UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





x
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
              For
      the quarterly period ended September 30, 2009o
            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: 333-146182


International Surf Resorts,
Inc.


(Exact
name of registrant as specified in its charter)





Nevada
            20-5978559(State
      or other jurisdiction of
              incorporation
      or organization)
            (I.R.S.
      Employer
              Identification
      No.)





1097 Country Coach Dr., Suite 705, Henderson,
      Nevada, 89002(Address
      of principal executive offices)





(800) 315-0045(Registrant’s
      Telephone Number)





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 past 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. xYes  oNo





Indicated
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). oYes  oNo




Indicate
by check mark whether the registrant is a large accelerated file, 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 (Do not
      check if a smaller reporting company)
            Smaller
      reporting company x





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





As of
November 16, 2009, there were 3,769,800shares of the issuer’s
$.001 par value common stock issued and outstanding.








1


PART
I - FINANCIAL INFORMATION





Item 1.  Financial
Statements


INTERNATIONAL SURF RESORTS, INC. AND
      SUBSIDIARY
                (A Development Stage
      Company)
                CONSOLIDATED BALANCE
      SHEETS





ASSETS





September
      30, 2009 (Unaudited)
            
            
            December
      31, 2008Current
      assetsCash
            
            $
            46,229
            
            
            $
            74,588Prepaid
      expenses
            
            
            3,767
            
            
            
            548Total
      current assets
            
            
            49,996
            
            
            
            75,136Property
      and equipment, net ofaccumulated
      depreciation
            
            
            5,680
            
            
            
            732Investment
      in real property
            
            
            61,335
            
            
            
            61,335Total
      assets
            
            $
            117,011
            
            
            $
            137,203








LIABILITIES
AND STOCKHOLDERS’ EQUITY





Current
      liabilitiesAccounts
      payable and accrued expenses
            
            $
            52,115
            
            
            $
            41,859Total
      current liabilities
            
            
            52,115
            
            
            
            41,859ISRI
      Stockholders’ equityCommon
      stock, $.001 par value; 100,000,000 shares authorized, 3,769,800 shares
      issued and outstanding as of September 30, 2009 and December 31,
      2008
            
            
            3,770
            
            
            
            3,770Additional
      paid-in capital
            
            
            208,780
            
            
            
            207,430Deficit
      accumulated during the development stage
            
            
            (145,153
            )
            
            
            (114,487
            )Total
      ISRI stockholders’ equity
            
            
            67,397
            
            
            
            96,713Noncontrolling
      interest
            
            
            (2,501
            )
            
            
            (1,369
            )Total
      liabilities and stockholders’ equity
            
            $
            117,011
            
            
            $
            137,203















See
      accompanying notes to unaudited consolidated financial
  statements


2
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (UNAUDITED)





Inception(December
      4,Three
      Months Ended September 30,
            
            
            Nine
      Months Ended September 30,
            
            
            2006)
      to2009
            
            
            2008
            
            
            2009
            
            
            2008
            
            
            September
      30,
              2009Net
      revenue
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -Operating
      expensesLegal
      and professional fees
            
            
            3,715
            
            
            
            8,078
            
            
            
            25,388
            
            
            
            36,164
            
            
            
            118,626Dues
      and fees
            
            
            -
            
            
            
            537
            
            
            
            1,177
            
            
            
            1,892
            
            
            
            10,010Rent
            
            
            1,650
            
            
            
            450
            
            
            
            2,950
            
            
            
            1,350
            
            
            
            6,700Organization
      costs
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            2,140General
      and administrative
            
            
            1,564
            
            
            
            193
            
            
            
            2,482
            
            
            
            7,425
            
            
            
            14,248Total
      operating expenses
            
            
            6,929
            
            
            
            9,258
            
            
            
            31,997
            
            
            
            46,831
            
            
            
            151,724Other
      income (expense), net
            
            
            71
            
            
            
            392
            
            
            
            199
            
            
            
            1,963
            
            
            
            4,070Net
      loss including noncontrolling interest
            
            
            (6,858
            )
            
            
            (8,866
            )
            
            
            (31,798
            )
            
            
            (44,868
            )
            
            
            (147,654
            )Less:
      Net loss attributable to noncontrolling interest
            
            
            727
            
            
            
            102
            
            
            
            1,132
            
            
            
            567
            
            
            
            2,501Net
      income (loss) attributable to ISRI
            
            $
            (6,131
            )
            
            $
            (8,764
            )
            
            $
            (30,666
            )
            
            $
            (44,301
            )
            
            $
            (145,153
            )Net
      income (loss) per common share – basic and diluted
            
            $
            -
            
            
            $
            -
            
            
            $
            (0.01
            )
            
            $
            (0.01
            )
            
            $
            (.04
            )Weighted
      average of common shares – basic and diluted
            
            
            3,769,800
            
            
            
            3,769,800
            
            
            
            3,769,800
            
            
            
            3,769,800
            
            
            
            3,628,607








See
accompanying notes to unaudited consolidated financial
statements
 3
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
 FOR
THE PERIOD FROM INCEPTION (DECEMBER 4, 2006)
 THROUGH
SEPTEMBER 30, 2009
 (UNAUDITED)





DeficitCommon
      Stock
            
            
            
            
            
            AccumulatedNumber
      of Shares
            
            
            Amount
            
            
            Additional
      Paid-In
              Capital
            
            
            During
      Development Stage
            
            Total
      Stockholders’ EquityBalance,
      December 4, 2006
            
            
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -Issuance
      of common stock,
              December
      5, 2006
            
            
            3,000,000
            
            
            
            3,000
            
            
            
            12,000
            
            
            
            -
            
            
            
            15,000Additional
      paid-in capital in exchange for facilities provided by related
      party
            
            
            -
            
            
            
            -
            
            
            
            150
            
            
            
            -
            
            
            
            150Net
      loss attributable to ISRI
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (2,847
            )
            
            
            (2,847
            )Balance,
      December 31, 2006
            
            
            3,000,000
            
            
            
            3,000
            
            
            
            12,150
            
            
            
            (2,847
            )
            
            
            12,303Notes
      payable conversion, May 3, 2007
            
            
            240,000
            
            
            
            240
            
            
            
            59,760
            
            
            
            -
            
            
            
            60,000Issuance
      of common stock, June 30, 2007
            
            
            529,800
            
            
            
            530
            
            
            
            131,920
            
            
            
            -
            
            
            
            132,450Additional
      paid-in capital in exchange for facilities provided by related
      party
            
            
            -
            
            
            
            -
            
            
            
            1,800
            
            
            
            -
            
            
            
            1,800


Net
      loss attributable to ISRI
            
            
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            (58,723
            )
            
            $
            (58,723
            )Balance,
      December 31, 2007
            
            
            3,769,800
            
            
            
            3,770
            
            
            
            205,630
            
            
            
            (61,570
            )
            
            
            147,830Additional
      paid-in capital in exchange for facilities provided by related
      party
            
            
            -
            
            
            
            -
            
            
            
            1,800
            
            
            
            -
            
            
            
            1,800Net
      loss attributable to ISRI
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (52,917
            )
            
            
            (52,917
            )Balance,
      December 31, 2008
            
            
            3,769,800
            
            
            
            3,770
            
            
            
            207,430
            
            
            
            (114,487
            )
            
            
            96,713Additional
      paid-in capital in exchange for facilities provided by related
      party
            
            
            -
            
            
            
            -
            
            
            
            1,350
            
            
            
            -
            
            
            
            1,350Net
      loss attributable to ISRI
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (30,666
            )
            
            
            (30,666
            )Balance,
      September 30, 2009
            
            
            3,769,800
            
            
            $
            3,770
            
            
            $
            208,780
            
            
            $
            (145,153
            )
            
            $
            67,397








See
accompanying notes to unaudited consolidated financial
statements
 4
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (UNAUDITED)





InceptionNine
      Months Ended September 30,
            
            
            (December
      4,2006)
      to2009
            
            
            2008
            
            
            September
      30, 2009Cash
      flows from operating activitiesNet
      loss including noncontrolling interest
            
            $
            (30,666
            )
            
            $
            (44,301
            )
            
            $
            (145,153
            )Adjustments
      to reconcile net loss including noncontrolling interest to net cash
      provided by (used in) operating activitiesAdditional
      paid-in capital in exchange for facilities provided by related
      party
            
            
            1,350
            
            
            
            1,350
            
            
            
            5,100Depreciation
            
            
            252
            
            
            
            196
            
            
            
            532Changes
      in operating assets and liabilitiesIncrease
      in prepaid expenses
            
            
            (3,219
            )
            
            
            (462
            )
            
            
            (3,767
            )Increase
      in accounts payable and accrued expenses
            
            
            10,256
            
            
            
            14,308
            
            
            
            52,115Net
      cash used in operating activities
            
            
            (22,027
            )
            
            
            (28,909
            )
            
            
            (91,173
            )Cash
      flows from investing activitiesPurchase
      of fixed assets
            
            
            (5,200
            )
            
            
            (1,012
            )
            
            
            (6,212
            )Investment
      in real property
            
            
            -
            
            
            
            -
            
            
            
            (61,335
            )Noncontrolling
      interest in subsidiary
            
            
            (1,132
            )
            
            
            (568
            )
            
            
            (2,501
            )Net
      cash used in investing activities
            
            
            (6,332
            )
            
            
            (1,580
            )
            
            
            (70,048
            )Cash
      flows from financing activitiesProceeds
      from issuance of common stock
            
            
            -
            
            
            
            -
            
            
            
            147,450Net
      proceeds/(payments) from stockholder loans
            
            
            -
            
            
            
            -
            
            
            
            60,000Net
      cash provided by financing activities
            
            
            -
            
            
            
            -
            
            
            
            207,450Net
      (decrease) increase in cash
            
            
            (28,359
            )
            
            
            (30,489
            )
            
            
            46,229Cash,
      beginning of period
            
            
            74,588
            
            
            
            109,846
            
            
            
            -Cash,
      end of period
            
            $
            46,229
            
            
            $
            79,357
            
            
            $
            46,229Supplemental
      disclosure of cash flow informationIncome
      taxes paid
            
            $
            -
            
            
            $
            -
            
            
            $
            -Interest
      paid
            
            $
            -
            
            
            $
            -
            
            
            $
            -Conversion
      of notes payable into common stock
            
            $
            -
            
            
            $
            -
            
            
            $
            60,000





See
accompanying notes to unaudited consolidated financial
statements
 5
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
30, 2009
 (UNAUDITED)





1.
            NATURE OF OPERATIONS
      AND BASIS OF PRESENTATION





Organization and Nature of
Operations





International
Surf Resorts, Inc. (the Company) is currently a development stage company under
the provisions of ASC 915 “Development Stage Entities”,and was incorporated under the laws of the State of Nevada on December 4,
2006.  From inception (December 4, 2006) through September 30, 2009,
the Company has produced no revenues and will continue to report as a
development stage company until significant revenues are produced.





The
Company is an Internet based provider of international surf resorts, camps, and
guided surf tours. The Company also intends to operate a surf camp in San
Juanico, Baja California Sur, Mexico on 2.5 acres of land that it owns
there.




On
February 19, 2007, the Company formed ISR de Mexico, a Mexican corporation, for
the purpose of acquiring real estate in Mexico.  At September 30,
2009, the Company owned 55% of ISR de Mexico.  The remaining 45%
interest is owned by related parties.





The
Company has evaluated subsequent events through November 16, 2009, the date
these consolidated condensed financial statements were issued





Basis of
Presentation





The
unaudited financial statements included herein have been prepared in accordance
with accounting principles generally accepted in the United States for interim
financial information and with the instructions to Form 10-Q and Item 10 of
Regulation S-X.  They do not include all information and notes required by
generally accepted accounting principles for complete financial statements.
However, except as disclosed herein, there has been no material changes in the
information disclosed in the notes to the financial statements included in the
Company’s annual report on Form 10-K of International Surf Resorts, Inc. for the
year ended December 31, 2008. In the opinion of management, all adjustments
(including normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine months ended
September 30, 2009, are not necessarily indicative of the results that may be
expected for any other interim period or the entire year. For further
information, these unaudited financial statements and the related notes should
be read in conjunction with the Company’s audited financial statements for the
year ended December 31, 2008, included in the Company’s annual report on Form
10-K.




Principles of
Consolidation





The
consolidated financial statements include the accounts of International Surf
Resorts, Inc. and its 55% owned subsidiary, ISR de Mexico.  All
inter-company accounts and transactions have been eliminated in consolidation
and minority interests were accounted for in the consolidated statements of
operations and the balance sheets.





Interest in
Subsidiary





The
Company’s percentage of controlling interest requires that operations be
included in the consolidated financial statements. The percentage of equity
interest that is not owned by the Company is shown as “Noncontrolling interest”
in the consolidated balance sheets and consolidated statements of
operations.





Use of
Estimates





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 reported periods.  Actual results could materially differ
from those estimates.





Long-Lived
Assets





The
Company accounts for its long-lived assets in accordance with ASC 360, "Property, Plant, and
Equipment." ASC 360 requires that long-lived assets be reviewed for
impairment whenever events or changes in circumstances indicate that the
historical cost carrying value of an asset may no longer be appropriate. The
Company assesses recoverability of the carrying value of an asset by estimating
the future net cash flows expected to result from the asset, including eventual
disposition. If the future net cash flows are less than the carrying value of
the asset, an impairment loss is recorded equal to the difference between the
asset's carrying value and fair value or disposable value. As of September 30,
2009, the Company did not deem any of its long-term assets to be
impaired.











6
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
30, 2009
 (UNAUDITED)








1.
              NATURE
      OF OPERATIONS AND BASIS OF PRESENTATION
  (Continued)
 
 Recent Accounting
Pronouncements
 
 In
June 2009, the Financial Accounting Standards Board (“FASB”) issued ASC No.
105,   the FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles (ASC 105).  ASC
105 will become the single source authoritative nongovernmental U.S. generally
accepted accounting principles (GAAP), superseding existing FASB, American
Institute of Certified Public Accountants, Emerging Issues Task Force, and
related accounting literature.  ASC 105 reorganized the thousands of
GAAP pronouncements into roughly 90 accounting topics and displays them using a
consistent structure.  Also included is relevant SEC guidance
organized using the same topical structure in separate sections.  The
Company adopted ASC 105 for the financial statements ended September 30,
2009.  The adoption of ASC 105 did not have an impact on the Company’s
financial position or results of operations.
  On
April 1, 2009, the Company adopted ASC 825-10-65, Financial
Instruments – Overall – Transition and Open Effective Date Information
(ASC 825-10-65). ASC 825-10-65 amends ASC 825-10 to require disclosures about
fair value of financial instruments in interim financial statements as well as
in annual financial statements and also amends ASC 270-10 to require those
disclosures in all interim financial statements. The adoption of ASC 825-10-65
did not have a material impact on the Company’s results of operations or
financial condition.
  On
April 1, 2009, the Company adopted ASC 855, Subsequent
Events(ASC 855). ASC 855 establishes general standards of accounting for
and disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. It requires
the disclosure of the date through which an entity has evaluated subsequent
events and the basis for that date – that is, whether that date represents the
date the financial statements were issued or were available to be
issued. This disclosure should alert all users of financial statements that
an entity has not evaluated subsequent events after that date in the set of
financial statements being presented. The adoption of ASC 855 did not have a
material impact on the Company’s results of operations or financial
condition.
 
 On
July 1, 2009, the Company adopted ASU No. 2009-05, Fair Value
Measurements and Disclosures (Topic 820) (ASU 2009-05). ASU 2009-05
provided amendments to ASC 820-10, Fair Value
Measurements and Disclosures – Overall, for the fair value measurement of
liabilities. ASU 2009-05 provides clarification that in circumstances in which a
quoted price in an active market for the identical liability is not available, a
reporting entity is required to measure fair value using certain techniques. ASU
2009-05 also clarifies that when estimating the fair value of a liability, a
reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the
transfer of a liability. ASU 2009-05 also clarifies that both a quoted price in
an active market for the identical liability at the measurement date and the
quoted price for the identical liability when traded as an asset in an active
market when no adjustments to the quoted price of the asset are required are
Level 1 fair value measurements. The adoption of ASU 2009-05 did not have a
material impact on the Company’s results of operations or financial
condition.
  In
October 2009, the FASB issued ASU 2009-13, Multiple-Deliverable
Revenue Arrangements, (amendments to ASC 605, Revenue
Recognition) (ASU 2009-13).  ASU 2009-13 requires entities to
allocate revenue in an arrangement using estimated selling prices of the
delivered goods and services based on a selling price hierarchy. The amendments
eliminate the residual method of revenue allocation and require revenue to be
allocated using the relative selling price method.  ASU 2009-13 should
be applied on a prospective basis for revenue arrangements entered into or
materially modified in fiscal years beginning on or after June 15, 2010,
with early adoption permitted. The Company does not expect adoption of ASU
2009-13 to have a material impact on the Company’s results of operations or
financial condition.





2.           GOING
CONCERN





As shown
in the accompanying financial statements, the Company has incurred a net
operating loss of $145,153 from inception (December 4, 2006) through September
30, 2009.





The
Company is subject to those risks associated with development stage
companies.  The Company has sustained losses since inception and
additional debt or equity financing may be required by the Company to fund its
development activities and to support operations.  However, there is
no assurance that the Company will be able to obtain additional
financing.  Furthermore, there is no assurance that rapid
technological changes, changing customer needs and evolving industry standards
will enable the Company to introduce new products on a continual and timely
basis so that profitable operations can be attained.






7
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
30, 2009
 (UNAUDITED)


3.
            FAIR VALUE OF FINANCIAL
      INSTRUMENTS





Fair Value
Measurements





Determination of Fair
Value




At
September 30, 2009, the Company calculated the fair value of its assets and
liabilities for disclosure purposes only.




Valuation
Hierarchy




ASC 820
establishes a three-level valuation hierarchy for the use of fair value
measurements based upon the transparency of inputs to the valuation of an asset
or liability as of the measurement date:





•
            
            Level
      1 - Unadjusted quoted prices in active markets that are accessible at the
      measurement date for identical, unrestricted assets or
      liabilities.





•
            
            Level
      2 - Inputs other than quoted prices included within Level 1 that are
      observable for the asset or liability, either directly or indirectly,
      including quoted prices for similar assets or liabilities in active
      markets; quoted prices for identical or similar assets or liabilities in
      markets that are not active; inputs other than quoted prices that are
      observable for the asset or liability (e.g., interest rates); and inputs
      that are derived principally from or corroborated by observable market
      data by correlation or other means.




•
            
            Level
      3 - Inputs that are both significant to the fair value measurement and
      unobservable. These inputs rely on management's own assumptions about the
      assumptions that market participants would use in pricing the asset or
      liability. (The unobservable inputs are developed based on the best
      information available in the circumstances and may include the Company's
      own data.)





The
following table presents the Company's fair value hierarchy for those assets and
liabilities measured at fair value on a recurring basis as of September 30, 2009
and December 31, 2008:





September
      30, 2009
            
            
            December
      31, 2008Level
            
            
            Fair
              Value
            
            
            Carrying
              Amount
            
            
            Fair
              Value
            
            
            Carrying
              AmountAssetsCash
            
            
            2
            
            
            $
            46,229
            
            
            $
            46,229
            
            
            $
            74,588
            
            
            $
            74,588Prepaid
      expenses
            
            
            3
            
            
            
            3,767
            
            
            
            3,767
            
            
            
            548
            
            
            
            548LiabilitiesAccounts
      payable
            
            
            3
            
            
            
            52,115
            
            
            
            52,115
            
            
            
            41,859
            
            
            
            41,859





4.           PROPERTY AND
EQUIPMENT





Property
and equipment at September 30, 2009 and December 31, 2008, consists of the
following:





September
      30,
            
            
            December
      31,2009
            
            
            2008Computer
      equipment
            
            $
            1,012
            
            
            $
            1,012Building
            
            $
            5,200
            
            
            $
            -Less:
      accumulated depreciation
            
            
            6,212
              (532
            )
            
            
            1,012
              (280
            )Total
      property and equipment
            
            $
            5,680
            
            
            $
            732





Depreciation
expense for the nine months ended September 30, 2009 and 2008 amounted to $252
and $196, respectively.











8
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
30, 2009
 (UNAUDITED)








5.           INVESTMENT IN REAL
PROPERTY





In
December 2006, the Company acquired real property in Mexico for $57,500 to
develop and potentially operate as a surf camp.  During the year ended
December 31, 2007, the Company incurred additional costs of $3,835 related to
the transfer of the property to the Company’s 55% owned subsidiary, ISR de
Mexico.





6.           COMMON
STOCK





On
December 5, 2006, the Company issued 3,000,000 shares of its common stock to its
founders at $.005 per share for a total of $15,000.





On May 3,
2007, the Company issued 240,000 shares of its common stock for the conversion
of notes payable in the amount of $60,000.





In June
2007, the Company performed a private placement and issued 529,800 shares of its
common stock at $0.25 per share for a total of $132,450.





In
September 2007, the Company submitted its Registration Statement on Form SB-2
for the registration of 489,800 shares of its outstanding common
stock.  On October 4, 2007, the Company’s registration statement was
declared effective by the Securities and Exchange Commission.





7.           PROVISION FOR INCOME
TAXES





As of
September 30, 2009, the Company reported an estimated federal net operating loss
carryforward of approximately $143,000 which can be used to offset future
federal income tax.  The federal net operating loss carryforward
expires in 2029.  Deferred tax assets resulting from the net operating
losses are reduced by a valuation allowance, when, in the opinion of management,
utilization is not reasonably assured.





As of
September 30, 2009, the Company had the following deferred tax assets that
related to its net operating losses. A 100% valuation allowance has been
established, as management believes it more likely than not that the deferred
tax assets will not be realized:




Federal
      loss carryforward (@ 25%)
            
            $
            36,000Less:
      valuation allowance
            
            
            (36,000
            )Net
      deferred tax asset
            
            $
            -








The
Company’s valuation allowance increased by approximately $8,000 during the nine
months ended September 30, 2009.





8.           RELATED PARTY
TRANSACTIONS





From the
Company’s inception (December 4, 2006) through September 30, 2009, the Company
utilized office space of a director of the Company at no charge.  The
Company treated the usage of the office space as additional paid-in capital and
charged the estimated fair value rent of $150 per month to
operations.  The Company recorded total rent expense of $1,350 for
each of the nine months ended September 30, 2009 and 2008.











9








Item 2.  Plan of
Operation





This
following information specifies certain forward-looking statements of management
of the company. Forward-looking statements are statements that estimate the
happening of future events and are not based on historical fact. Forward-looking
statements may be identified by the use of forward-looking terminology, such as
“may”, “shall”, “could”, “expect”, “estimate”, “anticipate”, “predict”,
“probable”, “possible”, “should”, “continue”, or similar terms, variations of
those terms or the negative of those terms. The forward-looking statements
specified in the following information have been compiled by our management on
the basis of assumptions made by management and considered by management to be
reasonable. Our future operating results, however, are impossible to predict and
no representation, guaranty, or warranty is to be inferred from those
forward-looking statements.





The
assumptions used for purposes of the forward-looking statements specified in the
following information represent estimates of future events and are subject to
uncertainty as to possible changes in economic, legislative, industry, and other
circumstances. As a result, the identification and interpretation of data and
other information and their use in developing and selecting assumptions from and
among reasonable alternatives require the exercise of judgment. To the extent
that the assumed events do not occur, the outcome may vary substantially from
anticipated or projected results, and, accordingly, no opinion is expressed on
the achievability of those forward-looking statements. We cannot guaranty that
any of the assumptions relating to the forward-looking statements specified in
the following information are accurate, and we assume no obligation to update
any such forward-looking statements.





Critical Accounting Policies and
Estimates.Our Management’s Discussion and Analysis of Financial
Condition and Results of Operations section discusses our financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. On an on-going basis, management evaluates its estimates and
judgments, including those related to revenue recognition, accrued expenses,
financing operations, and contingencies and litigation. Management bases its
estimates and judgments on historical experience and on various other factors
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions. The most
significant accounting estimates inherent in the preparation of our financial
statements include estimates as to the appropriate carrying value of certain
assets and liabilities which are not readily apparent from other
sources.





These
accounting policies are described at relevant sections in this discussion and
analysis and in the notes to the financial statements included in our Quarterly
Report on Form 10-Q for the period ended September 30, 2009.





Liquidity and Capital
Resources. We had cash of $46,229 and prepaid expenses of $3,767 as
of September 30, 2009.   Our total current assets were
$49,996.  As of September 30, 2009, our investment in real property
was $61,335., which along with $5,680 in property and equipment, net of
accumulated depreciation, equaled our total assets of $117,011.  We
expect that we will incur expenses related to professional fees to determine
feasibility of potential uses of our property located in San Juanico, Baja
California, Mexico.  As of September 30, 2009, our total liabilities
were $52,115, all of which was represented by accounts payable.  We
had no long term liabilities, commitments or contingencies.





During
2009, we anticipate that we will continue to incur significant accounting costs
associated with the audit and review of our financial statements. We also expect
that the legal and accounting costs of being a public company will continue to
impact our liquidity and we may need to obtain funds to pay those expenses.
Other than the anticipated increases in legal and accounting costs due to the
reporting requirements of being a reporting company and those anticipated costs
related to our real property as specified above, we are not aware of any other
known trends, events or uncertainties, which may affect our future
liquidity.





For the three months ended
September 30, 2009 as compared to the three months ended September 30,
2008.





Results of
Operations.





Revenues.We had no
revenue for the three months ended September 30, 2009 as compared to the three
months ended September 30, 2008, during which we also had no
revenue.





Operating Expenses and Net Loss.We had total operating expenses of $6,929 for the three months ended
September 30, 2009, as compared to total operating expenses of $9,258 for the
three months ended September 30, 2008. The decrease in total operating expenses
between the comparable periods is primarily due to a decrease in legal and
professional fees.  Specifically, legal and professional fees
decreased from $8,078 for the three months ended September 30, 2008, to $3,715
for the three months ended September 30, 2009.





Net Loss. For the three months
ended September 30, 2009, our net loss was $6,131, as compared to a net loss of
$8,764 for the three months ended September 30, 2008. The decrease in the net
loss was due to the decrease in legal and professional fees for the three months
ended September 30, 2009.  We expect to continue to incur net losses
for the foreseeable future.





10


For the nine months ended
September 30, 2009 as compared to the nine months ended September 30,
2008.





Results of
Operations.





Revenues.We had no
revenue for the nine months ended September 30, 2009 as compared to the nine
months ended September 30, 2008, during which we also had no
revenue.





Operating Expenses and Net Loss.We had total operating expenses of $31,997 for the nine months ended
September 30, 2009, as compared to total operating expenses of $46,831 for the
nine months ended September 30, 2008. The decrease in total operating expenses
between the comparable periods is primarily due to decreases in certain of our
operating expenses.  Specifically, legal and professional fees
decreased from $36,164 for the nine months ended September 30, 2008, to $25,388
for the nine months ended September 30, 2009.  Our general and
administrative expenses decreased from $7,425 for the nine months ended
September 30, 2008, to $2,482 for the nine months ended September 30, 2009. Our
legal and professional fees and general and administrative expenses were higher
for the comparable period in 2008 due to the costs associated with becoming a
public company.





Net Loss. For the nine months
ended September 30, 2009, our net loss was $30,666, as compared to a net loss of
$44,301 for the nine months ended September 30, 2008. The decrease in the net
loss was due to the decreases in legal and professional fees and general and
administrative expenses for the nine months ended September 30,
2009.  We expect to continue to incur net losses for the foreseeable
future.





Our Plan of Operations for the Next
Twelve Months.  To effectuate our business plan during the next
twelve months, we must determine the feasibility of building surf casas, or
vacation rentals, for our property located in San Juanico, Baja California,
Mexico.  We are currently assessing the feasibility of building surf casas
and also the feasibility of sub-dividing our parcel into smaller parcels and
selling them as we believe that we can sell the smaller lots at a significant
gain on our cost. We also may build on the subdivided lots and offer the surf
casas for sale as a finished product. In order to properly determine the
feasibility of those projects, our president Eduardo Biancardi intends to travel
to the property and live in San Juanico for a period of time. We also intend to
look for opportunities to work with other companies that will assist us in our
development of the property. In addition, during the next twelve months, we must
continue to develop our website and begin to attract customers.





During
the next three to six months, our primary objective is to complete our
assessment of the opportunities for the property located in San Juanico, Baja
California, Mexico, and complete development of our website. During the next six
to twelve months, we hope to raise additional funds so that we can expand our
product offerings and begin generating revenues. We believe that we will need to
spend approximately $5,000 to complete the development of website. In order to
market and promote our services and develop our property in San Juanico, Baja
California, Mexico, we will need to raise additional capital. Our failure to
market and promote our services will hinder our ability to increase the size of
our operations and generate revenues. If we are not able to generate additional
revenues that cover our estimated operating costs, our business may ultimately
fail.





In June
2009, we launched a pilot program to determine the feasibility of operating a
small surf resort in Bali. As part of the program, we purchased a wood house in
Bali for $5,200 and leased the land where the house is located for $400 per
month. The land is located very close to a beach which has a very good surf
break.  Our president is currently living in Bali and is responsible
to sanding and re-finishing the house to make it suitable for living. Our
president believes that we can purchase several wood houses at prices comparable
to the price we paid for the initial house. During the next twelve months, we
plan to assess the feasibility of leasing a large plot of land near the break
which would be suitable for multiple houses. In order to purchase those
additional houses and operate a small surf resort in this area, we will need to
raise additional capital.





To date,
we have experienced significant difficulties in raising additional
capital.  We believe our inability to raise significant additional
capital through debt or equity financings is due to various factors, including,
but not limited to, a tightening in the equity and credit markets. We had hoped
to expand our operations during the last six months. However, our ability to
commence and expand operations has been negatively affected by our inability to
raise significant capital and our inability to generate significant
revenues.





We had
cash of $46,229 as of September 30, 2009. In the opinion of management,
available funds will not satisfy our working capital requirements for the next
twelve months. Our forecast for the period for which our financial resources
will be adequate to support our operations involves risks and uncertainties and
actual results could fail as a result of a number of factors.  We
intend to pursue capital through public or private financing as well as
borrowings and other sources, such as our officers, director and principal
shareholders. We cannot guaranty that additional funding will be available on
favorable terms, if at all. If adequate funds are not available, we hope that
our officers, director and principal shareholders will contribute funds to pay
for our expenses to achieve our objectives over the next twelve months. However,
our officers, director and principal shareholders are not committed to
contribute funds to pay for our expenses.





We are
not currently conducting any research and development activities other than the
development of our website which we expect the total cost to be approximately
$1,500. We do not anticipate that we will purchase or sell any significant
equipment. In the event that we generate significant revenues and expand our
operations, then we may need to hire additional employees or independent
contractors as well as purchase or lease additional equipment.





Off-Balance Sheet Arrangements.We have no off-balance sheet arrangements.





Item 3. Quantitative and
Qualitative Disclosures about Market Risk





Not
applicable.





Item 4. Controls and
Procedures





Evaluation of disclosure controls and
procedures. We maintain controls and procedures designed to ensure that
information required to be disclosed in the reports that we file or submit under
the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the
Securities and Exchange Commission. Based upon their evaluation of those
controls and procedures performed as of September 30, 2009, the date of this
report, our chief executive officer and the principal financial officer
concluded that our disclosure controls and procedures were
effective.





Changes
in internal controls.There were no changes in our internal control
over financial reporting that occurred during the fiscal quarter covered by this
report that have materially affected, or are reasonably likely to materially
affect, our internal control over financial
reporting.





11


PART
II — OTHER INFORMATION





Item 1. Legal
Proceedings.





None.





Item 1A. Risk
Factors.





Not
applicable.





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





None.





Item 3.  Defaults
Upon Senior Securities





None.





Item
4.  Submission of Matters to Vote of Security
Holders





None.





Item 5.  Other
Information





None.





Item
6.  Exhibits





31
            Certification
      of Principal Executive and Financial Officer, pursuant to Rule 13a-14
      and 15d-14 of the Securities Exchange Act of 193432
            Certification
      of Principal Executive and Financial Officer, pursuant to 18 U.S.C.
      Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002





12


SIGNATURES





In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.





International
      Surf Resorts, Inc.,
              a
      Nevada corporationNovember
      16, 2009
            By:
            /s/ Eduardo
      BiancardiEduardo
      Biancardi
              Chief
      Executive Officer, Chief Financial Officer,
              Secretary,
      Director
              (Principal,
      Executive, Financial and Accounting Officer)