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 MARCH 31, 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). o Yes  xNo
 
 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 May 15, 2009, there were
3,769,800shares
of the issuer’s $.001 par value common stock issued and
outstanding.
  
  PART
I - FINANCIAL INFORMATION
 
 Item 1.  Financial
Statements
 
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 CONSOLIDATED
BALANCE SHEETS
   ASSETS
 
 March
      31,
                  2009
                
                
                December
      31, 2008(Unaudited)Current
      assetsCash
                
                $
                62,071
                
                
                $
                74,588Prepaid expenses
                
                
                566
                
                
                
                548Total
      current assets
                
                
                62,637
                
                
                
                75,136Property
      and equipment, net ofaccumulated
      depreciation
                
                
                648
                
                
                
                732Investment
      in real property
                
                
                61,335
                
                
                
                61,335Total
      assets
                
                $
                124,620
                
                
                $
                137,203
 LIABILITIES AND STOCKHOLDERS’
      EQUITYCurrent
      liabilitiesAccounts
      payable and accrued expenses
                
                $
                46,310
                
                
                $
                41,859Total
      current liabilities
                
                
                46,310
                
                
                
                41,859Minority
      interest in subsidiary
                
                
                (1,605
                )
                
                
                (1,369
                )Stockholders’
      equityCommon
      stock, $.001 par value; 100,000,000 shares authorized, 3,769,800
      sharesissued
      and outstanding as of March 31, 2009 and December 31, 2008
                
                
                3,770
                
                
                
                3,770Additional
      paid-in capital
                
                
                207,880
                
                
                
                207,430Deficit
      accumulated during the development stage
                
                
                (131,735
                )
                
                
                (114,487
                )Total
      stockholders’ equity
                
                
                79,915
                
                
                
                96,713Total
      liabilities and stockholders’ equity
                
                $
                124,620
                
                
                $
                137,203
 
  See accompanying notes to
unaudited consolidated financial statements.
  1
  INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (UNAUDITED)
 Inception(December
      4,Three
      Months Ended March 31,
                
                
                2006)
      to2009
                
                
                2008
                
                
                March
      31, 2009Net
      revenue
                
                $
                -
                
                
                $
                -
                
                
                $
                -Operating
      expensesLegal
      and professional fees
                
                
                15,613
                
                
                
                20,180
                
                
                
                108,850Dues
      and fees
                
                
                813
                
                
                
                737
                
                
                
                9,646Rent
                
                
                450
                
                
                
                450
                
                
                
                4,200Organization
      costs
                
                
                -
                
                
                
                -
                
                
                
                2,140General
      and administrative
                
                
                671
                
                
                
                850
                
                
                
                12,438Total
      operating expenses
                
                
                17,547
                
                
                
                22,217
                
                
                
                137,274Other
      income (expense), net
                
                
                63
                
                
                
                746
                
                
                
                3,934Net
      loss before minority interest
                
                
                (17,484
                )
                
                
                (21,471
                )
                
                
                (133,340
                )Minority
      interest in subsidiary
                
                
                236
                
                
                
                363
                
                
                
                1,605Net
      income (loss)
                
                $
                (17,248
                )
                
                $
                (21,108
                )
                
                $
                (131,735
                )Net
      income (loss) per common share – basic and diluted
                
                $
                (0.00
                )
                
                $
                (0.01
                )
                
                $
                (.04
                )Weighted
      average of common shares – basic and diluted
                
                
                3,769,800
                
                
                
                3,769,800
                
                
                
                3,598,102
   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 PERIOD FROM INCEPTION (DECEMBER 4, 2006)
 THROUGH
MARCH 31, 2009
 (UNAUDITED)
 Common
      Stock
                
                
                Additional
                
                
                DeficitAccumulated
                  During
                
                TotalNumber
      of Shares
                
                
                Amount
                
                
                Paid-In
                  Capital
                
                
                Development
                  Stage
                
                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 facilitiesprovided
      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 for facilitiesprovided
      by related party
                
                
                -
                
                
                
                -
                
                
                
                1,800
                
                
                
                -
                
                
                
                1,800
   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
MARCH 31, 2009
 (UNAUDITED)
 Common
      Stock
                
                
                Additional
                
                
                Deficit
                  Accumulated
                  During
                
                TotalNumber
      of Shares
                
                
                Amount
                
                
                Paid-In
                  Capital
                
                
                Development
                  Stage
                
                Stockholders’
      EquityNet
      loss
                
                
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                (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 facilitiesprovided
      by related party
                
                
                -
                
                
                
                -
                
                
                
                1,800
                
                
                
                -
                
                
                
                1,800Net
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (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 facilitiesprovided
      by related party
                
                
                -
                
                
                
                -
                
                
                
                450
                
                
                
                -
                
                
                
                450Net
      loss
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (17,248
                )
                
                
                (17,248
                )Balance,
      March 31, 2009
                
                
                3,769,800
                
                
                $
                3,770
                
                
                $
                207,880
                
                
                $
                (131,735
                )
                
                $
                79,915
   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)
 InceptionThree
      Months Ended March 31,
                
                
                (December
      4,2006)
      to2009
                
                
                2008
                
                
                March
      31, 2009Cash
      flows from operating activitiesNet
      loss
                
                $
                (17,248
                )
                
                $
                (21,108
                )
                
                $
                (131,735
                )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
                
                
                450
                
                
                
                450
                
                
                
                4,200Depreciation
                
                
                84
                
                
                
                28
                
                
                
                364Changes
      in operating assets and liabilitiesIncrease
      in prepaid expenses
                
                
                (18
                )
                
                
                (5,400
                )
                
                
                (566
                )Increase
      in accounts payable and accrued expenses
                
                
                4,451
                
                
                
                12,109
                
                
                
                46,310Net
      cash used in operating activities
                
                
                (12,281
                )
                
                
                (13,921
                )
                
                
                (81,427
                )Cash
      flows from investing activitiesPurchase
      of fixed assets
                
                
                -
                
                
                
                (1,012
                )
                
                
                (1,012
                )Investment
      in real property
                
                
                -
                
                
                
                -
                
                
                
                (61,335
                )Minority
      investment in subsidiary
                
                
                (236
                )
                
                
                (363
                )
                
                
                (1,605
                )Net
      cash used in investing activities
                
                
                (236
                )
                
                
                (1,375
                )
                
                
                (63,952
                )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
                
                
                (12,517
                )
                
                
                (15,296
                )
                
                
                62,071Cash,
      beginning of period
                
                
                74,588
                
                
                
                109,846
                
                
                
                -Cash,
      end of period
                
                $
                62,071
                
                
                $
                94,550
                
                
                $
                62,071
   See accompanying notes to
unaudited consolidated financial statements.
  5
  INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 InceptionThree
      Months Ended March 31,
                
                
                (December
      4,2006)
      to2009
                
                
                2008
                
                
                March
      31, 2009Supplemental
      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.
  6
  INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 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 Statement of Financial Accounting Standards (SFAS) No. 7 “Accounting and Reporting by
Development Stage Enterprises”,and was incorporated under the laws of
the State of Nevada on December 4, 2006.  From inception (December 4,
2006) through March 31, 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 March 31, 2009,
the Company owned 55% of ISR de Mexico.  The remaining 45% interest is
owned by related parties.
 
 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 Article
8 of RegulationS-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
three months ended March 31, 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.
  7
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 (UNAUDITED)
 1.
                NATURE
      OF OPERATIONS AND BASIS OF PRESENTATION
  (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.
 
 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 March 31, 2009, the Company did not deem any of its long-term
assets to be impaired.
  8
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 (UNAUDITED)
 1.
                NATURE
      OF OPERATIONS AND BASIS OF PRESENTATION
  (Continued)
 
 Recent Accounting
Pronouncements
 
 In
April 2009, the Financial Accounting Standards Board (FASB) issued FASB
Staff Position (FSP) Financial Accounting Standard (FAS) 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not
Orderly.  Based on the guidance, if an entity determines that
the level of activity for an asset or liability has significantly decreased and
that a transaction is not orderly, further analysis of transactions or quoted
prices is needed, and a significant adjustment to the transaction or quoted
prices may be necessary to estimate fair value in accordance with Statement of
Financial Accounting Standards (SFAS) No. 157 Fair Value Measurements. This
FSP is to be applied prospectively and is effective for interim and annual
periods ending after June 15, 2009 with early adoption permitted for
periods ending after March 15, 2009. The company will adopt this FSP for
its quarter ending June 30, 2009. There is no expected impact on the
Company’s financial statements.
  In
April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of
Other-Than-Temporary Impairments. The guidance applies to investments in
debt securities for which other-than-temporary impairments may be recorded. If
an entity’s management asserts that it does not have the intent to sell a debt
security and it is more likely than not that it will not have to sell the
security before recovery of its cost basis, then an entity may separate
other-than-temporary impairments into two components: 1) the amount related to
credit losses (recorded in earnings), and 2) all other amounts (recorded in
other comprehensive income). This FSP is to be applied prospectively and is
effective for interim and annual periods ending after June 15, 2009 with
early adoption permitted for periods ending after March 15, 2009. The
company will adopt this FSP for its quarter ending June 30, 2009. There is
no expected impact on the Company’s financial statements.
  In
April 2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board
(APB) 28-1, Interim
Disclosures about Fair Value of Financial Instruments. The FSP amends
SFAS No. 107 “Disclosures about Fair Value of Financial Instruments” to
require an entity to provide disclosures about fair value of financial
instruments in interim financial information. This FSP is to be applied
prospectively and is effective for interim and annual periods ending after
June 15, 2009 with early adoption permitted for periods ending after
March 15, 2009. The company will include the required disclosures in its
quarter ending June 30, 2009.
  9
 
  INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 (UNAUDITED)
 1.
                NATURE
      OF OPERATIONS AND BASIS OF PRESENTATION
  (Continued)
 
 Recent
Accounting Pronouncements (Continued)
 
 In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations, which
became effective January 1, 2009 via prospective application to business
combinations. This Statement requires that the acquisition method of accounting
be applied to a broader set of business combinations, amends the definition of a
business combination, provides a definition of a business, requires an acquirer
to recognize an acquired business at its fair value at the acquisition date and
requires the assets and liabilities assumed in a business combination to be
measured and recognized at their fair values as of the acquisition date (with
limited exceptions). The company adopted this Statement on January 1, 2009.
There was no impact upon adoption, and its effects on future periods will depend
on the nature and significance of business combinations subject to this
statement.
  In
April 2009, the FASB issued FSP FAS 141(R)-1, Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from
Contingencies. This FSP requires that assets acquired and liabilities
assumed in a business combination that arise from contingencies be recognized at
fair value if fair value can be reasonably estimated. If fair value cannot be
reasonably estimated, the asset or liability would generally be recognized in
accordance with SFAS No. 5, “Accounting for Contingencies” and FASB
Interpretation No. 14, “Reasonable Estimation of the Amount of a Loss”.
Further, the FASB removed the subsequent accounting guidance for assets and
liabilities arising from contingencies from SFAS No. 141(R). The
requirements of this FSP carry forward without significant revision the guidance
on contingencies of SFAS No. 141, “Business Combinations”, which was
superseded by SFAS No. 141(R) (see previous paragraph). The FSP also
eliminates the requirement to disclose an estimate of the range of possible
outcomes of recognized contingencies at the acquisition date. For unrecognized
contingencies, the FASB requires that entities include only the disclosures
required by SFAS No. 5. This FSP was adopted effective January 1,
2009. There was no impact upon adoption, and its effects on future periods will
depend on the nature and significance of business combinations subject to this
statement.
  10
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 (UNAUDITED)
 2.           
 GOING
CONCERN
 
 As shown
in the accompanying financial statements, the Company has incurred a net
operating loss of $131,735 from inception (December 4, 2006) through March 31,
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.
 
 3.
                FAIR VALUE OF FINANCIAL
      INSTRUMENTS
 
 Fair Value
Measurements
 
 On
January 1, 2008, the Company adopted SFAS No. 157 (SFAS 157), Fair Value
Measurements.  SFAS 157 relates to financial assets and
financial liabilities. In February 2008, the FASB issued FASB Staff Position
(FSP) No. FAS 157-2, Effective
Date of FASB Statement No. 157, which delayed the effective date of
SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except those
that are recognized or disclosed at fair value in the financial statements on at
least an annual basis, until January 1, 2009 for calendar year-end
entities.
 
 SFAS 157
defines fair value, establishes a framework for measuring fair value in
accounting principles generally accepted in the United States of America (GAAP),
and expands disclosures about fair value measurements. The provisions of this
standard apply to other accounting pronouncements that require or permit fair
value measurements and are to be applied prospectively with limited
exceptions.
  11
  INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 (UNAUDITED)
 3.
                FAIR VALUE OF FINANCIAL
      INSTRUMENTS (Continued)
 
 Fair
Value Measurements (continued)
 
 SFAS 157
defines fair value as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at
the measurement date. This standard is now the single source in GAAP for the
definition of fair value, except for the fair value of leased property as
defined in SFAS 13. SFAS 157 establishes a fair value hierarchy that
distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and
(2) an entity’s own assumptions, about market participant assumptions, that
are developed based on the best information available in the circumstances
(unobservable inputs). The fair value hierarchy consists of three broad levels,
which gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3). The three levels of the fair value hierarchy
under SFAS 157 are described below:
  •
                
                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.)
  12
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 (UNAUDITED)
 3.
                FAIR VALUE OF FINANCIAL
      INSTRUMENTS (Continued)
 
 Fair
Value Measurements (continued)
 
 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 March 31, 2009 and
December 31, 2008:
 
 March
      31, 2009
                
                
                December
      31, 2008Level
                
                
                Fair
                  Value
                
                
                Carrying
                  Amount
                
                
                Fair
                  Value
                
                
                Carrying
                  AmountAssetsCash
                
                
                2
                
                
                $
                62,071
                
                
                $
                62,071
                
                
                $
                74,588
                
                
                $
                74,588Prepaid
      expenses
                
                
                3
                
                
                
                566
                
                
                
                566
                
                
                
                548
                
                
                
                548LiabilitiesAccounts
      payable
                
                
                3
                
                
                
                46,310
                
                
                
                46,310
                
                
                
                41,859
                
                
                
                41,859
 
 Fair Value
Option
 
 On
January 1, 2008, the Company adopted SFAS No. 159 (SFAS 159), The Fair Value Option for Financial
Assets and Financial Liabilities.  SFAS 159 provides a fair
value option election that allows entities to irrevocably elect fair value as
the initial and subsequent measurement attribute for certain financial assets
and liabilities. Changes in fair value are recognized in earnings as they occur
for those assets and liabilities for which the election is made. The election is
made on an instrument by instrument basis at initial recognition of an asset or
liability or upon an event that gives rise to a new basis of accounting for that
instrument. The adoption of SFAS 159 did not have a material impact on the
Company’s financial statements as the Company did not elect the fair value
option for any of its financial assets or liabilities.
  13
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 (UNAUDITED)
 4.
                PROPERTY AND
      EQUIPMENT
 
 Property
and equipment at March 31, 2009 and December 31, 2008, consists of the
following:
 
 March
      31,
                
                December
      31,2009
                
                2008Computer
      equipment
                
                $
                1,012
                
                
                $
                1,0121,012
                
                
                
                1,012Less:
      accumulated depreciation
                
                
                (364
                )
                
                
                (280
                )Total
      property and equipment
                
                $
                648
                
                
                $
                732
  Depreciation
expense for the three months ended March 31, 2009 and 2008 amounted to $84 and
$28, respectively.
 
 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.
  14
 INTERNATIONAL
SURF RESORTS, INC. AND SUBSIDIARY
 (A
Development Stage Company)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2009
 (UNAUDITED)
 7.            
PROVISION FOR INCOME
TAXES
 
 As of
March 31, 2009, the Company reported an estimated federal net operating loss
carryforward of approximately $129,000 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
March 31, 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%)
                
                $
                32,300Less:
      valuation allowance
                
                
                (32,300
                )Net
      deferred tax asset
                
                $
                -
 
 The
Company’s valuation allowance increased by approximately $4,300 during the three
months ended March 31, 2009.
  8.            
RELATED PARTY
TRANSACTIONS
 
 From the
Company’s inception (December 4, 2006) through March 31, 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 $450 for each
of the three months ended March 31, 2009 and 2008.
 15
  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 March 31, 2009.
 
 Liquidity and Capital
Resources. We had cash of $62,071 and prepaid expenses of $566 as of
March 31, 2009.   Our total current assets were
$62,637.  As of March 31, 2009, our investment in real property was
$61,335.  That, along with $648 in property and equipment, net of
accumulated depreciation, equaled our total assets of $124,620.  We
expect that we will incur expense related to our president traveling to the
property located in San Juanico, Baja California, Mexico, as well as
professional fees to determine feasibility of potential uses of that
property.  As of March 31, 2009, our total liabilities were $46,310,
all of which was represented by accounts payable.  We also had $1,605
representing a minority interest in a subsidiary.
  16
 
 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. 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.
  For the three months ended
March 31, 2009 as compared to the three months ended March 31,
2008.
 
 Results of
Operations.
 
 Revenues.We had no
revenue for the three months ended March 31, 2009 as compared to the three
months ended March 31, 2008, during which we also had no revenue.
 
 Operating Expenses and Net Loss.Our total operating expenses for the three months ended March 31, 2009
was $17,547.  This was comprised of legal and professional fees of
$15,613, rent of $450 and general and administrative expenses of $671, and dues
and fees of $813.  With other income of $63, our net loss before
minority interest in our subsidiary was $17,484, and after $236 in the minority
interest in our subsidiary, our net loss was $17,248.   This is in
comparison to the three months ended March 31, 2008, during which we had total
operating expenses of $22,217, comprised of rent of $450, legal and professional
fees of $20,180, general and administrative expenses of $850, and dues and fees
of $737.  Therefore, for the three months ended March 31, 2008, after
other income of $746, our net loss was $17,484.  Also, after $363 for
minority interest in subsidiary, our net loss was $21,108 for that
period.
 
 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.
 
 We had
cash of $62,071 as of March 31, 2009. 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.
  17
 
 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 March 31, 2009, the date of this report,
our chief executive officer and the principal financial officer concluded that
our disclosure controls and procedures were effective.
 
 Item 4(T). Controls and
Procedures.
 
 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.
 
 
 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. Rule 13a-14(a)/15d-14(a) Certifications.
 32.
Section 1350 Certifications.
  18
  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 corporationMay
      15, 2009
                By:
                /s/ Eduardo
      BiancardiEduardo
      Biancardi
                  Principal
      Executive
      Officer, Principal Financial and Accounting Officer
                    President,
      Secretary, Treasurer, Director
   19