




1.    NATURE
OF BUSINESS







Until
December 31, 2008 all operating activities of Sunrise Energy Resources Inc. were
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
were engaged in oil and gas exploration and development in the country of
Ukraine.  While the Company had 8 leases which were licensed to the
Company’s wholly owned subsidiaries Esko Pivnich and Pari, the production
activities were limited to Karaikozovsk field in Eastern Ukraine. In addition to
selling oil and gas produced from its Karaikozovsk lease, 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:
570 Seventh Avenue, Suite 800, New York, New York 10018. As of March 31, 2010
the company employed 2 people.




2. 
PRESENTATION OF FINANCIAL STATEMENTS




Basis of
Presentation – The
accompanying unaudited condensed 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.






Going concern —The Company’s 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
financial statements, the Company incurred a net loss of $6,205 during the
period ended March 31, 2010, while the Company’s current liabilities exceeded
its current assets by $439,284.




In view of the matters described in the
preceding paragraph, recoverability of a major 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 by raising additional
funds in equity markets. At the present time the Company does not believe it
will be able to obtain additional funding. The 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
existence.




Use
of Estimates and Assumptions–The preparation of 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.




3. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES





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 December 31, 2009 consisted mainly of USD denominated current
accounts held at Citibank.




8




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.





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 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.





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.




Segment
Reporting – Prior to
December 31, 2008, the Company’s business operations were located in Ukraine and
related primarily to exploration and development of crude oil and natural gas
properties. For the purposes of these financial statements, these operations
were presented under the heading of “Discontinued Operations”.




4.      OTHER
ACCOUNTS PAYABLE AND ACCRUALS




Other
accounts payable and accruals as of March 31, 2010 and December 31, 2009
consisted of the following:




9





3/31/2010
            
            
            12/31/2009Professional
      Services
            
            $
            32,276
            
            
            $
            28,276Related
      partiesAdvances
      from shareholders
            
            
            384,532
            
            
            
            382,365Total
            
            $
            416,808
            
            
            $
            410,641





The
amounts of $32,276 and $28,276 were due to the Company’s auditor, transfer agent
and financial printer. The amounts of $384,532 and $382,365 represent advances
from shareholders with no specific terms paid to the Company during 2005-2006
and 2009-2010.




5.       INTEREST
PAYABLE




Interest
payable of $22,476 as of March 31, 2010 and December, 31 2009 represented
interest accrued on the loans from related parties (Note 4).




6.
      SHAREHOLDERS’ EQUITY




No
dividends were declared or paid by the Company during the periods ended March
31, 2010 and December 31, 2009.




7.
      INCOME/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.





Three
      Months EndedMarch
      31,2010
            
            
            2009(Unaudited)
              (in
      US dollars, except
              Per
      share amounts)Loss
      from continuing operations
            
            $
            (6,205
            )
            
            $
            (293,630
            )Income
      from discontinued operations
            
            
            
            
            
            
            3,302,948Net
      income/(loss) attributable to common stockholders
            
            $
            (6,205
            )
            
            $
            3,009,318Weighted
      average common shares outstanding, basic
            
            
            23,690,037
            
            
            
            23,616,187Loss
      from continuing operations per common share, basic
            
            
            (0.00
            )
            
            
            (0.01
            )Income/(Loss)
      from discontinued operations per common share, basic
            
            
            0.00
            
            
            
            0.14Income/(Loss)
      per common share, basic
            
            $
            0.00
            
            
            $
            0.13Weighted
      average common shares outstanding, diluted
            
            
            23,690,037
            
            
            
            23,616,187Loss
      from continuing operations per common share, basic
            
            
            (0.00
            )
            
            
            (0.01
            )Income/(Loss)
      from discontinued operations per common share, basic
            
            
            0.00
            
            
            
            0.14Loss
      per common share, diluted
            
            $
            0.00
            
            
            $
            0.13




10


8.     
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 March 31, 2010 and December 31, 2009 (Notes 4 and 5). Our
related parties are CJSC Infox, Zaccam Trading, Ltd.. and Burisma Holdings
Limited.




9.  COMMITMENTS
AND CONTINGENCIES




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. In accordance with the share purchase
agreement executed by the Company and Millington Solutions LLC, Millington would
assume all environmental remediation obligations relating to the oil & gas
properties previously held by the Company through its former subsidiaries Esko
Pivnich and Pari.




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.




10.  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.




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.




11.   
 SUBSEQUENT EVENTS




On May
12, 2010, Mr. David A. Melman, the Сhairman of the
Board of Directors of the Company notified Sunrise Energy Resources, Inc. (the
“Company”) of his decision to resign as director and Chairman of the Board of
Directors of the Company. Mr. Melman’s resignation was effective immediately.
Mr. Melman’s resignation was not based on any disagreement with the Company,
known to any executive officer or director of the Company, on any matter
relating to the Company’s operations, policies or practices.




11





MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS




Discussion and Analysis of
Financial Condition




Current
activities




At the
present time, the Company is engaged in oil and gas consulting
business.




Cash
requirements




The
Company anticipates it will require around $100,000 to sustain operations and
effectively evaluate new business opportunities over the next twelve months. The
Company believes it will be able to raise these funds through equity and debt
financing; however, there is no guarantee that funds will be
raised.




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 Financial
Statements.




Going
Concern




These
financial statements have been prepared on a going concern basis which assumes
that adequate sources of financing will be obtained as required and that our
assets will be realized and liabilities settled in the ordinary course of
business. Accordingly, these financial statements do not include any adjustments
related to the recoverability of assets and classification of assets and
liabilities that might be necessary should we be unable to continue as a going
concern.





In order
for us to continue as a going concern, we require additional financing. There
can be no assurance that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to continue as a going concern, we would likely be
unable to realize the carrying value of our assets reflected in the balances set
out in the preparation of financial statements. The Company’s limited revenue
history, absence of revenue sources following the sale and discontinuation of
its oil&gas business and limited funding raise substantial doubt about the
Company’s ability to continue as a going concern.





Accordingly,
our independent auditors included an explanatory paragraph in their report of
the December 31, 2009 financial statements regarding concerns about our ability
to continue as a going concern. Our financial statements contain additional
notes and disclosures describing the circumstances that lead to this disclosure
by our independent auditors.




12




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.




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.The Company had no revenue
during the reported period.




13




ITEM
3.  Quantitative and Qualitative Disclosures about Market
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 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.




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, 2009. Based upon that evaluation,
our Directors, Chief Executive and Chief Financial Officer, concluded that our
disclosure controls and procedures were effective.




14




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, 2009, 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, 2009, 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.





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. No particular disclosure has
been materially affected by the above weakness.





We intend
to continue providing 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.




15





Conclusion





The above
identified material weakness did not result in material audit adjustments to our
2009 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 period 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.


16




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 2009 Annual Report on Form 10-K
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





None





Item
3. Defaults upon Senior Securities





None





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





None





Item
5. Other Information





None




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




Reports
on Form 8-K




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




Form 8-K
dated May 12, 2010 regarding the resignation of David A. Melman as director and
Chairman of the Board of Directors of the Company.




Balance Sheets as of March 31,
2010 and December 31,
2009




Statements
of Changes in Stockholders’ Equity (Capital Deficit) for the three months ended
March 31, 2010




Statements
of Operations and Comprehensive Loss for the three months ended March 31, 2010
and 2009.




Notes to
the Financial Statements for the periods ended March 31, 2010and December 31,
2009




17




Exhibit
              Number
            
            Description
            
            Incorporation by
      Reference31.1
            
            Rule
      13a-14(a) Certification of Chief Executive
      Officer
            
            Filed
      Herewith31.2
            
            Rule
      13a-14(a) Certification of Chief Financial
      Officer
            
            Filed
      Herewith32.1
            
            Section
      1350 Certification of Chief Executive
      Officer
            
            Filed
      Herewith32.2
            
            Section
      1350 Certification of Chief Financial
      Officer
            
            Filed
      Herewith




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./s/
      Konstantin
      TsiryulnikovDate:
      May 14, 2010
            Konstantin
      TsiryulnikovPresident and Chief Executive
      Officer





18