UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-QSB





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

For the quarter ended August 31, 2005



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

For the transition period from ____ to _____





SUNBURST ACQUISITIONS IV, INC.

(Name of small business in its charter)



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



|                                         |           
|---------------------------------------- | ----------
|595 Howe Street, Suite 206
Vancouver, BC | V6C 2T5   
|(Address of principal executive offices) | (Zip Code)



Registrants telephone number, including area code:  (604) 684-1755



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



Applicable only to issuers involved in bankruptcy proceedings during the past five years:



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



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ____ No X



Applicable only to corporate issuers:

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 88,394,324 at August 31, 2005.



Transitional Small Business Disclosure Format (Check one):  Yes __ No X



1





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SUNBURST ACQUISITIONS IV, INC.

(An Exploration Stage Company)



Consolidated Financial Statements

Six-Months Ended August 31, 2005

(Unaudited) (U.S. Dollars)











Index to Consolidated Financial Statements





Consolidated Balance Sheet

3



Consolidated Statements of Operations & Deficit

4



Consolidated Statements of Cash Flows

5



Notes to Consolidated Financial Statements

6 - 9







2





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SUNBURST ACQUISITIONS IV, INC.

(An Exploration Stage Company)

Consolidated Balance Sheet

August 31

(Unaudited) (U.S. Dollars)



|                                                 |  |   |            
|------------------------------------------------ |  | - | -----------
|                                                 |  |   | 2005       
|                                                 |  |   |            
|Assets                                           |  |   |            
|                                                 |  |   |            
|Current                                          |  |   |            
|Cash                                             |  | $ | 84,010     
|Other current assets                             |  |   | 176,121    
|                                                 |  |   |            
|Total Assets                                     |  | $ | 260,131    
|                                                 |  |   |            
|Liabilities                                      |  |   |            
|                                                 |  |   |            
|Current                                          |  |   |            
|Accounts payable and accrued liabilities         |  | $ | 57,744     
|Convertible debentures (note 4)                  |  |   | 705,000    
|Notes payable to related parties                 |  |   | 5,400      
|Liability for Mineral Properties (note 3)        |  |   | 150,000    
|                                                 |  |   |            
|Total Liabilities                                |  |   | 918,144    
|                                                 |  |   |            
|Stockholders' Deficit                            |  |   |            
|                                                 |  |   |            
|Capital Stock                                    |  |   |            
|Authorized                                       |  |   |            
|20,000,000 Preferred stock with no par value     |  |   |            
|200,000,000 Common stock with no par value       |  |   |            
|Issued                                           |  |   |            
|88,394,324 Shares of Common stock (note 5)       |  |   | 2,480,977  
|Additional Paid-In Capital                       |  |   | 457,146    
|Stock Subscriptions (note 5)                     |  |   | 255,500    
|Deficit Accumulated During the Exploration Stage |  |   | (3,856,769)
|Accumulated Other Comprehensive Income           |  |   | 5,133      
|                                                 |  |   |            
|Total Stockholders Deficit                      |  |   | (658,013)  
|                                                 |  |   |            
|Total Liabilities and Stockholders Deficit      |  | $ | 260,131    











See notes to consolidated financial statements.

3





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SUNBURST ACQUISITIONS IV, INC.

(An Exploration Stage Company)

Consolidated Statements of Operations and Deficit

(Unaudited) (U.S. Dollars)



|                                            |                    |                               |                             |              |              |  |  |  |  | 
|------------------------------------------- | ------------------ | ----------------------------- | --------------------------- | ------------ | ------------ |  |  |  |  | 
|                                            | For the period     |                               |                             |              |             
|                                            | from Inception     |                               |                             |              |             
|                                            | (August 27, 1997)  | Three Months Ended August 31, | Six Months Ended August 31,
|                                            | to August 31, 2005 | 2005                          | 2004                        | 2005         | 2004        
|                                            |                    |                               |                             |              |             
|Revenues                                    | $246,395           | $0                            | $0                          | $0           | $0          
|                                            | $
$
$              |                               |                             |              |              | 
|Expenses                                    |                    |                               |                             |              |             
|Cost of goods sold                          | 24,721             | 0                             | 0                           | 0            | 0           
|Selling, general and administrative         | 1,840,731          | 70,812                        | 114,203                     | 83,864       | 162,818     
|                                            |                    |                               |                             |              |             
|Total Expenses                              | 1,617,999          | 70,812                        | 114,203                     | 83,864       | 162,818     
|                                            |                    |                               |                             |              |             
|Net Operating Loss                          | (1,619,057)        | (70,812)                      | (114,203)                   | (83,864)     | (162,818)   
|Other Income and Expense                    |                    |                               |                             |              |             
|Interest expense                            | (222,854)          | (400)                         | (142,917)                   | (1,690)      | (142,917)   
|Gain on sale of securities                  | 469,863            | 0                             | 0                           | 0            | 0           
|Acquisition of resource properties          |                    |                               |                             |              |             
|properties (note 2, note 3)                 | (832,500)          | (150,000)                     | (25,000)                    | (150,000)    | (682,500)   
|                                            |                    |                               |                             |              |             
|Net Loss from Continuing Operations         | (2,635,548)        | (221,212)                     | (282,120)                   | (235,554)    | (988,235)   
|Discontinued Operations                     |                    |                               |                             |              |             
|Loss on disposal of                         |                    |                               |                             |              |             
|HollywoodBroadcasting.com                   | (2,066,371)        | 0                             | 0                           | 0            | 0           
|Gain on disposition of discontinued         |                    |                               |                             |              |             
|operations                                  | 845,150            | 0                             | 0                           | 0            | 0           
|                                            |                    |                               |                             |              |             
|Net Loss                                    | (3,856,769)        | (221,212)                     | (282,120)                   | (235,554)    | (988,235)   
|Accumulated Deficit, Beginning of Period    | 0                  | (3,635,557)                   | (2,482,042)                 | (3,621,215)  | (2,003,427) 
|                                            |                    |                               |                             |              |             
|Accumulated Deficit, End of Period          | $(3,856,769)       | $(3,856,769)                  | $(2,764,162)                | $(3,856,769) | $(2,991,662)
|Other Comprehensive Income (Loss)           |                    |                               |                             |              |             
|Foreign exchange gain (loss) on translation | 19,204             | (1,578)                       | (1,160)                     | 5,133        | (2,436)     
|                                            |                    |                               |                             |              |             
|Total Comprehensive Loss                    | $(3,837,565)       | $(222,790)                    | $(283,280)                  | $(230,421)   | $(990,671)  
|                                            |                    |                               |                             |              |             
|Total Loss Per Share                        |                    | $ (0.00)                      | $ (0.00)                    | $ (0.00)     | $ (0.02)    
|                                            |                    |                               |                             |              |             
|Weighted Average Number of shares of        |                    |                               |                             |              |             
|Common Stock Outstanding                    |                    | 87,147,071                    | 84,578,702                  | 87,020,007   | 61,555,963  





See notes to consolidated financial statements.

4





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SUNBURST ACQUISITIONS IV, INC.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

(Unaudited) (U.S. Dollars)



|                                                               |                       |                             |            |  |  |  |  | 
|-------------------------------------------------------------- | --------------------- | --------------------------- | ---------- |  |  |  |  | 
|                                                               | Period from Inception |                             |           
|                                                               | (August 27, 1997)     | Six Months Ended August 31,
|                                                               | to August 31, 2005    | 2005                        | 2004      
|                                                               |                       |                             |           
|Operating Activities                                           |                       |                             |           
|Net loss                                                       | $(3,856,769)          | $(235,554)                  | $(988,235)
|Adjustments to reconcile net income (loss) to net cash flows   |                       |                             |           
|Write-off of note receivable                                   | 57,500                | 0                           | 57,500    
|Acquisition of resource properties for shares (note 2, note 3) | 580,000               | 150,000                     | 430,000   
|Discount on Convertible Debentures (note 4)                    | 175,000               | 0                           | 142,917   
|Gain on sale of securities                                     | (469,863)             | 0                           | 0         
|Unrealized Foreign Exchange (gain) loss                        | 22,820                | 3,795                       | (2,436)   
|Issuance of options                                            | 488,130               | 0                           | 0         
|Allowance for doubtful accounts                                | 88,360                | 0                           | 0         
|Discontinued operations                                        | (846,150)             | 0                           | 0         
|Decrease in inventory                                          | (57,705)              | 0                           | 0         
|Decrease in other assets                                       | (643,112)             | (163,008)                   | (503)     
|Decrease in accounts receivable                                | (37,910)              | 0                           | (172)     
|Increase in accrued expenses                                   | 150,218               | 0                           | 0         
|Increase in customer deposits                                  | 0                     | 0                           | 938       
|Increase in accounts payable and accrued liabilities           | 166,242               | 31,255                      | 58,426    
|Decrease in notes payable                                      | (23,100)              | (23,100)                    | 0         
|Amortization                                                   | 52,332                | 0                           | 0         
|Net Cash Flows from Operating Activities                       | (4,154,007)           | (236,612)                   | (301,565) 
|Investing Activities                                           |                       |                             |           
|Purchase of investment                                         | (22,353)              | 0                           | 0         
|Maturity of investment                                         | 22,353                | 0                           | 0         
|Proceeds from sale of securities                               | 394,863               | 0                           | 0         
|Purchase of property and equipment                             | (208,585)             | 0                           | 0         
|Cash Provided by Investing Activities                          | 186,278               | 0                           | 0         
|Financing Activities                                           |                       |                             |           
|Issuance of note receivable                                    | (57,500)              | 0                           | 0         
|Related party debt                                             | 691,056               | 0                           | 0         
|Proceeds from notes payable to stockholders                    | 548,191               | 0                           | 0         
|Proceeds from notes payable                                    | 105,500               | 5,000                       | 0         
|Proceeds from convertible debentures                           | 530,000               | 0                           | 408,333   
|Proceeds from exercise of options                              | 93,000                | 25,000                      | 35,000    
|Stock subscriptions                                            | 322,525               | 255,500                     | 196,135   
|Paid-in capital                                                | 16                    | 0                           | 0         
|Issuance of common stock                                       | 1,818,951             | 0                           | 5,975     
|Cash Provided by Financing Activities                          | 4,051,739             | 285,500                     | 645,443   
|Inflow of Cash and Cash Equivalents                            | 84,010                | 48,888                      | 343,878   
|Cash and Cash Equivalents, Beginning of Period                 | 0                     | 35,122                      | 22,077    
|Cash and Cash Equivalents, End of Period                       | $84,010               | $84,010                     | $365,955  





See notes to consolidated financial statements.

5





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SUNBURST ACQUISITIONS IV, INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

Six-Months Ended August 31, 2005

(Unaudited) (U.S. Dollars)







1.

MANAGEMENTS REPRESENTATION OF INTERIM FINANCIAL INFORMATION



These unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information.  These financial statements are condensed and do not include all disclosures required for annual financial statements.  The organization and business of the Company, accounting policies followed by the Company and other information are contained in the notes to the Companys audited financial statements filed as part of the Companys February 28, 2005 Form 10KSB.



In the opinion of the Companys management, these financial statements reflect all adjustments necessary to present fairly the Companys financial position at August 31, 2005 and the results of operations for the three and six-months ended August 31, 2005 and from inception to August 31, 2005 and the statement of cash flows for the six-months ended August 31, 2005 and from inception to August 31, 2005.  The results of operations for the three and six-months ended August 31, 2005 are not necessarily indicative of the results to be expected for the entire year.





2.

ACQUISITION OF SIERRA MINERALS AND MINING, INC.



In the 2004 fiscal year, during the quarter ending May 31, 2004, the Company completed a share exchange with the shareholders of Sierra Minerals and Mining, Inc. (Sierra).  Pursuant to the terms of the share exchange agreement, the Company issued 43,000,000 shares of its common stock in exchange for all of the outstanding shares of Sierra.  As a result, Sierra became a wholly owned subsidiary of the Company.  The common stock was valued at $0.01 per share.  Finders fees of 6,000,000 options to purchase the same number of shares of common stock of the Company at $0.01 per share are payable to non-related parties in connection with this share exchange.  The options were issued on May 25, 2004 and an amount of $175,800 was recorded as finders fees and additional paid in capital.  Sierra is a company incorporated in the state of Nevada that was incorporated just prior to the share exchange with the Company.  Sierra had no activities or operations other than having an option to acquire an interest in a property in Mexico, as noted below.  Due to the uncertainty of the future revenue to be generated from this property the cost of the acquisition of $430,000 has been charged to operations for the quarter ending May 31, 2004.



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



The joint venture agreement between Sierra and MRT required Sierra to invest cash totalling $1,000,000 by June 30, 2004 and to secure a $2,000,000 line of credit for the joint venture within sixty days of signing the joint venture agreement.  MRT will contribute the properties.  The joint venture is to be owned 60% by Sierra and 40% by MRT, however, should Sierra fail to secure the line of credit, its interest shall be reduced to 30% and the interest of MRT shall be increased to 70%.



On October 1, 2004, the Company signed an extension to provide the required investment of $1,000,000 by November 10, 2004. The Company was to also have until November 30, 2004, to secure the $2,000,000 line of credit. On November 16, 2004 the Company signed a further extension to provide the required investment of $1,000,000 by December 31, 2004. The Company was to also have until February 28, 2005, to secure the $2,000,000 line of credit.





6





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SUNBURST ACQUISITIONS IV, INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

Six-Months Ended August 31, 2005

(Unaudited) (U.S. Dollars)







2.

ACQUISITION OF SIERRA MINERALS AND MINING, INC. (continued)



As at February 28, 2005, the Company had advanced a total of $507,500 (which was charged to operations) of the $1,000,000 required investment. As at May 31, 2005, the Company was in default of the agreement and began negotiating an additional extension for the remaining $492,500 of the required $1,000,000 investment and $2,000,000 line of credit.



On August 25, 2005, the Company announced that it had successfully restructured its rights to properties in Mexico; thereby, this joint venture was superceded and replaced by the current agreements described below (see note 3).



3.

MINERAL PROPERTIES



On August 25, 2005, the Company announced that it had successfully restructured its rights to properties in Mexico.



The restructuring entailed incorporating a wholly-owned subsidiary, Sunburst de Mexico, S.A. de C.V. ("Sunburst Mexico"), which allowed the Company to take direct title to properties previously held beneficially through a joint venture with Minero Rio Tinto, S.A. de C.V. ("MRT").



Pursuant to the current agreements signed, the Company received an increased ownership of the Cieneguita concessions from 60% to 100% ownership, an option to purchase 11 of the Guazaparez concessions, two Encino Gordo concessions and the right of first refusal on two other Encino Gordo concessions from MRT.



All other interests were included in a previous joint venture agreement between Sierra Minerals and Mining, Inc, the Companys Nevada subsidiary, and MRT, which was attached as an exhibit to the Companys 8-K filing made on June 3, 2004.  This joint venture has been superceded and replaced by the current agreements.



As part of this restructuring, Sunburst must adhere to certain funding requirements including providing a payment of $100,000 US by November 30, 2005, and loan to Sunburst Mexico the amounts of $900,000 US by January 31, 2006 and $1,000,000 US by April 30, 2006. These funds will be used for exploration or development expenditures on Sunburst Mexico's concessions. Failure to adhere to the schedule will allow MRT to acquire for nominal consideration up to 100% of all outstanding shares of Sunburst Mexico which holds on option on all of these mineral concessions.



As consideration for these acquisitions, the Company agreed to issue 5 million shares to MRT (or its assignee) and an additional 5 million shares at the time the Cieneguita property reaches production of 15,000 ounces of gold per year. The first 5 million shares have not yet been issued at period end and the amount is reflected as a liability. The trading price on the day of the agreement was $0.03 and therefore, a liability of $150,000 has been recorded and has been charged to operations for the quarter ending August 31, 2005.



4.

CONVERTIBLE DEBENTURES



On August 25, 2004, the Company entered into a Securities Purchase Agreement (the Agreement), with Bristol Investment Fund, Ltd., Alpha Capital AG and Stonestreet LP (the Purchasers). Pursuant to the Agreement, the Purchasers agreed to purchase up to $1,350,000 in face amount of Secured Convertible Debentures (the Debentures) from the Company.  The Debentures do not bear interest but are to be issued at a 26% discount to the face amount. Accordingly, the cash purchase price for the full $1,350,000 face amount of the Debentures will be $1,000,000.   The Debentures will be due and payable in full one year from the date of issuance.



7





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SUNBURST ACQUISITIONS IV, INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

Six-Months Ended August 31, 2005

(Unaudited) (U.S. Dollars)







4.

CONVERTIBLE DEBENTURE (continued)



The Purchasers have the right to convert the full face amount of the Debentures to common stock of the Company at a price of $0.10 per share.  The conversion price is subject to adjustment in the event the market price of the Companys common stock falls below $0.10 per share for 10 days during any consecutive 20-day period. Under the Agreement, the Purchasers will also receive Warrants and Additional Investment Rights to purchase shares of the Companys common stock.  The Warrants are

exercisable at a price of $0.12 per share for a period of 5 years and give the holders the right to purchase the same number of shares as the total number of shares issuable upon conversion of the Debentures. The Additional Investment Rights are exercisable at a price of $0.10 per share and give the holders the right to purchase the same number of shares as the total number of shares issuable upon conversion of the Debentures. The Additional Investment Rights will generally be exercisable for a period of six months following the effective date of a registration statement (the Registration Statement) to be filed for purposes of registering the common stock underlying the Debentures, the Warrants and the Additional Investment Rights.



On August 30, 2004, the Company issued $551,250 of face amount Debenture of which $142,917 has been charged as interest. The cash purchase price of the Debenture was $408,333 less finder fees and commissions of $60,833 for net proceeds of $347,500.



On October 19, 2004, the Company issued $123,750 of face amount Debenture of which $32,083 has been charged as interest. The cash purchase price of the Debenture was $91,667 less finder fees and commissions of $9,167 for net proceeds of $82,500.



On August 10, 2005, the Company negotiated an agreement with debenture holders to retire the debentures including all associated principal, terms, warrants and rights for the amount of $500,000 plus 8% interest.  The debenture was to be repaid in full by September 1, 2005.  If the debentures were not repaid Mario Ayub, a director of Sunburst would resign and 2 new directors will be appointed at the request of the debenture holders. In September 2005, the debentures were paid out and retired (note 7).



5.

COMMON STOCK



|                                      |            |           
|------------------------------------- | ---------- | ----------
|                                      | Number     |           
|                                      | of Shares  | Amount    
|Balance, February 28, 2005            | 86,894,324 | $2,435,977
|Issued during the period:             |            |           
|No shares issued                      | -          | -         
|Balance, May 31, 2005                 | 86,894,324 | $2,435,977
|Issued during the period:             |            |           
|Pursuant to exercise of stock options | 1,000,000  | 25,000    
|Pursuant to compensation shares       | 500,000    | 20,000    
|                                      |            |           
|Balance, August 31, 2005              | 88,394,324 | $2,480,977







8





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SUNBURST ACQUISITIONS IV, INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

Six-Months Ended August 31, 2005

(Unaudited) (U.S. Dollars)







5.

COMMON STOCK (continued)



During the quarter ended May 31, 2005, the Company issued no shares.



During the quarter ended August 31, 2005, the Company issued 1,000,000 common shares from stock options being exercised.  Under the terms of a Consulting Agreement entered into July 1, 2005, the Company also issued a total of 500,000 shares of its common stock as compensation for services.  The shares were issued pursuant to a registration statement on Form S-8. During August 2005, the Company began accepting subscriptions for a private placement at $0.02 per share (see note 7). The Company received stock subscription proceeds totaling $255,500. These shares have not been issued.



6.

RELATED PARTY



The Company paid consulting fees of $12,000 (2004 - nil) to a an officer and director of the Company under the Services Agreement entered into on September 14, 2005, effective June 1, 2005 (See note 7). The services are on a month to month basis at $4,000 per month for the first three months and $1,500 per month thereafter.



As of August 31, 2005, accounts payable of $12,000 (2004  nil) was owing to a director of the Company



7.

SUBSEQUENT EVENTS



Convertible Debentures



On September 14, 2005, the Company announced that it made an interim payment of $300,000 to its debenture holders. The Company was also granted an extension to September 19, 2005 to provide the remaining $200,000, plus interest charges, required to retire the debentures.



On September 21, 2005, the Company reported that it paid to its debenture holders the final remaining amount of $200,000, plus interest charges, required to retire the debentures. As a result of this payment, the terms and conditions of the debentures were terminated and the associated warrants were cancelled.



Private Placement and Convertible Debentures



The Company raised the funds needed to repay its debenture holders in part through the private placement sale of shares of common stock at a price of $0.02 per share, and in part through the private placement sale of convertible debentures in the aggregate principal amount of $330,000. The newly issued convertible debentures bear interest at 10% per annum and are due and payable in six months.



Consulting Agreement



Under the terms of a Consulting Agreement entered into September 1, 2005, the Company issued a total of 1,000,000 shares of its common stock as compensation for future services.  The shares were issued pursuant to a registration statement on Form S-8 filed on October 11, 2005.



Under the terms of a Services Agreement entered into on September 14, 2005, effective June 1, 2005, the Company would provide $4,000 per month from June 1, 2005 to August 31, 2005, and $1,500 per month thereafter to an officer and director of the Company. This Services Agreement is on a month to month basis until terminated with 30 days notice.







9





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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS



SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS



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



Overview



We are a start-up, exploration stage company and have not yet generated or realized any revenues from our mining business operations, which we commenced in May 2004. We must raise additional cash in order to implement our plan and stay in business.



On August 25, 2005 the Company reported that it had successfully restructured its rights to properties in Mexico.



The restructuring entailed incorporating a wholly-owned subsidiary, Sunburst de Mexico, S.A. de C.V. ("Sunburst Mexico"), which allowed the Company to take direct title to properties previously held beneficially through a joint venture with Minero Rio Tinto, S.A. de C.V. ("MRT").



Pursuant to the agreements signed August 18, 2005 (described below), the Company received an increased ownership of the Cieneguita concessions from 60% to 100% ownership, an option to purchase 11 of the Guazaparez concessions, two Encino Gordo concessions and the right of first refusal on two other Encino Gordo concessions from MRT.



All other interests were included in a previous joint venture agreement between Sierra Minerals and Mining, Inc, the Companys Nevada subsidiary, and MRT, which was attached as an exhibit to the Companys 8-K filing made on June 3, 2004.  This joint venture has been superceded and replaced by the current agreements.



As part of this restructuring, Sunburst must adhere to certain funding requirements including providing a loan of US$1 million to Sunburst Mexico by December 31, 2005 and a further loan of US$1 million by April 30, 2006. These funds will be used for exploration or development expenditures on Sunburst Mexico's concessions. Failure to adhere to the schedule will allow MRT to acquire up to 100% of all outstanding shares of Sunburst Mexico for nominal consideration.



10





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As consideration for these acquisitions, the Company agreed to issue 5 million shares to MRT (or its assignee) at the time of the transaction, and an additional 5 million shares at the time the Cieneguita property reaches production of 15,000 ounces of gold per year. As of the date of this report, the first 5 million shares have not yet been issued and the amount is reflected as a liability. The trading price on the day of the agreement was $0.03 and therefore, a liability of $150,000 has been recorded and has been charged to operations for the quarter ending August 31, 2005.



Our continued existence and plans for future growth depend on our ability to obtain the additional capital necessary to operate, through the generation of revenue and the issuance of additional debt or equity.  Except for the net proceeds in the amount of $430,000 we have received in connection with the Securities Purchase Agreement entered in August 2004, our management has not secured a commitment of financial support to meet future obligations and we have not generated any revenues and no revenues are anticipated unless and until mineralized material is discovered on the properties that we have an interest in. Accordingly we must raise cash from other than the sale of mineralized materials. We will be conducting research in connection with the exploration of our properties. We are not planning to buy or sell any plant or significant equipment.



Plan of Operations



Our business plan is to proceed with the exploration of our Mexican mineral properties to determine whether there are commercially exploitable reserves of gold, silver or other metals.



Although our properties have been mined in the past, we are presently in the exploration stage and there is no assurance that a commercially viable mineral deposit, a reserve, exists in any of our properties until further exploration is done and a comprehensive evaluation concludes economic and legal feasibility.



We did not earn any revenues during the fiscal year ended February 28, 2005 or the six months ended August 31, 2005 in connection with our mining activities or otherwise. We do not anticipate earning revenues until such time as we have entered into commercial production of our mineral properties. We are presently in the exploration stage of our business and we can provide no assurance that we will discover commercially exploitable levels of mineral resources on our properties, or if such resources are discovered, that we will enter into commercial production of our mineral properties.  We generated no revenues during the year ended February 28, 2005 or the six months ended August 31, 2005.



We incurred operating expenses and a net loss in the amount of $235,554 for the six months ended August 31, 2005.



Liquidity and Capital Resources



We remain in the exploration stage.  Since inception we have undergone two unsuccessful business combinations, which have caused us to incur significant liabilities and which have resulted in the accumulation of a substantial deficit during the exploration stage.  As of August 31, 2005, we have total current assets of $260,131, total current liabilities of $918,143, and a deficit of $(3,856,769) accumulated in the exploration stage.





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The issued and outstanding shares are 88,394,324 as of August 31, 2005. We had cash on hand of $84,010 as of August 31, 2005. We plan to use our cash on hand to pay on-going expenses related to compliance with our reporting obligations under the Securities Exchange Act of 1934.



On July 15, 2005, the Company entered into an agreement with Bristol Investment Fund, Ltd., Alpha Capital AG and Stonestreet LP, pursuant to which it agreed to repurchase the convertible debentures held by such parties for $500,000 plus 8% interest.  Upon repurchase of the debentures, the warrants and additional investment rights held by the debenture holders will also be cancelled.



On September 21, 2005, the Company announced that it had re-paid to its debenture holders the face amount of $500,000 plus interest charges, required to retire the debentures. As a result of this payment, the terms and conditions of the debentures are now terminated and the associated warrants have been cancelled.



The Company raised the funds needed to repay its debenture holders in part through the private placement sale of shares of common stock at a price of $0.02 per share, and in part through the private placement sale of convertible debentures in the aggregate principal amount of $330,000. The newly issued convertible debentures bear interest at 10% per annum and are due and payable in six months.  
As previously reported, on May 25, 2004, we completed a share exchange transaction with Sierra Minerals and Mining, Inc, a Nevada corporation.  Sierra is a party to a joint Venture Agreement with Mineral Rio Tinto S.A. de C.V., a Mexican company (MRT), pursuant to which Sierra and MRT have agreed to explore and, if feasible, develop certain mining properties, which MRT has the option to acquire.  The properties are located in the state of Chihuahua, Mexico.   Due to the uncertainty of the future revenue to be generated from this property the cost of the acquisition of $430,000 and deposits of $507,500 were charged to operations in the year ended February 28, 2005.



Pursuant to the terms of the Joint Venture Agreement between Sierra and MRT, Sierra was required to invest cash totaling $1,000,000 into the joint venture, and was also required to secure a $2,000,000 line of credit for the joint venture. The Company raised $507,500 towards the initial $1,000,000 and did not secure a $2,000,000 line of credit. After further discussions with MRT, this joint venture has been superceded and replaced by the current agreements discussed below.



On August 18, 2005, the Company entered into various agreements, including agreements to acquire interests in various mining claims in Mexico through its wholly-owned Mexican subsidiary, Sunburst Mining de Mexico, S.A., de C.V.



The agreements include the following:



(1) Assignment of Contract Agreement between Minera Rio Tinto, S.A. de C.V. (MRT), Sunburst de Mexico, S.A. de C.V. (Sunburst Mexico), and owners of the Cieneguita Concessions (Cieneguita Owners), pursuant to which MRT assigned to Sunburst Mexico, with the permission of the Cieneguita Owners, all of MRTs rights and obligations acquired under a previous agreement, the Cieneguita Option Agreement, including the exclusive option to acquire the Cieneguita Concessions for a price of US $2,000,000 (all royalty payments to be deducted from the purchase price); the Cieneguita Owners have reserved a royalty of US $20 per ounce of gold produced from the Cieneguita Concessions. In the event that the price of gold is above $400 per ounce, the royalty payable to the Cieneguita Owners will be increased by $0.10 for each dollar increment over $400 per ounce.



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(2) Guazaparez Option Agreement signed between MRT and Sunburst Mexico pursuant to which MRT has granted Sunburst Mexico the exclusive option to purchase 7 of the Guazaparez concessions, for a term of 4 years, on payment of US $910,000.  MRT has reserved a 2.5% Net Smelter Royalty (NSR). MRT has reserved the right to extract from the Guazaparez concessions up to 5,000 tons per month of rock material; this right will terminate on exercise of the option.



(3) Sale and Purchase of Encino Gordo Concessions signed between MRT and Sunburst Mexico whereby MRT has sold to Sunburst Mexico two of the Encino Gordo concessions, for a price of $1,000 Pesos (approximately US $100), and has granted to Sunburst Mexico a first right of refusal to acquire two additional Encino Gordo concessions.  This is a new agreement, not an assignment of a previous agreement.



(4) Assignment of the San Francisco Option Agreement signed between MRT, Sunburst Mexico and San Francisco Concession Owner pursuant to which MRT has assigned to Sunburst Mexico, with the consent of the San Francisco Concessions Owner, MRTs rights and obligations acquired under the San Francisco Option Agreement, including the option to purchase the San Francisco Concession for a price of US $250,000 (the Purchase Price) for a term of 60 months commencing from June 25, 2004, the date of signing of the San Francisco Option Agreement (the Option Period).  MRT and the San Francisco Owner have reserved a combined 2.5% NSR. To maintain the option, Sunburst Mexico has assumed the obligation to pay to the San Francisco Owner cumulative annual payments totaling US$90,000; if option is exercised prior to the expiration of the Option Period by payment of the Purchase Price, the obligation to pay the annual payments will be terminated.



(5) Assignment of the San Antonio Option Agreement signed between MRT, Sunburst Mexico, and the San Antonio Option Concessions Owner pursuant to which MRT has assigned to Sunburst Mexico, with the consent of the San Antonio Concessions Owner, MRTs rights and obligations acquired under the San Antonio Option Agreement, including the option to purchase the San Antonio concessions for a price of US $500,000(the Purchase Price) for a term of 60 months commencing from January 15, 2004, the date of signing of the San Antonio Option Agreement (the Option Period).  MRT and the San Antonio owner have reserved a combined 2.5% NSR. To maintain the option, Sunburst Mexico has assumed the obligation to pay to the San Antonio Owner cumulative annual payments totaling US$140,000; if option is exercised prior to the expiration of the Option Period by payment of the Purchase Price, the obligation to pay the annual payments will be terminated. The San Antonio Owner has reserved the right to extract from the San Antonio concessions up to 50 tonnes per month of rock material; this right will terminate on the date of the exercise of the option.



(6) Operators Agreement signed between Sunburst Mexico and MRT pursuant to which Sunburst Mexico has engaged MRT as the Operator of the Cieneguita Property on payment of the Operators fee and an Operators bonus equal to 10% of the net proceeds of production if operating cash costs do not exceed US $230 per ounce of gold produced from the Cieneguita Property.



(7) Share Option Agreement signed between Sunburst Acquisitions IV Inc. (Sunburst USA) and MRT pursuant to which Sunburst USA has granted to MRT the exclusive option to acquire up to 100% of all outstanding shares of the capital of Sunburst Mexico if Sunburst USA does not (a) comply with the terms of the underlying Cieneguita Option Agreement, the San Antonio Option Agreement, the San Francisco Option Agreement and the Guazaparez Option Agreement, and (b) advance to MRT the amount of $100,000 US by November 30, 2005, and loan to Sunburst Mexico the amounts of $900,000 US by January 31, 2006 and $1,000,000 US by April 30, 2006. If option to purchase 100% of the shares of the capital of Sunburst Mexico is exercised by MRT, MRT is obligated to cancel all of the shares of the capital of Sunburst USA owned by MRTs and Mario Ayub.

Mario Ayub owns MRT and is a director of Sunburst USA.

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ITEM 3.

CONTROLS AND PROCEDURES



The Corporation maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its SEC reports are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Corporation's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as the Corporation's are designed to do, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.



In connection with the audit of the Corporation's consolidated financial statements for the year ended February 28, 2005, the Corporation's independent registered public accounting firm advised the Audit Committee and management of certain significant internal control deficiencies that they considered to be in the aggregate a material weakness. These consist of, inadequate staffing and supervision leading to adequate segregation of duties, the identification and resolution of certain accounting matters; substantiation and evaluation of certain account balances; lack of procedures or expertise required to prepare all required disclosures. Day to day operations of the Company are under the management of a non-director major shareholder who has signing authority over the bank account requiring only one signature. The independent registered public accounting firm indicated that they considered these deficiencies to be a material weakness and a reportable condition as that term is defined under standards established by the American Institute of Certified Public Accountants. A material weakness is a significant deficiency in one or more of the internal control components that alone or in the aggregate precludes our internal controls from reducing to an appropriately low level of risk that a material misstatement in our financial statements will not be prevented or detected on a timely basis. The Corporation considered these matters in connection with the period-end closing of accounts and preparation of related consolidated financial statements. The Company is currently reviewing appropriate measures to identify, rectify and implement suitable action to correct them.



As required by the SEC rules, we have evaluated the effectiveness of the design and operation of the Corporation's disclosure controls and procedures as of the end of the period covered by this Annual Report. This evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Corporation's controls and procedures were not effective, for the reasons noted above.



There have been no changes in the Companys internal procedures to the date of filing of this report.



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PART II - OTHER INFORMATION



ITEM 1.

LEGAL PROCEEDINGS



ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.



None.



ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None.



ITEM 6.

EXHIBITS.



The following exhibits are filed herewith:



2.1

Securities Purchase Agreement dated as of August 25, 2004 among Sunburst Acquisitions IV, Inc. (and identified purchasers) (incorporated by reference from Current Report on Form 8-K and filed with the Securities and Exchange Commission on August 31, 2004).



2.2

Share Exchange Agreement, dated May 3, 2004, by and among Sunburst Acquisitions IV, Inc., a Colorado corporation, Sierra Minerals and Mining, Inc., a Nevada corporation, and the shareholders of Sierra Minerals & Mining, Inc. (incorporated by reference from Current Report on Form 8-K/A and filed with the Securities and Exchange Commission on August 9, 2004).



2.3

Joint Venture Agreement, dated April 26, 2004 and amended on June 1, 2004, by and between Sierra Mining and Minerals, Inc., a Nevada corporation, and Minera Rio Tinto S.A. de C.V., a Mexican company (incorporated by reference from Current Report on Form 8-K/A and filed with the Securities and Exchange Commission on August 9, 2004).



2.4

Amendment to Joint Venture Agreement dated June 1, 2004 (incorporated by reference from Current Report on Form 8-K/A and filed with the Securities and Exchange Commission on August 9, 2004).



3 (i)

Articles of Incorporation (incorporated by reference from Registration Statement on Form 10-SB/A filed with the Securities and Exchange Commission on December 29, 1997).



3 (ii)

Bylaws (incorporated by reference from Registration Statement on Form 10-SB/A filed with the Securities and Exchange Commission on December 29, 1997).



4.1

Specimen Common Stock Certificate (incorporated by reference from Registration Statement on Form 10-SB/A filed with the Securities and Exchange Commission on December 29, 1997).



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4.2

Registration Agreement dated April 20, 2004, by and among Sunburst Acquisitions IV, Inc., a Colorado company, and each of the purchasers in a private placement of shares of Sunburst (incorporated by reference from Current Report on Form 8-K/A and filed with the Securities and Exchange Commission on August 9, 2004).



10.1

Distribution Agreement between EPI and Sunburst Acquisitions IV, Inc. (incorporated by reference from Form 10-KSB filed with the Securities and Exchange Commission on May 20, 2002).





10.2

Distribution Agreement by and between Romlight International, Inc. and Sunburst Digital, Inc. (incorporated by reference from Form 10-KSB filed with the Securities and Exchange Commission on June 11, 2003).



10.3

Promissory Note between Sunburst Acquisitions IV, Inc. and Minera Rio Tinto S.A. de C.V. in the amount of $ 57,500 dated January 9, 2004 (incorporated by reference from Current Report on Form 8-K/A and filed with the Securities and Exchange Commission on August 9, 2004).



10.4

Promissory Note between Sierra Mineral and Mining, Inc. and Minera Rio Tinto S.A. de C.V. in the amount of $ 167,500, dated May 3, 2004 (incorporated by reference from Current Report on Form 8-K/A and filed with the Securities and Exchange Commission on August 9, 2004).



31.1

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended.



32.1

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.







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SIGNATURE



In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





SUNBURST ACQUISITIONS IV, INC.









By: /S/ TERRY FIELDS

Terry Fields, President and Director



Date:  November 1, 2005







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