SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

           |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACTS OF 1934

                  For the quarterly period ended March 31, 2004

                                       or

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                        SECURITIES EXCHANGE ACTS OF 1934

                For the transition period from            to

                        Commission File Number: 000-27931

                          DESERT HEALTH PRODUCTS, INC.
             (Exact name of registrant as specified in its charter)

                                     Arizona
              (State of other jurisdiction of other jurisdiction of
                         incorporation or organization)

                                   86-0699108
                     (I.R.S. Employer Identification Number)

                 8221 East Evans Road, Scottsdale Arizona 85260
                     (Address of Principal executive office)

                                  480.951.1941
              (Registrant's telephone number, including area code)

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

      Indicate by check mark whether the registrant (1) 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 (2) has been subject to such
filing requirements for the past 90 days. Yes|X| No |_|

The number of shares of Common Stock outstanding as of March 31, 2004:
13,338,821

Transitional Small Business Disclosure Format (check one): Yes |_| No |X|


                                                                               1
<PAGE>

PART 1. FINANCIAL INFORMATION


                          DESERT HEALTH PRODUCTS, INC.
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                    March 31,       December 31,
                                                                                      2004              2003
                                                                                   (Unaudited)        (Audited)
                                                                                   -----------      ------------
<S>                                                                                <C>               <C>
                                                      ASSETS
Current Assets
      Cash                                                                         $    44,341       $    11,420
      Accounts receivable, net                                                           8,732            25,793
      Inventory                                                                        130,098            99,770
      Advances                                                                           2,010             1,010
      Prepaid expenses                                                                  20,606                --
                                                                                   -----------       -----------
           Total Current Assets                                                        205,787           137,993

Property and Equipment, net                                                             77,941            79,779

Other Assets
      Intangibles, net                                                                 756,822           756,822
      Goodwill, net                                                                    233,645           233,645
      Deferred financing costs                                                         211,913           100,996
      Deposits                                                                          20,076            21,326
                                                                                   -----------       -----------
                                                                                     1,222,456         1,112,789
                                                                                   -----------       -----------

           Total Assets                                                            $ 1,506,184       $ 1,330,561
                                                                                   ===========       ===========

                                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
      Loan inducement fees payable                                                 $    11,340       $    11,340
      Accounts payable and accrued expenses                                            363,293           314,920
      Deferred revenue                                                                  53,500            60,750
      Interest payable                                                                 239,450           212,718
      Dividends payable                                                                157,604           157,604
      Current portion of obligations payable                                         1,573,718         1,282,256
                                                                                   -----------       -----------
           Total Current Liabilities                                                 2,398,905         2,039,588

Long Term Liabilities
      Shares subject to mandatory redemption                                         1,100,000         1,100,000
      Long term note payable, net of current portion                                     7,000             7,000
                                                                                   -----------       -----------
           Total Liabilities                                                         3,505,905         3,146,588

Stockholders' Deficit
      Preferred Stock, convertible, $.001 par value, 10,000,000 shares
         authorized and 3,179,128 and 1,708,500 shares issued and outstanding
         as of March 31, 2004 and December 31, 2003, respectively                        3,179             1,708
      Common stock, $.001 par value, 25,000,000 shares
         authorized, 13,763,821 and 13,163,821 issued and 13,338,821
         and 12,113,821 outstanding as of March 31, 2004 and
         December 31, 2003, respectvely                                                 13,764            13,164
      Stock subscribed                                                                 618,515         1,744,000
      Treasury stock, 425,000 shares at cost                                          (191,250)         (191,250)
      Additional paid in capital in excess of par value                              7,317,585         5,390,025
      Accumulated deficit                                                           (9,761,514)       (8,773,674)
                                                                                   -----------       -----------
                                                                                    (1,999,721)       (1,816,027)
                                                                                   -----------       -----------

           Total Liabilities & Stockholders Deficit                                $ 1,506,184       $ 1,330,561
                                                                                   ===========       ===========
</TABLE>

          See accompanying notes to the condensed financial statements


                                      F-1
<PAGE>

                           DESERT HEALTH PRODUCTS, INC
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                          Three Months Ended March 31,

                                                  2004                  2003
                                              ------------         ------------
Revenue, net                                  $     46,535         $     33,580

Cost of Sales                                       31,293               21,295
                                              ------------         ------------
     Gross Profit                                   15,242               12,285

Operating Expenses                                 913,856              422,676
                                              ------------         ------------

     Loss from operations                         (898,614)            (410,391)

Other Income (Expense)
     Other income                                   14,249                   --
     Interest expense                             (101,677)             (67,616)
     Miscellaneous expense                          (1,835)              (4,879)
     Interest income                                    37                   60
                                              ------------         ------------
                                                   (89,226)             (72,435)
                                              ------------         ------------

Net Loss                                      $   (987,840)        $   (482,826)
                                              ============         ============

Basic Loss Per Common Share                   $      (0.08)        $      (0.04)
                                              ============         ============

Weighted Average Common Shares Outstanding      13,136,019           12,317,821
                                              ============         ============

          See accompanying notes to the condensed financial statements


                                      F-2
<PAGE>

                          DESERT HEALTH PRODUCTS, INC.
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited)

<TABLE>
<CAPTION>
                                                   Convertible
                                                 Preferred Stock                    Common Stock               Treasury Stock
                                           ----------------------------    --------------------------   ---------------------------
                                                             Par Value                     Par Value
                                             Shares          $.001 sh         Shares        $.001 sh       Shares            Cost
                                           ----------       -----------    -----------    -----------   -----------     -----------
<S>                                         <C>             <C>             <C>           <C>              <C>          <C>
Balances, December 31, 2003                 1,708,500       $     1,708     13,163,821    $    13,164      (425,000)    $  (191,250)

Preferred shares activity for the three
 months ended March 31, 2004
     Debt conversion                          130,625       $       131             --    $        --            --     $        --
     Stock conversion                         (90,000)              (90)        90,000             90            --              --
     Stock subscribed                       1,430,000             1,430             --             --            --              --
Common shares issued for the three
 months ended March 31, 2004
     Services and fees                             --                --        325,000            325            --              --
     Cash                                          --                --        185,000            185            --              --
Net loss for the three months ended
 March 31, 2004                                    --                --             --             --            --              --
                                           ----------       -----------    -----------    -----------   -----------     -----------
Balances,  March 31, 2004                   3,179,125       $     3,179     13,763,821    $    13,764      (425,000)    $  (191,250)
                                           ==========       ===========    ===========    ===========   ===========     ===========

<CAPTION>


                                               Additional
                                                 paid-in          Stock           Accumulated
                                                 Capital        subscribed          Deficit            Total
                                               -----------     ------------       -----------       -----------
<S>                                            <C>              <C>               <C>               <C>
Balances, December 31, 2003                    $ 5,390,025      $ 1,744,000       $(8,773,674)      $(1,816,027)

Preferred shares activity for the three
 months ended March 31, 2004
     Debt conversion                           $        --      $        --       $        --       $       131
     Stock conversion                                   --               --                --                --
     Stock subscribed                            1,442,570       (1,125,485)               --           318,515
Common shares issued for the three
 months ended March 31, 2004
     Services and fees                             300,175               --                --           300,500
     Cash                                          184,815                                              185,000
Net loss for the three months ended
 March 31, 2004                                         --               --          (987,840)         (987,840)
                                               -----------      -----------       -----------       -----------
Balances,  March 31, 2004                      $ 7,317,585      $   618,515       $(9,761,514)      $(1,999,721)
                                               ===========      ===========       ===========       ===========
</TABLE>

          See accompanying notes to the condensed financial statements


                                      F-3
<PAGE>

                          DESERT HEALTH PRODUCTS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                      For The Three Months Ended March 31,

<TABLE>
<CAPTION>
                                                                    2004             2003
                                                                  ---------       ---------
<S>                                                               <C>             <C>
Cash Flows from Operating Activities
     Cash received from customers                                 $  63,596       $  36,448
     Cash paid to suppliers and employees                          (575,101)       (374,214)
     Miscellaneous expense                                           (1,635)         (4,879)
     Miscellaneous income                                            14,249              --
     Interest income                                                     37              60
     Interest expense                                               (25,625)        (18,062)
                                                                  ---------       ---------

        Net Cash Used in Operating Activities                      (524,479)       (360,647)

Cash Flows from Investing Activities
     Deposits                                                         1,250              --
     Purchase of assets                                              (2,850)         (3,070)
     Payments on advances                                            (1,000)         (6,900)
                                                                  ---------       ---------

        Net Cash Used by Investing Activities                        (2,600)         (9,970)

Cash Flows from Financing Activities
     Proceeds from notes payable                                    142,000              --
     Payments on notes payable                                      (25,000)             --
     Proceeds from sale of stock                                    185,000              --
     Increase in stock subscription receivable                      258,000         300,000
                                                                  ---------       ---------

        Net Cash Provided  by Financing Activities                  560,000         300,000
                                                                  ---------       ---------

        Net Increase (Decrease) in Cash and Cash Equivalents         32,921         (70,617)

Beginning Cash and Cash Equivalents                                  11,420          55,515
                                                                  ---------       ---------

Ending Cash and Cash Equivalents                                  $  44,341       $ (15,102)
                                                                  =========       =========
</TABLE>

          See accompanying notes to the condensed financial statements


                                      F-4
<PAGE>

                          DESERT HEALTH PRODUCTS, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                      For The Three Months Ended March 31,

<TABLE>
<CAPTION>
                                                                               2004              2003
                                                                            ----------       ----------
<S>                                                                         <C>              <C>
Reconciliation of Changes in Net Operations to Net Cash Used
     by Operating Activities:
            Loss from operations                                            $ (987,840)      $ (482,826)
            Adjustments to reconcile change in loss from operations to
                  net cash used by operating activities:
                  Depreciation                                                   4,688            5,688
                  Loan inducement fees                                          60,515               --
                  Financing costs                                              103,585               --
                  Stock issued for services                                    239,985           24,797
            (Increase) decrease in operating assets
                  Accounts receivable                                           17,061            2,868
                  Inventory                                                    (30,328)           7,061
            Increase (decrease) in operating liabilities
                  Interest payable                                              26,732           49,554
                  Deferred revenue                                              (7,250)              --
                  Accounts payable                                              48,373           32,211
                                                                            ----------       ----------
                       Net Cash Used by Operating Activities                $ (524,479)      $ (360,647)
                                                                            ==========       ==========
</TABLE>

          See accompanying notes to the condensed financial statements


                                      F-5

<PAGE>

      ITEM 1. FINANCIAL STATEMENTS

The unaudited condensed consolidated balance sheet as of March 31, 2004 and the
related unaudited condensed consolidated statements of operations and cash flows
for the three months ended March 31, 2004 presented herein have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and in accordance with the
instructions to Form 10-QSB. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
Accounting principles assume the continuation of the Company as a going concern.
The Company's auditors, in their opinion on the financial statements for the
year ended December 31, 2003, expressed a concern about this uncertainty. The
accompanying financial statements do not include any adjustment that might arise
from the outcome of this assumption. In our opinion, the accompanying condensed
consolidated financial statements include all adjustments necessary for a fair
presentation of such condensed consolidated financial statements. Such necessary
adjustments consist of normal recurring items and the elimination of all
significant intercompany balances and transactions.

      These interim condensed consolidated financial statements should be read
in conjunction with the Company's December 31, 2003, Annual Report on Form
10-KSB. Interim results are not necessarily indicative of results for a full
year. Certain reclassifications have been made to conform prior period
financials to the presentation in the current reporting period. The
reclassifications had no effect on net loss.

      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
statement and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.

NEW FINANCING

      During the first quarter of 2004 the Company obtained new short term
financing from various individuals in the amount of $142,000. Maturity dates and
interest rates range from July 12, 2004 to March 22, 2005, and 10% to 20%,
respectively. All new financing is collateralized by a sufficient number of free
trading shares of the Company's common stock. Of the $142,000 in new financing,
$122,000 has terms in which all interest and principal is due upon maturity, the
balance of $20,000 has quarterly interest only payments of $1,000. In order for
the Company to obtain the above referenced financing, 82,500 shares of the
Company's common stock was issued to the individual lenders as loan inducement
fees totaling $60,515.

      ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

      Unless the context otherwise requires, the terms "Desert Health",
"Company", "we", "us" and "our" in this Quarterly Report on Form 10-QSB refer to
Desert Health Products, Inc., an Arizona corporation.

      The following discussion and analysis should be read in conjunction with
our Financial Statements and the notes thereto appearing elsewhere in this
document.

CAUTIONARY STATEMENTS

      This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. 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 below and elsewhere
in this report.


                                                                               2
<PAGE>

      With the exception of historical matters, the matters of discussion 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. The following discussion of our financial
condition and results of operations should be read in conjunction with our
financial statements and their related notes thereto appearing elsewhere herein.

Cautionary Statement Regarding Forward-looking Statements

      Our Annual Report on Form 10-KSB, this or any other quarterly reports on
Form 10-QSB filed by us or any other written or oral statements made by or on
our behalf may include forward-looking statements which reflect our current
views with respect to future events and financial performance. The words
"believe", "expect", "anticipate", "intends", "estimate", "forecast", "project"
and similar expressions identify forward-looking statements.

      We wish to caution investors that any forward-looking statements made by
or on our behalf are subject to uncertainties and other factors that could cause
actual results to differ materially from such statements. These uncertainties
and other factors include, but are not limited to the Risk Factors listed below
(many of which have been discussed in prior SEC filings). Though we have
attempted to list comprehensively these important factors, we wish to caution
investors that other factors could in the future prove to be important in
affecting our results of operations. New factors emerge from time to time and it
is not possible for management to predict all of such factors, nor can it assess
the impact of each such factor on the business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements.

      Investors are further cautioned not to place undue reliance on such
forward-looking statements as they speak only of our views as of the date the
statement was made. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

OVERVIEW

      We are engaged in the packaging, sale and distribution of branded and
store brand (private label) vitamins, nutritional supplements, skin care and
animal care products. We have focused our marketing and registration efforts
primarily in the foreign marketplace. This is a very time consuming and
expensive project, but the nutraceutical and nutritional supplement market is
growing at a faster pace internationally than the domestic market. One of the
many rewards of having customers in the international market is that once the
registrations are in place, the customer becomes a partner in developing that
market in the long-term. However, we are taking steps to offer our products to
mid-size chain store operations as an initial step towards penetrating the
domestic market.

      We market over 100 products, which are packaged under various labels and
bottle counts. They are sold in Vitamin and Mineral combinations, Chinese Herbal
Products, Specialty Supplements, Weight Management Products, Herbal/Botanical
Products, FemAid Product Support Systems, Ayurvedic Products, Skin Care
Products, Pet Care Products, and Water Purification Products. We have
traditionally outsourced our raw materials manufacturing.

      On January 26, 2000, pursuant to an Acquisition Agreement and Plan of
Merger entered into by and between Desert Health and Intercontinental Capital
Fund, Inc., ("Intercontinental"), a Nevada corporation (a company subject to the
reporting requirements of the Securities and Exchange Act of 1934, as amended)
all of the outstanding shares of common stock of Intercontinental were exchanged
for 400,000 shares of Rule 144 restricted common stock of Desert Health, in a
transaction in which Desert Health was the successor and took on the reporting
requirements of Intercontinental.


                                                                               3
<PAGE>

CRITICAL ACCOUNTING POLICIES

      This summary of critical accounting policies is presented to assist in
understanding our financial statements. The financial statements and notes are
representations of our management who is responsible for their integrity and
objectivity. These accounting policies conform to generally accepted accounting
principals and have been consistently applied in the preparation of the
financial statements.

Nature of Operations

      We were incorporated in the state of Arizona on July 21, 1991, to provide
innovative supplements and health solutions to the global marketplace. We have
grown from the humblest of beginnings in the Arizona desert to a company with a
global vision to educate, assess and deliver nutritional products to a global
market place. The worldwide nutritional industry is one of the fastest growing
sectors of the global economy. We have a commitment to purity, quality,
research, information and support. We have global distribution capabilities and
offer a choice of turnkey or customized private label options. This combined
with professionally derived formulations enables us to offer products to fill
any market niche. On October 31, 2002, we acquired all the capital stock of
Royal Products, Inc (f.k.a. JonDar Corp.), a Nevada corporation incorporated in
1991. Royal Product Inc.'s principal business activity is to provide network
marketing and is under contract to purchase all of its products from us.

Basis of Consolidation

      The consolidated financial statements include the accounts of Royal
Products, Inc., a wholly owned subsidiary. All significant intercompany accounts
and transactions have been eliminated in the consolidation.

Cash and Cash Equivalents

      For purposes of the statement of cash flows, we consider all short-term
debt securities purchased with an initial maturity of three months or less to be
cash equivalents.

Inventories

      Inventories consist primarily of health food supplements and vitamin
products and are stated at the lower of cost (first-in, first-out) or market
value. Market cost represents the lower of replacement cost or estimated net
realizable value.

Deferred Revenue

      Payments received from product sales that have not been shipped to the
customer are recorded as deferred revenue.

Note 1 - Basis of Presentation

      The financial statements are unaudited and have been prepared in
accordance with generally accepted accounting principles for interim financial
information and pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC"). The financial statements reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of Desert Health Products, Inc.'s
financial position and operating results for the interim period.

Depreciation

      Depreciation is computed by using the straight-line method for financial
reporting purposes and the accelerated cost recovery method for federal income
tax purposes


                                                                               4
<PAGE>

Income Taxes

      Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the bases of certain assets and
liabilities for financial and tax reporting. The deferred taxes represent the
future tax return consequences of those differences, which will either be
taxable when the assets and liabilities are recovered or settled.

Intangible Assets

      Goodwill and other intangible assets were not amortized in 2004. Statement
of Financial Accounting Standards No. 142 was implemented requiring goodwill and
other intangible assets to be adjusted to fair value by recording an impairment
loss when applicable. Fair value of each intangible and goodwill was determined
by calculating the net present value of management's estimate of future cash
flows expected to be generated by the intangible or goodwill over the next three
years

Revenue and Cost Recognition

      Revenues are recognized when earned, and expenses are recognized when
incurred. We generally recognize revenue upon shipment of our products in
accordance with the terms and conditions of firm orders placed with us by our
customers. The application of Staff Accounting Bulletin 101 did not have a
material affect on our financial position or results of operations.

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
disclose contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Advertising Costs

      We expense advertising costs as they are incurred.


                                                                               5
<PAGE>

RESULTS OF OPERATIONS- Three months ended March 31, 2004 and 2003

                                                   2004                  2003
                                                 ---------            ---------
Revenue, net                                     $  46,535            $  33,580

Cost of Sales                                       31,293               21,295
                                                 ---------            ---------
Gross Profit                                        15,242               12,285

Operating Expenses                                 913,856              422,676
                                                 ---------            ---------

Loss From Operations                              (898,614)            (410,391)

Other Income (Expense)
   Other income                                     14,249                   --
   Interest expense                               (101,546)             (67,616)
   Miscellaneous expense                            (1,835)              (4,879)
   Interest income                                      37                   60
                                                 ---------            ---------
                                                   (89,095)             (72,435)

Net Loss                                         $(987,709)           $(482,826)
                                                 =========            =========

      Revenues. Revenues for the three months ended March 31, 2004 were $46,535,
an increase of $12,955 or 39%, from $33,580 for the three months ended March 31,
2003. This increase was principally attributable to the increased acceptance of
our registrations in the foreign markets and to continuing penetration into the
domestic market. We are continuing our efforts to launch new distribution
outlets in Europe, Asia and in the domestic market.

      Operating Expenses. Operating expenses for the three months ended March
31, 2004 were $913,856, an increase of $491,180 or 116%, from $422,676 for the
three months ended March 31, 2003. This increase is primarily the result of loan
inducement fees from the issuance of company stock, increased financing costs
and amortization of capitalized financing costs, and increased travel and
professional fees.

      Net Income (Loss). Net loss was $987,709 for the three months ended March
31, 2004, as compared to a net loss of $482,826 for the three months ended March
31, 2003. This increase is primarily the result of loan inducement fees from the
issuance of company stock, increased financing costs and amortization of
capitalized financing costs, and increased travel and professional fees

OFF-BALANCE SHEET ARRANGEMENTS

      We do not have any off-balance sheet arrangements.

LIQUIDITY AND CAPITAL RESOURCES

      As indicated in our attached financial statements, our gross revenue was
not sufficient to meet our operating expenses for the three months ended March
31, 2004. In addition, as of March 31, 2004, our current liabilities exceeded
our current assets by $2,193,318, as compared to $1,788,256 for the comparable
three month period ended March 31, 2003.

      Since inception, we have financed our cash flow requirements through debt
financing, issuance of common stock for cash and services, and minimal cash
balances. As we continue our marketing activities in Europe, China and North
America, we may continue to experience net negative cash flows from operations,
pending receipt of sales revenues, and will be required to obtain additional
financing to fund operations through common and preferred stock offerings and
bank borrowings to the extent necessary to provide working capital.


                                                                               6
<PAGE>

      Over the next 12 months, we intend to increase our revenues by releasing
new products under development to our target markets. We believe that existing
capital and anticipated funds from operations will not be sufficient to sustain
operations and planned expansion in the next 12 months. Consequently, we will be
required to seek additional capital in the future to fund growth and expansion
through additional equity or debt financing or credit facilities. Considering
the state of market conditions, no assurance can be made that such financing
would be available, and if available it may take either the form of debt,
equity, or a combination thereof. The down turn in the capital market will
substantially impact our ability to sell securities in planned amounts and in
turn our ability to meet our capital requirements. In either case, the financing
could have a negative impact on our financial condition and our stockholders.

RECENT DEVELOPMENTS

      In January 2004, we appointed Leonard Makowka, M.D., and Ph.D. as head of
our Medical Advisory Board. Dr. Makowka, a distinguished clinical surgeon,
transplantation surgeon and medical researcher, is recognized as one of the
world's leading authorities in hepatic science (study relating to the liver. Dr.
Makowka has retired from surgical practice and has been using his medical
expertise to pursue investment strategies and technology developing in life
sciences and other technological areas. Dr. Makowka is one of the most
prestigious names in the medical community and he will be working with our
subsidiary to develop a line of children's nutritional and weigh loss products.

      In February 2004, we were accepted for listing on the Frankfurt Exchange
in Germany. Trading commenced February 10, 2004, under the symbol "DHE" and the
German cusip (WKN) number ADBMFX. The Frankfurt Exchange is the world's third
largest organized exchange-trading market in terms of turnover and dealings in
securities. It accounts for more than 85% of the total securities turnover in
Germany and is the largest of the eight German stock exchanges. It ranks third
in the world beyond the NYSE and NASDAQ markets. It offers its clients only
floor trading through brokers, and, since the launch of XETRA, also provides
fully-electronic trading facilities, whereby orders from any point in the globe
are automatically inputted into the order book on the central computer.

      Jan-Eric Soetbeer, President of OTC Consulting, prepared the registration
of Desert Health on the Frankfurt Exchange. Through their exclusive network,
they are beginning the process of notifying the European Financial community
about us and our present and future business plans.

      In March 2004, Mr. Edward L. Beddow joined us as our new head of
International Business Development and Corporate Finance. Mr. Beddow has been
Vice President and Global Quality Director CitiBusiness at Citigroup (NYSE:C)
and has over 20 years experience in Quality, Information Technology, Audit and
Finance in large multinational companies in the financial services and
manufacturing industries. He has participated in the establishment and growth of
new global businesses and functions within several companies. His
responsibilities have included recruitment of worldwide personnel, budget
management, process improvement projects and development of policies and
procedures. He has published several professional articles/books and taught
university courses at the graduate level.

      Websites for Royal Products, Inc., www.royalproducts.net and for Desert
Health www.deserthealth.com have been updated and are now e-commerce ready and
focused toward our specialty products.

SUBSEQUENT EVENTS

      April 28, 2004, we entered into a ten-year joint venture agreement with
Hebei YiXian Food Company of China to jointly invest in a new cooperative
company in China. This joint venture will provide to the Chinese marketplace a
new generation of nutritional drink. The objective is to take full advantage of
Hebei's manpower, resources, and superior marketing ability in China. We believe
this will aid in establishing a value on our Class 5 trademark and logo in the
international marketplace


                                                                               7
<PAGE>

RISK FACTORS

Risks Related to our Business

We cannot predict our future capital needs, and may not able to secure
additional financing.

      We will likely need to raise additional funds in the future to fund our
operations, to expand our markets and product offerings, or to respond to
competitive pressures or perceived opportunities. We cannot assure you that
additional financing will be available on favorable terms, or at all. If
adequate funds are not available when required or on acceptable terms, we may be
forced to cease our operations, and even if we are able to continue operations,
our ability to increase enrollments and revenues maybe adversely affected.

Our auditors have indicated uncertainty concerning our ability to continue as a
going concern.

      Our auditors have indicated uncertainty concerning our ability to continue
as a going concern as of the most recent audited financial statements. We cannot
assure you that our ability to obtain additional customers or financing sources
will be impaired as a result of this qualification. Additionally, we cannot
assure you that our proposed projects and services, if fully developed, can be
successfully marketed or that we will ever achieve significant revenues or
profitable margins and therefore remain as a going concern.

A significant or prolonged economic downturn could have a material adverse
effect on our results of operations.

      Our results of operations are affected by the level of business activity
of our customers, which in turn is affected by the level of consumer demand for
their products. A significant or prolonged economic downturn may adversely
affect the disposable income of many consumers and may lower demand for the
products we produce for our private label contract manufacturing customers, as
well as for our direct-to-consumer products. A decline in consumer demand and
the level of business activity of our customers due to economic conditions could
have a material adverse effect on our revenues and profit margins.

As we continue to expand into markets outside the United States our business
becomes increasingly subject to political and economic risks in those markets,
which could adversely affect our business.

      Our future growth may depend, in part, on our ability to continue to
expand into markets outside the United States. There can be no assurance that we
will be able to expand our presence in our existing markets outside the United
States, enter new markets on a timely basis, or that new markets outside the
United States will be profitable. There are significant regulatory and legal
barriers in markets outside the United States that we must overcome. We will be
subject to the burden of complying with a wide variety of national and local
laws, including multiple and possibly overlapping and conflicting laws. We also
may experience difficulties adapting to new cultures, business customs and legal
systems. Our sales and operations outside the United States are subject to
political, economic and social uncertainties including, among others:

      o     changes and limits in import and export controls;

      o     increases in custom duties and tariffs;

      o     changes in government regulations and laws;

      o     coordination of geographically separated locations;

      o     absence in some jurisdictions of effective laws to protect our
            intellectual property rights;

      o     changes in currency exchange rates;

      o     economic and political instability; and


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      o     currency transfer and other restrictions and regulations that may
            limit our ability to sell certain products or repatriate profits to
            the United States.

      Any changes related to these and other factors could adversely affect our
business, profitability and growth prospects. As we continue to expand into
markets outside the United States, these and other risks associated with
operations outside the United States are likely to increase.

Our products and manufacturing activities are subject to extensive government
regulation, which could limit or prevent the sale of our products in some
markets and could increase our costs.

      The manufacturing, packaging, labeling, advertising, promotion,
distribution, and sale of our products are subject to regulation by numerous
national and local governmental agencies in the United States and in other
countries. Failure to comply with FDA regulations may result in, among other
things, injunctions, product withdrawals, recalls, product seizures, fines, and
criminal prosecutions. Any action of this type by the FDA could materially
adversely affect our ability to successfully market our products. In addition,
if the FTC has reason to believe the law is being violated (for example, if it
believes we do not possess adequate substantiation for product claims), it can
initiate an enforcement action. FTC enforcement could result in orders
requiring, among other things, limits on advertising, consumer redress,
divestiture of assets, rescission of contracts, and such other relief as may be
deemed necessary. Violation of these orders could result in substantial
financial or other penalties. Any action by the FTC could materially adversely
affect our ability to successfully market our products.

      In markets outside the United States, before commencing operations or
marketing our products, we may be required to obtain approvals, licenses, or
certifications from a country's ministry of health or comparable agency.
Approvals or licensing may be conditioned on reformulation of products or may be
unavailable with respect to certain products or product ingredients. We must
also comply with product labeling and packaging regulations that vary from
country to country. Furthermore, the regulations of these countries may conflict
with those in the United States and with each other. The sale of our products in
Europe is subject to the rules and regulations of the European Union, which may
be interpreted differently among the countries within the union. The cost of
complying with these various and potentially conflicting regulations can be
substantial and can adversely affect our results of operations.

      We cannot predict the nature of any future laws, regulations,
interpretations, or applications, nor can we determine what effect additional
governmental regulations or administrative orders, when and if adopted, would
have on our business. They could include requirements for the reformulation of
certain products to meet new standards, the recall or discontinuance of certain
products, additional record keeping, expanded or different labeling, and
additional scientific substantiation. Any or all of these requirements could
have a material adverse effect on our operations.

We could be exposed to product liability claims or other litigation, which may
be costly and could materially adversely affect our operations.

      We could face financial liability due to product liability claims if the
use of our products results in significant loss or injury. Additionally, the
manufacture and sale of our products involves the risk of injury to consumers
from tampering by unauthorized third parties or product contamination. We could
be exposed to future product liability claims that, among others: our products
contain contaminants; we provide consumers with inadequate instructions about
product use; or we provide inadequate warning about side effects or interactions
of our products with other substances.

      We maintain product liability insurance coverage, including primary
product liability. The cost of this coverage has increased dramatically in
recent years, while the availability of adequate insurance coverage has
decreased. There can be no assurance that product liability insurance will
continue to be available at an economically reasonable cost or that our
insurance will be adequate to cover any liability we may incur. Additionally, it
is possible that one or more of our insurers could exclude from our coverage
certain ingredients used in our products. In such event, we may have to stop
using those ingredients or rely on indemnification or similar arrangements with
our customers who wish to continue to include those


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ingredients in their products. A substantial increase in our product liability
risk or the loss of customers or product lines could have a material adverse
effect on our results of operations and financial condition. ]

If we lose the services of our president, the ability to develop our business
will suffer.

      We are substantially dependent on the continued services and performance
of Johnny Shannon, our president. The loss of Mr. Shannon's services could
significantly delay or prevent the achievement of our development and strategic
objectives. We currently have an employment agreement with Mr. Shannon that
expires on January 31, 2005, renewable on an annual basis.

Our future success depends in part upon our ability to recruit and retain key
personnel.

      Our success to date has been, and our continuing success will be,
substantially dependent on the continued services of our executive officers and
other key personnel, who generally have extensive experience in the industry and
have been employed by us for substantial periods of time. If we ceased to employ
any of these integral personnel and failed to manage a smooth transition to new
personnel, our business could suffer.

Our industry is highly competitive and we may be unable to compete effectively.
Increased competition could adversely affect our financial condition.

      The market for our products is highly competitive. Many of our competitors
are substantially larger and have greater financial resources and broader name
recognition than we do. Our larger competitors may be able to devote greater
resources to research and development, marketing and other activities that could
provide them with a competitive advantage. Our market has relatively low entry
barriers and is highly sensitive to the introduction of new products that may
rapidly capture a significant market share. Increased competition could result
in price reductions, reduced gross profit margins or loss of market share, any
of which could have a material adverse effect on our financial condition and
results of operations. There can be no assurance that we will be able to compete
in this intensely competitive environment.

Risks Related to our Stock

Securities we issue to fund our operations could dilute your ownership.

      We may decide to raise additional funds through public or private debt or
equity financing to fund our operations. If we raise funds by issuing equity
securities, the percentage ownership of current stockholders will be reduced and
the new equity securities may have rights prior to those of our common stock. We
may not obtain sufficient financing on terms that are favorable to you or us.

There is no assurance of an established public trading market.

      Although our common stock trades on the OTCBB a regular trading market for
the securities may not be sustained in the future. The NASD has enacted recent
changes that limit quotations on the OTCBB to securities of issuers that are
current in their reports filed with the Securities and Exchange Commission. The
effect on the OTCBB of these rule changes and other proposed changes cannot be
determined at this time. The OTCBB is an inter-dealer, Over-The-Counter market
that provides significantly less liquidity than the NASD's automated quotation
system (the "NASDAQ Stock Market"). Quotes for stocks included on the OTCBB are
not listed in the financial sections of newspapers, as are those for the NASDAQ
Stock Market. Therefore, prices for securities traded solely on the OTC Bulletin
Board may be difficult to obtain and holders of common stock may be unable to
resell their securities at or near their original offering price or at any
price. Market prices for our Common Stock will be influenced by a number of
factors, including:

      o     the issuance of new equity securities;

      o     changes in interest rates;

      o     competitive developments, including announcements by competitors of
            new products or services or significant contracts, acquisitions,
            strategic partnerships, joint ventures or capital commitments;


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      o     variations in quarterly operating results;

      o     change in financial estimates by securities analysts;

      o     the depth and liquidity of the market for our common stock;

      o     investor perceptions of our company and the technologies industries
            generally; and

      o     general economic and other national conditions.

Our Common Stock could be considered a "penny stock."

      Our common stock could be considered to be a "penny stock" if it meets one
or more of the definitions in Rules 15g-2 through 15g-6 promulgated under
Section 15(g) of the Securities Exchange Act of 1934, as amended. These include
but are not limited to the following: (i) the stock trades at a price less than
$5.00 per share; (ii) it is NOT traded on a "recognized" national exchange;
(iii) it is NOT quoted on the NASDAQ Stock Market, or even if so, has a price
less than $5.00 per share; or (iv) is issued by company with net tangible assets
less than $2.0 million, if in business more than a continuous three years, or
with average revenues of less than $6.0 million for the past three years. The
principal result or effect of being designated a "penny stock" is that
securities broker-dealers cannot recommend the stock but must trade in it on an
unsolicited basis.

ITEM 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

      As of March 31, 2004, our Chief Executive Officer, or "CEO", and Chief
Financial Officer, or "CFO", performed an evaluation of the effectiveness and
the operation of our disclosure controls and procedures as defined in Rules 13a
- 15 (e) or 15d-15 (e) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Based on that evaluation, the CEO and CFO concluded that
our disclosure controls and procedures were effective as of March 31, 2004.

Changes in Internal Controls

      There have been no changes in our internal control over financial
reporting identified in connection with the evaluation required by paragraph (d)
Rule 13a-15 or 15d-15 under the Exchange Act that occurred during the quarter
ended March 31, 2004, that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      On March 5, 2003, we instituted suit in the Arizona Superior Court,
Maricopa County, against a Phoenix-based marketer of health care products,
seeking unspecified damages for fraud and misrepresentation arising from a
product licensing and marketing agreement.

      On November 12, 2002, we were named in a suit filed in Arizona Superior
Court by Christensen, et al. We have successfully satisfied the promissory note
claims and we have filed a counterclaim against Scott Christensen and that
counterclaim remains pending.

      We are named in a suit filed June 2, 2002, in the Maricopa County Superior
Court, brought by a plaintiff claiming to hold an assignment of note in the
amount of $50,000 from a former consultant to the Company The Company asserts
that the note was paid in full prior to the alleged assignment and intends to
vigorously defend our position. The matter is set for jury trial in January
2005.

      Buccaneer Holdings, Inc. secured a default judgment in Calgary, Alberta,
Canada, in December 2003 in the amount of USD 37,385 plus interest and legal
costs. Desert Health disputes that it ever received loan funds from Buccaneer
Holdings, Inc., and intends to aggressively resist the perfecting of the
judgment in Arizona. We have not accrued the amount in our financials.


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ITEM 2. CHANGES IN SECURITIES

      90,000 shares of preferred stock were converted to common stock, and an
additional 510,000 shares of common stock were issued during the quarter ended
March 31, 2004. Also, 1,430,000 shares of preferred stock were issued during the
quarter ended March 31, 2004.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      None.

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

      None.

ITEM 5. OTHER INFORMATION

      None.

ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K

      (a)   Exhibits

      Registrant is filing the following exhibits:

                  31.1. Certification of Chief Executive Officer pursuant to
                        Item 601(b)(31) of Regulation S-B, as adopted pursuant
                        to Section 302 of the Sarbanes-Oxley Act of 2002

                  31.2. Certification of Chief Financial Officer pursuant to
                        Item 601(b)(31) of Regulation S-B, as adopted pursuant
                        to Section 302 of the Sarbanes-Oxley Act of 2002

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

                  32.2. Certification of Chief Financial Officer pursuant to 18
                        U.S.D. Section 1350, as adopted pursuant to Section 906
                        of the Sarbanes-Oxley Act of 2002

      (b)   Reports on Form 8-K

                  Form 8-K filed March 22, 2004.


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                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

DESERT HEALTH PRODUCTS, INC.
(Registrant)


By:   /s/ Johnny Shannon                          May 17, 2004
      -------------------
      Johnny Shannon,
      President


By:   /s/ Johnny Shannon                          May 17, 2004
      -------------------
      Johnny Shannon,
      Chief Financial Officer


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