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                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB/A
                                 AMENDMENT NO. 1
(MARK ONE)
[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

                   For the fiscal year ended December 31, 2004

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(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 its charter)

                   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 Exchange Act:

                     Common Stock, $0.01 par value per share
                                (Title of Class)

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act. Yes [ ] No [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 the
registrant as of April 7, 2005 was $2,221,635 based upon the closing sale price
of the registrant's Common Stock of $1.00 as of April 7, 2005.

The number of shares outstanding of the registrant's Common Stock, $0.01 par
value per share, was 9,126,424 as of April 7, 2005. The registrant has no
outstanding 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 ...........................................  12

Item 3.  Legal Proceedings .................................................  12

Item 4.  Submission of Matters to a Vote of Security Holders ...............  13


                                     PART II

Item 5.  Market for Common Equity, Related Stockholder Matters and
         Small Business Issuer Purchases of Equity Securities ..............  13

Item 6.  Management's Discussion and Analysis or Plan of Operation .........  13

Item 7.  Financial Statements ..............................................  15

Item 8.  Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure ..........................................  16

Item 8A. Controls and Procedures ...........................................  16

Item 8B. Other Information .................................................  16


                                    PART III

Item 9.  Directors and Executive Officers of the Registrant ................  17

Item 10. Executive Compensation ............................................  19

Item 11. Security Ownership of Certain Beneficial Owners and
         Management and Related Stockholder Matters ........................  20

Item 12. Certain Relationships and Related Transactions ....................  21

Item 13. Exhibits ..........................................................  23

Item 14. Principal Accountant Fees and Services ............................  23

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ALL FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE DEEMED BY THE COMPANY TO BE
COVERED BY AND TO QUALIFY FOR THE SAFE HARBOR PROTECTION PROVIDED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. SHAREHOLDERS AND PROSPECTIVE
SHAREHOLDERS SHOULD UNDERSTAND THAT SEVERAL FACTORS GOVERN WHETHER ANY
FORWARD-LOOKING STATEMENT CONTAINED HEREIN WILL BE OR CAN BE ACHIEVED. ANY ONE
OF THOSE FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
PROJECTED HEREIN. THESE FORWARD-LOOKING STATEMENTS INCLUDE PLANS AND OBJECTIVES
OF MANAGEMENT FOR FUTURE OPERATIONS, INCLUDING PLANS AND OBJECTIVES RELATING TO
THE PRODUCTS AND THE FUTURE ECONOMIC PERFORMANCE OF THE COMPANY. ASSUMPTIONS
RELATING 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 WHICH
ARE BEYOND THE CONTROL OF THE COMPANY. ALTHOUGH THE COMPANY BELIEVES THAT THE
ASSUMPTIONS UNDERLYING THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN ARE
REASONABLE, ANY OF THOSE ASSUMPTIONS COULD PROVE INACCURATE AND, THEREFORE,
THERE CAN BE NO ASSURANCE THAT THE RESULTS CONTEMPLATED IN ANY OF THE
FORWARD-LOOKING STATEMENTS CONTAINED HEREIN WILL BE REALIZED. BASED ON ACTUAL
EXPERIENCE AND BUSINESS DEVELOPMENT, THE COMPANY MAY ALTER ITS MARKETING,
CAPITAL EXPENDITURE PLANS OR OTHER BUDGETS, WHICH MAY IN TURN AFFECT THE
COMPANY'S RESULTS OF OPERATIONS. IN LIGHT OF THE SIGNIFICANT UNCERTAINTIES
INHERENT IN THE FORWARD LOOKING STATEMENTS INCLUDED THEREIN, THE INCLUSION OF
ANY SUCH STATEMENT SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY OR
ANY OTHER PERSON THAT THE OBJECTIVES OR PLANS OF THE COMPANY WILL BE ACHIEVED.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Business Development

         StarMed Group, Inc., a Nevada corporation, referred herein to as "we",
"StarMed Group" or the "Company", is a holding company of Sierra Medicinals,
Inc., an Arizona corporation, and our wholly-owned subsidiary ("Sierra
Medicinals"). StarMed Group, through Sierra Medicinals is engaged in the
development and marketing of natural alternative medicinals. The Company was
first incorporated on November 3, 1961 under the name of Riverside Homes, Inc.
in North Carolina. On December 18, 1969 the Company's Articles of Incorporation
were amended to change the name of the Company to Port Star Industries, Inc. In
February, 1972, the Company had to sell all of its assets to pay existing debts.
The Company became inactive until August 3, 1981 when its domicile was changed
to Nevada from North Carolina.

         On March 20, 1984 the Company's shareholders voted to acquire a company
called Energy Dynamics, Inc. and to change its name to Energy Dynamics, Inc. On
March 20, 1985 this proposed acquisition was rescinded because of
non-performance and the Company changed its name 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 that company.

         On January 10, 2000, the Company was revived and received its
Certificate of Revival from the State of Nevada on January 24, 2001 with its
name changed to StarMed Group, Inc. At the time of its revival, the Company had
no assets and no liabilities. Mr. Rappaport was a majority shareholder of
StarMed Group, Inc. (either directly or through his family trust).

         On July 27, 2001, the Company acquired Sierra Medicinals, Inc., an
Arizona corporation incorporated in March, 2000, in an share exchange of a total
of 469,792 shares, on a one for one basis. The number of shares outstanding of
StarMed Group, Inc. is 4,945,384 as of December 31, 2001. Following the merger,
the Company has a wholly-owned subsidiary of Sierra Medicinals, Inc., an Arizona
corporation. Mr. Rappaport, either directly or through his family trust, was a
majority shareholder of Sierra Medicinals, Inc.

         There are no contracts or agreements between StarMed Group, Inc. and
its wholly owned subsidiary Sierra Medicinals, Inc. Sierra Medicinals, Inc. is
responsible for the development of specific nutraceuticals that address the
problems of aging sight, arthritis, colon and overweight. It has no further
rights or responsibilities, nor are there any commitments as to future funding,
financial terms, or termination provisions.

                                        2
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         We continue our operations through Sierra Medicinals, Inc. because of
the market recognition of the Sierra Medicinal label and the SierraMed website,
as well as the marketing of its existing 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. The business purpose of this subsidiary is
to focus on canine weight loss. Clinical trials were begun to test the efficacy
of Phase 2(tm) starch blocker product for canine weight loss. Results of the
clinical tests have been positive and The Company produces and markets its own
brand of weight loss for dogs.

         The Company has also commissioned the writing of a book on canine
weight loss which is to be used as a marketing tool for its products.

         All former Sierra Medicinals, Inc. stockholders (including minority
stockholders) have exchanged their stock for an equal number of shares in
StarMed Group, Inc.

         On July 23, 2003, the Company entered into 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 the issuance 82,300 restricted
shares of common stock. The agreement includes a guarantee and option whereby
the Company guarantees a market price of $3.50 per share in the event of the
future sale of the shares by the related shareholder in the form of either cash
or additional shares 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. The
Company's liability associated with the guarantee and option clause of the
agreement of $288,050 is included in accrued expenses on the accompanying
consolidated balance sheets at December 31, 2004 and 2003, respectively. The
Company recorded a gain on forgiveness of debt as a result of this transaction
in the amount of $178,382 which is included on the accompanying consolidated
statement of operations for the year ended December 31, 2003. See Notes to the
Financial Statements.

         The Company has never been involved in any bankruptcy, receivership, or
similar proceedings.

Business of Issuer

General

         We have three major targeted markets for Sierra Medicinals' products.
First, the domestic market (the United States), targets senior citizens with
products for diminishing sight, arthritis, colon and weight loss problems. Its
additional target is the Hispanic population of the United States. The second
market extends this latter market to Latin America. Dr. Hector Rodriguez, a
director of StarMed Group and a physician with extensive contacts in Latin
America, especially in Colombia where he was born and educated, is the lead
physician in the marketing of Sierra Medicinal's products to the
Spanish-speaking population. Our third target market includes the growing weight
loss problem which is currently among the most pressing health issues in the
country, as significant as smoking.

         The Company's management is seeking contracts with businesses that are
developing new nutraceuticals that can be tested and marketed by the Company. We
believe that there is a need for expanded sales by a number of private
nutritional manufacturers of products for chronic health problems. The specific
products sought are for chronic illnesses where natural alternative medicines
have their greatest promise. Each product, to be acceptable to the Company, must
have proven research results supporting the product's claims.

         Our plan of business operation consists of developing natural
alternative medicines to assist in helping solve health problems where
conventional prescription drugs often have side effects and usually are costly.
Although acute illnesses are best served by conventional medicines, alternative
and herbal medicines often have beneficial results with chronic health problems.

                                        3
<PAGE>

         We are exploring the opportunity to market our Sierra Medicinals
nutraceuticals in China and in Latin America. Our management recognizes the
considerable difficulty in exporting medicinals to foreign countries and the
need to meet foreign government regulations. Most foreign countries have strict
regulation governing the incorporation of medicinal products and there is no
assurance that the Company's products will be accepted.

         Our foreign contacts are the result of our management's experience.
Sierra Medicinals' president, Dr. Steven L. Rosenblatt, is a Western trained
physician, who was also trained as an acupuncturist in China. Herman Rappaport,
President of StarMed Group, Inc. and CEO of Sierra Medicinals, Inc. was an
advisor on Foreign Trade policy to the US Department of Commerce for
approximately 12 years and was introduced to China by China's Ambassador Li
Dayou's Trade Representatives to the United States, Tao Wuxin and Xu Ji, both of
whom serve currently as our representatives in Beijing and Shanghai.

         Dr. Hector Rodriguez, our director, is Colombian born and trained, and
has an extensive Spanish speaking patient practice in the United States and
roots in Latin America.

         The Company has a contract with Perrigo Company, that has established
its own Dr. Rosenblatt Brand weight loss tablets for human consumption. This
product is presently being sold in mass markets including Wal-Mart, CVS, Target
and others. The Company receives a royalty from such sales.

         Sierra Medicinals, Inc. is a purchaser for Pharmachem Laboratories'
ingredient, Phase 2(TM), a patented, natural weight loss product. Dr. Rosenblatt
is Pharmachem's leading spokesman for Phase 2(TM).

         Sierra Medicinals has an agreement with Natural Health Trends
Corporation, Inc. (NHTC) wherein Sierra sells Phase 2(TM) for incorporation into
a private brand label that is sold internationally. Lexxus International is
presently selling its product based on the Company's formula in China and has
plans underway to sell the product in 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 were completed in 2004 to test the efficacy of Phase
2(TM) starch blocker product for canine weight loss. Results were published in
the Journal of the American Holistic Veterinary Medical Association,
July-September 2004 issue. The Pharmachem Phase 2(TM) is a natural ingredient
presently being extensively used for humans. Results of the clinical tests were
very positive and the Company has produced and began marketing its own brand of
weight loss for dogs.

         The Company has also published the canine weight loss book "Happy
Healthy Dogs" to be used as a marketing tool for its products. The Herbal
Medicinal Industry

         The market for herbal remedies is increasing every year, not only in
public use, but in acceptance by mainstream Western medicine as well. According
to the NIH National Center for complementary and alternative medicine, the
people using complementary therapies increased from 33% in 1990 to more than 42%
in 1997. The NCCAM states that 75 out of 117 American Medical Schools now offer
courses in alternative medicine, educating Western doctors in herbal medicine,
etc. However, it must be recognized that competition is growing as well.

Our Strategy and Business Plan

         Our physicians are directing the Company's attention toward integrating
preventative and Western medicine in helping to increase health and wellness,
and utilizing supplements to help treat chronic illnesses where no safe
pharmaceutical alternative exists. This is especially true of chronic illnesses
where conventional Western medicines focus primarily on treating the symptoms
and are usually costly, and often have ill side effects. In general,
nutritionals such as those the Company markets, do not provide such a quick
symptom relief as conventional prescription drugs, but work to address and cure
the underlying cause of the illness, which is in our opinion necessary for good
health maintenance and longevity. Traditional treatment offered by Western
medicine may be enhanced by this approach.

                                        4
<PAGE>

         The Company's physicians recognize the importance of conventional
Western medicine as well as believe that natural supplements have beneficial
effects in treatment and prevention of many chronic illnesses.

         Sierra Medicinals products are not effective for all patients. Chronic
illnesses are, in many cases, long lasting and complex, as for example,
arthritis, where one formula is not of value for all cases. Similarly, Sierra
Medicinals products are not satisfactory in many cases.

         Each formula, the sum of its tested ingredients, has been tested by our
doctors. There have been no ill side effects reported. All testing has been done
in the United States and in accordance with US government standards. All are
available over-the counter, and as such, have not been tested nor approved by
the Federal Drug Administration ("FDA"), but do meet all appropriate government
standards and regulations.

         We are not marketing or manufacturing any of our products in any
foreign country at present, and therefore, we are not required to meet any
foreign regulations. Advertising and marketing in the United States is being
done in strict compliance with all U.S. government regulations e.g. FTC, FDA
labeling, Good Manufacturing Practices, etc. We are not required to meet any
regulations for China or Latin American countries at this time because we have
not attempted to import any products to those countries to date.

         Principals of our company have had a special interest in Chinese
products and Chinese approach to treatment of diseases. Dr. Steven Rosenblatt,
President of Sierra Medicinals, is a Western-trained medical doctor, who also
trained in China in acupuncture and was the first licensed American to practice
acupuncture in the United States. He is a member of the national examining board
for acupuncture schools and a known lecturer on Chinese herbal medicine. Dr.
August Reader III is a well-known ophthalmologist with the Pacific Eye Institute
in San Francisco and a recognized authority on the use of natural herbal
medicines in the practice of 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 his practice. Herman Rappaport has served with the U.S.
Department of Commerce, as an advisor on Foreign Trade for almost 12 years and
has studied the use of alternative medicine and foreign practices in medicine in
Russia and in China, as well as in the United States.

         Our network of American doctors consists at present of physicians
trained in Western medicine and on the staffs of or teaching in or have taught
in Cedars-Sinai Medical Center, UCLA Medical School, and others. The doctors are
also the shareholders of the Company and some of them also serve as the officers
and directors of the Company. The doctors provide us with the information and
findings beneficial to the development of our products on per project bases, as
may be requested by the Company. The doctors do not have a contractual duty to
provide us with such information but they do it voluntarily in an effort to make
the Company successful.

         Sierra's president, Dr. Steven L. Rosenblatt, Ph.D, L.Ac., is the lead
spokesman for The Company's new weight loss supplement, Sierra Slim. Dr.
Rosenblatt is also the co-author with the well-known science writer, Cameron
Stauth, of The Starch Blocker Diet, published by Harper Collins. The new starch
blocker product and book Have been promoted in the media on some 400 television,
radio, and print advertising, as well as major industry conventions.

Our Strategic Plan

         StarMed Wellness Center is our concept that offers total wellness to
clients. Its doctors also offer reactive medical services to correct existing
medical problems often at their very beginning before they become difficult and
costly to treat. Clients also have available doctor prescribed preventative
medicine and tested vitamins. In our strategic plan we have developed several
phases set forth below.

                                        5
<PAGE>

PHASE 1

         StarMed Wellness Center project proved its 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 to the research and formulation of
medicinal supplements for the growing aging population. 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 in its 6th printing, with a
paperback edition printed in February, 2005.

         Dr. Rosenblatt has appeared nationwide, as well as internationally in
Europe, China and Australia, since the book's publishing on over 400 radio, TV
talk shows and print media interviews as well as product conventions, as a
medical authority on weight loss and wellness.

         Dr. Hector Rodriquez, a director of the Company and practicing medical
specialist has appeared on Spanish television answering call-in health
questions. The Starch Blocker Diet has been translated into Spanish under Dr.
Rodriquez, director for the Hispanic market.

         Dr. August Reader, a neuro-ophthalmologist and originator of the
Company's product for aging eyesight is a well known medical authority and
lecturer in the United States, Japan and elsewhere on integrated medicine.

         Perrigo Industries, the manufacturer and distributor of medical
supplements is marketing to Wal-Mart, CVS, Target and all other mass markets the
Dr. Rosenblatt brand starch blocker, licensed by StarMed. Perrigo plans to mass
market a new appetite suppressant as its second product under the Dr. Rosenblatt
brand label. Perrigo has expressed considerable interest in marketing a third
product for inflammation under our company license, however, no agreement has
been reached yet by the parties.

         The Company has contracted to have Threshold Enterprises market Company
products to health food stores beginning in April, 2005.

         Lexxus International has an exclusive right to multi-level market
internationally a Sierra weight loss product formulated by the Company.

         Syndicated radio programs advertising Sierra'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 a national chain of Wellness Centers operated
exclusively by medical doctors and focused on preventative medicine and total
wellness. Billions are spent every year to control overweight primarily for
cosmetic reasons, only recently has it been determined that overweight is a
serious health problem often leading to diabetes, heart disease and other
illnesses. Similarly stress, is now being recognized as contributing to serious
health problems as well. Both conditions are recognized by the Wellness program,
whereas most medical practices don't have the time or inclination to deal with
these underlying causes of poor health.

         StarMed Wellness Centers' primary market is today's aging baby boomers,
all seeking to look and feel better as well as slow their aging process. We
believe that wellness has universal appeal. Everyone wants to live longer and in
good health. People today are better educated and are demanding more effective
medicine that is affordable and safe, without dangerous side effects.

         StarMed Centers are designed to appeal to clients at all income levels.
An increasing number of supplemental medical treatments offered by StarMed are
covered by health insurance, expanding the number of persons who can afford
StarMed Centers for a continuing, life-long need.

                                        6
<PAGE>

         StarMed Centers in addition to clients, brings together participants.
Medical doctors are looking for an alternative to the restrictions of health
insurance, and the time consuming demands of government regulations. The great
majority of doctors are calling for the right to practice without non-medical
constrains. Most also look for increased incomes, which are offered through
participating in the StarMed Wellness Center plan. Similarly, insurance has
begun to recognize the value in prevention, that preventing illness is more
profitable than paying for full-blown, long lasting health problems. Because of
this, we expect preventative treatments to soon be covered by health insurance.
The coverage will vary depending on the insurance company.

         The StarMed Wellness Centers Proof of Concept, developed by Dr.
Rosenblatt's medical clinic and affiliated clinics, is being carried into the
Company's prototype. StarMed is currently seeking to acquire real estate for its
prototype Wellness Center. The prototype is to be located convenient to
corporate headquarters and close to the practices of Company doctors, most of
whom are staff members of Cedars Sinai Medical Center, UCLA Medical Hospital and
St. John's Hospital.

         The prototype center is to be attractive and inviting to clients with
an upscale feel. Its design will promote relaxation employing warm colors,
tranquil music and fresh, soothing aromas. The objective is to have the client
feel cared for and catered to, to promote a sense of well-being.

A. WELLNESS CENTERS are intended to produce revenue from diagnostic fees as well
as from specialty treatments of existing problems. Clients seeking total
wellness may also require treatments, e.g., chronic pain, etc. for existing
conditions. All fee schedules have been based on Phase 1 clinical practices.
Many such additional treatments are expected to be covered by insurance as well
as the products prescribed by the client's medical 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 for clients.

B. SIERRA PRODUCTS are intended to provide a revenue stream from Sierra
nutritional supplements, nutraceuticals, etc. sold to mass markets, health food
stores and direct to consumers. Also revenue is anticipated from Sierra product
private labeling to mass markets, health food stores and direct to consumers.

C. SIERRAMED PUBLISHING is expected to generate a modest income stream while
providing low-cost marketing tools for Sierra products. The Starch Blocker Diet
has been translated into Spanish for the Hispanic market, to promote our Dr.
Rosenblatt weight loss product in that market. Agreement has been made with a
German publisher to translate the book into German. Happy Health Dogs has been
published to support the Company's animal products. Preliminary efforts are
underway for 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 the following 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 objective is 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 development of the prototype. The acquisition of
an existing medical facility will require less alteration to meet the Company's
criteria than acquisitions requiring rebuilding.

         StarMed's experience with Hispanic clinics highlights the opportunity
to expand client core to include ethnic communities. The need for preventative
medical services is even greater in ethnic communities and StarMed Centers are
to be located to make Wellness available to all.

         The number of Sierra products is expected to be expanded to include FDA
dietary foods as well as a line of nutraceuticals that the Company has
formulated to replenish the body with essential elements that prescription drugs
eliminate.

                                        7
<PAGE>

PHASE 4

         The basic StarMed Wellness Center expects to expand nationally, with
services priced to be affordable to all income levels. The prototype design will
be flexible to permit expansion to serve the needs of more affluent clients or
changed to serve regional needs. Hotels have expressed interest in offering
StarMed's Wellness services to their guests. Such an affiliation can expand the
Company's network of Centers rapidly.

         The Company believes that international expansion of Wellness Centers
will be an opportunity. Although individual destination oriented spas are
becoming widespread, there are no similar doctor managed centers focused on
preventative medicine and total health. All peoples seek to improve their
quality of life.

The Company's Products

         The Company's operation subsidiary, Sierra, is the formulator and
marketer of a number of over the counter proprietary nutraceuticals formulated
by Sierra doctors and addressing major health problems where conventional
medicines have limited success. Sierra's products are sold nationally in all 50
states as well as internationally. The Company has formed strategic alliances
with several major companies for the marketing of its products as previously
described.

         Each product is backed by a medical doctor as the lead spokesperson;
each doctor is an experienced lecturer on radio and television and a recognized
authority in his field. All products are science based and research backed.

         Each Sierra product is unique, affordable, and has major markets and
most has limited competition. None require FDA approval.

         Sierra Sight D and W are blends of natural medicinals formulated to
help combat the effects of aging eyesight.

         SierraMed JT Penetrating Cream is a new topical cream that penetrates
the skin and reaches deep into the arthritic joints.

         Sierra Colon IB helps reduce symptoms related to irritable bowel
syndrome. Colon IB is a blend of twenty Chinese herbs and minerals based on a
successful study reviewed in the November 11, 1998 issue of JAMA.

         Sierra Slim, is a proprietary weight loss supplement based on a
revolutionary patented starch blocker, Phase 2(TM). In 2003 UCLA completed a
successful double-blind study supporting the efficacy and safety of this main
ingredient, Phase 2(tm), of the Company's product, Sierra Slim. The medical
investigator's study has been published in the March 2004 issue of Alternative
Medicine Review.

         VetSlim, is our newest product, a proprietary weight loss supplement
for overweight dogs based on the patented starch blocker, Phase 2(TM). A study
was commissioned by The Company and published in the Journal of the American
Holistic Veterinary Medical Association, July-September 2004.

         Our medicinal products are formulated on our behalf by Herman Rappaport
and Dr. Steven Rosenblatt, based upon research published in authoritative
journals. Our products are currently manufactured to our formulated
specifications by American Supplement Technologies of Tempe, Arizona, a full
service contract manufacturer of dietary supplements. American Supplement
Technologies manufactures our medicinal products on a purchase order basis, and
we have no long-term commitments with American Supplement Technologies or any
other manufacturer, although we believe that there are numerous sources of
production for our products and we do not believe we are dependent upon this or
any other manufacturer. During the production process, private labels containing
our "Sierra" brand name are affixed to our medicinal products by the
manufacturer.

                                        8
<PAGE>

Marketing

         The Company plans to market its products through radio, Internet,
pharmacies, and doctor networks, as well as conventional print media. Each of
the Company's products will be accompanied by educational programs including
research authorities and articles written by the Company's medical specialists.

         To date, the substantial portion of our revenues has been derived from
third-party sales of our proprietary starch blocker product. The principal
customer for our starch blocker product is Natural Health Trends Corporation,
who accounted for approximately 69% and 97% of our revenues for the years ended
December 31, 2004 and 2003, respectively. We have entered into a preliminary
agreement with Natural Health Trends Corporation under which Natural Health
Trends' Lexxus International, Inc. subsidiary has been granted the exclusive
right to market a version of our starch blocker product formulated specifically
for them in network or multilevel marketing to international sources. The
preliminary agreement contemplates that the parties will enter into a more
definitive agreement with respect to marketing rights for our starch blocker
product; however, until such time as a more definitive agreement is entered
into, our relationship with Natural Health Trends Corporation is defined by the
preliminary agreement. No definitive agreement has been entered into and the
parties are not currently negotiating the terms of a definitive agreement.

GOVERNMENT REGULATION

         The composition and labeling of dietary supplements, which comprise a
significant majority of our products, are primarily subject to the jurisdiction
of the FDA under the provisions of the Federal Food, Drug, and Cosmetic Act, or
FFDC Act. The FFDC Act, the Nutrition Labeling and Education Act of 1990, or
NLEA, and the Dietary Supplement Health and Education Act of 1994, or DSHEA, may
all impact our products. Certain of our activities may also fall under the
jurisdiction of various agencies of the states, localities and foreign countries
to which our products may be distributed and in which our products may be sold.

         To our knowledge, the manufacture and sale of our natural medicinal
products does not require filings with or approvals, licenses or permits from
any regulatory authority. However, product claims are regulated by the Federal
Food and Drug Administration and we are required to state on our product labels
that: "These statements have not been evaluated by the Food and Drug
Administration. This product is not intended to diagnose, treat, cure or prevent
any disease." We believe that all advertising and marketing of medicinal
products in the United States is being performed in strict compliance with
applicable U.S. government regulations. We are not marketing or manufacturing
any of our products in any foreign country at present, and therefore, we are not
required to comply with any foreign regulations.

         We do not believe that our proposed StarMed Wellness Centers will
engage in the practice of medicine and, therefore, will not be subject to
regulations relating to the practice of medicine or licensing requirements
applicable to physicians. However, any medical clinics that participate in the
planned network of StarMed Wellness Centers will be subject to Federal and state
regulation and licensing requirements in the same manner as is applicable to all
medical clinics and doctors under their jurisdiction.

         We believe that we comply and will continue to comply with all
government regulations applicable to our operations.

Competition

         There is expected to be limited competition for many of the Company's
niche products. There are very few products presently on the market that compete
with the Company's eyesight products. The Company is investigating the
possibility of obtaining patents on these and several other products. Although
there are many ointments on the market for sore muscles, we believe that our
ointment that succeeds in penetrating into the arthritic joint is unique.
Similarly, the Company's colon product, based on a long accepted Chinese herbal
formula, has been combined with an American high-tech development that affects
the immune system and greatly enhances the effectiveness of the original
formula. There are no independent studies done at this time that would prove
these claims.

                                        9
<PAGE>

         Although there are other companies that distribute herbal products
through similar channels, what makes us unique and competitive in this market is
that we have medical doctors' backing in research and testing of all our
products.

         THORNE RESEARCH.

         Thorne manufactures nutritional supplements and similar products and
markets its products only to health care professionals. In fact, in marketing to
professionals, Thorne may be our biggest competitor, although our products are
different in nature than Thorne's. However, Thorne tends to cater to
Naturopathic Doctors, while the Company plans to market to a broader range of
professionals in the medical field, in addition to other markets.

         DOUGLAS LABS.

         This company manufactures some products which are similar to ours and
does a lot of private labeling for members of the health care profession.
Although we feel that our products are as good or better than those of Douglas,
we are not yet equipped to compete with their products in the private labeling
market.

         JARROW FORMULAS.

         Jarrow manufactures high quality products which are marketed in the
retail market. The retail market for Jarrow products seems to be growing and may
be a potential competition for our products.

         TWINLAB.

         This is a mass market-focused company. The Company has plans to enter
the mass market in the next few years, but we do not 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 herbal products and
nutraceuticals. We are not aware at this point that KAL markets the products
targeting the same ailments that our products do.

         HERBALIFE

         This company is in the business of selling and marketing weight
management products, nutritional supplements, and personal care products, as
well as other types of products. Herbalife does not directly compete with our
specific products, but it is a substantially larger company than we are, and has
available considerably greater financial resources than we have. Our ability to
remain competitive depends, in significant part, on our success in making our
products unique in a sense that they cannot be easily duplicated by larger
companies.

         The business of marketing weight management products, nutritional
supplements, and personal care products also is highly competitive. This market
segment includes numerous manufacturers, distributors, marketers, retailers and
physicians that actively compete for the business of consumers both in the
United States and abroad. The market is highly sensitive to the introduction of
new products or weight management plans, including various prescription drugs,
that may rapidly capture a significant share of the market. As a result, our
ability to remain competitive depends in part upon the successful introduction
of new products. In addition, we anticipate that we will be subject to
increasing competition in the future from sellers that utilize electronic
commerce. We cannot be sure of the impact of electronic commerce or that it will
not adversely affect our business.

                                       10
<PAGE>

         ALLERGY RESEARCH GROUP, INC.

         This is another competitor with strong interest in nutritional
supplements, which are not a type of products that we offer, however, they may
have an interest and ability to compete with our products. The market in this
area is very competitive and has many growth companies with strong marketing and
sales abilities, quality products and sound management. According to the trade
magazine Whole Foods, health food store sales throughout the nation grew in
revenues from $9 billion to $17 billion in 1998. Nutritional supplements
represent approximately 25% of those revenues according to Whole Foods. Vitamins
and nutritional supplements are sold primarily through the following channels of
distribution: health and natural food stores, mass market retailers (drug store
chains, supermarkets and other mass merchandisers), and direct sales channels
(including network marketing, catalog and Internet distribution).

         WEIDER NUTRITION INTERNATIONAL, INC.

         This company develops, manufactures, markets, distributes and sells
branded and private label vitamins, nutritional supplements and sports nutrition
products in the United States and throughout the world. It offers a broad range
of capsules and tablets, powdered drink mixes, 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 range of products which are
different than those of our Company, and at present none are in direct
competition with our products.

         Some of the companies listed above, and many other corporations in the
health and nutritional or herbal supplement business for chronic disorders, are
better funded and possess superior managerial and marketing resources. We plan
to compete primarily on the basis of differentiating the Company by marketing
its products of high quality and by producing products which address needs that
have not been met by our competitors' products.

         We may also in the future expand into the field of research on other
nutraceuticals with the hope that such research may lead to discovery of new
uses for herbs which may be incorporated into our existing products or used to
develop new products. We do not have, however, any such current research
projects nor any specific plans for such projects.

Raw materials and supplies

         The Company is committed to using only standardized extracts and
ingredients of highest purity in its formulae.

         Raw materials contained in our medicinal products include vitamins,
minerals and herbal supplements. Raw materials are available from a variety of
sources, on a purchase order basis, and we are not dependent upon any one source
for these materials, except our sole supplier of Phase2 starch blocker material
is Pharmachem Labs in New Jersey. We have no long-term supply agreement with
Pharmachem Labs or any supplier of raw materials.

Patents and Trademarks

         We have the trademark "Products that work 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 a 30-day money-back guarantee.

Insurance

         We plan to have product liability insurance on our products.

                                       11
<PAGE>

Research and Development

         Company doctors have developed, and intend to continue to develop and
test, each of the Company's products that 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 the efficacy and safety of their products and also
educating their audiences.

         Chinese research institutes that have offered the Company the
opportunity to import their medicinal products are set forth below:

         The Affilianted 307 Hospital - Beijing
         Shanghai United Cell Biology Co. Ltd.
         Institute of Chinese Materia Medica
         Shanghai No. 1 Chinese Medical Works

         Although a number of products were offered to the Company, some on an
exclusive basis, doctors before accepting such products are requiring that
clinical trials made in China be repeated here to conform to the United States
standards. The Company has not determined its continued interest in importing to
the US the fungus derivatives offered it.

         The amount spent on research and development for the year ended
December 31, 2004 was $0 out of the total expenditures of $534,858.

         Our current resources are sufficient for cash needs until the end of
fiscal year 2005. As of December 31, 2004, the Company had on hand inventory
wholesale valued at $32,970.

         At present, the Company does not have any ongoing research projects.

Employees

         The Company has 3 employees at present plus 2 part-time employees. We
plan to hire on as needed basis professional level consultants, accountants,
pharmacologists, staff etc.

ITEM 2.  DESCRIPTION OF PROPERTY

         The Company does not own any physical properties at this time excepting
office equipment and supplies.

         The Company's corporate officers are presently located in leased office
space in Century City, Los Angeles. 2029 Century Park East, Suite 1112 Los
Angeles, Ca. 90067. The Company entered into a twelve month lease for office
space commencing on November 1, 2003 that expired on October 31, 2004 at which
point the Company paid rent on a month-to-month basis. The Company entered into
a twelve month lease for office space commencing January 1, 2005 and expiring
December 31, 2005. Rent expenses incurred 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 space is currently sufficient for its
needs. The Company is seeking to acquire real property for its Wellness Center
prototype, however, no specific plans have been made yet.

         The Company has a five-year lease on computers. The monthly 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 the computers
assuming a 12% interest rate as $62,575 and has capitalized that value for
depreciation. The balance of the capital lease obligation was $22,683 and
$41,172 at December 31, 2004 and 2003, respectively.

ITEM 3.  LEGAL PROCEEDINGS

         The Company is not a party to any pending legal proceeding. Management
is not aware of any threatened litigation, claims or assessments.

                                       12
<PAGE>

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

         No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.

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 National
Association of Securities Dealers Over The Counter Electronic Board on March 17,
2005. The trading symbol is "SMEG". The closing price of the Company's common
stock as of April 7, 2005, was $1.00 per share.

         (b) Holders

As of December 31, 2004, there were 836 shareholders. A total of 1,601,635
shares of common stock out of 7,056,424 shares outstanding may be freely traded
with the general public. The balance of the common stock are held by individuals
and the trusts and are restricted and can only be sold pursuant to the
provisions 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, to
retain future earnings, if any. to support the growth of the Company. However,
there are no restrictions that limit the ability to pay dividends on common
equity when it is lawful to do so.

         (d) Sales of Unregistered Securities.

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. The
warrants have a life of 2 years and will expire in June 2004. Such warrants have
been cancelled.

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

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

On January 13, 2004, the Company issued 110,000 Common shares for services
rendered valued at $1,110.

On March 16, 2004, the Company issued 10,000 common shares in exchange for
accounts payable of $20,822.

The shares issued in reliance upon the exemption from registration set forth in
Section 4(2) of the Securities Act. The securities were issued with restrictive
legends.

ITEM 6.  PLAN OF OPERATION

Forward-Looking Statements

         This registration statement contains forward-looking statements. These
statements relate to future events or our future financial performance. In some
cases you can identify forward-looking statements 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 comparable terminology. These statements are only predictions and
involve risks, uncertainties and other factors, that may cause our or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements.

                                       13
<PAGE>

         Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Moreover, neither we nor any
other person assumes responsibility for the accuracy and completeness of the
forward-looking statements. We may not achieve the results indicated by the
forward-looking statements.

Overview

         StarMed Group, Inc., a Nevada corporation, referred herein to as "we",
"StarMed Group" or the "Company", is a holding company of Sierra Medicinals,
Inc., an Arizona corporation, and our wholly-owned subsidiary ("Sierra
Medicinals"). StarMed Group, through Sierra Medicinals is engaged in the
development and marketing of natural alternative medicinals.

         The Company's products include two products to help problems with
eyesight, one product to help those suffering from arthritis, one products for
colon distress and two products for weight loss. The Company's physicians have
formulated several levels of nutritionals for different levels of each patient's
need.

         The Company recognizes the need for product education not only to the
public, but also to doctors who are not trained in alternative medicine. The
Company, therefore, has as one of its primary efforts, the preparation of
educational material, including research data to support its products.

         The Company has engaged the services of two medical authors to write
two books on illnesses that effect the general public. The Company plans to
produce and market the products that help alleviate the problems discussed in
the books

Results of Operations for fiscal years 2004 and 2003

         The following discussion should be read in conjunction with the
Consolidated Financial Statements and Notes thereto appearing elsewhere in this
report.

FISCAL YEAR ENDED DECEMBER 31, 2004 COMPARED TO FISCAL YEAR ENDED DECEMBER 31,
2003

         TOTAL REVENUES. The Company's total sales increased to$1,742,351 in the
fiscal year ended December 31, 2004 as compared to $581,212 sales in fiscal
2003. This dramatic increase resulted from the agreement entered with NHTC, Inc.

         Operating revenues derived by the Company'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 from royalty payments in 2004 totaled
$104,776 compared to $124,101 in fiscal 2003, representing a decrease of 16%.
Royalty revenues as a percentage of total revenues decreased from 21% to 6% in
2004 as compared to 2003. This resulted from the increase in sales derived from
NHTC agreement.

         TOTAL EXPENSES. The Company's total expenses for the fiscal year ended
December 31, 2004 totaled $534,858 compared to $200,035 in the fiscal year ended
December 31, 2003, representing an increase of 167% due to expenses related to
increased NHTC sales. Total operating expenses, after taking into account all
corporate expenses, were 30% of total operating revenues as compared to 34% of
last year. This reflects the increased costs incurred by the Company as it
started to derive revenues from its operations.

         NET INCOME (LOSS). The Company had a net loss of $(99,877) for the
fiscal year ended December 31, 2004, compared to a net income of 367,394 for the
fiscal year ended December 31, 2003, representing an decrease of 127%. The loss
reflects the increased costs incurred by the company as it started to derive
revenues from its operations in fiscal 2004.

                                       14
<PAGE>

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 working capital at December 31, 2004. The
Company has been able to borrow and raise sufficient capital to continue
operations.

         In 2002, the Company had a $400,000 convertible note payable with an
interest rate at 10% per annum which matured on August 31, 2003.

         On July 23, 2003, the Company entered into 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 the issuance 82,300 restricted
shares of common stock. The agreement includes a guarantee and option whereby
the Company guarantees a market price of $3.50 per share in the event of the
future sale of the shares by the related shareholder in the form of either cash
or additional shares 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. The
Company's liability associated with the guarantee and option clause of the
agreement of $288,050 is included in accrued expenses on the accompanying
consolidated balance sheets at December 31, 2004 and 2003, respectively. The
Company recorded a gain on forgiveness of debt as a result of this transaction
in the amount of $178,382 which is included on the accompanying consolidated
statement of operations for the year ended December 31, 2003. See Notes to the
Financial Statements.

         Our ability to fund our business plans and meet our obligations is
dependent on our liquidty. There are no known trends, events or uncertainties
that are reasonably likely to impact our liquidity during fiscal 2005, except
that product sales subsequent to the end of the year covered by this report
indicate a reduction in revenue generation from the prior year's level. We are
dependent upon revenue generation consistent with prior levels or on our ability
to supplement or replace any decline in these sales with revenues from the
operation of our planned Wellness Centers, or our receipt of alternative
financing, as to which there is no certainty. We currently fund our operations
through limited revenues from (i) sales of our medicinal products and (ii) sales
of our debt and equity securities and, we will likely continue to do so until
our revenues from operations are sufficient to satisfy all of our cash needs.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The consolidated financial statements of the Company required to be included in
Item 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

                                       15
<PAGE>
             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 related
consolidated statements of operations, shareholders' equity (deficit) and cash
flows for the years then ended. 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 audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Starmed Group, Inc.
and its subsidiary as of December 31, 2004 and 2003, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

MENDOZA BERGER & COMPANY, LLP

March 18, 2005
Irvine, California

                                       F-1
<PAGE>
                       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
    issued and 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 and shareholders'
          equity (deficit) .........................    $ 269,243     $ 474,176

    The accompanying notes are an integral part of these financial statements

                                       F-2
<PAGE>
                       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 net revenues ......................       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

         Total expenses ..........................       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 financial statements

                                       F-3
<PAGE>
<TABLE>
                                    STARMED GROUP, INC. AND SUBSIDIARY
                         CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                              FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
<CAPTION>
                                                  Common Stock

                                                              PAR
                                                             VALUE
                                                             $0.01
                                               NUMBER OF      PER      PAID IN    ACCUMULATED
                                                SHARES       SHARE     CAPITAL      DEFICIT        TOTAL
                                                ------       -----     -------      -------        -----
<S>                                            <C>          <C>        <C>         <C>           <C>
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 and
 December 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 payable
 in 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 financial statements

                                                    F-4
</TABLE>
<PAGE>
                       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 financial statements

                                       F-5
<PAGE>
                       STARMED GROUP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

1.   HISTORY AND ORGANIZATION OF THE COMPANY

     The Company develops and sells high quality natural medicines. The
     Company's products are formulated by medicinal doctors as the result of
     scientific research. The current product line includes Sierra Slim, a
     starch blocker and natural weight loss product, Sight D for the slowing of
     degeneration of eye tissue and Sight W which promotes blood circulation to
     the optic nerve, Colon IB for the relief of symptoms from irritable bowel
     syndrome and JT Penetrating Cream to help relieve arthritis joint pain.
     Royalty revenue is from formulas for the herbal health products.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the financial statements of
     the Company and its wholly-owned subsidiary, Sierra Medicinals, Inc. All
     significant intercompany balances and transactions have been eliminated in
     consolidation.

          REVENUE RECOGNITION

     The Company has adopted SEC Staff Accounting Bulletin Topic 13 "Revenue
     Recognition" (SAB 104) and, accordingly, recognizes revenue when persuasive
     evidence of an agreement exits, upon shipment of the product to customers,
     upon fulfillment of acceptance terms, if any, when no significant
     contractual obligations remain, the price to the buyer is determinable, and
     collection of the related receivable is reasonable assured.

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

          USE OF ESTIMATES

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

          FAIR VALUE OF FINANCIAL INSTRUMENTS

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

                                       F-6
<PAGE>
                       STARMED GROUP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     INVENTORY

     The Company contracts a third party to process and package its formulated
     herbal products. The Company accounts for its inventory of finished goods
     on a first-in, first-out basis or market, if it should be lower.

     During the year ended December 31, 2004, the Company disposed of expired
     inventory totaling $27,915 through a donation to a not-for-profit
     organization.

     EQUIPMENT AND FURNITURE

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

     INCOME TAXES

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

     Deferred tax assets are reduced by a valuation allowance when, in the
     opinion of management, it is more likely than not that some portion or all
     of the deferred tax assets will not be realized. Deferred tax assets and
     liabilities are adjusted for the effects of changes in tax laws and 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 advertising expense of
     $40,559 and $8,651 respectively.

     EARNINGS PER SHARE

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

                                       F-7
<PAGE>
                       STARMED GROUP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     CONCENTRATIONS

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

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

3.   CORPORATE CREDIT CARD

     The Company has available up to $21,000 on an unsecured corporate credit
     card. The minimum payment due was $211 as of December 31, 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 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 the issuance 82,300
     restricted shares of common stock. The agreement includes a guarantee and
     option whereby the Company guarantees a market price of $3.50 per share in
     the event of the future sale of the shares by the related shareholder in
     the form of either cash or additional shares 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. The Company's liability associated with the
     guarantee and option clause of the agreement of $288,050 is included in
     accrued expenses on the accompanying consolidated balance sheets at
     December 31, 2004 and 2003, respectively. The Company recorded a gain on
     forgiveness of debt as a result of this transaction in the amount of
     $178,382 which is included on the accompanying consolidated statement of
     operations for the year ended December 31, 2003.

                                       F-8
<PAGE>
                       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. The monthly 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 the computers
     assuming a 12% interest rate as $62,575 and has capitalized that value for
     depreciation. The balance of the capital lease obligation was $22,683 and
     $41,172 at December 31, 2004 and 2003, respectively.

     The equipment under capital 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 the capital 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 with an exercise price of
     $0.10 and 75,000 warrants with an exercise price of $0.01 per share. The
     warrants had a life of 2 years and will expire in June 2004.

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

                                       F-9
<PAGE>
                       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 1,000,000 common shares for
     compensation to its officers valued at $10,000. The Company also issued
     87,359 common shares for services rendered valued at $873.

     On January 13, 2004, the Company issued 110,000 Common shares for services
     rendered valued at $1,110.

     On March 16, 2004, the Company issued 10,000 common shares in exchange for
     accounts payable of $20,822.

6.   INCOME TAXES

     Reconciliation of the differences between the statutory 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 federal statutory rate
     primarily due to permanent timing differences and net operating loss carry
     forwards.

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

     SFAS No. 109 requires a valuation allowance to be recorded when it is more
     likely than not that some or all of the deferred tax assets 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 income that would
     be generated in future years and therefore limited the recognition of the
     income tax benefit as of December 31, 2002. The Company restored the entire
     valuation allowance in 2003, as the Company began utilizing the net
     operating losses. However, the Company provided a valuation allowance for
     the $39,000 increase in deferred tax assets as of December 31, 2004.

                                      F-10
<PAGE>
                       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 of the 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 deferred income 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
<PAGE>
                       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 for office space commencing
     on November 1, 2003 that expired on October 31, 2004 at which point the
     Company paid rent on a month-to-month basis. The Company entered into a
     twelve month lease for office space commencing January 1, 2005 and expiring
     December 31, 2005. Rent expenses incurred 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.

8.   RELATED PARTY TRANSACTIONS

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

                                      F-12
<PAGE>

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND ACCOUNTING DISCLOSURE

         The Board of Directors of StarMed Group, Inc. approved the engagement
of Mendoza Berger & Company, LLP ("MBC") on January 4, 2003 to serve as the
Company's independent public auditor and to conduct the audit of the Company's
financial statements for the fiscal year 2002 and accepted the resignation of
its independent public auditor of record, William D. Lindberg, CPA. William D.
Lindberg, CPA resigned as the Registrant's independent public auditor as of
January 4, 2003. Mr. Lindberg ceased operations in 2003.

         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 not
contain any adverse opinion or disclaimer of opinion nor was any report
qualified 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 William D.
Lindberg, CPA on any matter of accounting principles or practices, financial
statement 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's
independent public auditor and to conduct the audit of the Company's financial
statements for the fiscal years 2000 and 2001. The decision resulted from the
fact that the previous auditor, Bharti Sudan, CPA, informed the Company that she
was resigning as the Company's auditor for reasons unrelated to the Company.

         The audit reports provided by the Company's previous auditor, Bharti
Sudan, CPA, for the previous fiscal years did not contain any adverse opinion or
disclaimer of opinion nor was any report modified as to uncertainty, audit scope
or accounting principles. There have been no past disagreements between the
Company and Bharti Sudan, CPA, on any matter of accounting principles or
practices, financial statement disclosure or auditing, scope or procedure prior
to the engagement of WL.

ITEM 8-A. CONTROLS AND PROCEDURES

         Our Chief Executive Officer and Chief Financial Officer (our principal
executive officer and principal financial officer, respectively) have concluded,
based on their evaluation as of December 31, 2004, that the design and operation
of our "disclosure controls and procedures" (as defined in Rule 13a-15(e) under
the Securities Exchange Act of 1934, as amended ("Exchange Act")) are effective
to ensure that information required to be disclosed by us in the reports filed
or submitted by us under the Exchange Act is accumulated, recorded, processed,
summarized and reported to our management, including our Chief Executive Officer
and Chief Financial Officer, as appropriate to allow timely decisions regarding
whether or not disclosure is required.

         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 materially affected, or are reasonably likely
to materially affect, our internal controls over financial reporting.

Item 8B. OTHER INFORMATION

                                       16
<PAGE>

PART III

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

         The following individuals are officers and/or directors of the Company:
<TABLE>
<CAPTION>
Name and Age                    Current Position                          Director Since      Officer Since
------------                    ----------------                          --------------      -------------
<S>                        <C>  <C>                                       <C>                 <C>

Herman H. Rappaport        88   President, Chief Executive Officer,       December 18, 1969   December 18, 1969
                                principal executive officer,
                                Acting Chief Financial Officer,
                                principal accounting officer and
                                Director

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
</TABLE>

         Each director's term will expire on next annual meeting. The date of
the next annual meeting of the shareholders was set by the Board of Directors to
be December 16, 2005 to vote on the length of the directors and executive
officers' terms. Directors are not compensated for their services.

Herman H. Rappaport, B.Ch.E., President, Chief Executive Officer, principal
executive officer, Acting Chief Financial Officer, principal accounting officer
and Director.

         Mr. Rappaport received his degree from the 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 as in the United States including
two winters in St. Petersburg and Moscow as well as trips to Beijing and
Shanghai to study natural medicine.

         Mr. Rappaport served as a member of two Advisory Boards on Foreign
Trade for the United States Department of Commerce from 1983 to 1996 and prior
to that time, served as a member for two terms on the Mass Transportation
Commission of the United States Department of Transportation.

         Mr. Rappaport was the Founder and President of the public, non-profit
Press, Education, Government Foundation for improved communications between the
media and government and hosted conferences at the Annenberg School of
Communications, University of Southern California on alternative energy, air
rights and others. He also served on the Economic Development Board of the City
of Los Angeles.

         Mr. Rappaport's business experience over the past 5 years consisted of
organizing and managing StarMed Group and Sierra Medicinals, working on the
establishment of formulas, and providing for the testing and marketing of the
same, also in preparing the design of the labels and brochures, and in general
running the office. Mr. Rappaport was also instrumental in establishing a group
of 13 medical doctors including medical authorities in ophthalmology,
gastroenterology, and other medical specialties, plus advisors in U.S.
government, Chinese government, and Latin America medicine, whose advise would
be used for the benefit of the Company. Mr. Rappaport also arranged for travel
to China with the medicinal director, August Reader III, and Helen Burroughs, an
expert in Chinese foreign trade. In Beijing, the group met with Ambassador Li
Dayou's former representatives on trade with the United States, Tao Wuxin and Zu
Ji. Mr. Rappaport was and continues to be responsible for all the Company's
business efforts, from its start, providing office facilities until September,
2001, directing production, to arranging for marketing.

                                       17
<PAGE>

Dr. Steven L. Rosenblatt, M.D., Ph.D., L.Ac. - Executive Vice President,
Director

         Dr. Rosenblatt holds a Ph.D, from the University 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 California Acupuncture College, founder and
director of the UCLA Acupuncture Clinic of UCLA School of Medicine. Dr.
Rosenblatt is a former director of the Complementary Medicine Program of
Cedars-Sinai Medical Center and is an examiner for the State of California
Acupuncture Board.

         Dr. Rosenblatt has conducted and been a participant of numerous medical
conferences of the subject of herbal medicines and has been in private practice
in Los Angeles for ten years and one of the leaders in the field of acupuncture
and oriental medicine for over thirty years.

Dr. Hector Rodriguez, M.D., Ph.D. Vice President, Director

         Dr. Rodriguez received an M.D. from the Universidad Nacional of Bogota,
Colombia and a Ph.D. from University of California at San Francisco with post
graduate work at Washington University School of Medicine, St. Louis, Mo. His
certifications include The American Board of Internal Medicine, Nephrology
Subspecialty and is licensed in Illinois, Missouri, and California where he has
practiced for the past twenty three years.

Dr. Avner Manzoor-Mandel, M.D. Vice President, Director

         Dr. Manzoor-Mandel holds medical degrees from Pahlavi University and
the University of Maryland. He is a member of the American College of Cosmetic
Surgery and the College of Obstetrics and Gynecology. For the past twenty years
he has been in private practice in Los Angeles.

Dr. Joel Feinstein, M.D., F.A.C.S., Vice President, Director

         Dr. Feinstein holds degrees from Penn State University, M.S. in
Physiology, and M.D. from Downstate Medical Center, Brooklyn, N.Y. Dr. Feinstein
is Gastroenterologist Consultant to Cedars-Sinai Medical Center and a Consultant
on Colon Cancer as well as Associate Clinical Professor of Medicine at UCLA. and
a member of the Education Committee, American Cancer Society, Los Angeles. Dr.
Feinstein has appeared as a medical authority on numerous conferences including
that of moderator at the World Congress of Gastroenterology. Dr. Joel Feinstein
has been a consultant to the Company since its inception and a director since
its formal organization. Dr. Feinstein is a practicing physician and specialist
in gastroenterology.

         Dr. Semour Levine, Director, an advisor on Rheumatology. Dr. Levine is
in private practice of Rheumatology and is the Clinical Chief of Rheumatology at
Cedars-Sinai Medical Center. Dr. Levine graduated 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-Sinai Care in Los Angeles. His professional
affiliations include Diplomate American Board of Internal Medicines, American
Board of Rheumatology and American Medical Association.

COMMITTEES

         The Company does not currently have standing audit, nominating or
compensation committees of the Board of Directors, or committees performing
similar functions.

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
Exchange Commission. It will be available on our Website, at www.sierramed.com
in approximately thirty days.

                                       18
<PAGE>

         We intend to satisfy the disclosure requirement under Item 10 of Form
8-K relating to amendments to or waivers from provisions of the code that relate
to one or more of the items set forth in Item 406(b) of Regulation S-B, by
describing on our Internet Website, within five business days following the date
of a waiver or a substantive amendment, the date of the waiver or amendment, the
nature of the amendment or waiver, and the name of the person to whom the waiver
was granted.

         Information on our Internet website is not, and shall not be deemed to
be, a part of this report or incorporated into any other filings we make with
the Securities and Exchange Commission.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934, as amended, or
the Exchange Act, requires our executive officers and directors, and persons who
beneficially own more than 10% of a registered class of our common stock, to
file initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission, or the SEC. These officers, directors and
stockholders are required by SEC regulations to furnish us with copies of all
such reports that they file.

         Based solely upon a review of copies of such reports furnished to us
during the fiscal year ended December 31, 2004 and thereafter, or any written
representations received by us from reporting persons that no other reports were
required, we believe that, during our fiscal 2004, all Section 16(a) filing
requirements applicable to our reporting persons were met although some of the
reports may have been late.

ITEM 10. EXECUTIVE COMPENSATION

         The following table sets forth information concerning the annual and
long-term compensation for services rendered during the last three fiscal years
to our company in all capacities as an employee by our Chief Executive Officer
and our other executive officers whose aggregate cash compensation exceeded
$100,000 (collectively, the "named executive officers") during fiscal 2004 shown
below.
<TABLE>
<CAPTION>
                                               Summary Compensation Table

Name and                   Year    Salary     Bonus       Other      Restricted   Options   LTIF   Other
Position                                              Compensation   Stock (1)
--------                   ----    ------     -----   ------------   ----------   -------   ----   -----
<S>                        <C>     <C>         <C>         <C>        <C>           <C>     <C>    <C>
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    84,378      -0-         -0-          -0-         -0-
                           2003    18,000      -0-         -0-        500,000       -0-
Executive Vice President   2002    40,500**    -0-         -0-          -0-         -0-

Dr. Hector Rodriguez       2004      -0-       -0-         -0-          -0-         -0-
                           2003      -0-       -0-         -0-         22,453       -0-
Vice President             2002      -0-       -0-         -0-          -0-         -0-

Dr. Joel Feinstein         2004      -0-       -0-         -0-          -0-         -0-
                           2003      -0-       -0-         -0-         22,453       -0-
Vice President             2002      -0-       -0-         -0-          -0-         -0-

Dr. Avner Manzoor-Mandel   2004      -0-       -0-         -0-          -0-         -0-
                           2003      -0-       -0-         -0-         22,453       -0-
Vice President             2002      -0-       -0-         -0-          -0-         -0-
</TABLE>

                                       19
<PAGE>

*   Additionally, Herman Rappaport holds 2,727,000 shares of common stock in the
    Rappaport Family Trust which was issued in 1987 and prior to the issuance of
    the 500,000 shares issued to Herman Rappaport and noted above. In addition,
    100,000 shares are held by Mr. Rappaport's daughter, Susan Harris

**  Includes $13,500 accrued and deferred salary which has not been paid.

(1) The value of the restricted stock issued for the services provided was $0.01
    (par value) per share.

         There is no plan to compensate directors for their services as
directors of the Company. Officers are not paid any cash compensation excepting
for a draw of $7,500 per month starting January 1, 2004 for services by Herman
Rappaport and Dr. Steven Rosenblatt. Officers have received stock in lieu of
cash for their work in such capacities.

         The following table sets forth for each of the named executives certain
information concerning stock and stock options granted during fiscal 2004.
<TABLE>
<CAPTION>
Name and Position          Number of Securities   % of Total Options
                                Underlying            Granted to       Exercise Price   Expiration
                                  Options             Employees           per Share        Date
-----------------          --------------------   ------------------   --------------   ----------
<S>                                  <C>                  <C>                <C>           <C>
Herman H. Rappaport                  0                    0                  $0            N/A
Dr. Steven Rosenblatt                0                    0                  $0            N/A
Dr. Hector Rodriguez                 0                    0                  $0            N/A
Dr. Joel Feinstein                   0                    0                  $0            N/A
Dr. Avner Manzoor-Mandel             0                    0                  $0            N/A
</TABLE>

COMPENSATION OF DIRECTORS

         The Company reimburses each Director for reasonable expenses (such as
travel and out-of-pocket expenses) in attending meetings of the Board of
Directors. Directors are not separately compensated for their services as
Directors.

EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

         There are no employment agreements with the Company's key employees at
this time.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information as of December 31,
2004 with respect to the beneficial ownership (as such term is defined under
Section 13 (d) of the Securities Act of 1934 as amended of the common stock by
(i) each person who is the beneficial owner of more than 5% of the common stock
outstanding as of such date, (ii) each director of the Company, (iii) the named
officers, and (iv) all executive officers of the Company as a group.

                                       20
<PAGE>

Name, Position and Address of            Amount and Nature of         Percent of
Beneficial Owner                       Beneficial Ownership (1)         Class
-----------------------------          ------------------------       ----------
Herman H. Rappaport (2) (3)                  3,920,489                  55.56%
President, CEO and Director

Dr. Steven L. Rosenblatt                       725,000                  10.27%
Executive Vice-President
and Director
11600 Wilshire Blvd, Suite 412
Los Angeles, Ca. 90025.

Dr. Hector Rodriguez (2)                        90,000                  1.28%
Vice-President and Director

Avner Manzoor-Mandel(2)                         90,000                  1.28%
Vice-President and Director

Dr. Joel Feinstein (2)                          90,000                  1.28%
Vice-President and Director

Dr. Seymour Levine  (2)                         10,000                    *%
Director

All Other Officers and Directors             4,925,489                  69.80%
 as a group (5)
_________________
*   Less than 1%

(1)  Except as otherwise indicated, the Company believes that the beneficial
     owners of Common Stock listed below, based on information furnished by such
     owners, have sole investment and voting power with respect to such shares,
     subject to community property laws where applicable. Beneficial ownership
     is determined in accordance with the rules of the Securities and Exchange
     Commission and generally includes voting or investment power with respect
     to securities. Shares of Common Stock subject to options or warrants
     currently exercisable, or exercisable within 60 days, are deemed
     outstanding for purposes of computing the percentage of the person holding
     such options or warrants, but are not deemed outstanding for purposes of
     computing the percentage of any other person.

(2)  C/o Company's address: 2029 Century Park East, Suite 1112, Los Angeles,
     California 90067.

(3)  3,210,489 shares are held by Herman and Rhoda Rappaport Living Trust, Susan
     Harris Trustee, are deemed to be beneficially owned by Mr. Rappaport with
     respect to the voting and investment power of such shares.

         There are no outstanding options or warrants. The number of shares of
common stock outstanding as of December 31, 2004 was 7,056,424.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Initial Investment in the Company by Herman H. Rappaport

         Herman H. Rappaport purchased the shares now in the possession of the
Rappaport Family Trusts and totaling 2,727,000 shares of Heathercliff Group,
Inc, (originally Port Star Industries) for the sum of $200,000 in 1969. In
fiscal year 2000, the officers and directors of the Company, Messrs. Rodriguez,
Manzoor-Mandel and Feinstein each purchased 45,000 shares of the Company for
$10,283 (for a total amount of $30,850 for a total of 135,000 shares).

         The shares were issued without registration in reliance upon the
exemption provided by Section 4(2) of the Securities Act.

                                       21
<PAGE>

         Shares for services

         On March 28, 2001 the Board of Directors authorized the issuance of a
total of 300,000 shares of common stock for services performed and funds
advanced during the reorganizational process of the Company. These shares were
issued to the following named persons.

         Herman H. Rappaport                 150,000 shares

         Dr. Steven L. Rosenblatt            150,000 shares

         In fiscal 2003, the Company issued 500,000 shares of its common stock
to each of Messrs. Rappaport and Rosenblatt for their respective services to the
Company. The Company also issued in the same fiscal year 22,453 shares of its
common stock to each of Messrs. Rodriguez, Feinstein and Manzoor-Mandel for
their respective services to the Company. The shares were valued at $0.01 per
share.

         The shares were issued without registration in reliance upon the
exemption provided by Section 4(2) of the Securities Act.

         Shares for acquisition

         On July 27, 2001 to reflect the merger of Sierra Medicinals, Inc., a
wholly owned subsidiary of StarMed Group Inc., all of 469,792 outstanding shares
of Sierra Medicinals, Inc. were exchanged in a merger with StarMed Group Inc., a
Nevada corporation, on a one for one basis. The number of shares outstanding of
StarMed Group, Inc. is 4,945,384 as of December 31, 2001. Following the merger,
the Company has a wholly-owned subsidiary of Sierra Medicinals, Inc., an Arizona
corporation. The shares in the acquisition were issued without registration in
reliance upon the exemption provided by Section 4(2) of the Securities Act. The
shares were issued in a private transaction not involving a public offering to a
total of 23 shareholders, all of which except for 6 persons, were accredited
investors.

         Shareholder Loans

         The Company owed a director, officer and shareholder $31,345 and
$28,425 in expense reimbursements as of December 31, 2003 and 2002,
respectively. The Company owes two shareholders a total of $42,344 in expense
reimbursements as of December 31, 2004 and 2003, respectively. This balance is
included in accrued liabilities on the consolidated balance sheet as of December
31, 2004 and 2003.

                                       22
<PAGE>

ITEM 13. EXHIBITS

         (a) Exhibits.

         The following exhibits of the Company are included herein.

Exhibit
Number   Description
-------  -----------
2.1      Certificate of Merger of StarMed Group, Inc.*

3.1      Articles of Incorporation of Port Star Industries, Inc.*

3.2      Amendment to the Articles of Incorporation of Port Star, Industries,
         Inc.*

3.3      Amendment to the Articles of Incorporation of Energy Dynamics, Inc.*

3.4      Amendment to the Articles of Incorporation of StarMed, Inc. (Arizona)*

3.5      Certificate of Revival of StarMed Group, Inc. (Nevada)*

3.6      Certificate of Reinstatement of Heathercliff Group, Inc.*

3.7      Bylaws*

10.1     Loan Agreement*

10.2     Memorandum of Understanding with Natural Health Trends Corporation*

10.3     License Agreement with L. Perrigo Company.*

10.4     Customer Interaction Service Agreement*

21.      Subsidiaries of the Registrant

31.1     CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE
         SARBANES-OXLEY ACT

31.2     CERTIFICATION OF ACTING CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302
         OF THE SARBANES-OXLEY ACT

32.1     CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND ACTING CHIEF FINANCIAL
         OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT

__________
* Previously filed with the Securities and Exchange Commission as exhibits to
the registration statement on Form 10-SB, subsequent amendments and reports.

ITEM 14. PRINCIPAL FEES AND SERVICES.

         Set forth below are fees paid to the Company's independent accountants
for the past two years for the professional services performed for the Company.

         Audit Fees: During 2004 and 2003 the Company paid Mendoza Berger &
Company LLP a total of $36,195 and $7,672.59 for professional services rendered
in connection with performance of our independent audits for the years ending
December 31, 2004 and 2003, respectively.

         Tax Fees: None

                                       23
<PAGE>
                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on September 30, 2005.

                                        STARMED GROUP, INC.


                                        By: /s/ Herman Rappaport
                                            --------------------
                                            Herman Rappaport

                                            President, Chief Executive Officer,
                                            principal executive officer,
                                            Acting Chief Financial Officer,
                                            principal accounting officer and
                                            Director


         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 and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>

<S>                             <C>                                      <C>

/s/ Herman Rappaport            President, Chief Executive Officer,      Date: September 30, 2005
--------------------            principal executive officer,
Herman Rappaport                Acting Chief Financial Officer,
                                principal accounting officer and
                                Director


/s/ Dr. Steven L. Rosenblatt    Executive Vice President and Director    Date: September 30, 2005
----------------------------
Dr. Steven L. Rosenblatt


/s/ Dr. Hector Rodriguez        Vice President and Director              Date: September 30, 2005
------------------------
Dr. Hector Rodriguez


/s/ Dr. Avner Manzoor-Mandel    Vice President and Director              Date: September 30, 2005
----------------------------
Dr. Avner Manzoor-Mandel


/s/ Dr. Joel Feinstein          Vice President and Director              Date: September 30, 2005
----------------------
Dr. Joel Feinstein


/s/ Dr. Seymour Levine          Director                                 Date: September 30, 2005
----------------------
Dr. Seymour Levine

</TABLE>

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