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 June 30, 2005

                                       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 August 19, 2005:
20,733,521

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


                                                                               1
<PAGE>

        DESERT HEALTH PRODUCTS, INC. CONSOLIDATED STATEMENTS (Unaudited)

                                FORM 10QSB INDEX

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited):

        a.  Consolidated Balance Sheets as of June 30, 2005, and
            December 31, 2004                                               F-1

        b.  Consolidated Statements of Operations                           F-2

        c.  Consolidated Statements of Stockholders Deficit                 F-3

        d.  Consolidated Statements of Cash Flow for the six months ended   F-4
            June 30, 2005 and 2004

        e.  Notes to Unaudited Consolidated Financial Statements            3

Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations                                               4

Item 3. Controls and Procedures                                             8

PART II - OTHER INFORMATION

Item 1. Legal Proceedings                                                   9

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds          9

Item 3. Defaults by the Company Upon Its Senior Securities                  9

Item 4. Submission of Matters to a Vote of Security Holders                 9

Item 5. Other Information                                                   9

Item 6. Exhibits                                                            9

Signatures                                                                  10

<PAGE>

                          DESERT HEALTH PRODUCTS, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                June 30,              December 31
                                                                                  2005                     2004
                                                                                (Unaudit)                (Audit)
                                                                              ------------            ------------
<S>                                                                           <C>                     <C>
                                    ASSETS
Current Assets
    Cash and cash equivalents                                                 $      1,129            $      2,135
    Accounts receivable, net                                                        53,945                     175
    Inventory                                                                       86,028                  75,141
    Prepaids                                                                            --                   7,500
                                                                              ------------            ------------
           Total Current Assets                                                    141,102                  84,951
                                                                              ------------            ------------

Property and Equipment, net                                                         14,756                  64,410
Other Assets
    Deferred financing costs                                                        10,875                 129,122
                                                                              ------------            ------------

           TOTAL ASSETS                                                       $    166,733            $    278,483
                                                                              ============            ============

                 LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
    Bank Overdraft                                                            $      4,811            $        809
    Accounts payable and accrued expenses                                          675,783                 609,212
    Loan inducement fees payable                                                    11,340                  11,340
    Deferred revenue                                                                44,372                  26,000
    Interest payable                                                               489,646                 417,246
    Dividends payable                                                              274,387                 274,387
    Current portion of obligations payable                                       2,372,802               1,935,193
                                                                              ------------            ------------

           Total Current Liabilities                                             3,873,141               3,274,187

Long Term Liabilities
    Convertible preferred stock subject to mandatory redemption;
      1,100,000 shares issued and outstanding as of June 30, 2005
      and December 31, 2004.
    Shares subject to mandatory redemption                                       1,100,000               1,100,000
    Long term note payable, net of current portion                                 225,000                 225,000
                                                                              ------------            ------------

           TOTAL LIABILITIES                                                     5,198,141               4,599,187
                                                                              ------------            ------------

Commitments and Contingencies                                                           --                      --

Stockholders' Deficit
    Preferred Stock, convertible, $.001 par value, 10,000,000
      shares authorized, 3,319,125 and 3,359,125 issued and
      outstanding as of June 30, 2005 and December 31, 2004,
      respectively                                                                   3,320                   3,360
    Common stock, $.001 par value, 25,000,000 shares
      authorized, 20,033,521 and 15,663,821 issued; and 19,608,521
      and 15,238,821 outstanding as of June 30, 2005 and
      December 31, 2004, respectively                                               20,034                  15,664
    Stock subscribed                                                               259,500                 404,881
    Treasury stock, 425,000 shares at cost                                        (191,250)               (191,250)
    Additional paid in capital                                                  10,143,675               8,758,124
    Accumulated deficit                                                        (15,266,687)            (13,311,483)
                                                                              ------------            ------------

           TOTAL STOCKHOLDERS' DEFICIT                                          (5,031,408)             (4,320,704)
                                                                              ------------            ------------

           TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                        $    166,733            $    278,483
                                                                              ============            ============
</TABLE>

         See accompanying notes to the consolidated financial statements


                                       F-1
<PAGE>

                          DESERT HEALTH PRODUCTS, INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

<TABLE>
<CAPTION>
                                                                 Three Months Ended                        Six Months Ended
                                                                       June 30,                                 June 30,
                                                           --------------------------------        --------------------------------
                                                               2005                2004                 2005               2004
                                                           ------------        ------------        ------------        ------------
<S>                                                        <C>                 <C>                 <C>                 <C>
Revenues, net                                              $     81,370        $     72,279        $     85,196        $    118,814
Cost of Revenues                                                     --
    Merchandise                                                  55,253              29,237              59,738              60,530
                                                           ------------        ------------        ------------        ------------
                                                                 55,253              29,237              59,738              60,530
                                                           ------------        ------------        ------------        ------------

    Gross Profit                                                 26,117              43,042              25,458              58,284

Operating Expenses
    General and administrative                                1,423,903             399,514           1,656,394             980,522
    Impairment of intangibles                                        --             756,822                  --             756,822
    Impairment of goodwill                                           --             233,645                  --             233,645
                                                           ------------        ------------        ------------        ------------
        Total operating expenses                              1,423,903           1,389,981           1,656,394           1,970,989
                                                           ------------        ------------        ------------        ------------

    Net Loss From Operations                                 (1,397,786)         (1,346,939)         (1,630,936)         (1,912,705)
                                                           ------------        ------------        ------------        ------------

Other Income (Expense)
    Interest expense                                           (159,915)           (399,621)           (329,268)           (834,146)
    Debt forgiveness                                              5,000                  --               5,000                  --
    Other expense                                                    --              (3,883)                 --              (5,718)
    Other income                                                     --                  85                  --              14,334
    Interest income                                                  --                  --                  --                  37
                                                           ------------        ------------        ------------        ------------
                                                               (154,915)           (403,419)           (324,268)           (825,493)
                                                           ------------        ------------        ------------        ------------

Net Loss                                                   $ (1,552,701)       $ (1,750,358)       $ (1,955,204)       $ (2,738,198)
                                                           ============        ============        ============        ============

Basic & Diluted Loss  Per Share                            $      (0.10)       $      (0.13)       $      (0.13)       $      (0.20)
                                                           ============        ============        ============        ============

Weighted Average Common Shares Outstanding                   15,750,951          13,516,348          15,434,422          13,379,923
                                                           ============        ============        ============        ============
</TABLE>

     See accompanying notes to the consolidated financial statements


                                       F-2
<PAGE>

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

<TABLE>
<CAPTION>
                                            Convertible Preferred Stock           Common Stock                   Treasury Stock
                                            ---------------------------     --------------------------       ----------------------
                                               Shares        Par Value         Shares        Par Value       Shares          Cost
                                             ----------      ---------      -----------      ---------       -------      ---------
<S>                                           <C>             <C>            <C>              <C>            <C>          <C>
Balances, December 31, 2004                   3,359,125       $ 3,360        15,663,821       $ 15,664       425,000      $(191,250)

 Shares cancelled for the six months
    ended June 30, 2005:                             --            --          (750,000)          (750)           --             --

 Shares issued for the six months
    ended June 30, 2005:
           Loan inducement                           --            --           275,000            275            --             --
           Services and fees                         --            --         4,400,000          4,400            --             --
           Stock conversion                     (40,000)          (40)           40,000             40            --             --
           Stock subscribed - issued                 --            --           404,700            405            --             --
           Stock subscribed                          --            --                --             --            --             --
 Net loss for the six months ended
    June 30, 2005                                    --            --                --             --            --             --
                                             ----------       -------       -----------       --------       -------      ---------
 Balances, June 30, 2005                      3,319,125       $ 3,320        20,033,521       $ 20,034       425,000      $(191,250)
                                             ==========       =======       ===========       ========       =======      =========

<CAPTION>
                                         Additional
                                           paid-in             Stock               Accumulated          Total Equity
                                           Capital           Subscribed              Deficit              (Deficit)
                                         -----------         ----------           ------------          ------------
<S>                                      <C>                  <C>                 <C>                    <C>
Balances, December 31, 2004              $ 8,758,124          $ 404,881           $(13,311,483)          $(4,320,704)

 Shares cancelled for the six months
    ended June 30, 2005:                         750                 --                     --                    --

 Shares issued for the six months
    ended June 30, 2005:
           Loan inducement                    51,975                 --                     --                52,250
           Services and fees               1,112,850                 --                     --             1,117,250
           Stock conversion                       --                 --                     --                    --
           Stock subscribed - issued         219,976           (220,381)                    --                    --
           Stock subscribed                       --             75,000                     --                75,000
 Net loss for the six months ended
    June 30, 2005                                 --                 --             (1,955,204)           (1,955,204)
                                         -----------          ---------           ------------           -----------
 Balances, June 30, 2005                 $10,143,675          $ 259,500           $(15,266,687)          $(5,031,408)
                                         ===========          =========           ============           ===========
</TABLE>

         See accompanying notes to the consolidated financial statements


                                       F-3
<PAGE>

                           DESERT HEALTH PRODUCTS, INC
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                        For The Six Months Ended June 30,

<TABLE>
<CAPTION>
                                                                                         2005                2004
                                                                                    -------------       -------------
<S>                                                                                 <C>                 <C>
Cash Flows from Operating Activities
        Loss from operations                                                        $  (1,955,204)      $  (2,738,198)
        Adjustments to reconcile net loss to net cash in operating activities:
               Depreciation                                                                49,654               9,375
               Preferred stock issued for interest payment                                     --             124,094
               Loan inducement fees and financing costs                                   170,497             276,049
               Impairment of intangibles and goodwill                                          --             990,467
               Stock issued for services and fees                                       1,117,250             380,000
               Bad debt expense                                                            20,834                  --
               Debt forgiveness                                                            (5,000)                 --
        Change in:
               Accounts receivable                                                        (74,604)              2,542
               Inventory                                                                  (10,887)            (14,805)
               Prepaid expenses                                                             7,500                  --
               Accounts payable                                                            66,571             150,009
               Deferred revenue                                                            18,372              14,692
               Bank overdraft                                                               4,002                  --
               Interest payable                                                           132,973              81,825
                                                                                    -------------       -------------

                    Net Cash Used in Operating Activities                                (458,042)           (723,950)
                                                                                    -------------       -------------
Cash Flows from Investing Activities
        Purchase of intangibles                                                                --              (2,850)
        Deposits                                                                               --               1,250
                                                                                    -------------       -------------

               Net Cash Used in Investing Activities                                           --              (1,600)
                                                                                    -------------       -------------

Cash Flows from Financing Activities
        Proceeds from notes payable                                                       397,036             307,500
        Payments on notes payable                                                         (15,000)            (25,000)
        Payments on advances                                                                   --              (1,000)
        Proceeds from sale of stock                                                            --             185,000
        Cash received for unissued shares                                                  75,000             258,000
                                                                                    -------------       -------------

               Net Cash Provided by Financing Activities                                  457,036             724,500
                                                                                    -------------       -------------

               Net Decrease in Cash and Cash Equivalents                                   (1,006)             (1,050)

Beginning Cash and Cash Equivalents                                                         2,135              11,420
                                                                                    -------------       -------------

Ending Cash and Cash Equivalents                                                    $       1,129       $      10,370
                                                                                    =============       =============

Non-cash financing and investing transactions
        Loan inducement fees and financing costs                                    $      52,250       $     164,100
        Stock issued that was subscribed                                                  220,381           1,282,025
</TABLE>

         See accompanying notes to the consolidated financial statements


                                       F-4
<PAGE>

Notes to Financial Statements

Note 1. Summary Of Significant Accounting Policies

Basis of Presentation and Interim Consolidated Financial Statements

      The accompanying unaudited condensed consolidated balance sheet as of June
30, 2005 and the related unaudited condensed consolidated statements of
operations, stockholders deficit and cash flows for the six months ended June
30, 2005 and 2004 presented herein have been prepared in accordance with
accounting principles ("GAAP") 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. 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, 2004, 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.

Stock Based Compensation

      The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB 25) and the related
interpretations in accounting for its employee stock options. Under APB 25,
because the exercise price of employee stock options equals or exceeds the
market price of the underlying stock on the date of grant, no compensation
expense is recorded. The Company has adopted the disclosure-only provision of
Statement of Financial accounting Standards No. 123., "Account for Stock Based
Compensation".

      The company has no issuances of stock options for the periods presented
and, as such has no pro forma earnings per share presentation.

Note 2. New Financing

      During the six months ended June 30, 2005, the Company obtained new short
term financing from an entity in the total amount of $397,000. The amount was
recorded as a note payable with interest bearing at 7%. As of the filing of this
statement the final terms of the agreement have not been finalized.

Note 3. Stock Issuances

      On May 2, 2005, the company established the 2005 Directors, Officers and
Consultants Stock Option, Stock Warrant and Stock Award Plan Under the Plan the
company is authorized to issue up to a maximum of 6,000,000 shares of common
stock. During the second quarter of 2005, the company issued 4,175,000 shares to
consultants for professional services. Subsequent to June 30, 2005, the company
issued 700,000 shares to consultants for professional services valued at
approximately $109,000.


                                                                               3
<PAGE>

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 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 which have
been discussed in prior filings with the Securities and Exchange Commission
("SEC"). The following factors, among others, could cause actual results to
differ from those indicated in the forward-looking statements:

      o     The gain or loss of significant customers or significant changes in
            purchasing volume;

      o     The amount and timing of our operating expenses and capital
            expenditures;

      o     Changes in the volume of our product sales and pricing concessions
            on volume sales;

      o     The timing, rescheduling or cancellation of customer orders;

      o     The varying length of our sales cycles;

      o     Our ability to specify, develop, complete, introduce and market new
            products and bring them to volume production in a timely manner;

      o     The rate of adoption and acceptance of new industry standards in our
            target markets;

      o     The effectiveness of our product cost reduction efforts and those of
            our suppliers;

      o     Changes in the mix of products we sell;

      o     Changes in the average selling prices of our products; and

      o     The risk factors described in other documents and reports filed with
            the SEC, including our Annual Report on Form 10-KSB for the year
            ended December 31, 2004.

            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.


                                                                               4
<PAGE>

      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.

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.

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.

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

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


                                                                               5
<PAGE>

RESULTS OF OPERATIONS.

      Three months ended June 30, 2005 and 2004

      Revenues. Revenues for the three months ended June 30, 2005 were $81,370,
an increase of $9,091 or 13%, from $72,279 for the three months ended June 30,
2004. 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.

      Gross Profit Margin. Gross profit was $26,117 or 32% for the three months
ended June 30, 2005, a decrease of $16,925 or 39%, from $43,042 or 60% for the
three months ended June 30, 2004. This decrease is primarily the result of costs
associated with distribution of marketing samples.

      Operating Expenses. Operating expenses for the three months ended June 30,
2005 were $1,423,903, an increase of $33,921 or 2%, from $1,393,779 for the
three months ended June 30, 2004. In 2004 approximately $1,000,000 of operating
expenses were the result of the complete write-off of intangibles to comply with
generally accepted accounting principles. In second quarter 2005 there is an
increase of $1,000,000 in professional services as noted in Note 3 of the
Financial Statements.

      Interest Expense. Interest expense for the three months ended June 30,
2005 was $159,915 a decrease of $239,706, or 60%, from $399,621 for the three
months ended June 30, 2004. The difference is primarily the result of decreased
levels of deferred financing costs and decreased levels of loan inducement fees.

      Net Income (Loss). Net loss was $1,552,701 for the three months ended June
30, 2005, as compared to a net loss of $1,750,358 for the three months ended
June 30, 2004. This increase is primarily the result of increased operating
expenses and interest expense as discussed in the operating expenses section and
the interest expense section.

      Six Months Ended June 30, 2005 and 2004

      Revenues. Revenues for the six months ended June 30, 2005 were $85,196, a
decrease of $33,618, or 28% decrease from $118,814 for the six months ended June
30, 2004. This decrease was principally attributable to the lack of sales
activity in the first quarter of 2005. The lack of sales was created by the
result of a major investor stopping funding. This funding was partially for
support of Desert Health's sales projects that were in place for the first
quarter of 2005, and are now being implemented in 2005. During the second
quarter there has been increased acceptance of our registrations in the foreign
markets and continuing penetration into the domestic market. We are continuing
our efforts to launch new distribution outlets in Europe, Asia and in the
domestic market.

      Gross Profit Margin. Gross profit was $25,458 or 30,%, for the six months
ended June 30, 2005, a decrease of $32,826 or 56% from $58,284 or 49%, for the
six months ended June 30, 2004. This decrease is primarily the result of
decreased sales in the first quarter and costs associated with distribution of
marketing samples.

      Operating Expenses. Operating expenses for the six months ended June 30,
2005 were $1,656,394, a decrease of $314,595 or 16% from $1,962,336 for the six
months ended June 30, 2004. In 2004 approximately $1,000,000 of operating
expenses were the result of the complete write-off of intangibles to comply with
generally accepted accounting principles. In second quarter 2005 there is an
increase of $1,000,000 in professional services as noted in Note 3 of the
Financial Statements.

      Interest Expense. Interest expense for the six months ended June 30, 2005,
was $329,268 a decrease of $504,878, or 61%, from $834,146 for the six months
ended June 30, 2004. The difference is primarily the result of decreased levels
of deferred financing costs and decreased levels of loan inducement fees.


                                                                               6
<PAGE>

      Net Income (Loss). Net loss was $1,955,204 for the six months ended June
30, 2005, as compared to a net loss of $2,738,198 for the six months ended June
30, 2004. This decrease is primarily the result of the matters discussed in the
Operating Expenses section and the Interest Expense section above.

Liquidity and Capital Resources

      As indicated in our attached financial statements, our gross revenue was
not sufficient to meet our operating expenses for the six months ended June 30,
2005. In addition, as of June 30, 2005, our current liabilities exceeded our
current assets by $3,732,039 as compared to $3,189,236 for the comparable six
month period ended June 30, 2004.

      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 will 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.

      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.

      We are continuing to position ourselves in the lucrative North American
market. We believe that trademark and logo registrations under Class 5 filed in
Mexico and Canada will contribute to the presence of our products in the network
marketing, private label and branded label markets.

      Over the next 12 months, we intend to increase our revenues through the
strong support from our international and domestic clients and registrations
from various countries around the world are continuing to be approved.

      A fast growing segment of the over fifty billion dollar U.S. nutritional
supplement market is being reached through the use of infomercials. Thus, we
have entered into a joint venture to participate in this form of marketing with
our new Celadrin Pain Management System, our Foot Care skin care system, and our
doctor tested and approved anti-aging products. These items are also being
offered to private label customers.

      During 2005, we are continuing to develop Royal Products, Inc., a wholly
owned subsidiary, which promotes sales in the network marketing arena. Interest
in this form of product sales is increasing as can be seen by the success of
major network marketing companies such as Forever Living, Herbalife, Shaklee and
others.

      There is increasing interest in our product lines from the international
markets. We have orders from our Middle East and United Kingdom customers and
have renewed the lease for the coming year at our office in Beijing, China, and
we are also becoming more aggressive in the domestic market.

      Management believes the implementation of events as described above will
bring liquidity and profitability to the Company in the coming year. We believe
exclusive marketing rights to the new health products, and other products being
negotiated for, will bring significant volume and profitability.


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<PAGE>

      We will increase the number of our employees, and expand our facilities
where necessary to meet product development and completion deadlines. 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. A 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
that of our shareholders.

Recent Developments

      In March 2005, we received an order from one of our major customers for
$76,400. The order was fulfilled in May 2005. This customer has advised us that
their market is expanding and they intend to add three to five new products from
our product lines within the next two years.

      On May 3, 2005, we issued a press release announcing that we have entered
into an agreement with Wilkerson Creative, Inc., a producer of Direct Response
Radio, TV Commercials and Infomercials. Wilkerson Creative, Inc., has agreed to
create direct response radio and television commercials as well as radio and
television infomercials and to enter into arrangements with entities to cause
such commercials and infomercials to be aired. Additionally, we believe that
Wilkerson Creative, Inc. will provide the necessary talent to contribute to the
success of these projects.

      The first of three infomercials scheduled for airtime will focus on Desert
Health's Celadrin(R)-based pain and joint support products. With recent
disclosures by the FDA concerning some pharmaceutical medications for arthritis
and pain relief either being removed from the market, or warnings being posted,
this natural pain relief product is being released in timely fashion. Over 70
million individuals in the U.S. have arthritis. The Arthritis Foundation reports
that arthritis is the leading disability of Americans, resulting in over 39
million medical visits per year and $65 billion dollars annually in medical
expenses and lost wages.

      The second scheduled set of media attention through Wilkerson Creative,
Inc., will concentrate on Desert Health's Anti-Aging Cream. Clinical studies
conducted by dermatologist, Dr. Eugene Conte, concluded that patients responded
to treatment with remarkable skin improvement and consumer approval. The last
set of media scheduled for completion by Wilkerson Creative, Inc., will focus on
Desert Health's Foot and Body Care system. This skin care system was designed
specifically to treat the dry skin and other conditions often associated with
diabetes. Unlike most exfoliation processes, this system is non-irritating, yet
highly effective .The following actions apply to this skin care system:
Cleanser; Incredible exfoliant; Antixoidant; Enhances natural skin repair;
Potent invigorator; Fantastic moisturizer.

      Rayfield Wright continues to be a supportive member of the quest for
optimal health through Wright's Sports and Nutrition's line of natural health
supplements. These supplement and skin care lines were designed and formulated
exclusively by Desert Health Products, Inc., for Wright's Sports and Nutrition,
LLC.

      The website address for Desert Health Products, Inc. is
www.deserthealth.com

ITEM 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

      As of June 30, 2005, 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


                                                                               8
<PAGE>

amended (the "Exchange Act"). Based on that evaluation, the CEO and CFO
concluded that our disclosure controls and procedures were effective as of June
30, 2005.

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)
of Rule 13a-15 or 15d-15 under the Exchange Act that occurred during the quarter
ended June 30, 2005, 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

Please see our Annual Report filed on Form 10-KSB for the period ended December
31, 2004, and our quarterly Report filed on Form 8-KSB for the period ended
March 31, 2005, for discussion of pending legal proceedings.

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended June 30, 2005 the following shares of common and
preferred stock were issued:

On May 25, 2005, 50,000 shares of common stock were issued to a sophisticated
investor as a loan inducement.

On June 2, 2005, 207,200 shares of common stock were issued to various
sophisticated investors as loan inducements.

On June 3, 2005, 92,500 shares of common stock were issued to various
sophisticated investors as loan inducements.

Additionally, 40,000 shares of preferred stock were converted to common stock
during the 3 months ended June 30, 2005.

ITEM 3. DEFAULTS BY THE COMPANY UPON ITS SENIOR SECURITIES

      None.

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

      None.

ITEM 5. OTHER INFORMATION

      None.

ITEM 6. EXHIBITS

      (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


                                                                               9
<PAGE>

            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

                                   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                          August 22, 2005
    -------------------
    Johnny Shannon,
    President

By: /s/ Johnny Shannon                          August 22, 2005
    -------------------
    Johnny Shannon,
    Chief Financial Officer


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