SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                 FORM 10-KSB

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

        [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934

                For the fiscal year ended: December 31, 2002

                      Commission file number 333-72230

                                ROYAL PHOENIX
           (Exact name of registrant as specified in its charter)

Nevada                                                      88-0475757
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                     Identification No.)

4180 S. Sandhill Rd., Suite B-9
Las Vegas, Nevada, USA                                           89121
(Address of principal executive offices)                    (zip code)

                Issuer's Telephone Number:    (702) 866-5835

       Securities registered under Section 12(b) of the Exchange Act:
                                    None

       Securities registered under Section 12(g) of the Exchange Act:
                        Common Stock, $.001 par value
                              (Title if Class)

     Indicate by check mark whether the registrant (a) has filed all  reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding 12 months (or for such shorter period  that  the
registrant  was required to file such reports), and (b) has been  subject  to
such filing requirements for the past 90 days.  Yes     X      No

     Indicate  by  check mark if disclosure of delinquent filers pursuant  to
Item  405  of  Regulation  S-B  is not contained  herein,  and  will  not  be
contained,  to  the  best of registrant's knowledge, in definitive  proxy  or
information  statements incorporated by reference in Part III  of  this  Form
10-K or any amendment to this Form 10-K.  [     ]

<PAGE>

     The  number of shares of Common Stock, $0.001 par value, outstanding  on
December 31, 2002, was 710,000 shares, held by 3 stockholders.

     The issuer's revenues for its most recent fiscal year ended December 31,
2002 were
$ -0-.

     The  aggregate  market value of the voting and non-voting common  equity
held by non-affiliates computed by reference to the price at which the common
equity  was last sold on the last business day of our most recently completed
second  fiscal quarter was $0 based on a share value of $.03 as of  June  28,
2002.

     Transitional Small Business Disclosure Format (check one):  Yes__ No X

<PAGE>

                                ROYAL PHOENIX
                        (A DEVELOPMENT STAGE COMPANY)
                          FOR THE FISCAL YEAR ENDED
                              December 31, 2002

                               Index to Report
                               on Form 10-KSB


PART I                                                       Page

Item      1.Business                                          4-9
Item      2.Description of Property                            10
Item      3.Legal Proceedings                                  10
Item      4.Submission of Matters to a Vote of
            Security Holders                                   10

PART II

Item      5.Market for Registrant's Common Equity and
            Related Stockholder Matters                     10-11
Item      6.Plan of Operation                               11-14
Item      7 Financial Statements and Supplementary Data        14
Item      8 Changes in and Disagreements With Accountants
            on Accounting and Financial Disclosure             14

PART III

Item      9 Directors and Executive Officers of
            the Registrant                                  14-15
Item      10 Executive Compensation                         15-16
Item      11 Security Ownership of Certain Beneficial
             Owners and Management                             16
Item      12 Certain Relationships and Related Transactions    16
Item      13 Controls and Procedures                        16-17
Item      14 Exhibits, Financial Statement Schedules
             and Reports on Form 8-K                           18

<PAGE>

     This  form 10-KSB contains forward-looking statements within the meaning
of   the  federal  securities  laws.  These  forward-looking  statements  are
necessarily based on certain assumptions and are subject to significant risks
and uncertainties. These forward-looking statements are based on management's
expectations  as of the date hereof, and the Company does not  undertake  any
responsibility to update any of these statements in the future. Actual future
performance  and results could differ from that contained in or suggested  by
these  forward-looking statements as a result of factors set  forth  in  this
Form  10-KSB (including those sections hereof incorporated by reference  from
other filings with the Securities and Exchange Commission), in particular  as
set forth in the "Plan of Operation" under Item 6.

     In this filing references to "Company," "we," "our," and/or "us," refers
to Royal Phoenix.

PART I

ITEM 1.   DESCRIPTION OF BUSINESS

(a) General Business Development

     Royal  Phoenix,  a  Nevada corporation, is a development  stage  company
incorporated  in  Nevada in October of 2000.  Royal Phoenix was  initially  a
wholly-owned  subsidiary  of  Desert Health Products,  Inc.  ("Desert  Health
Products");  however  it was decided by Desert Health  Products  to  separate
Royal Phoenix from Desert Health Products. Under the terms and conditions  of
the  Separation and Distribution Agreement entered into between Royal Phoenix
and  Desert  Health Products on October 18, 2000, as amended June  22,  2001,
Royal  Phoenix agreed to issue 10,000 shares of common stock of Royal Phoenix
to Desert Health Products.

     Royal Phoenix is a provider of herbal products via internet sales. Under
the  terms  and  conditions  of  a  "License,  Manufacture  and  Distribution
Agreement,"  executed  between Desert Health Products and  Royal  Phoenix  on
October  18,  2000,  Desert  Health Products will  continue  to  manufacture,
package,  ship, and handle credit card processing of Royal Phoenix  products.
This relationship will allow Royal Phoenix to concentrate on the marketing of
herbal  products.   In  addition Royal Phoenix may pursue  and  market  other
vitamin products which will be private labeled specifically for Royal Phoenix
by companies other than Desert Health Products.

     Royal  Phoenix has an authorized capitalization of 20,000,000 shares  of
common  stock, $0.001 par value per share, and as of December 31, 2002  there
were  710,000  shares  outstanding.  Royal Phoenix  also  has  an  authorized
capitalization  of  5,000,000 shares of preferred stock at  a  par  value  of
$0.001  per  share,  and  as  of  December 31,  2002  there  were  no  shares
outstanding.

     The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles that contemplate the
continuance  of the Company as a going concern.  The Company's cash  position
may be inadequate to pay all of the costs associated with testing, production
and marketing of products.  Management intends to use borrowings and security
sales to mitigate the effects of its cash position, however no assurance  can
be  given  that  debt  or  equity financing, if and  when  required  will  be
available.  The financial statements do not include any adjustments  relating
to   the   recoverability   and  classification  of   recorded   assets   and

<PAGE>

classification of liabilities that might be necessary should the  Company  be
unable to continue existence.

(b) Our Business

      Royal Phoenix is in the development stage to engage in the business  of
marketing, selling and distributing a line of herbal products under the  name
Royal Phoenix.  The Royal Phoenix herbal product line was developed by Desert
Health  Products  several  years  ago,  however,  the  product  line,   after
development, was not marketed.

Acquisition of the License, Manufacture and Distribution Agreement

     On October 18, 2000, we acquired a License, Manufacture and Distribution
Agreement   from  Desert  Health  Products.  The  License,  Manufacture   and
Distribution  Agreement grants us an exclusive right to use  the  name  Royal
Phoenix  for herbal products developed by Desert Health Products and  further
provides  the manufacture, packaging, shipping, and handling of  credit  card
processing.   The  consideration  for Desert Health  Products  providing  the
license  was  Desert Health Products ability to sell more product  through  a
different  distribution  channel in addition to retaining  10,000  shares  of
Royal Phoenix common stock.

The License

     We  have an exclusive non transferable license to make, have made,  use,
market,  import, have imported, lease, sell, distribute, offer for  sale,  or
otherwise  dispose  of a line of vitamins privately labeled  under  the  name
Royal  Phoenix.  Additionally,  the agreement  with  Desert  Health  Products
provides   that  Desert  Health  Products  shall  be  responsible   for   the
manufacture,  shipment, distribution, labeling, and collection  of  payments.
The  license shall continue until December 31, 2010 and does not contain  any
renewable option periods. The agreement with Desert Health Products does  not
provide for any minimal shipment amounts. The price we will pay Desert Health
Products  for  products  and shipping will include the  cost  of  production,
including  a  reasonable allowance for overhead, plus 30% of  such  cost  and
overhead.  Nothing  in the agreement prevents Royal Phoenix  from  purchasing
product  from  any other vendor or development, marketing or producing  other
vitamin and herbal products.  Further, the agreement does not prevent  Desert
Health  Products from using the line of herbal products, except Desert Health
Products may not market the products under the name "Royal Phoenix."

Our Product

      The following products are currently produced by Desert Health Products
under  their  own  label. Desert Health Products, under the  license  between
Desert  Health  Products  and  Royal Phoenix, will  package  and  ship  these
products under the brand name Royal Phoenix.

     Vitamins

       * Antioxidant
       * Multi Vitamin Tablets

<PAGE>

     Minerals

       * Multi Mineral Tablets
       * Chromium Picolinate
       * Selenium PlusT
       * Super Minerals w/Aloe VeraT

     Speciality Supplements

       * AlcotrolT
       * AsthmaCalmT
       * Brain BoostT
       * Desert BoostT
       * Enhanced Performance IIT
       * EnercoffeeT
       * Euro FiberT
       * Ginkgo Biloba
       * Glucosamine Complex
       * Liver p.s. TabletsT
       * Lyco/MenT
       * Migrasafe-NT
       * OsteoDense PlusT
       * Pain & Joint Support Cream
       * Shark Cartilage
       * Time-Released Melatonin

Cost and Availability of Raw Materials

     Many  of  the ingredients contained in our products are not commodities,
so  price  risk  cannot  be  hedged with traditional  futures  contracts.  In
addition,  some  of  these plants are picked in the wild,  rather  than  farm
cultivated, resulting in a highly unstable supply. This uncertain supply,  in
combination  with  the possibility of continued increases  in  demand,  could
result in significant increases in the price of the raw materials used in our
products. In addition, if due to supply shortages Royal Phoenix is unable  to
meet  the demand of its customers, even if for a short time, the result could
be a long-term decrease in sales of our Products. Our ability to increase the
price  of our licensed products to adjust for increases in raw material costs
is  limited  and  there  can  be no assurance  that  an  adequate  supply  of
ingredients will be available to us and on terms commercially viable to us in
order  for  us to meet supply obligations to our customers. There can  be  no
assurance  that  raw  materials  will  continue  to  be  available  on  terms
commercially reasonable to us.

<PAGE>

Risk Management Insurance

     We  do  not  maintain  a  liability insurance program  as  we  have  not
commenced the distribution of products to the general public or others except
by  way of sample products. Our proposed insurance program, once implemented,
will include property, casualty, comprehensive general liability and products
liability  coverage. Management believes that the proposed insurance  program
is  adequate. The testing, marketing and sale of health care products  entail
an inherent risk of product liability. There can be no assurance that product
liability  claims,  relating  to dietary supplement  products,  will  not  be
asserted  against  us,  Desert  Health Products,  its  collaborators  or  its
licensees.  There can be no assurance that we will be able to  maintain  such
product  liability  insurance in assignments from  various  manufacturers  or
obtain additional insurance, during clinical trials or upon commercialization
of  any product, on acceptable terms, if at all, or that such insurance  will
provide adequate coverage against any potential dietary supplement claims.  A
product  liability  claim or product recall, relating to  dietary  supplement
products, could and most likely would have a material adverse effect  on  our
business, financial condition or results of operations.

Industry Overview

     The  worldwide  market for natural dietary supplements  is  substantial.
According  to the Dietary Supplement Information Bureau, "Surveys  find  that
the  majority  of  Americans  rely on dietary supplements  to  maintain  good
health.  As  a result, the dietary supplement industry generates billions  of
dollars in sales annually, making it one of the most dynamic sectors  of  the
U.S. economy."

Source and Availability of Raw Materials

      The  principal  raw  materials used by Desert Health  Products  in  the
manufacturing  process  of  the products distributed  by  Royal  Phoenix  are
natural  ingredients  purchased from distributors  primarily  in  the  United
States, with certain materials imported from other countries. We believe that
at  this  time  the  materials purchased by Desert Health Products  from  its
suppliers  are readily available from numerous sources and that the  loss  of
these suppliers would not adversely affect our operations.

Quality Control

       Finished   production  capsules  are  purchased   from   manufacturing
operations,  which  include modern quality control laboratories  and  testing
facilities. When products are ready for bottling, automated equipment  counts
the  tablets  or capsules, inserts them into bottles, applies  a  cap,  which
includes  a tamper-resistant inner seal, affixes a label and adds  a  tamper-
resistant  outer  safety  seal.  All  of  this  is  done  according  to  Good
Manufacturing Practice regulations (GMP) for dietary supplements.

Competition

     The  market  for  vitamins and other nutritional supplements  is  highly
competitive in all of our channels of potential distribution. The marketplace

<PAGE>

for  private label business is extremely price sensitive with service levels,
quality,  innovative  packaging,  marketing  and  promotional  programs   and
uniqueness of products being the key factors influencing competitiveness.

      We  believe  that  there  are  also numerous  companies  competing  for
nutritional  product lines on the internet. As most companies  are  privately
held,  we  are unable to precisely assess the size of competitors.  Since  we
have  recently  established  operations, most competitors  are  substantially
larger than us and have greater financial resources.

Government Regulation

     The  processing, formulation, packaging, labeling and advertising of our
products are subject to regulation by one or more federal agencies, including
the   FDA,  the  Federal  Trade  Commission,  the  Consumer  Product   Safety
Commission, the United States Department of Agriculture and the United States
Environmental  Protection  Agency. These activities  are  also  regulated  by
various  agencies  of  the states, localities, and  countries  in  which  our
products  are sold. In addition, Desert Health Products manufactures  certain
of  our  products in compliance with the guidelines promulgated by the United
States  Pharmacopoeia Convention, Inc. ("USP") and other  voluntary  standard
organizations.

     The  Dietary Supplemental Health and Education Act ("DSHEA")  recognizes
the  importance  of  good  nutrition and the  availability  of  safe  dietary
supplements  in preventive health care. DSHEA amends the Federal  Food,  Drug
and  Cosmetic  Act  by defining dietary supplements, which include  vitamins,
minerals,  nutritional  supplements and herbs, as a  new  category  of  food,
separate from conventional food. Under DSHEA, the FDA is generally prohibited
from  regulating  such  dietary supplements as food additives  or  drugs.  It
requires  the FDA to regulate dietary supplements so as to guarantee consumer
access  to  beneficial  dietary  supplements, allowing  truthful  and  proven
claims. Generally, dietary ingredients that were on the market before October
15,  1994 may be sold without FDA pre-approval and without notifying the FDA.
However,  new  dietary  ingredients (those not used  in  dietary  supplements
marketed before October 15, 1994) require premarket submission to the FDA  of
evidence of a history of their safe use, or other evidence establishing  that
they  are reasonably expected to be safe. There can be no assurance that  the
FDA will accept the evidence of safety for any new dietary ingredient that we
may decide to use, and the FDA's refusal to accept such evidence could result
in  regulation  of such dietary ingredients as food additives, requiring  the
FDA pre-approval based on newly conducted, costly safety testing. Also, while
DSHEA authorizes the use of statements of nutritional support in the labeling
of  dietary  supplements,  the  FDA  is  required  to  be  notified  of  such
statements,  and  there can be no assurance that the FDA  will  not  consider
particular labeling statements used by Royal Phoenix to be drug claims rather
than acceptable statements of nutritional support, necessitating approval  of
a costly new drug application, or relabeling to delete such statements.

     DSHEA  also authorizes the FDA to promulgate good manufacturing practice
regulations  ("GMP")  for dietary supplements, which  would  require  special
quality controls for the manufacture, packaging, storage and distribution  of
supplements. We believe that the Desert Health Products facilities and  those
of  independent third party manufacturers have completed significant facility

<PAGE>

renovations that should allow the Company to comply with the new regulations.
DSHEA  further  authorizes  the FDA to promulgate regulations  governing  the
labeling of dietary supplements, including claims for supplements pursuant to
recommendations  made  by the Presidential Commission on  Dietary  Supplement
Labels.  Such rules, which were issued on September 23, 1997, entail specific
requirements  relative to the labeling of the Company's dietary  supplements.
The  rules  also  require additional record keeping and claim substantiation,
reformulation,  or  discontinuance of certain products, which  could  have  a
material expense to us.

     In  addition,  we cannot predict whether new legislation or  regulations
governing Royal Phoenix's activities will be enacted by legislative bodies or
promulgated by agencies regulating our activities, or what the effect of  any
such legislation or regulations on our business would be.

Research and Development

     Royal  Phoenix,  being a start up operation, does  not  conduct  primary
research  for  the  development of new ingredients.  Instead,  Royal  Phoenix
research  efforts are focused on relying on new products developed by  Desert
Health Products, and will in the future develop new products and packaging in
response  to  market  trends and consumer demands. We intend  to  continually
reformulate  existing  Royal  Phoenix products  in  response  to  changes  in
nationally   advertised  brand  formulas  in  order   to   maintain   product
comparability.

     We  believe that flexibility and innovation with respect to new products
will  be  crucial  factors in competing for market  share  in  the  field  of
nutritional  supplements. By monitoring market trends and by avoiding  short-
lived  "fad"  items,  we  believe we will be able to  anticipate  significant
consumer  demand for certain types of products. Our plan is  to  monitor  the
industry  by  analyzing  reports  such as the  Dietary  Supplement  Barometer
Survey, which tracks American attitudes and beliefs about vitamins, minerals,
herbs  and specialty supplements. Information gathered in the survey  quizzed
the  knowledge level of respondents about supplementation, finding that while
Americans regularly incorporate supplements into their health care regiments,
many  could use more information about the benefits and responsible usage  of
these  products. By utilizing information provided in surveys similar to  the
Dietary  Supplement Barometer Survey, in addition to surveys which we conduct
independently  in  the future, we will be in a position to  understand  which
products have a tendency to be short lived "fads."

Employees

     We  are a development stage company and currently have no employees.  We
are  currently managed by Joseph Scott Wilson, our sole officer and director.
We  look to Mr. Wilson for his entrepreneurial skills and talents. We plan to
use  consultants, attorneys and accountants as necessary and do not  plan  to
engage  any  full-time employees in the near future. We  may  hire  marketing
employees  based  on  the projected size of the market and  the  compensation
necessary  to  retain qualified sales employees.  A portion of  any  employee
compensation likely would include the right to acquire our stock which  would
dilute  the  ownership interest of holders of existing shares of  our  common
stock.

<PAGE>


ITEM 2.   DESCRIPTION OF PROPERTY

     We currently maintain a mailing address at 4180 S. Sandhill Rd., Suite B-
9,  Las  Vegas,  NV  89121.  Our yearly rent of $180  is  pre-paid  annually.
Additionally,  Mr.  Wilson, our sole officer and director, occasionally  will
utilize  his  home to conduct business on our behalf.  Mr.  Wilson  does  not
receive any remuneration for the use of his residence or time spent on behalf
of us.  We do not believe that we will need to obtain additional office space
at  any  time in the foreseeable future, approximately 12 months,  until  our
business plan is more fully implemented.

      As  a  result of our method of operations and business plan we  do  not
require  personnel other than Mr. Wilson, to conduct our  business.   In  the
future  we  anticipate  requiring  additional  office  space  and  additional
personnel;  however it is unknown at this time how much  space  or  how  many
individuals will be required.

ITEM 3.   LEGAL PROCEEDINGS

     We  are  not  presently a party to any material litigation, nor  to  the
knowledge  of  management is any litigation threatened against us  which  may
materially affect us.

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

      No  matters  were submitted to a vote of security holders, through  the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year ended December 31, 2002.

PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) Market Information

     There  is  currently no public market for our securities.  We intend  to
file  for  inclusion  of  our  common stock on the  National  Association  of
Securities Dealers, Inc. Over-the-Counter Bulletin Board; however, there  can
be no assurance that NASD will approve the inclusion of the common stock.

(b) Holders of Common Stock

     As  of December 31, 2002, we had 3 shareholders of record of the 710,000
shares outstanding.

(c) Dividends

     We have never declared or paid dividends on our Common Stock.  We intend
to  follow  a policy of retaining earnings, if any, to finance the growth  of
the  business  and  do  not  anticipate paying  any  cash  dividends  in  the

<PAGE>

foreseeable future.  The declaration and payment of future dividends  on  the
Common  Stock will be the sole discretion of the Board of Directors and  will
depend  on  our  profitability and financial condition, capital requirements,
statutory  and  contractual restrictions, future prospects and other  factors
deemed relevant.

Recent Sales of Unregistered Securities

     On  October 17, 2000, we issued 250,000 shares of our $0.001  par  value
common  stock at $0.03 per share to our sole officer and director in exchange
for  services  valued  at  $7,500.  The shares were issued  pursuant  to  the
exemption   provided  by  Section  4(2)  of  the  Act,  which  exempts   from
registration "transactions by an issuer not involving any public offering."

     On  October 19, 2000, we issued 250,000 shares of our $0.001  par  value
common  stock at $0.03 per share for total cash of $7,500.  The  shares  were
issued  pursuant to the exemption provided by Section 4(2) of the Act,  which
exempts from registration "transactions by an issuer not involving any public
offering."

     On  December 6, 2000, we issued 200,000 shares of our $0.001  par  value
common  stock at $0.03 per share to our sole officer and director in exchange
for  total  cash of $6,000.  The shares were issued pursuant to the exemption
provided  by  Section  4(2)  of  the  Act, which  exempts  from  registration
"transactions by an issuer not involving any public offering."

Use of Proceeds From Registered Securities

     Our Registration Statement on Form SB-2 (File No. 333-72230) related  to
our initial public offering was declared effective by the SEC on December 30,
2002.  As of the date of this filing we have not raised any money under  this
public offering.

ITEM 6.   PLAN OF OPERATION

     This  report  contains forward-looking statements.  Actual  results  and
events  could  differ  materially  from  those  projected,  anticipated,   or
implicit,  in the forward-looking statements as a result of the risk  factors
set forth below and elsewhere in this report.

     With  the exception of historical matters, the matters discussed  herein
are forward-looking statements that involve risks and uncertainties.  Forward-
looking  statements  include, but are not limited to,  statements  concerning
anticipated  trends in revenues and net income, the date of  introduction  or
completion  of our products, projections concerning operations and  available
cash  flow.   Our  actual results could differ materially  from  the  results
discussed  in  such forward-looking statements primarily  as  the  result  of
insufficient  cash to pursue production and marketing efforts. The  following
discussion  of  our financial condition and results of operations  should  be
read  in  conjunction  with our financial statements and  the  related  notes
thereto appearing elsewhere herein.

<PAGE>

Overview

     Royal  Phoenix, which was incorporated in Nevada in October 2000,  is  a
Development  Stage  Company,  engaged  in  the  business  of  marketing   and
distributing  Royal  Phoenix, a line of herbal products.  The  Royal  Phoenix
herbal  product  line was developed by Desert Health Products  several  years
ago, however, the product line, after development, was not marketed.

     We have a limited operating history and have not generated revenues from
the  sale  of  any products. Our company and products are the  result  of  an
agreement,  which  was entered into between Royal Phoenix and  Desert  Health
Products, which resulted in the separation from Desert Health Products of the
Royal  Phoenix  line of herbal products developed by Desert Health  Products.
Our  activities  have been limited to the negotiation of a license  agreement
and  preliminary market analysis. Consequently, we have incurred the expenses
of  start-up. Future operating results will depend on many factors, including
our  ability to raise adequate working capital, demand for our products,  the
level  of  competition and our ability to deliver products while  maintaining
quality  and  controlling costs. As a result of our lack of liabilities,  our
current  cash  position allows us to maintain a status  quo  position  for  a
period of approximately six months. However; this position will not allow  us
to pursue any significant business opportunity.

Plan of Operation

     Since our incorporation on October 17, 2000, we have not been engaged in
any  significant operations nor have we had any revenues, as we  are  in  the
development  stage.  Our only recent activities include organization  of  the
Company, the negotiation and execution of the license agreement, and research
over  the  Internet to determine methods of acquiring market  share  presence
without  significant start up expenses.  Our goal is to  distribute  our  own
product line of herbal products, primarily through Internet generated  sales,
at the most cost efficient method.

     During  the  next  12  months  we plan  to  focus  our  efforts  on  the
development   of  our  marketing  program  and  establishing   our   website,
royalphoenix.com, for secure retail purchases.

     Until  an  infusion  of  capital,  we  will  not  be  able  to  commence
operations. We currently have insufficient capital to commence operations and
are  dependent on proceeds from our registration statement to fund operations
along  with  future common stock offerings and bank borrowings to the  extent
available to begin such operations. We have suffered start-up losses and have
a  working capital deficiency which raises substantial concern regarding  our
ability to continue as a going concern.

      Satisfaction of our cash obligations for the next 12 months.  Our  plan
of  operation  is to establish an operational website as soon  as  practical.
When  having  established  our website as operational,  we  are  to  commence
advertising  in  selected periodicals, newspapers, and the  Internet  through
banner  advertising.  We are offering a maximum of 250,000 shares  of  common
stock  at  a  price of $0.10 per share, resulting in a maximum of $25,000  in
proceeds.   The  offering terminates on June 28, 2003.  The proceeds  of  our
current  registered offering are anticipated to provide our cash requirements
for the next 12 months.

     Summary of any product research and development that we will perform for
the  term  of  the  plan.   We do not anticipate performing  any  significant

<PAGE>

product  research  and development under our plan of operation.  In  lieu  of
product  research and development we anticipate maintaining control over  our
advertising,  especially on the Internet, to assist  us  in  determining  the
allocation of our limited advertising dollars.

     Expected purchase or sale of plant and significant equipment. We do  not
anticipate  the  purchase or sale of any plant or significant  equipment,  as
such items are not required by us at this time or in the next 12 months.

     Significant  changes  in number of employees.  The number  of  employees
required to operate our business is currently one part time individual. After
we   commence  generating  revenues  based  upon  the  expenditures  of   our
advertising  dollars, and word of mouth advertising, and at the  end  of  the
initial  12  month  period, our plan of operation anticipates  our  requiring
additional capital to hire at least one full time person.

Liquidity and Capital Resources

     Since  inception,  we  have financed our cash flow requirements  through
issuance  of  common stock. As we expand our activities, we may  continue  to
experience net negative cash flows from operations, pending receipt of  sales
revenues. Additionally we anticipate obtaining additional financing  to  fund
operations through common stock offerings and bank borrowings, to the  extent
available,  or  to  obtain additional financing to the  extent  necessary  to
augment our working capital.

     We  anticipate  that we will incur operating losses in the  next  twelve
months.  Our lack of operating history makes predictions of future  operating
results difficult to ascertain.  Our prospects must be considered in light of
the  risks, expenses and difficulties frequently encountered by companies  in
their  early stage of development, particularly companies in new and  rapidly
evolving  markets.  Such risks for us include, but are  not  limited  to,  an
evolving  and unpredictable business model and the management of  growth.  To
address  these  risks, we must, among other things, obtain a  customer  base,
implement  and  successfully  execute our business  and  marketing  strategy,
continually  develop  and  upgrade  our  product  packaging,  provide   order
fulfillment  through the Internet, respond to competitive  developments,  and
attract,  retain and motivate qualified personnel. There can be no  assurance
that we will be successful in addressing such risks, and the failure to do so
can  have  a  material  adverse effect on our business  prospects,  financial
condition and results of operations.

     Over  the  next  twelve  months we believe  that  existing  capital  and
anticipated  funds  from  operations  will  not  be  sufficient  to   sustain
operations and planned expansion.  Consequently, we will be required to  seek
additional  capital  in the future to fund growth and expansion  through  our
current registered offering and additional equity or debt financing or credit
facilities.  No assurance can be made that such financing would be available,
and  if  available it may take either the form of debt or equity.  In  either
case,  the  financing could have a negative impact on our financial condition
and our Stockholders.

<PAGE>

Going Concern

     The  consolidated financial statements included in this filing have been
prepared  in  conformity with generally accepted accounting  principles  that
contemplate the continuance of the Company as a going concern.  The Company's
cash  position  may  be  inadequate to pay all of the costs  associated  with
production and marketing.  Management intends to use borrowings and  security
sales to mitigate the effects of its cash position, however no assurance  can
be  given  that  debt  or  equity financing, if and  when  required  will  be
available.  The financial statements do not include any adjustments  relating
to   the   recoverability   and  classification  of   recorded   assets   and
classification of liabilities that might be necessary should the  Company  be
unable to continue existence.

ITEM 7.   FINANCIAL STATEMENTS

     See  Index  to  Financial Statements and Financial  Statement  Schedules
appearing on page F-1 through F-10 of this Form 10-KSB.

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

      We  have  not  had  any disagreements with our independent  auditor  on
accounting or financial disclosures.

PART III

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

     The  following table sets forth the names and positions of the executive
officers  and  directors of the Company.  Directors will be  elected  at  our
annual  meeting  of  stockholders and serve  for  one  year  or  until  their
successors  are elected and qualify.  Officers are elected by the  Board  and
their  terms  of  office  are, except to the extent  governed  by  employment
contract, at the discretion of the Board.

Name                Age         Positions and Offices held
Joseph Scott        35     President, Secretary, Treasurer and
Wilson                     Director

Duties, Responsibilities and Experience

     Joseph  Scott Wilson is the President, Secretary/Treasurer and  Director
of  Royal  Phoenix.   Mr. Wilson has been self-employed in  various  building
trades in Las Vegas, Nevada since 1994.  While working in the building trades
Mr.  Wilson  acquired  a usefulness and education on  herbal  products.   Mr.
Wilson's  knowledge of the herbal products created his interest in developing
a  method of marketing herbal products through the Internet and other  retail
channels.

<PAGE>

                    Limitation of Liability of Directors

      Pursuant  to  the  Nevada  General Corporation  Law,  our  Articles  of
Incorporation  exclude  personal liability for  our  Directors  for  monetary
damages  based  upon  any violation of their fiduciary duties  as  Directors,
except  as  to  liability  for any breach of the duty  of  loyalty,  acts  or
omissions  not  in good faith or which involve intentional  misconduct  or  a
knowing  violation of law, or any transaction from which a Director  receives
an improper personal benefit.  This exclusion of liability does not limit any
right  which  a Director may have to be indemnified and does not  affect  any
Director's liability under federal or applicable state securities  laws.   We
have  agreed  to  indemnify  our directors against expenses,  judgments,  and
amounts paid in settlement in connection with any claim against a Director if
he  acted  in  good  faith and in a manner he believed  to  be  in  our  best
interest.

               Board of Directors Committees and Compensation

Board Committees

      We  do  not  currently have any committees of the Board  of  Directors.
Additionally,  due  to  the nature of our intended  business,  the  Board  of
Directors  does  not  foresee a need for any committees  in  the  foreseeable
future.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section  16(a) of the Securities Exchange Act of 1934, as  amended  (the
"Exchange  Act"), requires our executive officers and directors, and  persons
who  beneficially  own  more than ten percent of our common  stock,  to  file
initial  reports  of ownership and reports of changes in ownership  with  the
SEC.  Executive  officers, directors and greater than ten percent  beneficial
owners  are  required by SEC regulations to furnish us  with  copies  of  all
Section  16(a)  forms they file. Based upon a review of the  copies  of  such
forms furnished to us and written representations from our executive officers
and  directors,  we  believe that during the year ended  2002,  Joseph  Scott
Wilson filed all forms 3, forms 4 and forms 5 on a timely basis.

ITEM 10.  EXECUTIVE COMPENSATION

     The  following  table sets forth the cash compensation of the  Company's
executive  officers  and directors during the last two fiscal  years  of  the
Company.   The remuneration described in the table does not include the  cost
to  the  Company  of  benefits  furnished to the  named  executive  officers,
including premiums for health insurance and other benefits provided  to  such
individual that are extended in connection with the conduct of the  Company's
business.

<PAGE>

Summary Compensation Table

                                                          Long Term
                        Annual Compensation              Compensation
  Name and                         Other Annual   Restricted
  Principal   Year  Salary  Bonus  Compensation      Stock    Options  Other
  Position
Joseph Scott  2000  $2,434    -0-            -0-      450,000     -0-    -0-
Wilson        2001  $3,556    -0-            -0-          -0-     -0-    -0-
President/    2002    $-0-    -0-            -0-          -0-     -0-    -0-
Secretary/
Treasurer/
Director
(1)  The  450,000 shares of Restricted Common Stock were purchased by  Joseph
Scott Wilson at $0.03 per share.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following table sets forth information as of December 31, 2002 with
respect to the beneficial ownership of common stock by (i) each person who to
the  knowledge of the Company, beneficially owned or had the right to acquire
more  than  5%  of  the outstanding common stock, (ii) each director  of  the
Company  and (iii) all executive officers and directors of the Company  as  a
group.


                                                            Percent
                                             Number       Beneficially
     Name of Beneficial Owner (1)           of Shares        Owned
Joseph Scott Wilson(2)                         450,000              63%
4180 S. Sandhill Rd., Suite B-9
Las Vegas, NV 89121
Shearson Barney Equity Fund                    250,000              35%
2332 Villandry Ct.
Henderson, NV 89014
All Directors & Officers and Beneficial                           98.5%
Owners as a Group                              700,000

(1)   As  used in this table, "beneficial ownership" means the sole or shared
power  to vote, or to direct the voting of, a security, or the sole or shared
investment power with respect to Common Stock (i.e., the power to dispose of,
or  to direct the disposition of, a security).  The address of each person is
care of the Company.
(2)  The 450,000 shares of Restricted Common Stock were purchased by Joseph
Scott Wilson at $0.03 per share.
(3)  The 250,000 shares of Restricted Common Stock were purchased by Shearson
Barney Equity Fund at $0.03 per share.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Office  services  are provided without charge by our  sole  officer  and
director.   Such  costs  are  immaterial to  our  financial  statements  and,
accordingly,  have  not  been reflected therein.  The estimated  fair  market
value for such facilities are estimated to be $600 per annum.

ITEM 13.  CONTROLS AND PROCEDURES

      We  maintain  disclosure controls and procedures that are  designed  to
ensure  that  information required to be disclosed in the Company's  Exchange

<PAGE>

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

      Within  90  days prior to the date of this report, we  carried  out  an
evaluation,  under  the  supervision  and  with  the  participation  of   our
management,  including our Chief Executive Officer and our  Chief  Accounting
Officer,  of  the effectiveness of the design and operation of the  Company's
disclosure  controls  and  procedures.  Based on  the  foregoing,  our  Chief
Executive  Officer and Chief Accounting Officer concluded that the  Company's
disclosure controls and procedures were effective.

      There  has been no significant changes in our internal controls  or  in
other   factors  that  could  significantly  affect  the  internal   controls
subsequent     to     the     date    we    completed     our     evaluation.

<PAGE>

ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Documents filed as part of this Report

     1.   Financial Statements:

          A.   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
          1.     Independent Auditors Report                       F-1
          2.     Financial Statements:
               Balance Sheet                                       F-2
               Statement of Operation                              F-3
               Statement of Changes in Stockholders'               F-4
               Statement of Cash Flows                             F-5
               Notes to Consolidated Financial Statements   F-6 - F-10

     2.     During the fiscal year December 31, 2002 the Company filed the
        following 8-Ks.
          NONE

     3.     Subsequent to the end of the fiscal year, the Company filed the
        following reports on Form 8-K
          NONE

<PAGE>

     4.   Exhibits

Exhibit                       Description
Number

3(i)*     Articles of Incorporation of Royal Phoenix
3(ii)*    Bylaws of Royal Phoenix
10(a)*    Separation and Distribution Agreement dated October 18, 2001,
          between Desert Health Products, Inc. and Royal Phoenix.
10(b)*    License, Manufacture and Distribution Agreement
10(c)*    Addendum to Separation and Distribution Agreement
23        Auditor's Consent
_____
*    Filed in Form SB-2 on October 26, 2001

<PAGE>


                                 SIGNATURES

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

                              ROYAL PHOENIX

                              By:/S/JOSEPH SCOTT WILSON
                                 Joseph Scott Wilson, President/Director

                                   Dated: March 31, 2003

     Pursuant  to  the requirements of the Securities Exchange Act  of  1934,
this  report has been signed below by the following persons on behalf of  the
registrant and in the capacities and on the dates indicated.

NAME                     OFFICE                   DATE

                         President/Treasurer      March 31, 2003
Joseph Scott Wilson      Secretary/Director

<PAGE>


                          CERTIFICATION PURSUANT TO
                18 USC, SECTION 1350, AS ADOPTED PURSUANT TO
           SECTIONS 302 AND 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of Royal Phoenix (the "Company") on
Form  10-KSB  for  the period ending December 31, 2002,  as  filed  with  the
Securities  and  Exchange Commission on the date hereof  (the  "Report"),  I,
Joseph  Scott  Wilson, President and Chief Acounting Officer of the  Company,
certify,  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Sections
302 and 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  I have reviewed the report;

(2)  To the best of my knowledge, the Report does not contain any untrue
 statement of a material fact or omit to state a material fact necessary in
 order to make the statements made, in light of the circumstances under which
 such statements were made, not misleading:

(3)  To  the  best of my knowledge, the financial statements, and  other
 financial information included in the Report, fairly present in all material
 respects the financial condition and results of operations of the Company as
 of, and for, the periods presented in the Report;

(4)  I:
(a)  am responsible for establishing internal controls;
(b)  have designed such internal controls to ensure that material information
relating to the Company and its consolidated subsidiaries is made known to me
by others within the Company, particularly during the period of January 1,
2002 through December 31, 2002;
(c)  have evaluated the effectiveness of the Company's internal controls as
of a date within 90 days prior to the Report; and
(d)  have presented in the Report my conclusions about the effectiveness of
my internal controls based on my evaluation of that date;

(5)  I have disclosed to the Company's auditors and the board of directors:
(a)  all significant deficiencies in the design or operation of internal
control which  could  adversely affect the Company's ability  to  record,
process,   summarize,  and  report  financial   data   and   have identified
for the Company's auditors any material weaknesses in internal controls; and
(b)  any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal controls;

(6)  I have indicated in the Report whether or not there were significant
changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of my evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses; and

(7)  The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

Date: March 31, 2003

/S/JOSEPH SCOTT WILSON
Joseph Scott Wilson, President/Chief Accounting Officer

<PAGE>

                                ROYAL PHOENIX

                        INDEX TO FINANCIAL STATEMENTS

INDEPENDENT AUDITORS' REPORT                                  F-1
BALANCE SHEETS                                                F-2
STATEMENTS OF OPERATIONS                                      F-3
STATEMENTS OF STOCKHOLDERS' EQUITY                            F-4
STATEMENTS OF CASH FLOWS                                      F-5
NOTES TO FINANCIAL STATEMENTS                            F-6-F-10

<PAGE>

Beckstead and Watts, LLP
Certified Public Accountants
                                                      3340 Wynn Road, Suite B
                                                          Las Vegas, NV 89102
                                                                 702.257.1984
                                                             702.362.0540 fax

INDEPENDENT AUDITORS' REPORT

                               March 27, 2003

Board of Directors
Royal Phoenix
Las Vegas, NV

We  have  audited  the  Balance Sheets of Royal Phoenix  (the  "Company")  (A
Development  Stage Company), as of December 31, 2002 and December  31,  2001,
and  the  related  Statements of Operations, Stockholders' Equity,  and  Cash
Flows  for  the  years  then  ended  and for  the  period  October  17,  2000
(inception)  to  December  31,  2002.  These  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Royal Phoenix (A Development
Stage Company) as of December 31, 2002 and December 31, 2001, and the related
Statements of Operations, Stockholders' Equity, and Cash Flows for the  years
then  ended  and for the period October 17, 2000 (inception) to December  31,
2002,  in  conformity with accounting principles generally  accepted  in  the
United States.

The accompanying financial statements have been prepared assuming the Company
will  continue  as a going concern.  As discussed in Note 4 to the  financial
statements,  the  Company has had limited operations and  has  not  commenced
planned  principal  operations.   This raises  substantial  doubt  about  its
ability to continue as a going concern.  Management's plan in regard to these
matters  are  also  described  in Note 4.  The financial  statements  do  not
include  any  adjustments  that  might  result  from  the  outcome  of   this
uncertainty.

Beckstead and Watts, LLP

<PAGE>
<TABLE>


                                Royal Phoenix
                        (a Development Stage Company)
                               Balance Sheets


                                            December 31,   December 31,
                                                2002           2001
Assets

Current assets:
<S>                                         <C>           <C>
  Cash                                       $     1,351   $       2,907


     Total current assets                          1,351           2,907

                                             $     1,351   $       2,907


Liabilities and Stockholders' Equity

Current liabilities:
     Total current liabilities
                                             $         -   $           -


Stockholders' equity:

Preferred stock, $0.001 par value,
5,000,000 shares
  authorized, no shares issued and
outstanding

Common stock, $0.001 par value,
20,000,000 shares
  authorized, 710,000 shares issued and              710             710
outstanding

Additional paid-in capital                        20,590          20,590

(Deficit) accumulated during development        (19,949)        (18,393)
stage
                                                   1,351           2,907

                                               $   1,351   $       2,907

</TABLE>


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

<PAGE>
<TABLE>

                                Royal Phoenix
                        (a Development Stage Company)
                          Statements of Operations

                                                            October 17,
                                                               2000
                               December    December 31,   (inception) to
                                  31,          2001        December 31,
                                 2002                          2002


Revenue
<S>                            <C>        <C>              <C>
                                $      -   $           -    $           -


Expenses:
  General and administrative
expenses                           1,556           2,534           13,959
  Payroll expenses                     -           3,556            5,990
     Total expenses                1,556           6,090           19,949

Net (loss)
                                $(1,556)   $     (6,090)   $     (19,949)


Weighted average number of
  common shares outstanding      710,000         710,000

Net (loss) per share
                                $ (0.00)   $      (0.00)


</TABLE>

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

<PAGE>
<TABLE>

                                Royal Phoenix
                        (a Development Stage Company)
                Statement of Changes in Stockholders' Equity
      For the Period October 17, 2000 (Inception) to December 31, 2002

                      Common Stock   Additio    (Deficit)        Total
                         Shares        nal     Accumulated   Stockholders
                         Amount      Paid-in      During           '
                                     Capital   Development      Equity
                                                  Stage
<S>                  <C>      <C>    <C>      <C>           <C>
Balance, October          -   $    - $      -  $          -  $           -
17, 2000

Shares retained by   10,000       10      290                          300
founder

Shares issued for   250,000      250    7,250                        7,500
services

Shares issued for   250,000      250    7,250                        7,500
cash

Shares issued for   200,000      200    5,800                        6,000
cash to founder

Net (loss)
 year ended                                        (12,303)       (12,303)
December 31, 2000

Balance, December   710,000      710   20,590      (12,303)          8,997
31, 2000

Net (loss)
 year ended                                         (6,090)        (6,090)
December 31, 2001

Balance, December   710,000   $  710 $ 20,590  $   (18,393)  $       2,907
31, 2001

Net (loss)
 year ended                                         (1,556)        (1,556)
December 31, 2002

Balance, December   710,000   $  710 $ 20,590  $   (19,949)  $       1,351
31, 2002

</TABLE>

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

<PAGE>
<TABLE>


                                Royal Phoenix
                        (a Development Stage Company)
                           Statements of Cash Flow

                                                         October 17, 2000
                                                          (inception) to
                               December    December 31,    December 31,
                                  31,          2001            2002
                                 2002
Cash flows from operating
activities
<S>                           <C>         <C>            <C>
Net (loss)                     $ (1,556)   $    (6,090)   $       (19,949)

  Shares issued for services           -              -              7,500
Net cash (used) by operating
activities                       (1,556)        (6,090)           (12,449)

Cash flows from investing
activities                             -              -                  -

Cash flows from financing
activities
  Common stock issued                  -              -             13,800
Net cash provided by
financing activities                   -              -             13,800

Net increase (decrease) in
cash                             (1,556)        (6,090)              1,351
Cash - beginning                   2,907          8,997                  -
Cash - ending                   $  1,351   $      2,907  $           1,351

</TABLE>



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

<PAGE>

Note 1 - Summary of significant accounting policies

Organization
The Company was organized October 17, 2000 (Date of Inception) under the laws
of  the  State of Nevada, as Royal Phoenix.  The Company began activities  to
license,  manufacture and distribute vitamin formulations.  The  Company  was
unsuccessful in conducting any business.

The  Company has not commenced significant operations and, in accordance with
SFAS #7, the Company is considered a development stage company.

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

Cash and cash equivalents
For  the  purpose  of  the  statements  of  cash  flows,  all  highly  liquid
investments  with the maturity of three months or less are considered  to  be
cash equivalents.

Revenue recognition
Sales  and  related cost of sales are generally recognized upon  shipment  of
products.  Cost of goods sold generally represents the cost of items sold and
the related shipping and selling expenses.

Advertising Costs
The  Company  expenses all costs of advertising as incurred.  There  were  no
advertising  costs  included  in general and administrative  expenses  as  of
December 31, 2002 or December 31, 2001.

Fair value of financial instruments
Fair   value  estimates  discussed  herein  are  based  upon  certain  market
assumptions and pertinent information available to management as of  December
31, 2002 and December 31, 2001.  The respective carrying value of certain on-
balance-sheet  financial instruments approximated their  fair  values.  These
financial  instruments include cash and accounts payable.  Fair  values  were
assumed to approximate carrying values for cash and payables because they are
short  term in nature and their carrying amounts approximate fair  values  or
they are payable on demand.

Impairment of long lived assets
Long  lived  assets  held and used by the Company are reviewed  for  possible
impairment whenever events or circumstances indicate the carrying  amount  of
an  asset  may  not be recoverable or is impaired.  No such impairments  have
been identified by management at December 31, 2002 or December 31, 2001.

<PAGE>

Stock-Based Compensation:
The  Company accounts for stock-based awards to employees in accordance  with
Accounting Principles Board Opinion No. 25, "Accounting for Stock  Issued  to
Employees"  and  related interpretations and has adopted the  disclosure-only
alternative  of  FAS  No.  123,  "Accounting for  Stock-Based  Compensation."
Options  granted to consultants, independent representatives and  other  non-
employees are accounted for using the fair value method as prescribed by  FAS
No. 123.

Earnings per share
The  Company  follows Statement of Financial Accounting  Standards  No.  128.
"Earnings  Per  Share"   ("SFAS No. 128").  Basic earning  per  common  share
("EPS")  calculations are determined by dividing net income by  the  weighted
average  number  of  shares  of  common stock outstanding  during  the  year.
Diluted earning per common share calculations are determined by dividing  net
income  by  the weighted average number of common shares and dilutive  common
share  equivalents outstanding. During periods when common stock equivalents,
if any, are anti- dilutive they are not considered in the computation.

Segment reporting
The  Company  follows Statement of Financial Accounting  Standards  No.  130,
"Disclosures  About Segments of an Enterprise and Related  Information".  The
Company  operates  as a single segment and will evaluate  additional  segment
disclosure requirements as it expands its operations.

Income taxes
The  Company  follows  Statement of Financial Accounting  Standard  No.  109,
"Accounting  for Income Taxes" ("SFAS No. 109") for recording  the  provision
for  income  taxes.  Deferred tax assets and liabilities are  computed  based
upon  the difference between the financial statement and income tax basis  of
assets  and  liabilities using the enacted marginal tax rate applicable  when
the  related  asset  or  liability is expected to  be  realized  or  settled.
Deferred  income  tax expenses or benefits are based on the  changes  in  the
asset  or liability each period.  If available evidence suggests that  it  is
more likely than not that some portion or all of the deferred tax assets will
not be realized, a valuation allowance is required to reduce the deferred tax
assets  to  the  amount that is more likely than not to be realized.   Future
changes  in  such  valuation  allowance are included  in  the  provision  for
deferred income taxes in the period of change.

Deferred  income  taxes may arise from temporary differences  resulting  from
income  and expense items reported for financial accounting and tax  purposes
in  different  periods.  Deferred taxes are classified  as  current  or  non-
current,  depending on the classification of assets and liabilities to  which
they relate.  Deferred taxes arising from temporary differences that are  not
related  to  an  asset or liability are classified as current or  non-current
depending  on the periods in which the temporary differences are expected  to
reverse.

Recent pronouncements
In  July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with  Exit or Disposal Activities", which addresses financial accounting  and

<PAGE>

reporting  for  costs  associated  with  exit  or  disposal  activities   and
supersedes  EITF  No.  94-3,  "Liability  Recognition  for  Certain  Employee
Termination  Benefits and Other Costs to Exit an Activity (including  Certain
Costs  Incurred in a Restructuring)." SFAS No. 146 requires that a  liability
for  a  cost associated with an exit or disposal activity be recognized  when
the  liability is incurred. Under EITF No. 94-3, a liability for an exit cost
was  recognized at the date of an entity's commitment to an exit  plan.  SFAS
No.  146 also establishes that the liability should initially be measured and
recorded  at  fair value. The provisions of SFAS No. 146 will be adopted  for
exit or disposal activities that are initiated after December 31, 2002.

In  December  2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS  No.  123."  This
Statement amends SFAS No. 123, "Accounting for Stock-Based Compensation",  to
provide alternative methods of transition for a voluntary change to the  fair
value  based  method of accounting for stock-based employee compensation.  In
addition, this statement amends the disclosure requirements of SFAS  No.  123
to  require  prominent  disclosures  in both  annual  and  interim  financial
statements   about   the  method  of  accounting  for  stock-based   employee
compensation  and  the  effect of the method used on  reported  results.  The
adoption  of  SFAS No. 148 is not expected to have a material impact  on  the
company's financial position or results of operations.

In  November  2002,  the  FASB  issued FASB Interpretation  ("FIN")  No.  45,
"Guarantors Accounting and Disclosure Requirements for Guarantees,  Including
Indirect Guarantees and Indebtedness of Others", an interpretation of FIN No.
5,  57  and  107,  and  rescission of FIN No.  34,  "Disclosure  of  Indirect
Guarantees  of Indebtedness of Others". FIN 45 elaborates on the  disclosures
to  be  made  by the guarantor in its interim and annual financial statements
about  its obligations under certain guarantees that it has issued.  It  also
requires  that  a  guarantor recognize, at the inception of  a  guarantee,  a
liability  for  the fair value of the obligation undertaken  in  issuing  the
guarantee.  The  initial  recognition  and  measurement  provisions  of  this
interpretation are applicable on a prospective basis to guarantees issued  or
modified  after  December 31, 2002; while, the provisions of  the  disclosure
requirements  are  effective for financial statements of  interim  or  annual
periods  ending  after  December  15, 2002. The  company  believes  that  the
adoption  of  such  interpretation will not have a  material  impact  on  its
financial   position   or  results  of  operations  and   will   adopt   such
interpretation during fiscal year 2003, as required.

     In  January 2003, the FASB issued FIN No. 46, "Consolidation of Variable
Interest Entities", an interpretation of Accounting Research Bulletin No. 51.
FIN  No.  46  requires that variable interest entities be consolidated  by  a
company if that company is subject to a majority of the risk of loss from the
variable interest entity's activities or is entitled to receive a majority of
the  entity's residual returns or both. FIN No. 46 also requires  disclosures
about  variable  interest  entities  that  companies  are  not  required   to
consolidate  but in which a company has a significant variable interest.  The
consolidation requirements of FIN No. 46 will apply immediately  to  variable
interest   entities  created  after  January  31,  2003.  The   consolidation
requirements will apply to entities established prior to January 31, 2003  in
the  first  fiscal year or interim period beginning after June 15, 2003.  The
disclosure  requirements will apply in all financial statements issued  after
January  31, 2003. The company will begin to adopt the provisions of FIN  No.
46 during the first quarter of fiscal 2003.

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Note 2 - Income taxes

The Company accounts for income taxes under Statement of Financial Accounting
Standards  No.  109, "Accounting for Income Taxes"  ("SFAS No.  109"),  which
requires  use of the liability method.   SFAS No.  109 provides that deferred
tax  assets and liabilities are recorded based on the differences between the
tax  bases of assets and liabilities and their carrying amounts for financial
reporting  purposes,  referred  to as temporary  differences.   Deferred  tax
assets  and  liabilities at the end of each period are determined  using  the
currently enacted tax rates applied to taxable income in the periods in which
the  deferred  tax  assets  and liabilities are expected  to  be  settled  or
realized.

There  is no provision for income taxes for the year ended December 31, 2002.
The Company's total deferred tax asset as of December 31, 2002 is as follows:


                              For the Year Ended   For the Year Ended
                                 December 31,         December 31,
                                     2002                 2001
Net operation loss carry
forward                       $         (19,949)   $          (18,393)
Valuation allowance                       19,949                18,393
Net deferred tax asset       $                 0   $                 0

Note 3 - Stockholder's equity

The  Company is authorized to issue 5,000,000 shares of it $0.001  par  value
preferred stock and 20,000,000 shares of its $0.001 par value common stock.

During  October  2000,  the Company issued 250,000 of its  $0.001  par  value
common  stock  at  $0.03 per share to its director in exchange  for  services
valued at $7,500.  The shares were deemed to have been issued pursuant to  an
exemption   provided  by  Section  4(2)  of  the  Act,  which  exempts   from
registration "transactions by an issuer not involving any public offering."

During  October  2000,  the Company issued 250,000 of its  $0.001  par  value
common  stock at $0.03 per share for total cash of $7,500.  The  shares  were
deemed to have been issued pursuant to an exemption provided by Section  4(2)
of  the  Act, which exempts from registration "transactions by an issuer  not
involving any public offering."

During  December  2000, the Company issued 200,000 of its  $0.001  par  value
common stock at $0.03 per share to its director in exchange for total cash of
$6,000.   The shares were deemed to have been issued pursuant to an exemption
provided  by  Section  4(2)  of  the  Act, which  exempts  from  registration
"transactions by an issuer not involving any public offering."

During  October  2000,  the Company as a wholly owned  subsidiary  of  Desert
Health  Products, Inc., agreed under the terms and conditions of a Separation

<PAGE>

and  Distribution  Agreement to issue 10,000 of its $0.001 par  value  common
stock  at  $0.03  per  share  to Desert Health  Products,  Inc.  The  Company
accounted  for  the  shares in its fiscal year 2000 as founders  shares.  The
issuance of the shares occurred in June 2001 concurrent with the execution of
the Amended Separation and Distribution Agreement.  The shares were deemed to
have  been  issued pursuant to an exemption provided by Section 4(2)  of  the
Act, which exempts from registration "transactions by an issuer not involving
any public offering."

There have been no other issuances of common stock.

Note 4 - Going concern

The  accompanying financial statements have been prepared assuming  that  the
Company   will   continue   as  a  going  concern  which   contemplates   the
recoverability of assets and the satisfaction of liabilities  in  the  normal
course  of business. As noted above, the Company is in the development  stage
and,  accordingly, has not yet generated revenues from operations. Since  its
inception, the Company has been engaged substantially in financing activities
and developing its product line, incurring substantial costs and expenses. As
a  result, the Company incurred accumulated net losses from October 17,  2000
(inception)  through  the  period ended December  31,  2002  of  $19,949.  In
addition,  the  Company's development activities since  inception  have  been
financially sustained by capital contributions.

The  ability of the Company to continue as a going concern is dependent  upon
its  ability to raise additional capital from the sale of common  stock  and,
ultimately,  the achievement of significant operating revenues.  The  Company
plans  to  raise an additional $25,000 through equity offerings in  order  to
continue  operations  for  the next 12 months.   The  accompanying  financial
statements  do not include any adjustments that might be required should  the
Company  be  unable  to  recover  the value of  its  assets  or  satisfy  its
liabilities.

Note 5 - Warrants and options

There are no warrants or options outstanding to acquire any additional shares
of common stock.

Note 6 - Related party transactions

The Company issued a combined total of 450,000 shares of its $0.001 par value
common  stock  to  its director in exchange for cash and services  valued  at
$13,500.

The  Company  does  not lease or rent any property other than  the  mail  box
address,  which is leased at a value of $180 per annum.  Office services  are
provided without charge by the Company's director.  Such costs are immaterial
to  the  financial  statements  and, accordingly,  have  not  been  reflected
therein. The estimated fair market value for such facilities are estimated to
be $600 per annum.