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      Sunset Brands, Inc. Form S-8 - Registration Statement
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">As
      filed
      with the Securities and Exchange Commission on June 22, 2006</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Registration
      No. 333-____________</font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman">UNITED
      STATES</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman">SECURITIES
      AND EXCHANGE COMMISSION</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Washington,
      D.C. 20549</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div>
        <hr style="COLOR: black" align="center" noshade size="2" width="40%">
      </div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>FORM
      S-8</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">REGISTRATION
      STATEMENT</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">UNDER</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">THE
      SECURITIES ACT OF 1933</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <hr style="COLOR: black" align="center" noshade size="2" width="40%">&#160;<br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 16pt; FONT-FAMILY: Times New Roman"><strong>SUNSET
      BRANDS, INC.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(Exact
      name of registrant as specified in its charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div align="left">
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            <td valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Nevada</font></div>
            </td>
            <td valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">91-2007330</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(State
                or other jurisdiction of incorporation or organization)</font></div>
            </td>
            <td valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(I.R.S.
                Employer Identification No.)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="50%">&#160;</td>
            <td valign="top" width="50%">&#160;</td>
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          <tr>
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            <td valign="top" width="50%">&#160;</td>
          </tr>
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            <td valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">10990
                Wilshire Boulevard, Suite 1220</font></div>
            </td>
            <td valign="top" width="50%">&#160;</td>
          </tr>
          <tr>
            <td valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Los
                Angeles, California</font></div>
            </td>
            <td valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">90024</font></div>
            </td>
          </tr>
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            <td valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(Address
                of Principal Executive Offices)</font></div>
            </td>
            <td valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(Zip
                Code)</font></div>
            </td>
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      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>2005
      Stock Incentive Plan</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(Full
      title of the plan)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Todd
      Sanders</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">President
      and Chief Executive Officer</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">10990
      Wilshire Boulevard, Suite 1220</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Los
      Angeles, California 90024</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(310)
      478-4600</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(Name,
      address, including zip code, and telephone number,</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">including
      area code, of agent for service)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>CALCULATION
      OF REGISTRATION FEE </strong></font>
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            <td align="left" valign="bottom" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Title
                of </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Securities</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">to
                </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">be
                Registered</font></div>
            </td>
            <td align="left" valign="bottom" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Amount
                </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">to
                be</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Registered</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><sup>(1)</sup></font></div>
            </td>
            <td align="left" valign="bottom" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Proposed
                </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Maximum</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Offering
                </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Price</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Per
                Share</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><sup>(2)</sup></font></div>
            </td>
            <td align="left" valign="bottom" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Proposed
                </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Maximum</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Aggregate
                </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Offering</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Price</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><sup>(2)</sup></font></div>
            </td>
            <td align="left" valign="bottom" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Amount
                of</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Registration</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Fee</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><sup>(2)</sup></font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="20%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="20%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Common
                Stock,</font></div>
            </td>
            <td align="justify" valign="top" width="20%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$.001
                par value</font></div>
            </td>
            <td align="justify" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">10,000,000
                shares</font></div>
            </td>
            <td align="justify" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$.32</font></div>
            </td>
            <td align="justify" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$3,200,000</font></div>
            </td>
            <td align="justify" valign="top" width="20%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$343</font></div>
            </td>
          </tr>

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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(1)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                number of shares being registered is the maximum aggregate number
                of
                shares presently issuable under the Plan. The registration statement
                also
                includes an indeterminable number of additional shares that may become
                issuable under the Plan pursuant to anti-dilution
                provisions.</font></div>
            </td>
          </tr>

      </table>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(2)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Estimated
                solely for the purpose of calculating the registration fee pursuant
                to
                Rule 457(c) based on the average of the bid and asked prices of the
                common
                stock as reported by the Over-The-Counter Bulletin Board on May 11,
                2006.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div><br></div>
    <div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
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          </div>
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          </div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>EXPLANATORY
      NOTE</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">This
      registration statement registers 10,000,000 shares of common stock of Sunset
      Brands, Inc. (the &#8220;Company&#8221;) to be offered pursuant to the Company&#8217;s 2005 Stock
      Incentive Plan. No shares have been issued under the 2005 Stock Incentive Plan
      as of the date hereof.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      materials which follow Part I, up to but not including the page beginning Part
      II of this registration statement, constitutes a reoffer prospectus, prepared
      in
      accordance with the requirements of Part I of Form S-3, in accordance with
      General Instruction C of Form S-8. The reoffer prospectus may be utilized for
      the reoffer and resale of up to 10,000,000 shares of common stock to the extent
      acquired by certain affiliates of the Company pursuant to the 2005 Stock
      Incentive Plan. The amount of the securities to be offered or resold by means
      of
      the reoffer prospectus by the designated selling shareholders may not exceed,
      during any three month period, the amount specified in Rule 144(e).</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>PART
      I</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>INFORMATION
      REQUIRED IN THE SECTION 10(a) PROSPECTUS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Item
      1.&#160;&#160; </strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Plan
      Information. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      documents containing the information specified in Part I of Form S-8 will be
      sent or given to participants in the 2005 Stock Incentive Plan as specified
      by
      Rule 428(b)(1) of the Securities Act of 1933, as amended (the &#8220;Securities Act&#8221;).
      Such documents are not required to be and are not filed with the Securities
      and
      Exchange Commission (the &#8220;Commission&#8221;) either as part of this registration
      statement, or as a prospectus or prospectus supplement pursuant to Rule 424.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Item
      2.&#160;&#160; </strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Registrant
      Information and Employee Plan Annual Information. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Upon
      written or oral request by a participant in the 2005 Stock Incentive Plan,
      the
      Company will provide any of the documents incorporated by reference into the
      Section 10(a) prospectus, without charge. Any document required to be delivered
      to the participants pursuant to Rule 428(b) will also be delivered without
      charge.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div><br></div>
    <div>
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        <div id="FTR">
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          </div>
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        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
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          </div>
        </div>
      </div>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>REOFFER
      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>PROSPECTUS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>SUNSET
      BRANDS, INC.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>10,000,000
      Shares of Common Stock</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">This
      prospectus relates to offers and sales of up to 10,000,000 shares of Common
      Stock, par value $.001 per share (the &#8220;Common Stock&#8221;) of Sunset Brands, Inc., a
      Nevada corporation (the &#8220;Company&#8221;) by officers, directors and other &#8220;affiliates&#8221;
as defined in Rule 405, promulgated under the Securities Act of 1933, as amended
      (the &#8220;Securities Act&#8221;). These affiliates (&#8220;Selling Shareholders&#8221;) have acquired
      or will acquire the shares under the Company&#8217;s 2005 Stock Incentive Plan (the
&#8220;Plan&#8221;). </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Selling Shareholders will determine when they will sell their shares, and in
      all
      cases they will sell their shares at the then-prevailing market price or at
      prices negotiated at the time of sale. We will not receive any proceeds from
      these sales. The brokers and dealers that the Selling Shareholders may utilize
      in selling their shares may receive compensation in the form of underwriting
      discounts, concessions or commissions from the sellers or purchasers of the
      shares.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Our
      stock
      is traded on the OTC Bulletin Board under the symbol &#8220;SSBN.&#8221; On May 11, 2006,
      the average of the bid and asked prices of our Common Stock on the OTC Bulletin
      Board was $0.32 per share. On May 11, 2006, there were 23,833,879 shares of
      our
      Common Stock issued and outstanding.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Company's executive offices are located at 10990 Wilshire Boulevard, Suite
      1220,
      Los Angeles, California 90024, and its telephone number at that location is
      (310) 478-4600.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Investing
      in the shares involves risks, which are described from time to time in the
      periodic reports we file with the Securities and Exchange Commission (the
&#8220;Commission&#8221;), and which we incorporate herein by reference. Also see &#8220;Risk
      Factors&#8221; beginning on page 6.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Neither
      the securities and exchange commission nor any state securities commission
      has
      approved or disapproved of these securities or passed upon the adequacy or
      accuracy of this prospectus. Any representation to the contrary is a criminal
      offense.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      date
      of this prospectus is June 22, 2006</font></div>
    <div>&#160;</div>
    <div><br>&#160;</div>
    <div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
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      </div>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">TABLE
      OF
      CONTENTS</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div align="center">
      <table cellpadding="0" cellspacing="0" width="80%">

          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Cautionary
                Statement Regarding Forward-Looking Statements</font></div>
            </td>
            <td align="right" valign="top" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="75%">&#160;</td>
            <td align="right" valign="top" width="5%">&#160;</td>
          </tr>
          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Our
                Company</font></div>
            </td>
            <td align="right" valign="top" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="75%">&#160;</td>
            <td align="right" valign="top" width="5%">&#160;</td>
          </tr>
          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Risk
                Factors </font></div>
            </td>
            <td align="right" valign="top" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">6</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="75%">&#160;</td>
            <td align="right" valign="top" width="5%">&#160;</td>
          </tr>
          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Use
                of Proceeds</font></div>
            </td>
            <td align="right" valign="top" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">12</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="75%">&#160;</td>
            <td align="right" valign="top" width="5%">&#160;</td>
          </tr>
          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Selling
                Shareholders</font></div>
            </td>
            <td align="right" valign="top" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">12</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="75%">&#160;</td>
            <td align="right" valign="top" width="5%">&#160;</td>
          </tr>
          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Plan
                of Distribution</font></div>
            </td>
            <td align="right" valign="top" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">13</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="75%">&#160;</td>
            <td align="right" valign="top" width="5%">&#160;</td>
          </tr>
          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Legal
                Matters</font></div>
            </td>
            <td align="right" valign="top" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">14</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="75%">&#160;</td>
            <td align="right" valign="top" width="5%">&#160;</td>
          </tr>
          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Experts</font></div>
            </td>
            <td align="right" valign="top" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">14</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="75%">&#160;</td>
            <td align="right" valign="top" width="5%">&#160;</td>
          </tr>
          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Indemnification
                of Directors and Officers</font></div>
            </td>
            <td align="right" valign="top" width="5%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">14</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="75%">&#160;</td>
            <td align="right" valign="top" width="5%">&#160;</td>
          </tr>
          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Where
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Information
      included in this prospectus may contain forward-looking statements. This
      information may involve known and unknown risks, uncertainties and other factors
      which may cause our actual results, performance or achievements to be materially
      different from the future results, performance or achievements expressed or
      implied by any forward- looking statements. Forward-looking statements, which
      involve assumptions and describe our future plans, strategies and expectations,
      are generally identifiable by use of the words "may," "should," "expect,"
      "anticipate," "estimate," "believe," "intend" or "project" or the negative
      of
      these words or other variations on these words or comparable
      terminology.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">This
      prospectus contains forward-looking statements, including statements regarding,
      among other things, (a) our projected sales and profitability, (b) our growth
      strategies, (c) anticipated trends in our industry, (d) our future financing
      plans, and (e) our anticipated needs for working capital. These statements
      may
      be found under "Our Business," as well as in this prospectus generally. Actual
      events or results may differ materially from those discussed in forward-looking
      statements as a result of various factors, including, without limitation, the
      risks outlined under "Risk Factors" and matters described in this prospectus
      generally. In light of these risks and uncertainties, there can be no assurance
      that the forward-looking statements contained in this prospectus will in fact
      occur.</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>OUR
      COMPANY</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Sunset
      Brands, Inc. was incorporated in Nevada on May 1, 1998 as Novanet International,
      Inc. Effective August 1, 2004, Sunset changed its name to Cascade Sled Dog
      Adventures, Inc. and effective October 4, 2004 it changed its name to Sunset
      Brands, Inc. Sunset&#8217;s initial business consisted of conducting sled dog tours in
      the Mt. St. Helens area of Washington State. The winter of 2000 through 2001
      was
      the only operational year for sled dog tours by Sunset. As of September 7,
      2001
      Sunset discontinued operations. In August, 2002 Sunset completed the divestment
      and return to Mr. Steve Madsen, an original founder, of all proprietary assets
      and rights pertaining to sled dog activities or other dog products and services
      earlier contributed by Mr. Madsen in exchange for all of his 480,000 issued
      and
      outstanding shares. Mr. Steve Madsen further relinquished all claims to any
      accrued wages or other compensation. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Since
      the
      return of assets to Mr. Steve Madsen, Sunset was an inactive public company
      until the completion of the Sunset Merger and the LCC Merger in October 2004.
      Following the Sunset Merger and the LCC Merger, Sunset's current business
      intends to capitalize on the fast growing demand for healthy, better for you
      foods and beverages that has resulted from the increased popularity of these
      items in everyday diets. It is Sunset's goal to become a category leader in
      this
      field through both the introduction of new product lines, as well as, the
      acquisition of additional healthy, better for you brands and/or companies.
      Sunset's initial entry into this category was through the acquisition of Low
      Carb Creations, Inc. (&#8220;Low Carb&#8221;) in October 2004. Low Carb has been a marketer
      of sweet and savory products for consumers interested in maintaining a low
      carbohydrate, healthy life style. Low Carb has provided development,
      distribution and consulting services related to low carbohydrate foods
      throughout the Untied States and Canada. During December 2004, Low Carb
      discontinued its active pursuit of its low carbohydrate business due to an
      inability to distribute its products. Although there can be no assurances that
      Sunset will be successful in its business plan, Sunset believes that it has
      positioned itself to begin its acquisition program and eventually become a
      leader in the healthy, better for you food and beverage industry. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">On
      November 10, 2005, Sunset acquired U.S. Mills, Inc. (&#8220;US Mills&#8221;) pursuant to an
      Amended and Restated Acquisition Agreement and Plan of Merger by which US Mills
      merged with a wholly-owned subsidiary of Sunset. As consideration for the
      acquisition, IBF Fund Liquidating LLC, (&#8220;IBF&#8221;) a Delaware limited liability
      company and the holder of the outstanding capital stock of US Mills, received
      the following: (i) $5,000,000 in cash (in addition to $1,000,000 in cash that
      US
      Mills had received on May 19, 2005 from Sunset) of which $4,851,000 was used
      to
      repay US Mills&#8217; outstanding indebtedness for borrowed money including debt to
      IBF and its affiliates, (ii) 321,429 shares of Sunset's Series B Preferred
      Stock
      which are convertible into 5,357,142 shares of common stock at an initial
      conversion price of $0.56 per share, with warrants to purchase an additional
      4,200,000 shares of the Company's common stock at $.70 per share, such Series
      B
      Preferred Stock being subject to a three-year lock-up (iii) a Senior
      Subordinated Note in the original principal amount of $1,000,000 from the
      Company to IBF, (iv) a Subordinated Note in the original principal amount of
      $5,000,000 from the Company to IBF, and (v) a 12% Secured Convertible Debenture
      in the original principal amount of $5,000,000 with warrants to purchase the
      Company's common stock. </font></div>
    <div>&#160;</div>
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    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">On
      November 10, 2005, the Company, as guarantor, entered into a Revolving Credit,
      Term Loan, and Security Agreement (the "Credit Agreement") with Capital Source
      Finance LLC, a Delaware limited liability company, as lender, and US Mills,
      the
      Company's wholly-owned subsidiary, as borrower. Pursuant to the Credit
      Agreement, the Lender agreed to make available to USM a revolving credit
      facility in the maximum principal amount of $3,000,000 and a term loan in the
      maximum principal amount of $3,500,000. The collateral for the payment of all
      amounts due under the Credit Agreement consists of substantially all of the
      assets of US Mills. A significant portion of the proceeds of the Credit
      Agreement were used to refinance the obligations and indebtedness of USM in
      connection with the Merger discussed above. The Credit Agreement terminates
      and
      all amounts outstanding thereunder shall be due and payable in full three years
      from November&#160;10, 2005. </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>&#160;
      </strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Upon
      the
      occurrence of an event of default under the Credit Agreement, the Company may
      become directly liable for US Mills' obligations under the Credit Agreement.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Following
      the US Mills acquisition, Sunset intends to capitalize on what we perceive
      as a
      growing demand for healthier foods and beverages. It is Sunset's goal to become
      a category leader in this field through both the introduction of new product
      lines, as well as, the acquisition of existing product lines or companies.
      Although there can be no assurances that Sunset will be successful in its
      business plan, Sunset believes that through US Mills and its management team,
      as
      well as the additional management resources that Sunset intends to add, Sunset
      will be well-positioned to emerge as a leader in the nutritional food and
      beverage industry. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">US
      Mills
      is a leading independent branded consumer marketer of natural, organic and
      specialty ready-to-eat cereals, hot cereals, cookies and crackers. The Company
      markets five established brands - Uncle Sam Cereal, Erewhon, New Morning, Farina
      and Skinner&#8217;s Raisin Bran - in all 50 states, Canada and Puerto Rico. The brands
      are sold through supermarkets, mass merchandisers, wholesale grocers, natural
      food distributors and specialty food distributors. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      original US Mills was founded in Omaha as a manufacturer of ready-to-eat
      breakfast cereals. The company&#8217;s first product, Uncle Sam Cereal&#8482;, was
      introduced in 1908 as &#8220;the food for health&#8221; and continues to occupy a unique
      niche in the marketplace today. In 1926 U.S. Mills began producing Skinner&#8217;s
      Raisin Bran </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><sup>TM
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">,
      America&#8217;s first raisin bran, for another company. US Mills later acquired the
      marketing rights to Skinner&#8217;s Raisin Bran under a 20-year renewable license.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Erewhon,
      Inc. was established in Boston in 1966 and was a pioneer in the &#8220;natural food&#8221;
category. The Erewhon </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><sup>TM
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">brand
      name is well known among natural food consumers, and its products are recognized
      for their purity and quality. In 1986, Erewhon acquired US Mills; the combined
      entity retained U.S. Mills as its corporate name and the Erewhon </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><sup>TM
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">brand
      name as its line of organic and natural foods. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">In
      2000,
      US Mills acquired New Morn, Inc., and the New Morning </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><sup>TM
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">brand
      of
      ready-to-eat organic food cereals. In 2001, US Mills acquired Holden Foods,
      Inc., and the Farina </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><sup>TM
      </sup></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">brand,
      originally introduced by Pillsbury in 1898. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div><br></div>
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    <div>&#160;</div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>RISK
      FACTORS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>Risks
      Related to our Business and Industry </u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>We
      have a limited operating history and cannot assure that our business will be
      profitable or that our business strategy can be implemented effectively.
</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Sunset
      has no operating history or significant assets. Sunset's prospects are subject
      to the substantial risks, expenses and difficulties frequently encountered
      in
      the establishment and growth of a new business in the food industry, which
      is
      characterized by a significant number of market entrants and intense
      competition, as well as the various risk factors described herein. The combined
      companies (Sunset and U.S. Mills) will incur substantial additional expenses,
      including advertising and promotional costs, &#8220;slotting&#8221; expenses (i.e., the cost
      of obtaining shelf space in certain stores), and integration costs of any future
      acquisitions. Accordingly, Sunset may incur losses in the future as a result
      of
      the implementation of its business strategy, even if revenues increase
      significantly. We can provide no assurance that Sunset&#8217;s business strategy will
      prove successful or that Sunset will be profitable in the future. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Our
      product diversification is limited, and we can provide no assurance that
      consumers will acceptance our existing and future products.
</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Consumer
      preferences for food and beverage products, especially health and diet-oriented
      products such as those Sunset intends to sell, are continually changing and
      are
      extremely difficult to predict. Tastes and preferences with respect to food
      and
      beverage products change from time to time. We can provide no assurance that
      Sunset will be able to achieve a significant degree of market acceptance for
      its
      products, that acceptance, if achieved, will be sustained for any significant
      period, or that product life cycles will be sufficient to permit Sunset to
      recover start-up and other associated costs.&#160; We can provide no assurance
      that Sunset will succeed in the development of any new products or that any
      new
      products developed by Sunset will achieve market acceptance or generate
      meaningful revenue for Sunset. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>Risks
      Relating to our Acquisition Strategy </u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>We
      will need additional financing for acquisitions and sales growth.
</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">A
      significant element of Sunset&#8217;s business strategy is the acquisition,
      development and expansion of healthy food and beverage brands and products.
      It
      is likely that Sunset will require third party financing (debt or equity) in
      connection with any future acquisitions, in connection with the expansion of
      Sunset&#8217;s business through non-acquisition means, as a result of any future
      operating losses, or to provide working capital for general corporate
      purposes.&#160; There can be no assurance that any such required financing will
      be available or, if available, on terms attractive to Sunset.&#160; Any third
      party financing obtained by Sunset may result in dilution of the equity
      interests of Sunset&#8217;s shareholders. In the event that Sunset is unable to obtain
      financing on favorable terms, Sunset may not be able to successfully implement
      its business plan and its financial condition and results of operations would
      be
      adversely affected. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>In
      addition, Sunset believes that U.S. Mills' ability to expand its sales and
      increase its operating profits is constrained by a lack of working capital
      necessary to acquire inventory</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">There
      can
      be no assurance that Sunset will be able to obtain adequate working capital
      on
      favorable terms, if at all. The failure to obtain such additional working
      capital would have an adverse effect on the ability of Sunset to expand sales
      and operating profits of any operating units, including U.S. Mills.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Pursuit
      of our acquisition strategy could result in unforeseen losses and diversion
      of
      time and resources. Failure of our acquisition strategy could decrease our
      efficiency, limit our growth and ultimately hinder our profitability.
</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">A
      significant element of our business strategy will be the pursuit of strategic
      acquisition opportunities for the purpose of expanding, complementing and/or
      diversifying Sunset&#8217;s product offerings and business.&#160; Such strategic
      acquisitions are likely to continue to comprise an element of Sunset&#8217;s business
      strategy for the foreseeable future.&#160; However, we can provide no assurance
      that we will be able to identify, finance and complete additional suitable
      acquisitions on acceptable terms, or that future acquisitions will be
      successful.&#160; Failure to acquire additional healthy food products or
      businesses may result in a failure to realize operating efficiencies and
      economies of scale and could prevent Sunset from obtaining the sales volume
      necessary to most effectively negotiate with customers and suppliers. This,
      in
      turn could, hinder our profitability. Moreover, Sunset may be unable to
      successfully integrate acquired companies or their management teams into
      Sunset&#8217;s operating structure, retain management teams of acquired companies on a
      long-term basis, or operate acquired companies profitably. </font></div>
    <div>&#160;</div>
    <div><br>&#160;</div>
    <div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
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          </div>
        </div>
      </div>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">In
      addition, future acquisitions could divert management&#8217;s attention from the daily
      operations of Sunset and otherwise require additional management, operational
      and financial resources.&#160; Acquisitions may also involve a number of other
      risks, including adverse short-term effects on Sunset&#8217;s operating results,
      dependence on retaining key personnel and customers, and risks associated with
      unanticipated liabilities or contingencies. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>The
      absence of substantive disclosure relating to prospective acquisition targets
      makes it difficult for investors to evaluate our future profitability.
</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Because
      a
      significant part of Sunset's business plan involves acquisitions of other
      businesses, companies or brands which have not yet been identified, purchasers
      of Sunset's common stock will have no substantive information concerning
      consummation of any specific acquisition in considering an investment in Sunset.
      The absence of disclosure can be contrasted with the disclosure which would
      be
      necessary if Sunset had already identified an acquisition target. There can
      be
      no assurance that an investment in the securities offered hereby will not
      ultimately prove to be less favorable to purchasers pursuant to this prospectus
      than a direct investment, if such opportunity were available, in an acquisition
      candidate. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>The
      absence of valuation or fairness opinion in connection with the U. S. Mills
      acquisition may mean that we paid more for the acquisition than an independent
      third-party could have. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Sunset
      did not obtain a valuation or fairness opinion concerning the acquisition of
      U.S. Mills prior to acquiring it. Sunset's board of directors primarily
      considered the assets on the balance sheet of U.S. Mills, the value of U.S.
      Mills&#8217;s brands, and actual and prospective financial performance when setting a
      price for the acquisition. The board also considered the fact that the
      stockholders of U.S. Mills agreed to take payment, in part, in stock, notes
      payable and convertible debt rather than cash in setting the value of the
      acquisition. The fact that Sunset did not receive a valuation or fairness
      opinion concerning the purchase may mean that an independent third-party could
      have acquired U.S. Mills for a price less than Sunset paid.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>Risks
      Relating to Our Business Operations </u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Our
      management lacks experience in operating U.S. Mills or other packaged food
      companies. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Sunset,
      together with its subsidiaries, is a newly-formed company with no operations
      for
      investors to review. A portion of our management team, including our Chief
      Executive Officer, has had no prior experience in operating U.S. Mills or any
      other consumer packaged goods company. Sunset will initially be dependent upon
      the industry experience of the existing management of U.S. Mills in operating
      our business and implementing Sunset's business plan. In the event that the
      management team of U.S. Mills become unavailable or is unable to work
      effectively with Sunset's management team to run U.S. Mills or any other
      companies or businesses Sunset acquires, Sunset's business and its ability
      to
      implement its business and growth plan would be adversely affected.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Because
      we have not patented the formulas or manufacturing methods for our products
      and
      we rely on third parties for product development, we may be vulnerable to
      infringement of these formulas or methods or to claims of infringement against
      Sunset. Loss of the use of these formulas or methods could diminish our
      profitability. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Although
      we believe that many of the formulas and processes utilized in connection with
      the production of U.S. Mills products may be proprietary, U.S. Mills has relied
      upon third-party manufacturers and producers to develop and test such formulas.
      U.S. Mills has not sought patent protection for such technology and it is
      unlikely that patent protection would be available. Sunset expects to rely
      on
      the complexity of the formulas, trade secrecy laws and on confidentiality
      agreements in order to protect any proprietary formulas and processes. However,
      there can be no assurance that such methods will be effective in preventing
      competitors or our third-party suppliers and manufacturers from utilizing these
      formulas and processes to produce competing products. If competitors of Sunset,
      certain of which may have significantly greater resources than Sunset, introduce
      products that utilize formulas and manufacturing methods that are similar or
      substantially the same as those currently manufactured, or that may in the
      future be manufactured, by Sunset, Sunset's sales, financial condition and
      prospects could be adversely affected. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div><br></div>
    <div>
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          </div>
        </div>
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    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Sunset
      has not attempted to ascertain or evaluate whether the formulas and processes
      utilized by U.S. Mills infringe on the patent or proprietary rights of others.
      As a result, Sunset and U.S. Mills may be subject to infringement claims. Any
      such claims, whether with or without merit, can be time consuming and expensive
      to defend, may divert management's attention and resources, could cause product
      shipment delays and could require Sunset to enter into costly royalty or
      licensing agreements. If a successful claim of product infringement is brought
      against Sunset or U.S. Mills, the inability to license the infringed or similar
      intellectual property could adversely affect our business. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Governmental
      regulation could result in increased costs of labeling, periodic audits and
      compliance as well as temporary stoppage of the distribution of our products.
      </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Companies
      engaged in the manufacture, packaging and distribution of food items are subject
      to extensive regulation by various government agencies, including the FDA and
      the USDA, which, pursuant to statutes, rules, and regulations, prescribe
      quality, purity, manufacturing and labeling requirements. Food products are
      often subject to &#8220;standard of identity&#8221; requirements which are promulgated at
      either the federal or state level to determine the permissible qualitative
      and
      quantitative ingredient content of food. To the extent that any product that
      we
      seek to market does not conform to an applicable standard, special permission
      to
      market such a product is required. United States product labels are subject
      to
      regulation by the USDA and/or the FDA. Such regulations include standards for
      product descriptions, nutritional claims, label format, minimum type sizes,
      content and location of nutritional information panels, nutritional comparisons,
      and ingredient content panels. Sunset's labels, ingredients and manufacturing
      processes will be subject to inspection by the FDA and USDA. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Food
      and
      beverage manufacturing facilities are subject to inspections by various
      regulatory authorities. A finding of a failure to comply with one or more
      regulatory requirements can result in the imposition of sanctions including
      the
      closing of all or a portion of a company's facilities, subject to a period
      during which the company can remedy the alleged violations. While Sunset
      believes that all of the distributors and co-packers used by U.S. Mills are
      in
      compliance in all material respects with governmental regulations regarding
      current products and have obtained the material governmental permits, licenses,
      qualifications and approvals required for our operations, we or they may be
      unable to comply with such laws and regulations in the future or new
      governmental laws and regulations may be introduced that could prevent or
      temporarily inhibit the development, distribution and sale of Sunset products
      to
      consumers. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Federal
      regulatory authorities, including the FDA and FTC, have indicated that they
      are
      considering the development and implementation of rules and regulations that
      would specifically apply to the low-carbohydrate food and beverage industry.
      State regulators may propose similar rules and regulations. Such rules and
      regulations, if adopted, could include labeling requirements or regulations
      that
      could require Sunset to alter the taste or composition of its products or impose
      other obligations on Sunset.&#160; Such changes could adversely affect sales and
      margins of Sunset, its financial condition and prospects. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">As
      a
      marketer of products that are ingested by consumers, U.S. Mills and Sunset
      will
      be subject to the risk that one or more of the ingredients in products sold
      by
      them may become the subject of adverse regulatory action at the state or federal
      level. Such actions could include sales restrictions or prohibitions, labeling
      requirements or reformulation, any of which could reduce our ability to generate
      revenues. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Sunset&#8217;s
      inability to compete effectively in the packaged and specialty food and
      beverages industry could cause the loss of our business. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      market for packaged foods and beverages in general, and specialty foods and
      beverages such as those that Sunset expects to sell, is intensely competitive.
      We compete directly with manufacturers and distributors of other
      low-carbohydrate and diet/health-oriented foods and beverages, and compete
      generally with manufacturers and distributors of other packaged foods and
      beverages. Competitive factors in the packaged food and beverage industry and
      the low-carb food and beverage segment include product quality and taste, brand
      awareness among consumers, access to supermarket and other retail shelf space,
      price, advertising and promotion, variety of products offered, nutritional
      content, product packaging and package design. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Some
      of
      the competitors and potential competitors that Sunset will face are part of
      large, diversified food and beverage companies, such as Kraft Foods and PepsiCo,
      which have greater financial resources and a wider range of product offerings
      than Sunset. If these larger competitors choose to introduce products similar
      to
      Sunset's at lower prices, Sunset's ability to expand its market presence in
      new
      markets and to retain market share in existing markets may be adversely affected
      and Sunset's margins would suffer. Sunset will lack the resources to advertise
      and promote its products on the scale that certain of its larger competitors
      use
      to foster brand recognition of their products. If Sunset is unable to
      effectively promote its brands and products, the resulting lack of consumer
      demand could cause retailers to not allocate shelf space to Sunset's products
      on
      favorable terms, if at all. Any failure to secure and maintain retail shelf
      space would have a significant negative impact on Sunset's operating results.
      As
      Sunset enters new markets, it may encounter competition from regional
      manufacturers and distributors not active in Sunset's established markets.
      If
      these competitors use price promotions or advertising campaigns to stimulate
      demand for their products, Sunset could be forced to compete using similar
      programs, thereby increasing its costs and reducing its margins. The competitive
      environment for low-carb products could adversely affect Sunset's future sales
      and profits, financial condition and liquidity and its ability to grow its
      business. Sunset may be unable to compete effectively in the markets it enters.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div><br></div>
    <div>
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    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Our
      inability to secure retail shelf space could limit our ability to generate
      revenues and sustain profitability. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Successful
      marketing of food and beverage products generally depends upon obtaining
      adequate retail shelf space for product display, particularly in supermarkets,
      supercenters and other large packaged food and beverage retailers. Retailers
      have a finite amount of shelf space in each of their stores on which food and
      beverage products are stocked. Like all food manufacturers, retailers may remove
      Sunset products from store shelves at any time if a retailer determines that
      sales of such products are falling short of expectations. Products of smaller
      companies such as Sunset are more likely to be removed from store shelves than
      products marketed by bigger manufacturers since larger companies can afford
      more
      expansive promotions and advertising campaigns. Ultimately, however, the
      decision about whether to remove or relocate a product will depend on its sales
      and retail margins, and how these compare to existing or new products. There
      can
      be no assurance that Sunset's products will compare favorably in sales and
      retail margins to existing or new food products that may be introduced in the
      future. Also, retailers can at their discretion relocate products to lower
      or
      higher shelf space that may make it more difficult for consumers to see or
      find
      Sunset's products. If Sunset loses shelf space, is unable to secure shelf space,
      or if Sunset's products are given less favorable shelf locations, Sunset's
      sales
      and financial performance will be adversely affected. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Frequently,
      food manufacturers and distributors incur additional costs in order to obtain
      additional shelf space. Whether or not Sunset incurs such costs in a particular
      market will depend on a number of factors, including demand for Sunset&#8217;s
      products, relative availability of shelf space and general competitive
      conditions. Sunset may incur significant shelf space or other promotional costs
      as a necessary condition of entering into competition or maintaining market
      share in particular markets or stores. If incurred, such costs may materially
      affect Sunset&#8217;s financial performance. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><a name="eolPage18"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;
      </font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>The
      lack of long-term agreements with retailers or distributors increases our risk
      of returned products and could cause a loss of revenues.&#160;
</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">U.S.
      Mills has not established, and Sunset does not expect to establish, any
      long-term agreements with any of their respective retail customers or
      distributors. As a result, arrangements with respect to pricing, shelf space,
      cooperative advertising or special promotions, among other things, may be
      subject to periodic negotiation with each retailer or distributor. It is
      expected that retailers and distributors will make no binding long-term
      commitments to Sunset regarding purchase volumes and will make all purchases
      through short term or one-time purchase orders. It is likely that retailers
      or
      distributors could reduce their overall purchases of Sunset products, the number
      and variety of such products that they carry and the shelf space allotted for
      Sunset products or otherwise materially change the terms of Sunset's
      relationship at any time. If any retailer or distributor insisted on returning
      Sunset products for any reason, it is likely that Sunset would be forced to
      accept the returns as a practical matter, regardless of its legal rights. Any
      reduction in purchases or increase in returns could significantly harm Sunset's
      business, financial condition and operating results. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Regulatory
      or other legal action against certain customers could result in a decrease
      in
      sales of our products to such customers. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Food
      manufacturers have historically paid food service companies and wholesalers
      promotional allowances and offered discounts for reaching designated sales
      volumes for food and beverage products. These discounts are generally taken
      when
      retailers pay for food products, which is why they are known as &#8220;billback&#8221;
discounts. These allowances and discounts may be permissible if in writing
      and
      so long as the food manufacturer does not engage in discriminatory or unfair
      pricing in violation of applicable antitrust law. The Securities and Exchange
      Commission has announced formal investigations and informal inquiries of and
      into accounting practices at several national food service companies and
      wholesalers that are centered on the payment of, and improper accounting
      treatment given to, promotional allowances and billback discounts. U.S. Mills
      may have paid, and Sunset may in the future pay, promotional allowances or
      slotting allowances to secure shelf space in retail stores, and offer billback
      discounts. While Sunset is not aware of any investigations of the customers
      of
      U.S. Mills, it is possible that one or more of Sunset's customers could become
      subject to regulatory or court proceedings related to these practices. If so,
      sales of Sunset's products to any such customers could decrease if the
      operations or business of such customers are adversely affected by regulatory
      or
      court proceedings. </font></div>
    <div>&#160;</div>
    <div><br>&#160;</div>
    <div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
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          </div>
        </div>
      </div>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Concentration
      of ownership in the food and beverage retail industry and the distribution
      of
      our products through a small number of distributors could limit or reduce our
      revenues. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">A
      large
      portion of the historical sales of U.S. Mills were through a small number of
      distributors and retailers. Moreover, consolidation among grocery stores, retail
      supercenters and club stores, has resulted in a significant concentration of
      ownership of food and beverage retail sales. As a result, Sunset's future
      success may be dependent upon our ability to create and maintain relationships
      with these large retailers and distributors on both a regional and national
      level. If Sunset is unsuccessful in gaining entry to regions or in convincing
      individual chains or stores to carry its product lines, we may be unable to
      grow
      or generate profits. Retailers continually evaluate the sales performance of
      products they carry and if sales of Sunset's products do not meet expectations,
      one or more of Sunset's customers may discontinue carrying Sunset's product
      lines which would cause a reduction in our revenues. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><a name="eolPage19"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Demand
      and supply fluctuations as well as variable or unexpected costs in the food
      and
      beverage industry could cause a decline in our revenues or prevent our making
      a
      profit. </strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;
      </font></a></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      food
      and beverage industry, and the markets within the food and beverage industry
      in
      which Sunset expects to compete, are subject to various risks, including:
      adverse changes in general economic conditions; evolving consumer preferences;
      nutritional and health-related concerns; federal, state and local food
      inspection and processing controls; oversupply of certain products at the
      wholesale and retail levels; consumer product liability claims; risks of product
      tampering; and the availability and expense of liability insurance, and other
      factors that are beyond Sunset's control. Any of these factors could cause
      our
      revenues to decline or prevent our making a profit. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Product
      liability claims, even if invalid, could pose unexpected costs and thus hamper
      our profitability. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">As
      a
      manufacturer and marketer of consumer food and beverage products, Sunset may
      be
      subjected to various product liability claims.&#160; There can be no assurance
      that any product liability insurance maintained by Sunset will be adequate
      to
      cover any loss or exposure for product liability, or that such insurance will
      continue to be available on terms acceptable to Sunset.&#160; Any product
      liability claim not fully covered by insurance, as well as any adverse publicity
      from a product liability claim, could have a material adverse effect on the
      financial condition or results of operations of Sunset. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Our
      reliance on third-party producers could cause an interruption in the supply
      of
      our products which, in turn, could cause Sunset to lose revenues.
</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Substantially
      all of the products sold by U.S. Mills are manufactured and packaged pursuant
      to
      production agreements pursuant to which such third parties agree to produce
      and
      warehouse product lines. Sunset expects that a large portion of any future
      products will be manufactured and packaged pursuant to similar third-party
      agreements. If any of Sunset's significant third-party producers terminated
      its
      relationship with us or were prevented from meeting our production needs on
      a
      timely and cost-effective basis for any reason, including regulatory or other
      actions taken by third parties, credit constraints on Sunset or such producers,
      capacity limitations or incorrect estimation of demand or production,
      competition for production resources, constraints in the supply of raw
      materials, increases in ingredient costs or the costs of production, or natural
      disaster, acts of terrorism or other disruptions, the resulting interruption
      or
      cessation of production would severely affect Sunset's operations and its
      customer relationships. Sunset may not be able to find an alternative third
      party producer that would agree to and could reliably manufacture Sunset
      products on a timely and cost effective basis. Any failure by Sunset to find
      alternative production sources could result in a loss of revenues and potential
      profits. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Shipping
      disruptions or the addition of fuel surcharges could result in increased costs
      causing a reduction in our potential profits. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Sunset
      and its third-party producers will rely on common carriers to ship virtually
      all
      of its products to customers and to secondary distribution facilities. These
      common carriers also ship ingredients, raw materials, cans, packaging and labels
      to Sunset's third-party producers from their respective suppliers. Any
      disruption or slowdown in deliveries of Sunset's products, ingredients or
      supplies caused by labor strikes, other labor disputes, weather conditions
      or
      other causes could significantly harm Sunset's business. Recent increases in
      diesel and other energy costs have led some common carriers to propose or
      implement fuel surcharges on some longer delivery routes. If fuel costs rise
      and
      more common carriers implement these charges, Sunset's operating costs and
      costs
      of good sold may increase and its margins may suffer. </font></div>
    <div><br></div>
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    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Fluctuations
      in prices and availability of supplies could drive up our production costs
      or
      prevent us from selling certain products altogether. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      manufacturing costs for any products of Sunset will be subject to fluctuations
      in the prices of underlying ingredients.&#160; Although Sunset believes that its
      requirements for products and ingredients are readily available and that its
      business success is not dependent on any single supplier, the failure of certain
      suppliers to meet performance specifications, quality standards or delivery
      schedules of Sunset or third-party manufacturers retained by Sunset, could
      make
      production more costly or prevent us from producing certain products.&#160; In
      particular, a sudden scarcity, a substantial price increase, or an
      unavailability of product ingredients could increase our costs or cause us
      to
      curtail production of certain products which could reduce our potential
      profits.&#160; We can provide no assurance that alternative ingredients would be
      available when needed and on commercially attractive terms, if at
      all.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Management's
      other activities may conflict with oversight of Sunset. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certain
      of the officers of Sunset may devote a portion of their time to other business
      activities and personal investments. In addition, certain members of our
      management may serve as managers of other businesses or entities. This may
      create conflicts of interest with respect to the allocation of time. Sunset
      will
      attempt to resolve these conflicts in a manner that does not disrupt the
      operations of Sunset. However, to the extent that one or more members of
      Sunset's management team are unavailable to Sunset, Sunset&#8217;s operations may be
      materially and adversely affected. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Sunset
      does not intend to pay dividends on its common stock or preferred stock (other
      than cumulated but unpaid dividends on the preferred stock) in the foreseeable
      future. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">There
      can
      be no assurance that the operation of Sunset will result in sufficient revenues
      to enable Sunset to operate at profitable levels or to generate positive cash
      flows. Any cash that might be available for dividends will be used instead
      to
      expand Sunset's business. Payment of any dividends in the future will depend
      on
      Sunset's financial condition, results of operations and capital requirements,
      as
      well as other factors deemed relevant by the Board of Directors. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Existing
      preemptive rights and preferred stock covenants could make it more difficult
      to
      obtain funding to grow our business. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Holders
      of our convertible preferred stock have certain pre-emptive rights and, have
      the
      right to approve certain transactions by Sunset in the future. Such rights
      could
      have an adverse effect on Sunset's ability to raise additional financing and
      may
      have an adverse effect on the trading price of the shares of Sunset. In
      addition, in the event that a majority of the holders of the preferred stock
      refuse to approve transactions with respect to which they have been granted
      approval rights, Sunset may be prevented from taking advantage of business
      or
      financing opportunities as they arise, which could have an adverse effect on
      Sunset and its business. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>The
      market for our common stock is volatile and it trades on low volume which could
      make our shares difficult to value and illiquid. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      common stock of Sunset is traded on the OTC Bulletin Board. The trading volume
      of the Sunset common stock historically has been limited and sporadic, and
      the
      stock prices have been volatile. As a result of the limited and sporadic trading
      activity, the quoted price for the Sunset common stock on the over-the-counter
      market is not necessarily a reliable indicator of its fair market value. The
      price at which the common stock of Sunset will trade may fluctuate as a result
      of a number of factors, including, without limitation, quarterly variations
      in
      operating results and actual or anticipated announcements of new products,
      positive or negative announcements by competitors as well as the number of
      shares available for sale in the market. In addition, sales by our current
      stockholders, under Rule 144 or other exemption from the Securities Act, if
      available, or pursuant to an effective registration statement, could have a
      depressive effect on the price of the Common Stock. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Risks
      associated with low-priced securities may affect the market value of our stock.
      </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Sunset's
      common stock may be subject to rules promulgated by the SEC relating to &#8220;penny
      stocks,&#8221; which generally apply to companies whose shares are not traded on a
      national stock exchange or on the NASDAQ Small-Cap or National Market Systems,
      trade at less than $5.00 per share, or who do not meet certain other financial
      requirements specified by the SEC. These rules require brokers who sell &#8220;penny
      stocks&#8221; to persons other than established customers and &#8220;accredited investors&#8221;
to complete certain documentation, make suitability inquiries of investors,
      and
      provide investors with certain information concerning the risks of trading
      in
      such penny stocks. These rules may discourage or restrict the ability of brokers
      to sell the Sunset Common Stock and may affect any secondary market for Sunset
      Common Stock. These rules could also hamper Sunset's ability to raise funds
      in
      the primary market for Sunset's Common Stock. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div><br></div>
    <div>
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    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>USE
      OF PROCEEDS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      shares are being registered for the account of the Selling Shareholders.
      Accordingly, the Company will not receive any of the proceeds from the sale
      of
      the shares by the Selling Shareholders.</font><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>SELLING
      SHAREHOLDERS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">This
      prospectus relates to shares of Common Stock that are being registered for
      offer
      and sale by Selling Shareholders who have acquired or may acquire shares of
      Common Stock pursuant to our 2005 Stock Incentive Plan, and who may be deemed
      "affiliates" of the Company. An "affiliate" is defined under the Securities
      Act
      as "a person that directly or indirectly, through one or more intermediaries,
      controls or is controlled by, or is under common control with" the company.
      The
      Selling Shareholders may resell any or all of the shares of Common Stock at
      any
      time while this prospectus is current.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">We
      do not
      know the number of shares of Common Stock which will be offered for sale by
      the
      named affiliates or whether any other affiliates of the Company will want to
      offer shares for resale under this prospectus. Executive officers, directors
      or
      others who are considered to be affiliates of the Company who acquire Common
      Stock under the Plan may be added to the list of selling shareholders, and
      their
      number of shares to be sold may be increased or decreased by the use of a
      prospectus supplement filed with the Commission pursuant to Rule 424(b) of
      the
      Securities Act.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      inclusion of the shares of Common Stock in the table below does not constitute
      a
      commitment to sell any shares.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
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          <tr>
            <td align="left" valign="top" width="24%">&#160;</td>
            <td valign="bottom" width="18%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Number
                of Shares of</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Common
                Stock</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Beneficially
                Owned Prior</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">to
                the Offering (1)</font></div>
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            <td valign="bottom" width="15%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Number
                of Shares of</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Common
                Stock to be</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">sold
                in Offering</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Shares
                of Common Stock Beneficially</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Owned
                After the Offering</font></div>
            </td>
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          <tr>
            <td align="left" valign="top" width="24%">&#160;</td>
            <td align="left" valign="top" width="18%">&#160;</td>
            <td align="left" valign="top" width="15%">&#160;</td>
            <td valign="top" width="12%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Number</font></div>
            </td>
            <td valign="top" width="13%" style="border-bottom: black thin solid;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Percent</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
            </td>
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          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="24%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Todd
                Sanders, CEO and President</font></div>
            </td>
            <td valign="top" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">5,532,206</font></div>
            </td>
            <td valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">0</font></div>
            </td>
            <td valign="top" width="12%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">5,532,206</font></div>
            </td>
            <td valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">100%</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="24%">&#160;</td>
            <td valign="top" width="18%">&#160;</td>
            <td valign="top" width="15%">&#160;</td>
            <td valign="top" width="12%">&#160;</td>
            <td align="left" valign="top" width="13%">&#160;</td>
          </tr>
          <tr bgcolor="#e2eef6">
            <td align="left" valign="top" width="24%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Stephen
                K. Radusch, Chief Financial Officer</font></div>
            </td>
            <td valign="top" width="18%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                387,314</font></div>
            </td>
            <td valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">0</font></div>
            </td>
            <td valign="top" width="12%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                387,314</font></div>
            </td>
            <td valign="top" width="13%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">100%</font></div>
            </td>
          </tr>
          <tr bgcolor="white">
            <td align="left" valign="top" width="24%">&#160;</td>
            <td align="left" valign="top" width="18%">&#160;</td>
            <td align="left" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="12%">&#160;</td>
            <td align="left" valign="top" width="13%">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>*
      denotes beneficial ownership of less than 1% of the class of securities
      indicated.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;

      <div>
        <hr style="COLOR: black" align="left" noshade size="1" width="70%">
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(1)
      Represents shares held by the Selling Shareholders subject to outstanding
      employee stock options granted under the Company&#8217;s 2005 Stock Incentive Plan.
      Unless otherwise indicated, the shareholders have sole voting and investment
      power with respect to all shares shown as beneficially owned by them. However,
      certain shares may be deemed to be beneficially owned by more than one holder
      as
      a result of attribution of ownership among affiliated persons and entities,
      or
      pursuant to contractual or other arrangements. The inclusion of any shares
      for
      any shareholder shall not be deemed an admission that such shareholder is,
      for
      any purpose, the beneficial owner of such shares. In addition, a person is
      deemed to be the beneficial owner of a security if that person has the right
      to
      acquire beneficial ownership of such security within 60 days.</font></div>
    <div>&#160;</div>
    <div><br>&#160;</div>
    <div>
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        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
    </div>
    <div><br>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>PLAN
      OF DISTRIBUTION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Shareholders
      selling under this prospectus may, from time to time, sell any or all of their
      shares of common stock on any stock exchange, market or trading facility on
      which the shares are traded or in private transactions. These sales may be
      at
      fixed or negotiated prices. The Selling Shareholders may use any one or more
      of
      the following methods when selling shares:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">an
                exchange distribution in accordance with the rules of the applicable
                exchange;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">privately
                negotiated transactions;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">short
                sales;</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">broker-dealers
                may agree with the Selling Shareholders to sell a specified number
                of such
                shares at a stipulated price per share; - a combination of any such
                methods of sale; and</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 36pt;">&#160;</td>
            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Symbol, serif">&#183;</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">any
                other method permitted pursuant to applicable
                law.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Selling Shareholders may also sell shares under Rule 144 under the Securities
      Act of 1933, as amended, if available, rather than under this
      prospectus.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Selling Shareholders may also engage in short sales against the box, puts and
      calls and other transactions in our securities or derivatives of our securities
      and may sell or deliver shares in connection with these trades. The Selling
      Shareholders may pledge their shares to their brokers under the margin
      provisions of customer agreements. If a Selling Shareholder defaults on a margin
      loan, the broker may, from time to time, offer and sell the pledged
      shares.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Broker-dealers
      engaged by the Selling Shareholders may arrange for other brokers-dealers to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the Selling Shareholders (or, if any broker-dealer acts as agent for the
      purchaser of shares, from the purchaser) in amounts to be negotiated. The
      Selling Shareholders do not expect these commissions and discounts to exceed
      what is customary in the types of transactions involved.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Selling Shareholders and any broker-dealers or agents that are involved in
      selling the shares may be deemed to be "underwriters" within the meaning of
      the
      Securities Act in connection with such sales. In such event, any commissions
      received by such broker-dealers or agents and any profit on the resale of the
      shares purchased by them may be deemed to be underwriting commissions or
      discounts under the Securities Act.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Under
      the
      securities laws of certain states, the shares may be sold in such states only
      through registered or licensed brokers or dealers. In addition, in certain
      states the shares may not be sold unless they have been registered or qualified
      for sale in such state or an exemption from registration or qualification is
      available and the sale is in compliance with the exemption. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">If
      and to
      the extent required, the specific Share is to be sold, the respective purchase
      prices and public offering prices, the names of any agent, broker, dealer or
      underwriter, any applicable commissions or discounts, and other facts material
      to the transaction will be set forth in an accompanying prospectus supplement
      or, if appropriate, a post effective amendment to the registration statement
      that includes this prospectus.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">There
      can
      be no assurance that the Selling Shareholders will sell any or all of the shares
      offered hereunder. In addition, there may be certain contractual or other
      restrictions on the ability of Selling Shareholder to sell any or all of his
      or
      her shares.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div><br></div>
    <div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
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    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>LEGAL
      MATTERS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      legality of the Company&#8217;s securities being registered will be passed upon by
      Hodgson Russ LLP. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>EXPERTS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      consolidated balance sheets of Sunset Brands, Inc and subsidiaries as of
      December 31, 2005 and 2004 and the related consolidated statements of
      operations, stockholders&#8217; equity (deficit) and cash flows for the years then
      ended, incorporated by reference in this&#160;registration statement have been
      included herein in reliance on the report of Hansen, Barnett &amp; Maxwell,
      independent registered public accounting firm, given upon the authority of
      that
      firm as experts in accounting and auditing. </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: -8.7pt">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      balance sheets of U.S. Mills, Inc. as of December 31, 2004 and 2003 and the
      related statements of operations, stockholders&#8217; equity and cash flows for the
      years then ended, incorporated by reference in this registration statement
      have
      been included herein in reliance on the report of Kirkland, Albrecht &amp;
Fredrickson, independent public accounting firm, given on the authority of
      that
      firm as experts in accounting and auditing.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>INDEMNIFICATION
      OF DIRECTORS AND OFFICERS </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Company&#8217;s Articles of Incorporation, as amended (the &#8220;Articles&#8221;), eliminates a
      director&#8217;s or officer&#8217;s personal liability to the Company or its stockholders
      for damages for breach of fiduciary duty as a director or officer except for
      liability for acts or omissions which involve intentional misconduct, fraud
      or a
      knowing violation of the law, or the unlawful payment of dividends. The Articles
      also provide that the Company&#8217;s directors shall be indemnified to the fullest
      extent permitted by Nevada law.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Company&#8217;s Bylaws provide that the Company shall indemnify the currently acting
      and former directors, officers, employees and agents of the Company against
      expenses, judgments, penalties, fines and amounts paid in settlement actually
      and reasonably incurred by them in connection with any action, suit or
      proceeding if such person acted in good faith and in a manner which he
      reasonably believed to be in or not opposed to the Company&#8217;s best interests, and
      in the case of any criminal proceeding, that he had no reasonable cause to
      believe his conduct was unlawful. The Company is also obligated to advance
      expenses of officers and directors incurred in defending any such action, suit
      or proceeding before any resolution of the action, suit or
      proceeding.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Insofar
      as indemnification for liabilities arising under the Securities Act may be
      permitted to our directors and officers pursuant to the foregoing provisions,
      or
      otherwise, we have been advised that in the opinion of the Securities and
      Exchange Commission such indemnification is against public policy as expressed
      in the Securities Act and is, therefore, unenforceable.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Company has purchased a policy of directors&#8217; and officers&#8217; liability insurance
      that insures our directors and officers against the cost of defense, settlement
      or payment of a judgment in some circumstances.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>WHERE
      YOU CAN FIND MORE INFORMATION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">We
      are
      required to file annual, quarterly and special reports, proxy statements, any
      amendments to those reports and other information with the Commission. You
      may
      read and copy any documents filed by us with the Commission at the Commission's
      public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
      call the Commission at 1-800-SEC-0330 for further information on the public
      reference room. Reports, proxy statements and information statements, any
      amendments to those reports and other information filed electronically by us
      with the Commission are available to the public at the Commission's website
      at
      http://www.sec.gov.</font></div>
    <div><br></div>
    <div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
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    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      following documents and information heretofore filed by the Company with the
      Securities and Exchange Commission are hereby incorporated by
      reference:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Company&#8217;s Annual Report on Form 10-KSB for the fiscal year ended December 31,
      2005; and </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      description of the Company&#8217;s Common Stock to be offered hereby which is
      contained in its Registration Statement on Form 8-A filed February 11, 2005
      pursuant to Section 12 of the Exchange Act; and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">All
      documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d)
      of the Exchange Act after the date of this prospectus and prior to the filing
      of
      a post-effective amendment which indicates that all securities offered have
      been
      sold or which deregisters all securities then remaining unsold, shall be deemed
      to be incorporated by reference in this prospectus and to be part hereof from
      the date of filing such documents. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">You
      may
      request a copy of these documents, at no cost to you, by writing or calling
      us
      at the following address:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Sunset
      Brands, Inc.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">10990
      Wilshire Boulevard, Suite 1220</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Los
      Angeles, California 90024</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Attention:
      Investor Relations</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(310)
      478-4600</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Any
      statement made in this prospectus concerning the contents of any contract,
      agreement or other document is only a summary of the actual document. You may
      obtain a copy of any document summarized in this prospectus at no cost by
      writing to or calling us at the address and telephone number given above. Each
      statement regarding a contract, agreement or other document is qualified in
      its
      entirety by reference to the actual document. More information can be found
      on
      the web sites </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>www.sunsetbrands.com</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">
      and
</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>www.usmillsinc.com</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>&#160;</div>
    <div><br></div>
    <div>
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          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
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    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>PART
      II</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>INFORMATION
      REQUIRED IN THE REGISTRATION STATEMENT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Item
                3.</strong></font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Incorporation
                of Documents by Reference.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      following documents filed by Sunset Brands, Inc., a Nevada corporation (the
      &#8220;Company&#8221;), with the Securities and Exchange Commission (the &#8220;Commission&#8221;) are
      incorporated by reference into this Registration Statement:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(a)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
      2005 filed with the Commission on April 26, 2006.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(b)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
        Company&#8217;s Form 8-K/A for U.S. Mills, Inc. acquisition filed with the Commission
        on June 23, 2006.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(c)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
        Company&#8217;s Form 10-QSB/A for the quarter ended March 31, 2006 filed with the
        Commission on June 20, 2006.</font></div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(d)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      description of the Company's Common Stock contained in the Company&#8217;s
      Registration Statement on Form 8-A filed with the Commission on February 11,
      2005 pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
      amended (the &#8220;Exchange Act&#8221;), together with all amendments or reports filed for
      the purpose of updating such description.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(e)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">All
      documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d)
      of the Exchange Act after the date of this Registration Statement and prior
      to
      the filing of a post-effective amendment to this Registration Statement which
      indicates that all securities offered hereunder have been sold, or which
      deregisters all securities then remaining unsold under this Registration
      Statement, shall be deemed to be incorporated by reference in this Registration
      Statement and to be a part hereof from the date of filing of such
      documents.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Item
                5.</strong></font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Interest
                of Named Experts and
                Counsel.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">None.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Item
                6.</strong></font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Indemnification
                of Directors and Officers.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Company&#8217;s Articles of Incorporation, as amended (the &#8220;Articles&#8221;), eliminates a
      director&#8217;s or officer&#8217;s personal liability to the Company or its stockholders
      for damages for breach of fiduciary duty as a director or officer except for
      liability for acts or omissions which involve intentional misconduct, fraud
      or a
      knowing violation of the law, or the unlawful payment of dividends. The Articles
      also provide that the Company&#8217;s directors shall be indemnified to the fullest
      extent permitted by Nevada law.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Company&#8217;s Bylaws provide that the Company shall indemnify the currently acting
      and former directors, officers, employees and agents of the Company against
      expenses, judgments, penalties, fines and amounts paid in settlement actually
      and reasonably incurred by them in connection with any action, suit or
      proceeding if such person acted in good faith and in a manner which he
      reasonably believed to be in or not opposed to the Company&#8217;s best interests, and
      in the case of any criminal proceeding, that he had no reasonable cause to
      believe his conduct was unlawful. The Company is also obligated to advance
      expenses of officers and directors incurred in defending any such action, suit
      or proceeding before any resolution of the action, suit or
      proceeding.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Insofar
      as indemnification for liabilities arising under the Securities Act may be
      permitted to our directors and officers pursuant to the foregoing provisions,
      or
      otherwise, we have been advised that in the opinion of the Securities and
      Exchange Commission such indemnification is against public policy as expressed
      in the Securities Act and is, therefore, unenforceable.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      Company has purchased a policy of directors&#8217; and officers&#8217; liability insurance
      that insures our directors and officers against the cost of defense, settlement
      or payment of a judgment in some circumstances.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div><br></div>
    <div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Item
                8.</strong></font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Exhibits.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      following exhibits are filed as part of the Registration Statement:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div align="center">
      <table cellpadding="0" cellspacing="0" width="90%">

          <tr>
            <td align="justify" valign="top" width="15%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>Exhibit
                No.</u></strong></font></div>
            </td>
            <td valign="top" width="75%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 135pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>Description</u></strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.1</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certificate
                of Amendment and Restatement of Articles of Incorporation (Filed
                as
                Exhibit 4.1 to the Company&#8217;s Current Report on Form 8-K filed with the
                Commission on October 4, 2004, and incorporated herein by
                reference).</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="justify" valign="top" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.2</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certificate
                of Amendment to Articles of Incorporation changing the Company&#8217;s name to
                Sunset Brands, Inc (Filed as Exhibit 4.2 to the Company&#8217;s Current Report
                on Form 8-K filed with the Commission on October 4, 2004, and incorporated
                herein by reference).</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.3</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certificate
                of Amendment to Articles of Incorporation effecting a one for two
                reverse
                stock split (Filed as Exhibit 3.1 to the Company&#8217;s Current Report on Form
                8-K filed with the Commission on January 28, 2005, and incorporated
                herein
                by reference).</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.4</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Bylaws
                (Filed as Exhibit 3.2 to Amendment No. 1 to the Company&#8217;s Registration
                Statement on Form SB-2/A filed with the Commission on April 9, 2001,
                and
                incorporated herein by reference).</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.5</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2005
                Stock Incentive Plan. (Filed herewith).</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">5.1</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Opinion
                (and consent) of Hodgson Russ LLP (Filed herewith).</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">23.1</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Consent
                of Hodgson Russ LLP (included in its opinion filed as Exhibit
                5.1).</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">23.2</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Consent
                of Hansen, Barnett &amp; Maxwell (Filed herewith).</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">23.3</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Consent
                of Kirkland, Albrecht &amp; Fredrickson</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">24</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Power
                of Attorney (included on the signature page of this registration
                statement)</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 45pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Item
                9.</strong></font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Undertakings.</strong></font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
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            <td style="width: 36pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(a)</font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                undersigned Registrant hereby
                undertakes:</font></div>
            </td>
          </tr>

      </table>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(1)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">To
      file,
      during any period in which offers or sales are being made, a post-effective
      amendment to this registration statement:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(i)&#160;&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">To
      include any prospectus required by Section 10(a)(3) of the Securities Act of
      1933;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">17</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      </div>
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    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(ii)&#160;
      <font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">To
      reflect in the prospectus any facts or events arising after the effective date
      of the registration statement (or the most recent post-effective amendment
      thereof) which, individually or in the aggregate, represent a fundamental change
      in the information set forth in the registration statement; and</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 108pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(iii)
      <font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">To
      include any material information with respect to the plan of distribution not
      previously disclosed in the registration statement or any material change to
      that information in the registration statement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Provided,
      however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
      information required to be included in a post-effective amendment by those
      paragraphs is contained in periodic reports filed with the Commission by the
      Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
      Act of 1934 that are incorporated by reference in the registration
      statement.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(2)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">That,
      for
      the purpose of determining any liability under the Securities Act of 1933,
      each
      such post-effective amendment shall be deemed to be a new registration statement
      relating to the securities offered therein, and the offering of such securities
      at that time shall be deemed to be the initial bona fide offering
      thereof.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 81pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(3)<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">To
      remove
      from registration by means of a post-effective amendment any of the securities
      being registered which remain unsold at the termination of the
      offering.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(b)&#160;
      <font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
      undersigned Registrant hereby undertakes that, for purposes of determining
      any
      liability under the Securities Act of 1933, each filing of the Registrant's
      annual report pursuant to Section 13(a) or Section 15(d) of the Securities
      Exchange Act of 1934 that is incorporated by reference in the registration
      statement shall be deemed to be a new registration statement relating to the
      securities offered therein, and the offering of such securities at that time
      shall be deemed to be the initial bona fide offering thereof.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(c)&#160;
      <font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Insofar
      as indemnification for liabilities arising under the Securities Act of 1933
      may
      be permitted to directors, officers and controlling persons of the Registrant
      pursuant to the foregoing provisions, or otherwise, the Registrant has been
      advised that in the opinion of the Securities and Exchange Commission such
      indemnification is against public policy as expressed in the Act and is,
      therefore, unenforceable. In the event that a claim for indemnification against
      such liabilities (other than the payment by the Registrant of expenses incurred
      or paid by a director, officer or controlling person of the Registrant in the
      successful defense of any action, suit or proceeding) is asserted by such
      director, officer or controlling person in connection with the securities being
      registered, the Registrant will, unless in the opinion of its counsel the matter
      has been settled by controlling precedent, submit to a court of appropriate
      jurisdiction the question whether such indemnification by it is against public
      policy as expressed in the Act and will be governed by the final adjudication
      of
      such issue.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div><br></div>
    <div>
      <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
        <div id="FTR">
          <div id="GLFTR" style="WIDTH: 100%" align="left">
          </div>
        </div>
        <div id="PN" style="PAGE-BREAK-AFTER: always">
          <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">18</font></div>
          <div style="WIDTH: 100%; TEXT-ALIGN: center">
            <hr style="COLOR: black" noshade size="2">
          </div>
        </div>
        <div id="HDR">
          <div id="GLHDR" style="WIDTH: 100%" align="right">
          </div>
        </div>
      </div>
    </div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Act of 1933, the Registrant certifies
      that
      it has reasonable grounds to believe that it meets all of the requirements
      for
      filing on Form S-8 and has duly caused this registration statement to be signed
      on its behalf by the undersigned, thereunto duly authorized, in the City of
      Los
      Angeles, State of California, on June 22, 2006.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div align="left">
      <table border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="justify" valign="top" width="50%">&#160;</td>
            <td align="justify" colspan="2" valign="top" width="50%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">SUNSET
                BRANDS, INC.</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="50%">&#160;</td>
            <td align="justify" valign="top" width="4%">&#160;</td>
            <td align="justify" valign="top" width="46%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="50%" style="border-bottom: medium none;">&#160;</td>
            <td align="justify" valign="top" width="4%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">By:</font></div>
            </td>
            <td align="justify" valign="top" width="46%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><em><u>&#160;&#160;&#160;&#160;&#160;
                /s/ Todd
                Sanders&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
                </u></em></font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="50%">&#160;</td>
            <td align="justify" valign="top" width="4%">&#160;</td>
            <td align="justify" valign="top" width="46%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Todd
                Sanders, President</font></div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="50%">&#160;</td>
            <td align="justify" valign="top" width="4%">&#160;</td>
            <td align="justify" valign="top" width="46%">
              <div style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">and
                Chief Executive Officer</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>POWER
      OF ATTORNEY</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Each
      person whose signature appears below constitutes and appoints Todd Sanders,
      President and Chief Executive Officer of the Registrant, his true and lawful
      attorney-in-fact and agent, with full power of substitution and resubstitution,
      for him and in his name, place and stead, in any and all capacities, to sign
      any
      and all amendments (including post-effective amendments) to this registration
      statement and to file the same, with all exhibits thereto, and other documents
      in connection therewith, with the Securities and Exchange Commission and any
      other regulatory authority, granting unto said attorney-in-fact and agent full
      power and authority to do and perform each and every act and thing requisite
      and
      necessary to be done, as fully to all intents and purposes as he might or could
      do in person, hereby ratifying and confirming all that said attorney-in-fact
      and
      agent, or his substitute may lawfully do or cause to be done by virtue
      hereof.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Act of 1933, this registration statement
      has been signed by the following persons in the capacities and on the dates
      indicated.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>Name</u></strong></font></div>
            </td>
            <td align="justify" valign="top" width="33%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>Title</u></strong></font></div>
            </td>
            <td align="justify" valign="top" width="24%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>Date</u></strong></font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%">&#160;</td>
            <td align="justify" valign="top" width="33%">&#160;</td>
            <td align="justify" valign="top" width="24%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><u><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;
                /s/ </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><em>Todd
                Sanders&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
                </em></font></u></div>
            </td>
            <td align="justify" valign="top" width="33%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">President,
                Chief Executive Officer</font></div>
            </td>
            <td align="justify" valign="top" width="24%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">June
                22, 2006</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%">
              <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Todd
                Sanders</font></div>
            </td>
            <td align="justify" valign="top" width="33%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(principal
                executive officer),</font></div>
            </td>
            <td align="justify" valign="top" width="24%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%">&#160;</td>
            <td align="justify" valign="top" width="33%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">and
                Director</font></div>
            </td>
            <td align="justify" valign="top" width="24%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%">&#160;</td>
            <td align="justify" valign="top" width="33%">&#160;</td>
            <td align="justify" valign="top" width="24%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><u><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;
                &#160;&#160; &#160;&#160;/s/ </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><em>Stephen
                K. Radusch&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
                </em></font></u></div>
            </td>
            <td align="justify" valign="top" width="33%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Chief
                Financial Officer (principal</font></div>
            </td>
            <td align="justify" valign="top" width="24%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">June
                22, 2006</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%">
              <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Stephen
                K. Radusch</font></div>
            </td>
            <td align="justify" valign="top" width="33%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">financial
                and accounting officer)</font></div>
            </td>
            <td align="justify" valign="top" width="24%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="justify" valign="top" width="33%">&#160;</td>
            <td align="justify" valign="top" width="24%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><u><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;
                /s/ </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><em>Linda
                Langdon&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
                </em></font></u></div>
            </td>
            <td align="justify" valign="top" width="33%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Director</font></div>
            </td>
            <td align="justify" valign="top" width="24%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">June
                22, 2006</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%">
              <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Linda
                Langdon</font></div>
            </td>
            <td align="justify" valign="top" width="33%">&#160;</td>
            <td align="justify" valign="top" width="24%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            </td>
            <td align="justify" valign="top" width="33%">&#160;</td>
            <td align="justify" valign="top" width="24%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><u><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;&#160;
                /s/ </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><em>Robert
                Moore&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
                </em></font></u></div>
            </td>
            <td align="justify" valign="top" width="33%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Director</font></div>
            </td>
            <td align="justify" valign="top" width="24%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">June
                22, 2006</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="33%">
              <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Robert
                Moore</font></div>
            </td>
            <td align="justify" valign="top" width="33%">&#160;</td>
            <td align="justify" valign="top" width="24%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 396pt; TEXT-INDENT: -360pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">19</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>EXHIBIT
      INDEX</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td width="5%">&#160;</td>
            <td align="left" valign="bottom" width="15%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>EXHIBIT</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>NUMBER
                </u></strong></font></div>
            </td>
            <td valign="bottom" width="75%" style="border-bottom: medium none;">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>DESCRIPTION</u></strong></font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.1</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certificate
                of Amendment and Restatement of Articles of Incorporation (Filed
                as
                Exhibit 4.1 to the Company&#8217;s Current Report on Form 8-K filed with the
                Commission on October 4, 2004, and incorporated herein by
                reference).</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="justify" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.2</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certificate
                of Amendment to Articles of Incorporation changing the Company&#8217;s name to
                Sunset Brands, Inc (Filed as Exhibit 4.2 to the Company&#8217;s Current Report
                on Form 8-K filed with the Commission on October 4, 2004, and incorporated
                herein by reference).</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.3</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certificate
                of Amendment to Articles of Incorporation effecting a one for two
                reverse
                stock split (Filed as Exhibit 3.1 to the Company&#8217;s Current Report on Form
                8-K filed with the Commission on January 28, 2005, and incorporated
                herein
                by reference).</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.4</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Bylaws
                (Filed as Exhibit 3.2 to Amendment No. 1 to the Company&#8217;s Registration
                Statement on Form SB-2/A filed with the Commission on April 9, 2001,
                and
                incorporated herein by reference).</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.5</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2005
                Stock Incentive Plan (Filed herewith).</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">5.1</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Opinion
                (and consent) of Hodgson Russ LLP (Filed herewith).</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">23.1</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Consent
                of Hodgson Russ LLP (included in its opinion filed as Exhibit
                5.1).</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">23.2</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Consent
                of Hansen, Barnett &amp; Maxwell (Filed herewith).</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">23.3</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Consent
                of Kirkland, Albrecht &amp; Fredrickson</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">&#160;</td>
            <td align="left" valign="top" width="75%">&#160;</td>
            <td width="5%">&#160;</td>
          </tr>
          <tr>
            <td width="5%">&#160;</td>
            <td align="justify" valign="top" width="15%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">24</font></div>
            </td>
            <td align="left" valign="top" width="75%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Power
                of Attorney (included on the signature page of this registration
                statement)</font></div>
            </td>
            <td width="5%">&#160;</td>
          </tr>

      </table>
    </div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;</div>
    <div>&#160;

      <div>
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{"company-data": {"conformed-name": "Sunset Brands Inc", "cik": "0001137149", "assigned-sic": "6770", "irs-number": "912007330", "state-of-incorporation": "NV", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-135275", "film-number": "06922732"}, "business-address": {"street1": "10990 WILSHIRE BLVD.", "street2": "SUITE", "city": "LOS ANGELES", "state": "CA", "zip": "90024", "phone": "(310) 478-4600"}, "mail-address": {"street1": "10990 WILSHIRE BLVD.", "street2": "SUITE", "city": "LOS ANGELES", "state": "CA", "zip": "90024"}, "former-company": [{"former-conformed-name": "CASCADE SLED DOG ADVENTURES INC", "date-changed": "20010618"}, {"former-conformed-name": "NOVANET INTERNATIONAL INC", "date-changed": "20010322"}]}
Sunset Brands, Inc. Form S-8 - Registration Statement
As
      filed
      with the Securities and Exchange Commission on June 22, 2006
Registration
      No. 333-____________
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
Washington,
      D.C. 20549
FORM
      S-8
REGISTRATION
      STATEMENT
UNDER
THE
      SECURITIES ACT OF 1933
SUNSET
      BRANDS, INC.
(Exact
      name of registrant as specified in its charter)
Nevada
91-2007330
(State
                or other jurisdiction of incorporation or organization)
(I.R.S.
                Employer Identification No.)
10990
                Wilshire Boulevard, Suite 1220
Los
                Angeles, California
90024
(Address
                of Principal Executive Offices)
(Zip
                Code)
2005
      Stock Incentive Plan
(Full
      title of the plan)
Todd
      Sanders
President
      and Chief Executive Officer
10990
      Wilshire Boulevard, Suite 1220
Los
      Angeles, California 90024
(310)
      478-4600
(Name,
      address, including zip code, and telephone number,
including
      area code, of agent for service)
CALCULATION
      OF REGISTRATION FEE
Title
                of
Securities
to
be
                Registered
Amount
to
                be
Registered
(1)
Proposed
Maximum
Offering
Price
Per
                Share
(2)
Proposed
Maximum
Aggregate
Offering
Price
(2)
Amount
                of
Registration
Fee
(2)
Common
                Stock,
$.001
                par value
10,000,000
                shares
$.32
$3,200,000
$343
(1)
The
                number of shares being registered is the maximum aggregate number
                of
                shares presently issuable under the Plan. The registration statement
                also
                includes an indeterminable number of additional shares that may become
                issuable under the Plan pursuant to anti-dilution
                provisions.
(2)
Estimated
                solely for the purpose of calculating the registration fee pursuant
                to
                Rule 457(c) based on the average of the bid and asked prices of the
                common
                stock as reported by the Over-The-Counter Bulletin Board on May 11,
                2006.
EXPLANATORY
      NOTE
This
      registration statement registers 10,000,000 shares of common stock of Sunset
      Brands, Inc. (the "Company") to be offered pursuant to the Company's 2005 Stock
      Incentive Plan. No shares have been issued under the 2005 Stock Incentive Plan
      as of the date hereof.
The
      materials which follow Part I, up to but not including the page beginning Part
      II of this registration statement, constitutes a reoffer prospectus, prepared
      in
      accordance with the requirements of Part I of Form S-3, in accordance with
      General Instruction C of Form S-8. The reoffer prospectus may be utilized for
      the reoffer and resale of up to 10,000,000 shares of common stock to the extent
      acquired by certain affiliates of the Company pursuant to the 2005 Stock
      Incentive Plan. The amount of the securities to be offered or resold by means
      of
      the reoffer prospectus by the designated selling shareholders may not exceed,
      during any three month period, the amount specified in Rule 144(e).
PART
      I
INFORMATION
      REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item
      1.
Plan
      Information.
The
      documents containing the information specified in Part I of Form S-8 will be
      sent or given to participants in the 2005 Stock Incentive Plan as specified
      by
      Rule 428(b)(1) of the Securities Act of 1933, as amended (the "Securities Act").
      Such documents are not required to be and are not filed with the Securities
      and
      Exchange Commission (the "Commission") either as part of this registration
      statement, or as a prospectus or prospectus supplement pursuant to Rule 424.
Item
      2.
Registrant
      Information and Employee Plan Annual Information.
Upon
      written or oral request by a participant in the 2005 Stock Incentive Plan,
      the
      Company will provide any of the documents incorporated by reference into the
      Section 10(a) prospectus, without charge. Any document required to be delivered
      to the participants pursuant to Rule 428(b) will also be delivered without
      charge.
1
REOFFER
PROSPECTUS
SUNSET
      BRANDS, INC.
10,000,000
      Shares of Common Stock
This
      prospectus relates to offers and sales of up to 10,000,000 shares of Common
      Stock, par value $.001 per share (the "Common Stock") of Sunset Brands, Inc., a
      Nevada corporation (the "Company") by officers, directors and other "affiliates"
as defined in Rule 405, promulgated under the Securities Act of 1933, as amended
      (the "Securities Act"). These affiliates ("Selling Shareholders") have acquired
      or will acquire the shares under the Company's 2005 Stock Incentive Plan (the
"Plan").
The
      Selling Shareholders will determine when they will sell their shares, and in
      all
      cases they will sell their shares at the then-prevailing market price or at
      prices negotiated at the time of sale. We will not receive any proceeds from
      these sales. The brokers and dealers that the Selling Shareholders may utilize
      in selling their shares may receive compensation in the form of underwriting
      discounts, concessions or commissions from the sellers or purchasers of the
      shares.
Our
      stock
      is traded on the OTC Bulletin Board under the symbol "SSBN." On May 11, 2006,
      the average of the bid and asked prices of our Common Stock on the OTC Bulletin
      Board was $0.32 per share. On May 11, 2006, there were 23,833,879 shares of
      our
      Common Stock issued and outstanding.
The
      Company's executive offices are located at 10990 Wilshire Boulevard, Suite
      1220,
      Los Angeles, California 90024, and its telephone number at that location is
      (310) 478-4600.
Investing
      in the shares involves risks, which are described from time to time in the
      periodic reports we file with the Securities and Exchange Commission (the
"Commission"), and which we incorporate herein by reference. Also see "Risk
      Factors" beginning on page 6.
Neither
      the securities and exchange commission nor any state securities commission
      has
      approved or disapproved of these securities or passed upon the adequacy or
      accuracy of this prospectus. Any representation to the contrary is a criminal
      offense.
The
      date
      of this prospectus is June 22, 2006
2
TABLE
      OF
      CONTENTS
Cautionary
                Statement Regarding Forward-Looking Statements
4
Our
                Company
4
Risk
                Factors
6
Use
                of Proceeds
12
Selling
                Shareholders
12
Plan
                of Distribution
13
Legal
                Matters
14
Experts
14
Indemnification
                of Directors and Officers
14
Where
                You Can Find More Information
14
YOU
      SHOULD ONLY RELY ON THE INFORMATION INCORPORATED BY REFERENCE OR PROVIDED IN
      THIS PROSPECTUS OR ANY SUPPLEMENT. WE HAVE NOT AUTHORIZED ANYONE ELSE TO PROVIDE
      YOU WITH DIFFERENT INFORMATION. THE COMMON STOCK IS NOT BEING OFFERED IN ANY
      STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
      INFORMATION IN THIS PROSPECTUS OR ANY SUPPLEMENT IS ACCURATE AS OF ANY DATE
      OTHER THAN THE DATE ON THE FRONT OF SUCH DOCUMENT.
3
CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Information
      included in this prospectus may contain forward-looking statements. This
      information may involve known and unknown risks, uncertainties and other factors
      which may cause our actual results, performance or achievements to be materially
      different from the future results, performance or achievements expressed or
      implied by any forward- looking statements. Forward-looking statements, which
      involve assumptions and describe our future plans, strategies and expectations,
      are generally identifiable by use of the words "may," "should," "expect,"
      "anticipate," "estimate," "believe," "intend" or "project" or the negative
      of
      these words or other variations on these words or comparable
      terminology.
This
      prospectus contains forward-looking statements, including statements regarding,
      among other things, (a) our projected sales and profitability, (b) our growth
      strategies, (c) anticipated trends in our industry, (d) our future financing
      plans, and (e) our anticipated needs for working capital. These statements
      may
      be found under "Our Business," as well as in this prospectus generally. Actual
      events or results may differ materially from those discussed in forward-looking
      statements as a result of various factors, including, without limitation, the
      risks outlined under "Risk Factors" and matters described in this prospectus
      generally. In light of these risks and uncertainties, there can be no assurance
      that the forward-looking statements contained in this prospectus will in fact
      occur.
OUR
      COMPANY
Sunset
      Brands, Inc. was incorporated in Nevada on May 1, 1998 as Novanet International,
      Inc. Effective August 1, 2004, Sunset changed its name to Cascade Sled Dog
      Adventures, Inc. and effective October 4, 2004 it changed its name to Sunset
      Brands, Inc. Sunset's initial business consisted of conducting sled dog tours in
      the Mt. St. Helens area of Washington State. The winter of 2000 through 2001
      was
      the only operational year for sled dog tours by Sunset. As of September 7,
      2001
      Sunset discontinued operations. In August, 2002 Sunset completed the divestment
      and return to Mr. Steve Madsen, an original founder, of all proprietary assets
      and rights pertaining to sled dog activities or other dog products and services
      earlier contributed by Mr. Madsen in exchange for all of his 480,000 issued
      and
      outstanding shares. Mr. Steve Madsen further relinquished all claims to any
      accrued wages or other compensation.
Since
      the
      return of assets to Mr. Steve Madsen, Sunset was an inactive public company
      until the completion of the Sunset Merger and the LCC Merger in October 2004.
      Following the Sunset Merger and the LCC Merger, Sunset's current business
      intends to capitalize on the fast growing demand for healthy, better for you
      foods and beverages that has resulted from the increased popularity of these
      items in everyday diets. It is Sunset's goal to become a category leader in
      this
      field through both the introduction of new product lines, as well as, the
      acquisition of additional healthy, better for you brands and/or companies.
      Sunset's initial entry into this category was through the acquisition of Low
      Carb Creations, Inc. ("Low Carb") in October 2004. Low Carb has been a marketer
      of sweet and savory products for consumers interested in maintaining a low
      carbohydrate, healthy life style. Low Carb has provided development,
      distribution and consulting services related to low carbohydrate foods
      throughout the Untied States and Canada. During December 2004, Low Carb
      discontinued its active pursuit of its low carbohydrate business due to an
      inability to distribute its products. Although there can be no assurances that
      Sunset will be successful in its business plan, Sunset believes that it has
      positioned itself to begin its acquisition program and eventually become a
      leader in the healthy, better for you food and beverage industry.
On
      November 10, 2005, Sunset acquired U.S. Mills, Inc. ("US Mills") pursuant to an
      Amended and Restated Acquisition Agreement and Plan of Merger by which US Mills
      merged with a wholly-owned subsidiary of Sunset. As consideration for the
      acquisition, IBF Fund Liquidating LLC, ("IBF") a Delaware limited liability
      company and the holder of the outstanding capital stock of US Mills, received
      the following: (i) $5,000,000 in cash (in addition to $1,000,000 in cash that
      US
      Mills had received on May 19, 2005 from Sunset) of which $4,851,000 was used
      to
      repay US Mills' outstanding indebtedness for borrowed money including debt to
      IBF and its affiliates, (ii) 321,429 shares of Sunset's Series B Preferred
      Stock
      which are convertible into 5,357,142 shares of common stock at an initial
      conversion price of $0.56 per share, with warrants to purchase an additional
      4,200,000 shares of the Company's common stock at $.70 per share, such Series
      B
      Preferred Stock being subject to a three-year lock-up (iii) a Senior
      Subordinated Note in the original principal amount of $1,000,000 from the
      Company to IBF, (iv) a Subordinated Note in the original principal amount of
      $5,000,000 from the Company to IBF, and (v) a 12% Secured Convertible Debenture
      in the original principal amount of $5,000,000 with warrants to purchase the
      Company's common stock.
4
On
      November 10, 2005, the Company, as guarantor, entered into a Revolving Credit,
      Term Loan, and Security Agreement (the "Credit Agreement") with Capital Source
      Finance LLC, a Delaware limited liability company, as lender, and US Mills,
      the
      Company's wholly-owned subsidiary, as borrower. Pursuant to the Credit
      Agreement, the Lender agreed to make available to USM a revolving credit
      facility in the maximum principal amount of $3,000,000 and a term loan in the
      maximum principal amount of $3,500,000. The collateral for the payment of all
      amounts due under the Credit Agreement consists of substantially all of the
      assets of US Mills. A significant portion of the proceeds of the Credit
      Agreement were used to refinance the obligations and indebtedness of USM in
      connection with the Merger discussed above. The Credit Agreement terminates
      and
      all amounts outstanding thereunder shall be due and payable in full three years
      from November 10, 2005.
Upon
      the
      occurrence of an event of default under the Credit Agreement, the Company may
      become directly liable for US Mills' obligations under the Credit Agreement.
Following
      the US Mills acquisition, Sunset intends to capitalize on what we perceive
      as a
      growing demand for healthier foods and beverages. It is Sunset's goal to become
      a category leader in this field through both the introduction of new product
      lines, as well as, the acquisition of existing product lines or companies.
      Although there can be no assurances that Sunset will be successful in its
      business plan, Sunset believes that through US Mills and its management team,
      as
      well as the additional management resources that Sunset intends to add, Sunset
      will be well-positioned to emerge as a leader in the nutritional food and
      beverage industry.
US
      Mills
      is a leading independent branded consumer marketer of natural, organic and
      specialty ready-to-eat cereals, hot cereals, cookies and crackers. The Company
      markets five established brands - Uncle Sam Cereal, Erewhon, New Morning, Farina
      and Skinner's Raisin Bran - in all 50 states, Canada and Puerto Rico. The brands
      are sold through supermarkets, mass merchandisers, wholesale grocers, natural
      food distributors and specialty food distributors.
The
      original US Mills was founded in Omaha as a manufacturer of ready-to-eat
      breakfast cereals. The company's first product, Uncle Sam Cereal™, was
      introduced in 1908 as "the food for health" and continues to occupy a unique
      niche in the marketplace today. In 1926 U.S. Mills began producing Skinner's
      Raisin Bran
TM
,
      America's first raisin bran, for another company. US Mills later acquired the
      marketing rights to Skinner's Raisin Bran under a 20-year renewable license.
Erewhon,
      Inc. was established in Boston in 1966 and was a pioneer in the "natural food"
category. The Erewhon
TM
brand
      name is well known among natural food consumers, and its products are recognized
      for their purity and quality. In 1986, Erewhon acquired US Mills; the combined
      entity retained U.S. Mills as its corporate name and the Erewhon
TM
brand
      name as its line of organic and natural foods.
In
      2000,
      US Mills acquired New Morn, Inc., and the New Morning
TM
brand
      of
      ready-to-eat organic food cereals. In 2001, US Mills acquired Holden Foods,
      Inc., and the Farina
TM
brand,
      originally introduced by Pillsbury in 1898.
5
RISK
      FACTORS
Risks
      Related to our Business and Industry
We
      have a limited operating history and cannot assure that our business will be
      profitable or that our business strategy can be implemented effectively.
Sunset
      has no operating history or significant assets. Sunset's prospects are subject
      to the substantial risks, expenses and difficulties frequently encountered
      in
      the establishment and growth of a new business in the food industry, which
      is
      characterized by a significant number of market entrants and intense
      competition, as well as the various risk factors described herein. The combined
      companies (Sunset and U.S. Mills) will incur substantial additional expenses,
      including advertising and promotional costs, "slotting" expenses (i.e., the cost
      of obtaining shelf space in certain stores), and integration costs of any future
      acquisitions. Accordingly, Sunset may incur losses in the future as a result
      of
      the implementation of its business strategy, even if revenues increase
      significantly. We can provide no assurance that Sunset's business strategy will
      prove successful or that Sunset will be profitable in the future.
Our
      product diversification is limited, and we can provide no assurance that
      consumers will acceptance our existing and future products.
Consumer
      preferences for food and beverage products, especially health and diet-oriented
      products such as those Sunset intends to sell, are continually changing and
      are
      extremely difficult to predict. Tastes and preferences with respect to food
      and
      beverage products change from time to time. We can provide no assurance that
      Sunset will be able to achieve a significant degree of market acceptance for
      its
      products, that acceptance, if achieved, will be sustained for any significant
      period, or that product life cycles will be sufficient to permit Sunset to
      recover start-up and other associated costs.  We can provide no assurance
      that Sunset will succeed in the development of any new products or that any
      new
      products developed by Sunset will achieve market acceptance or generate
      meaningful revenue for Sunset.
Risks
      Relating to our Acquisition Strategy
We
      will need additional financing for acquisitions and sales growth.
A
      significant element of Sunset's business strategy is the acquisition,
      development and expansion of healthy food and beverage brands and products.
      It
      is likely that Sunset will require third party financing (debt or equity) in
      connection with any future acquisitions, in connection with the expansion of
      Sunset's business through non-acquisition means, as a result of any future
      operating losses, or to provide working capital for general corporate
      purposes.  There can be no assurance that any such required financing will
      be available or, if available, on terms attractive to Sunset.  Any third
      party financing obtained by Sunset may result in dilution of the equity
      interests of Sunset's shareholders. In the event that Sunset is unable to obtain
      financing on favorable terms, Sunset may not be able to successfully implement
      its business plan and its financial condition and results of operations would
      be
      adversely affected.
In
      addition, Sunset believes that U.S. Mills' ability to expand its sales and
      increase its operating profits is constrained by a lack of working capital
      necessary to acquire inventory
.
There
      can
      be no assurance that Sunset will be able to obtain adequate working capital
      on
      favorable terms, if at all. The failure to obtain such additional working
      capital would have an adverse effect on the ability of Sunset to expand sales
      and operating profits of any operating units, including U.S. Mills.
Pursuit
      of our acquisition strategy could result in unforeseen losses and diversion
      of
      time and resources. Failure of our acquisition strategy could decrease our
      efficiency, limit our growth and ultimately hinder our profitability.
A
      significant element of our business strategy will be the pursuit of strategic
      acquisition opportunities for the purpose of expanding, complementing and/or
      diversifying Sunset's product offerings and business.  Such strategic
      acquisitions are likely to continue to comprise an element of Sunset's business
      strategy for the foreseeable future.  However, we can provide no assurance
      that we will be able to identify, finance and complete additional suitable
      acquisitions on acceptable terms, or that future acquisitions will be
      successful.  Failure to acquire additional healthy food products or
      businesses may result in a failure to realize operating efficiencies and
      economies of scale and could prevent Sunset from obtaining the sales volume
      necessary to most effectively negotiate with customers and suppliers. This,
      in
      turn could, hinder our profitability. Moreover, Sunset may be unable to
      successfully integrate acquired companies or their management teams into
      Sunset's operating structure, retain management teams of acquired companies on a
      long-term basis, or operate acquired companies profitably.
6
In
      addition, future acquisitions could divert management's attention from the daily
      operations of Sunset and otherwise require additional management, operational
      and financial resources.  Acquisitions may also involve a number of other
      risks, including adverse short-term effects on Sunset's operating results,
      dependence on retaining key personnel and customers, and risks associated with
      unanticipated liabilities or contingencies.
The
      absence of substantive disclosure relating to prospective acquisition targets
      makes it difficult for investors to evaluate our future profitability.
Because
      a
      significant part of Sunset's business plan involves acquisitions of other
      businesses, companies or brands which have not yet been identified, purchasers
      of Sunset's common stock will have no substantive information concerning
      consummation of any specific acquisition in considering an investment in Sunset.
      The absence of disclosure can be contrasted with the disclosure which would
      be
      necessary if Sunset had already identified an acquisition target. There can
      be
      no assurance that an investment in the securities offered hereby will not
      ultimately prove to be less favorable to purchasers pursuant to this prospectus
      than a direct investment, if such opportunity were available, in an acquisition
      candidate.
The
      absence of valuation or fairness opinion in connection with the U. S. Mills
      acquisition may mean that we paid more for the acquisition than an independent
      third-party could have.
Sunset
      did not obtain a valuation or fairness opinion concerning the acquisition of
      U.S. Mills prior to acquiring it. Sunset's board of directors primarily
      considered the assets on the balance sheet of U.S. Mills, the value of U.S.
      Mills's brands, and actual and prospective financial performance when setting a
      price for the acquisition. The board also considered the fact that the
      stockholders of U.S. Mills agreed to take payment, in part, in stock, notes
      payable and convertible debt rather than cash in setting the value of the
      acquisition. The fact that Sunset did not receive a valuation or fairness
      opinion concerning the purchase may mean that an independent third-party could
      have acquired U.S. Mills for a price less than Sunset paid.
Risks
      Relating to Our Business Operations
Our
      management lacks experience in operating U.S. Mills or other packaged food
      companies.
Sunset,
      together with its subsidiaries, is a newly-formed company with no operations
      for
      investors to review. A portion of our management team, including our Chief
      Executive Officer, has had no prior experience in operating U.S. Mills or any
      other consumer packaged goods company. Sunset will initially be dependent upon
      the industry experience of the existing management of U.S. Mills in operating
      our business and implementing Sunset's business plan. In the event that the
      management team of U.S. Mills become unavailable or is unable to work
      effectively with Sunset's management team to run U.S. Mills or any other
      companies or businesses Sunset acquires, Sunset's business and its ability
      to
      implement its business and growth plan would be adversely affected.
Because
      we have not patented the formulas or manufacturing methods for our products
      and
      we rely on third parties for product development, we may be vulnerable to
      infringement of these formulas or methods or to claims of infringement against
      Sunset. Loss of the use of these formulas or methods could diminish our
      profitability.
Although
      we believe that many of the formulas and processes utilized in connection with
      the production of U.S. Mills products may be proprietary, U.S. Mills has relied
      upon third-party manufacturers and producers to develop and test such formulas.
      U.S. Mills has not sought patent protection for such technology and it is
      unlikely that patent protection would be available. Sunset expects to rely
      on
      the complexity of the formulas, trade secrecy laws and on confidentiality
      agreements in order to protect any proprietary formulas and processes. However,
      there can be no assurance that such methods will be effective in preventing
      competitors or our third-party suppliers and manufacturers from utilizing these
      formulas and processes to produce competing products. If competitors of Sunset,
      certain of which may have significantly greater resources than Sunset, introduce
      products that utilize formulas and manufacturing methods that are similar or
      substantially the same as those currently manufactured, or that may in the
      future be manufactured, by Sunset, Sunset's sales, financial condition and
      prospects could be adversely affected.
7
Sunset
      has not attempted to ascertain or evaluate whether the formulas and processes
      utilized by U.S. Mills infringe on the patent or proprietary rights of others.
      As a result, Sunset and U.S. Mills may be subject to infringement claims. Any
      such claims, whether with or without merit, can be time consuming and expensive
      to defend, may divert management's attention and resources, could cause product
      shipment delays and could require Sunset to enter into costly royalty or
      licensing agreements. If a successful claim of product infringement is brought
      against Sunset or U.S. Mills, the inability to license the infringed or similar
      intellectual property could adversely affect our business.
Governmental
      regulation could result in increased costs of labeling, periodic audits and
      compliance as well as temporary stoppage of the distribution of our products.
Companies
      engaged in the manufacture, packaging and distribution of food items are subject
      to extensive regulation by various government agencies, including the FDA and
      the USDA, which, pursuant to statutes, rules, and regulations, prescribe
      quality, purity, manufacturing and labeling requirements. Food products are
      often subject to "standard of identity" requirements which are promulgated at
      either the federal or state level to determine the permissible qualitative
      and
      quantitative ingredient content of food. To the extent that any product that
      we
      seek to market does not conform to an applicable standard, special permission
      to
      market such a product is required. United States product labels are subject
      to
      regulation by the USDA and/or the FDA. Such regulations include standards for
      product descriptions, nutritional claims, label format, minimum type sizes,
      content and location of nutritional information panels, nutritional comparisons,
      and ingredient content panels. Sunset's labels, ingredients and manufacturing
      processes will be subject to inspection by the FDA and USDA.
Food
      and
      beverage manufacturing facilities are subject to inspections by various
      regulatory authorities. A finding of a failure to comply with one or more
      regulatory requirements can result in the imposition of sanctions including
      the
      closing of all or a portion of a company's facilities, subject to a period
      during which the company can remedy the alleged violations. While Sunset
      believes that all of the distributors and co-packers used by U.S. Mills are
      in
      compliance in all material respects with governmental regulations regarding
      current products and have obtained the material governmental permits, licenses,
      qualifications and approvals required for our operations, we or they may be
      unable to comply with such laws and regulations in the future or new
      governmental laws and regulations may be introduced that could prevent or
      temporarily inhibit the development, distribution and sale of Sunset products
      to
      consumers.
Federal
      regulatory authorities, including the FDA and FTC, have indicated that they
      are
      considering the development and implementation of rules and regulations that
      would specifically apply to the low-carbohydrate food and beverage industry.
      State regulators may propose similar rules and regulations. Such rules and
      regulations, if adopted, could include labeling requirements or regulations
      that
      could require Sunset to alter the taste or composition of its products or impose
      other obligations on Sunset.  Such changes could adversely affect sales and
      margins of Sunset, its financial condition and prospects.
As
      a
      marketer of products that are ingested by consumers, U.S. Mills and Sunset
      will
      be subject to the risk that one or more of the ingredients in products sold
      by
      them may become the subject of adverse regulatory action at the state or federal
      level. Such actions could include sales restrictions or prohibitions, labeling
      requirements or reformulation, any of which could reduce our ability to generate
      revenues.
Sunset's
      inability to compete effectively in the packaged and specialty food and
      beverages industry could cause the loss of our business.
The
      market for packaged foods and beverages in general, and specialty foods and
      beverages such as those that Sunset expects to sell, is intensely competitive.
      We compete directly with manufacturers and distributors of other
      low-carbohydrate and diet/health-oriented foods and beverages, and compete
      generally with manufacturers and distributors of other packaged foods and
      beverages. Competitive factors in the packaged food and beverage industry and
      the low-carb food and beverage segment include product quality and taste, brand
      awareness among consumers, access to supermarket and other retail shelf space,
      price, advertising and promotion, variety of products offered, nutritional
      content, product packaging and package design.
Some
      of
      the competitors and potential competitors that Sunset will face are part of
      large, diversified food and beverage companies, such as Kraft Foods and PepsiCo,
      which have greater financial resources and a wider range of product offerings
      than Sunset. If these larger competitors choose to introduce products similar
      to
      Sunset's at lower prices, Sunset's ability to expand its market presence in
      new
      markets and to retain market share in existing markets may be adversely affected
      and Sunset's margins would suffer. Sunset will lack the resources to advertise
      and promote its products on the scale that certain of its larger competitors
      use
      to foster brand recognition of their products. If Sunset is unable to
      effectively promote its brands and products, the resulting lack of consumer
      demand could cause retailers to not allocate shelf space to Sunset's products
      on
      favorable terms, if at all. Any failure to secure and maintain retail shelf
      space would have a significant negative impact on Sunset's operating results.
      As
      Sunset enters new markets, it may encounter competition from regional
      manufacturers and distributors not active in Sunset's established markets.
      If
      these competitors use price promotions or advertising campaigns to stimulate
      demand for their products, Sunset could be forced to compete using similar
      programs, thereby increasing its costs and reducing its margins. The competitive
      environment for low-carb products could adversely affect Sunset's future sales
      and profits, financial condition and liquidity and its ability to grow its
      business. Sunset may be unable to compete effectively in the markets it enters.
8
Our
      inability to secure retail shelf space could limit our ability to generate
      revenues and sustain profitability.
Successful
      marketing of food and beverage products generally depends upon obtaining
      adequate retail shelf space for product display, particularly in supermarkets,
      supercenters and other large packaged food and beverage retailers. Retailers
      have a finite amount of shelf space in each of their stores on which food and
      beverage products are stocked. Like all food manufacturers, retailers may remove
      Sunset products from store shelves at any time if a retailer determines that
      sales of such products are falling short of expectations. Products of smaller
      companies such as Sunset are more likely to be removed from store shelves than
      products marketed by bigger manufacturers since larger companies can afford
      more
      expansive promotions and advertising campaigns. Ultimately, however, the
      decision about whether to remove or relocate a product will depend on its sales
      and retail margins, and how these compare to existing or new products. There
      can
      be no assurance that Sunset's products will compare favorably in sales and
      retail margins to existing or new food products that may be introduced in the
      future. Also, retailers can at their discretion relocate products to lower
      or
      higher shelf space that may make it more difficult for consumers to see or
      find
      Sunset's products. If Sunset loses shelf space, is unable to secure shelf space,
      or if Sunset's products are given less favorable shelf locations, Sunset's
      sales
      and financial performance will be adversely affected.
Frequently,
      food manufacturers and distributors incur additional costs in order to obtain
      additional shelf space. Whether or not Sunset incurs such costs in a particular
      market will depend on a number of factors, including demand for Sunset's
      products, relative availability of shelf space and general competitive
      conditions. Sunset may incur significant shelf space or other promotional costs
      as a necessary condition of entering into competition or maintaining market
      share in particular markets or stores. If incurred, such costs may materially
      affect Sunset's financial performance.
The
      lack of long-term agreements with retailers or distributors increases our risk
      of returned products and could cause a loss of revenues.
U.S.
      Mills has not established, and Sunset does not expect to establish, any
      long-term agreements with any of their respective retail customers or
      distributors. As a result, arrangements with respect to pricing, shelf space,
      cooperative advertising or special promotions, among other things, may be
      subject to periodic negotiation with each retailer or distributor. It is
      expected that retailers and distributors will make no binding long-term
      commitments to Sunset regarding purchase volumes and will make all purchases
      through short term or one-time purchase orders. It is likely that retailers
      or
      distributors could reduce their overall purchases of Sunset products, the number
      and variety of such products that they carry and the shelf space allotted for
      Sunset products or otherwise materially change the terms of Sunset's
      relationship at any time. If any retailer or distributor insisted on returning
      Sunset products for any reason, it is likely that Sunset would be forced to
      accept the returns as a practical matter, regardless of its legal rights. Any
      reduction in purchases or increase in returns could significantly harm Sunset's
      business, financial condition and operating results.
Regulatory
      or other legal action against certain customers could result in a decrease
      in
      sales of our products to such customers.
Food
      manufacturers have historically paid food service companies and wholesalers
      promotional allowances and offered discounts for reaching designated sales
      volumes for food and beverage products. These discounts are generally taken
      when
      retailers pay for food products, which is why they are known as "billback"
discounts. These allowances and discounts may be permissible if in writing
      and
      so long as the food manufacturer does not engage in discriminatory or unfair
      pricing in violation of applicable antitrust law. The Securities and Exchange
      Commission has announced formal investigations and informal inquiries of and
      into accounting practices at several national food service companies and
      wholesalers that are centered on the payment of, and improper accounting
      treatment given to, promotional allowances and billback discounts. U.S. Mills
      may have paid, and Sunset may in the future pay, promotional allowances or
      slotting allowances to secure shelf space in retail stores, and offer billback
      discounts. While Sunset is not aware of any investigations of the customers
      of
      U.S. Mills, it is possible that one or more of Sunset's customers could become
      subject to regulatory or court proceedings related to these practices. If so,
      sales of Sunset's products to any such customers could decrease if the
      operations or business of such customers are adversely affected by regulatory
      or
      court proceedings.
9
Concentration
      of ownership in the food and beverage retail industry and the distribution
      of
      our products through a small number of distributors could limit or reduce our
      revenues.
A
      large
      portion of the historical sales of U.S. Mills were through a small number of
      distributors and retailers. Moreover, consolidation among grocery stores, retail
      supercenters and club stores, has resulted in a significant concentration of
      ownership of food and beverage retail sales. As a result, Sunset's future
      success may be dependent upon our ability to create and maintain relationships
      with these large retailers and distributors on both a regional and national
      level. If Sunset is unsuccessful in gaining entry to regions or in convincing
      individual chains or stores to carry its product lines, we may be unable to
      grow
      or generate profits. Retailers continually evaluate the sales performance of
      products they carry and if sales of Sunset's products do not meet expectations,
      one or more of Sunset's customers may discontinue carrying Sunset's product
      lines which would cause a reduction in our revenues.
Demand
      and supply fluctuations as well as variable or unexpected costs in the food
      and
      beverage industry could cause a decline in our revenues or prevent our making
      a
      profit.
The
      food
      and beverage industry, and the markets within the food and beverage industry
      in
      which Sunset expects to compete, are subject to various risks, including:
      adverse changes in general economic conditions; evolving consumer preferences;
      nutritional and health-related concerns; federal, state and local food
      inspection and processing controls; oversupply of certain products at the
      wholesale and retail levels; consumer product liability claims; risks of product
      tampering; and the availability and expense of liability insurance, and other
      factors that are beyond Sunset's control. Any of these factors could cause
      our
      revenues to decline or prevent our making a profit.
Product
      liability claims, even if invalid, could pose unexpected costs and thus hamper
      our profitability.
As
      a
      manufacturer and marketer of consumer food and beverage products, Sunset may
      be
      subjected to various product liability claims.  There can be no assurance
      that any product liability insurance maintained by Sunset will be adequate
      to
      cover any loss or exposure for product liability, or that such insurance will
      continue to be available on terms acceptable to Sunset.  Any product
      liability claim not fully covered by insurance, as well as any adverse publicity
      from a product liability claim, could have a material adverse effect on the
      financial condition or results of operations of Sunset.
Our
      reliance on third-party producers could cause an interruption in the supply
      of
      our products which, in turn, could cause Sunset to lose revenues.
Substantially
      all of the products sold by U.S. Mills are manufactured and packaged pursuant
      to
      production agreements pursuant to which such third parties agree to produce
      and
      warehouse product lines. Sunset expects that a large portion of any future
      products will be manufactured and packaged pursuant to similar third-party
      agreements. If any of Sunset's significant third-party producers terminated
      its
      relationship with us or were prevented from meeting our production needs on
      a
      timely and cost-effective basis for any reason, including regulatory or other
      actions taken by third parties, credit constraints on Sunset or such producers,
      capacity limitations or incorrect estimation of demand or production,
      competition for production resources, constraints in the supply of raw
      materials, increases in ingredient costs or the costs of production, or natural
      disaster, acts of terrorism or other disruptions, the resulting interruption
      or
      cessation of production would severely affect Sunset's operations and its
      customer relationships. Sunset may not be able to find an alternative third
      party producer that would agree to and could reliably manufacture Sunset
      products on a timely and cost effective basis. Any failure by Sunset to find
      alternative production sources could result in a loss of revenues and potential
      profits.
Shipping
      disruptions or the addition of fuel surcharges could result in increased costs
      causing a reduction in our potential profits.
Sunset
      and its third-party producers will rely on common carriers to ship virtually
      all
      of its products to customers and to secondary distribution facilities. These
      common carriers also ship ingredients, raw materials, cans, packaging and labels
      to Sunset's third-party producers from their respective suppliers. Any
      disruption or slowdown in deliveries of Sunset's products, ingredients or
      supplies caused by labor strikes, other labor disputes, weather conditions
      or
      other causes could significantly harm Sunset's business. Recent increases in
      diesel and other energy costs have led some common carriers to propose or
      implement fuel surcharges on some longer delivery routes. If fuel costs rise
      and
      more common carriers implement these charges, Sunset's operating costs and
      costs
      of good sold may increase and its margins may suffer.
10
Fluctuations
      in prices and availability of supplies could drive up our production costs
      or
      prevent us from selling certain products altogether.
The
      manufacturing costs for any products of Sunset will be subject to fluctuations
      in the prices of underlying ingredients.  Although Sunset believes that its
      requirements for products and ingredients are readily available and that its
      business success is not dependent on any single supplier, the failure of certain
      suppliers to meet performance specifications, quality standards or delivery
      schedules of Sunset or third-party manufacturers retained by Sunset, could
      make
      production more costly or prevent us from producing certain products.  In
      particular, a sudden scarcity, a substantial price increase, or an
      unavailability of product ingredients could increase our costs or cause us
      to
      curtail production of certain products which could reduce our potential
      profits.  We can provide no assurance that alternative ingredients would be
      available when needed and on commercially attractive terms, if at
      all.
Management's
      other activities may conflict with oversight of Sunset.
Certain
      of the officers of Sunset may devote a portion of their time to other business
      activities and personal investments. In addition, certain members of our
      management may serve as managers of other businesses or entities. This may
      create conflicts of interest with respect to the allocation of time. Sunset
      will
      attempt to resolve these conflicts in a manner that does not disrupt the
      operations of Sunset. However, to the extent that one or more members of
      Sunset's management team are unavailable to Sunset, Sunset's operations may be
      materially and adversely affected.
Sunset
      does not intend to pay dividends on its common stock or preferred stock (other
      than cumulated but unpaid dividends on the preferred stock) in the foreseeable
      future.
There
      can
      be no assurance that the operation of Sunset will result in sufficient revenues
      to enable Sunset to operate at profitable levels or to generate positive cash
      flows. Any cash that might be available for dividends will be used instead
      to
      expand Sunset's business. Payment of any dividends in the future will depend
      on
      Sunset's financial condition, results of operations and capital requirements,
      as
      well as other factors deemed relevant by the Board of Directors.
Existing
      preemptive rights and preferred stock covenants could make it more difficult
      to
      obtain funding to grow our business.
Holders
      of our convertible preferred stock have certain pre-emptive rights and, have
      the
      right to approve certain transactions by Sunset in the future. Such rights
      could
      have an adverse effect on Sunset's ability to raise additional financing and
      may
      have an adverse effect on the trading price of the shares of Sunset. In
      addition, in the event that a majority of the holders of the preferred stock
      refuse to approve transactions with respect to which they have been granted
      approval rights, Sunset may be prevented from taking advantage of business
      or
      financing opportunities as they arise, which could have an adverse effect on
      Sunset and its business.
The
      market for our common stock is volatile and it trades on low volume which could
      make our shares difficult to value and illiquid.
The
      common stock of Sunset is traded on the OTC Bulletin Board. The trading volume
      of the Sunset common stock historically has been limited and sporadic, and
      the
      stock prices have been volatile. As a result of the limited and sporadic trading
      activity, the quoted price for the Sunset common stock on the over-the-counter
      market is not necessarily a reliable indicator of its fair market value. The
      price at which the common stock of Sunset will trade may fluctuate as a result
      of a number of factors, including, without limitation, quarterly variations
      in
      operating results and actual or anticipated announcements of new products,
      positive or negative announcements by competitors as well as the number of
      shares available for sale in the market. In addition, sales by our current
      stockholders, under Rule 144 or other exemption from the Securities Act, if
      available, or pursuant to an effective registration statement, could have a
      depressive effect on the price of the Common Stock.
Risks
      associated with low-priced securities may affect the market value of our stock.
Sunset's
      common stock may be subject to rules promulgated by the SEC relating to "penny
      stocks," which generally apply to companies whose shares are not traded on a
      national stock exchange or on the NASDAQ Small-Cap or National Market Systems,
      trade at less than $5.00 per share, or who do not meet certain other financial
      requirements specified by the SEC. These rules require brokers who sell "penny
      stocks" to persons other than established customers and "accredited investors"
to complete certain documentation, make suitability inquiries of investors,
      and
      provide investors with certain information concerning the risks of trading
      in
      such penny stocks. These rules may discourage or restrict the ability of brokers
      to sell the Sunset Common Stock and may affect any secondary market for Sunset
      Common Stock. These rules could also hamper Sunset's ability to raise funds
      in
      the primary market for Sunset's Common Stock.
11
USE
      OF PROCEEDS
The
      shares are being registered for the account of the Selling Shareholders.
      Accordingly, the Company will not receive any of the proceeds from the sale
      of
      the shares by the Selling Shareholders.
SELLING
      SHAREHOLDERS
This
      prospectus relates to shares of Common Stock that are being registered for
      offer
      and sale by Selling Shareholders who have acquired or may acquire shares of
      Common Stock pursuant to our 2005 Stock Incentive Plan, and who may be deemed
      "affiliates" of the Company. An "affiliate" is defined under the Securities
      Act
      as "a person that directly or indirectly, through one or more intermediaries,
      controls or is controlled by, or is under common control with" the company.
      The
      Selling Shareholders may resell any or all of the shares of Common Stock at
      any
      time while this prospectus is current.
We
      do not
      know the number of shares of Common Stock which will be offered for sale by
      the
      named affiliates or whether any other affiliates of the Company will want to
      offer shares for resale under this prospectus. Executive officers, directors
      or
      others who are considered to be affiliates of the Company who acquire Common
      Stock under the Plan may be added to the list of selling shareholders, and
      their
      number of shares to be sold may be increased or decreased by the use of a
      prospectus supplement filed with the Commission pursuant to Rule 424(b) of
      the
      Securities Act.
The
      inclusion of the shares of Common Stock in the table below does not constitute
      a
      commitment to sell any shares.
Number
                of Shares of
Common
                Stock
Beneficially
                Owned Prior
to
                the Offering (1)
Number
                of Shares of
Common
                Stock to be
sold
                in Offering
Shares
                of Common Stock Beneficially
Owned
                After the Offering
Number
Percent
Todd
                Sanders, CEO and President
5,532,206
0
5,532,206
100%
Stephen
                K. Radusch, Chief Financial Officer
387,314
0
387,314
100%
*
      denotes beneficial ownership of less than 1% of the class of securities
      indicated.
(1)
      Represents shares held by the Selling Shareholders subject to outstanding
      employee stock options granted under the Company's 2005 Stock Incentive Plan.
      Unless otherwise indicated, the shareholders have sole voting and investment
      power with respect to all shares shown as beneficially owned by them. However,
      certain shares may be deemed to be beneficially owned by more than one holder
      as
      a result of attribution of ownership among affiliated persons and entities,
      or
      pursuant to contractual or other arrangements. The inclusion of any shares
      for
      any shareholder shall not be deemed an admission that such shareholder is,
      for
      any purpose, the beneficial owner of such shares. In addition, a person is
      deemed to be the beneficial owner of a security if that person has the right
      to
      acquire beneficial ownership of such security within 60 days.
12
PLAN
      OF DISTRIBUTION
Shareholders
      selling under this prospectus may, from time to time, sell any or all of their
      shares of common stock on any stock exchange, market or trading facility on
      which the shares are traded or in private transactions. These sales may be
      at
      fixed or negotiated prices. The Selling Shareholders may use any one or more
      of
      the following methods when selling shares:
·
ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers;
·
block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;
·
purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account;
·
an
                exchange distribution in accordance with the rules of the applicable
                exchange;
·
privately
                negotiated transactions;
·
short
                sales;
·
broker-dealers
                may agree with the Selling Shareholders to sell a specified number
                of such
                shares at a stipulated price per share; - a combination of any such
                methods of sale; and
·
any
                other method permitted pursuant to applicable
                law.
The
      Selling Shareholders may also sell shares under Rule 144 under the Securities
      Act of 1933, as amended, if available, rather than under this
      prospectus.
The
      Selling Shareholders may also engage in short sales against the box, puts and
      calls and other transactions in our securities or derivatives of our securities
      and may sell or deliver shares in connection with these trades. The Selling
      Shareholders may pledge their shares to their brokers under the margin
      provisions of customer agreements. If a Selling Shareholder defaults on a margin
      loan, the broker may, from time to time, offer and sell the pledged
      shares.
Broker-dealers
      engaged by the Selling Shareholders may arrange for other brokers-dealers to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the Selling Shareholders (or, if any broker-dealer acts as agent for the
      purchaser of shares, from the purchaser) in amounts to be negotiated. The
      Selling Shareholders do not expect these commissions and discounts to exceed
      what is customary in the types of transactions involved.
The
      Selling Shareholders and any broker-dealers or agents that are involved in
      selling the shares may be deemed to be "underwriters" within the meaning of
      the
      Securities Act in connection with such sales. In such event, any commissions
      received by such broker-dealers or agents and any profit on the resale of the
      shares purchased by them may be deemed to be underwriting commissions or
      discounts under the Securities Act.
Under
      the
      securities laws of certain states, the shares may be sold in such states only
      through registered or licensed brokers or dealers. In addition, in certain
      states the shares may not be sold unless they have been registered or qualified
      for sale in such state or an exemption from registration or qualification is
      available and the sale is in compliance with the exemption.
If
      and to
      the extent required, the specific Share is to be sold, the respective purchase
      prices and public offering prices, the names of any agent, broker, dealer or
      underwriter, any applicable commissions or discounts, and other facts material
      to the transaction will be set forth in an accompanying prospectus supplement
      or, if appropriate, a post effective amendment to the registration statement
      that includes this prospectus.
There
      can
      be no assurance that the Selling Shareholders will sell any or all of the shares
      offered hereunder. In addition, there may be certain contractual or other
      restrictions on the ability of Selling Shareholder to sell any or all of his
      or
      her shares.
13
LEGAL
      MATTERS
The
      legality of the Company's securities being registered will be passed upon by
      Hodgson Russ LLP.
EXPERTS
The
      consolidated balance sheets of Sunset Brands, Inc and subsidiaries as of
      December 31, 2005 and 2004 and the related consolidated statements of
      operations, stockholders' equity (deficit) and cash flows for the years then
      ended, incorporated by reference in this registration statement have been
      included herein in reliance on the report of Hansen, Barnett & Maxwell,
      independent registered public accounting firm, given upon the authority of
      that
      firm as experts in accounting and auditing.
The
      balance sheets of U.S. Mills, Inc. as of December 31, 2004 and 2003 and the
      related statements of operations, stockholders' equity and cash flows for the
      years then ended, incorporated by reference in this registration statement
      have
      been included herein in reliance on the report of Kirkland, Albrecht &
Fredrickson, independent public accounting firm, given on the authority of
      that
      firm as experts in accounting and auditing.
INDEMNIFICATION
      OF DIRECTORS AND OFFICERS
The
      Company's Articles of Incorporation, as amended (the "Articles"), eliminates a
      director's or officer's personal liability to the Company or its stockholders
      for damages for breach of fiduciary duty as a director or officer except for
      liability for acts or omissions which involve intentional misconduct, fraud
      or a
      knowing violation of the law, or the unlawful payment of dividends. The Articles
      also provide that the Company's directors shall be indemnified to the fullest
      extent permitted by Nevada law.
The
      Company's Bylaws provide that the Company shall indemnify the currently acting
      and former directors, officers, employees and agents of the Company against
      expenses, judgments, penalties, fines and amounts paid in settlement actually
      and reasonably incurred by them in connection with any action, suit or
      proceeding if such person acted in good faith and in a manner which he
      reasonably believed to be in or not opposed to the Company's best interests, and
      in the case of any criminal proceeding, that he had no reasonable cause to
      believe his conduct was unlawful. The Company is also obligated to advance
      expenses of officers and directors incurred in defending any such action, suit
      or proceeding before any resolution of the action, suit or
      proceeding.
Insofar
      as indemnification for liabilities arising under the Securities Act may be
      permitted to our directors and officers pursuant to the foregoing provisions,
      or
      otherwise, we have been advised that in the opinion of the Securities and
      Exchange Commission such indemnification is against public policy as expressed
      in the Securities Act and is, therefore, unenforceable.
The
      Company has purchased a policy of directors' and officers' liability insurance
      that insures our directors and officers against the cost of defense, settlement
      or payment of a judgment in some circumstances.
WHERE
      YOU CAN FIND MORE INFORMATION
We
      are
      required to file annual, quarterly and special reports, proxy statements, any
      amendments to those reports and other information with the Commission. You
      may
      read and copy any documents filed by us with the Commission at the Commission's
      public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
      call the Commission at 1-800-SEC-0330 for further information on the public
      reference room. Reports, proxy statements and information statements, any
      amendments to those reports and other information filed electronically by us
      with the Commission are available to the public at the Commission's website
      at
      http://www.sec.gov.
14
The
      following documents and information heretofore filed by the Company with the
      Securities and Exchange Commission are hereby incorporated by
      reference:
(a)
The
      Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
      2005; and
(b)
The
      description of the Company's Common Stock to be offered hereby which is
      contained in its Registration Statement on Form 8-A filed February 11, 2005
      pursuant to Section 12 of the Exchange Act; and
All
      documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d)
      of the Exchange Act after the date of this prospectus and prior to the filing
      of
      a post-effective amendment which indicates that all securities offered have
      been
      sold or which deregisters all securities then remaining unsold, shall be deemed
      to be incorporated by reference in this prospectus and to be part hereof from
      the date of filing such documents.
You
      may
      request a copy of these documents, at no cost to you, by writing or calling
      us
      at the following address:
Sunset
      Brands, Inc.
10990
      Wilshire Boulevard, Suite 1220
Los
      Angeles, California 90024
Attention:
      Investor Relations
(310)
      478-4600
Any
      statement made in this prospectus concerning the contents of any contract,
      agreement or other document is only a summary of the actual document. You may
      obtain a copy of any document summarized in this prospectus at no cost by
      writing to or calling us at the address and telephone number given above. Each
      statement regarding a contract, agreement or other document is qualified in
      its
      entirety by reference to the actual document. More information can be found
      on
      the web sites
www.sunsetbrands.com
and
www.usmillsinc.com
.
15
PART
      II
INFORMATION
      REQUIRED IN THE REGISTRATION STATEMENT
Item
                3.
Incorporation
                of Documents by Reference.
The
      following documents filed by Sunset Brands, Inc., a Nevada corporation (the
      "Company"), with the Securities and Exchange Commission (the "Commission") are
      incorporated by reference into this Registration Statement:
(a)
The
      Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
      2005 filed with the Commission on April 26, 2006.
(b)
The
        Company's Form 8-K/A for U.S. Mills, Inc. acquisition filed with the Commission
        on June 23, 2006.
(c)
The
        Company's Form 10-QSB/A for the quarter ended March 31, 2006 filed with the
        Commission on June 20, 2006.
(d)
The
      description of the Company's Common Stock contained in the Company's
      Registration Statement on Form 8-A filed with the Commission on February 11,
      2005 pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
      amended (the "Exchange Act"), together with all amendments or reports filed for
      the purpose of updating such description.
(e)
All
      documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d)
      of the Exchange Act after the date of this Registration Statement and prior
      to
      the filing of a post-effective amendment to this Registration Statement which
      indicates that all securities offered hereunder have been sold, or which
      deregisters all securities then remaining unsold under this Registration
      Statement, shall be deemed to be incorporated by reference in this Registration
      Statement and to be a part hereof from the date of filing of such
      documents.
Item
                5.
Interest
                of Named Experts and
                Counsel.
None.
Item
                6.
Indemnification
                of Directors and Officers.
The
      Company's Articles of Incorporation, as amended (the "Articles"), eliminates a
      director's or officer's personal liability to the Company or its stockholders
      for damages for breach of fiduciary duty as a director or officer except for
      liability for acts or omissions which involve intentional misconduct, fraud
      or a
      knowing violation of the law, or the unlawful payment of dividends. The Articles
      also provide that the Company's directors shall be indemnified to the fullest
      extent permitted by Nevada law.
The
      Company's Bylaws provide that the Company shall indemnify the currently acting
      and former directors, officers, employees and agents of the Company against
      expenses, judgments, penalties, fines and amounts paid in settlement actually
      and reasonably incurred by them in connection with any action, suit or
      proceeding if such person acted in good faith and in a manner which he
      reasonably believed to be in or not opposed to the Company's best interests, and
      in the case of any criminal proceeding, that he had no reasonable cause to
      believe his conduct was unlawful. The Company is also obligated to advance
      expenses of officers and directors incurred in defending any such action, suit
      or proceeding before any resolution of the action, suit or
      proceeding.
Insofar
      as indemnification for liabilities arising under the Securities Act may be
      permitted to our directors and officers pursuant to the foregoing provisions,
      or
      otherwise, we have been advised that in the opinion of the Securities and
      Exchange Commission such indemnification is against public policy as expressed
      in the Securities Act and is, therefore, unenforceable.
The
      Company has purchased a policy of directors' and officers' liability insurance
      that insures our directors and officers against the cost of defense, settlement
      or payment of a judgment in some circumstances.
16
Item
                8.
Exhibits.
The
      following exhibits are filed as part of the Registration Statement:
Exhibit
                No.
Description
4.1
Certificate
                of Amendment and Restatement of Articles of Incorporation (Filed
                as
                Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the
                Commission on October 4, 2004, and incorporated herein by
                reference).
4.2
Certificate
                of Amendment to Articles of Incorporation changing the Company's name to
                Sunset Brands, Inc (Filed as Exhibit 4.2 to the Company's Current Report
                on Form 8-K filed with the Commission on October 4, 2004, and incorporated
                herein by reference).
4.3
Certificate
                of Amendment to Articles of Incorporation effecting a one for two
                reverse
                stock split (Filed as Exhibit 3.1 to the Company's Current Report on Form
                8-K filed with the Commission on January 28, 2005, and incorporated
                herein
                by reference).
4.4
Bylaws
                (Filed as Exhibit 3.2 to Amendment No. 1 to the Company's Registration
                Statement on Form SB-2/A filed with the Commission on April 9, 2001,
                and
                incorporated herein by reference).
4.5
2005
                Stock Incentive Plan. (Filed herewith).
5.1
Opinion
                (and consent) of Hodgson Russ LLP (Filed herewith).
23.1
Consent
                of Hodgson Russ LLP (included in its opinion filed as Exhibit
                5.1).
23.2
Consent
                of Hansen, Barnett & Maxwell (Filed herewith).
23.3
Consent
                of Kirkland, Albrecht & Fredrickson
24
Power
                of Attorney (included on the signature page of this registration
                statement)
Item
                9.
Undertakings.
(a)
The
                undersigned Registrant hereby
                undertakes:
(1)
To
      file,
      during any period in which offers or sales are being made, a post-effective
      amendment to this registration statement:
(i)
To
      include any prospectus required by Section 10(a)(3) of the Securities Act of
      1933;
17
(ii)
To
      reflect in the prospectus any facts or events arising after the effective date
      of the registration statement (or the most recent post-effective amendment
      thereof) which, individually or in the aggregate, represent a fundamental change
      in the information set forth in the registration statement; and
(iii)
To
      include any material information with respect to the plan of distribution not
      previously disclosed in the registration statement or any material change to
      that information in the registration statement.
Provided,
      however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
      information required to be included in a post-effective amendment by those
      paragraphs is contained in periodic reports filed with the Commission by the
      Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
      Act of 1934 that are incorporated by reference in the registration
      statement.
(2)
That,
      for
      the purpose of determining any liability under the Securities Act of 1933,
      each
      such post-effective amendment shall be deemed to be a new registration statement
      relating to the securities offered therein, and the offering of such securities
      at that time shall be deemed to be the initial bona fide offering
      thereof.
(3)
To
      remove
      from registration by means of a post-effective amendment any of the securities
      being registered which remain unsold at the termination of the
      offering.
(b)
The
      undersigned Registrant hereby undertakes that, for purposes of determining
      any
      liability under the Securities Act of 1933, each filing of the Registrant's
      annual report pursuant to Section 13(a) or Section 15(d) of the Securities
      Exchange Act of 1934 that is incorporated by reference in the registration
      statement shall be deemed to be a new registration statement relating to the
      securities offered therein, and the offering of such securities at that time
      shall be deemed to be the initial bona fide offering thereof.
(c)
Insofar
      as indemnification for liabilities arising under the Securities Act of 1933
      may
      be permitted to directors, officers and controlling persons of the Registrant
      pursuant to the foregoing provisions, or otherwise, the Registrant has been
      advised that in the opinion of the Securities and Exchange Commission such
      indemnification is against public policy as expressed in the Act and is,
      therefore, unenforceable. In the event that a claim for indemnification against
      such liabilities (other than the payment by the Registrant of expenses incurred
      or paid by a director, officer or controlling person of the Registrant in the
      successful defense of any action, suit or proceeding) is asserted by such
      director, officer or controlling person in connection with the securities being
      registered, the Registrant will, unless in the opinion of its counsel the matter
      has been settled by controlling precedent, submit to a court of appropriate
      jurisdiction the question whether such indemnification by it is against public
      policy as expressed in the Act and will be governed by the final adjudication
      of
      such issue.
18
SIGNATURES
Pursuant
      to the requirements of the Securities Act of 1933, the Registrant certifies
      that
      it has reasonable grounds to believe that it meets all of the requirements
      for
      filing on Form S-8 and has duly caused this registration statement to be signed
      on its behalf by the undersigned, thereunto duly authorized, in the City of
      Los
      Angeles, State of California, on June 22, 2006.
SUNSET
                BRANDS, INC.
By:
/s/ Todd
                Sanders
Todd
                Sanders, President
and
                Chief Executive Officer
POWER
      OF ATTORNEY
Each
      person whose signature appears below constitutes and appoints Todd Sanders,
      President and Chief Executive Officer of the Registrant, his true and lawful
      attorney-in-fact and agent, with full power of substitution and resubstitution,
      for him and in his name, place and stead, in any and all capacities, to sign
      any
      and all amendments (including post-effective amendments) to this registration
      statement and to file the same, with all exhibits thereto, and other documents
      in connection therewith, with the Securities and Exchange Commission and any
      other regulatory authority, granting unto said attorney-in-fact and agent full
      power and authority to do and perform each and every act and thing requisite
      and
      necessary to be done, as fully to all intents and purposes as he might or could
      do in person, hereby ratifying and confirming all that said attorney-in-fact
      and
      agent, or his substitute may lawfully do or cause to be done by virtue
      hereof.
Pursuant
      to the requirements of the Securities Act of 1933, this registration statement
      has been signed by the following persons in the capacities and on the dates
      indicated.
Name
Title
Date
/s/
Todd
                Sanders
President,
                Chief Executive Officer
June
                22, 2006
Todd
                Sanders
(principal
                executive officer),
and
                Director
/s/
Stephen
                K. Radusch
Chief
                Financial Officer (principal
June
                22, 2006
Stephen
                K. Radusch
financial
                and accounting officer)
/s/
Linda
                Langdon
Director
June
                22, 2006
Linda
                Langdon
/s/
Robert
                Moore
Director
June
                22, 2006
Robert
                Moore
19
EXHIBIT
      INDEX
EXHIBIT
NUMBER
DESCRIPTION
4.1
Certificate
                of Amendment and Restatement of Articles of Incorporation (Filed
                as
                Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the
                Commission on October 4, 2004, and incorporated herein by
                reference).
4.2
Certificate
                of Amendment to Articles of Incorporation changing the Company's name to
                Sunset Brands, Inc (Filed as Exhibit 4.2 to the Company's Current Report
                on Form 8-K filed with the Commission on October 4, 2004, and incorporated
                herein by reference).
4.3
Certificate
                of Amendment to Articles of Incorporation effecting a one for two
                reverse
                stock split (Filed as Exhibit 3.1 to the Company's Current Report on Form
                8-K filed with the Commission on January 28, 2005, and incorporated
                herein
                by reference).
4.4
Bylaws
                (Filed as Exhibit 3.2 to Amendment No. 1 to the Company's Registration
                Statement on Form SB-2/A filed with the Commission on April 9, 2001,
                and
                incorporated herein by reference).
4.5
2005
                Stock Incentive Plan (Filed herewith).
5.1
Opinion
                (and consent) of Hodgson Russ LLP (Filed herewith).
23.1
Consent
                of Hodgson Russ LLP (included in its opinion filed as Exhibit
                5.1).
23.2
Consent
                of Hansen, Barnett & Maxwell (Filed herewith).
23.3
Consent
                of Kirkland, Albrecht & Fredrickson
24
Power
                of Attorney (included on the signature page of this registration
                statement)