SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q



                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


For the Quarter Ended                                 Commission File Number
 September 30, 1997                                              0-19516


                    SUNRISE INTERNATIONAL LEASING CORPORATION
             (Exact name of registrant as specified in its charter)


   DELAWARE                                                     41-1632858
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

                        5500 Wayzata Boulevard, Suite 725
                         Golden Valley, Minnesota 55416
                    (Address of principal executive offices)

               Registrant's telephone number, including area code
                                 (612) 593-1904

                            SUNRISE RESOURCES, INC.
(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                 Yes  [X]                       No [ ]


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

    7,787,796 shares of Common Stock, $.01 par value as of November 12, 1997.
<PAGE>


PART I - FINANCIAL INFORMATION

Item 1.  Financial   Statements  Included  herein  is  the  following  unaudited
     financial information:

     Consolidated Balance Sheets as of September 30, 1997 and March 31, 1997.

     Consolidated Statements of Operations for three month and six month periods
     ended September 30, 1997 and 1996.

     Consolidated  Statements  of Cash  Flows  for the six month  periods  ended
     September 30, 1997 and 1996.

     Notes to Consolidated Financial Statements.


<PAGE>


SUNRISE INTERNATIONAL LEASING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                     September 30,            March 31,
                                                                                          1997                 1997
                                                                                    ---------------     ---------------
                                                                                       (Unaudited)
<S>                                                                                 <C>                <C>
ASSETS
   Cash and cash equivalents                                                        $     2,386,000    $      2,191,000
   Accounts receivable, less allowance for doubtful accounts
     of $352,000 and $494,000                                                             1,714,000           1,928,000
   Income taxes receivable                                                                       --           1,245,000
   Inventory held for sale                                                                  523,000             388,000
   Loans receivable, less allowance for possible losses of $3,461,000
     and $3,401,000                                                                       5,567,000           7,503,000

   Investment in leasing operations:
     Direct financing leases                                                             37,099,000          46,759,000
     Operating leases, less accumulated depreciation of
       $25,022,000 and $22,973,000                                                       44,807,000          42,211,000
     Equipment held for lease                                                             8,910,000           6,435,000
      Initial direct costs                                                                  495,000             590,000
                                                                                    ---------------    ----------------
       Total investment in leasing operations                                            91,310,000          95,995,000
                                                                                    ---------------    ----------------
   Furniture and fixtures, less accumulated depreciation
     of $617,000 and $535,000                                                               382,000             411,000
   Other assets                                                                           1,261,000           1,498,000
                                                                                    ---------------    ----------------
       Total Assets                                                                $    103,144,000    $    111,159,000
                                                                                   ================    ================
LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
   Financing arrangements:
     Notes payable                                                                  $    20,196,000    $     13,329,000
     Securitized borrowings                                                               9,168,000          15,481,000
     Recourse participations in loans receivable                                             35,000             435,000
     Discounted lease rentals                                                            32,412,000          40,198,000
                                                                                    ---------------    ----------------
       Total financing arrangements                                                      61,811,000          69,443,000
                                                                                    ---------------    ----------------
Accounts payable                                                                          4,401,000           6,808,000
   Accrued liabilities                                                                    3,318,000           6,252,000
   Accrued income taxes                                                                   1,100,000                  --
   Deferred tax liability                                                                 1,899,000           1,899,000
                                                                                    ---------------    ----------------
       Total Liabilities                                                                 72,529,000          84,402,000
                                                                                    ---------------    ----------------
COMMITMENTS AND CONTINGENCIES (Note 6)

SHAREHOLDERS' EQUITY
   Common stock, $.01 par value, 17,500,000
     shares authorized, 7,788,000 and 7,189,000
     shares issued and outstanding, respectively                                             78,000              72,000
   Capital stock, undesignated, $.01 par value,
     2,500,000 shares authorized, none issued or outstanding                                     --                  --
   Additional paid-in capital                                                            27,617,000          25,601,000
   Retained earnings                                                                      2,920,000           1,084,000
                                                                                    ---------------      --------------
       Total Shareholders' Equity                                                        30,615,000          26,757,000
                                                                                    ---------------      --------------
       Total Liabilities and Shareholders' Equity                                  $    103,144,000     $   111,159,000
                                                                                   ================     ===============
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these balance sheets.
<PAGE>


SUNRISE INTERNATIONAL LEASING CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                     Three Months                           Six Months
                                                 Ended September 30,                    Ended September 30,
                                            ---------------------------------       ----------------------------------
                                                   1997               1996               1997                1996
                                            -----------------   -------------       ---------------    ---------------
<S>                                          <C>                <C>                 <C>                <C> 
REVENUES
   Operating leases                          $     8,316,000    $     6,142,000     $    16,236,000    $    11,866,000
   Direct financing leases                         1,288,000          2,046,000           2,678,000          4,221,000
   Equipment sales                                 1,763,000          2,314,000           3,420,000          4,801,000
   Interest Income                                    67,000            178,000             137,000            397,000
   Fee income                                        195,000             58,000             282,000            123,000
                                             ---------------    ---------------     ---------------    ---------------
     Total Revenues                               11,628,000         10,738,000          22,753,000         21,408,000
                                             ---------------    ---------------     ---------------    ---------------
COSTS AND EXPENSES
   Depreciation                                    4,621,000          3,682,000           8,953,000          6,838,000
   Interest                                        1,395,000          1,603,000           2,886,000          3,313,000
   Provision for lease and loan losses               345,000            205,000             615,000            426,000
   Cost of equipment sold                          1,807,000          1,885,000           3,457,000          4,065,000
   Compensation expense                              872,000          1,003,000           1,836,000          1,784,000
   Other operating expenses                          745,000            580,000           1,479,000          1,101,000
                                             ---------------    ---------------     ---------------    ---------------
     Total Costs and Expenses                      9,785,000          8,958,000          19,226,000         17,527,000
                                             ---------------    ---------------     ---------------    ---------------
INCOME FROM OPERATIONS
   BEFORE PROVISION
   FOR INCOME TAXES                                1,843,000          1,780,000           3,527,000          3,881,000

PROVISION FOR INCOME TAXES                           885,000            854,000           1,692,000          1,862,000
                                             ---------------    ---------------     ---------------    ---------------

NET INCOME                                   $       958,000    $       926,000     $     1,835,000     $    2,019,000
                                             ===============    ===============     ===============    ===============
NET INCOME PER COMMON
   AND COMMON
   EQUIVALENT SHARE                          $         0.12     $          0.13     $          0.24    $          0.28
                                             ==============     ===============     ===============     ==============
WEIGHTED AVERAGE NUMBER
   OF COMMON AND
   COMMON EQUIVALENT
   SHARES OUTSTANDING                              7,856,000          7,222,000           7,586,000          7,202,000
                                             ===============    ===============     ===============    ===============
</TABLE>
The accompanying notes to the consolidated  financial statements are an integral
part of these statements.
<PAGE>
SUNRISE INTERNATIONAL LEASING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                Six Months
                                                                                            Ended September 30,
                                                                                    -----------------------------------
                                                                                        1997                   1996
                                                                                    ---------------     ---------------
<S>                                                                                 <C>                 <C> 
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                                                          $     1,835,000     $     2,019,000
Adjustments to reconcile net income to net cash
      provided by operating activities:
    Provision for lease and loan losses                                                     615,000             410,000
    Depreciation and amortization                                                         9,358,000           6,860,000
    Change in operating assets and liabilities:
        Accounts receivable                                                                 (41,000)           (499,000)
        Income taxes receivable                                                           1,245,000           1,157,000
        Other assets                                                                         98,000             145,000
        Inventory held for sale                                                            (135,000)             15,000
        Accounts payable                                                                 (2,407,000)          4,409,000
        Accrued liabilities                                                                (912,000)            209,000
        Accrued income taxes                                                              1,100,000             731,000
                                                                                    ---------------     ---------------
           NET CASH PROVIDED BY OPERATING
              ACTIVITIES                                                                 10,756,000          15,456,000
                                                                                    ---------------     ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of equipment for lease                                                     (18,666,000)        (22,364,000)
    Principal portion of direct financing leases collected                               13,914,000          13,228,000
    Investment in loans receivable                                                               --          (1,221,000)
    Principal portion of loans receivable collected                                       1,876,000           3,875,000
    Purchase of furniture and fixtures                                                      (52,000)            (19,000)
                                                                                    ----------------    ---------------
           NET CASH USED IN INVESTING ACTIVITIES                                         (2,928,000)         (6,501,000)
                                                                                    ----------------    ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
    Borrowings on notes payable                                                          22,999,000           9,700,000
    Payments on notes payable                                                           (16,132,000)         (3,413,000)
    Payments on securitized borrowings                                                   (6,313,000)                 --
    Proceeds from discounted lease financing                                              4,492,000           4,339,000
Payments on discounted lease financing                                                  (12,278,000)        (13,962,000)
    Payments on participations in loans receivable                                         (401,000)         (2,880,000)
    Payments on note payable to King Holding Corporation                                         --          (2,534,000)
                                                                                    ---------------     ---------------
           NET CASH USED IN FINANCING
              ACTIVITIES                                                                 (7,633,000)         (8,750,000)
                                                                                    ----------------    ----------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                   195,000             205,000

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                          2,191,000           1,629,000
                                                                                    ---------------     ---------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                          $     2,386,000     $     1,834,000
                                                                                    ===============     ===============
SUPPLEMENTAL CASH FLOW INFORMATION
    Interest paid                                                                         1,621,000           1,819,000
    Income taxes paid (received)                                                           (700,000)              7,000
    Stock issued in arbitration settlement (See Note 6)                                   2,022,000                  --
</TABLE>
The accompanying notes to the consolidated  financial statements are an integral
part of these statements.
<PAGE>
SUNRISE INTERNATIONAL LEASING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTH PERIODS ENDED SEPTEMBER 30, 1997 and 1996 (Unaudited)
--------------------------------------------------------------------------------

1.   ACCOUNTING POLICIES

     In the opinion of management, the accompanying financial statements contain
     all  adjustments  necessary  to present  fairly the  financial  position of
     Sunrise  International  Leasing  Corporation  (formerly  known  as  Sunrise
     Resources,  Inc.) and  Subsidiaries  (the Company) as of September 30, 1997
     and March 31,  1997 and the  results of  operations  and cash flows for the
     three  and  six  months  ended  September  30,  1997  and  1996.  All  such
     adjustments are of a normal and recurring nature.

     These  statements  should  be read in  conjunction  with  the  Notes to the
     Financial  Statements contained in the Company's Annual Report on Form 10-K
     for the fiscal year ended March 31,  1997,  filed with the  Securities  and
     Exchange  Commission,  and with  "Management's  Discussion  and Analysis of
     Financial Condition and Results of Operations"  appearing in this quarterly
     report.  Results for the interim periods are not necessarily  indicative of
     sales trends or future results and performance.

     During March 1997, the Financial  Accounting  Standards Board released SFAS
     No.  128,  Earnings  per Share,  which  requires  the  disclosure  of basic
     earnings per share and diluted  earnings per share.  The Company expects to
     adopt  SFAS  No.  128 in  fiscal  1998 and  anticipates  it will not have a
     material  impact on the financial  position or the results of operations of
     the Company.

     In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
     Disclosures about Segments of an Enterprise and Related Information,  which
     will be effective  for the Company  beginning  April 1, 1998.  SFAS No. 131
     redefines how operating segments are determined and requires  disclosure of
     certain financial and descriptive  information about a company's  operating
     segments. The Company has not yet completed its analysis of which operating
     segments it will report on.

2.   INCOME TAXES

     Income tax expense has been provided based on management's  estimate of the
     annualized  effective  tax rate of 48% for the three  and six month  period
     ended September 30, 1997, and 48% for the three and six month periods ended
     September 30, 1996.

3.   LOANS RECEIVABLE

     Loans by Collateral Type
     The composition of the loans receivable portfolio by collateral type was as
     follows:
<TABLE>
<CAPTION>
                                                                                     September 30,     March 31,
                                                                                         1997                1997
                                                                                    ---------------    ----------
<S>                                                                                 <C>                <C> 
     Commercial loans, collateralized primarily by receivables                      $            --    $       161,000
     Commercial loans, collateralized by equipment, marketable
       securities and other                                                               4,409,000          5,163,000
     Real estate loans                                                                      350,000          1,038,000
     Non-accrual loans                                                                    4,633,000          5,475,000
     Non-recourse participations                                                           (300,000)          (867,000)
                                                                                    ---------------    ---------------
                                                                                          9,092,000         10,970,000
     Less:
       Allowance for possible loan losses                                                (3,461,000)        (3,401,000)
       Unearned fees from loan origination                                                  (64,000)           (66,000)
                                                                                    ---------------    ---------------
                                                                                    $     5,567,000    $     7,503,000
                                                                                    ===============    ===============
</TABLE>
<PAGE>
     Loan Portfolio Activity and Allowance for Possible Loan Losses

     As of  September  30,  1997 and  March 31,  1997,  the  Company's  recorded
     investment in impaired and other loans and the related valuation allowances
     was as follows:
<TABLE>
<CAPTION>
                                                     September 30, 1997                       March 31, 1997
                                            ------------------------------------    ----------------------------------
                                                 Recorded           Valuation          Recorded            Valuation
                                                Investment          Allowance         Investment           Allowance
                                            -----------------   ---------------     --------------     ---------------
<S>                                         <C>                 <C>                 <C>                <C>
     Impaired loans -
       Nonaccrual                           $      4,409,000    $    3,236,000      $     5,250,000    $     3,176,000
       Other                                         225,000           225,000              225,000            225,000
     Performing loans                              4,758,000                --            6,362,000                 --
     Nonrecourse participations                     (300,000)               --             (867,000)                --
                                            -----------------   --------------      ----------------   ---------------
                                            $      9,092,000    $    3,461,000      $    10,970,000    $     3,401,000
                                             ===============     =============       ==============     ==============
</TABLE>

     The activity in the allowance for possible loan losses during the three and
     six months ended September 30, 1997 and 1996 was as follows:
<TABLE>
<CAPTION>
                                                          Three Months                      Six Months
                                                     Ended September 30,                 Ended September 30,
                                                 ------------------------------     ------------------------------
                                                   1997                1996           1997                1996
                                                 -----------       -------------    ------------     -------------
<S>                                              <C>                <C>             <C>              <C>
         Balance, beginning of period            $3,431,000         $2,803,000      $3,401,000        $2,773,000
         Provisions for loan losses                  30,000             34,000          60,000            64,000
         Write-offs                                      --                 --              --                --
                                                 ------------      -------------    ------------     -----------
         Balance, end of period                  $3,461,000         $2,760,000      $3,461,000        $2,760,000
                                                 ============      =============    ============     ===========
</TABLE>
4.   DISCOUNTED LEASE RENTALS

     Discounted lease rentals consist of the following:

                                          September 30,         March 31,
                                              1997                1997
                                         ---------------    ---------------

         Non-recourse                    $    26,309,000    $    30,761,000
         Recourse                              6,103,000          9,437,000
                                         ---------------    ---------------
                                         $    32,412,000    $    40,198,000
                                         ===============    ===============

5.   FINANCING ARRANGEMENTS

     Lines of Credit

     The Company has a $25 million line of credit  facility  with a bank for use
     in its normal operations. Advances under this line of credit are subject to
     a borrowing  base  limitation of $25.0  million at September 30, 1997.  The
     loan  balance  outstanding  as of quarter end was $15.4  million.  Advances
     under  the  line  bear  interest  at  prime,  and  are   collateralized  by
     substantially all otherwise  unsecured assets of the Company.  This line of
     credit  facility  matured  on  September  30,  1997 and was  renewed  under
     identical terms for another twelve-month period ending September 30, 1998.

     This  credit  facility  requires   compliance  with  financial   covenants,
     including  the  maintenance  of  certain  liquidity  and net worth  ratios,
     prohibits  the payment of  dividends  and  requires  compliance  with other
     financial covenants.  As a result of charges taken in the fourth quarter of
     fiscal year 1997 for lease and loan losses and related events,  as of March
     31, 1997,  the Company did not meet certain  financial and other  covenants
     contained in credit agreements with certain lenders. With the assistance of
     King Management  Corporation,  the lenders have  subsequently  modified the
     financial covenants or waived the events of noncompliance.  As of September
     30,  1997,  the Company is in  compliance  with the revised  terms of these
     agreements.
<PAGE>
     Term Loan

     On May 16, 1997, Sunrise Leasing Corporation completed a $5,500,000 funding
     on a term loan with  National City Bank of  Minneapolis.  This term loan is
     secured by certain  leases of the Company.  These funds were used to reduce
     the debt  outstanding  under  the  Company's  bank  line of  credit.  As of
     September 30, 1997 the outstanding balance on this loan was $4.8 million.

     Securitization

     On October 31, 1996, the Company,  Sunrise  Leasing  Corporation  ("Sunrise
     Leasing") and Sunrise  Funding  Corporation I (a newly formed  wholly-owned
     special purpose subsidiary of Sunrise Leasing)("Sunrise  Funding"), entered
     into an agreement with a subsidiary of Dougherty Dawkins,  Inc. to place up
     to $20 million of notes issued by Sunrise Funding to private  institutional
     investors. Dougherty Dawkins, Inc. is an investment banking firm of which a
     former  director of the Company is Vice Chairman.  The notes are secured by
     certain leases  contributed  to Sunrise  Funding by Sunrise  Leasing.  This
     securitization  facility  was closed on November  8, 1996,  with an initial
     funding of $13,000,000 and subsequent advance of $7.0 million was funded on
     January 31, 1997.

6.   COMMITMENTS AND CONTINGENCIES

     Litigation

     On June 17,  1997,  a decision  was  released  by the  arbitrator  on these
     proceedings against the Company relating to the February 1995 merger of the
     Company with The P.J. King  Companies,  Inc. (d/b/a  International  Leasing
     Corporation)   ("ILC").   ILC  shareholders   were  denied  rescission  and
     reformation of the merger agreement as well as relief on five other claims.
     They were  however  granted  relief on one count of breach of warranty  and
     awarded  damages of  560,257  additional  shares of  Sunrise  International
     Leasing  Corporation  common stock. This award,  valued at $1,891,000,  was
     charged  as  an  expense  for  fiscal  1997.   Additionally,   certain  ILC
     shareholders  were awarded repayment of attorneys' fees payable in the form
     of 38,818 additional shares of Sunrise  International  Leasing  Corporation
     common stock.  This award valued at $131,000 was also charged as an expense
     for fiscal 1997.  These  proceedings  were conducted  under an agreement of
     binding  arbitration and therefore no further  disputes or settlements with
     the Company are expected to arise in connection with the merger agreement.

<PAGE>

7.    RELATED PARTY

     Employment Agreement

     On June 16, 1997, the Company  entered into an agreement (the  "Agreement")
     with Peter J. King and The King Management Corporation ("King Management"),
     a  corporation  which is  controlled  by Mr.  King,  whereby Mr. King would
     become Chairman of the Board and an employee of the Company and whereby Mr.
     King and King Management  would provide  certain  services for the Company.
     The term of the  agreement  is from June 16, 1997 through June 15, 1999 and
     entitles Mr. King to receive a salary of $10,000 per month for his services
     as a director and employee of the Company.  In addition,  Mr. King received
     (i) a five-year  option to purchase  270,753 shares of the Company's Common
     Stock at $3.375 per share,  which option is  immediately  exercisable,  and
     (ii) a five-year  option to purchase 270,753 shares of the Company's Common
     Stock at $3.375 per share, which option will become exercisable on June 16,
     2001 if Mr. King is still employed by the Company; provided,  however, that
     the vesting of such option  will be  accelerated  prior to June 16, 1999 if
     certain conditions are met.

     Also  pursuant to this  agreement  with Peter J. King and King  Management,
     King Management will provide subordinated debt financing,  direct financing
     and/or other financial  assistance to the Company for a period of two years
     in consideration of King Management's right to participate as lessor to the
     extent of 25% of certain higher-risk vendor leasing programs and risk pools
     and to the  extent  of 15% of all  other  vendor  leasing  programs  of the
     Company.

     As of  September  30,  1997,  King  Management  had  under  this  agreement
     purchased  62  leases  with a cost of  $1,388,000.  Had these  leases  been
     recorded on the Company's books,  $95,000 of additional  revenue would have
     been recognized for the three months ended September 30, 1997.

8.   SUBSEQUENT EVENT

     On  October  17,  1997,  Sunrise  Resources,  Inc.  merged  with and into a
     newly-formed   Delaware  subsidiary  named  Sunrise  International  Leasing
     Corporation,  thereby  changing the  Company's  state of  incorporation  to
     Delaware  and  the  Company's   name  to  Sunrise   International   Leasing
     Corporation.
<PAGE>
ITEM 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

Revenues

The Company classifies its lease  transactions,  as required by the Statement of
Financial Accounting Standards No. 13 ("FASB 13"), as either direct financing or
operating leases. Revenue, costs and resulting income are recognized during each
of the accounting periods during the term of the lease. The allocation of income
among the  accounting  periods  within a lease term will vary depending upon the
lease classification.

The  Company  segregates  the sources of its revenue  into five  categories  for
financial  statement  purposes:  (i)  operating  leases;  (ii) direct  financing
leases; (iii) sales of new and used equipment; (iv) fee income; and (v) interest
income.

Operating Leases.  All leases that are not classified as direct financing leases
are  treated  as  operating  leases.  Monthly  payments  from  these  leases are
recognized as leasing  revenue.  The Company's  cost of the leased  equipment is
recorded on the balance sheet and is depreciated on a  straight-line  basis over
the  lease  term to the  Company's  estimate  of  residual  value.  Revenue  and
depreciation  expense for operating  leases are recorded evenly over the term of
the lease.  If the lease is discounted to a financial  institution,  the related
interest  expense  declines  over the  term of the  lease  as the  principal  is
reduced,  with the  resultant net margin being lower in the early periods of the
lease and higher in the later periods.

Direct Financing  Leases.  These leases transfer  substantially all benefits and
risks of equipment  ownership to the lessee. A lease is a direct financing lease
if the creditworthiness of the customer and the collectibility of lease payments
are reasonably certain and it meets one of the following criteria: (i) the lease
transfers  ownership  of the  equipment  to the customer by the end of the lease
term; (ii) the lease contains a bargain purchase option; (iii) the lease term at
inception  is at  least  75% of  the  estimated  economic  life  of  the  leased
equipment;  or (iv) the present value of the minimum lease  payments is at least
90% of the fair value of the leased equipment at inception of the lease.

Direct financing leases consist of future lease payments plus the residual value
(collectively  referred  to as the "gross  investment").  Residual  value is the
estimated  fair market value at the time of lease  termination.  The  difference
between the gross investment in the lease and the cost (or carrying  amount,  if
different)  of the leased  equipment is recorded as unearned  revenue.  The "net
investment"  in the lease is the gross  investment  less unearned  revenue.  The
unearned  revenue is amortized to leasing revenue over the lease term to produce
a constant  percentage return on the net investment  whether or not the lease is
discounted to a financial institution.

Equipment Sales.  Revenue from equipment sales transactions is recognized by the
Company at the time title to the equipment  passes to the customer.  Leases that
entitle the customer to purchase the leased  equipment  for a nominal sum at the
end of the lease term and which are  discounted  on a  nonrecourse  basis at the
lease   commencement   date,  leaving  the  Company  with  no  interest  in  the
transaction, are treated by the Company as a sale of equipment.

Fee Income. Fee income consists  principally of fees earned for arranging leases
between  unrelated  parties.  These fees are  recognized  at the closing of such
transactions.  At  lease  termination,  the  Company  may  also be  entitled  to
additional  fee income equal to a portion of the net proceeds  from a subsequent
lease or sale of the equipment.  The Company's portion of such net proceeds,  if
any, is reported  as fee income at the time of the  subsequent  lease or sale of
the equipment.

Interest Income. Interest income is accrued on unimpaired loans receivable under
the effective interest method.  Interest income is not recognized on loans which
have been identified by the Company as impaired.
<PAGE>
Sunrise Financial Resources, Inc.

The Board of Directors made the  determination in fiscal 1996 to discontinue the
SFR  business.  The Company has sold the SFR  asset-based  lending  accounts and
one-half of its SFR commercial accounts.  Management believes the loan portfolio
is reflected at its estimated liquidation value as of September 30, 1997.

Results of Operations for the Three and Six Months Ended  September 30, 1997 and
1996

Total revenue from leasing activity increased approximately $1.4 million (17.3%)
and $2.8 million (17.6%) for the three and six-month periods ended September 30,
1997, as compared to the  corresponding  periods in fiscal 1997. The majority of
the revenue increase came from a $2.2 million (35.4%) and a $4.4 million (36.2%)
increase in operating  lease revenue for the three and  six-month  periods ended
September  30, 1997,  as compared to the previous  fiscal year.  The increase in
operating  lease  revenues  was offset by a decrease in direct  financing  lease
revenue of $758,000 (37.0%) and $1.5 million (36.6%) for the three and six-month
periods ended  September 30, 1997, as compared to the  corresponding  periods in
fiscal 1997. The increase in operating  lease revenue and the decrease in direct
finance  revenue are a result of the Company's  continuing  effort to expand and
focus on the vendor  leasing  business.  Operating  lease  revenue was, and will
continue to be, affected by King Management's  right to participate as lessor to
the extent of 15% or 25% of the Company's  vendor lease programs.  See Note 7 to
Consolidated Financial Statements.

Total leasing revenues were as follows (dollar amounts in millions):
<TABLE>
<CAPTION>
                                                   Three Months                              Six Months
                                                Ended September 30,                      Ended September 30,
                                            ---------------------------------      ---------------------------------
                                                 1997             1996                  1997              1996
                                            ---------------   ---------------      ---------------   ---------------
                                            Amount    %       Amount    %            Amount    %      Amount      %
                                            ---------------   ---------------      ---------------   ---------------
<S>                                         <C>      <C>      <C>      <C>          <C>      <C>     <C>        <C>

   Leasing Revenues:
         Vendor                             $   6.8   71%     $  4.7    57%         $  13.2   70%    $   8.9     55%
         Direct                                 2.8   29         3.5    43              5.7   30         7.2     45
                                            -------  ------   ------   -----        -------  ----    -------   -----
              Total                         $   9.6  100%     $  8.2   100%         $  18.9  100%    $  16.1    100%
                                            =======  ====     ======   ====         =======  ====    =======    ====

   As a percent of total revenues              82.6%            76.2%               83.1%              75.1%
                                               =====            =====               =====              =====
</TABLE>

Margins from leasing activities  (leasing revenue less depreciation and interest
expense)  were  37.3%  and 37.4% and 35.5% and 36.9% for the three and six month
periods of fiscal 1998 and fiscal 1997,  respectively.  Margins  will  fluctuate
from  period to period  based  upon the mix of direct  financing  and  operating
leases and the  extent to which the  Company  finances  leases  with  internally
generated  funds.  Margins  will also be  affected  by the mix and age of direct
finance and operating leases in the current portfolio.

In order to limit the impact of any interest  rate  fluctuations  on its leasing
transactions,  the Company continually  monitors its lease rate factors relative
to  interest  rates on  borrowed  funds.  The lease rate  factors  are  adjusted
periodically  on new leases to  correspond  to any change in  interest  rates on
borrowed funds supporting the related transactions.
<PAGE>

Revenue from equipment sales decreased $551,000 (23.8%) and $1.4 million (28.8%)
for the three and six month periods ended  September 30, 1997.  This decrease is
primarily a result of lower  off-lease  sales from the direct  customer  leasing
business.  The gross  margins of this  activity  were (1.0%) and (1.1%) of sales
revenue for the three and six month  periods of fiscal  1998,  compared to 18.5%
and 15.3% for the  corresponding  period in fiscal 1997.  This decrease in gross
margins was  specifically  attributable to one vendor program which  experienced
off-lease  sale losses during the period.  Gross margins will vary  depending on
the  Company's  ability  to  purchase  equipment  at  competitive  prices and to
negotiate attractive selling prices for such equipment.

Interest income  decreased  $111,000  (62.4%) and $260,000 (65.5%) for the three
and six month periods of fiscal 1998 as compared to the corresponding  period in
fiscal 1997.  This decrease was caused by the continuing  liquidation of the SFR
loan portfolio  which  coincided with the Company's  decision to discontinue its
commercial and asset-based lending services.

Fee income increased  $137,000  (236.2%) and $159,000 (129.3%) for the three and
six month  periods of fiscal 1998 as compared to the same period in fiscal 1997.
This  increase  is  due  to  the  additional  servicing  fees  received  on  the
securitization that began on November 1, 1996.

Total costs and expenses  increased  $827,000 (9.2%) and $1.7 million (9.7%) for
the three and six month periods of fiscal 1998 as compared to the  corresponding
period in fiscal 1997.

Depreciation expense for the three and six month period ended September 30, 1997
increased $939,000 (25.5%) and $2,115,000 (30.1%) over the same period in fiscal
1997.  This  increase  was due to an  increase  in  vendor  equipment  leases as
depicted in the above table, the majority of which are operating leases.

Interest expense  decreased  $208,000 (13.0%) and $427,000 (12.9%) for the three
and six month periods of fiscal 1998 as compared to the corresponding  period in
fiscal  1997.  This  decrease in  interest  expense is due to the  reduction  in
interest expense from discounted leases.

Cost of equipment  sold decreased  $78,000  (4.1%) and $608,000  (15.0%) for the
three and six month  periods of fiscal  1998 as  compared  to the  corresponding
period in fiscal  1997.  This  decrease  was  primarily  due to  decreased  sale
activity in the direct  leasing  business  during the first six months of fiscal
1998.

Compensation  expense  decreased  $131,000  (13.1%) for the three  months  ended
September  30, 1997 as compared to the same period in fiscal 1997.  Compensation
expense  for the six month  period  ended  September  30,  1997 showed a $52,000
(2.9%) increase over the previous  fiscal year.  These  fluctuations  are due to
slightly  higher  compensation  for the six-month  period in fiscal 1998 and the
timing of certain accruals.

Other operating expense increased  $165,000 (28.4%) and $378,000 (34.3%) for the
three and six month  periods  ended  September  30,  1997,  as  compared  to the
previous  periods in fiscal 1997.  The majority of this  increase was due to the
acceleration of amortization of some capitalized funding expenses.

Income tax  provision as a percentage  of income before taxes was 48.0% for both
the three and six month periods ended September 30, 1997 and 1996.
<PAGE>
Liquidity and Capital Resources

General

In the leasing  business the Company  uses a  combination  of its credit  lines,
other financing  sources and internally  generated cash flows to finance,  on an
interim  basis,  and the  acquisition  of equipment for lease.  Generally,  upon
commencement of an end-user lease,  the Company attempts to assign the remaining
lease payment  stream to a financial  institution  on a discounted,  nonrecourse
basis.  In this  manner,  the  Company  finances  a  substantial  portion of the
equipment  cost on a long-term  basis and attempts to limit its risk, if any, to
its equity  investment in the loan or equipment.  The discounted  lease proceeds
received by the Company are used to reduce borrowings under the credit lines. An
increasing  percentage  of leases and loans  originated  since  fiscal 1995 were
required to be funded by recourse  obligations.  In this type of financing,  the
Company assumes the entire risk on its investment in the loan or equipment.

At September 30, 1997,  the Company had total  borrowings  outstanding  of $61.3
million,  of which 42.6% were  nonrecourse.  At March 31, 1997,  the Company had
total borrowings outstanding of $69.4 million, of which 44.3% were nonrecourse.

As of  September  30,  1997,  the  Company  had a total  investment  in  leasing
operations of $91.3 million, as compared to $96.0 million at March 31, 1997. The
slight  decrease in investment  in leasing  operations is due to the decrease in
direct  finance  leases  as a result of the  reduction  of the  direct  customer
leases. The Company's  investment in leasing operations  includes equipment held
for lease,  which  consists of  equipment  for which a lease has been signed but
which has not yet commenced.  The amount of equipment held for lease  fluctuates
significantly  depending  on the dollar  amounts and  commencement  dates of the
Company's leases.

Net cash  provided  by  operating  activities  was $10.8  million  for the first
six-month  period of fiscal 1998.  Increases in depreciation  and  amortization,
which were due to increases in the Company's  operating lease portfolio,  offset
decreases  of  $2.4  million  in  accounts   payable  and  $912,000  in  accrued
liabilities.  The Company expects to fund future requirements through internally
generated  funds, as well as borrowings  under its lines of credit.  The Company
also expects to realize  additional  cash from the future  remarketing of leased
equipment.

Equipment expenditures of $18.7 million for the first six month period of fiscal
1998 were financed through $10.8 million of cash flows from operations,  through
the  discounting  of $5.5  million  of  noncancelable  lease  rentals to various
financial institutions at fixed rates and through the use of the Company's lines
of credit.  The  Company  does not have any  material  commitments  for  capital
expenditures, other than equipment held for lease.

Inflation has not been a significant  factor in the Company's business in any of
the periods presented.

Liquidity and Financing Sources

As of  September  30,  1997,  the  Company had  available a $25 million  line of
credit.  Of this amount,  $15.4  million had been  utilized as of September  30,
1997.  Advances under the line are  collateralized  by substantially  all of the
Company's  assets.  The interest rate is at prime, and the Company is subject to
certain financial and other covenants relating to net worth ratios and liquidity
requirements.  The Company's line of credit matured as of September 30, 1997 and
was  renewed  under  identical  terms for another  twelve  month  period  ending
September 30, 1998.

This credit facility requires compliance with financial covenants, including the
maintenance of certain liquidity and net worth ratios,  prohibits the payment of
dividends and requires compliance with other financial covenants. As a result of
fourth  quarter  charges for lease and loans  losses and related  events,  as of
March 31, 1997, the Company did not meet certain  financial and other  covenants
contained  in  credit   agreements  with  certain  lenders.   The  lenders  have
subsequently   modified  the  financial   covenants  or  waived  the  events  of
noncompliance.  As of November 12, 1997,  the Company is in compliance  with the
revised terms of these agreements.
<PAGE>

During  the  first  quarter  of  fiscal  1998,  the  Company's  Sunrise  Leasing
Corporation  subsidiary entered into a Discretionary  Revolving Credit Agreement
with National City Bank of Minneapolis. The agreement provides for discretionary
loan advances up to $5.5 million based on eligible  equipment  leases.  Advances
under the agreement are secured by the eligible  equipment leases and are repaid
over the term, up to 48 months, of such eligible  equipment leases with interest
at 3.25% above the yield on U.S.  Treasury  securities of equivalent  term.  The
credit facility is also guaranteed by Sunrise International Leasing Corporation.
In May 1997, the Company borrowed $5.5 million under this credit  facility,  and
$4.8 million remains outstanding as of September 30, 1997.

Based on its projected cash flow from operations,  completion of the Securitized
Facility and its recent success in obtaining  additional  discount financing and
the commitment of King  Management  Corporation to assist the Company in meeting
its financing requirements, the Company believes that it will be able to finance
its anticipated equipment purchasing commitments in fiscal 1998.

Over the past year or more, the Company has continued to monitor several problem
leases and loans.  While  there  continue  to be  several  loans  payable to the
Company which could force the Company to take additional write-offs,  management
does  not  currently  believe  that  any such  write-offs,  other  than the loan
described  below,  would be  material,  or that they would  create new  covenant
violations  on  current  credit  facilities  or  otherwise  limit or reduce  the
Company's access to credit.  During fiscal 1997, a lessee, which has a lease and
loan agreement with remaining  investment totaling $8.3 million, did not fulfill
its commitments in an already  restructured  lease and loan agreement by failing
to increase its monthly  payments from  $159,000 to $199,000 in November,  1996.
The lessee has not paid the  incremental  monthly rent of $40,000 despite demand
and is  currently  in  default.  As a result of this  default  and the  lessee's
request to restructure its payments, management recorded a reserve of $3,161,000
against this transaction in the fourth quarter of fiscal 1997. Any restructuring
is subject to the  approval  of a federal  government  agency and the  Company's
claims  against the assets and  collateral may be subject to prior claims of the
federal government. As a result, the remaining $5.1 million of net book value as
of September 30, 1997 is  significantly  undercollateralized.  While the Company
believes  the lessee will  continue  to make the  $159,000  monthly  payments in
fiscal 1998 and that certain loan and lease  guarantees are valid, if the lessee
ceases  making any payments  and the Company is  unsuccessful  in asserting  its
claims  under the  guarantees,  the  Company  would be required to write off the
remaining  lease  and loan  balance  which  as of  September  30,  1997 was $5.1
million.  This would have a materially adverse affect on the Company's financial
statements and its future cash flow would be reduced by the monthly payments for
the total  remaining  amount of the agreement.  The lessee has made the $159,000
monthly payments through October 1997.
<PAGE>
Outlook

The  statements   contained  in  this  Outlook  section  are  based  on  current
expectations. Certain of these statements are forward looking and actual results
may differ materially. The forward looking statements contained in this Outlook,
in particular the statements  regarding  growth of the Company's  vendor leasing
business, the Company's ability to finance its business, and management's belief
that any future loan or lease  write-off will not be material,  involve a number
of risks and  uncertainties  in addition to the  factors  discussed  above which
could  cause  actual  results to differ  from  those  projected,  including  the
following:

Highly   Competitive   Industry.   The  equipment  leasing  business  is  highly
competitive.  The Company competes with numerous  companies,  including  leasing
companies,  commercial  banks  and  financial  institutions,  some of which  the
Company relies on to obtain capital to finance its leases. Most of the Company's
competitors are significantly  larger and have  substantially  greater resources
than the Company. Because of its relative lack of capital, the Company typically
chooses not to compete with large  leasing  companies  for those leases in which
the cost of the equipment  greatly  exceeds the amount of nonrecourse  financing
available.

Future Growth.  The Company's ability to grow at an acceptable rate is dependent
to a great  extent  on the  expansion  of its  vendor  leasing  programs.  As of
September 30, 1997, the Company has only two significant vendor leasing programs
and has signed  agreements  for ten other  vendor  leasing  programs.  While the
Company  believes it has the ability and capacity to develop  other large vendor
leasing  programs,  there is no  assurance  that it will be  successful  in this
regard or that it will be able to generate acceptable revenue growth.

Risk of Additional Loan and Lease  Write-Offs.  While the Company  believes that
its current reserves are adequate, it continues to monitor closely several loans
and a material lease, including a significant casino loan and lease currently in
default,  as to  which  the  Company  has a book  value  of $5.1  million  as of
September  30,  1997 and a remaining  investment  of $8.3  million.  There is no
assurance  that such loans or such  lease will not go into  default or that they
are  adequately  secured.  Any future losses on such loans and lease incurred in
excess of the Company's  reserves would likely  materially  affect the Company's
future earnings and cash flows, and will cause the Company to be in violation of
one or more of its  covenants  under its credit  agreements  with its  financing
sources.

Financing.  The  Company's  growth and  profitability  are  dependent to a great
extent on the willingness of banks and other financial  institutions to lend the
Company  money to finance the purchase of equipment to be leased.  To date,  the
Company has financed  its  equipment  and vendor  leasing  businesses  primarily
through the sale of equity to the public, cash flow from operations,  bank lines
of credit,  non-recourse  discount  lease  financing,  recourse  discount  lease
financing  and  a  securitization  of  certain  lease  receivables  and  related
residuals. The Company normally seeks to fund its traditional equipment business
with non-recourse  discount financing.  There is no assurance that banks will be
willing to continue to finance the Company's equipment leasing transactions on a
non-recourse  basis,  and any  adverse  change  in the  willingness  of banks to
finance the Company's lease  transactions  on a non-recourse  basis could affect
the Company's  future equipment  leasing  revenue.  The Company's vendor leasing
business to date has been financed  with  internally-generated  cash flow,  bank
lines of credit and a significant  securitization program. The Company will seek
to  finance  its  future   vendor   leasing   business  in  part  with   similar
securitization   programs.  To  the  extent  such  financing  programs  are  not
available, the Company will assume a significantly higher degree of risk because
the  lender  has  direct  recourse  against  the  Company  for the amount of any
default.  A default on a lease with a  significant  lease  balance  could have a
material adverse impact on the Company.
<PAGE>

Major  Customers/Vendors.  Total  investments in leases and loans receivables to
customers  considered  highly  leveraged  or with  cash  flows  from  operations
inadequate to service  existing  obligations  were  $25,755,000  or 26.8% of the
portfolio as of September 30, 1997. Defaults by such customers would result in a
significant  loss to the  Company,  to the extent  such  amounts are not already
reserved.  In  addition,  as these  leases  and loans are funded  internally  or
through  recourse  financing,  the  Company  would be  obligated  to  repay  the
remaining  principal  balance to the  financial  institution  out of  internally
generated funds while receiving no cash payments from the lessee/borrower  which
would result in a significant reduction in cash flow.

In addition,  53.2% of the Company's  total leasing revenue for the period ended
September 30,1997 was generated through a single vendor leasing program.  Should
this program  terminate,  the Company would continue to realize related revenues
for a period  of up to three  years.  However,  if the  Company  were  unable to
replace this lost  business,  the Company's  future  financial  results could be
materially and adversely affected.

Residual Values of Leased Equipment.  The value of the data processing equipment
leased by the Company to its customers  represents a substantial  portion of the
Company's  capital.  At the inception of each lease,  the Company  estimates the
residual value of the leased  equipment,  which is the estimated market value of
the equipment at the end of the initial lease term. The actual realized residual
value of  leased  equipment  may  differ  from  its  estimated  residual  value,
resulting in profit or loss when the leased equipment is sold or leased again at
the end of the  initial  lease term.  If a lessee  defaults on a lease which has
been  discounted  by the  Company  to a  financial  institution,  the  financial
institution may foreclose on its security  interest in the leased  equipment and
the Company may not realize any portion of such  residual  value.  In  addition,
data processing equipment is subject to rapid technological obsolescence typical
of the computer industry.  While the Company's  experience to date has generally
resulted in actual residual  values in excess of estimated  residual  values,  a
greater than expected  decrease in the market value of data  processing or other
equipment  leased by the  Company  could  materially  and  adversely  affect the
Company's financial condition and profitability.
<PAGE>
PART II-OTHER INFORMATION
--------------------------------------------------------------------------------

ITEM 1. Legal Proceedings - None.

ITEM 2. Changes in Securities - None.

ITEM 3.  Defaults on Senior  Securities - See Note 5 to Financial  Statements at
         Part I, Item 1, above.

ITEM 4. Submission of Matters to a Vote of Security Holders - None.

ITEM 5. Other Information

          Merger

          On October  17,  1997  Sunrise  Resources,  Inc.  merged with and into
          Sunrise International  Leasing Corporation,  a newly formed subsidiary
          of the Company  incorporated  under the laws of the State of Delaware.
          As a result of the merger,  the Company's state of  incorporation  has
          effectively been changed to Delaware,  and the Company's name has been
          changed to Sunrise International  Leasing Corporation.  The merger was
          approved  by the  Company's  shareholders  at a meeting on October 17,
          1997.

          Change of Accountants

          Effective November 12, 1997, Arthur Andersen LLP ("AA") was dismissed.
          The Company has engaged Deloitte & Touche LLP ("D&T") as the Company's
          independent public accountants.

          During the Company's  two most recent fiscal years and the  subsequent
          interim period through  November 12, 1997, there were no disagreements
          with AA on any matter of accounting principles or practices, financial
          statement   disclosure,   or  auditing  scope  or  procedures,   which
          disagreements if not resolved to AA's  satisfaction  would have caused
          them to make reference in connection with their opinion to the subject
          matter  of  the   disagreement.   The  audit  reports  of  AA  on  the
          consolidated  financial statements of the Company as of March 31, 1997
          and 1996 and for the three  years ended March 31, 1997 did not contain
          any adverse opinion or disclaimer of opinion,  nor were they qualified
          or modified as to uncertainty, audit scope, or accounting principles.

          During the Company's  two most recent fiscal years and the  subsequent
          interim  period  through  November 12, 1997,  neither  the Company nor
          anyone on its behalf  consulted D&T regarding (i) the  application  of
          accounting  principles  to  a  specified  transaction,   completed  or
          proposed,  or the type of audit  opinion that might be rendered on the
          Company's financial  statements,  in connection with which any written
          report or oral advice was provided by D&T to the Company  which was an
          important  factor  considered by the Company in reaching a decision as
          to the accounting,  auditing or financial reporting issue; or (ii) any
          matter that was either the subject of a  disagreement  or a reportable
          event (as described in Regulation S-K Item 304(a)(1)).

          The Company's  decision to change  independent  public accountants was
          recommended by the Company's Board of Directors on October 17, 1997.

ITEM 6. Exhibits and Reports on Form 8-K.

          a.   Exhibits

               See Exhibit Index immediately following the signature page.

          b.   Form 8-K

               There have been no Current  Reports on Form 8-K filed  on  behalf
               of the  Company  during the  quarter  ended  September 30, 1997.

<PAGE>

                                    SIGNATURE

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



                                 SUNRISE INTERNATIONAL LEASING CORPORATION



Date:   November 12, 1997        By: /s/ Errol Carlstrom
                                  Errol Carlstrom, President and Chief Executive
                                  Officer (principal executive officer)




                                  By: /s/ Barry J. Schwach
                                   Barry J. Schwach
                                   Executive Vice President of Finance and
                                   Administration and Chief Financial Officer
                                   (principal financial officer)



                                   By: /s/ Paul R. Wotta
                                    Paul R. Wotta
                                    Controller (principal accounting officer)

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                           EXHIBIT INDEX TO FORM 10-Q


Commission File No.:  0-19516
For the quarter ended
September 30, 1997


                    SUNRISE INTERNATIONAL LEASING CORPORATION


      Exhibit
      Number                                           Description

        3.1              Certificate of Incorporation
        3.2              Bylaws
        4.1              Specimen of Common Stock Certificate
       10.1*             Agreement dated June 16, 1997 among the Company, Peter 
                         J. King and The King Management Corporation
       10.2*             Nonqualified Stock Option Agreement dated June 18, 1997
                         between the Company and Peter J. King (accelerated 
                         vesting upon performance)
       10.3*             Nonqualified Stock Option Agreement dated June 18, 1997
                         between the Company and Peter J. King (fully vested)
       11.1              Per Share Earnings Computations
       16.0              Letter from Arthur Andersen LLP
       27.0              Financial Data Schedule (filed with electronic version 
                         only)

*  Management contract or other compensation plan