**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
      1934**


**For
      the quarterly period ended June 30, 2008**





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


**For
      the transition period from ________to _________**





Commission
      File Number 001-16173




**Sunrise
      Solar Corporation**




(Exact
      name of small business issuer as specified in its charter)





**Nevada**
            **88-0460457**(State or other jurisdiction of
              incorporation or organization)
            (I.R.S.
                Employer
              Identification
                No.)**4703 Shavano Oak, Suite 104****San Antonio, Texas**
            **78249**(Address of principal
              executive offices)
            (Zip
                Code)Registrant's telephone number, including area code:  (210) 881-0850





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
      (or for such shorter period that the 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 is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act:





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




There
      were 6,138,077 shares of the registrant’s common stock issued and outstanding as
      of July 31, 2008.





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


Yes
o  No þ













**IMPORTANT
      INFORMATION REGARDING THIS FORM 10-Q**





Unless
      otherwise indicated, references to “we,” “us,” and “our” in this Quarterly
      Report on Form 10-Q refer collectively to Sunrise Solar Corporation and its
      wholly-owned subsidiaries.





Sunrise
      Solar Corporation, a Nevada corporation, (“SSC” or the “Company”) is the parent
      company to its wholly-owned subsidiary: SMS Envirofuels, Inc. (“SMSE”), a Texas
      corporation.





Readers
      should consider the following information as they review this Quarterly
      Report:





**Forward-Looking
      Statements**





The
      statements contained or incorporated by reference in this Quarterly Report
      on
      Form 10-Q that are not historical facts are “forward-looking statements” (as
      such term is defined in the Private Securities Litigation Reform Act of 1995),
      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 (the “Exchange
      Act”).  All statements other than statements of historical fact are,
      or may be deemed to be, forward-looking statements.  Forward-looking
      statements include any statement that may project, indicate or imply future
      results, events, performance or achievements.  The forward-looking
      statements contained herein are based on current expectations that involve
      a
      number of risks and uncertainties. These statements can be identified by the
      use
      of forward-looking terminology such as “believes,” “expect,” “may,” “will,”
“should,” “intend,” “plan,” “could,” “estimate” or “anticipate” or the negative
      thereof or other variations thereon or comparable terminology, or by discussions
      of strategy that involve risks and uncertainties.





Given
      the
      risks and uncertainties relating to forward-looking statements, investors should
      not place undue reliance on such statements.  Forward-looking
      statements included in this Quarterly Report on Form 10-Q speak only as of
      the
      date of this Quarterly Report on Form 10-Q and are not guarantees of future
      performance.  Although we believe that the expectations reflected in
      the forward-looking statements are reasonable, such expectations may prove
      to
      have been incorrect.  All subsequent written and oral forward-looking
      statements attributable to us, or persons acting on our behalf, are expressly
      qualified in their entirety by these cautionary statements.





**Subsequent
      Events**





All
      statements contained in this Quarterly Report on Form 10-Q, including the
      forward-looking statements discussed above, are made as of August 14, 2008,
      unless those statements are expressly made as of another date.  We
      disclaim any responsibility for the accuracy of any information contained in
      this Quarterly Report on Form 10-Q to the extent such information is affected
      or
      impacted by events, circumstances or developments occurring after August 14,
      2008 or by the passage of time after such date.  Except to the extent
      required by applicable securities laws, we expressly disclaim any obligation
      or
      undertakings to release publicly any updates or revisions to any statement
      or
      information contained in this Quarterly Report on Form 10-Q, including the
      forward-looking statements discussed above, to reflect any change in our
      expectations with regard thereto or any change in events, conditions or
      circumstances on which any statement or information is based.









**SUNRISE
      SOLAR CORPORATION**


**AND
      SUBSIDIARIES**


(A
      DEVELOPMENT STAGE ENTERPRISE)




**CONTENTS**








PART I – FINANCIAL INFORMATIONITEM 1 – UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) Consolidated Balance Sheets as of June 30, 2008,
            F-1 – F-2and December 31, 2007(Unaudited) Consolidated Statements of Operationsfor the three and six months ended June 30, 2008 and 2007, andfrom re-entering the development stage, January 16, 2008, to June 30, 2008
            F-3(Unaudited) Consolidated Statement of Changes in Stockholders’ Deficitfor the six months ended June 30, 2008 andthe years ended December 31, 2007 and 2006
            F-4(Unaudited) Consolidated Statements of Cash Flowsfor the six months ended June 30, 2008 and 2007 , andfrom re-entering the development stage, January 16, 2008, to June 30, 2008
            F-5NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
            F-6 – F-14ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS
            2ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURESABOUT MARKET RISKS
            7ITEM 4T – CONTROLS AND PROCEDURES
            7PART 2 – OTHER INFORMATIONITEM 1 – LEGAL PROCEEDINGS
            9ITEM 6 – EXHIBITS AND REPORTS ON FORM 8K
            10




1


SUNRISE
        SOLAR CORPORATION
 AND
        SUBSIDIARIES
 (A
        DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
        BALANCE SHEETS
 
 ASSETS
 
 (Unaudited)June 30, 2008
              
              December 31, 2007CURRENT
                  ASSETSCash
              
              $
              200
              
              $
              19,776Accounts
                  Receivable, less allowance for doubtfulaccounts
                  of $11,448 and $59,925
              
              
              -
              
              
              -Current
                  Note Receivable
              
              
              32,500
              
              
              -Prepaid
                  Expenses
              
              
              -
              
              
              11,310Total
                  Current Assets
              
              
              32,700
              
              
              31,086ASSETS
                  HELD FOR SALE, Net
              
              
              574,619
              
              
              577,438OTHER
                  ASSETSDeposits
              
              
              85,000
              
              
              85,000Long
                  Term Note Receivable
              
              
              21,667
              
              
              -Total
                  Other Assets
              
              
              106,667
              
              
              85,000TOTAL
                  ASSETS
              
              $
              713,986
              
              $
              693,524
 
 *The
        accompanying notes are an integral part of these consolidated financial
        statements.*
 
 F-1
 
 SUNRISE
        SOLAR CORPORATION
 AND
        SUBSIDIARIES
 (A
        DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
        BALANCE SHEETS
 
 LIABILITIES
        AND STOCKHOLDERS' DEFICIT
 
 (Unaudited)June 30, 2008
              
              December 31, 2007CURRENT
                  LIABILITIESAccounts
                  Payable
              
              $
              244,290
              
              $
              278,409Accounts
                  Payable, Related Parties
              
              
              172,716
              
              
              154,716Deferred
                  Liability
              
              
              70,000
              
              
              70,000Litigation
                  Settlement Liability
              
              
              307,500
              
              
              307,500Third
                  Party Advances
              
              
              13,000
              
              
              -Notes
                  Payable and Accrued Interest
              
              
              864,005
              
              
              805,993Notes
                  Payable to Stockholders and Accrued Interest
              
              
              5,938,730
              
              
              5,750,942Other
                  Current Liabilities
              
              
              92,715
              
              
              119,566Total
                  Current Liabilities
              
              
              7,702,956
              
              
              7,487,126TOTAL
                  LIABILITIES
              
              
              7,702,956
              
              
              7,487,126COMMITMENTS
                  AND CONTINGENCIES
              
              
              -
              
              
              -STOCKHOLDERS'
                  DEFICITPreferred
                  Stock, $.0001 par value, 5 million sharesauthorized;
                  no shares outstanding
              
              
              -
              
              
              -Common
                  Stock, $.0001 par value, 100 million sharesauthorized;
                  6,138,077 and 4,138,077 shares outstanding
              
              
              614
              
              
              414Additional
                  Paid-in Capital
              
              
              20,332,157
              
              
              19,815,491Accumulated
                  Deficit from Prior Operations
              
              
              (26,676,678
              )
              
              (26,609,507
              )Accumulated
                  Deficit from the Development Stage
              
              
              (645,063
              )
              
              -TOTAL
                  STOCKHOLDERS' DEFICIT
              
              
              (6,988,970
              )
              
              (6,793,602
              )TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              713,986
              
              $
              693,524
 
 *The
        accompanying notes are an integral part of these consolidated financial
        statements.*
  F-2
 
 SUNRISE
        SOLAR CORPORATION
 AND
        SUBSIDIARIES
 (A
        DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
        STATEMENTS OF OPERATIONS (UNAUDITED)
 
 Re-enteringThree Months Ended
              
              Six Months Ended
              
              Development Stage toJune 30, 2008
              
              June 30, 2007
              
              June 30, 2008
              
              June 30, 2007
              
              June 30, 2008REVENUES
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -COST
                  OF REVENUES
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -GROSS
                  PROFIT
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -EXPENSESPayroll,
                  contract labor and consultants
              
              
              22,658
              
              
              115,544
              
              
              417,805
              
              
              230,681
              
              
              348,032Selling,
                  general and administrative expenses
              
              
              2,696
              
              
              7,757
              
              
              14,509
              
              
              14,086
              
              
              12,086OPERATING
                  LOSS FROM CONTINUING OPERATIONS
              
              
              (25,354
              )
              
              (123,301
              )
              
              (432,314
              )
              
              (244,767
              )
              
              (360,118
              )Gain
                  on disposal of assets
              
              
              -
              
              
              -
              
              
              62,151
              
              
              -
              
              
              -Interest
                  expense
              
              
              (78,511
              )
              
              (28,633
              )
              
              (110,740
              )
              
              (59,502
              )
              
              (92,246
              )NET
                  LOSS FROM CONTINUING OPERATIONS
              
              
              (103,865
              )
              
              (151,934
              )
              
              (480,903
              )
              
              (304,269
              )
              
              (452,364
              )DISCONTINUED
                  OPERATIONS (Note 9)Loss
                  from discontinued operations
              
              
              (67,872
              )
              
              (141,689
              )
              
              (231,331
              )
              
              (383,009
              )
              
              (192,699
              )NET
                  LOSS
              
              $
              (171,737
              )
              $
              (293,623
              )
              $
              (712,234
              )
              $
              (687,278
              )
              $
              (645,063
              )NET
                  LOSS PER SHARE:Common
                  Stock:Basic
                  and Diluted Net Loss Per Share
              
              $
              (0.02
              )
              $
              (0.04
              )
              $
              (0.08
              )
              $
              (0.07
              )
              $
              (0.07
              )Basic
                  and Diluted Net Loss Per Sharefor
                  Discontinued Operations
              
              $
              (0.01
              )
              $
              (0.03
              )
              $
              (0.04
              )
              $
              (0.09
              )
              $
              (0.03
              )Total
                  Basic and Diluted Net Loss Per Share
              
              $
              (0.03
              )
              $
              (0.07
              )
              $
              (0.12
              )
              $
              (0.17
              )
              $
              (0.11
              )Denominator
                  for Basic and Diluted Net Loss Per ShareWeighted
                  Average Number ofCommon
                  Shares Outstanding
              
              
              6,140,000
              
              
              4,138,000
              
              
              5,950,000
              
              
              4,138,000
              
              
              6,140,000
 
 *The
        accompanying notes are an integral part of these consolidated financial
        statements.*
  F-3
 
 SUNRISE
        SOLAR CORPORATION
 AND
        SUBSIDIARIES
 (A
        DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
        STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT (UNAUDITED)
 
 Additional
              
              Accumulated Defecit
              
              TotalCommon Stock
              
              Paid-In
              
              Prior
              
              Development
              
              Stockholders'Shares
              
              Amount
              
              Capital
              
              Operations
              
              Stage
              
              Deficit**BALANCE
                  — December 31, 2005**
              
              
              **4,128,077**
              
              **$**
              **413**
              
              **$**
              **19,431,071**
              
              **$**
              **(23,721,232**
              **)**
              **$**
              **-**
              
              **$**
              **(4,289,748**
              **)**Shares
                  Issued for Loan Incentive
              
              
              10,000
              
              
              1
              
              
              5,499
              
              
              —
              
              
              —
              
              
              5,500Interest
                  Imputed on Non-Interest Bearing Notes Payable
              
              
              —
              
              
              —
              
              
              168,053
              
              
              —
              
              
              —
              
              
              168,053Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,441,988
              )
              
              —
              
              
              (1,441,988
              ).**BALANCE
                  — December 31, 2006**
              
              
              **4,138,077**
              
              
              **414**
              
              
              **19,604,623**
              
              
              **(25,163,220**
              **)**
              
              **-**
              
              
              **(5,558,183**
              **)**Interest
                  Imputed on Non-Interest Bearing Notes Payable
              
              
              —
              
              
              —
              
              
              210,868
              
              
              —
              
              
              —
              
              
              210,868Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,446,287
              )
              
              —
              
              
              (1,446,287
              ).**BALANCE
                  — December 31, 2007**
              
              
              **4,138,077**
              
              
              **414**
              
              
              **19,815,491**
              
              
              **(26,609,507**
              **)**
              
              **-**
              
              
              **(6,793,602**
              **)**Compensatory
                  Element of Stock Issuance
              
              
              500,000
              
              
              50
              
              
              99,950
              
              
              —
              
              
              —
              
              
              100,000Stock
                  Issued for Consulting Services
              
              
              1,500,000
              
              
              150
              
              
              299,850
              
              
              —
              
              
              —
              
              
              300,000Interest
                  Imputed on Non-Interest Bearing Notes Payable
              
              
              —
              
              
              —
              
              
              116,866
              
              
              —
              
              
              —
              
              
              116,866Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              (67,171
              )
              
              (645,063
              )
              
              (712,234
              ).**BALANCE
                  — June 30, 2008**
              
              
              **6,138,077**
              
              **$**
              **614**
              
              **$**
              **20,332,157**
              
              **$**
              **(26,676,678**
              **)**
              **$**
              **(645,063**
              **)**
              **$**
              **(6,988,970**
              **)**
 
 *The
        accompanying notes are an integral part of these consolidated financial
        statements.*
  F-4
  SUNRISE
        SOLAR CORPORATION
 AND
        SUBSIDIARIES
 (A
        DEVELOPMENT STAGE ENTERPRISE)
 CONSOLIDATED
        STATEMENTS OF CASH FLOWS (UNAUDITED)
  Re-enteringSix Months Ended
              
              Six Months Ended
              
              Development Stage toJune 30, 2008
              
              June 30, 2007
              
              June 30, 2008CASH
                  FLOWS FROM OPERATING ACTIVITIESNet
                  Loss
              
              $
              (712,234
              )
              $
              (687,278
              )
              $
              (645,063
              )Loss
                  from Discontinued Operations
              
              
              231,331
              
              
              383,009
              
              
              192,699Loss
                  from Continuing Operations
              
              
              (480,903
              )
              
              (304,269
              )
              
              (452,364
              )Adjustments
                  to reconcile net loss to netcash
                  used in operating activities:Imputed
                  interest
              
              
              116,866
              
              
              98,347
              
              
              97,349Gain
                  on Disposal of Assets
              
              
              (62,151
              )
              
              -
              
              
              -Issuance
                  of Common Stock for Services
              
              
              400,000
              
              
              -
              
              
              333,200Changes
                  in operating assets and liabilities:Accounts
                  Receivable
              
              
              -
              
              
              -
              
              
              -Other
                  Current Assets
              
              
              -
              
              
              310
              
              
              -Accounts
                  Payable
              
              
              (16,119
              )
              
              8,825
              
              
              (16,119
              )Accrued
                  Expenses
              
              
              25,424
              
              
              135,696
              
              
              25,424Prepaid
                  Expenses
              
              
              11,310
              
              
              
              
              
              11,310Litigation
                  Settlement
              
              
              -
              
              
              (45,000
              )
              
              -NET
                  CASH PROVIDED BY/(USED) IN OPERATING ACTIVITIES
              
              
              (5,573
              )
              
              (106,091
              )
              
              (1,200
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchases
                  of Fixed Assets
              
              
              -
              
              
              -
              
              
              -Principal
                  Payments on Notes Receivable
              
              
              10,833
              
              
              -
              
              
              9,024NET
                  CASH PROVIDED BY INVESTING ACTIVITIES
              
              
              10,833
              
              
              -
              
              
              9,024CASH
                  FLOWS FROM FINANCING ACTIVITIESNote
                  Proceeds from Stockholders Loans
              
              
              55,050
              
              
              471,214
              
              
              45,857Note
                  Proceeds from Other Loans
              
              
              13,000
              
              
              -
              
              
              10,829NET
                  CASH PROVIDED BY FINANCING ACTIVITIES
              
              
              68,050
              
              
              471,214
              
              
              56,686DISCONTINUED
                  OPERATIONSDiscontinued
                  Operating Activities
              
              
              (92,886
              )
              
              (381,100
              )
              
              (54,787
              )Discontinued
                  Investing Activities
              
              
              -
              
              
              (1,726
              )
              
              -NET
                  CASH USED IN DISCONTINUED OPERATIONS
              
              
              (92,886
              )
              
              (382,826
              )
              
              (54,787
              )NET
                  DECREASE IN CASH
              
              
              (19,576
              )
              
              (17,703
              )
              
              9,723CASH–
                  Beginning
              
              
              19,776
              
              
              33,077
              
              
              (9,523
              )CASH –
                  Ending
              
              $
              200
              
              $
              15,374
              
              $
              200SUPPLEMENTAL
                  DISCLOSURES OF CASH FLOW INFORMATIONCash
                  paid for:Interest
              
              $
              -
              
              $
              31,947
              
              $
              -Income
                  Taxes
              
              $
              -
              
              $
              -
              
              $
              -Non-cash
                  investing and financing activities:Sale
                  of ASPECT Business Segment for Notes Receivable
              
              $
              65,000
              
              $
              -
              
              $
              -Offset
                  of Related Payable with Note Payable
              
              $
              -
              
              $
              -
              
              $
              -Transfer
                  of Deposit Rights to Note Holder
              
              $
              -
              
              $
              170,000
              
              $
              -
 
 *The
        accompanying notes are an integral part of these consolidated financial
        statements.*
  F-5





**SUNRISE
      SOLAR CORPORATION**


**AND
      SUBSIDIARIES**


(A
      DEVELOPMENT STAGE ENTERPRISE)




NOTES
      TO
      UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








NOTE
      1 – BASIS
      OF PRESENTATION





The
      accompanying unaudited interim financial statements of Sunrise Solar Corporation
      (“SSC”) have been prepared in accordance with accounting principles generally
      accepted in the United States of America and the rules of the Securities and
      Exchange Commission ("SEC"), and should be read in conjunction with the audited
      financial statements and notes thereto contained in SSC's financial statements
      filed with the SEC on Form 10-KSB for the year ended December 31, 2007. In
      the
      opinion of management, all adjustments, consisting of normal recurring
      adjustments, necessary for a fair presentation of financial position and the
      results of operations for the interim periods presented have been reflected
      herein. The results of operations for interim periods are not necessarily
      indicative of the results to be expected for the full year. Notes to the
      financial statements which would substantially duplicate the disclosure
      contained in the audited financial statements for the most recent fiscal year
      2007 as reported in Form 10-KSB have been omitted.





NOTE
      2 – GOING
      CONCERN





The
      Company sustained a substantial loss of approximately $712,000 during the six
      months ended June 30, 2008, and as of June 30, 2008, had a combined accumulated
      deficit of approximately $27,322,000. In addition, the Company had negative
      cash
      flows from operations of approximately $6,000 during the six months ended June
      30, 2008.





These
      factors raise a substantial doubt about the Company’s ability to continue as a
      going concern. The accompanying financial statements do not include any
      adjustments that might result from the outcome of this uncertainty.





The
      Company does not have the resources at this time to repay its credit and debt
      obligations, make any payments in the form of dividends to its shareholders
      or
      fully implement its business plan. Without additional capital, the Company
      will
      not be able to remain in business.





In
      addition to operational expenses, as the Company executes its business plan,
      it
      is incurring expenses related to complying with its public reporting
      requirements. In order to finance these expenditures, the Company has raised
      capital in the form of debt which will have to be repaid, as discussed in detail
      below.  The Company has depended on shareholder loans for much of its
      operating capital.  The Company will need to raise capital in the next
      twelve months in order to remain in business.





F-6





**SUNRISE
      SOLAR CORPORATION**


**AND
      SUBSIDIARIES**


(A
      DEVELOPMENT STAGE ENTERPRISE)




NOTES
      TO
      UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








Management
      anticipates that significant dilution will occur as the result of any future
      sales of the Company’s common stock and this will reduce the value of its
      outstanding shares. The Company cannot project the future level of dilution
      that
      will be experienced by investors as a result of its future financings, but
      it
      will significantly affect the value of its shares.





Management
      has plans to address the Company’s financial situation as follows:





In
      the
      near term, management plans to continue to focus on raising the funds necessary
      to fully implement the Company’s business plan. Management believes that certain
      shareholders will continue to advance the capital required to meet the Company’s
      financial obligations. There is no assurance, however, that these shareholders
      will continue to advance capital to the Company or that the new business
      operations will be profitable. The possibility of failure in obtaining
      additional funding and the potential inability to achieve profitability raise
      doubts about the Company’s ability to continue as a going concern.




In
      the
      long term, management believes that the Company’s previously announced projects
      and initiatives will be successful and will provide significant profit to the
      Company which will be used to finance the Company’s future growth. However,
      there can be no assurances that the Company’s planned activities will be
      successful, or that the Company will ultimately attain profitability.  The
      Company’s long term viability depends on its ability to obtain adequate sources
      of debt or equity funding to meet current commitments and fund the continuation
      of its business operations and the ability of the Company to ultimately achieve
      adequate profitability and cash flows from operations to sustain its operations.





NOTE
      3
– ACCOUNTING
      POLICIES





BASIC
      AND
      DILUTED EARNINGS (LOSS) PER SHARE –
Basic
      and diluted earnings (loss) per share equals net loss divided by weighted
      average shares outstanding during the period. Diluted earnings (loss) per share
      includes the impact of common stock equivalents using the treasury stock method
      when the effect is dilutive. There were no common stock equivalents at June
      30,
      2008.





DEVELOPMENT
      STAGE ENTERPRISE ***-*** As
      a
      result of the Company’s sale of ASPECT, it’s only revenue source, and intended
      sale of the Biodiesel equipment, the Company is now considered a development
      stage enterprise pursuant to FASB Statement 7, which focuses on development
      stage companies. Users of the financial statements should be familiar with
      this
      statement and its effect on the financial statements.





F-7





**SUNRISE
      SOLAR CORPORATION**


**AND
      SUBSIDIARIES**


(A
      DEVELOPMENT STAGE ENTERPRISE)




NOTES
      TO
      UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








NOTE
      4 – ASSETS
      HELD FOR SALE





In
      an
      effort to secure additional capital for operations, the Company began actively
      seeking a purchaser for the assets located at its subsidiary’s (SMSE) production
      plant located in Poteet, Texas. On October 5, 2006, SMSE received a letter
      of
      intent (“LOI”) from Earth Biofuels, Inc. (“EBOF”) for the acquisition of these
      assets. The terms of the LOI created a tiered consideration payment based on
      SMSE’s ability to meet two levels of production; the minimum consideration was
      $2.7 million and the maximum was $4.7 million. EBOF did not meet the terms
      of
      the LOI and it expired with no sale transaction occurring. The Company will
      continue to pursue buyers for these assets.





The
      assets held for sale have a net book value at June 30, 2008 of $574,619 with
      no
      corresponding liabilities. On June 30, 2008 the Company signed a non-binding
      Letter of Intent with an unrelated third-party to begin discussions relating
      to
      the SMSE facility. Based upon these discussions and an expected sales price
      similar to the previously discussed EBOF LOI the Company believes that the
      fair
      value of this facility’s assets exceeds its net book value.





NOTE
      5 – SALE
      OF ASPECT BUSINESS SOLUTIONS, INC.





On
      January 15, 2008, the Company reached an agreement with certain affiliated
      parties to sell the company’s Aspect subsidiary. The terms of the agreement call
      for the payment of approximately $65,000 to the Company in return for 100%
      of
      Aspect’s stock. The $65,000 is being paid over 24 months in the form of a note
      receivable with monthly payments of $2,708 per month which began on February
      15,
      2008, and included the first payment due at closing. In addition, the Company
      agreed to continue assuming Aspect’s outstanding debt as of the date of the sale
      which was already previously consolidated. As a result of this transaction
      the
      Company classified Aspect as “Discontinued Operations” for the purposes of these
      financial statements in accordance with FASB Statement 144 and recorded a “Gain
      on Disposal of Assets” of $62,151 which represented the value of the assets
      given up of $2,849 less the consideration received. Additional disclosure can
      be
      found in Note 9. The total debt continuing to be assumed by the Company and
      not
      part of the sale was approximately $2,385,000.





F-8





**SUNRISE
      SOLAR CORPORATION**


**AND
      SUBSIDIARIES**


(A
      DEVELOPMENT STAGE ENTERPRISE)




NOTES
      TO
      UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








NOTE
      6 – NOTES
      PAYABLE TO OTHERS





On
      February 3, 2006, SMS borrowed $500,000 from an independent lender. The security
      pledged for this note is equipment recently purchased plus the deposit placed
      on
      equipment currently being prepared for delivery in the future. The interest
      rate
      on the unpaid balance is 18%. The Company is in default on this note. On
      February 8, 2007, an agreement to transfer deposit rights and partial release
      of
      the promissory note was signed by the Company and the independent note holder.
      In the agreement, the Company has transferred the rights to the deposit placed
      by the Company on 4 pieces of equipment that were to be used by its subsidiary
      SMSE, a value of $170,000, in exchange for a release and discharge of $240,000
      of the promissory note. In addition, the Company has the right to further
      release of $15,000 for any future transfer to note holder of the rights in
      the
      deposits of 2 additional pieces of equipment, a value of $85,000. At June 30,
      2008, the deferred liability is $70,000 and the principal balance on the note
      is
      $260,000 with interest accrued of $161,000.





On
      October 5, 2006, SMSE received an LOI, from EBOF, for the purchase of assets
      associated with its production facility in Poteet. The initial terms of the
      LOI
      enabled SMSE to sign a promissory note with EBOF for a line of credit not to
      exceed $788,000. The expiration date of this note was February 2, 2007. SMSE
      is
      in default on this note. The terms of the LOI were not met by the purchaser
      and
      the LOI expired with no sale. The interest rate on the unpaid balance is 18%.
      At
      June 30, 2008, the principal balance on the note is $350,000 and interest
      accrued is $93,005.





NOTE
      7 – NOTES
      PAYABLE TO STOCKHOLDERS





On
      April
      15, 2003, the predecessor to SSC signed a one-year promissory note with a
      stockholder for a line of credit up to $2,000,000. This note was extended for
      an
      additional one-year term on April 15, 2004. On March 7, 2006, the line was
      reduced to $500,000 and extended to December 31, 2006. On December 31, 2006,
      the
      note was extended to February 28, 2008 with an increase in the line amount
      to
      $1,000,000. On February 28, 2008 the note was extended until February 28, 2009.
      The note bears 10% interest, is payable on demand and has no collateral. At
      June
      30, 2008, the principal balance was $622,634 and accrued interest was
      $147,741.





On
      February 24, 2003, SMSE signed a one-year promissory note with a stockholder
      for
      a line of credit up to $1,000,000. This note was extended for an additional
      one-year term on February 24, 2004. On March 7, 2006, the credit line was
      increased to $2,000,000 and extended to December 31, 2006. On December 31,
      2006,
      the note was extended to February 28, 2008 and the line was increased to
      $2,500,000. On February 28, 2008 the note was extended until February 28, 2009.
      The line of credit bears 10% interest, is payable on demand and has no
      collateral. At June 30, 2008, the principal balance was $2,078,652 and accrued
      interest was $745,893.





F-9





**SUNRISE
      SOLAR CORPORATION**


**AND
      SUBSIDIARIES**


(A
      DEVELOPMENT STAGE ENTERPRISE)




NOTES
      TO
      UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








The
      stockholder also advanced money to ASPECT on an as-needed basis. The advances
      were assumed by SSC on January 15, 2008. As of June 30, 2008, the balance of
      these advances totaled $2,343,810.





During
      the six months ended June 30, 2008, the company borrowed an additional $55,000
      against these credit facilities. Total principal amounts due at June 30, 2008
      are $5,045,095.





NOTE
      8 – EQUITY





During
      the six months ended June 30, 2008, the Company issued 500,000 shares of its
      common stock to its new Chairman and CEO for services rendered valued at
      $100,000 based on the quoted market price of the Company’s common stock on the
      date of issuance.





Additionally,
      the Company issued 1,500,000 shares of its common stock to four consultants
      for
      services rendered during the Company’s transition valued at $300,000 based on
      the quoted market price of the Company’s common stock on the date of
      issuance.





Interest
      imputed on related party notes during the six months ended June 30, 2008 was
      $116,866.





On
      May 2,
      2008, the Company’s Board of Directors approved an amendment, subject to
      shareholder approval, to the Company’s Articles of Incorporation to effect a
      reverse stock split at the ratio of 1 for 5. On May 5, 2008, the majority
      stockholders of the Company approved the same resolution.




The
      Company has authorized capital consisting of 100,000,000 shares of common stock
      of which 30,690,386 shares of common stock were outstanding on May 5, 2008.
      Pursuant to the reverse stock split, the 30,690,386 shares of common stock
      previously outstanding were automatically converted into approximately 6,138,077
      shares of common stock.





F-10





**SUNRISE
      SOLAR CORPORATION**


**AND
      SUBSIDIARIES**


(A
      DEVELOPMENT STAGE ENTERPRISE)




NOTES
      TO
      UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








NOTE
      9 - DISCONTINUED
      OPERATIONS





SMSE


SMSE,
      a
      subsidiary of the Company, ceased production in December 2006 and its assets
      located in Poteet, Texas were classified as Held for Sale at December 31, 2006
      (see Note 4). The Company sought out arrangements in which the assets would
      be
      purchased but SMSE would retain management of the facility. Therefore, SMSE
      maintained the current staff which consisted of managerial, operational and
      custodial personnel. This provided a “ready” management team which made the
      purchase more attractive to potential buyers. However, in September and October,
      key managerial personnel employed by SMSE have resigned. The Company is no
      longer able to provide management of the facility and has therefore recognized
      this segment of its operations as discontinued.





SMSE’s
      activity represents the entirety of the Company’s alternative fuels segment (see
      Note 11). SMSE’s sales, reported in discontinued operations, for the six months
      ended June 30, 2008 and 2007 are $0 and $10,200, respectively. SMSE’s pretax
      loss from operations, reported in discontinued operations, for the six months
      ended June 30, 2008 and 2007 were $187,955 and $266,013, respectively. Prior
      year financial statements been restated to present the operations of SMSE as
      a
      discontinued operation. The fixed assets of the discontinued operation are
      listed as “Assets Held for Sale” in the accompanying Balance Sheets at June 30,
      2008 and December 31, 2007. Below is a table of all assets and liabilities
      for
      the discontinued operations of SMSE:





At
            
            AtJune 30,
            
            December 31,2008
            
            2007Assets of discontinued operations:Cash
            
            $
            —
            
            $
            2,561Accounts
                Receivable
            
            
            —
            
            
            —Inventory
            
            
            —
            
            
            —Property
                and Equipment, net
            
            
            574,619
            
            
            574,619Other
                Assets
            
            
            —
            
            
            9,392Total
                Assets
            
            $
            574,619
            
            $
            586,572Liabilities
                of discontinued operations:Accounts
                Payable
            
            
            252,281
            
            
            252,281Accounts
                Payable - related parties
            
            
            154,716
            
            
            154,716Accrued
                Expenses
            
            
            51,438
            
            
            51,438Total
                Liabilities
            
            $
            458,435
            
            $
            458,435





F-11





**SUNRISE
      SOLAR CORPORATION**


**AND
      SUBSIDIARIES**


(A
      DEVELOPMENT STAGE ENTERPRISE)




NOTES
      TO
      UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








Aspect


Aspect,
      a
      subsidiary of the Company, was sold pursuant to a Stock Purchase Agreement
      with
      certain affiliated individuals of the Company on January 15, 2008 (see Note
      5).
      As a result of this transaction the Company classified Aspect as “Discontinued
      Operations” for the purposes of these financial statements.





Aspect’s
      activity represents the entirety of the Company’s software sales and programming
      segment (see Note 10). Aspect’s sales, reported in discontinued operations, for
      the six months ended June 30, 2008 and 2007 are $0 and $332,343, respectively.
      Aspect’s pretax gain/(loss) from operations, reported in discontinued
      operations, for the six months ended June 30, 2008 and 2007 were $43,376 and
      $116,996 respectively. Prior year financial statements have been restated to
      present the operations of Aspect as a discontinued operation. Below is a table
      of all assets and liabilities for the discontinued operations of
      Aspect:





At
            
            AtJune 30,
            
            December 31,2008
            
            2007Assets
                of discontinued operations:Cash
            
            $
            —
            
            $
            17,184Accounts
                Receivable
            
            
            —
            
            
            —Prepaid
                Expenses
            
            
            —
            
            
            612Property
                and Equipment, net
            
            
            —
            
            
            2,819Total
                Assets
            
            $
            —
            
            $
            20,615Liabilities
                of discontinued operations:Accounts
                Payable
            
            
            —
            
            
            22,094Accounts
                and Notes Payable - related parties
            
            
            —
            
            
            2,343,413Accrued
                Expenses
            
            
            —
            
            
            60,220Total
                Liabilities
            
            $
            —
            
            $
            2,425,727




NOTE
      10 – INTERNAL
      REVENUE SERVICE TAX LIEN





During
      the second and third quarters of 2005, ASPECT, one of the Company’s
      subsidiaries, did not have the funds necessary to cover all the payroll taxes.
      In January 2006, the Internal Revenue Service (“IRS”) placed a lien on ASPECT
      assets. A third party accounting firm which represented ASPECT in the due
      process hearing negotiated an installment plan to settle the outstanding
      liability. Payments were tendered from this third party firm on behalf of the
      Company’s largest shareholder and holder of a line of credit with ASPECT. The
      balance due at June 30, 2008 is $38,086.





F-12





**SUNRISE
      SOLAR CORPORATION**


**AND
      SUBSIDIARIES**


(A
      DEVELOPMENT STAGE ENTERPRISE)




NOTES
      TO
      UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








NOTE
      11 – OPERATING
      RESULTS AND SEGMENT INFORMATION





(Discontinued)
            
            (Discontinued)Software Sales
            
            Alternative& Programming
            
            Fuels
            
            All Other
            
            Total6
                Months Ended June 30, 2008Revenues
                from operations
            
            $
            14,634
            
            $
            —
            
            $
            —
            
            $
            14,634Net
                operating loss from operations
            
            
            —
            
            
            —
            
            
            (432,314
            )
            
            (432,314
            )Loss
                from discontinued operations
            
            
            (43,376
            )
            
            (187,955
            )
            
            —
            
            
            (231,331
            )Assets
                held for sale
            
            
            —
            
            
            574,619
            
            
            —
            
            
            574,619Capital
                Expenditures
            
            
            —
            
            
            —
            
            
            —
            
            
            —Current
                Depreciation (included in gain on disposal)
            
            
            2,819
            
            
            —
            
            
            —
            
            
            2,8196
                Months Ended June 30, 2007Revenues
                from operations
            
            $
            332,343
            
            $
            10,200
            
            $
            —
            
            $
            342,543Net
                operating loss from operations
            
            
            —
            
            
            —
            
            
            (244,767
            )
            
            (244,767
            )Loss
                from discontinued operations
            
            
            (116,996
            )
            
            (266,013
            )
            
            —
            
            
            (383,009
            )Assets
                held for sale
            
            
            4,816
            
            
            574,619
            
            
            —
            
            
            579,435Capital
                Expenditures
            
            
            1,726
            
            
            —
            
            
            —
            
            
            1,726Depreciation
            
            
            3,728
            
            
            —
            
            
            —
            
            
            3,728





The
      Company reports its operations by segments, which for the Company, relates
      to
      specific subsidiaries and therefore are individually managed and have separate
      financial results that are viewed by the Company’s chief operating
      decision-maker. Profit from operations is net sales less cost of sales and
      selling, general and administrative expenses. There are two segments: Software
      sales, programming, and data capturing and storage and Renewable Energies.
      In
      addition, the Company reports certain administrative activities under the
      corporate segment labeled “All Other.”





As
      previously discussed, SMSE shuttered its Biodiesel refinery in late 2006. The
      assets related to this business segment are currently held for sale and are
      presented herein as discontinued operations.





Also,
      as
      previously discussed the Company sold its Aspect business segment on January
      15,
      2008. The results of Aspect are presented herein as discontinued
      operations.





F-13





**SUNRISE
      SOLAR CORPORATION**


**AND
      SUBSIDIARIES**


(A
      DEVELOPMENT STAGE ENTERPRISE)




NOTES
      TO
      UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS








NOTE
      12 – RELATED
      PARTY TRANSACTIONS





A
      stockholder of SSC advances money to SSC, SMSE and ASPECT on an as needed basis
      (see note 7).





The
      purchase of SMS Envirofuels, Inc. involved related parties. Prior to the
      acquisition, a stockholder owned the majority stock of SMS Envirofuels,
      Inc.





SMSE
      occupies approximately 11 acres of land in Poteet, Texas. The lease is with
      Texian Land and Cattle Company, LLC, a Wyoming limited liability company,
      authorized to do business in the state of Texas as “Big As Texas Land Co., LLC,”
with annual rents totaling $72,000. Certain stockholders of the Company hold
      an
      interest in Texian Land and Cattle.





In
      July
      2007, Texian Land and Cattle, a related party to the Company, filed for Chapter
      11 bankruptcy protection. The Company cannot be certain of any effects this
      may
      have on its subsidiary’s SMSE production facility lease agreement with
      Texian.





The
      Company is located in office space which is sub-leased from our largest
      shareholder. This space is approximately 1,500 square feet, with an average
      monthly rent of $2,300.





NOTE
      13 – RECLASSIFICATION





Certain
      accounts from prior periods have been reclassified to conform to current period
      presentations.





F-14





**ITEM
              2:**
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                OPERATIONS**




**FORWARD
      LOOKING STATEMENTS**


This
      document contains "forward-looking statements" within the meaning of the Private
      Securities Litigation Reform Act of 1995.  Forward-looking statements may
      be identified by words such as "expects," "anticipates," "intends," "plans,"
      "believes," "seeks," "estimates," "will" or words of similar meaning and
      include, but are not limited to, statements about the expected future business
      and financial performance of the Company.  Forward-looking statements are
      based on management's current expectations and assumptions, which are inherently
      subject to uncertainties, risks and changes in circumstances that are difficult
      to predict.  Actual outcomes and results may differ materially from these
      expectations and assumptions due to changes in global political, economic,
      business, competitive, market, regulatory and other factors.  We undertake
      no obligation to publicly update or review any forward-looking information,
      whether as a result of new information, future developments or
      otherwise.




**The
      following discussion and analysis should be read in connection with the
      Company’s consolidated financial statements and related notes thereto, as
      included in this report, as well as the Company’s Annual Report filed on form
      10-KSB.**





**Overview**





Sunrise
      Solar Corporation intends to develop and commercialize leading edge solar power
      technologies. We will bring solar power products to the consumer market
      primarily by utilizing our Internet presence. We also intend to distribute
      products to large public and commercial purchasers through wholesale
      channels.




In
      our
      early history, our revenue was derived principally from software services and
      BioFuel production. Both of these prior businesses are now considered
      discontinued operations. Currently, significant resources have been used in
      the
      establishment of our corporate structure for finance, reporting, and governance,
      and we would anticipate that such expenses will decrease, as a percentage of
      revenue, as our business increases.





On
      May 5,
      2008, we changed our name from Systems Management Solutions, Inc. to Sunrise
      Solar Corporation, and effected a one-for-five reverse stock split. For purposes
      of discussion and disclosure, we refer to the organization, both pre and post
      name change as Sunrise Solar Corporation.





2





Management
      is considering the impact of the following industry trends as they impact the
      manufacturing of complete photovoltaic systems and planned business model:





·
            Solar
                cell pricing trends around the world: Recently the key material in
                the
                production of solar cells (silicon) has been in limited supply.
                Consequently, prices and availability of solar modules have been
                limited.
                Solar cells are the major component cost in a photovoltaic module.
                The
                Company has responded by seeking long-term supply agreements for
                solar
                cells where pricing is adjusted quarterly to market rates. To date
                the
                Company has not entered into any long-term supply agreements for
                solar
                cells. Our intent is secure ample solar cell supply to meet our growth
                needs and to avoid the risk of long-term contract pricings with suppliers
                whose products are expected to see a decline in the average selling
                price.
                Industry experts believe that additional planned expansion of silicon
                processing factories coming on line over the next 18 months will
                produce enough raw materials to create an oversupply on projected
                demand.
                Failure to effectively manage our supply will hinder our expected
                growth
                and our component costs may have an adverse affect on the Company’s
                profitability; and





·
            Government
                subsidies: Federal and State subsidies relating directly to solar
                installations are an important factor in the planned growth of the
                solar
                industry. These subsidies are very important to growing the market
                for
                photovoltaic systems because they provide a significant economic
                incentive
                to all buyers. Without these incentives, industry growth would likely
                stall. These regulations are constantly being amended and will have
                a
                direct effect on our rollout of our planned franchise network among
                those
                states that offer superior incentives to the solar
                industry.




**Second
      Quarter 2008 Compared to Second Quarter 2007**





***Expenses.*** Our
      expenses for continuing operations increased substantially, when comparing
      2008
      to 2007 for the three month period ending June 30. The increase is attributed
      to
      two major factors: 1) expenses related to our exiting of the software business
      segment, and 2) expenses related to stock compensation granted to our new CEO
      and certain outside consultants. As of June 30, 2008 the Company had 2 full-time
      employees and was relying on contractors to meet its financial and regulatory
      reporting requirements.





**Six
      Months Ended June 30, 2008 Compared 2007**





***Expenses.*** Our
      expenses for continuing operations increased substantially, when comparing
      2008
      to 2007 for the six month period ending June 30. The increase is attributed
      to
      two major factors: 1) expenses related to our exiting of the software business
      segment, and 2) expenses related to stock compensation granted to our new CEO
      and certain outside consultants. As of June 30, 2008 the Company had 2 full-time
      employees and was relying on contractors to meet its financial and regulatory
      reporting requirements.




3





**Results
      of Operation**





SSC
      incurred a net loss of approximately $712,000 for the six months ended June
      30,
      2008, and had a working capital deficit of approximately $7,670,000 as of June
      30, 2008. These conditions create an uncertainty as to SSC’s ability to continue
      as a going concern. It is not yet determined when, or if, SMS Envirofuels will
      resume production.





Cash
      used
      by continuing operations was approximately $6,000 for the six months ended
      June
      30, 2008.  Cash used by discontinued operations was approximately $93,000
      for the same period.  The funds to cover these uses of cash were received
      against the note payable and advance agreement the Company maintains from a
      shareholder.





SSC
      continues to rely on loans and advances principally from a stockholder, United
      Managers Group, Inc., to fund operating shortfalls and does not foresee a change
      in this situation in the immediate future. There can be no assurance that SSC
      will continue to have such loans and advances available. SSC will not be able
      to
      continue operations without them. SSC is pursuing alternate sources of
      financing. This is reflected in the Letter of Intent received discussed above
      and the continuing effort to sell the alternative fuels segment of the
      Company.





**Critical
      Accounting Policies**


The
      financial reports for the period contained one additional critical accounting
      policy which was also an initial adoption of accounting policy that had a
      material impact. Below is a brief discussion of events that materially affected
      our financial statements and the basis in which the transactions were
      recorded.





DEVELOPMENT
      STAGE ENTERPRISE ***-*** As
      a
      result of the Company’s sale of ASPECT, it’s only revenue source, and intended
      sale of the biodiesel equipment, the Company is now considered a development
      stage enterprise pursuant to FASB Statement 7, which focuses on development
      stage companies. Users of the financial statements should be familiar with
      this
      statement and its effect on the financial statements.





At
      June
      30, 2008, an estimate was used to accrue for the expense to remove excess
      material from the production process from SMS Envirofuels, Inc. This estimate
      totaled $29,900 based on volume and vendor pricing.





**Internal
      Revenue Service Tax Lien**


During
      the second and third quarters of 2005, ASPECT, one of the Company’s
      subsidiaries, did not have the funds necessary to cover all the payroll taxes.
      In January 2006, the Internal Revenue Service (“IRS”) placed a lien on ASPECT
      assets. A third party accounting firm which represented ASPECT, in the due
      process hearing, negotiated an installment plan to settle the outstanding
      liability. Payments were tendered from this third party firm on behalf of the
      Company’s largest shareholder and holder of a line of credit with ASPECT. The
      balance due at June 30, 2008 is $38,086.





4




**Liquidity
      and Capital Resources**


Cash
      used
      by operating activities was approximately $6,000 for the six months ended June
      30, 2008. During the six months ended June 30, 2008 the Company and its
      Subsidiaries borrowed an additional approximately $55,000 from a shareholder.
      In
      addition the Company received advances under a finance agreement from a
      third-party in the amount of $13,000.





**Risk
      Factors**


You
      should consider the following discussion of risks as well as other information
      regarding our common stock. The risks and uncertainties described below are
      not
      the only ones. Additional risks and uncertainties not presently known to us
      or
      that we currently deem immaterial also may impair our business operations.
      If
      any of the following risks actually occur, our business could be
      harmed.





**Competition**


SSC’s
      business strategy is to be a leading supplier of solar products and
      technologies, both domestically and internationally. SSC believes the following
      to be the keys and risks to its success: marketing of solar technologies through
      aggressive promotional campaigns to both commercial and consumer users,
      achieving economies of scale, research and development of solar and other
      alternative energy technologies, and establishing a rapport with distributors
      and installers interested in alternative energy systems. The alternative energy
      industry is relatively new, and a suitable customer base is not currently
      adequately defined. Given that the customer base may be narrow, it is possible
      that other solar technology providers may provide significant competition for
      these markets.





**Reliance
      on Key Personnel**


While
      certain of SSC’s officers and employees have extensive experience in business
      management, none of them have any prior experience in advising or managing
      an
      enterprise such as SSC.





**Sales
      Channels**


Sales
      channels for the distribution of solar technologies historically have been
      non-existent as solar systems have not been marketed on a state, regional or
      national level until just recently. There can be no assurance that SSC will
      create distribution channels large enough and financially strong enough to
      distribute its product at sufficient levels to attain profitability.





**Limited
      Operating History: Operating Losses**


Despite
      factors that indicate an increasing acceptance and desire to use solar power
      technologies in certain segments of the industry and government, SSC cannot
      be
      assured of their continued demand. While SSC believes that demand for such
      alternative energy sources exists, SSC cannot assure that it will have success
      in marketing its products to its customer groups. The inability of SSC to
      successfully market and sell its products to these customer groups would have
      an
      adverse effect on SSC’s profitability.





5





**Going
      Concern**


The
      Company’s ability to continue as a going concern is an issue raised as a result
      of the significant operating losses incurred during the six months ended June
      30, 2008 and 2007 and its negative working capital. The Company continues to
      experience net operating losses. The ability to continue as a going concern
      is
      subject to the Company’s ability to obtain necessary funding from outside
      sources, including obtaining additional funding from the sale of securities,
      increasing sales or obtaining loans and grants from various financial
      institutions where possible.





**Additional
      Financing**


Additional
      financing is required to continue operations. Although actively searching for
      available capital, the Company does not have any current arrangements for
      additional outside sources of financing and cannot provide any assurance that
      such financing will be available.





**Limited
      Trading Market**


Currently
      only a very limited trading market exists for SSC common stock. The common
      stock
      trades on the OTCBB under the symbol "SSLR." The OTCBB is a limited market
      and
      subject to substantial restrictions and limitations in comparison to the NASDAQ
      system. Any broker/dealer that makes a market in the Company stock or other
      person that buys or sells the stock could have a significant influence over
      its
      price at any given time. The Company cannot assure its shareholders that a
      market for its stock will be sustained. There is no assurance that its shares
      will have any greater liquidity than shares that do not trade on a public
      market.





6





**ITEM
              3:**
            **QUANTITATIVE
                AND QUALITATIVE DISCLOSURES ABOUT MARKET
                RISKS**





As
      a
      smaller reporting company, we are not required to provide the information
      required by this Item.





**ITEM
              4T:**
            **CONTROLS
                AND PROCEDURES**





**Management’s
      Report on Internal Control Over Financial Reporting.**


Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting as defined in Rule 13a-15(f) under the
      Securities Exchange Act, as amended.  Our management assessed the
      effectiveness of our internal control over financial reporting as of December
      31, 2007 as seen in our 10KSB. In making this assessment, our management used
      the criteria set forth by the Committee of Sponsoring Organizations of the
      Treadway Commission (“COSO”) in Internal Control-Integrated
      Framework.  A material weakness is a deficiency, or a combination of
      deficiencies, in internal control over financial reporting, such that there
      is a
      reasonable possibility that a material misstatement of the company's annual
      or
      interim financial statements will not be prevented or detected on a timely
      basis.  We identified the following material weaknesses.





1.
            As
                of December 31, 2007, we did not maintain effective controls over
                the
                control environment.  Specifically, we have not formally adopted
                a written code of business conduct and ethics that governs to the
                Company’s employees, officers and directors.  Additionally, we
                have not developed and effectively communicated to our employees
                its
                accounting policies and procedures.  This has resulted in
                inconsistent practices.  Further, the Board of Directors does
                not currently have any independent members and no director qualifies
                as an
                audit committee financial expert as defined in Item 407(d)(5)(ii)
                of
                Regulation S-B.  Since these entity level programs have a
                pervasive effect across the organization, management has determined
                that
                these circumstances constitute a material
                weakness.





2.
            As
                of December 31, 2007 we did not maintain effective controls over
                financial
                statement disclosure.  Specifically, controls were not designed
                and in place to ensure that all disclosures required were originally
                addressed in our financial statements.   Accordingly, management
                has determined that this control deficiency constitutes a material
                weakness.





Because
      of these material weaknesses, management has concluded that the Company did
      not
      maintain effective internal control over financial reporting as of December
      31,
      2007, based on the criteria established in "Internal Control-Integrated
      Framework" issued by the COSO.





7





**Changes
      in Internal Control Over Financial
      Reporting.**


No
      change
      in the Company’s internal control over financial reporting occurred during the
      quarter ended June 30, 2008, that materially affected, or is reasonably likely
      to materially affect, the Company’s internal control over financial
      reporting.





Corrective
      Action


None.





8





**PART
      II. OTHER INFORMATION**





**ITEM
              1:**
            **LEGAL
                PROCEEDINGS**





Other
      than as disclosed below, we know of no material, existing or pending legal
      proceedings against our company, nor are we involved as a plaintiff in any
      material proceeding or pending litigation.  There are no proceedings in
      which any of our directors, officers or affiliates, or any registered or
      beneficial shareholder, is an adverse party or has a material interest adverse
      to our interest.





In
      early
      2005, the landlord for the offices occupied by YCO Holdings, Inc. and its
      subsidiaries filed suit in the 295 th District
      Court of Harris County, Texas Cause No. 2005-04423 captioned WKB Value Partners,
      LP vs. Systems Management Solutions, Inc., alleging that the Company was
      obligated on the lease even though no authorized officer of the Company had
      signed the same. This lawsuit was dismissed in February, 2006 pursuant to a
      Comprehensive Settlement Agreement which required the Company to make payments
      to WKB Value Partners, LP in the amount of $470,000. The payment schedule called
      for $20,000 initial payment, followed by monthly payments of $7,500 for 60
      months. The Company is currently in default under the terms of the settlement
      agreement. As of June 30, 2008 the liability to WKB was approximately
      $307,500.





In
      December of 2006, Cargill Incorporated (“Cargill”), a Delaware corporation,
      filed suit in the Judicial District Court of Bexar County, Texas Cause No.
      2006-CI-19096, against subsidiary SMS Envirofuels, Inc., and certain related
      and
      unrelated companies and individuals, claiming non payment for amounts due
      Cargill by SMSE. The SMSE payable to Cargill as of October 5, 2006 is $608,387,
      which included $528,387 for material received and $80,000 for the hedge loss
      incurred by cancellation of the open physical contracts. On that same date,
      SMSE
      entered into an agreement to sell certain assets located at its production
      plant
      in Poteet, Texas. The purchaser, Earth Biofuels, Inc. (“EBOF”), as part of the
      agreement, expressly agreed to assume this debt to Cargill and provide
      additional working capital to SMSE. In return, SMSE signed a promissory note
      to
      EBOF for a line of credit not to exceed $788,000. Cargill agreed to this
      arrangement with EBOF but reserved the right to pursue any and all claims
      against SMSE upon failure of EBOF to adhere to the terms outlined in the
      agreement between EBOF and Cargill. EBOF subsequently made partial payments
      totaling $250,000 to Cargill, leaving a balance of $358,387. As of this filing,
      the purchase of the certain assets by EBOF has not occurred and there is not
      an
      expectation that a sale will occur in the future. Cargill was awarded a
      declaratory judgment in its favor. In July of 2007, Cargill reached a payout
      agreement with SMSE and certain related individuals. The balance, which includes
      interest and legal fees, totaled $380,000. The agreement required one payment
      of
      $75,000 due July 27, 2007 and monthly payments of $25,000 due the 1st of every
      month until the balance is paid in full, beginning with September 1, 2007.
      If in
      the event that SMSE or its certain related individual defaults on this
      agreement, Cargill will file and execute its judgment as it was awarded. During
      2007 the Company and its affiliates made net payments of $128,000 towards the
      Cargill obligation. The Company is currently in default under the terms of
      the
      settlement agreement. As of June 30, 2008 the liability to Cargill was $230,000.





9





In
      June
      of 2007, Earthbiofuels, Inc (“EBOF”), posted in the Atascosa County Public Deed
      Records, a Notice of Substitute Trustee’s Foreclosure Sale on the property
      located at 8275 FM 476 West, Poteet, Texas in effort to collect on the
      promissory note made by SMS Envirofuels, Inc. (“SMSE”) as part of the agreement
      entered into in October 2006 (see Note 5 of the accompanying financial
      statements). SMSE is currently in default on this promissory note. The
      promissory note was secured by this property which is owned by Texian Land
      and
      Cattle (“Texian”), a related party to the Company, and leased to SMSE. In July
      of 2007 Texian filed for Chapter 11 bankruptcy protection (see Note 12 of the
      accompanying financial statements).   On
        May
        14, 2008 the former CEO of the Company was served with a lawsuit, on behalf
        of
        the Company, relating to an unpaid Promissory Note between the Company and
        a
        shareholder. Current management has received a copy of this lawsuit and has
        begun discussions with the note holder’s representatives as to a potential
        settlement and can therefore make no statement as to the potential liability
        related thereto.





**ITEM
              6:**
            **EXHIBITS
                AND REPORTS ON FORM
                8-K**





(a)    Exhibits:


Exhibit
                No.
            Description31.1
            Section
                302 Certification – Eddie Austin, Jr.32.1
            Section
                906 Certification – Eddie Austin,
                Jr.




(b)    Reports on Form 8-K:





None.





SIGNATURES





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the Company has duly caused this report to be signed on its behalf by
      the
      undersigned, thereunto duly authorized.





Sunrise Solar CorporationBy:
            /s/  Eddie Austin, Jr.Eddie Austin, Jr.Chairman & CEO(Principal Executive Officer andPrincipal Accounting Officer)




Date:
      August 14, 2008




10