UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2011o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ______________ to _____________





Commission file number:  001-31669







SUNRIDGE INTERNATIONAL, INC.


(Exact name of registrant as specified in its charter)





Nevada

98-0348905(State or other jurisdiction of

(IRS Employer Identification No.)incorporation or organization)





16857 E. Saguaro Blvd.


Fountain Hills, Arizona 85268


(Address of principal executive offices)





(480) 837-6165


(Registrant’s telephone number, including area code)





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





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes oNo o Not applicable.





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.  (Check one):





Large accelerated filer    o
Accelerated filer    oNon-accelerated filer    o
Small reporting company    þ





Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).  Yes  oNo þ





As of May 16, 2011, 49,272,619 shares of the issuer’s common stock were outstanding.





SUNRIDGE INTERNATIONAL, INC.


INDEX








PART I. FINANCIAL INFORMATION





Item 1. Financial Statements
3Condensed Consolidated Balance Sheets as of March 31, 2011 (Unaudited) and June 30, 2010
3Condensed Consolidated Statements of Operations for the Three and Nine Months EndedMarch 31, 2011 and 2010 (Unaudited)
4Condensed Consolidated Statements of Changes in Equity (Deficit) for the Nine Months EndedMarch 31, 2011 (Unaudited)
5Condensed Consolidated Statements of Cash Flows for the Nine Months EndedMarch 31, 2011 and 2010 (Unaudited)
6Notes to Condensed Consolidated Financial Statements (Unaudited)
7Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
13Item 3. Quantitative and Qualitative Disclosures about Market Risk
18Item 4. Controls and Procedures
18PART II. OTHER INFORMATIONItem 1. Legal Proceedings
19Item 1A. Risk Factors
19Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
19Item 3. Defaults upon Senior Securities
20Item 4. (Removed and Reserved)
20Item 5. Other Information
20Item 6. Exhibits
20Signatures
21Index of Exhibits
22





2





PART I – FINANCIAL INFORMATION





Item 1.  Financial Statements





SUNRIDGE INTERNATIONAL, INC.


Condensed Consolidated Balance Sheets


As of March 31, 2011 (Unaudited) and June 30, 2010




March 31,


June 30,2011


2010(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents

$
660


$
-Accounts receivable


2,566



8,927Employee advances


-



3,400Prepaid expenses and other assets


11,814



179,814Inventory


18,077



20,920Total current assets


33,117



213,061Property and equipment, net


2,513



2,871Total assets

$
35,630


$
215,932LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT LIABILITIES:Notes payable - related parties

$
161,751


$
203,976Notes payable


225,229



293,202Cash overdraft


-



1,633Accounts payable


366,804



307,805Accrued salaries


141,900



-Accrued interest


70,847



44,902Total liabilities


966,531



851,518COMMITMENTS AND CONTINGENCIES (see Note 6)STOCKHOLDERS' EQUITY (DEFICIT)Preferred stock, $.001 par value; 50,000,000 shares authorized;no shares issued or outstanding


-



-Common stock, $.001 par value; 550,000,000 shares authorized;48,468,690 and 42,942,180 shares issued and outstanding asof March 31, 2011 and June 30, 2010, respectively


48,468



42,942Additional paid-in capital


14,046,145



13,407,088Accumulated deficit


(15,025,514
)


(14,085,616
)Total Stockholders' Equity (Deficit)


(930,901
)


(635,586
)Total Liabilities and Stockholders' Equity (Deficit)

$
35,630


$
215,932











See accompanying unaudited notes to the condensed consolidated financial statements.





3


SUNRIDGE INTERNATIONAL, INC.


Condensed Consolidated Statements of Operations


For the Three and Nine Months Ended March 31, 2011 and 2010


(Unaudited)




For the Three Months Ended


For the Nine Months EndedMarch 31,


March 31,2011


2010


2011


2010PRODUCT REVENUES

$
11,310


$
18,761


$
56,743


$
25,761Less: Returns and allowances


-



-



(4,290
)


-NET REVENUE


11,310



18,761



52,453



25,761Cost of product revenues


7,112



4,141



19,064



6,411GROSS PROFIT


4,198



14,620



33,389



19,350GENERAL & ADMINISTRATIVE EXPENSESEmployee and consultants expenses


120,900



24,650



347,900



210,250Freight


432



1,686



1,724



1,792Auto expense


3,012



-



7,152



-Reorganization cost


-



-



-



189,673Loss on stock issuances


55,775



170,807



257,940



170,807Depreciation


19



200



358



599Telephone and utilities


2,422



2,709



7,877



4,548Bank service fees


47



-



408



-Office expenses


1,144



2,289



5,858



4,019Insurance


3,297



7,845



22,106



13,190Travel & entertainment


-



3,127



8,323



4,296Legal and professional fees


86,741



34,886



176,553



143,558Rent expense


6,000



13,560



20,012



46,480Selling and marketing expenses


675



36,086



81,078



36,086FDA expense


-



2,008



-



2,008Other general & operating expenses


483



1,751



4,449



2,696TOTAL GENERAL & ADMINISTRATIVE EXPENSES


280,947



301,604



941,738



830,002LOSS FROM OPERATIONS


(276,749
)


(286,984
)


(908,349
)


(810,652
)OTHER INCOME (EXPENSE)Other income


10,065



-



11,270



-Interest expense


(9,968
)


(42,120
)


(42,819
)


(73,095
)TOTAL OTHER INCOME (EXPENSES)


97



(42,120
)


(31,549
)


(73,095
)NET LOSS

$
(276,652
)

$
(329,104
)

$
(939,898
)

$
(883,747
)Basic net loss per share

$
(0.01
)

$
(0.01
)

$
(0.02
)

$
(0.02
)Weighted average shares outstanding


47,414,721



40,007,222



45,296,437



40,002,381
 
 
  See accompanying unaudited notes to the condensed consolidated financial statements.


4


SUNRIDGE INTERNATIONAL, INC.


Condensed Consolidated Statements of Changes in Equity (Deficit)


For the Nine Months Ended March 31, 2011


(Unaudited)







Stockholders'Common Stock


Paid-in


Retained


EquityShares


Amount


Capital


Deficit


(Deficit)Balance at June 30, 2010


42,942,180


$
42,942


$
13,407,088


$
(14,085,616
)

$
(635,586
)Common Stock Issued for Services


1,266,430



1,266



135,034



-



136,300Common Stock Issued for Debt and Interest


844,101



844



103,800



-



104,644Common stock issued for cash


3,415,979



3,416



142,283



-



145,699Loss on stock issuances


-



-



257,940



-



257,940Net loss for the nine months ended March 31, 2011


-



-



-



(939,898
)


(939,898
)Balance at March 31, 2011


48,468,690


$
48,468


$
14,046,145


$
(15,025,514
)

$
(930,901
)


See accompanying unaudited notes to the condensed consolidated financial statements.


5


SUNRIDGE INTERNATIONAL, INC.


Condensed Consolidated Statements of Cash Flows


For the Nine Months Ended March 31, 2011 and 2010


(Unaudited)





For the Nine Months EndedMarch 31,2011


2010Cash flows from operating activities:Net loss

$
(939,898
)

$
(883,747
)Adjustments to reconcile net loss to net cash used in operating activities-Loss on stock issuances


257,940



170,807Stock and debt issued for interest and services


145,190



65,786Depreciation


358



598Reorganization Costs


-



189,673Changes in Assets and Liabilities:Accounts receivable


6,361



(4,065
)Inventory


2,843



3,556Prepaid expenses


168,000



-Deposits


-



4,520Accrued salaries


141,900



-Accounts payable and advances


58,999



233,086Accrued interest


25,945



27,662Net cash used in operating activities


(132,362
)


(192,124
)Cash flows from investing activities:Proceeds from reorganization


-



1,027Net cash provided by investing activities


-



1,027Cash flows from financing activities:Overdraft borrowings (repayments)


(1,633
)


(2,463
)Repayment on notes payable, related party


(70,406
)


(26,700
)Repayment on notes payable


(30,160
)


(6,000
)Proceeds from stock issuance


145,699



-Proceeds from borrowings


89,522



257,337Net cash provided by financing activities


133,022



222,174Net increase in cash and cash equivalents


660



31,077Cash and cash equivalents, beginning of period


-



-Cash and cash equivalents, end of period

$
660


$
31,077Supplemental Disclosures:Interest paid

$
7,984


$
20,432Non cash transactions:Issuance of common stock for services


136,300



70,786Issuance of common stock for interest


8,890



53,229Issuance of common stock for debt


95,754



383,405Cancellation of debt for repayment of employee advances


3,400



-








See accompanying unaudited notes to the condensed consolidated financial statements.


6


SUNRIDGE INTERNATIONAL, INC.


Notes to Condensed Consolidated Financial Statements (Unaudited)








Note 1 – Description of the Business and Summary of Significant Accounting Policies





Ophthalmic International, Inc. (OI) was incorporated in March 1997 in the state of Nevada. The Company had been a wholly owned subsidiary of Coronado Industries, Inc. until January 26, 2007 when the Company and its subsidiaries were purchased from Coronado Industries, Inc. for cash and other consideration.





Tari, Inc. (Tari) was incorporated on May 2, 2001 under the laws of the state of Nevada. It is located in Toronto, Ontario, Canada.





In September, 2009 Tari consummated an Agreement of Share Exchange and Plan of Reorganization (The Agreement) with OI. Pursuant to the Agreement Tari agreed to issue an aggregate of 33,050,000 shares of its restricted common stock to all of the shareholders of OI in exchange for all the issued and outstanding common stock of OI.





The exchange of shares has been accounted for as a reverse acquisition in the form of a recapitalization with OI as the “accounting acquirer.” Prior to the acquisition, Tari changed its name to SunRidge International, Inc. (hereinafter referred to as “SunRidge” or the “Company”).  Following the acquisition, OI became the wholly owned subsidiary of SunRidge.  SunRidge has adopted a fiscal year end of June 30. Operations after the acquisition have been based in Fountain Hills, Arizona, where the Company manufactures and markets a patented Vacuum Fixation Device and patented suction rings to major medical supply companies and health care providers throughout the world.  As a recapitalization, the accompanying financial statements represent the activity of OI.





Interim Financial Information





The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information and with the instructions to Form 10-Q.  Accordingly, they do not include all of the information required to be included in a complete set of consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).  In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  Operating results for the three and nine month periods ended March 31, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2011.  The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s 2010 Annual Report filed with the SEC on Form 10-K on November 15, 2010.





Basis of Presentation and Going Concern





The accompanying condensed consolidated financial statements are presented on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not made an operating profit since 1996. Further, the Company has a working capital deficit of approximately $933 thousand and a negative net worth of approximately $931 thousand as of March 31, 2011. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company cannot guarantee that, if additional financing is needed, we would be able to obtain financing on terms acceptable to us, if at all. As such, the Company’s independent registered public accounting firm has expressed a going concern opinion on the consolidated financial statements for the fiscal year ended June 30, 2010.





The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.  If the Company were unable to continue as a going concern, substantial adjustments would be necessary to the carrying value of assets, the reported amounts of liabilities, reported revenues and expenses and balance sheet classifications.


7


Management plans to monitor the Company’s liquidity, carefully work to reduce the uncertainty regarding the Company’s ability to generate sufficient cash flows and liquidity to fund operations and address the Company’s cash needs. Realization of management’s plans is dependent on the Company’s ability to finalize certain transactions which are inherently risky and difficult to predict as to timing.





Use of Estimates





Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States. Significant estimates include, but are not limited to, collectability of accounts receivable, recovery of inventory, depreciable lives of fixed assets, realization of net operating loss carryforwards, and valuation of stock-based transactions.  Actual results may vary from the estimates that were assumed in preparing the condensed consolidated financial statements.





The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure 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 differ from those estimates.





Accounting Developments





With the exceptions of those discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2011, that are of significance, or potential significance to the Company.





In October 2009, the FASB issued guidance on revenue recognition for multiple-deliverable revenue arrangements.  The guidance is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010 and addresses how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting.  The Company has adopted the guidance which did not have a material impact on its financial position and results of operations.





Principles of Consolidation





The condensed consolidated financial statements include the financial position, results of operations, cash flows and changes in stockholders’ equity (deficit) of the Company and its wholly owned subsidiary. All material intercompany transactions, accounts and balances have been eliminated in consolidation.





Cash and Cash Equivalents





Cash and cash equivalents are considered to be all highly liquid investments purchased with an initial maturity of three (3) months or less.





Prepaids





As of March 31, 2011, the Company had $11,814, or approximately 33% of total assets, recorded as prepaid expenses. This amount is related to the issuance of 800,000 shares of common stock, valued at $224,000, for professional services to be performed over a one year period ending April 18, 2011. As of March 31, 2011, $11,814 was unearned and recorded as a prepaid expense.





Inventories





Inventories consist primarily of materials and parts and are stated at the lower of cost, as determined on a first-in, first-out (FIFO) basis, or market.


8


Accounts Receivable





The Company follows the allowance method of recognizing uncollectible accounts receivable.  The Company recognizes bad debt expense based on a review of the individual accounts outstanding and the Company’s prior history of uncollectible accounts receivable. As of March 31, 2011 and June 30, 2010, the Company has not established an allowance for uncollectible accounts receivable. The Company does not record interest income on delinquent receivable balances until it is received. Accounts receivable are generally unsecured.





Property and Equipment





Property and equipment are stated at cost. Maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its life are charged to operations as incurred.  Betterments or renewals are capitalized when incurred. Depreciation is provided using accelerated methods over the following useful lives:





Office furniture & Equipment
5 – 7 YearsMachinery
5 – 7 YearsLeasehold Improvements
5 Years





Long Lived Assets





We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.





Contingencies





We accrue for contingent obligations, including legal costs, when the obligation is probable and the amount can be reasonably estimated. As facts concerning contingencies become known we reassess our position and make appropriate adjustments to the financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal, and other regulatory matters that are subject to change as events evolve and additional information becomes available.





Deferred Income Taxes





Deferred income taxes are provided on an asset and liability method, whereby deferred tax assets are recognized for deductible temporary differences and operating losses and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.





Loss Per Share





Basic loss per share includes no dilution and is computed by dividing loss to common stockholders by the weighted average number of common shares outstanding for the period. The effect of the recapitalization is included in all periods presented.





The Company has a net loss available to common stockholders for the periods ended March 31, 2011 and 2010, the diluted EPS calculation has been excluded from the financial statements.  As of March 31, 2011, and 2010, there were no dilutive securities outstanding.





Fair Value of Financial Instruments





The carrying values of our financial instruments included in current assets and current liabilities approximated their respective fair values at each balance sheet date due to the immediate or short-term maturity of these financial instruments.





9


Revenue Recognition





The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, our price is fixed or determinable, and collection is reasonably assured. We recognize revenue on our standard products when title passes to the customer upon shipment. The standard products do not have customer acceptance criteria. The Company has standard rights of return that are accounted for as a warranty provision, although it is deemed immaterial at this time. The Company does not have any price protection agreements or other post shipment obligations. For custom equipment where customer acceptance is part of the sales agreement, revenue will be recognized when the customer has accepted the product. In cases where custom equipment does not have customer acceptance as part of the sales agreement, revenue will be recognized upon shipment, as long as the system meets the specifications as agreed upon with the customer.





Note 2 – Debt and Debt Conversion





For the three and nine months ended March 31, 2011, the Company issued $2,990 and $89,522 of promissory notes, respectively.  These promissory notes were for a duration of three months with an interest rate of 10% for the term and a default rate of 12%.





The Company offered the promissory note holders the opportunity to convert their principal and accrued interest into restricted common stock of the Company at various times during the three and nine months ended March 31, 2011.





For the three months ended March 31, 2011, conversions took place at the closing bid stock prices between $.04 and $.09 per share, and converted $23,591 of principal and interest. For the nine months ended March 31, 2011, conversions took place at the closing bid stock prices between $.04 and $.30 per share, and converted $104,644 of principal and interest.





Note 3– Equity





Preferred Stock





As of March 31, 2011, our authorized preferred stock is 50,000,000 shares of preferred stock with par value of $0.001 per share. The Company’s Board of Directors has the authority to divide the preferred stock shares into series and to fix the voting powers, designation, preference, and relative participating, option or other special rights, and the qualifications, limitations, or restrictions of the shares of any series so established. The Company has issued no preferred stock shares as of March 31, 2011.





Common Stock





In September 2009, Tari, Inc. completed a 5-for-1 forward stock split which brought the shares outstanding of Tari, Inc. from 3,890,000 to 19,450,000. The 5-for-1 forward split has been accounted for retroactively for all periods presented.





The President of Tari, Inc. then contributed 12,500,000 shares of common stock to the Company as part of the exchange of shares with OI, leaving 6,950,000 shares outstanding prior to the merger.





In September, 2009, Tari consummated an Agreement of Share Exchange and Plan of Reorganization (the “Agreement”) with OI. Pursuant to the Agreement, Tari agreed to issue an aggregate of 33,050,000 shares of its restricted common stock to all of the shareholders of OI in exchange for all the issued and outstanding common stock of OI.





During the three months ended March 31, 2011 the following equity transactions took place:





The Company issued 410,000 shares of common stock valued at $14,500 to various consultants and vendors for services performed. The Company also issued 351,307 shares of common stock valued at $23,591 to various note holders for payment of principal and interest. The Company received $41,050 for the issuance of 1,320,570 shares of common stock of which $36,050 for 1,220,570 shares was from related parties.





During the nine months ended March 31, 2011 the following equity transactions took place:


10


The Company issued 1,266,430 shares of common stock valued at $136,300 to various consultants and vendors for services performed. The Company also issued 844,101 shares of common stock valued at $104,644 to various note holders for payment of principal and interest. The Company received $145,699 for the issuance of 3,415,979 shares of common stock of which $59,700 for 1,800,070 shares was from related parties.





Note 4 – Loss on Stock Issuance





Incentives were given by the Company for issuance of common stock for cash, conversion of promissory notes for common stock, and payment of certain consultants with common stock. The incentive was for stock to be issued at a discount from the closing bid trade price. As such, the Company recorded a loss on stock issuances of $55,775 on 1,896,877 shares of common stock for the three months ended March 31, 2011. For the nine months ended March 31, 2011, the Company recorded a loss on stock issuances of $257,940 on 5,211,510 shares of common stock.





Note 5 – Related Party Transactions





During the three months ended March 31, 2011, G. Richard Smith, the Company's President and a Director, loaned the Company $1,540 and was repaid $29,347.  For the nine months ended March 31, 2011, G. Richard Smith loaned the Company $58,386 and was repaid $101,592. This debt bears an interest rate of 10% for the term and 12% default per annum thereafter and is currently due on demand.  At March 31, 2011, G. Richard Smith was owed $156,770 by the Company.





During the three months ended March 31, 2011, the Company issued 1,220,570 shares of common stock to related parties for $36,050 in cash, 170,000 shares of common stock for wages valued at $8,500, and 301,307 shares of common stock for debt and interest payments valued at $21,091. For the nine months ended March 31, 2011, the Company issued 1,800,070 shares of common stock to related parties for $59,700 in cash, 367,339 shares of common stock for wages valued at $33,800, and 379,690 shares of common stock for debt and interest payments valued at $31,394.





Subsequent to March 31, 2011, the Company issued 56,667 shares of common stock for $1,700 in cash, 183,522 shares of common stock for wages valued at $8,500, and 100,000 shares for debt and interest payments valued at $3,000.





Note 6 – Commitments and Contingencies





Operating Leases





The Company entered into a non-cancelable lease agreement for office space in Fountain Hills, Arizona commencing December 1, 2004, through December 15, 2009. Monthly rental payments were $4,520.  After the lease expired, the Company extended the lease to December 31, 2010, at a monthly rate of $4,520. As of December 31, 2009, the Company had been delinquent in its rent payments. In order to make up past due payments, the Company issued a promissory note dated January 27, 2010 to convert $70,309 in rent and related late and legal fees into a note to pay $17,627 in four quarterly payments for a total principal amount of $70,309, including interest at 12% per annum after July 1, 2010.





The balance of the note as of March 31, 2011 was $31,872, including accrued interest.





As of December 31, 2010, the Company had amended their lease agreement. The new agreement extends the term of the lease to January 1, 2013. There is no January 2011 lease payment. The base rent for February 2011 through January 2012 will be $4,500 per month, with $3,000 going towards the current rent and $1,500 applied to the note balance. The base rent for February 2012 through January 2013 shall be $4,500 per month, with $3,500 going towards current rent and $1,000 applied to the note balance.





Indemnification





The Company has agreed to indemnify its officers and directors for certain events or occurrences that may arise as a result of the officer or director serving in such capacity.  The term of the indemnification period is for the officer’s or director’s lifetime.  The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited.  However, the Company believes the estimated fair value of these indemnification agreements is minimal and has no liabilities recorded for these agreements as of March 31, 2011 and June 30, 2010.


11


Contingent Liability





The Company had a consulting agreement with Francesco Aspes whereby a clause stated that the Company would reimburse Mr. Aspes for documented expenses, up to a maximum of 80,000 euros (or $109,000 USD currently). There is a claim by Mr. Aspes for the maximum amount, however, the Company believes that the reimbursement claim is unenforceable as no underlying documentation in support of this claim has been received. Therefore, the Company believes that it is reasonably possible that no loss has been incurred. As such, there is no accrued expense related to the potential reimbursement at March 31, 2011.





Litigation





In December 2009, our patent attorneys, Meschkow & Gresham, P.L.C., filed a lawsuit (CV 2009-037698) in the Superior Court for Maricopa County, Arizona against the Company and Mr. Richard Smith for breach of contract in the failure to pay for legal services in the amount of $12,063 plus costs and legal fees. Our answer to the complaint admitted that legal services had been provided but claimed no knowledge of the value of those services. This case was transferred to arbitration and an award was rendered in the amount of $8,064 against G. Richard Smith, our President and Director, his wife, Karen Smith and the Ophthalmic International, Inc., our wholly-owned subsidiary, plus court costs of $453 and attorney fees of $1,500. During the period ended December 31, 2010, this arbitration award proceeded to judgment against the parties. As of March 31, 2011, there is a remaining balance of $5,300 which is recorded as accounts payable on the condensed consolidated financial statements.





In October 2010, Charles E. Brokup filed a lawsuit (CV 2010-054295) in Superior Court for Maricopa County, Arizona against Ophthalmic International, Inc. and Mr. G. Richard Smith for breach of promise to pay $10,000 principal on a promissory note and $1,000 per month in interest. Our answer to the complaint admitted that the principal amount of $10,000 was owed but denies that more than legal interest is owed after the first month expressly stated interest of $1,000. As of March 31, 2011, the $10,000 was recorded as a note payable on the condensed consolidated financial statements.





In October 2010, Francesco Aspes, our former European marketing consultant, filed a lawsuit (CV 2010-028530) in the Superior Court for Maricopa County, Arizona against the Company for failure to pay him $180,000 of employee wages earned previously plus 80,000 Euros of expenses incurred as an employee of the Company. Our answer to this complaint disputes the 80,000 Euros of expense because the complaint contained no accounting of these expenses. As to the matter of $180,000 of employees wages, our answer alleges this employee obtained our agreement to pay this sum through duress and bad faith and this employee ceased working on our behalf previously.  The plaintiff in this case has filed a Motion For Summary Judgment to which we have responded that there are facts still to be determined at trial.  No decision has been made yet by the Court on this motion.





All litigation settlement expenses are included in general and administrative costs.





Note 7 – Subsequent Events





Subsequent to March 31, 2011, the Company issued the following restricted common stock: (i) 183,522 shares for $8,500 of services; (ii) 563,740 shares in conversion of $25,437 of debt and accrued interest; (iii) 56,667 shares for $1,700 cash. These sales were made without public solicitation. There were no underwriting discounts or commissions paid on these sales of securities.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.





Forward-Looking Disclosure





This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and should be read in conjunction with the Financial Statements of SunRidge International, Inc. (the “Company” or “SunRidge”).  Such statements are not historical facts and reflect our current views regarding matters such as operations and financial performance. In general, forward-looking statements are identified by such words or phrases as “expects,” “anticipates,” “believes,” “could,” “approximates,” “estimates,” “may,” “intends,” “predicts,” “projects,” “plans,” or “will,” or the negative of those words or other terminology. These statements are not guarantees of future performance and involve certain known and unknown inherent risks, uncertainties and other factors that are difficult to predict; our actual results could differ materially from those expressed in these forward-looking statements.  The cautionary factors, risks and other factors presented should not be construed as exhaustive.   Other risks not presently known to us, or that we currently believe are immaterial, could also adversely affect our business, financial condition or results of operations.





Each forward-looking statement should be read in context with, and with an understanding of, the various disclosures concerning our business made elsewhere in this Quarterly Report, as well as other public reports filed by us with the United States Securities and Exchange Commission. Readers should not place undue reliance on any forward-looking statement as a prediction of actual results of developments. Except as required by applicable law or regulation, we undertake no obligation to update or revise any forward-looking statement contained in this Quarterly Report.





General





The following is management’s discussion and analysis of certain significant factors affecting our financial position and operating results during the periods included in the accompanying condensed consolidated financial statements.





Overview





The following is a discussion of the financial condition of the Company as of March 31, 2011 and June 30, 2010, and results of operations of the Company for the periods ended March 31, 2011 and 2010.  This discussion should be read in conjunction with the Financial Statements of the Company and the related notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on November 15, 2010.





Description of the Company





On September 5, 2009, we entered into an Agreement of Share Exchange and Plan of Reorganization (the “Share Exchange Agreement”) and consummated a share exchange (the “Share Exchange”) with Ophthalmic International, Inc. (“OI”), a Nevada corporation.  The closing date of the transaction was September 29, 2009 (the “Closing Date”) and resulted in the acquisition of OI (the “Acquisition”).  Pursuant to the terms of the Share Exchange Agreement, we acquired all of the outstanding capital stock of OI from the five OI shareholders, and the OI shareholders transferred and contributed all of their share interests in OI to us.  In exchange, we issued to the OI shareholders 33,050,000 shares, or approximately 82.6% of our common stock.  On the Closing Date, OI became our wholly owned subsidiary.





Ophthalmic International, Inc.





OI was founded in 1997 and until January 2007, was a subsidiary of Coronado Industries, Inc., a publicly traded company.  In January 2007, OI was acquired by G. Richard Smith, OI’s President and majority shareholder and former Chairman, Director and principal shareholder of Coronado Industries, Inc.  Since January 2007, OI has operated as a private company.  At one time OI attempted a merger with a public company, but the terms were unsatisfactory so the deal was not consummated and OI remained private.





Since 1997, Ophthalmic International, Inc. has manufactured and marketed a fixation device with a patented designed suction ring that treats Open Angle and Pigmentary glaucoma.


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In the United States, glaucoma is the second leading cause of blindness affecting approximately 3,000,000 persons. Of those, about 60,000 are legally blind. If detected and treated early, glaucoma need not cause blindness or even severe vision loss. While there is no cure for glaucoma, we believe that our patented device and process provide an effective treatment for afflicted persons and that a significant global market for our patented process, equipment and rings currently exists. OI has not yet received FDA approval for sale of its products in the United States and at this time it appears OI’s sales in Europe and Canada will be negatively impacted until such FDA approval is obtained.





Glaucoma may have many forms which cause or present a feature of progressive damage to the optic nerve due to increased pressure within the eyeball. As the optic nerve deteriorates, blind spots and patterns develop. If left untreated, the result may be total blindness. The space between the lens and the cornea in the eye is filled with a fluid called the aqueous humor. This fluid circulates from behind the colored portion of the eye (the iris) through the opening at the center of the eye (pupil) and into the space between the iris and cornea. The aqueous humor is produced constantly, so it must be drained constantly. The drain is at the point where the iris and cornea meet, known as the drainage angle, which directs fluid into a channel (Schlemm’s canal) that then leads it to a system of small veins outside the eye. When the drainage angle does not function properly, the fluid cannot drain and pressure builds up within the eye. Pressure also is exerted on another fluid in the eye, the vitreous humor behind the lens, which in turn presses on the retina. This pressure affects the fibers of the optic nerve, slowly damaging them. The result over time is a loss of vision.





Critical Accounting Policies, Judgments and Estimates





Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q.The preparation of these condensed consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.





An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur, could materially impact the consolidated financial statements. We believe that the following critical accounting policies reflect the more significant estimates and assumptions used in the preparation of the condensed consolidated financial statements.





There are other items within our financial statements that require estimation, but are not deemed critical as defined above. Changes in estimates used in these and other items could have a material impact on our financial statements.





Revenue Recognition





We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, our price is fixed or determinable, and collection is reasonably assured. We recognize revenue on our standard products when title passes to the customer upon shipment. The standard products do not have customer acceptance criteria. We have standard rights of return that are accounted for as a warranty provision, although it is deemed immaterial at this time. We do not have any price protection agreements or other post shipment obligations. For custom equipment where customer acceptance is part of the sales agreement, revenue will be recognized when the customer has accepted the product. In cases where custom equipment does not have customer acceptance as part of the sales agreement, revenue will be recognized upon shipment, as long as the system meets the specifications as agreed upon with the customer. Certain transactions may have multiple deliverables, with the deliverables clearly defined. To the extent that the secondary deliverables are other than perfunctory, we will recognize the revenue on each deliverable as it is delivered, if separable, or on the completion of all deliverables, if not separable.





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Debt and Equity-Based Transactions





We have received capital investment in exchange for promissory notes. These promissory notes are typically short-term and are issued at fair market rates at the time of the issuance. From time to time, we have offered the promissory note holders the opportunity to convert their promissory notes to common stock. As an incentive to induce the conversion, we offered the promissory note holders a conversion price at a discount to the closing price of our common stock on the date of the election to convert. We recognize these discounts as a loss on stock issuances.





Allowance for Bad Debts





We maintain an allowance for potential credit losses based on historical experience and other information available to management.





Contingencies





We accrue for contingent obligations, including legal costs, when the obligation is probable and the amount can be reasonably estimated. As facts concerning contingencies become known we reassess our position and make appropriate adjustments to the financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal, and other regulatory matters that are subject to change as events evolve and additional information becomes available.





Income Taxes





We use the asset and liability method to account for income taxes. Under this method, deferred income taxes are determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws. A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available evidence, is more likely than not to be realized.





Results of Operations





Three Months Ended March 31, 2011 Compared to Three Months Ended March 31, 2010





Revenues





Total revenues for the three months ended March 31, 2011 were $11,310, compared to total revenues of $18,761 for the three months ended March 31, 2010, a decrease of approximately 39.7%. This decrease is attributable to the timing of sales made during the three months ended March 31, 2011 compared to the three months ended March 31, 2010.





Operating Costs





Total cost of product revenues increased $2,971 to $7,112 for the three months ended March 31, 2011, from $4,141 for the three months ended March 31, 2010, an increase of approximately 72%. This increase in primarily attributable to a one time write-down of inventory during the three months ended March 31, 2011.





Total general and administrative expenses decreased $20,657 to $280,947 for the three months ended March 31, 2011, from $301,604 for the three months ended March 31, 2010.  This reduction is due primarily to lower expense associated with the loss on stock issuances, offset by increases in employee and consulting expenses and legal and professional fees.  Loss on stock issuances decreased $115,032 to $55,775 for the three months ended March 31, 2011, from $170,807 for the three months ended March 31, 2010, as a result of repayment of less debt with our common stock at a discount to market value in the three months ended March 31, 2011 compared to the three months ended March 31, 2010. Employee and consultant expenses increased $96,250 to $120,900 for the three months ended March 31, 2011, from $24,650 for the three months ended March 31, 2010, as a result of increased consulting expense associated with an investor relations consultant. Legal and professional fees increased $51,855 to 86,741 for the three months ended March 31, 2011, from $34,886 for the three months ended March 31, 2010, as a result of the increased legal expenses associated with counsel on litigation contract negotiation matters.


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Interest expense decreased $32,152 to $9,968 for the three months ended March 31, 2011, from $42,120 for the three months ended March 31, 2010. This decrease is related to the reduction in debt during the period.





Our Employee and Consultant Expenses will likely increase in 2011 as we anticipate incurring cost associated with our officers and hire additional personnel, assuming we can obtain sufficient working capital. We are likely to incur substantial loss on stock issuances in the future because our creditors demand a discount when converting debt to restricted stock. We are likely to incur substantial research and development expenses in 2011 as we commence our clinical studies in Canada.  There is no assurance that we will ever be profitable.





Nine Months Ended March 31, 2011, Compared to Nine Months Ended March 31, 2010





Revenues





Total revenues for the nine months ended March 31, 2011, less $4,290 in returns and allowances, were approximately $52,453, compared to total revenues of $25,761 for the nine months ended March 31, 2010, an increase of $26,692 or approximately 104%. This increase is a result of our increase in distribution agreements and their associated increased orders.





Operating Costs





Total cost of product revenues increased $12,653 to $19,064 for the nine months ended March 31, 2011, from $6,411 for the three months ended March 31, 2010, an increase of approximately 197%. This increase is a direct result of the increase in sales for the nine months ended March 31, 2011, as compared to the nine months ended March 31, 2010.





Total general and administrative expenses increased $111,736, or approximately 13.5%, to $941,738 for the nine months ended March 31, 2011, from $830,002 for the nine months ended March 31, 2010.  This increase is due primarily to higher expenses related to costs associated with employee and consulting expenses, loss on stock issuances, selling and marketing expenses, and increased legal and professional fees, offset by a decrease in reorganization costs. Employee and consultant expense increased $137,650, or approximately 66% to $347,900 for the nine months ended March 31, 2011, from $210,250 for the nine months ended March 31, 2010, as a result of increased consulting expense associated with an investor relations consultant. Loss on stock issuances increased $87,133, or approximately 51%, to $257,940 for the nine months ended March 31, 2011, from $170,807 for the nine months ended March 31, 2010, as a result of repayment of less debt with our common stock at a discount to market value in the nine months ended March 31, 2011 compared to the nine months ended March 31, 2010. Selling and marketing expense increased $44,992, or approximately 125%, to $81,078 for the nine months ended March 31, 2011, from $36,086 for the nine months ended March 31, 2010, as a result of increased efforts to market our products. Legal and professional fees increased $32,995, or approximately 23%, to $176,553 for the nine months ended March 31, 2011, from $143,558 for the nine months ended March 31, 2010, as a result of the increased legal expenses associated with counsel on litigation contract negotiation matters.





Interest expense decreased $31,086 to $42,819 for the nine months ended March 31, 2011, from $73,905 for the nine months ended March 31, 2010. This decrease is related to the reduction in debt during the period.





Our Employee and Consultant Expenses will likely increase in 2011 as we commence paying salaries to our officers and hire additional personnel, assuming we can obtain sufficient working capital. We are likely to incur substantial loss on stock issuances in the future because our creditors demand a discount when converting debt to restricted stock. We are likely to incur substantial research and development expenses in 2011 as we commence our clinical studies in Canada.  There is no assurance that we will ever be profitable.





Liquidity and Capital Resources





As of March 31, 2011, we had approximately $660 in cash and cash equivalents.


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Cash used in operating activities was $132,362 for the nine months ended March 31, 2011, compared to cash used in operating activities of $192,124 for the nine months ended March 31, 2010. This decrease is attributable primarily to a decrease in reorganization fees and accounts payable offset by increases in stock and debt issued for interest and services, prepaid expenses, and accrued salaries. For the nine months ended March 31, 2011, there were no reorganizational costs compared to $189,673 for the nine months ended March 31, 2010. The change in accounts payable for the nine months ended March 31, 2011 was $58,999 compared to $233,086 for the nine months ended March 31, 2010. For the nine months ended March 31, 2011, the change in stock and debt issued for interest and services was $145,190 compared to $65,786 for the nine months ended March 31, 2010. The change in prepaid expenses increase to $168,000 for the nine months ended March 31, 2011 compared to no related expense in the nine months ended March 31, 2010. The change in accrued salaries was $141,900 for the nine months ended March 31, 2011 compared to no related expense in the nine months ended March 31, 2010.





Cash provided by investing activities was $0 for the nine months ended March 31, 2011, compared to cash provided of $1,027 for the nine months ended March 31, 2010.





Cash provided by financing activities was $133,022 for the nine months ended March 31, 2011, compared to $222,174 for the nine months ended March 31, 2010. For the nine months ended March 31, 2011, cash provided by financing activities consisted predominately of $145,699 in proceeds from stock issuance and $89,522 in proceeds from borrowings, offset by cash used consisting of a repayment of $1,633 from overdraft borrowings, $70,406 repayment of related party notes payable, and $30,160 repayment of notes payable. For the nine months ended March 31, 2010, cash provided consisted of $257,337 from the proceeds of borrowings offset by the cash used consisting of a repayment of $2,463 from overdraft borrowings, $26,700 repayment of related party notes payable, and $6,000 repayment on notes payable.





We suffered a severe liquidity shortage in fiscal years 2009 and 2010. From July 1, 2010 to March 31, 2011, we borrowed a total of $89,522.  These loans bear annual interest of 10% to 12% per annum and all of the loans are due on demand or prior to June 30, 2011.  During the three months ended March 31, 2011 our interest expense decreased $32,152 to $9,968 from $42,120 for the three months ended March 31, 2010 as a result of conversion of debt to Company common stock during the prior year.  During the quarter ended March 31, 2011, we repaid $38,091 of debt, interest and services by issuing common stock.





During the quarter ended March 31, 2011, G. Richard Smith, the Company's President and a Director, loaned the Company an additional $1,540 and was repaid $29,347.  This debt bears an interest rate of 10% for the term and 12% default per annum thereafter and is currently due on demand.  At March 31, 2011, G. Richard Smith was owed $156,770 by the Company.








Without substantial funding in the very near future, our liquidity shortage will become critical.  We are hopeful we will be able to obtain substantial funding during the remainder of fiscal year 2011, but we presently have no agreements or arrangements to obtain any such funding.





Over the next three years, we must obtain at least $6,500,000 of funding to finance our two planned patient clinical studies in Canada and the U.S., and a minimum level of administrative staff. If such funding is not obtained, it is unlikely we will receive FDA approval for the sale of our product in the U.S. Without FDA approval our revenues will be totally dependent on foreign sales.





During the quarter ended March 31, 2011 we commenced attempts to secure funding to open one or more glaucoma treatment clinics in Canada.  We presently estimate we would require approximately $800,000 to $1,000,000 of working capital for the first year's expenses for each new Canadian treatment clinic.  Presently, we have no agreements or arrangements to obtain such funding and there are no assurances such funding can be obtained.





The condensed consolidated financial statements contained in this Form 10-Q have been prepared assuming we will continue to operate and do not include any adjustments that might be necessary if we are unable to continue as a going concern. As a result, our independent registered public accountants have issued a going concern explanatory paragraph to their audit report on our consolidated financial statements for the fiscal year ended June 30, 2010, and that qualification would have been extended through the quarter ended March 31, 2011.


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Accounting Developments





With the exceptions of those discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the quarter ended March 31, 2011, that are of significance, or potential significance to the Company.





In October 2009, the FASB issued guidance on revenue recognition for multiple-deliverable revenue arrangements.  The guidance is effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010 and addresses how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting.  The Company has adopted the guidance which did not have a material impact on its financial position and results of operations.





Item 3.  Quantitative and Qualitative Disclosures about Market Risk.





Not applicable.





Item 4. Controls and Procedures.





Evaluation of Disclosure Controls and Procedures





Under the supervision and with the participation of our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Accordingly, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act were not effective as of March 31, 2011 to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure.





Management conducted a thorough review of all significant or non-routine adjustments for the quarter ended March 31, 2011.  As a result of this review, management believes that there are no material inaccuracies or omissions of material fact and, to the best of their knowledge, believes that the unaudited condensed consolidated financial statements for the quarter ended March 31, 2011 fairly present in all material respects the financial condition and results of operations for the Company in conformity with U.S. generally accepted accounting principles.





Inherent Limitations Over Internal Controls





Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls. Accordingly, even an effective internal control system may not prevent or detect material misstatements on a timely basis. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.





Changes in Internal Control Over Financial Reporting.





During the quarter ended March 31, 2011, we retained the services of a financial professional. We expect that by having more financial expertise, we will be able to improve our internal control over financial reporting. During the quarter ended March 31, 2011 we have made no other changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


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PART II – OTHER INFORMATION





Item 1. Legal Proceedings.





In December 2009, our patent attorneys, Meschkow & Gresham, P.L.C., filed a lawsuit (CV 2009-037698) in the Superior Court for Maricopa County, Arizona against the Company and Mr. Richard Smith for breach of contract in the failure to pay for legal services in the amount of $12,063 plus costs and legal fees. Our answer to the complaint admitted that legal services had been provided but claimed no knowledge of the value of those services. This case was transferred to arbitration and an award was rendered in the amount of $8,064 against G. Richard Smith, our President and Director, his wife, Karen Smith and the Ophthalmic International, Inc., our wholly-owned subsidiary, plus court costs of $453 and attorney fees of $1,500. During the quarter ended December 31, 2010, this arbitration award proceeded to judgment against the parties. As of March 31, 2011, there is a remaining balance of $5,300 which is recorded as accounts payable on the condensed consolidated financial statements.





In October 2010, Charles E. Brokup filed a lawsuit (CV 2010-054295) in Superior Court for Maricopa County, Arizona against Ophthalmic International, Inc. and Mr. G. Richard Smith for breach of promise to pay $10,000 principal on a promissory note and $1,000 per month in interest. Our answer to the complaint admitted that the principal amount of $10,000 was owed but denies that more than legal interest is owed after the first month expressly stated interest of $1,000. As of March 31, 2011, the $10,000 was recorded as a note payable on the condensed consolidated financial statements.





In October 2010, Francesco Aspes, our former European marketing consultant, filed a lawsuit (CV 2010-028530) in the Superior Court for Maricopa County, Arizona against the Company for failure to pay him $180,000 of employee wages earned previously plus 80,000 Euros of expenses incurred as an employee of the Company. Our answer to this complaint disputes the 80,000 Euros of expense because the complaint contained no accounting of these expenses. As to the matter of $180,000 of employees wages, our answer alleges this employee obtained our agreement to pay this sum through duress and bad faith and this employee ceased working on our behalf previously.  The plaintiff in this case has filed a Motion For Summary Judgment to which we have responded that there are facts still to be determined at trial.  No decision has been made yet by the Court on this motion.





Other than as set forth above, the Company is not currently a party to any pending lawsuit or legal proceeding.





Item 1A. Risk Factors.





Not applicable.





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





Between January 1, 2011 and March 31, 2011, the Company issued the following restricted common stock: (i) 410,000 shares for $14,500 of services performed by two Non-Accredited Investors, as defined by SEC Rule 501; (ii) 351,307 shares in conversion of $23,591 of debt and accrued interest by three Non-Accredited Investors; and (iii) 1,320,570 shares to five Accredited Investors for $41,050 cash of which $36,050 for 1,220,570 shares was from related parties. These sales were made without public solicitation. There were no underwriting discounts or commissions paid on these sales of securities.





Between October 1, 2010 and December 31, 2010, the Company issued the following restricted common stock: (i) 611,269 shares for $66,500 of services by 4 Non-Accredited Investor, as defined by SEC Rule 501; (ii) 190,736 shares in conversion of $21,303 of debt and accrued interest by 4 Non-Accredited Investors; and (iii) 1,995,409 shares to 4 Non-Accredited Investors and 1 Accredited Investor for $87,650 cash. These sales were made without public solicitation. There were no underwriting discounts or commissions paid on these sales of securities.





Between July 1, 2010 and September 30, 2010, the Company issued the following restricted common stock: (i) 45,161 shares for $8,300 of services by one Non-Accredited Investor, as defined by SEC Rule 501; (ii) 302,058 shares in conversion of $59,750 of debt and accrued interest by four Non-Accredited Investors; (iii) 200,000 shares for $47,000 of public relations services by two Non-Accredited firms; and (iv) 100,000 shares to one Non-Accredited Investor for $17,000 cash. These sales were made without public solicitation. There were no underwriting discounts or commissions paid on these sales of securities.


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Subsequent Events





Subsequent to March 31, 2011, the Company issued the following restricted common stock: (i) 183,522 shares for $8,500 of services; (ii) 563,740 shares in conversion of $25,437 of debt and accrued interest; (iii) 56,667 shares for $1,700 cash. These sales were made without public solicitation. There were no underwriting discounts or commissions paid on these sales of securities.





Item 3.  Defaults upon Senior Securities





None.





Item 4.  (Removed and Reserved)





Item 5.  Other Information





None.





Item 6.  Exhibits





See Exhibit Index.


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SIGNATURES





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








SUNRIDGE INTERNATIONAL, INC.(Registrant)May 23, 2011
By /s/ G. Richard SmithG. Richard SmithPresident and Chief Executive OfficerMay 23, 2011
By /s/ Charles B. MathewsCharles B. MathewsChief Financial Officer


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Exhibit Index




The following exhibits are filed herewith or incorporated herein pursuant to Regulation S-K, Item 601:




Exhibit31.1*
Certifications Pursuant to 18 U.S.C. Section 1350-Section 302, signed by G. Richard Smith, President and Chief Executive Officer .31.2*
Certifications Pursuant to 18 U.S.C. Section 1350-Section 302, signed by Charles B. Mathews, Chief Financial Officer.32*
Certification Pursuant to 18 U.S.C. Section 1350-Section 906, signed by G. Richard Smith, President and Chief Executive Officer and Charles B. Mathews, Chief Financial Officer.





*
Filed herewith.


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