**UNITED
          STATES**
 **SECURITIES
          AND EXCHANGE COMMISSION**
 **Washington,
          D.C. 20549**
 
 **FORM
          10-QSB**
 x**QUARTERLY
        REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** **FOR
        THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007**
  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:333-146182
  **International
        Surf Resorts, Inc.**
 (Exact
        name of small business issuer 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**(Issuer’s
                  Telephone Number)
 
 Indicate
        by check mark whether the issuer (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
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act).
 xYes  oNo
 
 **APPLICABLE
        ONLY TO CORPORATE ISSUERS**
  State
        the
        number of shares outstanding of each of the issuer’s classes of common equity,
        as of the latest practical date.  As of November 8, 2007, there were
3,769,800****shares
        of the issuer’s $.001 par value common stock issued and
        outstanding.
  Transitional
        Small Business Disclosure format (check one):   xYes   oNo
  
  **PART
        I - FINANCIAL INFORMATION**
   **Item
        1.  Financial Statements**
    **INTERNATIONAL
          SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
          Development Stage Company)**
 **CONSOLIDATED
          BALANCE SHEETS**
 **SEPTEMBER
            30, 2007 AND DECEMBER 31, 2006**
 **ASSETS**
 **September
                    30,**
                  **2007**
                
                
                **December
                    31,**
                  **2006****(Unaudited)**Current
                    assetsCash
                
                $
                127,900
                
                
                $
                46,097Total
                    current assets
                
                
                127,900
                
                
                
                46,097Investment
                    in real property
                
                
                61,335
                
                
                
                57,500Total
                    assets
                
                $
                189,235
                
                
                $
                103,597
 **LIABILITIES
                    AND STOCKHOLDERS’ EQUITY**Current
                    liabilitiesAccounts
                    payable and accrued expenses
                
                $
                18,704
                
                
                $
                1,294Notes
                    payable, stockholders
                
                
                -
                
                
                
                90,000Total
                    current liabilities
                
                
                18,704
                
                
                
                91,294Minority
                    interest in subsidiary
                
                
                (15,544
                )
                
                
                -Stockholders’
                    equityCommon
                    stock, $.001 par value; 100,000,000 shares authorized,3,769,800
                    and 3,000,000 shares issued and outstanding as ofSeptember
                    30, 2007 and December 31, 2006, respectively
                
                
                3,770
                
                
                
                3,000Additional
                    paid-in capital
                
                
                205,180
                
                
                
                12,150Deficit
                    accumulated during the development stage
                
                
                (22,875
                )
                
                
                (2,847
                )Total
                    stockholders’ equity
                
                
                186,075
                
                
                
                12,303Total
                    liabilities and stockholders’ equity
                
                $
                189,235
                
                
                $
                103,597
   **See
            accompanying notes to unaudited consolidated financial
            statements.**
 1
  **INTERNATIONAL
          SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
          Development Stage Company)**
 **CONSOLIDATED
          STATEMENTS OF OPERATIONS**
 **FOR
          THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND**
 **FOR
          THE PERIOD FROM INCEPTION (DECEMBER 4, 2006)**
 **THROUGH
            SEPTEMBER 30, 2007**
 **(Unaudited)**
   **Inception****Three
                      months ended**
                
                
                ****Nine
                    months**ended**
                
                
                **(December
                      4, 2006)****September
                    30,**
                
                
                **September
                    30,**
                
                
                **to
                    September 30,****2007**
                
                
                **2007**
                
                
                **2007**Net
                    revenue
                
                $
                -
                
                
                $
                -
                
                
                $
                -Operating
                    expensesLegal
                    and professional fees
                
                
                26,140
                
                
                
                29,725
                
                
                
                29,725Dues
                    and fees
                
                
                2,521
                
                
                
                2,521
                
                
                
                2,521Rent
                
                
                450
                
                
                
                1,350
                
                
                
                1,500Organization
                    costs
                
                
                -
                
                
                
                -
                
                
                
                2,140General
                    and administrative
                
                
                667
                
                
                
                3,122
                
                
                
                3,182Total
                    operating expenses
                
                
                (29,778
                )
                
                
                (36,718
                )
                
                
                (39,068
                )Other
                    income (expense), net
                
                
                649
                
                
                
                1,146
                
                
                
                649Net
                    loss before minority interest
                
                
                (29,129
                )
                
                
                (35,572
                )
                
                
                (38,419
                )Minority
                    interest in subsidiary
                
                
                14,149
                
                
                
                15,544
                
                
                
                15,544Net
                    loss
                
                $
                (14,980
                )
                
                $
                (20,028
                )
                
                $
                (22,875
                )Net
                    loss per common share – basic and diluted
                
                $
                -
                
                
                $
                (.01
                )
                
                $
                (.01
                )Weighted
                    average of common shares – basic and diluted
                
                
                3,769,800
                
                
                
                3,313,229
                
                
                
                3,285,038
   **See
          accompanying notes to unaudited consolidated financial
          statements.**
  2
  **INTERNATIONAL
          SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
          Development Stage Company)**
 **CONSOLIDATED
          STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY**
 **FOR
          THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND**
 **FOR
          THE PERIOD FROM INCEPTION (DECEMBER 4, 2006)**
 **THROUGH
          SEPTEMBER 30, 2007**
 **(Unaudited)**
   **Deficit****Accumulated****Common
                    Stock**
                
                
                **Additional**
                
                
                **During**
                
                
                **Total****Number
                    of**
                
                
                
                
                
                **Paid-In**
                
                
                **Development**
                
                
                **Stockholders’****Shares**
                
                
                **Amount**
                
                
                **Capital**
                
                
                **Stage**
                
                
                **Equity**Balance,
                    December 4, 2006
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Issuance
                    of common stock,December
                    5, 2006
                
                
                3,000,000
                
                
                
                3,000
                
                
                
                12,000
                
                
                
                -
                
                
                
                15,000Additional
                    paid-in capital in exchange forfacilities
                    provided by related party
                
                
                -
                
                
                
                -
                
                
                
                150
                
                
                
                -
                
                
                
                150Net
                    loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (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 forfacilities
                    provided by related party
                
                
                -
                
                
                
                -
                
                
                
                1,350
                
                
                
                -
                
                
                
                1,350Net
                  loss
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (20,028
                )
                
                
                (20,028
                )Balance,
                  September 30, 2007
                
                
                3,769,800
                
                
                $
                3,770
                
                
                $
                205,180
                
                
                $
                (22,875
                )
                
                $
                186,075
   **See
          accompanying notes to unaudited consolidated financial
          statements.**
  3
  **INTERNATIONAL
          SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
          Development Stage Company)**
 **CONSOLIDATED
          STATEMENTS OF CASH FLOWS**
 **FOR
          THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND**
 **FOR
          THE PERIOD FROM INCEPTION (DECEMBER 4, 2006)**
 **THROUGH
          SEPTEMBER 30, 2007**
 **(Unaudited)**
   **Inception****Nine
                      months ended**
                
                
                **(December
                      4, 2006)****September
                    30,**
                
                
                **to
                    September 30,****2007**
                
                
                **2007**Cash
                    flows from operating activitiesNet
                    loss
                
                $
                (20,028
                )
                
                $
                (22,875
                )Adjustments
                    to reconcile net loss to net cash provided by (used in) operating
                    activitiesAdditional
                    paid-in capital in exchange for facilities provided by related
                    party
                
                
                1,350
                
                
                
                1,500Changes
                    in operating assets and liabilitiesIncrease
                    in accounts payable and accrued expenses
                
                
                17,410
                
                
                
                18,704Net
                    cash used in operating activities
                
                
                (1,268
                )
                
                
                (2,671
                )Cash
                    flows from investing activitiesInvestment
                    in real property
                
                
                (3,835
                )
                
                
                (61,335
                )Minority
                    investment in subsidiary
                
                
                (15,544
                )
                
                
                (15,544
                )Net
                    cash used in investing activities
                
                
                (19,379
                )
                
                
                (76,879
                )Cash
                    flows from financing activitiesProceeds
                    from issuance of common stock
                
                
                132,450
                
                
                
                147,450Net
                    proceeds/(payments) from stockholder loans
                
                
                (30,000
                )
                
                
                60,000Net
                    cash provided by financing activities
                
                
                102,450
                
                
                
                207,450Net
                    increase in cash
                
                
                81,803
                
                
                
                127,900Cash,
                    beginning of period
                
                
                46,097
                
                
                
                -Cash,
                    end of period
                
                $
                127,900
                
                
                $
                127,900**Supplemental
                    disclosure of cash flow information**Income
                    taxes paid
                
                $
                -
                
                
                $
                -Interest
                    paid
                
                $
                -
                
                
                $
                -Conversion
                    of notes payable into common stock
                
                $
                60,000
                
                
                $
                60,000
   **See
          accompanying notes to unaudited consolidated financial
          statements.**
  4
  **INTERNATIONAL
          SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
          Development Stage Company)**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
          30, 2007**
 **(Unaudited)**
 **1.**
                **NATURE
                    OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
                    POLICIES**
 
 **Organization
          and Nature of Operations**
 
 International
          Surf Resorts, Inc. (the Company) is currently a development stage company
          under
          the provisions of Statement of Financial Accounting Standards (SFAS) No.
          7 and
          was incorporated under the laws of the State of Nevada on December 4,
          2006.  For the period from inception (December 4, 2006) through
          September 30, 2007, the Company has produced no revenues and will continue
          to
          report as a development stage company until significant revenues are
          produced.
 
 The
          Company intends to develop and operate surf camps.  The Company has
          acquired coastal land in Mexico and is currently seeking to acquire coastal
          land
          in other areas with plans to develop and operate surf camps.  The
          Company may also subdivide and sell the acquired properties.  The
          Company is headquartered in Henderson, Nevada.
 
 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,
          2007, the Company owned 55% of ISR de Mexico.  The remaining 45%
          interest is owned by related parties.
 
 **Basis
          of Presentation**
 
 The
          accompanying unaudited consolidated financial statements have been prepared
          in
          accordance with accounting principles generally accepted in the United
          States of
          America for interim financial information and with the instructions to
          item
          310(b) of Regulation S-B. Certain information and footnote disclosures
          normally
          included in annual financial statements prepared in accordance with accounting
          principles generally accepted in the United States of America have been
          omitted
          pursuant to such rules and regulations.
 
 In
          the
          opinion of management, all adjustments, including normal and recurring
          accruals,
          necessary for a fair presentation of the financial position and the results
          of
          operations for the periods presented have been included. The operating
          results
          of the Company on a quarterly basis may not be indicative of operating
          results
          for the full year. For further information, refer to the financial statements
          and notes included in the Company’s audited financial statements for the year
          ended December 31, 2006.
  5
  **INTERNATIONAL
            SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
            Development Stage Company)**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007**
 **(Unaudited)**
 **1.**
                **NATURE
                    OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
                    (Continued)
 
 **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.
 
 **Minority
          Interest**
 
 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 “Minority interest in
          subsidiary” 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.
 
 **Cash
          and Cash Equivalents**
 
 For
          purposes of the balance sheet and statement of cash flows, the Company
          considers
          all highly liquid debt instruments purchased with maturity of three months
          or
          less to be cash equivalents.
 
 **Fair
          Value of Financial Instruments**
 
 Pursuant
          to SFAS No. 107, “*Disclosures About Fair Value of Financial
          Instruments*”, the Company is required to estimate the fair value of all
          financial instruments included on its balance sheet.  The carrying
          value of cash, accounts payable and accrued expenses approximate their
          fair
          value due to the short period to maturity of these instruments.
  6
  **INTERNATIONAL
            SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
            Development Stage Company)**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007**
 **(Unaudited)**
 **1.**
                **NATURE
                    OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
                    (Continued)
 
 **Long-Lived
          Assets**
 
 The
          Company accounts for its long-lived assets in accordance with SFAS No.
          144,
*"Accounting for the Impairment or Disposal of Long-Lived Assets."* SFAS
          No. 144 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, 2007, the
          Company
          did not deem any of its long-term assets to be impaired.
 
 **Income
          Taxes**
 
 The
          Company accounts for income taxes under SFAS 109, “*Accounting for Income
          Taxes*”.  Under the asset and liability method of SFAS 109,
          deferred tax assets and liabilities are recognized for the future tax
          consequences attributable to differences between the financial statements
          carrying amounts of existing assets and liabilities and their respective
          tax
          bases.  Deferred tax assets and liabilities are measured using enacted
          tax rates expected to apply to taxable income in the years in which those
          temporary differences are expected to be recovered or settled.  Under
          SFAS 109, the effect on deferred tax assets and liabilities of a change
          in tax
          rates is recognized in income in the period the enactment occurs.  The
          components of the deferred tax assets and liabilities are classified as
          current
          and non-current based on their characteristics.  A valuation allowance
          is provided for certain deferred tax assets if it is more likely than not
          that
          the Company will not realize tax assets through future operations.
 
 **Comprehensive
          Income**
 
 The
          Company applies Statement of Financial Accounting Standards No. 130,
“*Reporting Comprehensive Income*” (SFAS 130).  SFAS 130
          establishes standards for the reporting and display of comprehensive income
          or
          loss, requiring its components to be reported in a financial statement
          that is
          displayed with the same prominence as other financial statements.  For
          the nine months ended September 30, 2007, the Company had no other components
          of
          comprehensive loss other than net loss as reported on the statement of
          operations.
  7
 
  **INTERNATIONAL
              SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
              Development Stage Company)**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2007**
 **(Unaudited)**
 **1.**
                **NATURE
                    OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
                    (Continued)
 
 **Segment
          Reporting**
 
 Pursuant
          to Financial Accounting Standards No. 131, “Disclosures about Segments of an
          Enterprise and Related Information,” (“SFAS No. 131”), the Company is required
          to disclose certain disclosures of operating segments, as defined in SFAS
          No.
          131. Management has determined that the Company has only one operating
          segment
          and therefore does not disclose operating segment information.
 
 **Basic
          and Diluted Income (Loss) Per Share**
 
 In
          accordance with SFAS No. 128, “*Earnings Per Share*”, basic income (loss)
          per common share is computed by dividing net income (loss) available to
          common
          stockholders by the weighted average number of common shares
          outstanding.  Diluted income (loss) per common share is computed
          similar to basic income per common share except that the denominator is
          increased to include the number of additional common shares that would
          have been
          outstanding if the potential common shares had been issued and if the additional
          common shares were dilutive.  As of September 30, 2007, the Company
          did not have any equity or debt instruments outstanding that could be converted
          into common stock.
 
 **Recent
          Accounting Pronouncements**
 
 FASB
          Interpretation No. 48– In July 2006, the FASB issued Interpretation No. 48,
“*Accounting for Uncertainty in Income Taxes*” (FIN 48), which
          supplements SFAS No. 109, “*Accounting for Income Taxes*”, by defining
          the confidence level that a tax position must meet in order to be recognized
          in
          the financial statements.  The Interpretation requires that the tax
          effects of a position be recognized only if it is “more-likely-than-not” to be
          sustained based solely on its technical merits as of the reporting
          date.  The more-likely-than-not threshold represents a positive
          assertion by management that a company is entitled to the economic benefits
          of a
          tax position.  If a tax position is not considered
          more-likely-than-not to be sustained based solely on its technical merits,
          no
          benefits of the position are to be recognized.  This Interpretation is
          effective for fiscal years beginning after December 15, 2006.  The
          Company is currently assessing the potential effect of FIN 48 on its financial
          statements.
  8
 
 **INTERNATIONAL
              SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
              Development Stage Company)**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2007**
 **(Unaudited)**
 **1.**
                **NATURE
                    OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
                    POLICIES******(Continued)
 
 **Recent
          Accounting Pronouncements** (continued)
 
 SFAS
          No. 157– In September 2006, the FASB issued Statement 157, “*Fair Value
          Measurements*”.  This Statement defines fair value, establishes a
          framework for measuring fair value in generally accepted accounting principles
          (GAAP), and expands disclosures about fair value measurements.  This
          Statement applies under other accounting pronouncements that require or
          permit
          fair value measurements, the Board having previously concluded in those
          accounting pronouncements that fair value is the relevant measurement
          attribute.  Accordingly, this Statement does not require any new fair
          value measurements.  However, for some entities, the application of
          this Statement will change current practice.  This Statement is
          effective for financial statements issued for fiscal years beginning after
          November 15, 2007, and interim periods within those fiscal
          years.  Earlier application is encouraged, provided that the reporting
          entity has not yet issued financial statements for that fiscal year, including
          financial statements for an interim period within that fiscal
          year.  The Company is currently assessing the potential effect of SFAS
          157 on its financials statements.
 
 FAS
          No. 158– In September 2006, the FASB issued Statement No. 158
“*Employers’ Accounting for Defined Benefit Pension and Other Postretirement
          Plans - an amendment of FASB Statements No. 87, 88, 106, and
          132(R*)”.  This Statement improves financial reporting by
          requiring an employer to recognize the overfunded or underfunded status
          of a
          defined benefit postretirement plan (other than a multiemployer plan) as
          an
          asset or liability in its statement of financial position and to recognize
          changes in that funded status in the year in which the changes occur through
          comprehensive income of a business entity or changes in unrestricted net
          assets
          of a not-for-profit organization.  This Statement also improves
          financial reporting by requiring an employer to measure the funded status
          of a
          plan as of the date of its year-end statement of financial position, with
          limited exceptions.  An employer with publicly traded equity
          securities is required to initially recognize the funded status of a defined
          benefit postretirement plan and to provide the required disclosures as
          of the
          end of the fiscal year ending after December 15, 2006.  An employer
          without publicly traded equity securities is required to recognize the
          funded
          status of a defined benefit postretirement plan and to provide the required
          disclosures as of the end of the fiscal year ending after June 15,
          2007.  The Company believes that the adoption of this standard will
          not a have a material impact on its financial statements.
  9
 **INTERNATIONAL
            SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
            Development Stage Company)**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007**
 **(Unaudited)**
 **1.**
                **NATURE
                    OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
                    POLICIES******(Continued)
 
 **Recent
          Accounting Pronouncements** (Continued)
 
 SAB No. 108–
          In September 2006, the Securities and Exchange Commission issued Staff
          Accounting Bulletin No. 108 (SAB No. 108), “Considering the
          Effects of Prior Year Misstatements when Quantifying Misstatements in Current
          Year Financial Statements.” The guidance in SAB No. 108 requires
          Companies to base their materiality evaluations on all relevant quantitative
          and
          qualitative factors. This involves quantifying the impact of correcting
          all
          misstatements, including both the carryover and reversing effects of prior
          year
          misstatements, on the current year financial statements. The Company has
          adopted
          this standard.
 
 SFAS
          No. 159– In February 2007, the FASB issued Statement No. 159, *The Fair
          Value Option for Financial Assets and Financial Liabilities—Including an
          amendment of FASB Statement No. 115***.**This Statement
          permits entities to choose to measure many financial instruments and certain
          other items at fair value. The objective is to improve financial reporting
          by
          providing entities with the opportunity to mitigate volatility in reported
          earnings caused by measuring related assets and liabilities differently
          without
          having to apply complex hedge accounting provisions. This Statement is
          expected
          to expand the use of fair value measurement, which is consistent with the
          Board’s long-term measurement objectives for accounting for financial
          instruments. This Statement applies to all entities, including not-for-profit
          organizations. Most of the provisions of this Statement apply only to entities
          that elect the fair value option.
  **2.**
                **CONCENTRATION
                    OF CREDIT RISK**
 
 The
          Company maintains its cash deposits in two bank accounts which at times
          have
          exceeded federally insured limits.  At September 30, 2007, the Company
          had uninsured cash deposits in excess of the FDIC insurance limit of
          $17,844.  The Company has not experienced any losses with respect to
          its cash balances.
  10
 
  **INTERNATIONAL
              SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
              Development Stage Company)**
 **NOTES
              TO CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
              30, 2007**
 **(Unaudited)**
 **3.**
                **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 nine
          months ended September 30, 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.
  **4.**
                **COMMON
                    STOCK**
 
 The
          Company is authorized to issue up to 50,000,000 shares of $0.001 par value
          common stock and 5,000,000 shares of $0.001 par value preferred
          stock.  Each share of common stock shall entitle the holder to one
          vote, in person or by proxy, on any matter on which action of the stockholders
          of this corporation is sought.  The holders of shares of preferred
          stock shall have no right to vote such shares, with certain exceptions
          as
          determined by the Board of Directors of this corporation or as otherwise
          provided by the Nevada General Corporation Law, as amended from time to
          time.
 
 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.
  **5.**
                **PROVISION
                    FOR INCOME TAXES**
 
 As
          of
          September 30, 2007, the Company reported an estimated federal net operating
          loss
          carryforward of approximately $22,000 which can be used to offset future
          federal
          income tax.  The federal net operating loss carryforward expires in
          2027.  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.
  11
  **INTERNATIONAL
            SURF RESORTS, INC. AND SUBSIDIARY**
 **(A
            Development Stage Company)**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
 **SEPTEMBER
            30, 2007**
 **(Unaudited)**
 **5.**
                **PROVISION
                    FOR INCOME
                    TAXES******(Continued)
 
 As
          of
          September 30, 2007, 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 (@ 15%)
                
                $
                3,430Less:
                    valuation allowance
                
                
                (3,430
                )Net
                    deferred tax asset
                
                $
                -
 
 The
          Company’s valuation allowance increased by $3,010 for the nine months ended
          September 30, 3007.
  **6.**
                **RELATED
                    PARTY TRANSACTIONS**
 
 From
          the
          Company’s inception (December 4, 2006) through September 30, 2007, 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 the
          nine months ended September 30, 2007.
  12
  **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-QSB for the period ended September 30, 2007.
 
 **Liquidity
        and Capital Resources.**We
        had
        cash of $127,900as of
        September 30, 2007. In June 2007, we raised $132,450 in a private placement
        in
        exchange for 529,800 shares of our common stock. We have used a small portion
        of
        those proceeds for the audit of financial statements. In March 2007, we issued
        240,000 shares of our common stock to repay certain loans in the amount of
        $60,000.  As of September 30, 2007, our investment in real property
        was $61,335. We expect that we will incur expenses related to our president
        traveling to the property located
        inSan Juanico, Baja
        California, Mexico, as well as professional fees to determine the feasibility
        of
        potential uses of that property. As of September 30, 2007, our total liabilities
        were $18,704, all of which was represented by accounts payable.
  13
 
 During
          2007 and 2008, we anticipate that we will incur significant accounting
          costs
          associated with the audit and review of our financial statements. We expect
          that
          the legal and accounting costs of becoming 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 becoming 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. We had no long term liabilities, commitments or
          contingencies.
 
 In
        September 2007, we filed a Registration Statement on Form SB-2 for the
        registration of 489,800 shares of our outstanding common stock.  On
        October 4, 2007, our registration statement was declared effective by the
        Securities and Exchange Commission.  The purpose of the SB-2 was to
        register shares of common stock held by our existing shareholders.
 
 **Our
        Plan of Operation 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
        theproperty 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 inSan 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.
 
 We
        had
        cash of $127,900as
        of September 30,
        2007.In
        the opinion of management, available funds will 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.  In the event that we experience a shortfall in our capital,
        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.
 
 Because
        we have limited operations and
        assets, we may be considered ashell company as defined in Rule 12b-2 of
        the Securities Exchange Act of 1934. Accordingly, we have checked the box
        on the
        cover page of this report that specifies we are a shell company.
 
 **Off-Balance
        Sheet Arrangements.**We have no off-balance sheet
        arrangements.
  14
 
 **Item
        3. Controls and Procedures**
 
 (a)
        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,
        2007, the date of this report, our chief executive officer and the principal
        financial officer concluded that our disclosure controls and procedures were
        effective.
 
 (b)
        Changes in internal controls. There were no significant changes in our internal
        controls or in other factors that could significantly affect these controls
        subsequent to the date of the evaluation of those controls by the chief
        executive officer and principal financial officer.
 
 
 **PART
        II — OTHER INFORMATION**
 
 **Item
        1. Legal Proceedings.**
 
 None.
 
 **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.
        Rule 13a-14(a)/15d-14(a) Certifications.
 32.
        Section 1350 Certifications.
  15
  **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 corporation**Date:
                  November
                  8, 2007
              By:
              /s/ Eduardo
                BiancardiEduardo
                BiancardiIts:
              Principal
                Executive Officer,
                Principal Financial Officer
                President,
                  Secretary, Treasurer, Director