**UNITED STATES**

Form 10-KSB

X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 29, 2004

_ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to _____

**SUNBURST ACQUISITIONS IV, INC.******

|Colorado                                       | 0-23561                  | 84-1431797                          
|---------------------------------------------- | ------------------------ | ------------------------------------
|(State or other jurisdiction of
incorporation) | (Commission File Number) | (IRS Employer Identification
Number)



|103 - 20120 64th Avenue 
Langley, B.C.,  Canada | V2Y 1M8   
|----------------------------------------------- | ----------
|(Address of principal executive offices)        | (Zip Code)

Registrant's telephone number, including area code:  (604) 533-9572

Securities to be registered under Section 12(b) of the Act:

Securities to be registered under Section 12(g) of the Act:

Check whether the issuer (1) filed all reports required to be filed by  Section 13 or 15(d) of the Securities
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.___

State issuer's revenue for its most recent fiscal year: $ 13,580.

State the aggregate market value of the voting stock held by non-affiliates computed by reference to the
price at which the stock was sold, or the average bid and asked priced of such stock, as of a specified date
within the past 60 days (See definition of affiliate in Rule 12b-2): $4,770,443 as of May 24, 2004.

Note: If determining whether a person is an affiliate will involve an unreasonable effort and expense, the
issuer may calculate the aggregate market value of the common equity held by non-affiliates on the basis
of reasonable assumptions, if the assumptions are stated.

(Issuers involved in bankruptcy proceedings during the past five years):

Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or
15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ____
No ____

(Applicable only to corporate registrants) State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:40,107,597as of May 24, 2004.

(Documents incorporated by reference. If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g. Part I, Part II, etc.) into which the document
is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3)
any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").  The
listed documents should be clearly described for identification purposes.

PART I

ITEM 1.   DESCRIPTION OF BUSINESS.

**Background**

We were incorporated under the laws of the State of Colorado on August 27, 1997.  We were
formed to seek out and acquire business opportunities.  In accordance with our business plan, we have
engaged in two separate acquisition transactions which are described below.  However, neither of these
transactions has resulted in the acquisition of a viable operating business.  As a result, as of the end of its
fiscal year ending February 29, 2004, we remain in the  development stage.

We have focused over the past two years on development of a business related to the  marketing,
distribution and sale of digital electronic ballasts, through our wholly-owned Canadian subsidiary,
Sunburst Digital, Inc.   However, due to problems with quality and delivery of the ballasts from the
manufacturer, we have also sought other opportunities.   On May 25, 2004, subsequent to the end of the
fiscal year, we completed a share exchange transaction with Sierra Minerals and Mining, Inc., a Nevada
corporation ("Sierra"), pursuant to which Sierra became our wholly-owned subsidiary.  Through our new
subsidiary, we now intend to seek to develop several mining properties in Mexico.

Prior Acquisitions

Prologic Systems, Inc.	In August 1999,  the Company invested $1,000,000 in Prologic Systems,
Inc., an Arizona corporation engaged in the business of providing systems integration services,
networking services, software development and applications software for the commercial market.  The
investment in Prologic was made in anticipation of a business combination with that company and as part
of that transaction, the Company acquired 3,459,972 shares of Prologic.  However, the agreement to
complete a business combination with Prologic was terminated prior to its consummation, and in March,
2000, the Company charged off its investment to operations.

In January, 2001, the Company entered into an agreement with Prologic to recover a portion of
its investment.  Pursuant to that agreement, on February 16, 2001, the Company completed the sale of
2,859,972 shares of stock in Prologic to Prologic, or its designees, for a total sales price of $400,000.
The sales price was paid $325,000 in cash at closing and $75,000 through Prologic's execution of a
promissory note.  The promissory note bears interest at the rate of 10% per annum and requires payments
of $25,000 principal, plus accrued interest, on each of April 12, 2001, July 12, 2001 and October 12,
2001.  Thus far, no payments have been received by the Company.

The Company retained ownership of a total of 600,000 shares of Prologic, which it has
subsequently sold.  See "Plan of Operations" below.  Such shares were "restricted securities" as defined
in Rule 144 under the Securities Act of 1933.  The terms of the agreement with Prologic required them to
file a registration statement in order to register the Company's shares for resale.  This registration
statement was not filed, and the shares were sold in accordance with the provisions of Rule 144(k).

HollywoodBroadcasting.com  On December 4, 2000, the Company completed the closing under
an Agreement for Share Exchange between it and HollywoodBroadcasting.com, Inc., a Nevada
corporation ("HB.C").  As a result of that closing, HB.C became a wholly-owned subsidiary of the
Company.

HB.C is a development stage company formed for the purpose of developing and producing
original entertainment and information programming for various media including domestic and foreign
broadcast, cable and satellite television, home video, DVD sales and rentals and the Internet.  The
primary focus of HB.C was intended to bedevelopment and production (or acquisition) of original
entertainment and information programs for webcasting over the Internet from its
HollywoodBroadcasting.com website.

HB.C and other content providers relied upon the availability of the specified revenue streams as
the platform for their business model.  The Company was not able to generate significant revenues from
any of the sources it relied upon in establishing its business model, and it is now apparent that the model
was based on false assumptions.On September 28, 2001, the Company completed the sale of its wholly
owned subsidiary Hollywoodbroadcasting.com for $1,000 in cash.  The Company has begun the process
of seeking out potential opportunities in other unrelated areas of business.

Current Business Activities

On February 27, 2002, we were assigned a sub-distributorship pursuant to a contract between
1357784 Ontario Ltd ("EPI") and Romlight International, Inc., a company based in Toronto, Ontario
Canada.  Pursuant to the sub-distributorship agreement, we became the exclusive worldwide distributor
to the hydroponics industry of a digital electronic lighting ballast.

Romlight developed the ballast and is also currently the sole manufacturer.  The Romlight
product is a digital electronic ballast which may be produced in various sizes ranging from 70 watts to
1,000 watts, and which is designed to replace the traditional core and coil ballasts required to drive
various types of lamp systems including High Density Discharge (HID) and Fluorescent lighting.  At the
core of the Romlight ballast system in the application and use of microprocessor technology and related
component software.

The technology gives the ballast a number of unique features.  It is a compact, modular and
lightweight design which is intended to be easy to install.  The light burns brighter and longer as
compared to other traditional types of ballasts, it does not produce heat and it is able to be controlled by a
dimmer.  In addition, various test results of which we have been advised claim to demonstrate that the
ballast can result in significant energy savings (ranging between 20-50%) as compared to traditional core
and coil ballasts.

Under the subdistributorship agreement with EPI, we had a annual purchase commitment of
100,000 units.  However,because of difficulties in obtaining delivery of finished product from the
manufacturer, during the fiscal year ending February 28, 2003,we took delivery of a total of only 500
400-watt ballasts. During the current fiscal year,  both the contract between EPI and Romlight
International and our sub-distributorship agreement were cancelled, and on April 2, 2003, our wholly-owned subsidiary, Sunburst Digital, Inc., signed an agreement directly with Romlight containing terms
and conditions substantially identical to the terms of the sub-distributorship agreement.  This new
agreement also includes an annual purchase commitment of 100,000 units, but it only becomes applicable
when Romlight is able to resolve its production difficulties and commit itself to a reliable delivery
schedule for completed ballasts.

As a result of continuing problems with both quality and delivery of the product, as of the end of
the fiscal end, all purchase orders were on hold.  However, subsequent to the end of the fiscal year, we
have been advised that Romlight has made arrangements for manufacture of the 600-watt ballast in
Korea, and on May 1, 2004, a total of 28 new samples were received from the new manufacturer.  It is
our intention to do significant testing of the new samples prior to making any new purchase orders.

In the event we do elect to order and take delivery of ballasts from the Korean manufacturer, we
plan to market and distribute the units through independent sales representatives who will be
compensated through payment of commissions.   Our contract with the manufacturer gives us exclusive
rights to market the ballasts in British Columbia, Canada, and the exclusive rights to market the products
on a worldwide basis to the hydroponics industry.   It is anticipated that initial marketing efforts will be
directed primarily toward the hydroponics industry.

**Subsequent Event**

As indicated above, on May 25, 2004, subsequent to the end of the fiscal year, we completed a
share exchange transaction with Sierra Minerals and Mining, Inc., a Nevada corporation, pursuant to
which Sierra became our wholly-owned subsidiary.  Sierra  is a party to a Joint Venture Agreement (the
"JV Agreement"), dated April 26, 2004 and amended on June 1, 2004, by and between Sierra and Minera
Rio Tinto S.A. de C.V., a Mexican company ("MRT"), pursuant to which Sierra and MRT have agreed to
explore and, if feasible, develop certain mining properties which MRT has the option to acquire. The
properties are located in the state of Chihuahua, Mexico and its intended that the joint venture will be
owned 60% by Sierra and 40% by MRT.

Sierra has a number of financial obligations under the terms of the JV Agreement .  It is our
intention to seek to raise capital through the offer and sale of our securities in order to assist Sierra in
satisfying its financial obligations to the joint venture.  There is no assurance that we will be able of raise
sufficient capital to allow Sierra to satisfy is financial obligations to the joint venture.

**Employees**

We currently have no employees and have no current plans to hire employees.  Instead,  we  rely
on members of management to handle all matters related to business development and business
operations.

ITEM 2.	DESCRIPTION OF PROPERTY.

****The Company currently maintains a mailing address at 541 Howe Street, Suite 300, Vancouver,
BC, Canada BC V6C 2C2..  Its telephone number at that address is (604) 684-1755. The Company pays
no rent for use of this mailing address, and does not anticipate the need for maintaining a separate office
until it has completed a business combination transaction.

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, as of the end of its fiscal year
ending February 29, 2004,  no such proceedings are known to be contemplated.  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.

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 February 29, 2004.

PART II

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

The Company's common stock is currently traded on the Over the Counter, Bulletin Board under
the symbol "SBAQ." The following  table sets forth the Company's high and low closing prices for the
Company's common stock as reported on the Bulletin Board for the  periods indicated.

|Fiscal Year Ending
February 28, 2003 | High   | Low   
|------------------------------------ | ------ | ------
|First Quarter                        | $0.32  | $0.06 
|Second Quarter                       | $0.29  | $0.17 
|Third Quarter                        | $0.05  | $0.031
|Fourth Quarter                       | $0.065 | $0.035

|Fiscal Year Ending
February 29, 2004 | High  | Low   
|------------------------------------ | ----- | ------
|First Quarter                        | $0.09 | $0.041
|Second Quarter                       | $0.08 | $0.05 
|Third Quarter                        | $0.11 | $0.041
|Fourth Quarter                       | $0.26 | $0.045

The prices presented are bid prices which represent prices between broker-dealers and don't
include retail mark-ups and mark-downs or any commission to the dealer.  The  prices may not reflect
actual transactions.

As of May 24, 2004, there were approximately 188 stockholders of record of the Company's
common stock.

There have been no cash dividends declared or paid on the shares of common stock, and
management does not anticipate payment  of dividends in the foreseeable future.

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

SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this report, including statements in the following discussion which are not
statements of historical fact, are what are known as "forward looking statements, " which are basically
statements about the future.  For that reason, these statements involve risk and uncertainty since no one
can accurately predict the future.  Words such as "plans," "intends," "will," "hopes," "seeks,"
"anticipates," "expects  "and the like often identify such forward looking statements, but are not the only
indication that a statement is a forward looking statement.  Such forward looking statements include
statements concerning our plans and objectives with respect to the present and future operations of the
Company, and statements which express or imply that such present and future operations will or may
produce revenues, income or profits.  Numerous factors and future events could cause the Company to
change such plans and objectives or fail to successfully implement such plans or achieve such objectives,
or cause such present and future operations to fail to produce revenues, income or profits.  Therefore, the
reader is advised that the following discussion should be considered in light of the discussion of risks and
other factors contained in this report on Form 10KSB and in the Company's other filings with the
Securities and Exchange Commission.  No statements contained in the following discussion should be
construed as a guarantee or assurance of future performance or future results.

**Liquidity and Capital Resources**

We remain in the development stage.  Since inception we have undergone two unsuccessful business
combinations, which have caused us to incur significant liabilities and have resulted in the accumulation
of a substantial deficit during the development stage.  As of February 29, 2004, we have total current
assets of $36,763 and total current liabilities of $80,693.

During the fiscal year ending February 29, 2004, the Company received $30,000 and issued a convertible
debenture, which bears interest at 8% per annum and is convertible to stock at $0.02.  No new shares
were issued.  The issued and outstanding shares remain at 35,457,597 as of February 29, 2004.  We had
cash on hand of $22,077 as of February 29, 2004.

We plan to use our cash on hand to pay on-going expenses related to compliance with our reporting
obligations under the Securities Exchange Act of 1934.  If Romlight is able to begin making regular
deliveries of a sufficient number of ballasts, we believe that our plan to pay for purchase of the ballasts
within 10 days after delivery, using funds generated from sale of the units, will generate working capital.
If we begin receiving regular deliveries of units from the manufacturer and are able to implement this
plan, our current cash on hand combined with revenues from product sales will be adequate to satisfy our
cash needs for the next twelve months.

On May 25,2004, subsequent to the end of the fiscal year, we completed a share exchange transaction
with Sierra Minerals and Mining, Inc., a Nevada corporation.  Sierra is a party to a Joint Venture
Agreement with Minera Rio Tinto S.A. de C.V., a Mexican company ("MRT"), pursuant to which Sierra
and MRT have agreed to explore and, if feasible, develop certain mining properties which MRT has the
option to acquire. The properties are located in the state of Chihuahua, Mexico.  Under the terms of the
Joint Venture Agreement, Sierra has a number of financial obligations which the Company has agreed to
help it meet.

The Company intends to seek to raise the necessary capital to through the private placement offering and
sale of its securities.   Since there is no assurance that funds from ballast sales will be sufficient to satisfy
our cash needs, we also intend to continue to seek additional funding for working capital purposes.

**Plan of Operations**

We remain in the development stage.  Our plan of operations for the next twelve months is to continue
our efforts to develop a business related to the marketing, distribution and sale of digital electronic
ballasts through our wholly owned Canadian subsidiary, Sunburst Digital, Inc.  In addition, we will seek
to raise the necessary capital to finance the joint venture obligations of Sierra Minerals and Mining.

In February, 2002, we signed a sub-distributorship agreement with 1357784 Ontario Ltd ("EPI") pursuant
to a contract between EPI and Romlight International, the manufacturer.  However, both the contract
between EPI and Romlight, and the sub-distributorship agreement were cancelled in January, 2003.  Our
subsidiary, Sunburst Digital, Inc. signed an agreement directly with Romlight on April 2, 2003.  The
terms and conditions of the new agreement are the same as those contained in our original agreement
with EPI, and under the new agreement all deposits that we have previously paid to EPI have been
forwarded to Romlight.

Under the terms of the new agreement with Romlight, we have an annual purchase commitment of
100,000 ballasts.  However, this commitment is subject to the ability of the manufacturer to produce and
deliver ballasts in a timely fashion.  Thus,  our annual purchase commitment will not commence until the
first 5,000 ballasts have been received.  During the fiscal year ending February, 2004,   Romlight was not
able to manufacture and deliver the product and, as a result, we did not purchase any ballasts.

We have been advised by Romlight that it has entered into an agreement with a Korean manufacturer for
production of the ballasts.  On May 2, 2004, subsequent to the end of the fiscal year, we received for
testing 28 new samples of a 600-watt ballast manufactured in Korea.  In the event the ballasts are
determined to meet appropriate quality control standards,  it is expected that large quantities can be
delivered.  However, until we have completed adequate testing, we do not intend to place any purchase
orders.

The development and delivery of ballasts is still uncertain, and as a result, as of the end of the fiscal year,
we have classified the deposit held by Romlight as impaired, and it has been written off.

As a result of continuing uncertainties relating to development and delivery of ballasts, we have
continued to seek new opportunities.  As described above, on May 25, 2004, subsequent to the end of the
fiscal year, we completed a share exchange with the shareholders of Sierra Minerals and Mining, Inc.
"Sierra", a Nevada corporation.

Sierra, and its joint venture partner, Minera Rio Tinto S.A. de C.V. a Mexcian company ("MRT"), have
the option to acquire a number of mining properties located in the state of Chihuahua, Mexico.  The first
property being considered is "Cienguita"which is located in the state of Chihuahua, Mexico.  Through
Sierra, we are completing a report on this property and, through a private placement offering of our
securities,  plan to attempt to raise the required funding of US $1,500,000 to put the property back into
production at an estimated rate of production of approximately 20,000 oz of gold per year.  Previous
drilling indicates that there are reserves of 100,000 oz of gold and the potential for expansion.

There is no guarantee that the funds can be raised or that the targeted production rate of 20,000 ounces of
gold per year can be achieved.

ITEM  7.	FINANCIAL STATEMENTS AND EXHIBITS

Index to Financial Statements - February 29, 2004

|Report of Independent Accountants              | F-1
|---------------------------------------------- | ---
|Consolidated Balance Sheet                     | F-2
|Consolidated Statements of Operations          | F-3
|Consolidated Statements of Cash Flows          | F-4
|Consolidated Statement of Stockholders' Equity | F-5
|Notes to Consolidated Financial Statements     | F-6

---

******REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

The Board of Directors and Stockholders of

 Sunburst Acquisitions IV, Inc.

We have audited the accompanying consolidated balance sheet of Sunburst Acquisitions IV, Inc. and
subsidiary (a development stage company) as of February 29, 2004, and the related consolidated
statements of operations, stockholders' equity, and cash flows for the year ended February 29, 2004, for
the year ended February 28, 2003, and for the period from inception (August 27, 1997) to February 29,
2004.  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 the standards of the Public Company Accounting Oversight
Board (United States).  Those standards require that we plan and perform the audit 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 consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Sunburst Acquisitions IV, Inc. as of February 29, 2004, and the results
of its consolidated operations, cash flows and changes in stockholders' equity for the year ended
February 29, 2004, for the year ended February 28, 2003, and for the period from inception (August 27,
1997) to February 29, 2004, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as
a going concern.  As discussed in Note 6 to the financial statements, the Company has sustained
operating losses since its inception and has deficits in working capital and equity which raises substantial
doubt about its ability to continue as a going concern.  Management's plans in regard to these matters,
which include a private placement of securities, are also described in Note 6.  The financial statements do
not include any adjustments related to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might result should the Company be unable to continue as
a going concern.

|Denver, Colorado

May 24, 2004 | ******PROFESSIONAL CORPORATION**
|------------------------------ | --------------------------------

F-1



---

**Sunburst Acquisitions IV, Inc. and Subsidiary**

**(a Development Stage Company)**

**BALANCE SHEET**

**February 29, 2004**

|                                               | **ASSETS**                                                 |                                                          |                  
|---------------------------------------------- | ---------------------------------------------------------- | -------------------------------------------------------- | -----------------
|                                               |                                                            |                                                          |                  
|CURRENT ASSETS**                               |                                                            |                                                         
|                                               | **************Cash and cash equivalents                    |                                                          | $         22,077 
|                                               | **************Accounts receivable                          |                                                          | 8,206            
|                                               | Other current assets****                                   | ****                                                     | 6,480            
|                                               |                                                            |                                                          |                  
|                                               |                                                            | ****Total current assets                                 | ****             
|                                               |                                                            |                                                          |                  
|************OTHER ASSETS                       | ****                                                       |                                                         
|                                               | **************Investment in Sierra****                     | ****                                                     | 57,500           
|                                               |                                                            |                                                          |                  
|                                               |                                                            | ************TOTAL ASSETS                                 | ****             
|                                               |                                                            |                                                          |                  
|                                               | ************LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |                                                         
|                                               |                                                            |                                                          |                  
|************CURRENT LIABILITIES                | ****                                                       |                                                         
|                                               | Accounts payable                                           |                                                          | $           6,338
|                                               | Accrued interest                                           |                                                          | 15,855           
|                                               | Convertible debenture                                      |                                                          | 30,000           
|                                               | Notes payable - related parties                            |                                                          | 28,500           
|                                               |                                                            |                                                          |                  
|                                               |                                                            | ********Total current liabilities                        | ****             
|                                               |                                                            |                                                          |                  
|************LONG-TERM LIABILITIES              | ****                                                       |                                                         
|                                               | Customer deposits****                                      | ****                                                     | 44,809           
|                                               |                                                            |                                                          |                  
|***********STOCKHOLDERS' EQUITY (DEFICIT)***** |                                                           
|                                               | Preferred stock, no par value; 20,000,000 shares           |                                                         
|                                               |                                                            | authorized; no shares issued and outstanding             | -                
|                                               | Common stock, no par value; 200,000,000 shares             |                                                         
|                                               |                                                            | authorized; 35,457,597 shares issued and outstanding     | 1,701,843        
|                                               | Additional paid-in capital from stock
options              |                                                          | 194,375          
|                                               | Additional paid-in capital                                 |                                                          | 16               
|                                               | Stock subscriptions                                        |                                                          | 67,025           
|                                               | Deficit accumulated during the development stage           | (2,003,427)                                             
|                                               | Accumulated other comprehensive
income                     |                                                          | 8,929            
|                                               |                                                            |                                                          |                  
|                                               |                                                            |                                                          |                  
|                                               |                                                            |                                                          |                  
|                                               |                                                            | ****TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $         94,263 

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

F-2



---

**Sunburst Acquisitions IV, Inc. and Subsidiary**

**(a Development Stage Company)**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

|                                                      |                                                                                    |                                             | **For the period**                   | ****                                 |                                           |                                      |         
|----------------------------------------------------- | ---------------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------ | ------------------------------------ | ----------------------------------------- | ------------------------------------ | --------
|                                                      |                                                                                    |                                             | **************from inception**       | ****                                 |                                           |                                     
|                                                      |                                                                                    |                                             | (August 27, 1997)                    | **For the year**                     | ****                                      | **For the year**                    
|****                                                  |                                                                                    |                                             | **to February 29,**                  | ****                                 | **ended February 29,**                    | **ended February 28,**              
|****                                                  |                                                                                    |                                             | **2004**                             | ****                                 | **2004**                                  | ****                                 | **2003**
|****                                                  |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|****REVENUES                                          | $                    246,395                                                       |                                             | $                          13,580    |                                      | ********$                          24,580
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|EXPENSES                                              |                                                                                    |                                             |                                      |                                      |                                          
|                                                      | ****Cost of goods sold                                                             | 24,721                                      |                                      | 8,082                                |                                           | 16,639                              
|                                                      | ********Selling, general and administrative                                        | 1,430,460                                   |                                      | 357,879                              |                                           | 273,795                             
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|                                                      |                                                                                    | ********Total expenses                      | 1,455,181                            |                                      | 365,961                                   |                                      | 290,434 
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|NET OPERATING LOSS                                    | (1,208,786)                                                                        |                                             | (352,381)                            |                                      | (265,854)                                
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|OTHER INCOME AND EXPENSE                              |                                                                                    |                                             |                                      |                                      |                                          
|                                                      | Interest expense                                                                   | (43,283)                                    |                                      | (4,580)                              |                                           | (4,811)                             
|                                                      | Gain on sale of securities                                                         | 469,863                                     |                                      | -                                    |                                           | 69,863                              
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|NET LOSS FROM CONTINUING OPERATIONS                   | (782,206)                                                                          |                                             | (356,961)                            |                                      | (200,802)                                
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|********DISCONTINUED OPERATIONS                       |                                                                                    |                                             |                                      |                                      |                                          
|                                                      | ****Loss from operations of HollywoodBroadcasting.com                              |                                             |                                      |                                      |                                           |                                     
|                                                      |                                                                                    | ****disposed of (net of income taxes of $0) | (2,066,371)                          |                                      | -                                         |                                      | -       
|                                                      | ********Gain on disposition of discontinued operations (net of income
taxes of $0) | 845,150                                     |                                      | -                                    |                                           | -                                   
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|********NET INCOME (LOSS)                             | (2,003,427)                                                                        |                                             | (356,961)                            |                                      | (200,802)                                
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|Accumulated deficit                                   |                                                                                    |                                             |                                      |                                      |                                          
|                                                      | Balance, beginning of period                                                       | -                                           |                                      | (1,646,466)                          |                                           | (1,445,664)                         
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|                                                      | Balance, end of period                                                             | $               (2,003,427)                 |                                      | $                   (2,003,427)      |                                           | $                   (1,646,466)     
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|NET LOSS PER SHARE                                    | $                         (0.02)                                                   |                                             | $                             (0.01) |                                      | $                             (0.01)     
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|********Other comprehensive income (loss)             |                                                                                    |                                             |                                      |                                      |                                          
|                                                      | Unrealized foreign exchange income (loss)                                          | $                        8,929              |                                      | $                          14,739    |                                           | $                           (5,810) 
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|OTHER COMPREHENSIVE INCOME (LOSS)                     | $                        8,929                                                     |                                             | $                          14,739    |                                      | $                           (5,810)      
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|TOTAL COMPREHENSIVE INCOME (LOSS)                     | $               (1,994,498)                                                        |                                             | $                      (342,222)     |                                      | $                      (206,612)         
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|TOTAL COMPREHENSIVE INCOME (LOSS) PER SHARE           |                                                                                    |                                             |                                      |                                      |                                          
|                                                      | Loss from continuing operations                                                    | $                         (0.02)            |                                      | $                             (0.01) |                                           | $                             (0.01)
|                                                      | ********Loss from discontinued operations                                          | (0.06)                                      |                                      | -                                    |                                           | -                                   
|                                                      | ********Gain on disposal of discontinued operations                                | 0.03                                        |                                      | -                                    |                                           | -                                   
|                                                      | ********Other comprehensive income                                                 | -                                           |                                      | -                                    |                                           | -                                   
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|                                                      | ********Total comprehensive income (loss)                                          | $                         (0.05)            |                                      | $                             (0.01) |                                           | $                             (0.01)
|                                                      |                                                                                    |                                             |                                      |                                      |                                           |                                      |         
|WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND |                                                                                    |                                             |                                      |                                     
|****                                                  | **COMMON STOCK EQUIVALENTS OUTSTANDING**                                           | ****33,778,590                              |                                      | 35,457,597                           |                                           | 33,877,227                          

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

F-3



---

**Sunburst Acquisitions IV, Inc. and Subsidiary**

**(a Development Stage Company)**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

|                                         |                                                      |                                            |                                          | For the period        | ****             |                 
|---------------------------------------- | ---------------------------------------------------- | ------------------------------------------ | ---------------------------------------- | --------------------- | ---------------- | ----------------
|                                         |                                                      |                                            |                                          | ****from inception    | **For the year** | **For the year**
|****                                     |                                                      |                                            |                                          | **(August 27, 1997)** | **ended**        | **ended**       
|****                                     |                                                      |                                            |                                          | **to February 29,**   | **February 29,** | **February 28,**
|****                                     |                                                      |                                            |                                          | **2004**              | **2004**         | **2003**        
|**CASH FLOWS FROM OPERATING ACTIVITIES** |                                                      |                                            |                                         
|Net loss                                 |                                                      | $           (2,003,427)                    | $       (356,961)                        | $       (200,802)    
|Adjustments to reconcile                 |                                                      |                                            |                                         
|                                         | net loss to net cash flows                           |                                            |                                          |                      
|                                         | from operating activities:                           |                                            |                                          |                      
|                                         |                                                      | Gain on sale of securities                 | (469,863)                                | -                     | (69,863)        
|                                         |                                                      | Foreign exchange income (loss),
unrealized | 8,929                                    | 14,739                | (5,810)         
|                                         |                                                      | Issuance of options                        | 225,375                                  | 146,055               | 79,320          
|                                         |                                                      | Depreciation                               | 52,332                                   | -                     | -               
|                                         |                                                      | Allowance for doubtful accounts            | 88,360                                   | -                     | 88,360          
|                                         |                                                      | Discontinued operations                    | (846,150)                                | -                     | -               
|                                         |                                                      | (Increase) decrease in inventory           | (57,705)                                 | 22,245                | (22,245)        
|                                         |                                                      | (Increase) decrease in other assets        | (481,737)                                | 84,380                | (83,089)        
|                                         |                                                      | (Increase) decrease in accounts receivable | (29,704)                                 | 13,038                | (34,604)        
|                                         |                                                      | Increase in accrued expenses               | 150,218                                  | 4,580                 | 2,311           
|                                         |                                                      | Increase in customer deposits              | 44,809                                   | 44,809                | -               
|                                         |                                                      | Increase (decrease) in accounts payable    | 125,232                                  | 74                    | (2,250)         
|                                         |                                                      |                                            |                                          |                       |                  |                 
|                                         |                                                      |                                            | Net cash flows from operating activities | (3,193,331)           | (27,041)         | (248,672)       
|                                         |                                                      |                                            |                                          |                       |                  |                 
|CASH FLOWS FROM INVESTING ACTIVITIES     |                                                      |                                            |                                         
|                                         | ******** Purchase of investment                      | (22,353)                                   | -                                        | (22,353)             
|                                         | ******** Maturity of investment                      | 22,353                                     | -                                        | 22,353               
|                                         | ******** Proceeds from sale of securities            | 394,863                                    | -                                        | 69,863               
|                                         | Purchase of property and equipment                   | (208,585)                                  | -                                        | -                    
|                                         |                                                      |                                            |                                          |                       |                  |                 
|                                         |                                                      |                                            | Net cash flows from investing activities | 186,278               | -                | 69,863          
|                                         |                                                      |                                            |                                          |                       |                  |                 
|CASH FLOWS FROM FINANCING ACTIVITIES     |                                                      |                                            |                                         
|                                         | ******** Proceeds of sale of discontinued operations | 1,000                                      | -                                        | -                    
|                                         | ******** Related party debt                          | 691,056                                    | -                                        | (49,500)             
|                                         | ******** Proceeds from notes payable to stockholders | 548,191                                    | -                                        | -                    
|                                         | ******** Proceeds from notes payable                 | 100,500                                    | -                                        | -                    
|                                         | ******** Proceeds from convertible debenture         | 30,000                                     | 30,000                                   | -                    
|                                         | ******** Proceeds from exercise of options           | 33,000                                     | -                                        | 33,000               
|                                         | ******** Stock subscriptions                         | 67,025                                     | 67,025                                   | -                    
|                                         | ******** Paid-in capital                             | 16                                         | 16                                       | -                    
|                                         | ******** Issuance of note receivable                 | (57,500)                                   | (57,500)                                 | -                    
|                                         | Issuance of common stock                             | 1,615,842                                  | -                                        | 204,426              
|                                         |                                                      |                                            |                                          |                       |                  |                 
|                                         |                                                      |                                            | Net cash flows from financing activities | 3,029,130             | 39,541           | 187,926         
|                                         |                                                      |                                            |                                          |                       |                  |                 
|NET INCREASE IN CASH                     |                                                      |                                            |                                         
|                                         | ******AND CASH EQUIVALENTS**                         | 22,077                                     | 12,500                                   | 9,117                
|                                         |                                                      |                                            |                                          |                       |                  |                 
|********CASH AND CASH EQUIVALENTS,       |                                                      |                                            |                                         
|                                         | ******BEGINNING OF PERIOD**                          | -                                          | 9,577                                    | 460                  
|                                         |                                                      |                                            |                                          |                       |                  |                 
|********CASH AND CASH EQUIVALENTS,       |                                                      |                                            |                                         
|                                         | ******END OF PERIOD**                                | $                  22,077                  | $          22,077                        | $            9,577   

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

F-4



---

Sunburst Acquisitions IV, Inc.

(a Development Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

|                                         |                           |              |              |                  |                   |                            | Deficit                    |                            |                       
|---------------------------------------- | ------------------------- | ------------ | ------------ | ---------------- | ----------------- | -------------------------- | -------------------------- | -------------------------- | ----------------------
|                                         |                           |              |              |                  |                   |                            | accumulated                |                            |                       
|                                         |                           |              | Common stock | Additional       |                   | during the                 | Other                      | Total                     
|                                         |                           |              | Number of    |                  | paid-in           | Stock                      | development                | comprehensive              | stockholders'         
|                                         |                           |              | shares       | Amount           | capital           | subscriptions              | stage                      | income (loss)              | equity (deficit)      
|Common stock issued for cash:            |                           |              |              |                  |                   |                            |                           
|                                         | April 1999                |              | 15,000,000   | $
15,000         | $
-               | $                        - | $                        - | $                        - | $               15,000
|                                         | May 1999                  |              | 15,000,000   | 15,000           | -                 | -                          | -                          | -                          | 15,000                
|                                         | July 1999                 |              | 2,500,000    | 2,500            | 22,500            | -                          | -                          | -                          | 25,000                
|                                         | August 1999               |              | 1,500,000    | 1,500            | 13,500            | -                          | -                          | -                          | 15,000                
|                                         | September 1999            |              | 136,667      | 137              | 81,863            | -                          | -                          | -                          | 82,000                
|                                         | October 1999              |              | 100,000      | 100              | 59,900            | -                          | -                          | -                          | 60,000                
|                                         | November 1999             |              | 376,667      | 377              | 225,623           | -                          | -                          | -                          | 226,000               
|                                         | December 1999             |              | 546,667      | 547              | 327,453           | -                          | -                          | -                          | 328,000               
|                                         | January 2000              |              | 521,667      | 522              | 312,478           | -                          | -                          | -                          | 313,000               
|                                         | February 2000             |              | 150,000      | 150              | 89,850            | -                          | -                          | -                          | 90,000                
|                                         |                           |              |              |                  |                   |                            |                            | -                          |                       
|Net loss for the period ended            |                           |              |              |                  |                   | -                          |                           
|February 29, 2000                        |                           | -            | -            | -                | -                 | (536,237)                  | -                          | (536,237)                 
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Balance, February 29, 2000               |                           | 35,831,668   | 35,833       | 1,133,167        | -                 | (536,237)                  | -                          | 632,763                   
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Recapitalization of                      |                           |              |              |                  |                   |                            |                            |                           
|                                         | HollywoodBroadcasting.com |              |              |                  |                   |                            |                            |                           
|December 4, 2000                         |                           | 9,070,831    | 1,309,283    | (1,133,167)      | -                 | -                          | -                          | 176,116                   
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Net loss for the year ended              |                           |              |              |                  |                   |                            |                            |                           
|February 28, 2001                        |                           | -            | -            | -                | -                 | (1,630,777)                | -                          | (1,630,777)               
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Balance, February 28, 2001               |                           | 44,902,499   | 1,345,116    | -                | -                 | (2,167,014)                | -                          | (821,898)                 
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Cancellation of shares:                  |                           |              |              |                  |                   |                            |                            |                           
|December 4, 2000                         |                           | (15,000,000) | -            | -                | -                 | -                          | -                          | -                         
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Common stock issued for cash:            |                           |              |              |                  |                   |                            |                           
|                                         | June 2001                 |              | 235,000      | 7,050            | -                 | -                          | -                          | -                          | 7,050                 
|                                         | July 2001                 |              | 945,000      | 28,351           | -                 | -                          | -                          | -                          | 28,351                
|                                         | August 2001               |              | 350,000      | 10,500           | -                 | -                          | -                          | -                          | 10,500                
|                                         | September 2001            |              | 350,000      | 10,500           | -                 | -                          | -                          | -                          | 10,500                
|                                         | October 2001              |              | 330,000      | 9,900            | -                 | -                          | -                          | -                          | 9,900                 
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Net gain for the year ended              |                           |              |              |                  |                   |                            |                            |                           
|February 28, 2002                        |                           | -            | -            | -                | -                 | 721,350                    | -                          | 721,350                   
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Balance, February 28, 2002               |                           | 32,112,499   | 1,411,417    | -                | -                 | (1,445,664)                | -                          | (34,247)                  
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Common stock issued for cash:            |                           |              |              |                  |                   |                            |                           
|                                         | September 2002            |              | 1,082,098    | 110,126          | -                 | -                          | -                          | -                          | 110,126               
|                                         | November 2002             |              | 943,000      | 94,300           | -                 | -                          | -                          | -                          | 94,300                
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Common stock issued in exchange of debt: |                           |              |              |                  |                   |                           
|                                         | September 2002            |              | 220,000      | 22,000           | -                 | -                          | -                          | -                          | 22,000                
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Options issued:                          |                           |              |              |                  |                   |                            |                            |                           
|                                         | March 2002                |              | -            | 31,000           | 31,000            | -                          | -                          | -                          | 62,000                
|                                         | June 2002                 |              | -            | -                | 17,320            | -                          | -                          | -                          | 17,320                
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Options excercised:                      |                           |              |              |                  |                   |                            |                            |                           
|                                         | April 2002                |              | 1,000,000    | 30,000           | -                 | -                          | -                          | -                          | 30,000                
|                                         | September 2002            |              | 100,000      | 3,000            | -                 | -                          | -                          | -                          | 3,000                 
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Foreign exchange translation
adjustment  | -                         | -            | -            | -                | -                 | (5,810)                    | (5,810)                   
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Net loss for the year ended              |                           |              |              |                  |                   |                            |                            |                           
|                                         | February 28, 2003         |              | -            | -                | -                 | -                          | (200,802)                  | -                          | (200,802)             
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Balance, February 28, 2003               |                           | 35,457,597   | 1,701,843    | 48,320           | -                 | (1,646,466)                | (5,810)                    | 97,887                    
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Capital contribution                     |                           | -            | -            | 16               | -                 | -                          | -                          | 16                        
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Stock subscriptions                      |                           | -            | -            | -                | 67,025            | -                          | -                          | 67,025                    
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Options issued:                          |                           |              |              |                  |                   |                            |                            |                           
|                                         | March 2003                |              | -            | -                | 146,055           | -                          | -                          | -                          | 146,055               
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Foreign exchange translation
adjustment  | -                         | -            | -            | -                | -                 | 14,739                     | 14,739                    
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|Net loss for the year ended              |                           |              |              |                  |                   |                            |                            |                           
|                                         | February 29, 2004         |              | -            | -                | -                 | -                          | (602,206)                  | -                          | (602,206)             
|                                         |                           |              |              |                  |                   |                            |                            |                            |                       
|                                         |                           |              | 35,457,597   | $      1,701,843 | $         194,391 | $              67,025      | $        (2,248,672)       | $                8,929     | $           (276,484) 

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

F-5



---

**Sunburst Acquisitions IV, Inc.**

**(A Development Stage Company)**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**February 29, 2004**

****

******1.	Summary of Significant Accounting Policies**

**Development Stage Activities and Basis of Presentation**

Sunburst Acquisitions IV, Inc. (a development stage company) (the "Company") was formed to seek out and
acquire business opportunities. In August 1999, the Company invested $1,000,000 in Prologic Management
Systems, Inc. ("Prologic"), an Arizona corporation in the software industry, in anticipation of a business
combination with that company.  The agreement to acquire Prologic was terminated prior to its
consummation, and the Company charged off the investment to operations in March 2000.  Since that time,
the Company has entered into an agreement with Prologic to recover a portion of its investment and, to date,
has received $325,000 in funds related thereto.  (See Note 5).

In December 2000, the Company acquired all of the issued and outstanding common stock of
HollywoodBroadcasting.com ("HBC") in exchange for 35,831,668 shares of the Company's stock in a
transaction accounted for as a recapitalization of HBC.  HBC was incorporated under the laws of the State
of Nevada on March 19, 1999.  It was created to provide live, daily, interactive programming for the internet.
On September 28, 2001, the Company completed the sale of its wholly owned subsidiary
HollywoodBroadcasting.com for $1,000 in cash.  (See Note 8).

On February 27, 2002, the Company signed an agreement with 1357784 Ontario Ltd. ("EPI") to distribute
1000-watt ballasts.  On January 23, 2003, the Company terminated its agreement with EPI and began an
agreement with Romlight International, Inc. ("Romlight"), the manufacturer of the ballasts.  (See Note 7).

The Company is a new enterprise in the development stage as defined by Statement No. 7 of the
Financial Accounting Standards Board, since it has derived only minimal revenues from its activities to
date.

**Accounting Method**

The Company records income and expenses on the accrual method.

**Fiscal Year**

The fiscal year of the Company is February 28.

**Principles of Consolidation**

The accompanying financial statements include all of the accounts and activity of Sunburst Acquisitions
IV, Inc., and its wholly-owned subsidiary, Sunburst Digital.  All intercompany transactions have been
eliminated in consolidation.

**Accounts Receivable**

The Company writes off accounts receivable as bad debts when they are determined to be uncollectible.
Based on the Company's experience, this practice approximates treatment under GAAP.  For certain notes
and interest receivables, an allowance has been recorded to reflect the fair value of the assets.

******1.	Summary of Significant Accounting Policies (continued)**

**Financial Instruments**

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

**Advertising Costs**

Costs associated with advertising are expensed in the year incurred.

**Statements of Cash Flows**

For purposes of the statements 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.

**Loss per Share**

Loss per share has been calculated based upon the weighted average shares outstanding.

**Impairment or Disposal of Long-Lived Assets**

In August 2001, the FASB issued Statement No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("FAS 144").  FAS 144 clarifies the accounting for the impairment of long-lived
assets and for long-lived assets to be disposed of, including the disposal of business segments and major
lines of business.  The Company has implemented FAS 144 for this fiscal year.  Long-lived assets are
reviewed when facts and circumstances indicate that the carrying value of the asset may not be
recoverable.  When necessary, impaired assets are written down to estimated fair value based on the best
information available.  Estimated fair value is generally based on either appraised value or measured by
discounting estimated future cash flows.  Considerable management judgment is necessary to estimate
discounted future cash flows.  Accordingly, actual results could vary significantly from such estimates.

See Note 7 for discussion of evaluation of deposit on merchandise and subsequent impairment write-down for the fiscal year ending February 29, 2004.

**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**

SFAS No. 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.

******1.	Summary of Significant Accounting Policies (continued)**

**Stock-Based Compensation**

SFAS No. 123 - Accounting for Stock-Based Compensation allows companies to choose whether to
account for stock-based compensation under the method prescribed in Accounting Principles Board
Opinion No. 25 ("APB 25") or use the fair value method described in SFAS No. 123.  For purposes of
options granted to employees, the Company continues to follow the accounting measurement provisions
of APB 25 and implements the disclosure provisions of SFAS No. 123.

During the year ended February 29, 2004, the Company issued 3,900,000 options under its Incentive
Stock Option Plan.  Compensation expense recognized for the year totaled $146,055.  The average fair
value was estimated using the Black-Scholes option-pricing model based on the following weighted
average assumptions:  risk free interest rate of 6.0% and 199% volatility, no assumed dividends, and an
expected life of between five and ten years.

**Income Taxes**

The Company accounts for income taxes in accordance with SFAS No. 109 -Accounting for Income Taxes.
Deferred tax assets and liabilities are recognized with respect to the tax consequences attributable to
differences between the financial statement carrying values and tax basis of existing assets and liabilities.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income
in the years in which these temporary differences are expected to be recovered or settled.  Further, the effect
on deferred tax assets and liabilities of changes in tax rates is recognized in income in the period that
includes the enactment date.

**2.	Stockholders' Equity**

The Company is authorized to issue 20,000,000 shares of preferred stock.  The Company's Board of Directors
is authorized to divide the preferred stock into series, and with respect to each series, to determine the
preferences and rights and qualifications, limitations or restrictions thereof, including the dividend rights,
conversion rights, voting rights, redemption rights and terms, liquidation preferences, sinking fund
provisions, and the number of shares constituting the series and the designations of such series.  The Board
of Directors could, without stockholder approval, issue preferred stock with voting and other rights that could
adversely affect the voting rights of the holders of common stock which issuance could have certain anti-takeover effects.



**3.	Related Party Transactions**

As of February 29, 2004, the Company had notes payable to related entities in the amount of $28,500.
Interest on these notes has been imputed at a rate of 6.09% and totaled $15,855 cumulatively at February 29,
2004.

**4.	Income Taxes**

A deferred tax asset of $337,000 at February 29, 2004 relates to net operating losses and deductible
temporary differences due to development stage costs.  Management does not consider it likely that the
deferred tax asset will be realized.  Therefore, a full valuation allowance has been established against the
deferred tax asset.  The net operating losses will begin to expire in 2020.

******5.	Investment in Prologic Management Systems, Inc.**

On February 16, 2001, the Company completed the sale of 2,859,972 shares of stock in Prologic Management
Systems, Inc. ("Prologic"), an Arizona corporation, to Prologic, or its designees, for a total sales price of
$400,000, or approximately $0.1399 per share.  The sale was completed pursuant to the terms of a Settlement
Agreement and Release, dated January 26, 2001.  This investment had been charged to operations in August
2000 by the Company.

The sales price was paid $325,000 in cash at closing and $75,000 through Prologic's execution of a
promissory note.  The promissory note bears interest at the rate of 10% per annum and requires payments
of $25,000 each on both the principal and interest, as of April 12, 2001, July 12, 2001, and October 12, 2001.
No payments have been made to date.  The Company does not expect to receive payment from Prologic.  The
Company has accrued an allowance for doubtful accounts covering the $75,000 note and the corresponding
interest in the amount of $13,360.

In February 2004, all assets of Prologic were taken under foreclosure in bankruptcy.  The Company has
removed the note and interest and related allowance from its balance sheet.

**6.	Going Concern**

The accompanying financial statements have been prepared on a going concern basis.  The Company has
a history of operating losses and will need to raise additional capital to fund its planned operations.  It
has current assets of $36,763 and current liabilities totaling $80,693 resulting in a current ratio of 0.46 as
of February 29, 2004.  Liquidity was achieved through the exercise of options and through the issuance
of a convertible debenture, and not from operations.  The Company has a cumulative loss from
continuing operations of approximately $782,000 at February 29, 2004, $558,000 of which was earned
within the past two fiscal years.  These conditions raise substantial doubt about the Company's ability to
continue as a going concern.

The Company intends to reduce its cumulative loss from continuing operations through the attainment of
profitable operations, either through its existing product lines which include ballasts (see Note 7) or
potential cash flow from its new investment in a Mexican mining joint venture (see Note 13). In addition,
the Company has conducted a private placement of convertible debt and equity (see Notes 11 and 12),
which has generated sufficient liquidity to satisfy the initial cash requirements of its planned mining joint
venture.

**7.	Distribution Agreement**

On February 27, 2002, the Company signed a distribution agreement with EPI.  EPI has a distribution
agreement with Romlight, with offices at Stevmar House, Rockley, Christ Church Barbados, West Indies.
Under this agreement, Sunburst Acquisitions IV, Inc. will be the sole sub-distributor for the length of the
contract.

The distribution agreement between Romlight and EPI was signed October 5, 2000.  The initial purchase
for the first year was 20,000 units of a Romlight ballast.  Romlight was not able to supply the ballasts in
2001 and, therefore, the contract took effect in 2002 when Romlight could produce and deliver the
ballasts.  During the last fiscal year, the Company took delivery of 500 ballasts valued at approximately
$45,000 ($70,000CND).  On January 23, 2003, the Company terminated its agreement with EPI and
began an agreement with Romlight, the manufacturer of the ballasts.  During the fiscal year ended
February 29, 2004, the Company received samples of 600-watt ballast produced for Romlight by a
Korean manufacturer, but did not sell any of the product due to quality concerns.

**7.****Distribution Agreement (continued)**

A deposit of $183,454 ($245,920CND) was issued to Romlight through EPI pursuant to their agreement.
The deposit will be applied to the last 1,000 ballasts and also gives the Company exclusive rights to sell
Romlight Ballasts to the hydroponic market.  Management has performed an impairment assessment on this
long term assets and determined that, due to quality controls issues, the asset is impaired and has written off
the entire deposit.

******8.	Sale of Discontinued Operations**

On September 28, 2001, the Company completed the sale of its wholly owned subsidiary
HollywoodBroadcasting.com for $1,000 in cash.

Operating results of HollywoodBroadcasting.com during the inception to date period are shown separately
in the accompanying income statement as loss from discontinued operations.

Assets and liabilities of HollywoodBroadcasting.com sold consisted of the following:

|Cash                           | $2,510     
|------------------------------ | -----------
|Accounts receivable            | 367        
|Inventories                    | 57,705     
|Capitalized project costs      | 481,519    
|Property, plant, and equipment | 156,253    
|Total assets                   | 698,354    
|Accounts payable               | 118,893    
|Accrued expenses               | 134,364    
|Notes payable to stockholders  | 548,191    
|Due to related party           | 741,056    
|Total liabilities              | 1,542,504  
|Net liabilities disposed of    | $   844,150

**9.**	**Stock Compensation Programs**

On March 14, 2002, the Company's Board of Directors approved a Stock Compensation Program and an
Incentive Stock Option Plan (the "Plans"). The maximum number of shares that may be purchased
pursuant to the Plans is 6,000,000.  Options granted under the Plans include incentive and nonqualified
stock options, as well as actual shares of common stock, with vesting determined on the grant date, not to
exceed ten years, and are exercisable over a ten-year maximum period at a price to approximate the fair
market value of the common stock at the date of grant.

****On March 1, 2003, the Company granted 3,900,000 options under its Incentive Stock Option Plan, which
vested immediately.  Compensation expense was recognized for the fiscal year totaling $146,055 for
these options.  These options are exercisable at prices between $0.02 and $0.03 per share.  One million
options vested immediately; the remaining options vested 50% as of the date of grant and the remaining
50% on the one year anniversary of the date of grant.

Subsequent to year end, 1,000,000 options were exercised at $0.02 per share.

**9.**	**Stock Compensation Programs (continued)**

The options are summarized as follows:

|                                 | Shares      | Weighted

Average

Exercise

Price
|-------------------------------- | ----------- | ----------------------------------
|Outstanding at February 28, 2002 | -           | $     -                           
|Granted                          | 2,100,000   | 0.03                              
|Cancelled                        | -           | -                                 
|Exercised                        | (1,100,000) | 0.03                              
|Outstanding at February 28, 2003 | 1,000,000   | 0.03                              
|Granted                          | 3,900,000   | 0.026                             
|Cancelled                        | -           | -                                 
|Exercised                        | -           | -                                 
|Outstanding at February 29, 2004 | 4,900,000   | $         0.027                   

The following table summarizes options outstanding at February 29, 2004:

|Range         | Outstanding

Number | Wtd. Ave. Life | Wtd. Ave. Price | Exercisable
|------------- | ------------------- | -------------- | --------------- | -----------
|$0.02 - $0.03 | 4,900,000           | 6.76           | $0.027          | 2,950,000  

**10.	Investment in Sierra Minerals and Mining, Inc.**

As of February 29, 2004, in anticipation of the consummation of the share exchange agreement more
fully described in Footnote 13, the Company had invested $57,500 in Sierra Minerals and Mining, Inc., a
Nevada corporation ("Sierra.")   An additional $167,500 was invested in Sierra after year end.

**11.	Convertible Debenture**

On January 15, 2004, the Company secured financing in the form of a convertible debenture.  The loan is
convertible into common stock at any time during the following one year period.  The conversion of
principal and accrued interest (8% per annum) shall be at the rate of $0.02 per share.

**12.	Private Placement**

The Company began accepting subscriptions for shares of common stock at $0.02 per share during the
current fiscal year.  At year end, the Company had received $67,025 as payment for approximately
3,351,250 shares of common stock, which amount is shown as common stock subscribed in the
stockholders' equity section of the balance sheet.  Subsequent to year end, the Company completed the
private placement and issued 3,650,000 shares of common stock for total proceeds of $73,000.

**13.	Subsequent Events**

Subsequent to year end, the Company began accepting subscriptions for shares of common stock at $0.10
per Unit.  Each Unit consists of one share of common stock and one warrant to purchase an additional
share of common stock at a price of $0.20 per share at any time during the twelve months following the
date of issuance.  The Company raised a total of $196,286 through the sale of Units.

On May 25, 2004, the Company completed a share exchange with the shareholders of Sierra (See Note
10) pursuant to the terms of the Share Exchange Agreement dated May 3, 2004.  In the exchange, the
Company issued 43,000,000 shares of common stock representing approximately 51.7% of the
Company's then-outstanding shares to Sierra's shareholders in exchange for all of the shares of Sierra
capital stock.  As a result, Sierra became a wholly owned subsidiary of the Company.

Sierra is a party to a Joint Venture Agreement with Minera Rio Tinto S.A. de C.V., a Mexican company
("MRT") pursuant to which Sierra and MRT have agreed to explore and develop, if feasible, certain
mining properties in the state of Chihuahua, Mexico.

Effective May 3, 2004, Sierra loaned a total of (US)$167,500 to MRT pursuant to an unsecured
promissory note payable due August 31, 2004 with interest at 8%.

The joint venture agreement between Sierra and MRT requires Sierra to invest cash totaling $1,000,000
by June 30, 2004, and to secure a $2,000,000 line of credit for the joint venture within sixty days of
signing the joint venture agreement.  The $1,000,000 investment will be reduced by $57,500 and
$167,500 previously advanced, plus accrued interest, upon commencement of the joint venture.  MRT
will contribute the properties.  The joint venture is to be owned 60% by Sierra and 40% by MRT.

F-6



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******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.****

**ITEM 8A. 	CONTROLS AND PROCEDURES.**

The Securities and Exchange Commission defines the term disclosure controls and procedures to
mean a company's controls and other procedures that are designed to ensure that information required to
be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time periods specified in the Securities and Exchange
Commissions rules and forms. The Company maintains such a system of controls and procedures in an
effort to ensure that all information which it is required to disclose in the reports it files under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time
periods specified under the SEC's rules and forms.

Based on an evaluation performed, the Company's certifying officers have concluded that the
disclosure controls and procedures were effective as of February 29, 2004, to provide reasonable
assurance of the achievement of these objectives.

There was no change in the Company's internal control over financial reporting during the
quarter ended February 29, 2004, that has materially affected, or is reasonably likely to materially affect,
the Company's internal control over financial reporting.

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 | Tenure                                                             
|-------------- | --- | -------------------------------------------------------------------
|Terry Fields   | 60  | President and Secretary since May 2001; Director since January 2001
|Kelly Zastowny | 39  | Director since March 2002                                          

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, plan 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, and there is no arrangement,
plan or understanding as to whether non-management shareholders will exercise their voting rights to
continue to elect the current directors to the Company's board.  There are also no arrangements,
agreements or understandings between non-management shareholders and management under which
non-management shareholders may directly or indirectly participate in or influence the management of
the Company's affairs.

Biographical Information of Directors and Executive Officers follows:

Terry Fields.

Mr. Fields is a self-employed Attorney-at-Law in the state of California.  Mr. Fields was called to
the bar on June 15, 1969, and he has been a director of a number of public companies.

Kelly Zastowny.

Since 1985 Mr. Zastowny has been involved in the hydroponics industry.  His company, Western
Water Farms ("WWF") is a major retailer and wholesaler of hydroponic equipment throughout North
America, Europe and Australia.  WWF produces unique liquid organic fertilizers, plastic molds, and
other parts for the hydroponic industry.  Compliance with Section 16(a) of the Exchange Act

The Company's officers, directors and principal shareholders have each filed an Annual Statement of
Changes in Beneficial Ownership of Securities on Form 5.

**ITEM 10.       EXECUTIVE COMPENSATION.**

****No officer or director received any cash 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
cash compensation from the Company other than reimbursement for out-of-pocket expenses incurred on
behalf of the Company.  See "Certain Relationships and Related Transactions."  In March, 2002, the
Company adopted a Stock Compensation Plan for the benefit of directors, officers, employees,
consultants and advisors.   On or about March 1, 2003, the Board granted Terry Fields, the Company's
President an option to acquire a total of up to 600,000 shares at an exercise price of $0.03 per share.  The
option is valid for a period of 10 years from the date of its grant.   On March 1, 2003, the Board also
granted options to four other persons who are not officers or directors of the Company, giving such
persons the right to acquire a total of up to 3,300,000 shares at an exercise price of between $0.02 and
$0.03 per share.  Such options are all valid for periods of between 5 and 10 years from the date of grant.

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

The following table sets forth, as of February 29, 2004, the stock ownership of each executive
officer and director of Sunburst Acquisitions, Inc., of all executive officers and directors as a group, and
of each person known by Sunburst Acquisitions, Inc. to be a beneficial owner of 5% or more of its
Common Stock.  Except as otherwise noted, each person listed below is the sole beneficial owner of the
shares and has sole investment and voting power as such shares.  No person listed below has any options,
warrants or other rights to acquire additional securities of Sunburst Acquisitions, Inc., except as may be
otherwise noted.

|Name and Address                                                   | Number of Shares
Owned Beneficially | % of Class Owned
|------------------------------------------------------------------ | ----------------------------------- | ----------------
|Charles Malette1550 35th Avenue WestVancouver, B.C.Canada,  V6M1H2 | 13,500,000                          | 38.07%          
|Terry Fields (1)No. 3 Poipu DriveHonolulu, HI 96825                | 600,000 (2)                         | 1.69%           
|Kelly Zastowny (1)103 - 20120 64th Avenue 
Langley, BC V2Y 1M8     | 0                                   | 0               
|Paul Kessler6363 Sunset Boulevard, 5th Fl.Hollywood, CA 90028      | 6,525,000 (3)                       | 18.40%          
|All directors and executive officers (2 persons)                   | 600,000                             | 1.699%          
|                                                                   |                                     |                 

(1)  The person listed is an officer, a director, or both, of the Company.

(2) Includes 600,000 shares of Common Stock which Mr. Fields has an option to acquire for a purchase
price of $0.03 per share at any time on or before February 28, 2013.

(3) Includes (i) 2,000,000 shares of the Company's Common Stock which Mr. Kessler has an option to
acquire for a purchase price of $0.03 per share at any time on or before February 25, 2007, and (ii)
1,500,000 shares of the Company's Common Stock which may be acquired by Bristol Capital, LLC
pursuant to a convertible debenture dated January 16, 2004, which shares are deemed to be beneficially
owned by Paul Kessler as an authorized signatory of Bristol Capital, LLC who has voting and investment
control over the shares owned by Bristol Capital, LLC. The outstanding principal amount of the
debenture and, at the option of the Company, the accrued interest on the debenture is convertible into
shares of the Company's Common Stock at the rate of $0.02 per share. Pursuant to the terms of the stock
option agreement, Mr. Kessler may not exercise the option if the result of such exercise would cause Mr.
Kessler and his affiliates to beneficially own a number of shares of the Company's Common Stock which
would exceed 4.9% of the Company's outstanding Common Stock. Pursuant to the terms of the
debenture, Bristol Capital, LLC may not effect a conversion of the debenture if the result of such
conversion would cause Bristol Capital, LLC and its affiliates to beneficially own a number of shares of
the Company's Common Stock which would exceed 4.9% of the Company's outstanding Common Stock.

**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 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 their 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.

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

> (a)  The Exhibits listed below are filed as part of this Annual Report.
> 
> 
> 3.1	Articles of Incorporation (incorporated by reference from Registration Statement on
> Form 10-SB/A filed with the Securities and Exchange Commission on December 29,
> 1997).
> 
> 
> 3.2	Bylaws (incorporated by reference from Registration Statement on Form 10-SB/A filed
> with the Securities and Exchange Commission on December 29, 1997).
> 
> 
> 31.1	Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act
> of 1934, as amended.
> 
> 32.1 	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
> the Sarbanes-Oxley Act of 2002.
> 
> 4.1	Specimen Common Stock Certificate (incorporated by reference from Registration
> Statement on Form 10-SB/A filed with the Securities and Exchange Commission on
> December 29, 1997).
> 
> 10.1	Distribution Agreement between EPI and Sunburst Acquisitions IV, Inc.(incorporated by
> reference from Form 10-KSB filed with the Securities and Exchange Commission on
> May 20, 2002).
> 
> 10.2	Distribution Agreement by and between Romlight International, Inc. and Sunburst
> Digital, Inc. (incorporated by reference from Form 10-KSB filed with the Securities and
> Exchange Commission on June 11, 2003).
> 
> (b)	No reports on Form 8-K were filed by the Company during the last quarter of its fiscal
> year ending February 29, 2004.

**ITEM 14. 	PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The aggregate fees billed by Comiskey & Co., P.C. for audit of the Company's annual financial
statements were $5,000 for for the fiscal year ended February 29, 2004, and $3,824 for the fiscal year
ended February 28, 2003. The aggregate fees billed by Comiskey & Co. for review of the Company's
financial statements included in its quarterly reports on Form 10QSB were $1,315 during the period
ended February 2, 2004, and $ 7,639 during the period ended February 28, 2003.

Audit-Related Fees

Comiskey & Co., P.C.  did not bill the Company any amounts for assurance and related services that
were related to its audit or review of the Company's financial statements during the fiscal years ending
February 29, 2004 or February 28, 2004.

Tax Fees

The aggregate fees billed by Comiskey & Co. P.C. for tax compliance, advice and planning were $ 3,800
for the fiscal year ended February 29, 2004 and $ 3,917 for the fiscal year endedFebruary 28, 2003.

All Other Fees

Comiskey & Co. P.C. did not bill the Company for any products and services other than the foregoing
during the fiscal years ended February 29, 2004 and February 28, 2003.

---

******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 IV, INC.**

By: /S/ TERRY FIELDSTerry Fields, President and Director

Date:   June 14, 2004

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.

By: /S/ TERRY FIELDSTerry Fields, President and Director

By: /S/ KELLY ZASTOWNYKelly Zastowny, Director

Date: June 14, 2004