UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10 – Q


(Mark
      One)


x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


For the
quarterly period ended September 30,
2010





 ̈
            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: 333-149850





EASTERN
RESOURCES, INC.


(Exact
name of registrant as specified in its charter)





Delaware
              
              45-0582098(State or other jurisdiction of incorporation)
              
              (I.R.S. Employer Identification No.)





166
East 34th Street, Suite 18K, New York, NY 10016


(Address
of principal executive offices)





(917)
687-6623


(Registrant’s
telephone number, including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes xNo  ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes  ̈ No
 ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer  ̈
            
            Accelerated filer  ̈
            
            Non-accelerated filer  ̈
            
            Smaller reporting company x(Do not check if a smaller
              Reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes  ̈ No
x





There
were 20,629,000 shares of the issuer’s common stock outstanding as of November
15, 2010.





EASTERN
RESOURCES, INC.





FORM
10-Q


FOR THE
QUARTERLY PERIOD ENDED SEPTEMBER 30, 2010


TABLE OF
CONTENTS





PAGEPART
      I - FINANCIAL INFORMATIONItem
      1.
              Financial
      Statements
              3Item
      2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              16Item
      3.
              Quantitative
      and Qualitative Disclosures About Market Risk
              20Item
      4.
              Controls
      and Procedures
              20PART
      II - OTHER INFORMATIONItem
      1.
              Legal
      Proceedings
              22Item
      1A.
              Risk
      Factors
              22Item
      2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              22Item
      3.
              Defaults
      Upon Senior Securities
              22Item
      4.
              (Removed
      and Reserved)
              22Item
      5.
              Other
      Information
              22Item
      6.
              Exhibits
              22SIGNATURES
              23


2


PART
I – FINANCIAL INFORMATION




ITEM
1. FINANCIAL STATEMENTS





PAGEConsolidated
      Balance Sheets as of September 30, 2010 (Unaudited) And December 31, 2009
      (Audited)
                      
                      4Consolidated
      Statements of Operations for the three and nine month periods ended
      September 30, 2010 (Unaudited) and September 30, 2009 (Unaudited) and the
      period from March 15, 2007 (Inception) to September 30, 2010
      (Unaudited)
                      
                      5Consolidated
      Statements of Cash Flows for the nine month periods ended September 30,
      2010 (Unaudited) and September 30, 2009 (Unaudited) and for the period
      from March 15, 2007 (Inception) to September 30, 2010
      (Unaudited)
                      
                      6Notes
      to the Unaudited Consolidated Financial Statements
                      
                      7


3


EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


CONSOLIDATED
BALANCE SHEETS





September 30, 2010
                    
                    
                    December 31, 2009(Unaudited)
                    
                    
                    (Audited)ASSETSCURRENT
      ASSETSCash
                    
                    $
                    558
                    
                    
                    $
                    -TOTAL
      CURRENT ASSETS
                    
                    
                    558
                    
                    
                    
                    -Capitalized
      film costs
                    
                    
                    1,271,611
                    
                    
                    
                    1,271,611TOTAL
      ASSETS
                    
                    $
                    1,272,169
                    
                    
                    $
                    1,271,611LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
                    
                    $
                    109,111
                    
                    
                    $
                    46,050Loan
      payable-stockholder
                    
                    
                    40,000
                    
                    
                    
                    40,000Convertible
      debenture
                    
                    
                    50,179
                    
                    
                    
                    47,395Compensation
      payable
                    
                    
                    355,462
                    
                    
                    
                    355,462Derivative
      liability
                    
                    
                    763
                    
                    
                    
                    -Notes
      payable—current
                    
                    
                    165,749
                    
                    
                    
                    230,059TOTAL
      CURRENT LIABILITIES
                    
                    
                    721,264
                    
                    
                    
                    718,966LONG-TERM
      LIABILITIESNotes
      payable—non-current
                    
                    
                    81,999
                    
                    
                    
                    -10%
      Convertible debenture, net of discount of $1,850
                    
                    
                    72,830
                    
                    
                    
                    -TOTAL
      LIABILITIES
                    
                    
                    876,093
                    
                    
                    
                    718,966STOCKHOLDERS'
      EQUITYPreferred
      stock, $.001 par value, 10,000,000 shares authorized; none
      issued
                    
                    
                    -
                    
                    
                    
                    -Common
      stock, $.001 par value, 300,000,000 shares authorized; 20,629,000 issued
      and outstanding at September 30, 2010 and at December 31,
    2009
                    
                    
                    20,629
                    
                    
                    
                    20,629Additional
      paid-in capital
                    
                    
                    903,771
                    
                    
                    
                    903,771Deficit
      accumulated in the development stage
                    
                    
                    (528,324
                    )
                    
                    
                    (371,755
                    )TOTAL
      STOCKHOLDERS' EQUITY
                    
                    
                    396,076
                    
                    
                    
                    552,645TOTAL
      LIABILITIES ANDSTOCKHOLDERS'
      EQUITY
                    
                    $
                    1,272,169
                    
                    
                    $
                    1,271,611





See notes
to the unaudited consolidated financial statements.


4





EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


CONSOLIDATED
STATEMENTS OF OPERATIONS


(Unaudited)





March 15,
                        2007Three Months Ended
                      
                      
                      Nine Months Ended
                      
                      
                      (Inception) toSeptember 30,
                        2010
                      
                      
                      September 30,
                        2009
                      
                      
                      September 30,
                        2010
                      
                      
                      September 30,
                        2009
                      
                      
                      September 30,
                        2010Revenues
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -Operating
      expenses:General
      and administrative
                      
                      
                      65,667
                      
                      
                      
                      18,719
                      
                      
                      
                      150,195
                      
                      
                      
                      99,695
                      
                      
                      
                      523,581Total
      operating expenses
                      
                      
                      65,667
                      
                      
                      
                      18,719
                      
                      
                      
                      150,195
                      
                      
                      
                      99,695
                      
                      
                      
                      523,581Net
      loss before other income (expense)
                      
                      
                      (65,667
                      )
                      
                      
                      (18,719
                      )
                      
                      
                      (150,195
                      )
                      
                      
                      (99,695
                      )
                      
                      
                      (523,581
                      )Other
      income (expense):Gain
      on fair value of derivative liability
                      
                      
                      881
                      
                      
                      
                      -
                      
                      
                      
                      2,539
                      
                      
                      
                      -
                      
                      
                      
                      2,539Interest
      expense
                      
                      
                      (3,245
                      )
                      
                      
                      (928
                      )
                      
                      
                      (8,916
                      )
                      
                      
                      (1,467
                      )
                      
                      
                      (11,311
                      )Interest
      income
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      3
                      
                      
                      
                      3
                      
                      
                      
                      4,029Net
      loss
                      
                      $
                      (68,031
                      )
                      
                      $
                      (19,647
                      )
                      
                      $
                      (156,569
                      )
                      
                      $
                      (101,159
                      )
                      
                      $
                      (528,324
                      )Basic
      earnings per share
                      
                      $
                      (0.00
                      )
                      
                      $
                      (0.00
                      )
                      
                      $
                      (0.01
                      )
                      
                      $
                      (0.00
                      )Weighted
      average number of common shares outstanding - basic and
      diluted
                      
                      
                      20,629,000
                      
                      
                      
                      20,629,000
                      
                      
                      
                      20,629,000
                      
                      
                      
                      20,629,000





See notes
to the unaudited consolidated financial statements.


5


EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


Notes to
the Unaudited Consolidated Financial Statements





EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(Unaudited)





Nine
      Months
                    
                    
                    Nine
      Months
                    
                    
                    March
      15, 2007Ended
                    
                    
                    Ended
                    
                    
                    (Inception)
      toSeptember 30, 2010
                    
                    
                    September 30, 2009
                    
                    
                    September 30, 2010CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                    
                    $
                    (156,569
                    )
                    
                    $
                    (101,159
                    )
                    
                    $
                    (528,324
                    )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Gain
      on fair value of derivative liability
                    
                    
                    (2,539
                    )
                    
                    
                    -
                    
                    
                    
                    (2,539
                    )Amortization
      of discount on convertible debenture
                    
                    
                    1,452
                    
                    
                    
                    -
                    
                    
                    
                    1,452Increase
      in film costs
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (1,276,220
                    )Increase
      in capitalized interest
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    33,694Increase
      (decrease) in accounts payable and accrued expenses
                    
                    
                    63,061
                    
                    
                    
                    23,611
                    
                    
                    
                    109,111Officer
      stock compensation
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    11,500Increase
      in compensation payable
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    355,462NET
      CASH USED IN OPERATING ACTIVITIES
                    
                    
                    (94,595
                    )
                    
                    
                    (77,548
                    )
                    
                    
                    (1,295,864
                    )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from loans payable
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    160,000Proceeds
      from loan payable-shareholder
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    40,000Increase
      in notes payable accrued interest
                    
                    
                    17,689
                    
                    
                    
                    16,025
                    
                    
                    
                    58,663Proceeds
      from convertible debenture
                    
                    
                    70,000
                    
                    
                    
                    45,000
                    
                    
                    
                    115,000Increase
      in convertible debenture accrued interest
                    
                    
                    7,464
                    
                    
                    
                    1,467
                    
                    
                    
                    9,859Proceeds
      from issuance of common stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    912,900NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                    
                    
                    95,153
                    
                    
                    
                    62,492
                    
                    
                    
                    1,296,422INCREASE
      (DECREASE) IN CASH
                    
                    
                    558
                    
                    
                    
                    (15,056
                    )
                    
                    
                    558CASH-BEGINNING
      OF PERIOD
                    
                    
                    -
                    
                    
                    
                    15,056
                    
                    
                    
                    -CASH-END
      OF PERIOD
                    
                    $
                    558
                    
                    
                    $
                    -
                    
                    
                    $
                    558CASH
      PAID FOR:Interest
                    
                    $
                    -
                    
                    
                    $
                    -Income
      taxes
                    
                    $
                    -
                    
                    
                    $
                    -





See notes
to the unaudited consolidated financial statements.


6





EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


Notes to
the Unaudited Consolidated Financial Statements





Note
1 - Organization, Nature of Operations and Basis of Presentation





Eastern
Resources, Inc. (the “Company”) was incorporated in the State of Delaware on
March 15, 2007. On that date the Company acquired Buzz Kill, Inc. (“Buzz Kill”),
for 11,500,000 common shares. The Company, through Buzz Kill, completed
production of a feature length major motion picture, and plans to market it to
distributors in the United States and abroad. The Company plans to produce a
wide range of independent films outside the traditional studio system. The
Company intends to distribute films for theatrical release, and exploit methods
of delivery worldwide. The Company intends to execute its business plan through
the acquisition of unique films from a broad spectrum of independent writers,
directors and producers. Each project will become an independent production
company, created as a subsidiary of the Company. The Company plans to fund the
projects and maintain ownership of the films with the intent of building a film
library with the rights to DVD, book, and other reproductive media for sale to
the public.




On May
13, 2010, Buzz Kill executed a trademark license agreement with Second City,
Inc. Pursuant to the Agreement, the Company acquired a non-exclusive right
to use the “Second City” trademark in connection with the distribution of the
film, in exchange for payment of a royalty to Second City equal to 10% of the
producer gross receipts, as defined in the agreement. On May 19, 2010, Buzz Kill
executed a contest agreement with Reed Business Information and uPlaya Music
Intelligence Solutions, Inc., whereby uPlaya will provide hosting services for a
contest to select a song for BuzzKill,and the contest
will be co-branded and co-marketed from the media outlets of Variety, the weekly
entertainment-trade magazine published by Reed Business Information. The contest
is scheduled to run through November 30, 2010.





Also, in
September 2010, Buzz Kill entered a distribution agreement with Indican
Pictures. The agreement covers North American DVD and television rights. The
title is expected to be available for public consumption late Q1
2011.





The
Company intends to raise additional capital through the issuance of debt and/or
equity securities to provide financing for marketing and distribution
activities. Currently, the Company is in negotiations with an independent media
production and distribution company to secure distribution for the
film.




Basis of
Presentation: The accompanying unaudited financial statements of the Company
have been prepared in accordance with generally accepted accounting principles
for interim financial information. Accordingly, they do not include all the
information and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
necessary to present fairly the information set forth therein have been
included. Operating results for the nine months ended September 30, 2010 are not
necessarily indicative of the results that may be experienced for the fiscal
year ending December 31, 2010. The accompanying consolidated financial
statements should be read in conjunction with the Company’s Form 10-K for the
fiscal year ended December 31, 2009, which was filed on March 23,
2010.


7


EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


Notes to
the Unaudited Consolidated Financial Statements





Note
2 - Summary of Significant Accounting Policies





Principles of Consolidation -
The consolidated financial statements of the Company include those of the
Company and its wholly owned subsidiary, Buzz Kill, Inc. All significant
inter-company accounts and transactions have been eliminated in
consolidation.





Use of Estimates - The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date
of the financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those
estimates.





Cash and Cash Equivalents -
The Company considers all highly liquid short-term investments with a remaining
maturity of three months or less when purchased, to be cash
equivalents.





Capitalized Film Costs - Film
costs include all direct negative costs incurred in the physical production of
the film, as well as allocated production overhead. Such costs include story
costs and scenario; compensation of cast, directors, producers, and extras; set
construction and operations; wardrobe and accessories; sound synchronization;
location expenses and post production costs, including music, special effects,
and editing. Film costs are amortized based on the ratio of current period gross
revenues to estimated remaining ultimate revenues from all sources on an
individual production basis. Estimated ultimate revenues are revised
periodically and the carrying values of the films are evaluated for impairment.
Losses, if any, are provided in full.





As of
September 30, 2010 and December 31, 2009, the Company is not yet able to
reasonably estimate projected revenues, therefore the Company has not
recorded any amortization expense to-date.





Fair Value of Financial
Instruments - The carrying amount reported in the consolidated balance
sheets for cash and cash equivalents, accounts payable, and accrued expenses
approximate fair value because of the immediate or short-term maturity of these
financial instruments.





Income Taxes - Income
taxes are accounted for in accordance with the provisions of FASB ASC Topic No.
740, “Income Taxes”(formerly SFAS No. 109,“Accounting for Income
Taxes”). Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement 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. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amounts
expected to be realized.


8


EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


Notes to
the Unaudited Consolidated Financial Statements





Note
2 - Summary of Significant Accounting Policies-continued





Revenue Recognition - The
Company recognizes revenues from the sale or licensing arrangement of a film
upon delivery of a completed film or the commencement of a licensing period. The
Company had substantially completed film production at September 30, 2010, but
realized no revenues as of that date.





Advertising Costs -
Advertising costs are expensed as incurred. Expenditures for the nine month
periods ended September 30, 2010 and September 30, 2009 were
insignificant.





Loss Per Common Share - Loss
per common share is computed using the weighted average number of shares
outstanding. Potential common shares includable in the computation of fully
diluted per share results are not presented in the financial statements as their
effect would be anti-dilutive.





New Accounting
Pronouncements -




In
October 2009, the FASB issued guidance for amendments to FASB Emerging Issues
Task Force on EITF Issue No. 09-1 “Accounting for Own-Share Lending Arrangements
in Contemplation of a Convertible Debt Issuance or Other Financing” (Subtopic
470-20) “Subtopic”. This accounting standards update establishes the accounting
and reporting guidance for arrangements under which own-share lending
arrangements issued in contemplation of convertible debt issuance. This
Statement is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2009. Earlier adoption is not
permitted. Management believes this Statement will have no impact on the
consolidated financial statements of the Company once adopted.





In
December 2009, the FASB issued guidance for Consolidations – Improvements to
Financial Reporting by Enterprises Involved with Variable Interest Entities
(Topic 810). The amendments in this update are a result of incorporating the
provisions of SFAS No. 167, Amendments to FASB Interpretation No. 46(R). The
provisions of such Statement are effective for fiscal years, and interim periods
within those fiscal years, beginning on or after November 15, 2009. Earlier
adoption is not permitted. The presentation and disclosure requirements shall be
applied prospectively for all periods after the effective date. Management
believes this Statement will have no impact on the consolidated financial
statements of the Company once adopted.





In
January 2010, the FASB issued ASU 2010-06, Fair Value Measurements and
Disclosures (Topic 820) Improving Disclosures about Fair Value
Measurements, which enhances the usefulness of fair value measurements. The
amended guidance requires both the disaggregation of information in certain
existing disclosures, as well as the inclusion of more robust disclosures about
valuation techniques and inputs to recurring and nonrecurring fair value
measurements.




9




EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


Notes to
the Unaudited Consolidated Financial Statements





Note
2 - Summary of Significant Accounting Policies-continued





The
amended guidance is effective for interim and annual reporting periods beginning
after December 15, 2009, except for the disaggregation requirement for the
reconciliation disclosure





Effective
January 29, 2010, the Company adopted FASB ASC Topic No. 815 – 40, Derivatives
and Hedging - Contracts in Entity’s Own Stock (formerly Emerging Issues
Task Force Issue No. 07-5, Determining Whether an Instrument or Embedded Feature
is Indexed to an Entity’s Own Stock ). The adoption of FASB ASC Topic No. 815
–40’s requirements can affect the accounting for warrants and many convertible
instruments with provisions that protect holders from a decline in the stock
price (or “down-round” provisions). As a result of the Company issuing a
convertible note on January 29, 2010, the Company adopted ASC Topic No. 815 –
40, Derivatives and Hedging - Contracts in Entity’s Own Stock (formerly Emerging
Issues Task Force Issue No. 07-5, Determining Whether an Instrument or Embedded
Feature is Indexed to an Entity’s Own Stock ). As such, the embedded feature
convertible option on the January 29, 2010 convertible note are classified as
liabilities as of January 29, 2010 as these exercise price reset features and
are not deemed to be indexed to the Company’s own stock. See Note 6 for further
discussion.





Management
does not believe that any other recently issued, but not yet effective,
accounting standards could have a material effect on the accompanying
consolidated financial statements. As new accounting pronouncements are issued,
the Company will adopt those that are applicable under the
circumstances.




Note
3 - Going Concern





The
Company at present has insufficient funds to sustain the cash flows required to
meet the anticipated operating costs to be incurred in the next twelve months.
Management intends to sell additional equity and/or debt securities in the
future to supplement potential revenues. However, there can be no assurance that
the Company will be successful in raising significant additional funds. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.





Note
4 - Notes Payable





In
2007, Buzz Kill issued 10% Subordinated Debenture Notes (the “2007 Notes”)
aggregating $160,000 payable to four persons. The 2007 Notes included accrued
interest compounded monthly, and become due and payable on varying dates in the
year 2010. The 2007 Notes are subordinated to monies payable to trade payables,
to the Hanna Loan (defined below) payable to Mr. Hanna, an officer and major
stockholder, and to the Senior Note (defined below). The Company agreed to pay
the 2007 Note holders an additional premium of 20% of the original principal
$32,000, upon the future repayment of the 2007 Notes and accrued interest
thereon, which has been recorded at present value of $24,324. The 2007
Note holders’ rights to receive the premium survive any redemption of the
2007 Notes.




10




EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


Notes to
the Unaudited Consolidated Financial Statements





Note
4 - Notes Payable-continued





Such
amount was calculated using 10% per annum compounded monthly. In addition to the
repayments of principal, accrued interest and premium, the 2007 Note holders
will be entitled to a 12% participation in the film’s net proceeds as defined in
the agreements.





On July
26, 2010, one of the 2007 Notes with a principal amount of $50,000, bearing 10%
interest, matured. The Company was able to obtain an extension of the maturity
date, amending the maturity date from July 26, 2010 to July 26,
2012.





On August
1, 2010, one of the 2007 Notes with a principal amount of $5,000, bearing 10%
interest, matured. The Company was able to obtain an extension of the maturity
date, amending the maturity date from August 1, 2010 to August 1,
2012.





On August
1, 2010, one of the 2007 Notes with a principal amount of $5,000, bearing 10%
interest, matured. The Company was able to obtain an extension of the maturity
date, amending the maturity date from August 1, 2010 to August 1,
2012.





One of
the 2007 Notes in the principal amount of $100,000, bearing 10% interest, was
set to mature on October 17, 2010, and the holder agreed on September 10, 2010
to extend the maturity date to October 17, 2012.





On
September 10, 2010, Buzz Kill issued a 10% senior note due April 15, 2012 in the
principal amount of $15,000 (the “Senior Note”) to an unaffiliated third party
for that party’s $15,000 loan to Buzz Kill. As a condition to this loan, all of
the holders of the 2007 Notes and, in connection with the Hanna Loan, Thomas
Hanna, signed a subordination agreement pursuant to which payment and
performance of any and all obligations under the 2007 Notes and the Hanna Loan
are subordinated to the Senior Note. The related cash proceeds were received on
October 15, 2010.





At
September 30, 2010 and December 31, 2009, the Company recorded related accrued
interest of $58,663 and $40,973, respectively.





Note
5 - Loan Payable-Stockholder




In July
2007, the Company received a bridge loan of $100,000 from Mr. Hanna (the “Hanna
Loan”). Subsequent repayments of $60,000 have reduced the Hanna Loan to an
outstanding amount of $40,000 as of September 30, 2010. The Hanna Loan is
unsecured, interest free, and repayable on demand. As a result of the
issuance of the Senior Note, the Hanna Loan is now subordinated to the Senior
Note.


11


EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


Notes to
the Unaudited Consolidated Financial Statements




Note
6 - Convertible Note Payable and Derivatives
 
 8.25%
Convertible Debenture




On May 8,
2009, the Company entered into a securities purchase agreement with Milestone
Enhanced Fund Ltd. (“Milestone” or “Holder”). Under the purchase agreement, the
Companyissued to Milestone a convertible promissory note (“Promissory Note”),
convertible into the Company’s common stock, in the amount of
$45,000.





At any
time, subject to a written notice of conversion, the Holder may convert any
portion of the outstanding and unpaid principal and interest balance due on the
Promissory Note into the Company’s common shares at a conversion price to be
mutually determined by the Company and the Holder. Any conversion of any portion
of the Promissory Note shall be deemed to be a prepayment of principal, without
any penalty, and shall be credited against future payments of principal in the
order such payments become due or payable.





The
Promissory Note bears interest at the rate of 8.25% per annum and is payable at
maturity, November 8, 2010, together with any accrued and unpaid interest. The
Promissory Note may be prepaid by the Company at any time without penalty. Both
parties may, however, mutually agree to extend the term of the Promissory Note
beyond the maturity date.





In the
event of default due to non-payment of principal and interest at maturity date,
the Holder would have the right to all legal remedies available for it to pursue
collection, and the Company shall bear all reasonable costs of collection,
including but not limited to attorney’s fees.





At
September 30, 2010 and December 31, 2009, the Company recorded accrued interest
of $5,179 and $2,395, respectively, related to the convertible
debenture.





10%
Convertible Debenture





On
January 29, 2010, the Company issued to Paramount Strategy Corp. (“Paramount”) a
convertible promissory note (“Paramount Promissory Note”) amounting to
$70,000.





At any
time, subject to a written notice of conversion, Paramount may convert any
portion of the outstanding and unpaid principal and interest balance due on
the Paramount Promissory Note into the Company’s common shares at a
conversion price (the “Fixed Conversion Price”) of $0.10 per share. So long
as the Paramount Promissory Note is outstanding, if the Company issues
shares of its common stock at a price below the Fixed Conversion Price, the
Fixed Conversion Price shall be reduced to such other lower price. The
Fixed Conversion Price and number of shares to be issued upon conversion
shall also be subject to adjustment from time to time upon the happening of
certain other events, in particular in the event a merger or sale of the
Company’s assets, reclassification, or change in the Company’s common stock, and
in the event of stock splits, combinations or dividends. The Paramount
Promissory Note bears interest at the rate of 10% per annum and is payable at
its maturity on July 28, 2011, unless its term is mutually extended by both
parties.


12


EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


Notes to
the Unaudited Consolidated Financial Statements





Note
6 - Convertible Note Payable and Derivatives-continued





The
Paramount Promissory Note contains ratchet provisions which adjust the exercise
price of the embedded feature conversion option if the Company issues
common stock at a price lower than the fixed conversion prices in the
10% Paramount Promissory Note. As a result, the Company assessed the terms
of the 10% Paramount Promissory Note in accordance with ASC Topic No. 815 –
40, Derivatives and Hedging - Contracts in Entity’s Own Stock (formerly
Emerging Issues Task Force Issue No. 07-5, Determining Whether an
Instrument or Embedded




Feature
is Indexed to an Entity’s Own Stock ) and determined that the underlying
embedded feature conversion option are not indexed to the Company’s
common stock and are therefore a derivative which should be valued at fair
value at the date of issuance and at each subsequent
interim period.





As of
January 29, 2010 (date of note issuance), the fair value of the derivatives was
$3,302. As a result, a discount of $3,302 on the Paramount Promissory Note, and
a derivative liability of $3,302 was recorded on January 29, 2010. The
revaluation of the derivatives as of September 30, 2010 resulted in a value of
derivative liability of $763. The change in fair value during the period
from January 29, 2010 to September 30, 2010 resulted in a recorded gain on fair
value of derivative liability of $2,539 in the accompanying consolidated
statement of operations. For the


nine
months ended September 30, 2010, the Company also amortized the discount on the
note for $1,452.





The fair
value of the derivative was determined using the Black-Scholes option pricing
model with the following assumptions:





January
      29,
                    2010
                  
                  
                  September
                    30,
      2010Common
      stock issuable upon conversion
                  
                  
                  700,000
                  
                  
                  
                  700,000Estimated
      market value of common stock on measurement date
                  
                  $
                  0.02
                  
                  
                  $
                  0.02Exercise
      price
                  
                  $
                  0.10
                  
                  
                  $
                  0.10Risk
      free interest rate (1)
                  
                  
                  0.82
                  %
                  
                  
                  0.82
                  %Term
      in years
                  
                  1.49
      years
                  
                  
                  0.82
      yearsExpected
      volatility
                  
                  
                  129
                  %
                  
                  
                  114
                  %Expected
      dividends (2)
                  
                  
                  0
                  %
                  
                  
                  0
                  %





(1) The
risk-free interest rate was estimated by management using the U.S. Treasury
zero-coupon yield over the contractual term of the note.





(2)
Management estimated the dividend yield at 0% based upon its expectation that
there will not be earnings available to pay dividends in the near
term.


13





EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


Notes to
the Unaudited Consolidated Financial Statements





Note
7 - Fair Value Measurements





As
defined in FASB ASC Topic No. 820 – 10 (formerly SFAS 157), fair value is the
price that would be received upon the sale of an asset or paid to transfer
a liability in an orderly transaction between market participants at the
measurement date. FASB ASC Topic No. 820 – 10 requires disclosure that
establishes a framework for measuring fair value and expands disclosure
about





fair
value measurements. The statement requires fair value measurements be classified
and disclosed in one of the following categories:





Level
      1:
            Unadjusted
      quoted prices in active markets that are accessible at the measurement
      date for identical, unrestricted assets or liabilities. The Company
      considers active markets as those in which transactions for the
      assets or liabilities occur in sufficient frequency and volume to provide
      pricing information on an ongoing
basis.





Level
      2:
            Quoted
      prices in markets that are not active, or inputs which are observable,
      either directly or indirectly, for substantially the full term of the
      asset or liability. This





category
      includes those derivative instruments that the Company values using
      observable market data. Substantially all of these inputs are observable
      in the marketplace throughout the term of the derivative instruments,
      can be derived from observable data, or supported by observable
      levels at which transactions are executed in the
    marketplace.





Level
      3:
            Measured
      based on prices or valuation models that require inputs that are both
      significant to the fair value measurement and less observable from
      objective sources (i.e. supported by little or no market activity).
      The Company’s valuation models are primarily industry standard
      models. Level 3 instruments include derivative warrant instruments.
      The Company does not have sufficient corroborating evidence to support
      classifying these assets and liabilities as Level 1 or Level
      2.




As
required by FASB ASC Topic No. 820 – 10 (formerly SFAS 157), financial assets
and liabilities are classified based on the lowest level of input that is
significant to the fair value measurement. The Company’s assessment of the
significance of a particular input to the fair value measurement requires
judgment, and may affect the valuation of the fair value of assets
and liabilities and their placement within the fair value hierarchy
levels.





The
estimated fair value of the derivative liability was calculated using the
Black-Scholes option pricing model (see Note 6).





The
following table sets forth, by level within the fair value hierarchy, the
Company’s financial assets and liabilities that were accounted for at fair
value on a recurring basis as of September 30, 2010:


14


EASTERN
RESOURCES, INC. AND SUBSIDIARY


(A
Development Stage Company)


Notes to
the Unaudited Consolidated Financial Statements





Note
7 - Fair Value Measurements-continued





Fair Value Measurements at September30, 2010TotalCarryingDescription
                
                (Level 1)
                
                
                (Level 2)
                
                
                (Level 3)
                
                
                ValueDerivative
      liability -
                
                $
                -
                
                
                $
                -
                
                
                $
                763
                
                
                $
                $763Total
                
                $
                -
                
                
                $
                -
                
                
                $
                763
                
                
                $
                $763





Note
8 - Issuance of Common and Preferred Stock





Authorized
capital stock consists of 300,000,000 shares of common stock with a par value of
$0.001 per share and 10,000,000 shares of preferred stock, with a par value of
$0.001 per share.





In
December 2007, the Company completed a private placement offering of 8,529,000
shares of common stock at a price of $0.10 per share for aggregate proceeds of
$852,900.  In June 2008, the Company sold additional 600,000 shares of
its common stock to an institutional investor at a price of $0.10 per share for
gross proceeds of $60,000.





As of
September 30, 2010, there were 20,629,000 shares of common stock issued and
outstanding. No preferred stock shares have been issued.





Note
9 - Commitments and Contingencies





On May
13, 2010, the Company entered into a trademark license agreement with Second
City, Inc., in which the Company acquired a non-exclusive right to use the
“Second City” trademark in connection with the distribution of the film, in
exchange for payment of a royalty to Second City equal to 10% of the producer
gross receipts, as defined in the agreement.





On May
19, 2010, the Company executed a contest agreement with Reed Business
Information and uPlaya Music Intelligence Solutions, Inc., whereby uPlaya will
provide hosting services for a contest to select a song for BuzzKill,and the contest
will be co-branded and co-marketed from the media outlets of Variety, the weekly
entertainment-trade magazine published by Reed Business Information. As per the
agreement, the Company has accrued $3,500 to compensate uPlaya for incremental
design, and technical and administrative set-up costs. Buzzkill agrees to
compensate the Grand Prize Winner $1,000 within 15 days of the contest end-date
and winner verification. The contest is continuing until November 30, 2010 when
a winner is to be selected by a panel of judges including, Krysten Ritter an
actress from the film.





Also, in
September 2010, Buzz Kill entered a distribution agreement with Indican
Pictures. The agreement covers North American DVD and television rights. The
title is expected to be available for public consumption late Q1
2011.




15





ITEM
      2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





Statement
Regarding Forward-Looking Information





This
report contains forward-looking statements. All statements other than statements
of historical facts included in this Quarterly Report on Form 10-Q, including
without limitation, statements in this Management’s Discussion and Analysis of
Financial Condition and Results of Operations regarding our financial position,
estimated working capital, business strategy, the plans and objectives of our
management for future operations and those statements preceded by, followed by
or that otherwise include the words “believe”, “expects”, “anticipates”,
“intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”,
“should”, or similar expressions or variations on such expressions are
forward-looking statements. We can give no assurances that the assumptions upon
which the forward-looking statements are based will prove to be correct. Because
forward-looking statements are subject to risks and uncertainties, actual
results may differ materially from those expressed or implied by the
forward-looking statements. There are a number of risks, uncertainties and other
important factors that could cause our actual results to differ materially from
the forward-looking statements, including, but not limited to, the availability
and pricing of additional capital to finance operations, the acceptance of our
feature film at various film festivals, the successful negotiation and execution
of marketing and distribution agreements, our ability to acquire and develop
future film projects, and future economic conditions and the independent film
market.





Except
as otherwise required by the federal securities laws, we disclaim any
obligations or undertaking to publicly release any updates or revisions to any
forward-looking statement contained in this Quarterly Report on Form 10-Q to
reflect any change in our expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is
based.





Background





We were
formed as a Delaware corporation on March 15, 2007 for the purpose of producing
full length independent feature films through our wholly-owned subsidiary, Buzz
Kill, Inc. (“Buzz Kill”).  Since inception, we have been engaged in
the production and attempted distribution of our first independent, full-length
feature film entitled “BuzzKill” (or, the
“Film”).





On April
1, 2007 Buzz Kill acquired all rights, title and interest in and to the
screenplay entitled “Buzz
Kill,” written by Steven Kampmann and Matt Smollon.  Pursuant
to the Literary Purchase Agreement, dated April 1, 2007, each of Messrs.
Kampmann and Smollon received the following compensation:  (i) $6,250,
(ii) $12,731 in deferred compensation, and (iii) contingent compensation equal
to 3.5% of the “net proceeds” of the Film.  Messrs. Kampmann and
Smollon will receive an additional $25,000 if the film’s North American (i.e.,
the United States and Canada) theatrical box office receipts reach $15,000,000
and an additional $25,000 thereafter for each $15,000,000 in theatrical box
office receipts reached thereafter.




16


On April
13, 2007, Buzz Kill hired Mr. Kampmann to direct the Film.  Pursuant
to Director Agreement, dated April 13, 2007, for his director services Mr.
Kampmann received the following compensation:  (i) $20,000, (ii)
$50,000 in deferred compensation, (iii) an additional $10,000 for every $100,000
by which the final, actualized budget exceeds $650,000, and (iv) contingent
compensation equal to 5% of the “net proceeds” of the Film.  Mr.
Kampmann will also receive, as the Film’s director, an additional $25,000 if the
Film’s North American (i.e., the United States and Canada) theatrical box office
receipts reach $15,000,000 and an additional $25,000 thereafter for each
$15,000,000 in theatrical box office receipts reached thereafter.





Pursuant
to the Investment Agreement, dated May 1, 2007, between our Company and Buzz
Kill, we provided financing to Buzz Kill in the amount of $800,000 for the
production (principal photography only) and exploitation of BuzzKill.  Under
the agreement, we received a “first priority” right of recoupment of the
financing amount and a 20% premium.  In addition, our Company is
entitled to a percentage of the “net proceeds” of the Film, calculated as a
percentage equal to 50% of the fraction with a numerator equal to the amount of
our financing and a denominator equal to the amount of the final, actualized
budget of the Film. Buzz Kill agreed (i) that the net cost of the Film (that is,
the cost of actually producing and shooting the Film and not including such
costs as distribution and promotion) shall not exceed $1,100,000 without the
written consent of our Company, and (ii) to limit its financing debt to $300,000
plus 20%.





In
December 2007, we completed a private placement offering of 8,529,000 shares of
our common stock to a total of 33 purchasers at a price of $0.10 per share for
aggregate proceeds of $852,900. In June 2008, we sold additional 600,000 shares
of our common stock to an institutional investor at a price of $0.10 per share
for gross proceeds of $60,000.





In
February 2008, through Buzz Kill, we completed post-production of the Film, and
now seek to market the Film and secure distribution.  We secured the
services of a sales representative who will assist us in guiding the Film
through the festival and distribution process and, on May 13, 2010, Buzz Kill
executed a trademark license agreement with Second City,
Inc.  Pursuant to the Agreement, we acquired a non-exclusive right to
use the “Second City” trademark in connection with the distribution of the Film,
in exchange for payment of a royalty to Second City equal to 10% of the producer
gross receipts, as defined in the agreement.  On May 19, 2010 Buzz
Kill executed a contest agreement with Reed Business Information and uPlaya
Music Intelligence Solutions, Inc., whereby uPlaya will provide hosting services
for a contest to select a song for BuzzKill,and the contest will be
co-branded and co-marketed from the media outlets of Variety, the weekly
entertainment-trade magazine published by Reed Business Information. The contest
runs through November 30, 2010.





Results
of Operations





For the
quarter ended September 30, 2010 and since our date of inception (March 15,
2007), we have not generated any operating revenues. We do not anticipate
generating operating revenues in the near future. We are
presently in the development stage of our business and we can provide no
assurance that we will make any money on the films we produce.




17


We
incurred total operating expenses of $65,667 and $150,195 for the three and nine
month periods ended September 30, 2010, as compared to total operating expenses
of $18,719 and $99,695 for the three and nine month periods ended September 30,
2009. The increase in total operating expenses was due to increase in legal and
other professional fees incurred in connection with ongoing SEC filing
requirements.





We have
generated no operating revenues since our inception and our net loss from
inception through September 30, 2010 was $(528,324).





Liquidity
and Capital Resources





The
report of our independent registered accounting firm on our audited consolidated
financial statements for the fiscal year ended December 31, 2009 contains a
going concern qualification as we have suffered losses since our inception. We
have minimal assets and have achieved no revenues since our inception. We have
depended on loans and sales of equity securities to conduct operations. As of
September 30, 2010 and December 31, 2009, we had cash of $558 and $0,
respectively, current assets of $558 and $0, respectively, and current
liabilities of $721,264 and $718,966, respectively. Unless and until we achieve
material revenues, we will remain dependent on financings to continue our
operations.





From July
to October 2007, our wholly-owned subsidiary, Buzz Kill, issued an aggregate
principal amount of $160,000 of its 10% notes (the “2007 Notes”).  The
2007 Notes had an interest rate of 10%, compounded monthly, and a maturity date
of three years from the date of issuance.  Upon repayment of the 2007
Notes, in addition to the outstanding principal balance and all accrued and
unpaid interest, the noteholders will be entitled to receive (i) a premium equal
to 20% of the original principal amount, and (ii) contingent compensation equal
to 12% of the “net proceeds” of the Film. Proceeds from the 2007 Notes were used
to finance the production of the Film.  On July 26, 2010 one of the
2007 Notes in the principal amount of $50,000 matured, and the holder agreed to
extend the maturity date to July 26, 2012.  On August 1, 2010 two of
the 2007 Notes, each in the principal amount of $5,000 matured and the holders
agreed to extend the maturity dates to August 1, 2012.





One of
the 2007 Notes in the principal amount of $100,000, bearing 10% interest, was
set to mature on October 17, 2010, and the holder agreed on September 10, 2010
to extend the maturity date to October 17, 2012.





On
September 10, 2010, Buzz Kill issued a 10% senior note due April 15, 2012 in the
principal amount of $15,000 (the “Senior Note”) to an unaffiliated third party
for that party’s $15,000 loan to Buzz Kill. As a condition to this loan, all of
the holders of the 2007 Notes and, in connection with the Hanna Loan (defined
below), Thomas Hanna, signed a subordination agreement pursuant to which payment
and performance of any and all obligations under the 2007 Notes and the Hanna
Loan are subordinated to the Senior Note. The related cash proceeds were
received on October 15, 2010.




18


As of
September 30, 2010, our Company also has (i) a demand loan payable to Thomas
Hanna in the amount of $40,000 (the “Hanna Loan”), (ii) a $70,000 loan payable
to an unaffiliated third party due July 28, 2011 and represented by an 10%
convertible promissory note dated January 29, 2010, and (iii) a $45,000 loan
payable to an unaffiliated third party due November 8, 2010 and represented by
an 8.25% convertible promissory note dated May 9, 2009.





We intend
to raise additional capital to provide financing for our marketing and
distribution activities.  Also, we will need to obtain additional
capital in order to maintain our public company regulatory requirements and
execute our business plan, build our operations and become profitable. In order
to obtain capital, we may need to sell additional shares of our common stock or
debt securities, or borrow funds from private lenders or banking institutions.
We have not made any decisions with respect to any such
financing.  There can be no assurance that we will be successful in
obtaining additional funding in amounts or on terms acceptable to us, if at
all.  If we are unable to raise additional funding as necessary, we
may have to suspend our operations temporarily or cease operations
entirely.





Milestone
to Achieve in the Next Twelve Months





Our major
objective in the next twelve months is to market the film with Indican Pictures
to maximize the film’s exposure leading up to and continuing through the film’s
distribution date while continuing to pursue other avenues of distribution,
including but not limited to theatrical and foreign of our first independent
feature film, “BuzzKill”. Principal
photography on the Film was completed in September 2007, and post-production was
completed in February 2008.





We are
currently engaged in the initial marketing of the Film.  The finished
Film will be entered into various film festivals in the U.S. and
abroad.  The fee for entering a film into a festival competition is
typically $200-300 per entry.  We believe this is the most
time-efficient and inexpensive means of (i) measuring audience response, (ii)
meeting film distributors both domestic and foreign, and (iii) formulating a
public relations campaign with print, TV and other media outlets. To date, we
have submitted the Film to a number of film festivals.  The Film won
the People’s Choice Award for Best Feature Film at the 2008 NJ State Film
Festival at Cape May and Best Director and Best Comedy Feature Honors at the Big
Easy Film Festival. The film was also selected to participate at this years
prestigious Hollywood Film Festival this past October.





Total
marketing and distribution costs are estimated at $200,000.  We hope
to reduce out-of-pocket expenses by entering into a distribution
agreement.  This distributor will market and distribute the Film in
exchange for a percentage of royalties.  This means that additional
out-of-pocket expense for marketing and sales would be minimal.  If we
are unable to contract with a distributor, we intend to finance these
expenditures through additional private equity or debt financing.





Our next
objective in the next twelve months is to complete the conception phase and
enter into the pre-production phase of a second feature film. As of the date of
this report, we have not identified our second project.




19


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





Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Exchange Act of 1934 (the “Exchange
Act”) is accumulated and communicated to the issuer's management, including its
principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure. It should be noted that the design of any system of controls is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions, regardless of how
remote.





The
management of Loreto Resources Corporation is responsible for establishing and
maintaining an adequate system of internal control over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with
the participation of our senior management, consisting of Luis F. Saenz, our
Chief Executive Officer and Interim Chief Financial Officer, we conducted an
evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act as of the end of the period covered by this report (the “Evaluation
Date”). Based on this evaluation, our chief executive officer and interim chief
financial officer concluded, as of the Evaluation Date, that our disclosure
controls and procedures were not effective because of the identification of what
might be deemed a material weakness in our internal control over financial
reporting which is identified below.




Our
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes of accounting
principles generally accepted in the United States.  Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance of achieving their control
objectives. In evaluating the effectiveness of our internal control over
financial reporting, our management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based
on this evaluation, our sole officer concluded that, during the period covered
by this quarterly report, our internal controls over financial reporting were
not operating effectively. Management did not identify any material weaknesses
in our internal control over financial reporting as of September 30, 2010;
however, it has identified the following deficiencies that, when aggregated, may
possibly be viewed as a material weakness in our internal control over financial
reporting as of that date:




20




1.
            We
      do not have an audit committee. While we are not currently obligated to
      have an audit committee, including a member who is an “audit committee
      financial expert,” as defined in Item 407 of Regulation S-K, under
      applicable regulations or listing standards; however, it is management’s
      view that such a committee is an important internal control over financial
      reporting, the lack of which may result in ineffective oversight in the
      establishment and monitoring of internal controls and
      procedures.




2.
            We
      did not maintain proper segregation of duties for the preparation of our
      financial statements. We currently only have one officer overseeing all
      transactions. This has resulted in several deficiencies including the lack
      of control over preparation of financial statements, and proper
      application of accounting policies:




Management
believes that the material weaknesses set forth the two items above did not have
an effect on our financial results. However, management believes that the lack
of a functioning audit committee and the lack of a majority of outside Directors
on our Board of Directors results in ineffective oversight in the establishment
and monitoring of required internal controls and procedures, which could result
in a material misstatement in our financial statements in future
periods.





Management's
Remediation Initiatives





In an
effort to remediate the identified material weaknesses and other deficiencies
and enhance our internal controls, we plan to initiate the following series of
measures once we have the financial resources to do so:





We will
create a position to segregate duties consistent with control objectives and
will increase our personnel resources and technical accounting expertise within
the accounting function when funds are available to us. And, we plan to appoint
one or more outside directors to our board of directors who shall be appointed
to an audit committee resulting in a fully functioning audit committee who will
undertake the oversight in the establishment and monitoring of required internal
controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.





Management
believes that the appointment of one or more outside Directors, who shall be
appointed to a fully functioning audit committee, would remedy the lack of a
functioning audit committee and a lack of a majority of outside directors on our
Board.





Changes
in Internal Control Over Financial Reporting





There
have been no changes in our internal control over financial reporting that
occurred during the last fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.




21


PART
II – OTHER INFORMATION





ITEM 1.
            LEGAL
      PROCEEDINGS





In the
ordinary course of our business, we may from time to time become subject to
routine litigation or administrative proceedings which are incidental to our
business. We are not a party to nor are we aware of any existing, pending or
threatened lawsuits or other legal actions involving us.





ITEM 1A.
            RISK
      FACTORS





Not
applicable.





ITEM
      2.
            UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS





We issued
no equity securities during the quarter ended September 30, 2010.





ITEM 3.
            DEFAULTS
      UPON SENIOR SECURITIES





None.





ITEM 4.
            (REMOVED
      AND RESERVED)





ITEM 5.
            OTHER
      INFORMATION





On August
6, 2010, Dylan Hundley resigned as our Vice President, Secretary and Director
and Kristie Rubendunst resigned as our Director, both resignations became
effective as of that date.  Neither Ms. Hundley nor Ms. Rubendunst had
any disagreement with us on any matter relating to our operations, policies or
practices.





ITEM 6.
            EXHIBITS.





The
following exhibits are included as part of this report:





Exhibit No.
                    
                    Description31.1
      / 31.2
                    
                    Certification
      of Principal Executive and Financial Officer pursuant to Section 302 the
      Sarbanes-Oxley Act of 200232.1
      / 32.2
                    
                    Certification
      of Principal Executive and Financial Officer pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002




22





SIGNATURES





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





November
15, 2010


EASTERN
      RESOURCES, INC.By:
                  /s/Thomas H. Hanna, Jr.Thomas
      H. Hanna, Jr., Principal Executiveand
      Principal Financial Officer




23