ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS
Certain statements contained in this Annual Report on Form 10-K, including, without limitation, statements using words such as "believe", "expect", "anticipate", "intend", "estimate", "plan", and words and expressions of similar import, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties, and our actual results could differ from those anticipated in such statements as a result of these risks and uncertainties. In addition to the uncertainties stated elsewhere in this report, the factors which could affect these forward-looking statements include, but are not limited to, adverse changes in general economic conditions, including adverse changes in the specific markets for our products, adverse business conditions, increased competition, pricing pressures, lack of success in marketing our products and services, and other factors. These forward-looking statements speak only as of the date of this report and readers are cautioned not to place undue reliance upon such statements.

The following discussion and analysis should be read in connection with the Company's consolidated financial statements and related notes thereto, as included in this report.

Overview

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

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

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

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

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

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

Results of Operation

SSC incurred a net loss of approximately $1,030,000 for the twelve months ended December 31 2008, and had a working capital deficit of approximately $961,000 as of December 31, 2008. These conditions create an uncertainty as to SSC's ability to continue as a going concern.

Cash provided by continuing operations and investing activities was approximately $9,000 and $11,000, respectively, for the year ended December 31, 2008. Cash used by discontinued operations was approximately $181,000 for the same period. The funds to cover these uses of cash were received against an advance agreement the company maintains with a related party lender.

SSC continues to rely on advances to fund operating shortfalls and does not foresee a change in this situation in the immediate future. There can be no assurance that SSC will continue to have such advances available. SSC will not be able to continue operations without them. SSC is pursuing alternate sources of financing.

Results of Operations for the years ended December 31, 2008 and 2007

Total Revenue and Gross Profit. The comparative statements of operations for the years ended December 31, 2008 and 2007, reflect no revenue as all revenue was generated by the Company's discontinued operations and has therefore been reclassified as "Loss from Discontinued Operations" on the attached Financial Statements.

Expenses. Total expenses decreased by 30% when comparing the years ended December 31, 2008 and 2007. The reduction is attributed mainly due to reductions in personnel, sales and marketing, a result of discounting the Company's legacy business operations.

Critical Accounting Policies

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

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Development Stage Enterprise - As a result of the Company's sale of ASPECT and SMSE, the Company is now considered a development stage enterprise pursuant to FASB Statement 7, which focuses on development stage companies. Users of the financial statements should be familiar with this statement and its effect on the financial statements.

Internal Revenue Service Tax Lien

During the second and third quarters of 2005, ASPECT, one of the Company's former subsidiaries, did not have the funds necessary to cover all the payroll taxes. In January 2006, the Internal Revenue Service ("IRS") placed a lien on ASPECT assets. A third party accounting firm which represented ASPECT, in the due process hearing, negotiated an installment plan to settle the outstanding liability. Payments were tendered from this third party firm on behalf of the Company's largest shareholder and holder of a line of credit with ASPECT. The balance due at December 31, 2008 is approximately $38,000.

Liquidity and Capital Resources

Cash provided by operating activities was approximately $9,000 for the year ended December 31, 2008. During the year ended December 31, 2008, the Company borrowed an additional approximately $71,000 under a finance agreement from a related-party lender.

Going Concern

The Company's ability to continue as a going concern is an issue raised as a result of the significant operating losses incurred during the years ended December 31, 2008 and 2007 and its negative working capital. The Company continues to experience net operating losses. The ability to continue as a going concern is subject to the Company's ability to obtain necessary funding from outside sources, including obtaining additional funding from the sale of securities, increasing sales, or obtaining loans and grants from various financial institutions where possible.

Additional Financing

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