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


                                   FORM 10-KSB


[X]    Annual report pursuant to section 13 or 15(d) of the Securities Exchange
       Act of 1934 for the fiscal year ended

                                December 31, 2004

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


                         Commission file number 0-28861


                            INTERNATIONAL STAR, INC.
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in its charter)


              NEVADA                                       86-0876846
--------------------------------------------     -------------------------------
     (State or other jurisdiction of                    (I.R.S. Employer
      incorporation or organization)                     Identification No.)


   2266 Chestnut Bluffs, Henderson, NV                        89052
--------------------------------------------     -------------------------------
  (Address of principal executive offices)               (Zip Code)


                    Issuer's telephone number: (702) 897-5338

Securities registered pursuant to Section 12(b) of the Act:   None

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

                  Common stock, par value $.001



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Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to filed such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]


Indicate by check mark if disclosure of delinquent filers, pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of the 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. [ ]

Registrant's revenues in fiscal year 2004:    $0.00.

Aggregate market value of the voting stock held by non-affiliates as of FEB 1,
2005:
                $7,189,257.05

Number of common shares outstanding as of February 1, 2005:

                64,428,741

Documents incorporated by reference:      None.

Transitional Small Business Disclosure Format: YES [ ]    NO [X]



                                      -ii-

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                                     PART I.

ITEM 1.  DESCRIPTION OF BUSINESS

Our Background and Business Development

     International Star, Inc. was organized under the laws of the State of
Nevada on October 28, 1993 as Mattress Showrooms, Inc. Our principal office is
located at 2266 Chestnut Bluffs, Henderson, NV 89052.

     We changed our name to International Star in 1997 and engaged in the
business of construction, sale and operation of state of the art waste
management systems, specializing in turnkey systems for management of hospital,
industrial, petroleum, chemical and municipal solid waste collection systems. We
were unable to develop the business beyond the start-up stage.

     Following the unsuccessful venture in waste management, the Company then
refocused its efforts into mineral exploration in 1998.

     On March 3, 1998 the Company entered into a mineral lease with James R.
Ardoin for the Detrital Wash mineral claims located around mile marker 22 on Hwy
93, Mohave County, Arizona. The lease does not require any minimum payments, and
charges a royalty of 2% of net smelter returns (NSR). The term of the lease is
for 20 years.

     We accepted the resignations of our officers as of September 8, 1999, at
which time Mr. Kamal Alawas and Mr. Pat Westphal (now deceased), as Officers and
Directors began managing the Company.

     On September 23, 2000, we acquired from Gold Standard Mines Inc. 51 lode
mining claims located in the Wikieup mining district, Mohave County, Arizona and
the exclusive rights to an extraction process for recovery of precious metals
from the property, developed by the claim owner. We have not had the extraction
process verified independently. This acquisition was completed on March 26, 2001
and the consideration was 1,000,000 restricted common shares valued at $400,000
as of the date of the agreement.

     On October 15, 2001, the Company announced the formation of a wholly owned
subsidiary, Qwik Track, Inc., and the appointment of Robert L. Hawkins to its
Board of Directors. Qwik Track is a web-based information distribution service
business intended to provide timely and accurate thoroughbred handicapping
analytical data and statistical information to the international account
wagering market.

     Effective October 1, 2002 we acquired Pita King Bakeries International,
Inc. and appointed Hassan Alaeddine to our Board of Directors. As noted in the
Company's 10QSB filings during 2004, the further development of Qwik Track, Inc
has been suspended for the time being and Pita King Bakeries International, Inc
has been sold.



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     In December 2004 the authorized capitalization of the Company was increased
to 780 Million Shares of Common Stock and 20 Million Shares of Undesignated
Preferred Stock.


Our Business

     We are primarily engaged in the acquisition and exploration of precious
metals mineral properties. Since 1998, we have examined various mineral
properties prospective for precious metals and minerals, and have acquired
interests in those we believe may contain precious metals and minerals. Our
properties are located in Arizona. We have not established that any of the
properties contain reserves (a reserve is that part of a mineral deposit which
could be economically and legally extracted or produced at the time of the
reserve determination). Further exploration will be needed before a final
determination can be made whether any property is economically and legally
feasible. Therefore, at present we have no reserves and no income from mineral
production.

     For the fiscal year ended December 31, 2003 we reported revenues of $80,618
generated by the Pita King subsidiary; however, the unit was not profitable and
we have since divested it. Our Qwik Track subsidiary is inactive at the current
time, and we have no plans to pursue development of that business in the
foreseeable future. Instead, we will focus our efforts and limited resources on
the further exploration of our mineral property holdings.

Products and/or Services

     As of December 31, 2003, our Pita King subsidiary produced and marketed a
variety of pita breads and chips and the web-based Qwik Track subsidiary
(development cost of $165,959) was capable of producing customized handicapping
data for thoroughbred racing enthusiasts. We no longer own the bakery and have
chosen to suspend further development of Qwik Track for an indefinite period.
(See "Notes to Financial Statements," Notes F and G.)

Exploration Planning - Speculative Nature of Mineral Exploration

     Exploration for and production of minerals is highly speculative and
involves greater risks than exist in many other industries. Many exploration
programs do not result in the discovery of minerals and any mineralization
discovered may not be of a sufficient quantity or quality to be profitably
mined. Also, because of the uncertainties in determining metallurgical
amenability of any minerals discovered, the mere discovery of mineralization may
not warrant the mining of the minerals on the basis of available technology.

     Although we have processed and tested mineralized materials and produced
very small amounts of precious metals on a testing basis (these have come from
the testing of mineralized material from both the Detrital Wash and Wikieup
properties), our decision as to whether any of the mineral properties we now
hold, or which we may acquire in the future, contain commercially mineable


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deposits, and whether such properties should be brought into production, will
depend upon the results of the exploration programs and independent feasibility
analysis and the recommendation of engineers and geologists. The decision will
involve the consideration and evaluation of a number of significant factors,
including, but not limited to:

     1.   The ability to obtain all required permits

     2.   Costs of bringing the property into production, including exploration
          and development or preparation of feasibility studies and construction
          of production facilities

     3.   Availability and costs of financing

     4.   Ongoing costs of production

     5.   Market prices for the metals to be produced

     6.   The existence of reserves or mineralization with economic grades of
          metals or minerals.

     We cannot be certain that any of our properties contain commercially
mineable mineral deposits, and no assurance can be given that the company will
ever generate a positive cash flow from production operations on such
properties.

     However, encouraged by the early stage exploration performed on our
Detrital Wash property by Kokanee Placer, Inc. of White Rock, BC, a geological
exploration company, and independent tests performed by the Company on our
Wikieup property, we are in the process of developing a staged exploration plan
based on the perceived merits of both our properties and projected costs of
further exploration. (See "Subsequent Events" below under this Item.)


Regulation

     Our exploration activities are subject to various federal, state and local
laws and regulations governing such matters as:

     o   prospecting
     o   development
     o   taxes
     o   labor standards
     o   waste disposal
     o   occupational safety and health
     o   protection of the environment
     o   reclamation of the environment
     o   toxic substances

and similar matters. We believe we are currently in substantial compliance with
any such regulations that apply to us. However, we may not be able to anticipate


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all liabilities that may arise in the future under existing regulations, or the
costs of compliance. If we are not in compliance, we may be subject to fines,
clean-up orders, restrictions on our operations, or other penalties.

     Federal, state and local provisions regulating the discharge of material
into the environment, or otherwise relating to the protection of the
environment, such as the Clean Air Act, Clean Water Act, the Resource
Conservation and Recovery Act, and the Comprehensive Environmental Response
Liability Act ("Superfund") affect mineral operations. For exploration and
mining operations, applicable environmental regulation includes a permitting
process for mining operations, an abandoned mine reclamation program and a
permitting program for industrial development and siting. Other
non-environmental regulations can impact exploration and mining operations and
indirectly affect compliance with environmental regulations. For example, a
state highway department may have to approve a new access road to make a project
accessible at lower costs, but the new road itself may raise environmental
issues. Compliance with these laws, and any regulations, can make the
development of mining claims prohibitively expensive, thereby impeding the sale
or lease of properties, or curtailing profits or royalties, which might have
been received. The company cannot anticipate what the further costs and/or
effects of compliance with any environmental laws might be.

Facilities

     We own no production, laboratory or storage facilities and rent space as
appropriate when necessary. Our executive offices are located at 2266 Chestnut
Bluffs, Henderson, NV (telephone 702.897.5338; fax 702.897.5832). (See Item 12 -
Certain Relationships and Related Transactions.)

Employees

     As of yearend 2004 we had no employees other than our executive officers,
nor any plans to recruit employees within the next twelve months.

Competition

     The business of mineral exploration is highly competitive, and tends to be
dominated by a limited number of major mining companies. Inasmuch as we have
exclusive exploration rights to the properties that are the targets of our
current exploration activities, we do not compete directly against any
particular firm for sales or market share. However, many of the human and
physical resources we may require, such as engineering professionals, managers,
skilled equipment operators, and metallurgical and extractive processes and
equipment, among others, are also sought by companies with substantially greater
financial resources than we possess, which places us at a competitive
disadvantage in obtaining such resources for our own use. Accordingly, such
competition may make our exploration activities more difficult than for a
larger, more substantial company.



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Subsidiaries

     On October 15, 2001, we organized Qwik Track, Inc. as a wholly owned
subsidiary of International Star, Inc. Qwik-Track was to operate as a web-based
service business providing the wagering enthusiast with thoroughbred
handicapping, analytical data and statistical information for racetrack wagering
over the Internet.

     As of November, 2003, we suspended development of the Qwik Track
subsidiary's business to focus our limited resources on exploring our mineral
properties.(See "Notes to Financial Statements," Note G.)

     On October 1, 2002, we acquired 100% of the equity stock of Pita King
Bakeries International, Inc. ("Pita King"), a Nevada corporation, in exchange
for 4,139,500 restricted shares of common stock. Pita King operates a wholesale
and retail pita bread bakery in Everett, Washington. We operated Pita King as a
wholly owned subsidiary until January 1, 2004 when we sold the unit back to its
founding shareholders.

     On June 1, 2004 we divested our Pita King subsidiary by executing an
agreement returning it assets to its original founders and shareholders,
effective as of January 1, 2004.

     In full settlement of this transaction each party made the following
considerations:

     1.   International Star forgave debt totaling Thirty Five thousand dollars
          ($35,000.00) incurred by Pita King in the form of loans from the
          parent Company.

     2.   The principals and officers of Pita King returned to the Company Four
          million shares (4,000,000) of "common stock" issued in consideration
          of the acquisition.

     3.   Both parties agree that the remaining One hundred, Thirty nine
          thousand and five hundred shares of International Star restricted
          "common stock" issued for the acquisition to compensate the original
          shareholders of Pita King will remain the property of those
          shareholders and will not be effected by this agreement.

The results of Pita King's operations were included in the consolidated
financial statements for the year ended December 31, 2003. (See "Notes to
Financial Statements," Note "F".)

Changes in Capitalization

     On December 21, 2004, in lieu of a meeting of shareholders, as authorized
by NRS 78.320, by taking the written consents of shareholders holding a majority
of the shares eligible to vote on such matters the Company increased its
authorized capitalization to 780 Million Shares of Common Stock and 20 Million
Shares of Undesignated Preferred Stock. As of December 31, 2004 approximately
711,711,259 shares of our common stock were authorized but un-issued. These


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shares may be issued in the future without stockholder approval. The prices at
which we sell these securities and other terms and provisions will depend on
prevailing market conditions and other factors in effect at that time, all of
which are beyond our control. Shares may be issued at prices that are less than
the then-current price for our common stock.

Subsequent Event

     Exploration Planning - On February 16, 2005, the Company finalized its
agreement with Zereko Nevada, Inc. (Zereko), a Nevada based corporation engaged
in mining engineering and related services, for various services in support of
the ongoing exploration activities at the Company's Detrital Wash property.
Under the terms of the agreement, Zereko will review in detail available
information on all previous work done on the property, define areas that merit
further detailed examination, then propose and implementation plan, prepare
budgets and obtain quotes for the indicated exploration activity.


RISK FACTORS

     The business of mineral exploration is inherently speculative, and involves
a number of general risks which could result in the complete loss of your
investment, including among others, the rarity of commercial mineral deposits,
environmental and other laws and regulations, physical dangers to personnel
associated with exploration activity, and political events. Before making an
investment in our securities, you should carefully consider these general risks
as well as the specific risks listed below.

     WE HAVE NO RESERVES, NO MINING OPERATIONS AND NO MINERAL RELATED INCOME.
reserves, by definition, contain mineral deposits in a quantity and in a form
room which the target minerals may be economically and legally extracted or
produced. We have not established that such reserves exist on our properties and
unless or until we do so we will not have any income from our mineral
operations.

     EXPLORATION FOR ECONOMIC DEPOSITS IS SPECULATIVE. The business of mineral
exploration is very speculative, since there is generally no way to recover any
of the funds expended on exploration unless the company establishes the
existence of mineable reserves and then exploits those reserves by either
commencing mining operations, selling or leasing its interest in the property,
or entering into a joint venture with a larger resource company that can develop
the property to the production stage. Unless we can establish and exploit
reserves before our funds are exhausted, we will have to discontinue operations,
which could make our stock valueless.

     OUR DIRECTORS AND EXECUTIVE OFFICERS LACK SIGNIFICANT EXPERIENCE OR
TECHNICAL TRAINING IN EXPLORING FOR PRECIOUS METAL DEPOSITS AND DEVELOPING
MINES. Our directors and executive officers lack significant experience or
technical training in exploring for precious metal deposits and developing
mines. Accordingly, our management may not be fully aware of many of the
specific requirements related to working within this industry. Their decisions


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and choices may not take into account standard engineering or managerial
approaches such as mineral exploration companies commonly use. Consequently, our
operations, earnings, and ultimate financial success could suffer irreparable
harm due to management's lack of experience in the industry. The Corporation
plans to align itself with reputable, knowledgeable experts in the mining
industry to overcome this lack of experience and expertise. On February 16, 2005
International Star, Inc. entered into a service agreement with one such entity;
Zereko Nevada, Inc, and a mining engineer, Karel Pieterse.

     FUTURE CHANGES IN REGULATORY OR POLITICAL POLICY COULD ADVERSELY AFFECT OUR
EXPLORATION. Any changes in government policy may result in changes to laws
affecting ownership of assets, land tenure, mining policies, taxation,
environmental regulations, labor relations, or other factors relating to our
exploration activities. Such changes could cause us to incur significant
unforeseen expenses of compliance or even require us to suspend our activities
altogether.

OUR DIRECTORS AND EXECUTIVE OFFICERS OWN A SIGNIFICANT AMOUNT OF STOCK OF
INTERNATIONAL STAR, INC. AND EXERT CONSIDERABLE INFLUENCE OVER US. As of
February 1, 2005, our directors and executive officers beneficially owned common
stock and securities convertible into our common stock which, upon exercise,
would equal to approximately 51.8% of the voting power. As a result, these
stockholders are potentially able to decide all matters requiring stockholder
approval, including the election of directors and the approval of significant
corporate transactions. This concentration of ownership could also delay or
prevent a change in control that may be favored by other stockholders.

                           FORWARD LOOKING STATEMENTS

     Except for historical and current information, all the information in this
annual report is considered to be "forward looking" statements. Specifically,
all statements (other than statements of historical and current information)
regarding financial and business strategy and the performance objectives of
management for future operations are forward-looking statements. These
forward-looking statements are based on the beliefs of management, as well as
assumptions made by and information currently available to them. These
statements involve known risks such as lack of capital to put our properties
into production, disappointing recoveries of precious metals from our properties
once we put them into production, higher than expected production costs,
declining market prices for precious metals, and delays or increased costs to
obtain production or mining permits.

     When we use the words "anticipate," "believe," "estimate," "expect," "may,"
"will," "should," "continue," "intend" and similar words or phrases, we are
identifying forward-looking statements (also known as "cautionary statements"
because you should be cautious in evaluating such statements in the context of
all the information in this annual report). These statements reflect our current
views with respect to future events. However, the merit or validity of current


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views is subject to the realization in fact of assumptions we have made. What we
now think will happen may turn out much different, and therefore our assumptions
may prove to have been inaccurate or incomplete.

ITEM 2 -- DESCRIPTION OF PROPERTY

     We currently hold interests in two properties which we believe show
potential for mineral development. Both properties are unpatented mining claims
located on federal public land and managed by the United States Bureau of Land
Management (the"BLM").

     Unpatented claims are "located" or "staked" by individuals or companies on
federal public land. Each placer claim covers 20 to 160 acres; each lode claim
covers 20 acres. The company is obligated to pay a maintenance fee of $100 per
claim per year to the BLM or file an Affidavit of Assessment Work with the
County showing labor and improvements of at least $100 for each claim yearly.

     If the statutes and regulations for the location and maintenance of a
mining claim are complied with, the locator obtains a valid possessory right to
the contained minerals. Failure to pay such fees or make the required filings
may render the mining claim void or voidable. We believe we have valid claims,
but, because mining claims are self-initiated and self-maintained, it is
impossible to ascertain their validity solely from public real estate records.

     If the government challenges the validity of an unpatented mining claim, we
would have the burden of proving the present economic feasibility of mining
minerals located on the claims.

     There are uncertainties as to title matters in the mining industry. We
believe that we have good title to our properties; however, defects in such
title could have a material adverse effect on us. We have investigated our
rights to explore, exploit and develop our various properties in manners
consistent with industry practice and, to the best of our knowledge; those
rights are in good standing. However, we cannot assure that the title to our
properties will not be challenged or impugned by third parties or governmental
agencies. In addition, there can be no assurance that the properties in which we
have an interest are not subject to prior unregistered agreements; transfers or
claims and title may be affected by undetected defects. Any such defects could
cause us to lose our rights to the property or to incur substantial expense in
defending our rights.


Detrital Wash, Mohave County, Arizona Property

     On March 3, 1998 the Company entered into a mineral lease with James R.
Ardoin for the DETRITAL WASH mineral claims located one mile east of mile marker
22 on Hwy 93, Mohave County, Arizona. The lease does not require any minimum
payments, and charges a royalty of 2% of net smelter returns (NSR). The term of
the lease is for 20 years with an option to renew for an additional 20-year
period.



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     The DETRITAL WASH property originally consisted of 8 placer claims lying in
Section 36, Township 28 N, Range 21W and is easily accessed by partially paved
entry off Hwy 93 and has availability to electricity and water.

     In July of 2004 we reached an agreement in principle with the holders of
131 placer association claims covering approximately 20,000 acres adjacent to
and surrounding our DETRITAL WASH property. The agreement will grant us
exclusive exploration rights on the claims, and first right of refusal for
exclusive development rights in exchange for a 0.25% net smelter return payable
to the claimholders. The agreement will require the company to expend a minimum
of $125,000 on exploration during a three-year period.

     The majority of this 22,240-acre property is composed of "alluvial sand,"
that is to say, a dry riverbed lying 210 feet above the existing water table.
Two historically documented sources found at the County seat archives in
Kingman, Arizona provide possible explanation for the deposition of valuable
minerals in the Detrital Valley:

     1.   A major flood in early 1900's. This flood washed away approximately 15
          major gold and silver mines overlooking the Detrital on the West.
          These mining camps, among the most prolific and highest producing
          mines in the Western USA, were known as Silverado, Excelsior, Prince
          Albert, Occidental, Etc. According to County records most of the mine
          stockpiles and tailing were washed into the Detrital Wash. The flood
          acted as a water cannon stripping the landscape and washing everything
          down into the valley below.

     2.   In 1982, County Historian, Roman Malach, in a book entitled " White
          Hills, Silverado in Mohave County" confirms the disaster in White
          Hills, the valuable gold camps, particularly Silverado that were lost
          to the flood and, the likely presence of an ancient river which flowed
          through the Detrital Valley. This river was likely the transporter of
          gold, silver, platinum and palladium to the Valley.

     Although limited in number prior to 2005, all "spot/surface samples" taken
by the Company on this property indicated the existence of "precious metals". Of
major significance was a 2-ton "bulk sample" (at a depth of 4 to 12 feet) by
AuRIC Metallurgical Laboratories, LLC, Salt Lake City, Utah, conducted in 1998
under a "chain of custody" (COC) that provided evidence of gold and silver with
traces of palladium and platinum.

     Two batch tests of 1,000 lbs. each were performed, each batch produced a
"dore bar" (composite of all metalliferous minerals recovered from the sample).
One of the dore bars was then refined and yielded metals equivalent to the
following values per ton of original material:

         Gold (Au)                  0.812 oz.
         Silver (Ag)                1.359 oz.
         Platinum (Pt)              0.440 oz.
         Palladium (Pd)             0.019 oz.



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     Believing that the precious metals derived from the surface and bulk
samples were of sufficient quantity and quality to warrant further exploration
of the DETRITAL WASH property, the Company on January 9, 2004 engaged Kokanee
Placer, Inc. of White Rock, BC, a geological exploration company, to execute the
initial phase of an exploration program on our original 1,280 acre Detrital Wash
property, the results of which would dictate subsequent exploration phases, if
found to be practical.

     This initial work effort called for surface sampling of the property in a
grid pattern at intervals of every 500 feet (in excess of 200 samples).

     The results of the sampling program identified areas of elevated to
anomalous values of placer gold and silver that require follow-up exploration
and evaluation.

     Hence, on February 16, 2005, the Company finalized its agreement with
Zereko Nevada, Inc. (Zereko), a Nevada based corporation engaged in mining
engineering and related services, for various services in support of the ongoing
exploration activities at the Company's Detrital Wash property.

     Currently we are attempting to raise additional capital to continue a
staged exploration program on this property. Although a number of parties have
expressed interest in funding the needed exploration of the DETRITAL WASH, as of
yearend 2004 the Company has been partially successful in completing
arrangements for the start of a staged exploration program.

Wikieup, Arizona Property

     In March, 2001 we purchased from Gold Standard Mines Inc. 51 lode mining
claims located in the WIKIEUP mining district, Mohave County, Arizona.
Consideration for the acquisition was 1,000,000 restricted common shares valued
at $400,000 as of the date of the agreement.

     The WIKIEUP property at present consists of approximately 840 acres (42
lode claims) of mountainous terrain and is accessible by paved and dirt roads
west of Wikieup, Arizona off U.S. Highway 93. The property is located in Section
36, Township 16N, Range 14W in the Holapa Mountain Range. There is nearby access
to electricity and water.

     In the area of the claims where the Company has explored, is the Oakman
mining district, which is located to the northwest and also the Bagdad open pit
copper property located to the southeast of this area.

     We processed a limited number of "spot samples" of stockpiled screened
material from a claim immediately adjacent to our WIKIEUP and found precious
metals to exist in the material, although our sampling did not permit a reliable
quantitative evaluation as we could not be certain of the degree of
pre-treatment and concentration the material had undergone. Nevertheless, the


                                      -10-
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spot samples confirmed our belief, based on the available literature, that the
property shows promise as an exploration target. However, the mountainous
terrain and complex nature of the geological makeup of the WIKIEUP property
would likely make it much more costly to explore and develop than the Company's
other property. As a result, the Detrital Wash property is the Company's primary
focus at this time.

     We have not systematically drilled and sampled the Wikieup property. The
sampling of Detrital Wash property is not sufficient to confirm the presence of
any concentrations of precious metals in a mineable mass. The Company believes
that the staged exploration program being conducted by Zereko Nevada will assist
in making those determinations. There is substantial risk that such testing
would show limited concentrations of precious metals, and such testing may show
a lack of precious metals in a mineable mass. Test results so far have been
positive and confirm the presence of precious metals in the samples. However,
you cannot safely assume that precious metals-bearing materials exist in quality
and quantity to make a mining operation economically feasible.

     Wikieup testing to date has focused principally on assaying materials for
precious metals content, with very limited testing of how to process materials
for production. The various procedures we have used to assay the samples have
not addressed what metallurgical procedures would be best suited to process
precious metals out of the materials on an economic scale. Even if independent
reserve reports indicate the presence of precious metals, further extensive work
will be needed in the form of a feasibility study to determine if the precious
metals (if any are shown likely to be present in the property) in fact can be
processed out of the material at a profit. Some companies decide that even
though one of their properties contains valuable minerals, it is impossible to
remove them profitably in commercial production.


ITEM 3 - LEGAL PROCEEDINGS

     We know of no current or threatened legal proceedings involving us or our
properties reportable under this Item 3.


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

     On December 23, 2004 the Company, by taking the written consents of
shareholders holding a majority of the shares eligible to vote on such matters
increased the authorized capitalization of the Company, approved a Stock Option
and Restricted Stock Plan and announced the election of its Board of Directors.
Actions were taken in lieu of a meeting of shareholders, as authorized by NRS
78.320.

     Total Authorized Capital Stock Increased to 780 Million Shares of Common
Stock and 20 Million Shares of Undesignated Preferred Stock - Having deemed the
current capitalization inadequate to meet the future needs of the corporation;
and to ensure the Company has capital stock available in the future for issue


                                      -11-
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for legitimate corporate purposes; the Company has amended its Articles of
Incorporation as follows:

          "The total authorized capital stock of the corporation shall be Seven
     Hundred Eighty Million (780,000,000) shares of $.001 par value Common
     Stock, all of which shall be entitled to voting power when issued, and
     Twenty Million (20,000,000) shares of undesignated preferred stock. The
     Board of Directors may issue authorized shares of common and preferred
     stock from time to time without action by the shareholders, at such
     consideration as may from time to time be set by the Board of Directors.
     The Board of Directors may issue such shares of common and preferred stock
     in one or more series, at such price and in such number of each series with
     such voting powers, designations, preferences, and rights or qualifications
     or restrictions thereof as shall be stated in the resolution or resolutions
     adopted by them."


     The Company also approved eighteen million (18,000,000) shares of the
authorized but unissued Common Stock (the "Shares") of the Corporation be
reserved for issuance pursuant to the terms and conditions of the Stock Option
and Restricted Stock Plan currently under consideration by its Board of
Directors.

     And, the Company announced the following individuals had been elected
Directors of the Corporation beginning as of January 1, 2005, to serve for one
year or until their successors are elected and qualified: Robert L. Hawkins,
Denny Cashatt, Kamal Alawas and Hassan Alaeddine.


                                     PART II

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

Market for Our Common Stock

     International Star, Inc was dropped from the NASD Over-the-counter Bulletin
Board (OTC-BB) in May of 2003 for failure to file timely its required yearend
2002 10-KSB Annual Report and is currently quoted on the "Pink Sheets" quotation
system under the symbol ISRI:PK.

     The following table shows in United States dollars the high and low bid
quotation for the shares for the last two years. Quotations reflect inter-dealer
prices, without retail mark-up, markdown, or commissions, and do not necessarily
represent actual transactions.

         2003
         First Quarter            $0.040         $0.040
         Second Quarter           $0.000         $0.000
         Third Quarter            $0.000         $0.000
         Fourth Quarter           $0.010         $0.010



                                      -12-
<PAGE>

         2004
         First Quarter            $0.059         $0.059
         Second Quarter           $0.059         $0.109
         Third Quarter            $0.15          $0.17
         Fourth Quarter           $0.10          $0.10

Security Holders

     We had approximately 146 shareholders of record on December 31, 2004, plus
an unknown number of holders in street name.

Dividends

     The company has never paid any dividends, and has no plans to do so in the
foreseeable future. There are no legal, contractual or other restrictions, which
limit the company's ability to pay dividends.

Adoption of Stock Benefit Plan

     Effective January 1, 2005, subsequent to the period covered by this report,
we adopted our 2005 Stock Benefit Plan (the "Plan"). The Plan provides that
18,000,000 of our common shares be reserved for future issuance as direct awards
or upon exercise of options granted under the Plan. We expect to file a
Registration Statement on Form S-8 in connection with the adoption of the Plan.


Recent Sales Of Unregistered Securities

     During the three fiscal years ending on December 31, 2004, we issued and/or
sold the securities listed in the table below without registration under the
Securities Act of 1933. No underwriters were involved in these transactions.
Selling prices for the shares may have been discounted from then prevailing
market prices to reflect the restricted status of the shares or the urgency of
our need for capital. When shares were issued for property or services, in each
instance the valuation of the property or services was based on the board of
director's determination of the value received for the shares.

     The securities were sold by our officers without the use of an underwriter.
In effecting the sales, we relied on the exemption authority provided by Section
4(2) of the Securities Act of 1933, as amended, relating to sales not involving
any public offering. We believe that all such sales were made by our executive
officers in private, negotiated transactions without any advertising, public
announcements or general solicitation. The purchasers of the shares represented
themselves in writing to be, and we believe them to be, members of one or more
of the following classes of purchaser:

     a.   Officers, directors, promoters or control persons of the issuer;
     b.   Accredited investors, as defined in Rule 501 under Regulation D of the
          Securities Act;
     c.   Purchasers in bona fide overseas transactions, as defined in Rule 902
          of Regulation S under the Securities Act; and


                                      -13-
<PAGE>

     d.   Individuals who:
          i.   Are knowledgeable and sophisticated in investment matters;
          ii.  Are able to assess the risks of an investment such as in our
               securities;
          iii. Are financially able to bear the risk of a loss of their entire
               investment; and
          iv.  Have access to pertinent information regarding the issuer and its
               operations.

The shares are subject to the resale provisions of Rule 144 under the Securities
Act of 1933, as amended, and may not be sold or transferred without registration
except in accordance with that rule. Certificates representing the securities
bear a legend to that effect.

===============================================================================
                                                                  Number of
 Date Issued         Class              Amount        Price      Purchasers
----------------- ----------------- ------------ -------------- -------------
Dec 31, 2004      Common Stock          $14,000     $0.10  (1)        1
Dec 3, 2004       Common Stock         $325,000     $0.10  (2)        6
Dec 1, 2004       Common Stock          $50,000     $0.10  (3)        2
Sep 30, 2004      Common Stock          $74,973     $0.10  (4)        1
May 21, 2004      Common Stock         $100,000     $0.066 (5)        2
April 1, 2004     Common Stock          $15,000     $0.11  (6)        1
Feb 17, 2004      Common Stock           $6,000     $0.06  (7)        1
Feb 2, 2004       Common Stock           $1,500     $0.05  (8)        1
-----------------------------------------------------------------------------
(1)  Issued to a director of the company in settlement of management fees due.
(2)  For cash, including 1,620,000 issued to Kilpatrick Life Insurance Co., and
     1,630,000 to affiliates of Kilpatrick. Warrants were issued at $0.15 and
     will expire December 2006.
(3)  Issued for cash to non-affiliate investors. Warrants were issued at $0.15
     and will expire December 2005.
(4)  Issued for cash to non-affiliate investors.
(5)  For cash, 1,515,152 to affiliates of Kilpatrick.
(6)  Issued for cash to non-affiliate investors.
(7)  Issued for cash to non-affiliate investors.
(8)  Issued for cash to non-affiliate investors.
===============================================================================


Derivitive Securities

     The following table lists all of the outstanding securities that are
convertible into our common stock.




                                      -14-
<PAGE>

                       Table of Warrants and Stock Options

<TABLE>
<CAPTION>
===========================================================================================
 Type of Derivative                                   No. of Common Shares     Expiration
      Security         Issue Date    Exercise Price   Underlying Securities       Date
-------------------- -------------- --------------- ------------------------ --------------

     Options           01/01/2005        $0.10            15,500,000(1)         01/01/2010

     Warrants          12/03/2004        $0.15             2,430,000(2)         12/03/2006
-------------------------------------------------------------------------------------------
1    Issued to our executive officers and directors pursuant to our 2005 Stock
     Benefit Plan
2    Issued in connection with a private placement of our stock to Kilpatrick
     Life Insurance Co. and affiliates of Kilpatrick.
===========================================================================================
<S>     <C>
</TABLE>



Subsequent Event - 3:1 Forward Split and New Trading Symbol

     As of February 18, 2005, NASDAQ approved the Company's plans for a 3:1
forward split of the company's common stock. As a result, shareholders of record
received three shares for each share held as of the opening of the stock market
on the effective date, Feb. 22, 2005. As of the approval date, the total number
of shares outstanding for ISRI was 64,428,741, after the 3:1 Forward Split the
total number of shares outstanding was 193,286,223.

     Current ISRI stock certificates displaying a CUSIP# 460371 10 7 were
automatically valued at three times their face value as of the stock market's
opening on Feb. 22, 2005. Surrendered certificates and all newly issued
certificates will be issued with a new CUSIP# 460371 20 6 and will be worth face
value.

     NASDAQ has also assigned a new symbol for International Star Inc. effective
at the opening of the market on Feb. 22, 2005. The new symbol has been assigned
as ILST, and is found on the Pink Sheets listings.


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

Plan of Operation

     We intend to focus on rising the funding necessary for further exploration
on the Detrital Wash property. We believe the results of the limited sampling
conducted in 1998 by AuRic Metallurgical Laboratories and completion of surface
sampling program conducted by Kokanee Placer Ltd. warrant further investigation
of the mineral potential of that property.



                                      -15-
<PAGE>

     During the year we secured additional funding through private placements of
our common stock. Kilpatrick Life Insurance Co. and associated individuals of
Shreveport, Louisiana purchased 4,765,152 shares of our common stock for
$425,000. Additionally, we secured funding through private placements in the
amount of $147,473 for 1,516,364 shares of our common stock, for a total of
$572,473 secured for 6,281,516 shares of common stock for the year.

     We have no credit lines or other sources of cash. We believe our current
cash is sufficient to sustain our administrative overhead over the next twelve
months, and to commence some exploration operations on our Detrital Wash
property. We will continue to pursue means to expand our exploration activities,
either by seeking additional capital through loans or private placements of our
securities, or possibly entering joint venture arrangements with one or more
other, more substantial companies. However, there are no arrangements now in
place to further fund the company by any of these means, and the outcome of the
discussions with other entities cannot be predicted. If we raise capital by
selling our equity stock, the proportionate ownership of existing shareholders
will be diminished (i.e., "diluted").

Results of Discontinued Operations

     For the fiscal year ended December 31, 2004 we reported no revenues versus
$364,146 for the prior year. Revenue for the prior year was attributable to our
Pita King Bakeries subsidiary, acquired in the fourth quarter. In 2004 we
divested the subsidiary, taking effect as of January 1, 2004, so that the
revenue have no significance to our ongoing operations.

     Effective January 1, 2004 we sold our 100% ownership of Pita King Bakeries
International, Inc. back to the founding shareholders from whom we had purchased
the unit. The principals and officers of Pita King returned 4,000,000 of the
4,139,500 shares of International Star's common stock to us, and we forgave debt
totaling $35,000 that we had advanced to Pita King. See "Notes to Financial
Statements," Note F.


Going Concern

         We have incurred substantial operating and net losses, as well as
negative operating cash flow, since our inception. Accordingly, we continued to
have significant stockholder deficits and working capital deficits during the
year ended December 31, 2004. In recognition of these trends, our independent
registered accountants, Madsen and Associates CPAs, Inc., included cautionary
statements in their report on our financial statements for the year ended
December 31, 2004 that expressed "substantial doubt" regarding our ability to
continue as a going concern.

         Our ability to continue as a going concern is dependent on obtaining
additional working capital and our management has developed a strategy which it
believes will accomplish this objective through additional equity funding, long
term financing, and payment of Company expenses by our officers, if needed,
which will enable us to operate for the coming year.



                                      -16-
<PAGE>

ITEM 7 -- FINANCIAL STATEMENTS

     The Financial Statements meeting the requirements of Regulation S-B follow.





Board of Directors
International Star, Inc. and Subsidiaries
Henderson, Nevada


                REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM


We have audited the accompanying consolidated balance sheets of International
Star, Inc. and Subsidiaries (an Exploration Stage Company) as of December 31,
2004 and 2003 and the related consolidated statements of operations,
stockholders' equity and cash flows for the years ended December 31, 2004 and
2003. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards of the Public
Company Accounting Oversight Board ("PCAOB"). Those standards require that we
plan and perform an audit to obtain reasonable assurance 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,
significant estimates made by management and evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, based upon our audits, these consolidated financial statements
present fairly, in all material aspects, the consolidated financial position of
the Company as of December 31, 2004 and 2003, and the consolidated results of
its operations and cash flows for the years ended December 31, 2004 and 2003 in
conformity with accounting principles generally accepted in the United States of
America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company does not have the
necessary working capital to service its debt and for its planned activity,
which raises substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are described in Note F to the
financial statements. These financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

Madsen & Associates CPA's, Inc.
March 10, 2005
Salt Lake City, Utah




                                      -17-
<PAGE>

                            INTERNATIONAL STAR, INC.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                         (An Exploration Stage Company)


<TABLE>
<CAPTION>
                                                                        December 31,      December 31,
                                ASSETS                                      2004              2003
                                                                       --------------    --------------
Current Assets:
<S>                                                                     <C>               <C>
     Cash                                                               $    200,266      $    364,146
     Accounts Receivable                                                          -             23,805
     Inventories                                                                  -             63,812
     Prepaid Legal Fees                                                           -              1,990
     Prepaid expenses                                                         54,000                -
                                                                       --------------    --------------
                                                  Total Current Assets       254,266           453,753
Mineral Assets:
     Screened Ore                                                                 -              2,600
                                                                       --------------    --------------
                                                  Total Mineral Assets            -              2,600

Fixed Assets (Net of Depreciation)                                            33,578           284,888
Other Assets & Prepaid Rent                                                       -             28,402
Goodwill                                                                          -            64,472
                                                                       --------------    --------------
                                                          Total Assets  $    287,844      $    834,115
                                                                       ==============    ==============

                 LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
     Accounts payable and accrued interest                              $      1,275      $     31,968
       Advances and Loans from officers with accrued interest                     -             49,392
     Accrued Compensation and Management Fees                                      -           117,105
                                                                       --------------    --------------
                                             Total Current Liabilities         1,275           198,465

Long-term Liabilities:
     Line of Credit and Accrued Interest                                $         -       $     84,206
     Note Payable                                                            250,000           250,000
                                                                       --------------    --------------
                                           Total Long-term Liabilities       250,000           334,206

Stockholders' Equity:
       Common Stock, $.001 par value; authorized 100,000,000 shares;    $     64,430      $     60,043
       issued and outstanding 64,428,741 and 60,042,227 at December
       31, 2004 and December 31, 2003, respectively.
     Paid-In Capital                                                       3,015,787         2,295,282
     Accumulated Deficit                                                  (3,043,648)       (2,053,881)
                                                                       --------------    --------------
                                            Total Stockholders' Equity        36,569           301,444

                                                                       --------------    --------------
                            Total Liabilities and Stockholders' Equity  $   (287,844)     $    834,115
                                                                       ==============    ==============
</TABLE>


               See accompanying notes to the financial statements.


                                      -18-
<PAGE>

                            INTERNATIONAL STAR, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                         (An Exploration Stage Company)


<TABLE>
<CAPTION>
                                                                 Year Ended             Year Ended
                                                              December 31, 2004      December 31, 2003
                                                             -------------------    ------------------

<S>                                                           <C>                    <C>
Revenue:                                                      $              -       $        363,635
                                                             -------------------    ------------------
                                              Total Revenue                  -                363,635

Cost of Goods Sold:
     Materials                                                               -                134,666
     Packaging                                                               -                      -
                                                             -------------------    ------------------
                                  Total Cost of Goods Sold:                  -       $        134,666

Gross Profit                                                                 -       $        228,969

 Expenses:
     Mineral exploration costs                                         231,145                  1,857
     Professional fees                                                  87,813                      -
     Management fees                                                   219,827                135,000
     Compensation                                                      277,000                212,267
     Depreciation & amortization                                         2,859                 25,230
     General & administrative                                           42,374                302,500
                                                             -------------------    ------------------
                                             Total Expenses            861,018                676,854

                                                             -------------------    ------------------
                                  Net (loss) from operation   $     (861,018)        $       (447,885)
                                                             ===================    ==================

Other Income (Expenses)
     Interest Expense                                                 (29,277)                (11,650)
     Loss on divestiture of subsidiary                                (99,472)                      -
                                                             -------------------    ------------------
                                       Total Other Expenses          (128,749)                (11,650)
                                                             -------------------    ------------------
                                                   Net Loss          (989,767)               (459,535)
                                                             ===================    ==================

                                    Weighted Average Shares
                                   Common Stock Outstanding       58,366,381             40,393,069
                                                             ===================    ==================

                                  Net Loss Per Common Share
                                 (Basic and Fully Dilutive)   $         (0.02)       $         (0.02)
                                                             ===================    ==================
</TABLE>


                See accompanying notes to financial statements.


                                      -19-
<PAGE>

                            INTERNATIONAL STAR, INC.
                                AND SUBSIDIARIES
                        STATEMENT OF STOCKHOLDERS' EQUITY
                         (AN EXPLORATION STAGE COMPANY)
                    FROM JANUARY 1, 2003 TO DECEMBER 31, 2004


<TABLE>
<CAPTION>
                                           Common             Common
                                            Stock             Stock             Paid-In          Accumulated           Total
                                           Shares             Amount            Capital            Deficit             Equity
                                        --------------    ---------------    ---------------    ---------------    ---------------
<S>                                       <C>                   <C>              <C>              <C>               <C>
Balances as of January 1, 2003            $36,050,737           $ 36,051         $1,494,501       $ (1,594,347)     $     (63,795)
Common stock issued for cash.  August
13, 2003 Valued at $.010 per share            185,000                185             18,315                  -             18,500
Common stock issued for cash.  August
13, 2003 Valued at $.05 per share           1,000,000              1,000             49,000                  -             50,000
Common stock issued for cash.
September 25, 2003 Valued at $.10 per
share                                          30,000                 30              2,970                  -              3,000
Common stock issued for cash.
September 25, 2003 Valued at $.02 per
share                                         255,000                255              4,845                  -              5,100
Common stock issued for debt to
shareholders and officers.  November
12, 2003 Valued at $0.0331/3 per share     14,807,990             14,808            475,415                  -            490,223
Common stock issued for debt.
November 14, 2003 Valued at $0.0331/3
per share                                   7,663,500              7,664            247,786                  -            255,450
Common stock issued for debt.
November 17, 2003 Valued at $.05 per
share                                          50,000                 50              2,450                  -              2,500
Net Loss for the year ended December
31, 2003                                            -                  -                  -           (459,535)          (459,535)
                                        --------------    ---------------    ---------------    ---------------    ---------------
Balances at December 31, 2003              60,042,227      $      60,043      $   2,295,282      $    (203,881)          $301,444
                                        ==============    ===============    ===============

Shares cancelled from divestiture of
Pita King Bakeries, Int'l, Inc.            (4,000,000)            (4,000)            (4,000)
Shares returned to Company and
cancelled                                     (35,000)               (35)            (2,965)
Common stock issued for cash.
February 20, 2004 Valued at $.05 per
share                                          30,000                 30              1,470
Common stock issued for cash.
February 20, 2004 Valued at $.06 per
share                                         100,000                100              5,900
Common stock issued for cash.  April
27, 2004 Valued at $.11 per share             136,364                136             14,864
Common stock issued for cash.  May
28, 2004 Valued at $.07 per share             151,515                152              9,848
Common stock issued for cash.  June
7, 2004 Valued at $.07 per share            1,363,636              1,364             88,636


                                      -20-
<PAGE>



                                           Common             Common
                                            Stock             Stock             Paid-In          Accumulated           Total
                                           Shares             Amount            Capital            Deficit             Equity
(continued)                             --------------    ---------------    ---------------    ---------------    ---------------

<S>                    <C>                <C>                   <C>              <C>              <C>               <C>
Capital contributed for interest
expenses.  June 30, 2004                            -                  -              7,500
Common stock issued for services.
September 30, 2004 Valued at $.03 per
share                                       2,000,000              2,000             58,000
Common stock issued for cash.
October 6, 2004 Valued at $.10 per
share                                         750,000                750             74,250
Common stock issued for cash.
November 29, 2004 Valued at $.10 per
share                                         500,000                500             49,500
Common stock issued for cash.
December 8, 2004 Valued at $.10 per
share                                       3,250,000              3,250            321,750
Common stock issued for services.
December 31, 2004 Valued at $.10 per
share                                         140,000                140             13,860
Capital contributed for services and
accrued expenses                                    -                  -             73,892
                                        --------------    ---------------    ---------------
Net (loss) for year ended
  December 31, 2004                        64,428,741             64,430          3,015,787
                                        ==============    ===============    ===============
</TABLE>


                See accompanying notes to financial statements.



                                      -21-
<PAGE>

                            INTERNATIONAL STAR, INC.
                                AND SUBSIDIARIES
                            STATEMENTS OF CASH FLOWS
                         (AN EXPLORATION STAGE COMPANY)


<TABLE>
<CAPTION>
                                                                             Year Ended        Year Ended
                                                                            December 31,       December 31,
                                                                                2004              2003
                                                                           ---------------    ---------------
Cash Flows Used in Operating Activities:
<S>                                                                         <C>                <C>
                                                              Net Loss      $    (989,767)     $   (459,535)
Adjustments to Reconcile net loss to
     Common stock issued for services                                              74,000                 -
     Loss of divestiture of Pita King                                              99,472                 -
     Depreciation & Amortization                                                    2,859             25,230
                                                                           ---------------    ---------------
                                           Net Cash used in Operations           (813,436)     $    (434,305)
Changes to Operating Assets and Liabilities:
     (Increase) decrease in screened ore                                            2,600                 -
     (Increase) decrease in Accounts Receivable and Prepaids                       25,795              3,618
     (Increase) decrease in Inventories                                            63,812            (15,562)
     (Increase) decrease in Goodwill and other assets                              92,874                 -
     (Decrease) Increase in accounts payables and accrued interest                (30,693)           (51,041)
    (Decrease) Increase in accrued management fees / compensation                 (44,474)          (125,326)
                                                                           ---------------    ---------------
                               Cash Flows Used in Operating Activities           (703,522)          (622,616)
Cash Flows used in Investing Activities:
     Purchase fixed assets                                                        (29,355)           (11,169)
                                                                           ---------------    ---------------
                               Cash Flows Used in Investing Activities                               (11,169)
Cash Flows from Financing Activities:
     Common stock issued for cash                                                 569,000            332,050
     Proceeds from notes payable                                                       -             250,000
     Repayments on line of credit                                                      -             (17,281)
     Advances from officers/affiliates                                                 -             393,478
                                                                           ---------------    ---------------
                                  Cash Flows from Financing Activities            569,000            958,247
                                                                           ---------------    ---------------
                                       Net Increase (Decrease) in Cash           (163,880)           324,462
                                           Cash at Beginning of Period            364,146             39,684
                                                                           ---------------    ---------------
                                                 Cash at End of Period      $     200,266      $     364,146
                                                                           ===============    ===============
Supplemental Non-Cash Financing Activities:
     Cancellation of 4,000,000 shares from the divestiture of Pita
King Bakeries Int'l
       at January 1, 2004                                                   $          -       $          -
                                                                           ===============    ===============
     Common stock issued for loans, cash advances, accrued management
        fees and interest                                                   $          -       $     492,723
                                                                           ===============    ===============
     Capital contributed for payment of loans, cash advances and            $      81,392      $          -
        interest
                                                                           ===============    ===============
     Interest Paid                                                          $      21,777      $      10,106
                                                                           ===============    ===============
    Income Taxes Paid                                                       $          -       $          -
                                                                           ===============    ===============

</TABLE>


                See accompanying notes to financial statements.


                                      -22-
<PAGE>

                            INTERNATIONAL STAR, INC.
                                AND SUBSIDIARIES

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2004

A.   ORIGINATION AND HISTORY

International Star, Inc. (the Company) was incorporated October 28, 1993 as a
Nevada corporation. On November 5, 1993, the Company issued 2,500 shares, no par
value, for cash consideration of $5,000 in a 504 intrastate offering. The
Company amended its "Articles of Incorporation" on January 22, 1997, increasing
its authorized common stock from 2,500 shares to 100,000,000 shares and
modifying its par value to $.001 per share.

In January 1997, the Company forward split its common stock to 6,000,000 shares
in a 2400:1 exchange. In April 1997, the Company again forward split its stock
5:1, increasing the total outstanding shares to 30,000,000 and, in a
reorganization of outstanding shares canceled 17,400,000 shares forward split
the balance of the shares 8:1 for an additional issuance of 10,080,000 shares to
the 12,600,000 shares outstanding, and then issued 300,000 shares to the
shareholders who canceled the 17,400,000 shares, resulting in 22,980,000 shares
issued and outstanding. Also, in April 1997, the Company issued 4,500,000
shares, (valued at $10,000) in consideration of services performed by various
individuals and corporations. The 4,500,000-share transaction, which predates
the 5:1 and 8:1 transactions, were apparently not impacted by either of the two
aforementioned forward splits, but resulted in a total of 27,480,000 shares of
common stock issued and outstanding.

In April 1997, the Company entered the waste management business. A loan of
$50,000 was obtained from an affiliated entity, American Holding Group, at 3%,
(no formal loan documents were drafted), a portion of which was used to open a
Company office in Idaho Falls, Idaho.

Due to a lack of capital, the Company was only able to obtain a small
instrumentation sale for $17,444 to Asia Kingtec Co. LTD., in December 1997. The
Company closed its office in January 1998 and abandoned the computers and office
equipment, purchased at $6,981, to the three individuals who lead the Company
into the waste management business. The Company accounts payable reflect $11,455
in disputed bills from these discontinued operations, which the Company does not
intend to pay.

The three officers and directors who were appointed at the time of the Company's
connection with the foray into the waste management business, resigned in August
1999. The Company accepted the resignations on September 8, 1999.

On July 17, 1998, the Company entered into an extraction agreement with AuRic
Metallurgical Laboratories, Inc., a Utah limited liability corporation, with the
requirement that the Company pay a 1% net smelter return to AuRic for
utilization of its technology.



                                      -23-
<PAGE>

On October 12, 1998, the Company entered into a letter of intent with North
American Industrial Development Authority, Inc. (NAIDA), of Kingman, Arizona.
The original proposal involved constructing an investment in a mineral
processing plant in order to process ores from the Company's mineral property.
In exchange, NAIDA would receive 15% of the total ore produced. However, because
of NAIDA's inability to perform, the proposal was never set into motion.

On October 15, 2001, the Company formed a wholly owned subsidiary called Qwik
Track, Inc. (Qwik Track). Qwik Track operated as an internet web-based business
that provides handicapping, analytical data and statistical information for
wagering on thoroughbred horse races. Qwik Track was to offer wagering
enthusiasts the opportunity to participate in multiple racetrack wagering via
the Internet. Further development of this web-based business has been halted for
the time being while we focus our limited resources on our mineral exploration
activities.

On October 1, 2002, the Company acquired all of the outstanding shares of common
stock of Pita King Bakeries International, Inc. (Pita King) making Pita King a
wholly owned subsidiary of the Company. Pita King operated a retail bakery
outlet in Everett, Washington which commenced operations in September of 2001.

On January 1, 2004, the original shareholders of Pita King and the management of
the Company mutually agreed to dissolve their business relationship. See "Notes
to Financial Statements," Note F.

The Company's main focus of business, commencing January 1, 2004, is the
exploration of mining claims and mining properties. The Company has in
accordance with guidelines of the Securities and Exchange Commission (SEC)
appropriately disclosed that the company is considered and exploration stage
company.

B.   SIGNIFICANT ACCOUNTING POLICIES

     1.   Principles of Consolidation and Accounting Methods

     These consolidated financial statements include the accounts of
     International Star, Inc., and Qwik Track, Inc. (a wholly owned subsidiary)
     for the fiscal year ended December 31, 2004 and the accounts of
     International Star, Inc., Qwik Track, Inc. and Pita King Bakeries
     International, Inc. (a wholly owned subsidiary) for the fiscal year ended
     December 31, 2003.

     2.   Use of Estimates

     The preparation of consolidated financial statements in conformity with
     generally accepted accounting principles requires management to make
     estimates and assumptions that affect the reported amount of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the financial statements and the reported amounts of revenues and
     expenses during the reporting period. Actual results could differ from
     those estimates.



                                      -24-
<PAGE>

     3.   Dividend Policy

     The Company has not adopted a policy regarding the payment of dividends.

     4.   Mineral Properties and Equipment

     The Company has expensed the costs of acquiring and exploring its
     properties during the periods in which they were incurred, and will
     continue to do so until it is able to determine that commercially
     recoverable ore reserves are present on the properties. If it determines
     that such reserves exist, it will capitalize further costs.

     5.   Basic and Dilutive Net Income (Loss) Per Share

     Basic net income (loss) per share amounts are computed based on the
     weighted average number of shares actively outstanding in accordance with
     SFAS NO. 128 "Earnings Per Share." Diluted net income (loss) per share
     amounts are computed using the weighted average number of common shares and
     common equivalent shares outstanding as if shares had been issued on the
     exercise of any common share rights unless the exercise becomes antidultive
     and then only the basic per share amounts are shown in the report.

     6.   Comprehensive Income

     The Company adopted SFAS No. 130, "Reporting Comprehensive Income", which
     requires inclusion of foreign currency translation adjustments, reported
     separately in its Statement of Stockholders' Equity, in other comprehensive
     income. Such amounts are immaterial and have not been reported separately.
     The Company had no other forms of comprehensive income since inception.

     7.   Stock Based Compensation

     The Company has elected to follow Accounting Principles Board Opinion No.25
     (APB 25) and related interpretations in accounting for its employee stock
     options. Under APB25, when the exercise price of employee stock options is
     equal to the estimated market price of the stock on the date of grant, no
     compensation expense is recorded. The Company has adopted the
     disclosure-only provisions of Statement of Financial Accounting Standards
     No. 123 (SFAS 123) with respect to employee stock options.

     8.   Income Taxes

     The Company has adopted SFAS No. 109 "Accounting for Income Taxes". The
     Company accounts for income taxes under an asset and liability approach
     that requires the recognition of deferred tax assets and liabilities for
     the expected future tax consequences of events that have been recognized in
     the Company's financial statements or tax returns. In estimating future tax
     consequences, all expected future events, other than enactment of changes
     in the tax laws or rates, are considered.

     Due to the uncertainty regarding the Company's future profitability, the
     future tax benefits of its losses have been fully reserved and no net tax
     benefit has been recorded in these financial statements.



                                      -25-
<PAGE>

     9.   Fair Value of Financial Instruments

     The respective carrying value of certain on-balance-sheet financial
     instruments approximated their fair values. These financial instruments
     include cash, tax credit recoverable, reclamation bond, accounts payable
     and accrued liabilities, amount due to a director and loan payable.

     10.  Recent Accounting Pronouncements

     The Company does not expect that the adoption of other recent account
     pronouncements will have a material effect on its financial statements.

     11.  Revenue Recognition

     Revenue will be recognized on the sale and delivery of a product or the
     completion of a service provided.

     12.  Statement of Cash Flows

     For the purposes of the statement of cash flows, the Company considers all
     highly liquid investments with maturity of three months or less to be cash
     equivalents.

     13.  Financial and Concentration Risk

     The Company does not have any concentration or related financial credit
     risk.


C.   EXPLORATION PROPERTIES INCREASED BY 20,000 ACRES

February 13, 2004 we acquired the exploration rights on 131 mineral claims
(approximately 20,000 acres) surrounding our existing Detrital Wash property by
entering into a mineral lease agreement with Associated Placer Group (APG). The
lease required no cash or stock settlement; did not require any minimum royalty
payments and charged a royalty of .025% of net smelter returns (NSR). The term
of the lease was 20 years, renewable for an additional 20 years. Furthermore,
the Company agreed to spend a minimum of $125,000 in exploration costs over a
three-year period and to keep the claims in good standings by paying the Bureau
of Land Management (BLM)"maintenance fees" during the three-year period.

D.   LOANS AND ADVANCES FROM COMPANY DIRECTORS

Company directors have from time to time advanced funds to the Company for the
payment of operating expenses. These advances have been repaid in cash and
through common stock of the Company. The amounts that were due to the Company
directors for these advances was $0 and $49,392 at December 31, 2004 and 2003,
respectively. During the year ended December 31, 2004, directors of the Company
contributed to capital amounts that totaled $73,892 as payment for the advances
and accrued compensation that was owed to them.



                                      -26-
<PAGE>

The Company's President/CEO and Vice-President/COO charges the Company a
management fee of $5,000 each per month, totaling $120,000 annually. A director
of the Company is also compensated in the form of a management fee in the amount
of $5,000 per month as the Director of Mineral Operations for the Company.

E.   COMMON STOCK

During the year ended December 31, 2003, the Company issued 9,133,500 shares of
common stock for cash with the shares valued at a range of $0.01 to $0.10 per
share. The Company also issued 14,857,990 shares of common stock for loans, cash
advances, accrued management fees and interest valued at a range of $0.03 1/3 to
$0.05 per share.

During the year ended December 31, 2004, the Company issued 6,281,515 shares of
common stock for cash with the shares valued at a range of $0.05 to $0.11 per
share. The Company also issued 2,140,000 shares of common stock for services
rendered to the Company at $0.03 and $0.10 per share.

F.   ACQUISITION AND DIVESTITURE OF PITA KING BAKERIES INTERNATIONAL, INC.

On October 1, 2002, the Company issued 4,139,500 restricted shares of common
stock to the shareholders of Pita King Bakeries International, Inc. (Pita King)
and acquired all of the outstanding shares of Pita King. Pita King Bakeries
International, Inc. (a Nevada corporation) is a wholly owned subsidiary, and the
holding company for Pita King Ltd. (a Washington corporation). Pita King, Ltd.
began operations as a retail bakery in Everett, Washington in September of 2001
and continues to operate as a retail bakery. The results of Pita King's
operations for the fiscal year ended October 31, 2003 are included in the
consolidated statement of operations.

Effective January 1, 2004, the original shareholders of Pita King and the
management of the Company mutually agreed to dissolve their business
relationship. Under terms of this dissolution, the original shareholders of Pita
King returned 4,000,000 shares of common stock to the Company and Company agreed
to forgive a $35,000 loan made to Pita King. The original shareholders of Pita
King were allowed to retain 139,500 shares of the Company's common stock which
they had received as part of the original purchase of Pita King. The Company has
recognized a loss of $99,472 on the divestiture of Pita King.

G.  INVESTMENT IN QWIK TRACK, INC.

On October 15, 2001, Qwik Track, Inc. (Q-Track) was organized as a wholly owned
subsidiary of International Star, Inc. Q-Track was to operate as a web-based
service business providing the wagering enthusiast with thoroughbred
handicapping, analytical data and statistical information for racetrack wagering
over the Internet. Q-Track has not commenced principal operations and management
halted developmental efforts in 2004 allowing us to focus our limited resources
on the mineral properties.



                                      -27-
<PAGE>

H.  QUANTITATIVE AND QUALITATIVE DISCLOSURES

The Company will be exposed to various market risks as a part of its future
operations. As an effort to mitigate losses associated with these risks, the
Company may, at times, enter into derivative financial instruments. These may
take the form of forward sales contracts and interest rate swaps. The Company
does not actively engage in the practice of trading derivative securities for
profit. This discussion of the Company's market risk assessments contains
"forward looking statements" that contain risks and uncertainties. Actual
results and actions could differ materially from those discussed below.

The Company's future operating results will be substantially dependent upon the
world market prices of Palladium, Platinum, Gold and Silver, which can fluctuate
widely and are affected by numerous factors, such as supply and demand and
investor sentiment. In order to mitigate some of the risk associated with these
fluctuations, the Company may at times enter into forward sale contracts. The
Company will continually evaluate the potential benefits of engaging in these
strategies based on the then current market conditions. Counter parties as a
result of its hedging activities may expose the Company to nonperformance. This
exposure would be limited to the amount that the spot price of the metal falls
short of the contract price.

I.  NOTE PAYABLE

On October 28, 2003 management approved the acceptance of a Subscription
Agreement and Loan Agreement between the Company and a Life Insurance Company.
Under the terms of the agreement, the Life Insurance Company loaned $250,000 to
the Company. This note carries an interest rate of 6% per annum with interest
only payable in quarterly installments with the first quarterly interest payment
due on April 28, 2004. This note is due and payable in full on October 28, 2006
and is secured by a mortgage of a 25% mineral interest in the Company's original
1,280 acre Detrital Wash Mining Claims in Mohave County, Arizona (see Note E
Re-Establishing the Detrital Wash Project). This Life Insurance Company also
purchased 7,663,500 shares of the Company's common stock at a value of $0.03 1/3
for a total purchase price of $250,000 (see Note H Common Stock). The Company is
current on its obligations under this note and has paid all interest due on this
note through December 4, 2004.

NOTE J - GOING CONCERN

The Company will need additional working capital to service its debt and for its
planned activity, which raises substantial doubt about its ability to continue
as a going concern. The continuation of the Company as a going concern is
dependent on obtaining additional working capital and the management of the
Company had developed a strategy which it believes will accomplish this
objective through additional equity funding, long term financing, and payment of
Company expenses by its officers, if needed, which will enable the Company to
operate for the coming year.





                                      -28-
<PAGE>

Item 8  -  Changes in or Disagreements with Accountants

None.



Item 8A  -  Controls and Procedures

     Our Principal Executive Officer and Principal Financial Officer have
reviewed and evaluated the effectiveness of our disclosure controls and
procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the
period covered by this report. Based on that evaluation, the Principal Executive
Officer and Principal Financial Officer have concluded that the company's
current disclosure controls and procedures are effective to ensure that
information required to be disclosed by the company in reports it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms. There was no change in the company's internal controls that
occurred during the fourth quarter of the period covered by this report that has
materially affected, or is reasonably likely to affect, the company's internal
controls over financial reporting.


<PAGE>


                                    PART III

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

The following is a list of our current directors and executive officers.
Directors hold office for one year or until their successors are duly elected.
Executive officers serve until resignation or removal, at the pleasure of the
Board of Directors.


                                      -29-
<PAGE>
<TABLE>
<CAPTION>
===========================================================================================
       Name                   Age         Position(s) held                 Service began
-------------------------- -------- ------------------------------------ -----------------
<S>                           <C>      <C>                                 <C>
Robert L. Hawkins             60       President, CEO, Director            Sept. 2003(1)
Denny Cashatt                 57       Vice President, COO, Director       Sept. 2003
Dottie Wommack McNeely        48       Secretary, Treasurer                April 2004
Kamal Alawas                  54       Director of Mining Operations       Sept. 2003(2)
Hassan Alaeddine              49       Director                            Oct. 2004
Virginia Shehee               84       Director                            Jan. 2005 (3)
-----------------------------------------------------------------------------------------
1.   Mr. Hawkins also served as Secretary and Treasurer from June 2002 to
     September 2003, and as president of Qwik Track from October 2001.
2.   Mr. Alawas served as President and CEO from September 1999 to September
     2003.
3.   Service began subsequent to the period covered by this annual report.
===========================================================================================
</TABLE>


     Robert L. Hawkins, age 60, President/CEO and Director, joined the Company
in October of 2001 as a Director and President of Qwik Track, Inc. Prior to
joining the Company, Mr. Hawkins was with International Business Machines for
twenty-four years serving in various management and staff positions in Branch,
District, Region and Corporate Offices. In the most resent five years Mr.
Hawkins has served as Vice President of Development for QwikCap Corp and
TurfClub.Com.

     Denny Cashatt, age 57, joined the Company after serving for the past two
years as Vice President of Marketing - U.S. Operations for International
Software Company of Paris, France. Prior to that he was Vice President of
Winner's Edge, an information distribution company. Mr. Cashatt has extensive
sales, marketing and project management experience in the field of computer
software.

     Kamal Alawas, age 54, served as the Company's President/CEO for the
preceding four years. Presently, he serves on the Board of Directors of Franklin
Lake Resources, a publicly traded Nevada company (FKLR: BB).

     Hassan Alaeddine, age 49, with fifteen years experience in the bakery
business co-founded Pita King Bakeries International, Inc in Everett,
Washington.

     Virginia Kilpatrick Shehee, former State Senator of Louisiana and current
President and CEO of Kilpatrick Life Insurance, joined the Board of Directors of
International Star, Inc. effective January 5, 2005.

     Lynetta Hawkins, age 54, President/CEO's wife, for the interim period June
2002 through March 2004 served as the Company's Secretary and Treasurer. Mrs.
Hawkins no longer serves in any capacity for International Star, Inc.



                                      -30-
<PAGE>

     Dottie Wommack McNeely, age 48, assumed the duties of Secretary/Treasurer
as of April 1, 2004. Mrs. McNeely formerly served with Northeast Texas Community
College as Administrative Assistant to the Vice-President of Administrative
Services and as Associate Faculty in the Computer Science Department.

     No officer or director of the Company is or has been involved in any form
of legal proceedings disclosable under this item.

Family Relationships

     For the interim period, October 1, 2002 through April 30, 2004 the
President/CEO's wife served as the Company's Secretary and/or Treasurer. Mrs.
Hawkins no longer serves in any capacity for International Star, Inc.

Audit Committee Financial Expert

     We do not have an audit committee or an audit committee financial expert,
owing to our severely limited financial resources. Based on our limited
operations, we do not believe that our lack of such an expert is material to the
integrity of our financial statements.

     The Board of Directors carries out the responsibilities that an audit
committee would have. In this respect the Board of Directors has the
responsibility of reviewing our financial statements, exercising general
oversight of the integrity and reliability of our accounting and financial
reporting practices, and monitoring the effectiveness of our internal control
systems. The Board of Directors also recommends selection of the auditing firm
and exercises general oversight of the activities of our independent auditors,
principal financial and accounting officers and employees and related matters.

Code of Ethics

     We have adopted a Code of Ethics that applies to our principal executive
officer, principal financial officer, and principal accounting officer. Upon
request, we will provide a copy of our Code of Ethics to any person without
charge. Requests should be submitted in writing to International Star, Inc.,
Attn: Shareholder Relations, 2266 Chestnut Bluffs, Henderson, NV 89052.

Compliance with Section 16(a) of the Exchange Act

     Based solely on a review of Forms 3, 4 and 5 furnished to us with respect
to our most recent fiscal year, we believe that the following reports under
Section 16(a) of the Exchange Act with respect to our securities were not timely
filed:

     Form 5 for Kamal Alawas for the fiscal year ended December 31, 2005 was not
     timely filed. However, the report has been filed as of the date of this
     Annual Report.

     Form 5 for Robert Hawkins for the fiscal year ended December 31, 2005 was
     not timely filed. However, the report has been filed as of the date of this
     Annual Report.



                                      -31-
<PAGE>

     Form 5 for Denny Cashatt for the fiscal year ended December 31, 2005 was
     not timely filed. However, the report has been filed as of the date of this
     Annual Report.

     Form 5 for Dottie Wommack-McNeely for the fiscal year ended December 31,
     2005 was not timely filed. However, the report has been filed as of the
     date of this Annual Report.

     Form 5 for Virginia Sheehee for the fiscal year ended December 31, 2005 was
     not timely filed. However, Ms. Sheehee is aware of the oversight and
     expects to file the report shortly.

     Form 5 for Hassan Alaeddine for the fiscal year ended December 31, 2005 was
     not timely filed. However, Mr. Alaeddine is aware of the oversight and
     expects to file the report shortly.


ITEM 10 -- EXECUTIVE COMPENSATION.

     The Board of Directors granted key employees, officers and/or directors an
Option to Purchase a certain number of shares of common stock of the
Corporation. Options to Purchase an aggregate of 15,500,000 shares of the
un-issued common stock of the Corporation for the option price of $0.10 per
shares was approved by written consent of more than 51% of the registered
shareholders in lieu of a meeting of shareholders, as authorized by NRS 78.320,
by taking the written consents of shareholders holding a majority of the shares
eligible to vote on such matters.

     Each of our present directors who is also an employee/officer receives no
additional compensation for acting as a director or attending meetings.

     Since incorporation, no company officer's salary plus any form of
additional compensation has exceeded $100,000 annually. The Summary Compensation
Table following shows all forms of compensation paid to our Chief Executive
Officer for the years indicated



                                      -32-
<PAGE>

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
==========================================================================================================================
                                                                             Long Term Compensation
                                                                  --------------------------------------------
                                       Annual Compensation                        Awards              Payouts
                                   ------------------------------ ---------------------------------- ----------
         (a)               (b)       (c)        (d)        (e)          (f)              (g)            (h)        (i)
                                   Salary     Bonus       Other     Restricted       Securities        LTIP     All Other
                                                          Annual    Stock Awards     Underlying        Payouts   Compen-
                                                          Compen-                   Options/SARs                 sation
                                                          sation
Name and Principle        Year        ($)        ($)        ($)         (#)              (#)            ($)        ($)
Position
------------------------- -------- ---------- ---------- -------- ---------------- ----------------- ---------- ----------
Robert Hawkins            2003     $60,000
President/CEO,            2004     $60,000    $18,000          0              0    5,500,000(3)
Director(1)
------------------------- -------- ---------- ---------- -------- ---------------- ----------------- ---------- ----------
Kamal Alawas
President/CEO,            2003     $60,000
Director(2)               2004     $60,000    $18,000                              3,500,000(4)
--------------------------------------------------------------------------------------------------------------------------
1.       Mr. Hawkins served as Secretary and Treasurer from June 2002 until September 2003.
2.       Since September 2003 Mr. Alawas has served as Director of Mining Operations.
3.       All options awarded December 2004, did not go into effect until January 1, 2005.
4.       Awarded as a signing/merit bonus upon completion of detailed objectives.
==========================================================================================================================
<S>     <C>
</TABLE>


     Options or SARs were granted to officers, directors or employees during our
most recent fiscal year. On December 10, 2004 after receiving a majority vote
from the shareholders of International Star, an "Employee Stock Option Plan" was
adopted and became effective January 1, 2005. The options will terminate on
January 1, 2010.

     At December 31, 2004, there were no effective options or SARs held by our
officers and directors. No options or SARs were exercised during our most recent
fiscal year.


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

     The following table sets forth certain information about beneficial
ownership of our common stock as of February 1, 2005 by each officer and
director, by any person or group who is known by us to own more than 5% of our
common stock, and by the officers and directors as a group.

                                      -33-
<PAGE>

<TABLE>
<CAPTION>
==============================================================================================
Title of            Name and Address of             Amount and Nature of        Percent of
 Class              of Beneficial Owner             Beneficial Ownership          Class
---------------- ---------------------------- ------------------------------ --------------
<S>              <C>                 <C>         <C>          <C>                <C>
Common           Virginia K. Shehee              Direct       14,773,636(1)       17.1%
                 1818 Marshall St.
                 Shreveport, LA 71161
Common           Kamal Alawas                    Direct       12,681,508(2)       14.7%
                 52 Megan Dr
                 Henderson, NV 89074
Common           Robert L. Hawkins               Direct        9,197,612(3)       10.7%
                 52 Megan Dr
                 Henderson, NV 89074
Common           Denny Cashatt                   Direct        6,339,456(4)        7.4%
                 2266 Chestnut Bluffs
                 Henderson, NV 89052
Common           Dottie Wommack McNeely          Direct        1,183,334(5)        1.4%
                 2266 Chestnut Bluffs
                 Henderson, NV 89052
Common           Hassan Alaeddine                Direct          505,000(6)        0.6%
                 2210-37 Street
                 Everett, WA 98201
-------------------------------------------------------------------------------------------
                          Total All Officers/Directors        44,680,546          51.8%
-------------------------------------------------------------------------------------------
(1)  Includes shares beneficially owned by Kilpatrick Life Insurance Co., a
     privately owned company controlled by Mrs. Shehee. Includes 2,430,000
     shares issuable upon exercise of warrants at $0.15, and 1,000,000 shares
     issuable upon exercise of options at $0.10 per share.
(2)  Includes 500,000 shares beneficially owned by Alawas Investments, Inc., a
     private investment company controlled by Mr. Alawas. Includes 3,500,000
     shares issuable upon exercise of options at $0.10.
(3)  Includes 363,036 shares beneficially owned by Mr. Hawkins' spouse. Includes
     5,500,000 shares issuable upon exercise of options at $0.10.
(4)  Includes 4,500,000 shares issuable upon exercise of options at $0.10 per
     share. (5) Includes 500,000 shares issuable upon exercise of options at
     $0.10 per share. (6) Includes 500,000 shares issuable upon exercise of
     options at $0.10 per share.
============================================================================================
</TABLE>


To our knowledge, each of the named shareholders exercises sole dispositive
power over the indicated holdings. We know of no voting trusts or other
arrangements respecting the voting rights of the shares.




                                      -34-
<PAGE>

ITEM 12 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Advances from Officers and Accrued Management Fees.

     From time to time we have covered our expenses by borrowing from our
officers, and by accruing their business expenses and salaries. At December 31,
2004 accrued compensation and management fees totaled $14,000.

Office Space

     We rent office space from our current vice president, Denny Cashatt, to
serve as our principle executive offices on a temporary basis. We pay Mr.
Cashatt $600 per month on a month-to-month tenancy ($550 space rental and $50
utility allowance), with either party permitted to terminate on reasonable
notice. The board of directors, with Mr. Cashatt declaring his interest in the
transaction and abstaining from the vote, made a determination that the rental
rate was competitive with comparable facilities available in the area, and that
the arrangement was in the best interests of the company. The total amount paid
to Mr. Cashatt for the year ending December 31, 2004 was $7,200.00.


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

(a)      Exhibits:

      Exhibit No.             Description
      -----------      -------------------------------------

          3.1          Articles of Incorporation(1)
          3.2          Bylaws(1)
           21          Subsidiaries
          31.1         Certification of CEO
          31.2         Certification of CFO
          32.2         Certification of CEO
          32.2         Certification of CFO

----------------------
1 Previously filed on EDGAR as the corresponding exhibit to our registration
statement on Form 10SB-12G as of January 12, 2000, and incorporated herein by
reference.


ITEM 14 -- PRINCIPAL ACCOUNTANT FEES AND SERVICES.

     Our principal accounting firm was Madsen and Associates, CPAs Inc. for the
fiscal years ended December 31, 2004 and 2003. We paid fees to our accountants
as indicated in the following table:


                                      -35-
<PAGE>

                                        Year ended December 31,
                                         2004             2003
                                     ------------    --------------

Audit and Quarterly Review Fees      $ 10,021.35     $       3,020
Audit-related Fees                             0                 0
Tax Fees                                       0                 0
All Other Fees                                 0                 0
                                     ============    ==============
                  Total Fees         $ 10,021.35     $       3,020




                                      -36-
<PAGE>

                                   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.

                                                     INTERNATIONAL STAR INC.


  March 30, 2005                                  By: /s/ Robert L. Hawkins
 -----------------                                   --------------------------
    Date                                             Robert L. Hawkins
                                                     President, CEO



     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.


/s/Robert L. Hawkins          President, Chief Executive         March 30, 2005
-------------------------     Officer, Director


/s/Denny Cashatt              Vice President, Chief Operating    March 30, 2005
-------------------------     Officer, Acting Chief Financial
                              Officer


/s/Dottie Wommack McNeely     Secretary, Treasurer,              March 30, 2005
-------------------------     Principal Accounting
                              Officer


/s/Kamal Alawas               Director of Mining                 March 30, 2005
-------------------------     Operations


/s/Virginia K. Shehee         Director                           March 30, 2005
-------------------------


/s/Hassan Alaeddine           Director                           March 30, 2005
-------------------------


                                      -37-