UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)
[X]  Annual report under section 13 or 15(d) of the Securities Exchange Act of
     1934 for the fiscal year ended August 31, 2000

[ ]  Transition report under  section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 for the transition period from ____ to ____.

                           Commission File No: 0-23559

                         SUNBURST ACQUISITIONS III, INC.
                 (Name of small business issuer in its charter)

         COLORADO                                           84-1432001
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                         Identification No.)


                   4807 S. ZANG WAY, MORRISON, COLORADO 80465
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (303)979-2404

           Securities registered under Section 12(b) of the Act: NONE

Securities registered under Section 12(g) of the Act: COMMON STOCK, NO PAR VALUE

Check  whether the issuer (1) 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. Yes |X| No |_|

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. |_|

Issuer's revenues for its most recent fiscal year: $  -0-

Aggregate market value of voting stock held by non-affiliates as of November 30,
2000:  -0-

Number of shares of Common Stock outstanding as of November 30, 2000: 33,303,840

Documents incorporated by reference: NONE


<PAGE>



                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS.
--------------------------------------------------------------------------------


GENERAL

The Company was  incorporated  under the laws of the State of Colorado on August
27, 1997, and is in the early  developmental and promotional stages. To date the
Company's only  activities  have consisted of the raising of capital and efforts
to seek one or more  properties or businesses for  acquisition.  The Company has
not commenced any commercial operations.  The Company has no full-time employees
and owns no real estate.

The  Company's  business  plan has always  been to seek,  investigate,  and,  if
warranted, acquire one or more properties or businesses. Such an acquisition may
be made by purchase,  merger, exchange of stock, or otherwise, and may encompass
assets  or  a  business  entity,  such  as  a  corporation,  joint  venture,  or
partnership.  The Company has very limited capital,  and it is unlikely that the
Company  will  be able  to  take  advantage  of  more  than  one  such  business
opportunity.  The  Company  intends  to  seek  opportunities  demonstrating  the
potential of long-term growth as opposed to short-term earnings.

AMERICAN RECRUITMENT CONFERENCES/WORKSEEK

As of August  30,  1999,  the  Company  entered  into an  Agreement  and Plan of
Reorganization  with  American  Recruitment  Conferences,   Inc.,  a  California
corporation ("ARC"), and Workseek.com,  a California  corporation  ("Workseek").
ARC and Workseek,  which are  affiliated  companies,  were to be acquired by the
Company in a reverse acquisition  transaction,  resulting in the shareholders of
ARC and Workseek  obtaining  control over the Company.  A series of transactions
were  contemplated by the Agreement,  including  implementation  of a 16.16-to-1
forward split,  voluntary  surrender for  cancellation of shares by the existing
shareholders of the Company,  and issuance of new shares to the ARC and Workseek
shareholders.

In contemplation of the ARC/Workseek acquisition, shares of the Company's Common
Stock were sold in a private  placement in August and September  1999,  with the
proceeds loaned to ARC. A total of 1,000,000  shares were sold for $1,400,000 in
cash and $600,000 in receivables  assigned to the Company.  The promissory  note
from ARC and  Workseek  evidencing  the loan was due  January 23,  2000,  and is
secured by the accounts, equipment, general intangibles,  inventory,  negotiable
collateral, assets, and proceeds therefrom of ARC and Workseek.

As of November 30, 2000, the proposed  transaction had not been  consummated and
the loan had not been repaid.  The Company is in the process of  foreclosing  on
its security interest,  but recovery of the amount due under the promissory note
is doubtful.  Accordingly,  the promissory  note receivable has been offset by a
full allowance for realization.




                                        2

<PAGE>



ADMINISTRATIVE OFFICES

The Company currently maintains a mailing address at 4807 S. Zang Way, Morrison,
Colorado  80465,  which is the office  address of its  President.  The Company's
telephone number there is (303) 979-2404.  Other than this mailing address,  the
Company does not currently  maintain any other office  facilities,  and does not
anticipate  the  need  for  maintaining  office  facilities  at any  time in the
foreseeable  future.  The Company pays no rent or other fees for the use of this
mailing address.

EMPLOYEES

The Company is a  development  stage  company and  currently  has no  employees.
Management of the Company expects to use consultants,  attorneys and accountants
as necessary,  and does not anticipate a need to engage any full-time employees.
No remuneration will be paid to the Company's officers except as set forth under
"Executive   Compensation"   and  under  "Certain   Relationships   and  Related
Transactions."


ITEM 2.          DESCRIPTION OF PROPERTY.
--------------------------------------------------------------------------------


The Company currently maintains a mailing address at 4807 S. Zang Way, Morrison,
Colorado 80465, which is the address of its President.  The Company pays no rent
for the use of this mailing address,  however, for financial statement purposes,
the Company is accruing  $50 per month as  additional  paid-in  capital for this
use. The Company does not believe that it will need to maintain an office at any
time in the  foreseeable  future  in order to carry  out its plan of  operations
described herein. The Company's telephone number is (303) 979-2404.

The Company currently has no investments in real estate,  real estate mortgages,
or real estate  securities,  and does not anticipate making any such investments
in the future.  However, the policy of the Company with respect to investment in
real  estate  assets  could be changed in the future  without a vote of security
holders.


ITEM 3.  LEGAL PROCEEDINGS.
--------------------------------------------------------------------------------


The  Company  is not a  party  to any  pending  legal  proceedings,  and no such
proceedings are known to be contemplated,  other than any proceedings  resulting
from the Company's  decision to foreclose on its security interest in the assets
of ARC and Workseek.

No director,  officer or  affiliate  of the  Company,  and no owner of record or
beneficial  owner of more than 5.0% of the  securities  of the  Company,  or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material  interest  adverse to the Company in  reference to
pending litigation.





                                        3

<PAGE>



ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
--------------------------------------------------------------------------------


No matters  were  submitted  to a vote of the  security  holders of the  Company
during the fourth quarter of the fiscal year which ended August 31, 2000.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
--------------------------------------------------------------------------------


Although the Company's shares have been approved for trading on the OTC Bulletin
Board since approximately November 19, 1998, under the trading symbol "SBSQ," no
actual  trading of such shares has occurred and no bid or asked prices have been
posted.  It is not anticipated that any actual trading activity will occur until
the Company has  completed a merger or  acquisition  transaction.  The Company's
securities are currently held of record by a total of approximately 62 persons.

No dividends have been declared or paid on the Company's  securities,  and it is
not  anticipated  that any dividends will be declared or paid in the foreseeable
future.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
--------------------------------------------------------------------------------


The Company  remains in the  development  stage.  Until it conducted the private
placement in contemplation of the ARC/Workseek  acquisition,  it had experienced
no significant change in liquidity or capital resources or stockholders'  equity
other than the  receipt  of  proceeds  in the  amount of $8,000  from its inside
capitalization  funds,  and the  expenditure of such funds in furtherance of the
Company's business plan,  including primarily  expenditure of funds to pay legal
and  accounting  expenses.  Consequently,  the  Company's  balance sheet for the
fiscal year ended August 31, 2000, reflects a current asset value of $338.

RESULTS OF OPERATIONS

During the period from August 27, 1997 (inception)  through August 31, 1998, the
Company  engaged  in  no  significant   operations  other  than   organizational
activities,  acquisition of capital,  preparation and filing of the registration
of its  securities  under  the  Securities  Exchange  Act of 1934,  as  amended,
compliance  with its periodic  reporting  requirements,  and efforts to locate a
suitable  merger or  acquisition  candidate.  No revenues  were  received by the
Company during this period and the Company incurred a net loss of $10,305.

For the fiscal years ending August 31, 1999, the Company  incurred a net loss of
$9,031 as a result of expenses  associated  with  compliance  with the reporting
requirements  of the Securities  Exchange Act of 1934,  and expenses  associated
with locating and evaluating acquisition candidates.

For the fiscal year ending August 31, 2000,  the Company  incurred a net loss of
$2,022,917,  primarily as a result of the $2,000,000  valuation  allowance taken
against the promissory note from ARC and

                                        4

<PAGE>



Workseek. Legal fees of $9,292 were incurred as a result of the negotiations and
dealings  with  ARC  and  Workseek  and  compliance  with  the  SEC's  reporting
requirements.

The Company  anticipates that until a business  combination is completed with an
acquisition  candidate,  it will not generate revenues.  It may also continue to
operate at a loss after  completing a business  combination,  depending upon the
performance of the acquired business.

NEED FOR ADDITIONAL FINANCING

The Company will require  additional capital in order to meet its cash needs for
the next year,  including the costs of compliance with the continuing  reporting
requirements of the Securities Exchange Act of 1934, as amended.

No specific commitments to provide additional funds have been made by management
or  other  stockholders,  and  the  Company  has no  current  plans,  proposals,
arrangements  or  understandings  with  respect  to  the  sale  or  issuance  of
additional  securities  prior  to  the  location  of  a  merger  or  acquisition
candidate. Accordingly, there can be no assurance that any additional funds will
be available to the Company to allow it to cover its  expenses.  Notwithstanding
the foregoing,  to the extent that  additional  funds are required,  the Company
anticipates  receiving  such  funds in the  form of  advancements  from  current
shareholders  without  issuance of  additional  shares or other  securities,  or
through the private  placement of  restricted  securities  rather than through a
public offering.  The Company does not currently contemplate making a Regulation
S offering.

The Company may also seek to  compensate  providers  of services by issuances of
stock in lieu of cash. For  information as to the Company's  policy in regard to
payment for consulting services, see "Certain Relationships and Transactions."


ITEM 7.  FINANCIAL STATEMENTS.
--------------------------------------------------------------------------------


See the pages beginning with F-1.


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.
--------------------------------------------------------------------------------


The  Company  has  had no  change  in,  or  disagreements  with,  its  principal
independent accountant since the date of inception.








                                        5

<PAGE>



                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
--------------------------------------------------------------------------------


The  directors  and  executive  officers  currently  serving  the Company are as
follows:

NAME               AGE              POSITIONS HELD AND TENURE

Jay Lutsky         58               President and a Director since August, 1997

Michael R Quinn    77               Secretary, Treasurer, and a Director since
                                    August, 1997

The  directors  named  above will  serve  until the next  annual  meeting of the
Company's stockholders. Thereafter, directors will be elected for one-year terms
at the annual stockholders'  meeting.  Officers will hold their positions at the
pleasure of the board of directors,  absent any employment  agreement,  of which
none  currently  exists  or  is   contemplated.   There  is  no  arrangement  or
understanding  between any of the  directors  or officers of the Company and any
other person  pursuant to which any director or officer was or is to be selected
as a director or officer.

The directors and officers will devote their time to the Company's affairs on an
"as needed" basis,  which,  depending on the  circumstances,  could amount to as
little as two hours per month, or more than forty hours per month, but more than
likely will fall within the range of five to ten hours per month.

BIOGRAPHICAL INFORMATION

JAY LUTSKY

Mr.  Lutsky has served as President  and as a Director of the Company  since its
inception.  From 1968 to 1974,  Mr. Lutsky was employed at United Bank of Denver
in various management positions,  including Guaranteed Check Manager,  Corporate
Programs Manager and Executive  Lending  Officer.  From April 1974 through April
1980, Mr. Lutsky was involved in the  publishing  and ski  promotions  business,
serving as President of Mountain States Ski Association,  a company he helped to
start.  From  August 1983  through  September  1985,  Mr.  Lutsky  worked in the
positions of General Manager of the SumFun Program,  Regional marketing Manager,
and Investor  Relations Manager for Gold C Enterprises,  Inc., a publicly-traded
Colorado  corporation that published  discount coupon books.  Since May of 1980,
Mr. Lutsky has done business as Dolphin & Associates,  a private consulting firm
and he has managed his personal investment portfolio.

Mr.  Lutsky  has  served on the  board  and been  president  of  several  public
companies.  From December 1986 through May, 1990, Mr. Lutsky served as president
of Eagle  Venture  Acquisitions,  Inc.  ("Eagle").  Eagle  merged  with  Network
Financial  Services,  Inc.  ("Network") in May 1990. Mr. Lutsky continued on the
board of Network which traded on the NASDAQ  system until  December,  1993.  Mr.
Lutsky was a vice-president  and served on the board of Starlight  Acquisitions,
Inc.

                                        6

<PAGE>



("Starlight")  a  blank  check  offering.  Starlight  merged  with  Toucan  Gold
Corporation  ("Toucan"),  TUGO- Bulletin  Board, on May 10, 1996. Mr. Lutsky now
serves  as an  advisor  to the  current  board of  directors  of  Toucan.  Until
November,  1997,  Mr. Lutsky was an officer and served on the board of directors
of Gatwick,  Ltd., a Regulation A public company.  In November,  1997,  Gatwick,
Ltd.,  changed  its  name  to  AIM  Smart  Corporation  and  completed  a  share
acquisition transaction with Smart AIM Corporation, a Michigan corporation.  Mr.
Lutsky also currently serves on the board of directors of Sunburst  Acquisitions
V, Inc.,  Sunburst  Acquisitions VI, Inc.,  Sunburst  Acquisitions VII, Inc. and
Sunburst  Acquisitions  VIII,  Inc.,  all of which are blind pool or blank check
companies he has formed in conjunction with Mr. Quinn.

He earned a Bachelor of Science degree from Kent State University in 1967.

MICHAEL R. QUINN

Mr.  Quinn  has  served as  Secretary  and  Director  of the  Company  since its
inception.  He has been involved with several  development  stage companies.  He
consults with companies  contemplating trading publicly and his services consist
of corporate structuring, management, accounting, productions, sales, etc.

Mr. Quinn earned the degrees of Metallurgical  Engineer and Engineer of Mines at
the Colorado School of Mines in 1946. He did graduate work and was employed as a
research assistant at MIT.

Over the last six years,  Mr. Quinn has served as a consultant to equity holders
involved in a  bankruptcy  case,  as a  consultant  and lead  plaintiff in three
lawsuits, all of which have resulted in favorable decisions for the plaintiff.

He served as  President,  Treasurer and Director of O.T.C.  Capital  Corporation
("OTC").  OTC acquired Capital 2000 and is currently actively trading.  He was a
founder  of  American  Leverage,  Inc.,  and was its  Secretary/Treasurer  and a
Director  until  American  Leverage,  Inc.  acquired Data  National  Corporation
("Data"). Data is active, profitable and in a growth mode. Until November, 1997,
Mr. Quinn was an officer and served on the board of directors of Gatwick,  Ltd.,
a Regulation A public company.  In November,  1997,  Gatwick,  Ltd., changed its
name to AIM Smart Corporation and completed a share acquisition transaction with
Smart AIM Corporation,  a Michigan corporation.  Mr. Quinn also currently serves
on  the  board  of  directors  of  Sunburst   Acquisitions  IV,  Inc.,  Sunburst
Acquisitions V, Inc., Sunburst Acquisitions VI, Inc., Sunburst Acquisitions VII,
Inc. and Sunburst  Acquisitions VIII, Inc., all of which are blind pool or blank
check companies he has formed in conjunction with Mr. Lutsky.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Jay Lutsky  and  Michael R.  Quinn are  subject to the report  their  beneficial
ownership of the Company's  securities  under Section 16(a) of the Exchange Act.
Each was  required  to file an Initial  Statement  of  Beneficial  Ownership  of
Securities on Form 3 at the time of the registration of the Company's securities
under Section 12(g) of the Exchange Act. To the best knowledge and belief of the
Company, such persons made a late filing of Form 3.

                                        7

<PAGE>




ITEM 10. EXECUTIVE COMPENSATION.
--------------------------------------------------------------------------------


No officer or director  received any  remuneration  from the Company  during the
fiscal year. Until the Company acquires  additional  capital, it is not intended
that any officer or director  will receive  compensation  from the Company other
than reimbursement for out-of-pocket expenses incurred on behalf of the Company.
See "Certain  Relationships and Related  Transactions." The Company has no stock
option,  retirement,  pension,  or  profit-sharing  programs  for the benefit of
directors, officers or other employees, but the Board of Directors may recommend
adoption of one or more such programs in the future.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
--------------------------------------------------------------------------------


The following table sets forth, as of November 30, 2000, the number of shares of
Common Stock owned of record and beneficially by executive  officers,  directors
and  persons  who  hold  5.0% or more of the  outstanding  Common  Stock  of the
Company.  Also  included  are the  shares  held by all  executive  officers  and
directors as a group.
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
                                 NUMBER OF SHARES              PERCENT OF
NAME AND ADDRESS                OWNED BENEFICIALLY           CLASS OWNED (1)<F1>
--------------------------------------------------------------------------------
<S>                                 <C>                          <C>
Jay Lutsky                          13,057,280                   39.21%
4807 S. Zang Way
Morrison, Colorado 80465
--------------------------------------------------------------------------------
Michael R. Quinn                    13,024,960                   39.11%
2082 Cherry Street
Denver, Colorado 80207
--------------------------------------------------------------------------------
All directors and executive         26,082,240                   78.32%
officers (2 persons)
--------------------------------------------------------------------------------
<FN>
(1)<F1>  Based on 33,303,840 shares outstanding.
</FN>
</TABLE>



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
--------------------------------------------------------------------------------


INDEMNIFICATION OF OFFICERS AND DIRECTORS

As permitted by Colorado law, the Company's  Articles of  Incorporation  provide
that the Company will indemnify its directors and officers  against expenses and
liabilities  they incur to defend,  settle,  or  satisfy  any civil or  criminal
action  brought  against  them on account of their being or having been  Company
directors  or officers  unless,  in any such  action,  they are adjudged to have
acted with gross negligence or willful  misconduct.  Insofar as  indemnification
for  liabilities  arising under the  Securities  Act of 1933 may be permitted to
directors, officers or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that, in the opinion of the

                                        8

<PAGE>



Securities  and Exchange  Commission,  such  indemnification  is against  public
policy as expressed in that Act and is, therefore, unenforceable.

EXCLUSION OF LIABILITY

Pursuant  to  the  Colorado   Corporation   Code,  the  Company's   Articles  of
Incorporation  exclude personal liability for its directors for monetary damages
based upon any violation of their  fiduciary  duties as directors,  except as to
liability  for any breach of the duty of loyalty,  acts or omissions not in good
faith or which involve  intentional  misconduct  or a knowing  violation of law,
acts in violation of Section  7-5-114 of the Colorado  Corporation  Code, or any
transaction from which a director receives an improper  personal  benefit.  This
exclusion of liability  does not limit any right which a director may have to be
indemnified  and does not  affect  any  director's  liability  under  federal or
applicable state securities laws.

CONFLICTS OF INTEREST

None of the  officers of the Company will devote more than a portion of his time
to  the  affairs  of  the  Company.  There  will  be  occasions  when  the  time
requirements  of  the  Company's  business  conflict  with  the  demands  of the
officers' other business and investment  activities.  Such conflicts may require
that the Company attempt to employ additional  personnel.  There is no assurance
that the services of such persons will be available or that they can be obtained
upon terms favorable to the Company.

Each of the Company's  officers and directors also are officers,  directors,  or
both of several other Colorado based  development-stage  corporation in the same
business as the Company.  These companies may be in direct  competition with the
Company for  available  opportunities.  However,  as of the end of the Company's
fiscal year, each of these entities had  substantially  the same shareholders as
the Company,  which means that there was no actual conflict of interest  between
the Company and these other entities as of that time.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
--------------------------------------------------------------------------------


(a)      The Exhibits listed below are filed as part of this Annual Report.
<TABLE>
<CAPTION>
   EXHIBIT NO.                            DOCUMENT
       <S>          <C>
       3.1          Articles of Incorporation (1)<F1>
       3.2          Bylaws (1)<F1>
       4.1          Specimen Common Stock Certificate (1)<F1>
       4.2          Specimen Class A Convertible Preferred Stock Certificate (1)<F1>
       10.1         Agreement and Plan of Reorganization (2)<F2>
       10.2         American Recruitment Conferences/Workseek Loan Documents (2)<F2>


                                        9

<PAGE>



   EXHIBIT NO.                                                  DOCUMENT

        27          Financial Data Schedule
---------------
<FN>
(1)<F1>  Incorporated  by  reference  from the  Registration  Statement  on Form
         10-SB/A filed with the Securities  and Exchange  Commission on December
         29, 1997).
(2)<F2>  Incorporated  by  reference to the  exhibits  filed with the  Company's
         annual report on Form 10-KSB for the fiscal year ended August 31, 1999.
</FN>
</TABLE>


(b)      No  reports  on Form 8-K  were  filed by the  Company  during  the last
         quarter of its fiscal year ending August 31, 2000.


                                                    SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                    SUNBURST ACQUISITIONS III, INC.


Date: December 6, 2000              By: /s/ JAY LUTSKY
                                       -----------------------------------------
                                         Jay Lutsky, President

In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.



Date: December 6, 2000              /s/ JAY LUTSKY
                                    --------------------------------------------
                                    Jay Lutsky
                                    (Principal Executive Officer and Director)


Date: December 6, 2000              /s/ MICHAEL R. QUINN
                                    --------------------------------------------
                                    Michael R. Quinn
                                    (Principal Financial and Accounting Officer
                                    and Director)



                                       10

<PAGE>


                         SUNBURST ACQUISITIONS III, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                              FINANCIAL STATEMENTS

                                 AUGUST 31, 2000




<PAGE>


                                    CONTENTS




                                                                        PAGE


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                F-1

BALANCE SHEET                                                           F-2

STATEMENTS OF OPERATIONS                                                F-3

STATEMENT OF STOCKHOLDERS' EQUITY                                       F-4

STATEMENTS OF CASH FLOWS                                                F-5

NOTES TO FINANCIAL STATEMENTS                                       F-6 TO F-8


<PAGE>



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



The Board of Directors and Stockholders of
Sunburst Acquisitions III, Inc.


We have audited the  accompanying  balance sheet of Sunburst  Acquisitions  III,
Inc.  (a  development  stage  company)  as of August 31,  2000,  and the related
statements of operations,  stockholders'  equity, and cash flows for each of the
two years then ended and for the period  from  inception  (August  27,  1997) to
August 31,  2000.  These  financial  statements  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Sunburst Acquisitions III, Inc.
as of August 31, 2000, and the results of its operations and cash flows for each
of the two years then ended and for the period from inception  (August 27, 1997)
to August 31, 2000 in conformity with generally accepted accounting principles.

Denver, Colorado
December 4, 2000
                                                         /S/ COMISKEY & COMPANY
                                                        PROFESSIONAL CORPORATION


                                      F-1
<PAGE>
                        SUNBURST ACQUISITIONS III, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEET
                                AUGUST 31, 2000
<TABLE>
<CAPTION>

   ASSETS
<S>                                                                  <C>
CURRENT ASSETS
   Cash and cash equivalents                                         $       338
   Note receivable (net of valuation allowance of $2,000,000)                  -
                                                                     ------------
      Total current assets                                                   338

      TOTAL ASSETS                                                   $       338
                                                                     ============

   LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
   Accounts payable                                                  $    20,847
                                                                     ------------
      Total current liabilities                                           20,847

STOCKHOLDERS' DEFICIT
   Preferred stock, no par value; 20,000,000 shares
      authorized; No shares issued and outstanding                           -
   Common stock, no par value; 100,000,000
      shares authorized; 33,303,840 shares issued and
      outstanding                                                      2,020,435
   Additional paid-in capital                                              3,244
                                                                     ------------
   Deficit accumulated during the development stage                   (2,044,188)
                                                                     ------------
      Total stockholders' deficit                                        (20,509)
                                                                     ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                    $       338
                                                                     ============
</TABLE>


    The accompanying notes are an integral part of the financial statements.

                                      F-2
<PAGE>

                        SUNBURST ACQUISITIONS III, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                          For the period
                                          from inception       For the year     For the year
                                        (August 27, 1997)         ended            ended
                                          to August 31,        August 31,        August 31,
                                              2000                2000              1999
                                        -----------------     -------------     -------------
<S>                                       <C>                 <C>               <C>
REVENUES                                  $        -          $        -        $        -
                                          -------------       -------------     -------------
EXPENSES
   Amortization                                    300                 -                 240
   Consulting fees                               4,935                 -                 -
   General office                                  966                 162               296
   Legal fees                                   17,678              10,193             4,317
   Professional fees                            13,706               9,292             2,297
   Rent                                          1,800                 600               600
   Taxes and licenses                              107                 -                 -
   Transfer agent                                4,696               2,670             1,281
   Valuation allowance                       2,000,000           2,000,000               -
                                          -------------       -------------     -------------
      Total expenses                         2,044,188           2,022,917             9,031
                                          -------------       -------------     -------------

NET LOSS                                    (2,044,188)         (2,022,917)           (9,031)

Accumulated deficit

   Balance, beginning of period                    -               (21,271)          (12,240)
                                          -------------       -------------     -------------
   Balance, end of period                 $ (2,044,188)       $ (2,044,188)     $    (21,271)
                                          =============       =============     =============

NET LOSS PER SHARE                        $       (NIL)       $       (NIL)     $       (NIL)
                                          =============       =============     =============

WEIGHTED AVERAGE NUMBER OF
   SHARES OUTSTANDING                       35,219,703          33,342,176        38,313,589
                                          =============       =============     =============
</TABLE>

    The accompanying notes are an integral part of the financial statements.
                                      F-3


<PAGE>

                        SUNBURST ACQUISITIONS III, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                       STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                                                                            Deficit
                                                                                                          accumulated
                                    Preferred stock          Common stock        Common      Additional   during the      Total
                                   Number of             Number of                Stock        paid-in    development  stockholders'
                                    shares     Amount     shares      Amount    Subscribed     capital       stage         equity
                                   --------   -------  ------------  ---------  -----------     -----     -----------   -----------
<S>                                <C>        <C>      <C>           <C>        <C>             <C>       <C>           <C>
Preferred stock issued for
   cash, August 27,1997 at
   $0.001 per share                 80,000     8,000           -           -           -          -              -           8,000

Common stock issued for
   services, August 27, 1997 at
   $0.000062 per share                 -         -      31,269,600       1,935         -          -              -           1,935

Net loss for the period ended
August 31, 1997                        -         -             -           -           -          -           (1,935)       (1,935)
                                   --------   -------  ------------  ---------  -----------     -----     -----------   -----------
Balance, August 31, 1997            80,000     8,000    31,269,600       1,935         -          -           (1,935)        8,000

Rent at no charge                      -         -             -           -           -          600            -             600

Common stock issued for
   services, July 1998 at
   $0.00186 per share                  -         -       1,616,000       3,000         -          -              -           3,000

Net loss for the year ended
August 31, 1998                        -         -             -           -           -          -          (10,305)      (10,305)
                                   --------   -------  ------------  ---------  -----------     -----     -----------   -----------
Balance, August 31, 1998            80,000     8,000    32,885,600       4,935         -          600        (12,240)        1,295

Rent at no charge                      -         -             -           -           -          600            -             600

Common stock issued for
   cash, January 1999 at
   $0.00155 per share                  -         -       4,848,000       7,500         -          -              -           7,500

Preferred stock converted to
   common, May 1999 at
   $0.00309 per share              (80,000)   (8,000)    2,585,600       8,000         -          -              -             -

Common stock subscribed,
   year ended August 31, 1999          -         -             -           -     2,000,000        -              -       2,000,000

Net loss for the year ended
August 31, 1999                        -         -             -           -           -          -           (9,031)       (9,031)
                                   --------   -------  ------------  ---------  -----------     -----     -----------   -----------
Balance, August 31, 1999               -         -      40,319,200      20,435   2,000,000      1,200        (21,271)    2,000,364

Issuance of common stock
   subscribed, September 1999
   at $2.00 per share                  -         -       1,000,000   2,000,000  (2,000,000)       -              -             -

Voluntary cancellation of
   outstanding shares,
   September 1999                      -         -      (8,015,360)        -           -          -              -             -

Rent at no charge                      -         -             -           -           -          600            -             600

Expenses paid by shareholder           -         -             -           -           -        1,444            -           1,444

Net loss for the year ended
August 31, 2000                        -         -             -           -           -          -       (2,022,917)   (2,022,917)
                                   --------   -------  ------------  ---------  -----------     -----     -----------   -----------
Balance, August 31, 2000               -         -      33,303,840   2,020,435         -        3,244     (2,044,188)      (20,509)

</TABLE>


    The accompanying notes are an integral part of the financial statements

                                      F-4
<PAGE>


                        SUNBURST ACQUISITIONS III, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                For the period
                                                                from inception       For the year     For the year
                                                               (August 27, 1997)         ended            ended
                                                                 to August 31,        August 31,        August 31,
                                                                     2000                2000              1999
                                                               -----------------     -------------    ------------
<S>                                                              <C>                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                         $(2,044,188)        $(2,022,917)       $(9,031)
Adjustments to reconcile
   net loss to net cash flows
   from operating activities:
      Amortization                                                       300                 -              240
      Rent expense                                                     1,800                 600            600
      Stock issued for consulting fees                                 4,935                 -              -
      Decrease in prepaid expenses                                       -                   -              474
      Decrease in accounts receivable
         - related party                                                 -                   -              103
      Increase in accounts payable                                    20,847              19,699          1,148
      Decrease in accounts payable
         - related party                                                 -                   -             (495)
                                                                 ------------        ------------       --------
            Net cash flows from operating activities              (2,016,306)         (2,002,618)        (6,961)

CASH FLOWS FROM INVESTING ACTIVITIES
   Increase in organization costs                                       (300)                -              -
   Cash in escrow                                                        -             1,271,000            -
                                                                 ------------        ------------       --------
            Net cash flows from investing activities                    (300)          1,271,000            -

CASH FLOWS FROM FINANCING ACTIVITIES
   Issuance of common stock                                        2,007,500           2,000,000          7,500
   Issuance of preferred stock                                         8,000                 -              -
   Additional paid-in capital                                          1,444               1,444
   Common stock subscribed                                               -            (1,271,000)           -
                                                                 ------------        ------------       --------

            Net cash flows from financing activities               2,016,944             730,444          7,500
                                                                 ------------        ------------       --------
NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                                                  338              (1,174)           539

CASH AND CASH EQUIVALENTS,
   BEGINNING OF PERIOD                                                   -                 1,512            973
                                                                 ------------        ------------       --------
CASH AND CASH EQUIVALENTS,
   END OF PERIOD                                                 $       338         $       338        $ 1,512
                                                                 ============        ============       ========
</TABLE>
    The accompanying notes are an integral part of the financial statements.

                                      F-5
<PAGE>

                        SUNBURST ACQUISITIONS III, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2000


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     DEVELOPMENT STAGE COMPANY
     Sunburst   Acquisitions  III,  Inc.  (a  development  stage  company)  (the
     "Company")  was  incorporated  under the laws of the State of  Colorado  on
     August 27, 1997. The initial  principal  office of the  corporation is 4807
     South Zang Way, Morrison, Colorado 80465.

     The  Company is a new  enterprise  in the  development  stage as defined by
     Statement No. 7 of the  Financial  Accounting  Standards  Board and has not
     engaged  in any  business  other  than  organizational  efforts.  It has no
     full-time  employees  and owns no real  property.  The  Company  intends to
     operate as a capital market access corporation by registering with the U.S.
     Securities and Exchange  Commission  under the  Securities  Exchange Act of
     1934.  After  this,  the  Company  intends to seek to  acquire  one or more
     existing  businesses  which have  existing  management,  through  merger or
     acquisition.  Management  of the  Company  will  have  virtually  unlimited
     discretion  in  determining  the business  activities  in which the Company
     might engage.

     On August 30,  1999,  the Company  entered  into an  Agreement  and Plan of
     Reorganization ("Agreement") by and among the Company, Sunburst Subsidiary,
     Inc., a California corporation ("Subsidiary"),  WorkSeek.com,  a California
     corporation  ("WorkSeek")  and American  Recruitment  Conferences,  Inc., a
     California corporation ("American").  The Agreement contemplates the merger
     of American and WorkSeek into Subsidiary.  The proposed merger has not been
     consummated. See Note 6.

     ACCOUNTING METHOD
     The Company records income and expenses on the accrual method.

     LOSS PER SHARE
     Loss per share was computed using the weighted  average number of shares of
     common stock outstanding during the period.

     ORGANIZATION COSTS
     Costs  to  incorporate  the  Company  were  originally  capitalized  to  be
     amortized  over a sixty-month  period.  With the adoption of SOP 98-5,  the
     unamortized  portion of these costs was  written off to expense  during the
     year ended August 31, 1999.

     FINANCIAL INSTRUMENTS
     Unless  otherwise  indicated,  the fair  value of all  reported  assets and
     liabilities which represent  financial  instruments (none of which are held
     for trading purposes) approximate the carrying values of such amounts.

     STATEMENT OF CASH FLOWS
     For purposes of the  statement  of cash flows,  the Company  considers  all
     highly liquid debt instruments purchased with an original maturity of three
     months or less to be cash equivalents.


                                      F-6

<PAGE>

                        SUNBURST ACQUISITIONS III, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2000


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
     USE OF ESTIMATES
     The  preparation of the Company's  financial  statements in conformity with
     generally accepted accounting  principles requires the Company's management
     to make estimates and assumptions that effect the amounts reported in these
     financial  statements and accompanying  notes.  Actual results could differ
     from those estimates.

     CONSIDERATION OF OTHER COMPREHENSIVE INCOME ITEMS
     SFAF 130 - Reporting  Comprehensive  Income,  requires companies to present
     comprehensive income (consisting  primarily of net income plus other direct
     equity  changes  and  credits)  and its  components  as  part of the  basic
     financial  statements.  For the year ended August 31, 2000,  the  Company's
     financial statements do not contain any changes in equity that are required
     to be reported separately in comprehensive income.

     STOCK BASIS
     Shares of  common  stock  issued  for  other  than cash have been  assigned
     amounts  equivalent to the fair value of the service or assets  received in
     exchange.

2.   STOCKHOLDERS' EQUITY
     As of August  29,  1999,  2,035,000  shares of the  Company's  no par value
     common stock had been issued for consulting services provided. The services
     were  converted  to shares at $0.001  per  share.  300,000  shares had been
     issued for cash at $0.025  per share,  and  160,000  additional  shares are
     outstanding as a result of the conversion of preferred  stock at $0.050 per
     share.

     On August 30, 1999, the Company underwent a 16.16 for 1 forward stock split
     of its then outstanding common shares. In addition,  and in anticipation of
     the merger  mentioned  above,  the Company sold in a private  placement,  a
     total of 1,000,000  post-split  common shares at $2.00 per share.  Proceeds
     were  received  in the form of  $1,400,000  cash and  $600,000  in assigned
     conversion  agreements,  under which  creditors  of American  had agreed to
     convert prior loans to American into common shares at the rate of $2.00 per
     share. The private placement was completed in September 1999.

     Officers and other stockholders also voluntarily cancelled 8,015,360 common
     shares as part of the agreement in September 1999.

     All share and per share amounts have been  restated.  A total of 33,303,840
     shares were outstanding at August 31, 2000.

     As of August 31,  2000,  all shares of the  Company's no par value Series A
     preferred stock have been converted to common stock.



                                      F-7
<PAGE>
                        SUNBURST ACQUISITIONS III, INC.
                         (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2000


3.   RELATED PARTY TRANSACTIONS
     Following the conversion of their preferred shares,  the Company's officers
     and directors were the owners of 26,082,240  shares of common stock.  These
     common shares owned by the directors  account for  approximately 78% of the
     Company's issued and outstanding shares.

     The  Company's  President  is  providing  office  space at no charge to the
     Company. For purposes of the financial statements,  the Company is accruing
     $50 per month as additional paid-in capital for this use.

4.   INCOME TAXES
     The Company has Federal net operating loss  carryforwards  of approximately
     $2,044,188  expiring  during  the years 2018 and 2020.  The tax  benefit of
     these net operating losses is approximately $389,162 and has been offset by
     a full allowance for realization. This carryforward may be limited upon the
     consummation of a business combination under IRC Section 381. For the years
     ended  August 31,  2000 and 1999,  the  valuation  allowance  increased  by
     approximately $385,067 and $1,740, respectively.

5.   STATEMENT OF CASH FLOWS
     Non cash  investing and  financing  activities  included the  assignment of
     notes   receivable  for  stock  in  the  amount  of  $600,000.   The  stock
     subscription receivable of $129,000 was collected in September 1999.

6.   NOTES RECEIVABLE
     In  connection  with the  Agreement,  the cash  proceeds  from the  private
     placement  were  advanced to American  pursuant  to a  promissory  note and
     security agreement in the amount of $1,400,000.  The loan, which is secured
     by all of  American's  right  title and  interest in  accounts,  equipment,
     general intangibles,  inventory,  negotiable collateral,  and proceeds from
     the  disposition of such  collateral,  was due and payable with interest at
     10% per year on January 23, 2000.  No payment has been made and  collection
     is doubtful.  The note  receivable  has been offset by a full allowance for
     realization.

     No  payment  has been  received  on the  $600,000  in  assigned  conversion
     agreements and a full allowance for realization has been recorded.

                                      F-8