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U. S. SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C.20549
FORM 10-KSB

(MARK ONE)

[X]

       ANNUAL REPORT UNDER SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2004 
[   ]

       TRANSITION REPORT UNDER SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 0-32863
STARMED GROUP, INC.(Name of small business issuer in itscharter)
NEVADA
 
52-2220728

(State or other jurisdiction of 
(I.R.S. Employer
incorporation or organization) 
Identification No.)
 2029 CENTURY PARK EAST, SUITE 1112	 
Los Angeles, California
 
90067

(Address of principal executive offices) 
(Zip Code)

Issuer’s telephone number (including area code): (310)226-2555
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered pursuant to Section 12(g) of the ExchangeAct:
Common Stock, $0.01 par value per share(Title of Class)

Check whether the issuer: (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act during the past 12 months (or for such shorterperiod that registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days. Yes [X ]No[   ]
 
Check if there is no disclosure of delinquent filers in response to Item 405 ofRegulation S-B not contained in this form, and no disclosure will be contained,to the best of registrant’s knowledge, in definitive proxy or informationstatements incorporated by reference in Part III of this Form 10-KSB or anyamendment to this Form 10-KSB. [X]
 
The registrant’s revenues for its most recent fiscal year were$1,847,127.
 
The aggregate market value of the voting stock held by non-affiliates of theregistrant as of April 7, 2005 was $2,221,635 based upon the closing sale priceof the registrant’s Common Stock of $1.00 as of April 7, 2005.
 
The number of shares outstanding of the registrant’s Common Stock, $0.01par value per share, was 9,126,424 as of April 7, 2005. The registrant has nooutstanding non-voting common equity.
 
DOCUMENTS INCORPORATED BY REFERENCE 
None
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TABLE OF CONTENTS 
PART 1  
Item 1.

Description of Business

2
  
Item 2.

Description of Property

11
  
Item 3.

Legal Proceedings

11
  
Item 4.

Submission of Matters to a Vote of Security Holders

11
   
PART II  
Item 5.

Market for Common Equity, Related Stockholder Matters and
  
 Small Business Issuer Purchases of Equity Securities

11
  
Item 6.

Management’s Discussion and Analysis or Plan of Operation

12
  
Item 7.

Financial Statements

14
  
Item 8.

Changes in and Disagreements with Accountants on Accounting
  
       and Financial Disclosure

15
  
Item 8A.

Controls and Procedures

15
 
Item 8B.

Other Information

15
  
PART III  
Item 9.

Directors and Executive Officers of the Registrant

16
  
Item 10.

Executive Compensation

18
 
Item 11.

Security Ownership of Certain Beneficial Owners and
 
       Management and Related StockholderMatters

19
  
Item 12.

Certain Relationships and Related Transactions

19
 
Item 13.

Exhibits

21
 
Item 14.

Principal Accountant Fees and Services

21

****    	

ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE DEEMED BY THE COMPANY TO BECOVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATESECURITIES LITIGATION REFORM ACT OF 1995. SHAREHOLDERS AND PROSPECTIVESHAREHOLDERS SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER ANYFORWARD-LOOKING STATEMENT CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY ONEOF THOSE FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSEPROJECTED HEREIN. THESE FORWARD-LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVESOF MANAGEMENT FOR FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES RELATING TOTHE PRODUCTS AND THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONSRELATING TO THE FOREGOING INVOLVE JUDGMENTS WITH RESPECT TO, AMONG OTHER THINGS,FUTURE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS, FUTURE BUSINESS DECISIONS,AND THE TIME AND MONEY REQUIRED TO SUCCESSFULLY COMPLETE DEVELOPMENT PROJECTS,ALL OF WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT ACCURATELY AND MANY OF WHICHARE BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THEASSUMPTIONS UNDERLYING THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN AREREASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE,THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THEFORWARD-LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUALEXPERIENCE AND BUSINESS DEVELOPMENT, THE COMPANY MAY ALTER ITS MARKETING,CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN AFFECT THECOMPANY’S RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIESINHERENT IN THE FORWARD LOOKING STATEMENTS INCLUDED THEREIN, THE INCLUSION OFANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY ORANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL BEACHIEVED.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Business Development
       StarMed Group, Inc., a Nevadacorporation, referred herein to as "we", "StarMed Group" or the "Company", is aholding company of Sierra Medicinals, Inc., an Arizona corporation, and ourwholly-owned subsidiary ("Sierra Medicinals"). StarMed Group, through SierraMedicinals is engaged in the development and marketing of natural alternativemedicinals. The Company was first incorporated on November 3, 1961 under thename of Riverside Homes, Inc. in North Carolina. On December 18, 1969 theCompany’s Articles of Incorporation were amended to change the name of theCompany to Port Star Industries, Inc. In February, 1972, the Company had to sellall of its assets to pay existing debts. The Company became inactive untilAugust 3, 1981 when its domicile was changed to Nevada from North Carolina.
       On March 20, 1984 the Company’sshareholders voted to acquire a company called Energy Dynamics, Inc. and tochange its name to Energy Dynamics, Inc. On March 20, 1985 this proposedacquisition was rescinded because of non-performance and the Company changed itsname to Heathercliff Group Inc. The Company became inactive for several years.Heathercliff Group, Inc. was in real estate development, and Herman Rappaport,either directly or through his family trust, was a majority shareholder of thatcompany.
       On January 10, 2000, the Company wasrevived and received its Certificate of Revival from the State of Nevada onJanuary 24, 2001 with its name changed to StarMed Group, Inc. At the time of itsrevival, the Company had no assets and no liabilities. Mr. Rappaport was amajority shareholder of StarMed Group, Inc. (either directly or through hisfamily trust).
       On July 27, 2001, the Company acquiredSierra Medicinals, Inc., an Arizona corporation incorporated in March, 2000, inan share exchange of a total of 469,792 shares, on a one for one basis. Thenumber of shares outstanding of StarMed Group, Inc. is 4,945,384 as of December31, 2001. Following the merger, the Company has a wholly-owned subsidiary ofSierra Medicinals, Inc., an Arizona corporation. Mr. Rappaport, either directlyor through his family trust, was a majority shareholder of Sierra Medicinals,Inc.**2**   
       There are no contracts or agreementsbetween StarMed Group, Inc. and its wholly owned subsidiary Sierra Medicinals,Inc. Sierra Medicinals, Inc. is responsible for the development of specificnutraceuticals that address the problems of aging sight, arthritis, colon andoverweight. It has no further rights or responsibilities, nor are there anycommitments as to future funding, financial terms, or termination provisions.
       We continue our operations throughSierra Medicinals, Inc. because of the market recognition of the SierraMedicinal label and the SierraMed website, as well as the marketing of itsexisting nutraceuticals e.g. Sight D, Sight W, Colon IB, JT Penetrating Cream,and Sierra Slim.
       The Company organized a new,wholly-owned Nevada subsidiary on August 22, 2003 named Vet Medicinals, Inc. Thebusiness purpose of this subsidiary is to focus on canine weight loss. Clinicaltrials were begun to test the efficacy of Phase 2(tm) starch blocker product forcanine weight loss. Results of the clinical tests have been positive and TheCompany produces and markets its own brand of weight loss for dogs.
       The Company has also commissioned thewriting of a book on canine weight loss which is to be used as a marketing toolfor its products.
       All former Sierra Medicinals, Inc.stockholders (including minority stockholders) have exchanged their stock for anequal number of shares in StarMed Group, Inc.
       On July 23, 2003, the Company enteredinto an agreement for the cancellation of the note payable in the amount of$467,255 including accrued interest through July 23, 2003, in exchange for theissuance 82,300 restricted shares of common stock. The agreement includes aguarantee and option whereby the Company guarantees a market price of $3.50 pershare in the event of the future sale of the shares by the related shareholderin the form of either cash or additional shares of common stock valued at thebid price on the date of payment.  Currently there is no public market for theCompany’s common stock.  The Company’s liability associated with theguarantee and option clause of the agreement of $288,050 is included in accruedexpenses on the accompanying consolidated balance sheets at December 31, 2004and 2003, respectively. The Company recorded a gain on forgiveness of debt as aresult of this transaction in the amount of $178,382 which is included on theaccompanying consolidated statement of operations for the year ended December31, 2003. See Notes to the Financial Statements.
       The Company has never been involved inany bankruptcy, receivership, or similar proceedings.
Business of Issuer
General
       We have three major targeted marketsfor Sierra Medicinals’ products. First, the domestic market (the UnitedStates), targets senior citizens with products for diminishing sight, arthritis,colon and weight loss problems. Its additional target is the Hispanic populationof the United States. The second market extends this latter market to LatinAmerica. Dr. Hector Rodriguez, a director of StarMed Group and a physician withextensive contacts in Latin America, especially in Colombia where he was bornand educated, is the lead physician in the marketing of Sierra Medicinal’sproducts to the Spanish-speaking population. Our third target market includesthe growing weight loss problem which is currently among the most pressinghealth issues in the country, as significant as smoking.
       The Company’s management isseeking contracts with businesses that are developing new nutraceuticals thatcan be tested and marketed by the Company. We believe that there is a need forexpanded sales by a number of private nutritional manufacturers of products forchronic health problems. The specific products sought are for chronic illnesseswhere natural alternative medicines have their greatest promise. Each product,to be acceptable to the Company, must have proven research results supportingthe product’s claims.
       Our plan of business operationconsists of developing natural alternative medicines to assist in helping solvehealth problems where conventional prescription drugs often have side effectsand usually are costly. Although acute illnesses are best served by conventionalmedicines, alternative and herbal medicines often have beneficial results withchronic health problems.**3**   

We are exploring the opportunity to market our Sierra Medicinals nutraceuticalsin China and in Latin America. Our management recognizes the considerabledifficulty in exporting medicinals to foreign countries and the need to meetforeign government regulations. Most foreign countries have strict regulationgoverning the incorporation of medicinal products and there is no assurance thatthe Company’s products will be accepted.
       Our foreign contacts are the result ofour management’s experience. Sierra Medicinals’ president, Dr.Steven L. Rosenblatt, is a Western trained  physician, who was also trained asan acupuncturist in China. Herman Rappaport, President of StarMed Group, Inc.and CEO of Sierra Medicinals, Inc. was an advisor on Foreign Trade policy to theUS Department of Commerce for approximately 12 years and was introduced to Chinaby China’s Ambassador Li Dayou’s Trade Representatives to the UnitedStates, Tao Wuxin and Xu Ji, both of whom serve currently as our representativesin Beijing and Shanghai.
       Dr. Hector Rodriguez, our director, isColombian born and trained, and has an extensive Spanish speaking patientpractice in the United States and roots in Latin America.
       The Company has a contract withPerrigo Company, that has established its own Dr. Rosenblatt Brand weight losstablets for human consumption. This product is presently being sold in massmarkets including Wal-Mart, CVS, Target and others. The Company receives aroyalty from such sales.
       Sierra Medicinals, Inc. is a purchaserfor Pharmachem Laboratories’ ingredient, Phase 2TM, a patented,natural weight loss product. Dr. Rosenblatt is Pharmachem’s leadingspokesman for Phase 2TM.
       Sierra Medicinals has an agreementwith Natural Health Trends Corporation, Inc. (NHTC) wherein Sierra sells Phase2TM for incorporation into a private brand label that is soldinternationally. Lexxus International is presently selling its product based onthe Company’s formula in China and has plans underway to sell the productin other international markets.
       The Company organized a new,wholly-owned Nevada subsidiary on August 22, 2003 named Vet Medicinals, Inc.which business focus is the weight loss of canines. Clinical trials werecompleted in 2004 to test the efficacy of Phase 2TM starch blocker productfor canine weight loss. Results were published in the Journal of the AmericanHolistic Veterinary Medical Association, July-September 2004 issue. ThePharmachem Phase 2TM is a natural ingredient presently being extensivelyused  for humans. Results of the clinical tests were very positive and theCompany  has produced and began marketing its own brand of weight loss fordogs.
       The Company has also published thecanine weight loss book “Happy Healthy Dogs” to be used as amarketing tool for its products.  The Herbal Medicinal Industry
       The market for herbal remedies isincreasing every year, not only in public use, but in acceptance by mainstreamWestern medicine as well. According to the NIH National Center for complementaryand alternative medicine, the people using complementary therapies increasedfrom 33% in 1990 to more than 42% in 1997. The NCCAM states that 75 out of 117American Medical Schools now offer courses in alternative medicine, educatingWestern doctors in herbal medicine, etc. However, it must be recognized thatcompetition is growing as well.
Our Strategy and Business Plan
       Our physicians are directing theCompany’s attention toward integrating preventative and Western medicinein helping to increase health and wellness, and  utilizing supplements to helptreat chronic illnesses where no safe pharmaceutical alternative exists. This isespecially true of chronic illnesses where conventional Western medicines focusprimarily on treating the symptoms and are usually costly, and often have illside effects. In general, nutritionals such as those the Company markets, do notprovide such a quick symptom relief as conventional prescription drugs, but workto address and cure the underlying cause of the illness, which is in our opinionnecessary for good health maintenance and longevity.  Traditional treatmentoffered by  Western medicine may be enhanced by thisapproach.**4**   

       The Company’s physiciansrecognize the importance of conventional Western medicine as well as believethat natural supplements have beneficial  effects in treatment and prevention ofmany chronic illnesses.
       Sierra Medicinals products are noteffective for all patients. Chronic illnesses are, in many cases, long lastingand complex, as for example, arthritis, where one formula is not of value forall cases. Similarly, Sierra Medicinals products are not satisfactory in manycases.
       Each formula, the sum of its testedingredients, has been tested by our doctors. There have been no ill side effectsreported. All testing has been done in the United States and in accordance withUS government standards. All are available over-the counter, and as such, havenot been tested nor approved by the Federal Drug Administration ("FDA"), but domeet all appropriate government standards and regulations.
       We are not marketing or manufacturingany of our products in any foreign country at present, and therefore, we are notrequired to meet any foreign regulations. Advertising and marketing in theUnited States is being done in strict compliance with all U.S. governmentregulations e.g. FTC, FDA labeling, Good Manufacturing Practices, etc. We arenot required to meet any regulations for China or Latin American countries atthis time because we have not attempted to import any products to thosecountries to date.
       Principals of our company have had aspecial interest in Chinese products and Chinese approach to treatment ofdiseases. Dr. Steven Rosenblatt, President of Sierra Medicinals, is aWestern-trained medical doctor, who also  trained in China in acupuncture andwas the first licensed American to practice  acupuncture in the United States.He is a member of the national examining board  for acupuncture schools and aknown lecturer on Chinese herbal medicine. Dr.  August Reader III is awell-known ophthalmologist with the Pacific Eye Institute  in San Francisco anda recognized authority on the use of natural herbal medicines  in the practiceof ophthalmology. Similarly, each medical director of the Company  (i.e. Dr.Hector Rodriguez, Dr. Joel Feinstein, Dr. Seymour Levine and Dr. Avner  Mandel)is a Western trained medical doctor who has applied alternative medicine  in hispractice. Herman Rappaport has served with the U.S. Department of Commerce,  asan advisor on Foreign Trade for almost 12 years and has studied the use ofalternative  medicine and foreign practices in medicine in Russia and in China,as well as  in the United States.
       Our network of American doctorsconsists at present of physicians trained in Western medicine and on the staffsof or teaching in or have taught in Cedars-Sinai Medical Center, UCLA MedicalSchool, and others. The doctors are also the shareholders of the Company andsome of them also serve as the officers and directors of the Company. Thedoctors provide us with the information and findings beneficial to thedevelopment of our products on per project bases, as may be requested by theCompany. The doctors do not have a contractual duty to provide us with suchinformation but they do it voluntarily in an effort to make the Companysuccessful.
       Sierra’s president, Dr. StevenL. Rosenblatt, Ph.D, L.Ac., is the lead spokesman for The Company’s newweight loss supplement, Sierra Slim. Dr. Rosenblatt  is also the co-author withthe well-known science writer, Cameron Stauth, of The Starch Blocker Diet,published by Harper Collins. The new starch blocker product and book Have beenpromoted in the media on some 400 television, radio, and print advertising,  aswell as major industry conventions.**5**   

Our Strategic Plan 
       StarMed Wellness Center is our conceptthat offers total wellness to clients. Its doctors also offer reactive medicalservices to correct existing medical problems often at their very beginningbefore they become difficult and costly to treat. Clients also have availabledoctor prescribed preventative medicine and tested vitamins.  In our strategicplan we have developed several phases set forth below.
**Phase 1**
       StarMed Wellness Center project provedits total health concept of preventative medicine under the leadership of Dr.Steven Rosenblatt, a practicing physician and president of Sierra Medicinals,Inc.  Dr. Rosenblatt and the Company’s initial efforts were directed tothe research and formulation of medicinal supplements for the growing agingpopulation.  Recognizing the increasing danger to American health of overweight,Dr. Rosenblatt co-authored the Harper Collins book, *The Starch Blocker Diet,*for weight loss, with well-known science writer Cameron Stauth, presently inits 6th printing, with a paperback edition printed in February, 2005.

       Dr. Rosenblatt has appearednationwide, as well as internationally in Europe, China and Australia, since thebook’s publishing on over 400 radio, TV talk shows and print mediainterviews as well as product conventions, as a medical authority on weight lossand wellness.
       Dr. Hector Rodriquez, a director ofthe Company and practicing medical specialist has appeared on Spanish televisionanswering call-in health questions.  *The Starch Blocker Diet* has beentranslated into Spanish under Dr. Rodriquez, director for the Hispanicmarket.
       Dr. August Reader, aneuro-ophthalmologist and originator of the Company’s product for agingeyesight is a well known medical authority and lecturer in the United States,Japan and elsewhere on integrated medicine.
       Perrigo Industries, the manufacturerand distributor of medical supplements is marketing to Wal-Mart, CVS, Target andall other mass markets the Dr. Rosenblatt brand starch blocker, licensed byStarMed.  Perrigo plans to mass market a new appetite suppressant as its secondproduct under the Dr. Rosenblatt brand label.  Perrigo has expressedconsiderable interest in marketing a third product for inflammation under ourcompany license, however, no agreement has been reached yet by the parties.
       The Company has contracted to haveThreshold Enterprises market Company products to health food stores beginning inApril, 2005.
       Lexxus International has an exclusiveright to multi-level market internationally a Sierra weight loss productformulated by the Company.  
       Syndicated radio programs advertisingSierra’s products are currently starting.
       The website, www.sierramed,com,is marketing company supplements directly to consumers.
 	
**Phase** 2
       StarMed Wellness Centers’business plan is unique.  It is the first business model designed to be anational chain of Wellness Centers operated exclusively by medical doctors andfocused on preventative medicine and total wellness.   Billions are  spent everyyear to control overweight primarily for cosmetic reasons, only recently has itbeen determined that overweight is a serious health problem often leading todiabetes, heart disease and other illnesses.  Similarly stress, is now beingrecognized as contributing to serious health problems as well.  Both conditionsare recognized by the Wellness program, whereas most medical practicesdon’t have the time or inclination to deal with these underlying causes ofpoor health.
       StarMed Wellness Centers’primary market is today’s aging baby boomers, all seeking to look and feelbetter as well as slow their aging process.  We believe that wellness hasuniversal appeal.  Everyone wants to live longer and in good health.  Peopletoday are better educated and are demanding more effective medicine that isaffordable and safe, without dangerous side effects.**6**   

       StarMed Centers are designed to appealto clients at all income levels.  An increasing number of supplemental medicaltreatments offered by StarMed are covered by health insurance, expanding thenumber of persons who can afford StarMed Centers for a continuing, life-longneed.
       StarMed Centers in addition toclients, brings together participants.  Medical doctors are looking for analternative to the restrictions of health insurance, and the time consumingdemands of government regulations.  The great majority of doctors are callingfor the right to practice without non-medical constrains.  Most also look forincreased incomes, which are offered through participating in the StarMedWellness Center plan.  Similarly, insurance has begun to recognize the value inprevention, that preventing illness is more profitable than paying forfull-blown, long lasting health problems.  Because of this, we expectpreventative treatments to soon be covered by health insurance. The coveragewill vary depending on the insurance company. 
       The StarMed Wellness Centers Proof ofConcept, developed by Dr. Rosenblatt’s medical clinic and affiliatedclinics, is being carried into the Company’s prototype.  StarMed iscurrently seeking to acquire real estate for its prototype Wellness Center.  Theprototype is to be located convenient to corporate headquarters and close to thepractices of Company doctors, most of whom are staff members of Cedars SinaiMedical Center, UCLA Medical Hospital and St. John’s Hospital.
     The prototype center is to be attractive andinviting to clients with an upscale feel.  Its design will promote relaxationemploying warm colors, tranquil music and fresh, soothing aromas.  The objectiveis to have the client feel cared for and catered to, to promote a sense ofwell-being.
**a.     Wellness Centers** are intended to producerevenue from diagnostic fees as well as from specialty treatments of existingproblems.  Clients seeking total wellness may also require treatments, e.g.,chronic pain, etc. for existing conditions.  All fee schedules have been basedon Phase 1 clinical practices.  Many such additional treatments are expected tobe covered by insurance as well as the products prescribed by the client’smedical doctor.  Revenues are based on existing clinic practices and charges.Additional revenues are expected to be received from medicinals, supplements,and dietary foods, etc. carried by the centers and doctor prescribed forclients.
**b.     Sierra Products** are intended to provide arevenue stream from Sierra nutritional supplements, nutraceuticals, etc. sold tomass markets, health food stores and direct to consumers.  Also revenue isanticipated from Sierra product private labeling to mass markets, health foodstores and direct to consumers.
**c.     SierraMed Publishing** is expected togenerate a modest income stream while providing low-cost marketing tools forSierra products.  *The Starch Blocker Diet* has been translated intoSpanish for the Hispanic market, to promote our Dr. Rosenblatt weight lossproduct in that market.  Agreement has been made with a German publisher totranslate the book into German.  *Happy Health Dogs* has been published tosupport the Company’s animal products.  Preliminary efforts are underwayfor a book to introduce a new line of anti-inflammatory products.
**Phase 3**
       StarMed Wellness Centers are expected,once the prototype is constructed, to develop 4 additional Centers in thefollowing locations:  Santa Barbara, San Fernando Valley, Anaheim, and Hawaii.No specific plans have been made yet at this time for such construction.
       The Company’s initial objectiveis to acquire existing medical clinics as well as MRI clinics, weight loss gyms,etc.  It should be noted that there will be a time overlap with the developmentof the prototype.  The acquisition of an existing medical facility will requireless alteration to meet the Company’s criteria than acquisitions requiringrebuilding.
       StarMed’s experience withHispanic clinics highlights the opportunity to expand client core to includeethnic communities.  The need for preventative medical services is even greaterin ethnic communities and StarMed Centers are to be located to make Wellnessavailable to all.
       The number of Sierra products isexpected to be expanded to include FDA dietary foods as well as a line ofnutraceuticals that the Company has formulated to replenish the body withessential elements that prescription drugs eliminate.
**Phase 4**
       The basic StarMed Wellness Centerexpects to expand nationally, with services priced to be affordable to allincome levels.  The prototype design will be flexible to permit expansion toserve the needs of more affluent clients or changed to serve regional needs.Hotels have expressed interest in offering StarMed’s Wellness services totheir guests.  Such an affiliation can expand the Company’s network ofCenters rapidly.**7**   
       The Company believes thatinternational expansion of Wellness Centers will be an opportunity.  Althoughindividual destination oriented spas are becoming widespread, there are nosimilar doctor managed centers focused on preventative medicine and totalhealth.  All peoples seek to improve their quality of life.
The Company’s Products
       The Company’s operationsubsidiary, Sierra, is the formulator and marketer of a number of over thecounter proprietary nutraceuticals formulated by Sierra doctors and addressingmajor health problems where conventional medicines have limited success.Sierra’s products are sold nationally in all 50 states as well asinternationally. The Company has formed strategic alliances with several majorcompanies for the marketing of its products as previously described.
       Each product is backed by a medicaldoctor as the lead spokesperson; each doctor is an experienced lecturer on radioand television and a recognized authority in his field. All products are sciencebased and research backed.
       Each Sierra product is unique,affordable, and has major markets and most has limited competition. None requireFDA approval.
       Sierra Sight D and W are blends ofnatural medicinals formulated to help combat the effects of aging eyesight.
       SierraMed JT Penetrating Cream is anew topical cream that penetrates the skin and reaches deep into the arthriticjoints.
       Sierra Colon IB helps reduce symptomsrelated to irritable bowel syndrome. Colon IB is a blend of twenty Chinese herbsand minerals based on a successful study reviewed in the November 11, 1998 issueof JAMA.
       Sierra Slim, is a proprietary weightloss supplement based on a  revolutionary patented starch blocker, Phase2TM. In 2003 UCLA completed a  successful double-blind study supporting theefficacy and safety of this  main ingredient, Phase 2(tm), of theCompany’s product, Sierra Slim.  The medical investigator’s studyhas been published in the March 2004 issue of Alternative Medicine Review.
       VetSlim, is our newest product, aproprietary weight loss supplement for overweight dogs based on the patentedstarch blocker, Phase 2TM.  A study was commissioned by The Company andpublished in the Journal of the American Holistic Veterinary MedicalAssociation, July-September 2004.
Marketing
       The Company plans to market itsproducts through radio, Internet, pharmacies, and doctor networks, as well asconventional print media. Each of the Company’s products will beaccompanied by educational programs including research authorities and articleswritten by the Company’s medical specialists.
Competition
       There is expected to be limitedcompetition for many of the Company’s niche products. There are very fewproducts presently on the market that compete with the Company’s eyesightproducts. The Company is investigating the possibility of obtaining patents onthese and several other products. Although there are many ointments on themarket for sore muscles, we believe that our ointment that succeeds inpenetrating into the arthritic joint is unique. Similarly, the Company’scolon product, based on a long accepted Chinese herbal formula, has beencombined with an American high-tech development that affects the immune systemand greatly enhances the effectiveness of the original formula. There are noindependent studies done at this time that would prove these claims.
       Although there are other companiesthat distribute herbal products through similar channels, what makes us uniqueand competitive in this market is that we have medical doctors’ backing inresearch and testing of all our products.
       THORNE RESEARCH.
Thorne manufactures nutritional supplements and similar products and markets itsproducts only to health care professionals. In fact, in marketing toprofessionals, Thorne may be our biggest competitor, although our products aredifferent in nature than Thorne’s. However, Thorne tends to cater toNaturopathic Doctors, while the Company plans to market to a broader range ofprofessionals in the medical field, in addition to othermarkets.**8**   
       DOUGLAS LABS.
       This company manufactures someproducts which are similar to ours and does a lot of private labeling formembers of the health care profession. Although we feel that our products are asgood or better than those of Douglas, we are not yet equipped to compete withtheir products in the private labeling market.
       JARROW FORMULAS.
       Jarrow manufactures high qualityproducts which are marketed in the retail market. The retail market for Jarrowproducts seems to be growing and may be a potential competition for ourproducts.
       TWINLAB.
       This is a mass market-focused company.The Company has plans to enter the mass market in the next few years, but we donot have any specific marketing plan at present.
       KAL.
       This company produces herbal products.This may be our a direct competitor, since we are producing and marketing herbalproducts and nutraceuticals. We are not aware at this point that KAL markets theproducts targeting the same ailments that our products do.
       HERBALIFE
       This company is in the business ofselling and marketing weight management products, nutritional supplements, andpersonal care products, as well as other types of products. Herbalife does notdirectly compete with our specific products, but it is a substantially largercompany than we are, and has available considerably greater financial resourcesthan we have. Our ability to remain competitive depends, in significant part, onour success in making our products unique in a sense that they cannot be easilyduplicated by larger companies.
       The business of marketing weightmanagement products, nutritional supplements, and personal care products also ishighly competitive. This market segment includes numerous manufacturers,distributors, marketers, retailers and physicians that actively compete for thebusiness of consumers both in the United States and abroad. The market is highlysensitive to the introduction of new products or weight management plans,including various prescription drugs, that may rapidly capture a significantshare of the market. As a result, our ability to remain competitive depends inpart upon the successful introduction of new products. In addition, weanticipate that we will be subject to increasing competition in the future fromsellers that utilize electronic commerce. We cannot be sure of the impact ofelectronic commerce or that it will not adversely affect our business.
       ALLERGY RESEARCH GROUP, INC.
       This is another competitor with stronginterest in nutritional supplements, which are not a type of products that weoffer, however, they may have an interest and ability to compete with ourproducts. The market in this area is very competitive and has many growthcompanies with strong marketing and sales abilities, quality products and soundmanagement. According to the trade magazine Whole Foods, health food store salesthroughout the nation grew in revenues from $9 billion to $17 billion in 1998.Nutritional supplements represent approximately 25% of those revenues accordingto Whole Foods. Vitamins and nutritional supplements are sold primarily throughthe following channels of distribution: health and natural food stores, massmarket retailers (drug store chains, supermarkets and other mass merchandisers),and direct sales channels (including network marketing, catalog and Internetdistribution).**9**   

       WEIDER NUTRITION INTERNATIONAL,INC.
       This company develops, manufactures,markets, distributes and sells branded and private label vitamins, nutritionalsupplements and sports nutrition products in the United States and throughoutthe world. It offers a broad range of capsules and tablets, powdered drinkmixes, bottled beverages and nutrition bars. Its portfolio of recognized brands,including Schiff, Weider Sports Nutrition, MetaForm and American Body Building,are primarily marketed in four principal categories, sports nutrition, vitamins,minerals and herbs, weight management and healthy snacks. Weider carries a rangeof products which are different than those of our Company, and at present noneare in direct competition with our products.
       Some of the companies listed above,and many other corporations in the health and nutritional or herbal supplementbusiness for chronic disorders, are better funded and possess superiormanagerial and marketing resources. We plan to compete primarily on the basis ofdifferentiating the Company by marketing its products of high quality and byproducing products which address needs that have not been met by ourcompetitors’ products.
       We may also in the future expand intothe field of research on other nutraceuticals with the hope that such researchmay lead to discovery of new uses for herbs which may be incorporated into ourexisting products or used to develop new products. We do not have, however, anysuch current research projects nor any specific plans for such projects.
Raw materials and supplies
       The Company is committed to using onlystandardized extracts and ingredients of highest purity in its formulae.
       Our raw materials include vitamins,minerals, and herbals supplements. Production has been by American SupplementTechnologies, Inc. of Phoenix, Arizona. Raw materials are readily available frommany sources, although present suppliers include Stauber, Ashland, Kelatron,AIDP, Stryka, and Nebraska Cultures. Major supplier of the Phase 2TMmaterial is Pharmaceum Labs in New Jersey.
Patents and Trademarks
       We have the trademark "Products thatwork from Doctors who care" and have an application pending for "Steven L.Rosenblatt, M.D., Ph.D." and "Vet Slim and Trim".
Product Warranties
       We plan to sell all products on a30-day money-back guarantee.
Insurance
       We plan to have product liabilityinsurance on our products.
Research and Development
       Company doctors have developed, andintend to continue to develop and test, each of the Company’s productsthat are being considered to be offered to the public. All products,ingredients, and their manufacture conform to U.S. government regulations.Company medical doctors plan also to appear as spokespersons, backing theefficacy and safety of their products and also educating their audiences.
       Chinese research institutes that haveoffered the Company the opportunity to import their medicinal products are setforth below:
       The Affilianted 307 Hospital -Beijing      Shanghai United Cell Biology Co.Ltd.      Institute of Chinese MateriaMedica      Shanghai No. 1 Chinese MedicalWorks**10**   

       Although a number of products wereoffered to the Company, some on an exclusive basis, doctors before acceptingsuch products are requiring that clinical trials made in China be repeated hereto conform to the United States standards. The Company has not determined itscontinued interest in importing to the US the fungus derivatives offered it.
       The amount spent on research anddevelopment for the year ended December 31, 2004 was $0 out of the totalexpenditures of $534,858.
       Our current resources are sufficientfor cash needs until the end of fiscal year 2005. As of December 31, 2004, theCompany had on hand inventory wholesale valued at $32,970.
       At present, the Company does not haveany ongoing research projects.
Employees
       The Company has 3 employees at presentplus 2 part-time  employees. We plan to hire on as needed basis professionallevel consultants, accountants, pharmacologists, staff etc.
ITEM 2. DESCRIPTION OF PROPERTY
       The Company does not own any physicalproperties at this time excepting office equipment and supplies.
       The Company’s corporate officersare presently located in leased office space in Century City, Los Angeles. 2029Century Park East, Suite 1112 Los Angeles, Ca. 90067. The Company entered into atwelve month lease for office space commencing on November 1, 2003 that expiredon October 31, 2004 at which point the Company paid rent on a month-to-monthbasis.  The Company entered into a twelve month lease for office spacecommencing January 1, 2005 and expiring December 31, 2005.  Rent expensesincurred for the years ended December 31, 2004 and 2003 was $59,417 and $39,544,respectively. Future minimum rental payments under the office lease are$59,593.
       The Company believes that such spaceis currently sufficient for its needs.  The Company is seeking to acquire realproperty for its Wellness Center prototype, however, no specific plans have beenmade yet.
       The Company has a five-year lease oncomputers. The monthly payment is $1,473 per month. The Company will acquire thecomputers for $1 at the end of the lease. The Company has calculated the presentvalue of the computers assuming a 12% interest rate as $62,575 and hascapitalized that value for depreciation. The balance of the capital leaseobligation was $22,683 and $41,172 at December 31, 2004 and 2003,respectively.
ITEM 3. LEGAL PROCEEDINGS
       The Company is not a party to anypending legal proceeding. Management is not aware of any threatened litigation,claims or assessments.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
       No matters were submitted to a vote ofsecurity holders during the fourth quarter of the fiscal year covered by thisreport.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
       (a) Market Information
StarMed Group, Inc. common stock was approved for trading on the on the NationalAssociation of Securities Dealers Over The Counter Electronic Board on March 17,2005. The trading symbol is “SMEG”.  The closing price of theCompany’s common stock as of April 7, 2005, was $1.00 pershare.**11**   

       (b) Holders
As of December 31, 2004, there were 836 shareholders. A total of 1,601,635shares of common stock out of 7,056,424 shares outstanding may be freely tradedwith the general public. The balance of the common stock are held by individualsand the trusts and are restricted and can only be sold pursuant to theprovisions of Rule 144 adopted under the Securities Act as explained herein.
       (c) Dividends
The Company does not currently contemplate the payment of any dividend
The current policy of the Company is not to pay cash dividends but instead, toretain future earnings, if any. to support the growth of the Company. However,there are no restrictions that limit the ability to pay dividends on commonequity when it is lawful to do so.
       (d) Sales of UnregisteredSecurities.
In June 2002, the Company issued 200,000 warrants with an exercise price of$0.10 and 75,000 warrants with an exercise price of $0.01 per share. Thewarrants have a life of 2 years and will expire in June 2004.  Such warrantshave been cancelled.
On September 25, 2003, the Company issued 804,381 common shares for servicesrendered and also as retainer fees valued at $8,044.
On December 31, 2003, the Company issued 1,000,000 common shares forcompensation to its officers valued at $10,000. The Company also issued 87,359common shares for services rendered valued at $873.
On  January 13, 2004, the Company issued 110,000 Common shares for servicesrendered valued at $1,110.
On March 16, 2004, the Company issued 10,000 common shares in exchange foraccounts payable of $20,822.
The shares issued in reliance upon the exemption from registration set forth inSection 4(2) of the Securities Act. The securities were issued with restrictivelegends.
ITEM 6. PLAN OF OPERATION
Forward-Looking Statements
       This registration statement containsforward-looking statements. These statements relate to future events or ourfuture financial performance. In some cases you can identify forward-lookingstatements by terminology such as "may," "will," "should," "except," "plan,""anticipate," "believe," "estimate," "predict," "feel," "confident,""potential," or "continue," the negative of such terms or other comparableterminology. These statements are only predictions and involve risks,uncertainties and other factors, that may cause our or our industry’sactual results, levels of activity, performance or achievements to be materiallydifferent from any future results, levels of activity, performance orachievements expressed or implied by such forward-looking statements.
       Although we believe that theexpectations reflected in the forward-looking statements are reasonable, wecannot guarantee future results, levels of activity, performance orachievements. Moreover, neither we nor any other person assumes responsibilityfor the accuracy and completeness of the forward-looking statements. We may notachieve the results indicated by the forward-looking statements.
Overview
       StarMed Group, Inc., a Nevadacorporation, referred herein to as "we", "StarMed Group" or the "Company", is aholding company of Sierra Medicinals, Inc., an Arizona corporation, and ourwholly-owned subsidiary ("Sierra Medicinals"). StarMed Group, through SierraMedicinals is engaged in the development and marketing of natural alternativemedicinals.
       The Company’s products includetwo products to help problems with eyesight, one product to help those sufferingfrom arthritis, one products for colon distress and two products for weightloss. The Company’s physicians have formulated several levels ofnutritionals for different levels of each patient’sneed.**12**   

       The Company recognizes the need forproduct education not only to the public, but also to doctors who are nottrained in alternative medicine. The Company, therefore, has as one of itsprimary efforts, the preparation of educational material, including researchdata to support its products.
       The Company has engaged the servicesof two medical authors to write two books on illnesses that effect the generalpublic. The Company plans to produce and market the products that help alleviatethe problems discussed in the books
Results of Operations for fiscal years 2004 and 2003
       The following discussion should beread in conjunction with the Consolidated Financial Statements and Notes theretoappearing elsewhere in this report.
FISCAL YEAR ENDED DECEMBER 31, 2004 COMPARED TO FISCAL YEAR ENDED DECEMBER31, 2003
       TOTAL REVENUES. The Company’stotal sales increased to$1,742,351 in the fiscal year ended December 31, 2004 ascompared to $581,212 sales in fiscal 2003. This dramatic increase resulted fromthe agreement entered with NHTC, Inc.
       Operating revenues derived by theCompany’s from the sales of its products were to $1,742,351 compared to$581,212 revenues in fiscal 2003.
       Revenues for the Company’s fromroyalty payments in 2004 totaled $104,776 compared to $124,101 in fiscal 2003,representing a decrease of 16%. Royalty revenues as a percentage of totalrevenues decreased from 21% to 6% in 2004 as compared to 2003. This resultedfrom the increase in sales  derived from NHTC agreement.
       TOTAL EXPENSES. The Company’stotal expenses for the fiscal year ended December 31, 2004 totaled $534,858compared to $200,035 in the fiscal year ended December 31, 2003, representing anincrease of 167% due to expenses related to increased NHTC sales. Totaloperating expenses, after taking into account all  corporate expenses, were 30%of total operating revenues as compared to 34% of last year. This reflects theincreased costs incurred by the Company as it started to derive revenues fromits operations.
       NET INCOME (LOSS). The Company had anet loss of $(99,877) for the fiscal year ended December 31, 2004, compared to anet income of 367,394 for the fiscal year ended December 31, 2003, representingan decrease of 127%. The loss reflects the increased costs incurred by thecompany as it started to derive revenues from its operations in fiscal 2004.
LIQUIDITY AND CAPITAL RESOURCES
       The Company had a cash balance of$72,708 at December 31, 2004 as compared to $247,288 at December 31, 2003.
       The Company had positive workingcapital at December 31, 2004. The Company has been able to borrow and raisesufficient capital to continue operations.
       In 2002, the Company had a $400,000convertible note payable with an interest rate at 10% per annum which matured onAugust 31, 2003.**13**   

On July 23, 2003, the Company entered into an agreement for the cancellation ofthe note payable in the amount of $467,255 including accrued interest throughJuly 23, 2003, in exchange for the issuance 82,300 restricted shares of commonstock. The agreement includes a guarantee and option whereby the Companyguarantees a market price of $3.50 per share in the event of the future sale ofthe shares by the related shareholder in the form of either cash or additionalshares of common stock valued at the bid price on the date of payment.Currently there is no public market for the Company’s common stock.  TheCompany’s liability associated with the guarantee and option clause of theagreement of $288,050 is included in accrued expenses on the accompanyingconsolidated balance sheets at December 31, 2004 and 2003, respectively. TheCompany recorded a gain on forgiveness of debt as a result of this transactionin the amount of $178,382 which is included on the accompanying consolidatedstatement of operations for the year ended December 31, 2003. See Notes to theFinancial Statements.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of the Company required to be included inItem 7 are set forth in the Financial Statements Index.
TABLE OF CONTENTS 
Report of Independent Registered Public Accounting Firm

F-1
  
Consolidated Balance Sheets

F-2
  
Consolidated Statements of Operations

F-3
  
Consolidated Statement of Shareholders’ Equity (Deficit)

F-4
  
Consolidated Statements of Cash Flows

F-5
  
Notes to Consolidated Financial Statements

F-6
 
**14**   

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
To the Board of Directors and Stockholders
Starmed Group, Inc. and Subsidiary
We have audited the accompanying consolidated balance sheets of Starmed Group,Inc. and its subsidiary, as of December 31, 2004 and 2003, and the relatedconsolidated statements of operations, shareholders’ equity (deficit) andcash flows for the years then ended. These consolidated financial statements arethe responsibility of the Company’s management. Our responsibility is toexpress an opinion on these consolidated financial statements based on ouraudits. 
We conducted our audits in accordance with the standards of the Public CompanyAccounting Oversight Board (United States).  Those standards require that weplan and perform the audits to obtain reasonable assurance about whether theconsolidated financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the consolidated financial statements. An audit also includesassessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above presentfairly, in all material respects, the financial position of Starmed Group, Inc.and its subsidiary as of December 31, 2004 and 2003, and the results of itsoperations and its cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.
**Mendoza Berger & Company, LLP**
March 18, 2005Irvine, California**F-1**   

**STARMED GROUP, INC. AND SUBSIDIARY**
**CONSOLIDATED BALANCE SHEETS**
**DECEMBER 31, 2004 AND 2003**

**ASSETS**
 
**2004**
 
**2003**
      
Current assets:
     
  Cash

$
72,708  
$
247,288 
  Accounts receivable
 
16,561   
20,215 
  Inventory
 
32,970   
45,493 
  Prepaid expenses
 
2,113 
  
5,946 
      
       Total current assets
 
124,352   
318,942       
  Equipment and furniture:
     
 Office furniture and computers
 
65,063   
65,063 
 Accumulated depreciation
 
(30,438)
  
(21,142)
      
       Total equipment and furniture
 
34,625 
  
43,921 
      
  Deferred tax asset
 
105,000   
105,000 
  Deposits
 
5,266 
  
6,313 
      
       Total assets

$

269,243 
 
$
474,176 
      
**LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)**
Current liabilities:
     
  Accounts payable

$
21,381  
$
133,527 
  Accrued expenses
 
334,105   
355,848 
  Income tax payable
 
25,400   
- 
  Capital lease obligation - current portion
 
15,808 
  
18,200 
      
       Total current liabilities
 
396,694   
507,575       
Long term debt:
 
    
  Capital lease obligation - less current portion
 
6,875 
  
22,972 
      
       Total long term debt
 
6,875 
  
22,972 
      
       Total liabilities
 
403,569   
530,547       
Commitments
 
-   
- 
Shareholders’ equity:
     
  Common stock (par value $0.01) 50,000,000 shares 
     
    authorized; 7,056,424 and 6,936,424 shares issuedand
     
    outstanding at December 31, 2004 and 2003,respectively
 
70,564   
69,364 
  Additional paid in capital
 
109,646   
88,924 
  Accumulated deficit
 
(314,536)
  
(214,659)
      
       Total shareholders’ deficit
 
(134,326)
  
(56,371)
      
       Total liabilities andshareholders’ equity (deficit)

$
269,243 
 
$
474,176 

The accompanying notes are an integral part of these financialstatements**F-2**   

**STARMED GROUP, INC. AND SUBSIDIARY**
**CONSOLIDATED STATEMENTS OF OPERATIONS**
**FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003**
 
**2004**
 
**2003**
    
Sales

$
1,742,351  
$
581,212 
Cost of sales
 
(1,405,861)
  
(364,011)
      
Gross profit
 
336,490   
217,201 
Revenue from royalties
 
104,776 
  
124,101 
      
       Total netrevenues
 
441,266 
  
341,302 
      
Compensation
 
240,555   
46,200 
Professional fees
 
39,131   
61,521 
Accounting fees
 
36,195   
7,678 
Office
 
57,120   
9,892 
Donations
 
27,915   
- 
Rent
 
59,417   
39,544 
Insurance
 
18,028   
8,135 
Advertising, marketing and promotion
 
46,212   
17,011 
Depreciation
 
9,297   
9,297 
Travel
 
988 
  
757 
      
       Totalexpenses
 
534,858 
  
200,035 
      
Income (loss)  from operations
 
(93,592)  
141,267 
Forgiveness of debt
 
-   
178,382 
Interest expense
 
(5,385)
  
(31,855)
      
Income (loss) before income taxes
 
(98,977)  
287,794 
Benefit (provision)  for income taxes
 
(900)
  
79,600 
      
Net income (loss)

$
(99,877)
 
$
367,394 
      
Net income (loss) per share - basic

$
(0.01)
 
$
0.07 
      
Net income (loss) per share - diluted

$
(0.01)
 
$
0.07 
      
Weighted average number of shares outstanding - basic
 
7,050,753 
  
5,217,636 
  
    
Weighted average number of shares outstanding -diluted
 
7,050,753 
  
5,492,636 
 	

The accompanying notes are an integral part of these financialstatements**F-3**   

**STARMED GROUP, INC. AND SUBSIDIARY**
**CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY(DEFICIT)**
**FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003**
 
Common Stock
               
**Number of** 
**Par Value $0.01**   
**Accumulated**   
**Shares**
 
**per Share**
 
**Paid in Capital**
 
**Deficit**
 
**Total**
          
Balance at December 31, 2002

4,962,384
$
49,624
$
88,924
$
(582,053)
$
(443,505)          
Conversion of note payable to common shares

82,300 
823 
- 
-  
823           
Common shares issued for compensation for  
         
  services rendered in September andDecember
         
  2003 valued at  $0.01 per share
 1,891,740	 
18,917 
- 
-  
18,917           
Net income

-
 
-
 
-
 
367,394 
 
367,394 
          
Balance at December 31, 2003

6,936,424 
69,364 
88,924 
(214,659) 
(56,371)          
Common shares issued for services in January
         
  2004, valued at $0.01 per share

110,000 
1,100 
- 
-  
1,100 
Common shares issued for cancellation of
         
  contract in exchange for accounts payablein
            March 2004, values at $2.08 per share.	
10,000 
100 
20,722 
-  
20,822           
Net  loss

-
 
-
 
-
 
(99,877)
 
(99,877)
          
Balance at December 31, 2004

7,056,424

$
70,564

$
109,646

$
(314,536)

$
(134,326)
                                         	 	

The accompanying notes are an integral part of these financialstatements**F-4**   

**STARMED GROUP, INC. AND SUBSIDIARY**
**CONSOLIDATED STATEMENTS OF CASH FLOWS**
**FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003**
 
**2004**
 
**2003**
      
Cash flows from operating activities:
     
Net income (loss)

$
(99,877) 
$
367,394
Adjustments to reconcile net (loss) to net cash:
     
  Depreciation
 
9,297  
9,297
  Forgiveness of debt
 
-  
(178,382)
  Shares issued for compensation and services
 
1,100  
18,917
  Donation of inventory
 
27,915  
-
(Increase) decease in operating assets:
     
  Accounts receivable
 
3,653  
(20,215)
  Inventory
 
(15,392)  
(4,628)
  Prepaid expenses
 
3,833  
(3,278)
  Deferred income taxes
 
-  
(105,000)
  Deposits 
 
1,047  
(6,313)
Increase (decrease) in operating liabilities:
     
  Accounts payable
 
(91,324)  
110,772
  Accrued expenses
 
(21,743)  
36,017
  Income tax payable
 
25,400
  
-
      
Net cash provided by ( used in) operating activities
 
(156,091)  
224,581      
Cash flows from financing activities:
     
  Accrual of interest on note payable
 
-  
22,356
  Capital lease
 
(18,489)
  
(6,125)
      
Net cash provided by (used in) financing activities
 
(18,489)
  
16,231
      
Net increase (decrease) in cash 
 
(174,580)  
240,812      
Cash, beginning of period
 
247,288
  
6,476
      
Cash, end of period

$
72,708
 
$
247,288
      
**Supplemental information on non-cash investing**
     
**  and financial  activities:**
     
  Conversion of note payable to common shares and accrued expenses

$
-
 
$
467,255
      
  Stock issued for compensation and services

$
1,100
 
$
18,917
      
**Supplemental cash flow  information:**
     
     Cash paid during the year for:
     
     Payments of interest

$
5,385
 
$
-
      
     Stock issued in exchange for accounts payable

$
20,822
 
$
-

The accompanying notes are an integral part of these financialstatements**F-5**   

**STARMED GROUP, INC. AND SUBSIDIARY**
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
**FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003**

**1.      HISTORY AND ORGANIZATION OF THECOMPANY**

The Company develops and sells high quality naturalmedicines. The Company’s products are formulated by medicinal doctors asthe result of scientific research. The current product line includes SierraSlim, a starch blocker and natural weight loss product, Sight D for the slowingof degeneration of eye tissue and Sight W which promotes blood circulation tothe optic nerve, Colon IB for the relief of symptoms from irritable bowelsyndrome and JT Penetrating Cream to help relieve arthritis joint pain. Royaltyrevenue is from formulas for the herbal health products.

**2.     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES**
**       Principles ofConsolidation**

The consolidated financial statements include thefinancial statements of the Company and its wholly-owned subsidiary, SierraMedicinals, Inc. All significant intercompany balances and transactions havebeen eliminated in consolidation.

**       Revenue Recognition**

The company has adopted SEC Staff Accounting BulletinNo. 101 "Revenue Recognition in Financial Statements" (SAB 101) and accordinglyrecognizes revenue upon shipment of the product to customers, upon fulfillmentof acceptance terms, if any, when no significant contractual obligations remainand collection of the related receivable is reasonable assured.

During 2004 and 2003, the Company had sales ofapproximately $40,000 and $78,000, respectively, to customers through theCompany’s website.  These sales allow customers a 30-day money backguarantee, less shipping costs, for unused products.  The Company has adoptedSFAS 48 "Revenue Recognition When Right of Return Exists" for the website salesand records revenue net of a provision for estimated product returns.

**       Use of Estimates**

The preparation of financial statements in accordancewith generally accepted accounting principles requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities, and thereported amounts of revenues and expenses during the reporting period. Actualresults could differ from those estimates. 

**       Fair Value of FinancialInstruments**

Financial instruments consist principally of cash,payables and accrued expenses. The estimated fair value of these instrumentsapproximate their carrying value.

**F-6**   

**STARMED GROUP, INC. AND SUBSIDIARY**
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
**FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003**

**2.     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES** (Continued)

Inventory

The Company contracts a third party to process andpackage its formulated herbal products. The Company accounts for its inventoryof finished goods on a first-in, first-out basis or market, if it should belower. 

During the year ended December 31, 2004, the Companydisposed of expired inventory totaling $27,915 through a donation to anot-for-profit organization.

Equipment and Furniture

Equipment and furniture is stated at cost anddepreciated using the straight-line method over the estimated useful life of theassets, which is seven years.  The Company has acquired its computers under acapital lease.

**       Income Taxes**

Deferred income taxes are reported using the liabilitymethod. Deferred tax assets are recognized for deductible temporary differencesand deferred tax liabilities are recognized for taxable temporary differences.Temporary differences are the differences between the reported amounts of assetsand liabilities and their tax bases.

Deferred tax assets are reduced by a valuationallowance when, in the opinion of management, it is more likely than not thatsome portion or all of the deferred tax assets will not be realized. Deferredtax assets and liabilities are adjusted for the effects of changes in tax lawsand rates on the date of enactment.

**       Advertising Costs**

The Company expenses advertising costs as incurred.For the years ended December 31, 2004 and 2003, the Company incurred advertisingexpense of $40,559 and $8,651 respectively. 

**       Earnings Per Share**

In February 1997, the Financial Accounting StandardsBoard (FASB) issued SFAS No. 128 "Earnings Per Share" which requires the Companyto present basic and diluted earnings per share, for all periods presented. Thecomputation of loss per common share (basic and diluted) is based on theweighted average number of shares actually outstanding during the period.

**F-7**   

**STARMED GROUP, INC. AND SUBSIDIARY**
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
**FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003**

**2.     SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES** (Continued)
**       Concentrations**

During 2004 and 2003, a single customer accountedfor 97% and 70% of sales, respectively.

During 2004 and 2003, products purchased from amanufacturer accounted for approximately 96% and 91% of purchases,respectfully.

**3.     CORPORATE CREDIT CARD**

The Company has available up to $21,000 on anunsecured corporate credit card. The minimum payment due was $211 as of December31, 2004.  The Company had an outstanding balance of $10,040 as of December 31,2004, which is included in accounts payable.

**4.      LONG TERM DEBT**
**       Note Payable**
       

On July 23, 2003, the Company entered into anagreement for the cancellation of the note payable in the amount of $467,255including accrued interest through July 23, 2003, in exchange for the issuance82,300 restricted shares of common stock. The agreement includes a guarantee andoption whereby the Company guarantees a market price of $3.50 per share in theevent of the future sale of the shares by the related shareholder in the form ofeither cash or additional shares of common stock valued at the bid price on thedate of payment.  Currently there is no public market for the Company’scommon stock.  The Company’s liability associated with the guarantee andoption clause of the agreement of $288,050 is included in accrued expenses onthe accompanying consolidated balance sheets at December 31, 2004 and 2003,respectively. The Company recorded a gain on forgiveness of debt as a result ofthis transaction in the amount of $178,382 which is included on the accompanyingconsolidated statement of operations for the year ended December 31,2003.

**F-8**   

**STARMED GROUP, INC. AND SUBSIDIARY**
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
**FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003**

**4.      LONG TERM DEBT** (Continued)
**       Capital Lease**

The Company has a five-year lease on computers. Themonthly payment is $1,473 per month. The Company will acquire the computers for$1 at the end of the lease. The Company has calculated the present value of thecomputers assuming a 12% interest rate as $62,575 and has capitalized that valuefor depreciation. The balance of the capital lease obligation was $22,683 and$41,172 at December 31, 2004 and 2003, respectively.The equipment undercapital lease is as follows:
 
**December 31, 2004** 
**December 31, 2003**      
Computers

$
62,575 
$
62,575
Less: accumulated depreciation
 
(29,262)
  
(20,322)
       
$
33,313
 
$
42,253

Minimum future minimum lease payments under thecapital lease as of December 31, 2004 are as follows:

**For the year ended December 31,**     
2005
$

17,679
2006 
7,366
   
Total minimum lease payments
 
25,045
Less: amount representing interest
 
(2,362)
   
Present value of total minimum lease payments
 
22,683
Less: current portion
 
(15,808)
   
Long term portion

$

6,875

**5.      CAPITAL STOCK**

In June 2002, the Company issued 200,000 warrants withan exercise price of $0.10 and 75,000 warrants with an exercise price of $0.01per share. The warrants had a life of 2 years and will expire in June2004.

On September 25, 2003, the Company issued 804,381common shares for services rendered and also as retainer fees valued at$8,044.

**F-9**   

**STARMED GROUP, INC. AND SUBSIDIARY**
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
**FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003**

**5.      CAPITAL STOCK** (Continued)

On December 31, 2003, the Company issued 1,000,000common shares for compensation to its officers valued at $10,000. The Companyalso issued 87,359 common shares for services rendered valued at $873.

On January 13, 2004, the Company issued 110,000 Commonshares for services rendered valued at $1,110.On March 16, 2004, the Companyissued 10,000 common shares in exchange for accounts payable of $20,822.

**6.      INCOME TAXES**

Reconciliation of the differences between thestatutory tax and the effective income tax are as follows:
 
**December 31, 2004** 
**December 31, 2003**    
Federal statutory tax

(34.0%) 
34.0%
State taxes, net of federal tax

(5.83%) 
8.8%
Valuation allowance

39.53%
 
(70.5%)
    
Effective income tax rate

-
 
(27.7%)

The effective income tax rate differs from the federalstatutory rate primarily due to permanent timing differences and net operatingloss carry forwards. 

The Company had available approximately $320,000 and$221,000 of unused federal operating loss carry-forwards at December 31, 2004and 2003, and $608,000 and $508,000 of unused state operating losscarry-forwards at December 31, 2004 and 2003 that may be applied against futuretaxable income.  The State of California suspended the use of net operating losscarry-forwards for tax years 2002 and 2003.  

SFAS No. 109 requires a valuation allowance to berecorded when it is more likely than not that some or all of the deferred taxassets will not be realized.  At December 31, 2002 a valuation allowance for$203,000 was recorded due to uncertainties as to the amount of taxable incomethat would be generated in future years and therefore limited the recognition ofthe income tax benefit as of December 31, 2002.  The Company restored the entirevaluation allowance in 2003, as the Company began utilizing the net operatinglosses.  However, the Company provided a valuation allowance for the $39,000increase in deferred tax assets as of December 31, 2004.

**F-10**   

**STARMED GROUP, INC. AND SUBSIDIARY**
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
**FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003**

**6.      INCOME TAXES** (Continued)

The (provision) benefit for income taxes consists ofthe following as of December 31:
 
2004
 
**2003**      
Current:
     
  Federal

$
- 
$
-
  State
 
(900)
  
(25,400)
      
Deferred:
     
  Federal
 
34,000  
(98,000)
  State
 
5,000
  
-
      
Total (provision) benefit before valuation allowance
 
38,100  
(123,400)      
Change in valuation allowance
 
(39,000)
  
203,000
      
Total (provision) benefit

$
(900)
 
$
79,600

       The components of the net deferredincome tax asset are as follows as of December 31:
 
2004
 
**2003**    
Deferred income tax assets:
   
Net operating loss carry forward

$
144,000
 
$
105,000
        
144,000
  
105,000
      
Deferred income tax asset, net before valuation
     
  allowance
 
144,000  
105,000
Less: valuation allowance
 
(39,000)
  
-
      
Deferred income tax asset, net

$
105,000
 
$
105,000

**F-11**   

**STARMED GROUP, INC. AND SUBSIDIARY**
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
**FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003**

**7.      OFFICE LEASE**

The Company entered into a twelve month lease foroffice space commencing on November 1, 2003 that expired on October 31, 2004 atwhich point the Company paid rent on a month-to-month basis.  The Companyentered into a twelve month lease for office space commencing January 1, 2005and expiring December 31, 2005.  Rent expenses incurred for the years endedDecember 31, 2004 and 2003 was $59,417 and $39,544, respectively. Future minimumrental payments under the office lease are $59,593.

**8.      RELATED PARTY TRANSACTIONS**

The Company owes two shareholders a total of  $42,344in expense reimbursements as of December 31, 2004 and 2003, respectively. Thisbalance is included in accrued liabilities on the consolidated balance sheet asof December 31, 2004 and 2003.

**F-12**   

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND ACCOUNTINGDISCLOSURE
The Board of Directors of StarMed Group, Inc. approved the engagement of MendozaBerger & Company, LLP ("MBC") on January 4, 2003 to serve as theCompany’s independent public auditor and to conduct the audit of theCompany’s financial statements for the fiscal year 2002 and accepted theresignation of its independent public auditor of record, William D. Lindberg,CPA. William D. Lindberg, CPA resigned as the Registrant’s independentpublic auditor as of January 4, 2003.  Mr. Lindberg ceased operations in2003.
The audit report provided by the Registrant’s previous auditor, William D.Lindberg, CPA for the fiscal years ended December 31, 2000 and 2001, did notcontain any adverse opinion or disclaimer of opinion nor was any reportqualified or modified as to uncertainty, audit scope, or accounting principles.During the Registrant’s two most recent fiscal years ending December 31,2000 and 2001, and the interim period from January 1, 2002 through January 4,2003, there have been no past disagreements between the Registrant and WilliamD. Lindberg, CPA on any matter of accounting principles or practices, financialstatement disclosure or auditing, scope or procedure.
The Board of Directors of the Company approved the engagement of William D.Lindberg, CPA ("WL") on March 20, 2002 to serve as the Company’sindependent public auditor and to conduct the audit of the Company’sfinancial statements for the fiscal years 2000 and 2001. The decision resultedfrom the fact that the previous auditor, Bharti Sudan, CPA, informed the Companythat she was resigning as the Company’s auditor for reasons unrelated tothe Company.
The audit reports provided by the Company’s previous auditor, BhartiSudan, CPA, for the previous fiscal years did not contain any adverse opinion ordisclaimer of opinion nor was any report modified as to uncertainty, audit scopeor accounting principles. There have been no past disagreements between theCompany and Bharti Sudan, CPA, on any matter of accounting principles orpractices, financial statement disclosure or auditing, scope or procedure priorto the engagement of WL.
ITEM 8-A. CONTROLS AND PROCEDURES
       Our Chief Executive Officer and ChiefFinancial Officer (our principal executive officer and principal financialofficer, respectively) have concluded, based on their evaluation as of December31, 2004, that the design and operation of our "disclosure controls andprocedures" (as defined in Rule 13a-15(e) under the Securities Exchange Act of1934, as amended ("Exchange Act")) are effective to ensure that informationrequired to be disclosed by us in the reports filed or submitted by us under theExchange Act is accumulated, recorded, processed, summarized and reported to ourmanagement, including our Chief Executive Officer and Chief Financial Officer,as appropriate to allow timely decisions regarding whether or not disclosure isrequired.
       During the quarter ended December 31,2004, there were no changes in our internal controls over financial reporting(as defined in Rule 13a-15(f) under the Exchange Act) that have materiallyaffected, or are reasonably likely to materially affect, our internal controlsover financial reporting.
Item 8B. OTHER INFORMATION**15**   

PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCEWITH SECTION 16(a) OF THE EXCHANGE ACT.
       The following individuals are officersand/or directors of the Company:

Name and Age
 
Current Position

Director Since

Officer Since
     
Herman H. Rappaport

88
President, CEO, Director

December 18, 1969

December 18, 1969
  
Dr. Steven L. Rosenblatt    

58
Exececutive Vice President and Director

February 23, 2000

February 25, 2000
 
Dr. Hector Rodriguez

61
Vice President and Director

February 23, 2000

February 23, 2000
  
Dr. Avner Manzoor-Mandel    

56
Vice President and Director

February 23, 2000

February 23, 2000
 
Dr. Joel Feinstein

56
Vice President and Director

February 23, 2000

February 23, 2000
  
Dr. Semour Levine

62
Director

June 18, 2002
 
       Each director’s term will expireon next annual meeting. The date of the next annual meeting of the shareholderswas set by the Board of Directors to be December 16, 2005 to vote on the lengthof the directors and executive officers’ terms. Directors are notcompensated for their services.
Herman H. Rappaport, B.Ch.E., President, Chief Executive Officer, Director
       Mr. Rappaport received his degree fromthe University of the City of New York in 1939. During the last seven years Mr.Rappaport has studied medical systems and products in Russia, China as well asin the United States including two winters in St. Petersburg and Moscow as wellas trips to Beijing and Shanghai to study natural medicine.
       Mr. Rappaport served as a member oftwo Advisory Boards on Foreign Trade for the United States Department ofCommerce from 1983 to 1996 and prior to that time, served as a member for twoterms on the Mass Transportation Commission of the United States Department ofTransportation.
       Mr. Rappaport was the Founder andPresident of the public, non-profit Press, Education, Government Foundation forimproved communications between the media and government and hosted conferencesat the Annenberg School of Communications, University of Southern California onalternative energy, air rights and others. He also served on the EconomicDevelopment Board of the City of Los Angeles.
       Mr. Rappaport’s businessexperience over the past 5 years consisted of organizing and managing StarMedGroup and Sierra Medicinals, working on the establishment of formulas, andproviding for the testing and marketing of the same, also in preparing thedesign of the labels and brochures, and in general running the office. Mr.Rappaport was also instrumental in establishing a group of 13 medical doctorsincluding medical authorities in ophthalmology, gastroenterology, and othermedical specialties, plus advisors in U.S. government, Chinese government, andLatin America medicine, whose advise would be used for the benefit of theCompany. Mr. Rappaport also arranged for travel to China with the medicinaldirector, August Reader III, and Helen Burroughs, an expert in Chinese foreigntrade. In Beijing, the group met with Ambassador Li Dayou’s formerrepresentatives on trade with the United States, Tao Wuxin and Zu Ji. Mr.Rappaport was and continues to be responsible for all the Company’sbusiness efforts, from its start, providing office facilities until September,2001, directing production, to arranging for marketing.**16**   

Dr. Steven L. Rosenblatt, M.D., Ph.D., L.Ac. - Executive Vice President,Director
       Dr. Rosenblatt holds a Ph.D, from theUniversity of California at Los Angeles, an M.D. from the School of Medicine,St. George University. He is a founder and past president of the CaliforniaAcupuncture College, founder and director of the UCLA Acupuncture Clinic of UCLASchool of Medicine. Dr. Rosenblatt is a former director of the ComplementaryMedicine Program of Cedars-Sinai Medical Center and is an examiner for the Stateof California Acupuncture Board.
       Dr. Rosenblatt has conducted and beena participant of numerous medical conferences of the subject of herbal medicinesand has been in private practice in Los Angeles for ten years and one of theleaders in the field of acupuncture and oriental medicine for over thirtyyears.
Dr. Hector Rodriguez, M.D., Ph.D. Vice President, Director
       Dr. Rodriguez received an M.D. fromthe Universidad Nacional of Bogota, Colombia and a Ph.D. from University ofCalifornia at San Francisco with post graduate work at Washington UniversitySchool of Medicine, St. Louis, Mo. His certifications include The American Boardof Internal Medicine, Nephrology Subspecialty and is licensed in Illinois,Missouri, and California where he has practiced for the past twenty threeyears.
Dr. Avner Manzoor-Mandel, M.D. Vice President, Director
       Dr. Manzoor-Mandel holds medicaldegrees from Pahlavi University and the University of Maryland. He is a memberof the American College of Cosmetic Surgery and the College of Obstetrics andGynecology. For the past twenty years he has been in private practice in LosAngeles.
Dr. Joel Feinstein, M.D., F.A.C.S., Vice President, Director
       Dr. Feinstein holds degrees from PennState University, M.S. in Physiology, and M.D. from Downstate Medical Center,Brooklyn, N.Y. Dr. Feinstein is Gastroenterologist Consultant to Cedars-SinaiMedical Center and a Consultant on Colon Cancer as well as Associate ClinicalProfessor of Medicine at UCLA. and a member of the Education Committee, AmericanCancer Society, Los Angeles. Dr. Feinstein has appeared as a medical authorityon numerous conferences including that of moderator at the World Congress ofGastroenterology. Dr. Joel Feinstein has been a consultant to the Company sinceits inception and a director since its formal organization. Dr. Feinstein is apracticing physician and specialist in gastroenterology.
       Dr. Semour Levine, Director, anadvisor on Rheumatology. Dr. Levine is in private practice of Rheumatology andis the Clinical Chief of Rheumatology at Cedars-Sinai Medical Center. Dr. Levinegraduated from and completed his residency at the John Hopkins University. Dr.Levine is a member of the President’s Task Force on Health Care Reform,founding member and past president of Managed Care Providers at Cedars-SinaiCare in Los Angeles. His professional affiliations include Diplomate AmericanBoard of Internal Medicines, American Board of Rheumatology and American MedicalAssociation.
COMMITTEES
The Company does not currently have standing audit, nominating or compensationcommittees of the Board of Directors, or committees performing similarfunctions.
CODE OF BUSINESS CONDUCT AND ETHICS
Our code of business conduct and ethics, as approved by our board of directors,has been filed together with this report with the Securities and ExchangeCommission. It will be available on our Website, at www.sierramed.com inapproximately thirty days.**17**   
       We intend to satisfy the disclosurerequirement under Item 10 of Form 8-K relating to amendments to or waivers fromprovisions of the code that relate to one or more of the items set forth in Item406(b) of Regulation S-B, by describing on our Internet Website, within fivebusiness days following the date of a waiver or a substantive amendment, thedate of the waiver or amendment, the nature of the amendment or waiver, and thename of the person to whom the waiver was granted.
       Information on our Internet website isnot, and shall not be deemed to be, a part of this report or incorporated intoany other filings we make with the Securities and Exchange Commission.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
       Section 16(a) of the SecuritiesExchange Act of 1934, as amended, or the Exchange Act, requires our executiveofficers and directors, and persons who beneficially own more than 10% of aregistered class of our common stock, to file initial reports of ownership andreports of changes in ownership with the Securities and Exchange Commission, orthe SEC. These officers, directors and stockholders are required by SECregulations to furnish us with copies of all such reports that they file.
       Based solely upon a review of copiesof such reports furnished to us during the fiscal year ended December 31, 2004and thereafter, or any written representations received by us from reportingpersons that no other reports were required, we believe that, during our fiscal2004, all Section 16(a) filing requirements applicable to our reporting personswere met although some of the reports may have been late.
ITEM 10. EXECUTIVE COMPENSATION
       The following table sets forthinformation concerning the annual and long-term compensation for servicesrendered during the last three fiscal years to our company in all capacities asan employee by our Chief Executive Officer and our other executive officerswhose aggregate cash compensation exceeded $100,000 (collectively, the "namedexecutive officers") during fiscal 2004 shown below.
 
Summary Compensation Table 
Name and

Year
Salary
Bonus
Other
Restricted
Options
LTIF
Other
Position

Compensation
Stock (1)  
Herman Rappaport *

2004
90,192
-0-
-0-
-0-
-0-  
2003
18,000
-0-
-0-
500,000
-0- 
President & CEO

2002
40,500**
-0-
-0-
-0-
-0-  
Dr. Steven Rosenblatt

2004