sunii feb07

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 quarterly period ended February 28, 2007.

....Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from _________ to _________.

Commission File No: 0-23559

SUNBURST ACQUISITIONS III, INC.

---------------------------------------

(Name of small business in its charter)

Colorado 84-14320001

---------------------- -----------------------

(State or other (IRS Employer Id. No.)

jurisdiction of Incorporation)

Bellemarc Building, 1912 Sidewinder Drive, Suite 200-A, Park City, UT 84060

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(Address of Principal Office) Zip Code

Issuer's telephone number: (949) 635-0647

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 _ _ __

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

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 __ X _ No __ _ __

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. At February 28, 2007, 33,303,840 shares were outstanding.

Transitional Small Business Disclosure Format

(Check one):Yes ____ _ No __ X_ _

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PART 1 - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS

(a) The financial statements of registrant for the three months ended February 28, 2007, follow. The financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented.

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SUNBURST ACQUISITIONS III, INC.

FINANCIAL STATEMENTS

February 28, 2007

SUNBURST ACQUISITIONS III, INC.

(A Development Stage Company)

BALANCE SHEET

February 28, 2007

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 598

---------

Total current assets 598

---------

TOTAL ASSETS $ 598

=========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:

Notes payable - related party $ 50,592

Accounts payable 12,055

---------

Total current liabilities 62,647

STOCKHOLDERS' EQUITY (DEFICIT)

Preferred stock, no par value

20,000,000 shares authorized;

no shares issued and outstanding -

Common stock, no par value;

100,000,000 shares authorized;

33,303,840 shares issued and

outstanding 2,020,435

Additional paid-in capital 52,467

Deficit accumulated

during the development stage (2,134,951)

---------

Total stockholders’ deficit (62,049)

---------

TOTAL LIABILITIES AND STOCKHOLDERS'

DEFICIT $ 598

=========

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

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SUNBURST ACQUISITIONS III, INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(Unaudited)

Period

August 27, 1997 For the three months For the six months

(inception) to ended February 28, ended February 28,

February 28, 2007 2007 2006 2007 2006

----------------- ----------- ----------- ----------- -----------

REVENUES $ 1,067 $ - $ - $ - $ -

----------------- ----------- ----------- ----------- -----------

EXPENSES

Amortization 300 - - - -

Bank charges 36 18 - 36 -

Consulting fees 20,887 6,038 2,121 6,038 7,296

General office 2,694 99 - 220 95

Interest 8,387

1,040 - 2,092 -

Legal fees 53,010 3,837 850 3,995 850

Professional fees 31,785 1,775 - 1,775 -

Rent 5,700 150 150 300 300

Taxes and licenses 142 - - 10 -

Transfer agent 13,077 775 575 925 775

Valuation allowance 2,000,000 - - - -

----------------- ----------- ----------- ----------- -----------

Total expense 2,136,018 13,732 3,696 15,391 9,316

----------------- ----------- ----------- ----------- -----------

NET INCOME(LOSS) (2,134,951) (13,732) (3,696) (15,391) (9,316)

Accumulated deficit

Balance, Beginning

of period - (2,121,219) (2,106,256) (2,119,560) (2,100,636)

----------------- ----------- ----------- ----------- -----------

Balance,

end of period $ (2,134,951) $(2,134,951) $(2,109,952) $(2,134,951) $(2,109,952)

================= =========== =========== =========== ===========

NET INCOME(LOSS)

PER SHARE $ (0.06) $ (0.00) $ (0.00) $ (0.00) $ (0.00)

================= =========== =========== =========== ===========

WEIGHTED AVERAGE NUMBER

OF SHARES OF COMMON

STOCK AND COMMON STOCK

EQUIVALENTS

OUTSTANDING 33,910,824 33,303,840 33,303,840 33,303,840 33,303,840

================= =========== =========== =========== ===========

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

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Sunburst Acquisitions III, Inc.

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(Unaudited)

Period

August 27, 1997

(inception) For the six months

to February 28, ended February 28,

2007 2007 2006

--------------- ------------- -----------

CASH FLOWS FROM

OPERATING ACTIVITIES:

Net Loss $ (2,134,951) $ (15,391) $ (9,316)

Adjustments to reconcile

net loss to net cash flows

from operating activities:

Amortization 300 - -

Rent expense 4,500 300 300

Stock issued for

consulting fees 4,935 - -

Increase(Decrease) in

accounts payable 12,055 12,055 (2,618)

Increase in notes

payable to related party 50,592 2,092 16,193

--------------- ------------- -----------

Net cash flows from

operating activities (2,062,569) (944) 4,559

CASH FLOWS FROM

INVESTING ACTIVITIES

Increase in organization costs (300) - -

--------------- ------------- -----------

Net cash flows from

investing activities (300) - -

CASH FLOWS FROM

FINANCING ACTIVITIES

Issuance of common stock 2,007,500 - -

Issuance of preferred

Stock 8,000 - -

Additional paid-in capital 47,967 - -

-------------- ------------- -----------

Net cash flows from

financing activities 2,063,467 - -

-------------- ------------- -----------

Net increase in cash and

cash equivalents 598 (944) 4,559

CASH AND CASH EQUIVALENTS,

Beginning of Period - 1,542 (4)

-------------- ------------- -----------

CASH AND CASH EQUIVALENTS,

End of Period $ 598 $ 598 $ 4,555

============== ============= ===========

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

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Sunburst Acquisitions III, Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

February 28, 2007

(Unaudited)

1. Management's Representation of Interim Financial Information

------------------------------------------------------------

The accompanying financial statements have been prepared by Sunburst Acquisitions III, Inc. without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance

with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These financial statements include all of the adjustments which, in the opinion of management, are necessary to a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. These financial statements should be read in conjunction with the audited financial statements at August 31, 2006.

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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," "will," "hopes," "seeks," "anticipates," "expects," and the like, often identify such forward-looking statements, but are not the only indication that a statement is a forward-looking statement. Such forward-looking statements include statements concerning our plans and objectives with respect to the present and future operations of the Company, and statements which express or imply that such present and future operations will or may produce revenues, income or profits. Numerous factors and future events could cause the Company to change such plans and objectives, or fail to successfully implement such plans or achieve such objectives, or cause such present and future operations to fail to produce

revenues, income or profits.

Therefore, the reader is advised that the following discussion should be considered in light of the discussion of risks and other factors contained in this report on Form 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.

Liquidity and Capital Resources

As of February 28, 2007, the Company remains in the development stage. For the period ended February 28, 2007, the Company's balance sheet reflects current and total assets of $ 598, and current liabilities of $62,647.

Results of Operations

During the period from August 27, 1997 (inception) through February 28, 2007, the Company has accumulated a deficit of $2,134,951. This deficit is primarily the result of a $2,000,000 valuation allowance taken against a promissory note from American Recruitment Conferences, Inc., a California corporation ("ARC") and Workseek.com, Inc., a California corporation ("Workseek"). The promissory note

was issued to the Company to evidence a loan made in conjunction with execution of an Agreement and Plan of Reorganization with ARC and Workseek, dated August 30, 1999. The proposed transaction was not consummated and recovery of the amount due under the promissory note was doubtful. As a result, as of August 31, 2000, the promissory note receivable was offset by a full allowance for realization.

During the period from inception to February 28, 2007, the Company has engaged in no significant operations other than organizational activities, acquisition of capital, preparation and filing of the registration of its securities under the Securities Exchange Act of 1934, as amended, compliance with its periodical reporting requirements, and efforts to locate a suitable merger or acquisition

candidate. No revenues were received by the Company during this period.

From the date of filing of its registration statement under the Securities Exchange Act of 1934 (December 29, 1997) until the end of the fourth quarter of its 2001 fiscal year, the Company filed all required periodic reports under the Securities Exchange Act of 1934. After completing the filing of the report on Form 10KSB for the fiscal year ended August 31, 2001, the Company ceased filing reports in order to avoid incurring additional legal and accounting expenses.

After the 2001 fiscal year, the Company remained dormant throughout the fiscal years ending August 31, 2002 and August 31, 2003. The Company incurred no expenses for legal and accounting fees in 2002 and 2003, and it also ceased all efforts related to seeking a suitable merger or acquisition candidate during the period remained dormant.

Plan of Operations and Need for Additional Financing

The Company's plan of operations since August 31, 2001 was to remain dormant in order to avoid incurring legal and accounting fees related to compliance with its reporting obligations. However, in February 2004 there was a change of control, and the Company elected to begin taking the steps necessary to file all delinquent reports and to once again become current in compliance with its reporting obligations under the Securities Exchange Act of 1934. As of the date of filing of this report on Form 10QSB for the period ended February 28, 2007, is current with its periodic reporting obligations under the Securities Exchange Act of 1934.

For the fiscal year ending August 31, 2007, the Company's plan of operations is to remain current in compliance with its reporting obligations under the Securities Exchange Act of 1934 and to engage in efforts to locate a suitable merger or acquisition candidate. The Company will require additional capital in order to pay the costs associated with making required filings and seeking out suitable merger or acquisition candidates.

No specific commitments to provide additional funds have been made by management or other stockholders, and the Company has no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities prior to the location of a merger or acquisition candidate. Accordingly, there can be no assurance that any additional funds will be available to the Company to allow it to cover

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its expenses. Notwithstanding the foregoing, to the extent that additional funds are required, the Company anticipates receiving such funds in the form of advancements from current shareholders without issuance of additional shares or other securities, or through the private placement of restricted securities rather than through a public offering.

The Company may also seek to compensate providers of services by issuances of stock in lieu of cash. For information as to the Company's policy in regard to payment for consulting services, see "Certain Relationships and Transactions."

Item 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures: Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and

Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were designed and were effective in ensuring that information required to be disclosed in the reports submitted under the Exchange Act is

recorded, processed, summarized and reported as and when required.

Changes in Internal Control over Financial Reporting: There were no changes in our internal controls or in other factors that could affect these controls subsequent to the date of their evaluation, including any deficiencies or material weaknesses of internal controls that would require corrective action.

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PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

The following exhibits are filed herewith:

31.1 Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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

32.2 Certification 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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SIGNATURES

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 III, INC.

By: /s/ Scott MacCaughern

Scott MacCaughern, Principal Executive Officer, Director, and Principal Accounting Officer

Date: September 21, 2007

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