FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
                             OF 1934 (FEE REQUIRED)

                                       OR

[_]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 or  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934 (NO FEE REQUIRED)


                       Commission File Number: 33-12029-D

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                         Desert Springs Acquisition Corp
             (Exact name of Registrant as specified in its charter)
                                    formerly
                          Bartel Financial Group, Inc.

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           Colorado                                     84-1043258
(Jurisdiction of Incorporation)             (I.R.S. Employer Identification No.)

5160 South Valley View, Suite 106, Las Vegas NV                        89118
(Address of principal executive offices)                             (Zip Code)

Registrant's telephone number, including area code:    (702) 739-6552

Securities registered pursuant to Section 12(b) of the Act:    None

Securities registered pursuant to Section 12(g) of the Act:    None:

Yes[_] No[x]  (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.)

Not[X]  (Indicate  by check mark  whether if  disclosure  of  delinquent  filers
(ss.229.405)  is not and  will  not to the  best of  Registrant's  knowledge  be
contained  herein,  in definitive proxy or information  statements  incorporated
herein by reference or any amendment hereto.)

As of June 30, 1999, the aggregate number of shares held by  non-affiliates  was
approximately  308,000  shares.  Due to  the  limited  market  for  the  Company
securities,  no estimate is being supplied herewith of the market value for such
securities.

As of June 30, 1999, the number of shares outstanding of the Registrant's Common
Stock was 2,542,500.

                                               Exhibit Index is found on page 12

        Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 1


<PAGE>


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                                     PART I


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        Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 2


<PAGE>


                                Item 1. Business.


(a)  Organization of the Issuer.

     Desert Springs Acquisition Corp. (the "Issuer", the "Company" and sometimes
the  "Registrant") is a Colorado  corporation  (formerly Bartel Financial Group,
Inc) ("BFG Colorado")  organized October 3, 1986, as WTS III Capital Corporation
("WTS").  WTS  conducted  a public  offering  of its  securities  pursuant  to a
Registration  Statement  filed with the Denver Regional Office of the Securities
and Exchange  Commission  ("SEC") which was effective on August 11, 1987,  under
the  Securities  Act of 1933.  The offering  closed after receipt of the maximum
proceeds of $300,000.  On October 7, 1987, WTS acquired 100% of Bartel Financial
Group,   Inc.  ("BFG  Utah"),  a  Utah   Corporation  in  transaction   commonly
characterized as a "reverse acquisition".

     On July 11, 1995,  pursuant to  authority  granted by  shareholders  at the
Special  Shareholders  Meeting  of  October  28,  1994,  the Board of  Directors
resolved as follows:  The Officers  were  empowered and directed to effectuate a
200  for 1  reverse  split  of the  Company's  Common  Stock;  provided  that no
shareholder  shall be  reduced  to less  than 10  shares  as a  result  thereof.
Following  the 200 to 1 reverse  split,  and as a result  thereof,  the existing
138,100,000  shares issued and outstanding  were reduced to 690,500 shares.  The
Officers  were  further  empowered  and  directed  to  change  the  name  of the
Corporation to Desert Springs Acquisition Corp.

     On  September  18,  September  28, and October 7, 1995,  respectively,  the
Issuer entered into certain Financial Service Agreements.  Attention is directed
to the Exhibits furnished with Quarterly Report on Form 10-Q dated September 30,
1995, December 31, 1995 and March 31, 1996, all of which are incorporated herein
by this reference as though fully set forth herein, and are attached as Exhibits
28.1, 28.2 and 28.3 thereto.  These agreements were the subjects,  respectively,
of three successive filings resulting in the Registration of 1,252,000 shares of
common stock on Form S-8,  pursuant to the  Securities Act of 1933. No change of
control of the issuer  resulted  from the  registration  or  disposition  of the
Securities registered on Form S-8.

     As a result of the  foregoing  transactions,  as of the date of this Annual
Report, the Issuer had a single class of securities, namely common equity voting
stock, 500,000,000 shares (of par value $0.0001) authorized;  of which 2,542,500
shares were issued and outstanding.

(b)  The Business of Registrant and its Subsidiary.

     On October 7, 1987, WTS (then the Issuer) acquired 100% of Bartel Financial
Group,  Inc.  ("BFG Utah"),  a Utah  Corporation in a reverse  acquisition.  The
Company and its wholly-owned  subsidiary had no employees and conducted business
solely  through  BFG  Publishers,   Inc.,  a  related  entity,   publishing  and
distributing   investment   advisory   newsletters   to   approximately   15,000
subscribers.  During  fiscal  1991,  BFG Utah  discontinued  operations  and the
subsidiary  companies were dissolved by the State of Utah. The Issuer  therefore
began the development stage on July 1, 1991. On July 11, 1995, the Issuer's name
was changed to Desert  Springs  Acquisition  Corp.  and is  currently  seeking a
business opportunity or combination candidate.

(c)  Employees and Facilities.

     The Company has no employees or  facilities,  and enjoys the  non-exclusive
office services of its President and Majority Shareholder.


        Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 3


<PAGE>


(d)  Year 2000.

     The Issuer had reviewed its year 2000 compliance issues and determined that
it will not be affected,  for the reason that it owns and operates no computers,
or other digital devices, and that it has no customers or suppliers.

                               Item 2. Facilities.

     The Company has no employees or  facilities,  and enjoys the  non-exclusive
office services of its President and Majority Shareholder.

                           Item 3. Legal Proceedings.

     There are no legal or other proceedings  pending against the Company, as of
the preparation of this Report,  and no facts are known or suspected which would
give rise to any anticipation of any such proceedings in the foreseeable future.

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

     There have been no matters  submitted to a vote of shareholders  during the
annual period covered by this report.


        Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 4


<PAGE>


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                                     PART II


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        Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 5


<PAGE>


            Item 5. Market for Common Equity and Stockholder Matters.


(a)  Market Information.

     The Registrant  Company has one class of  securities,  Common Voting Equity
Shares ("Common Stock"). As of the date of this Annual Report, the securities of
the Issuer are not traded  over the counter or on any  trading  exchange.  It is
foreseeable  that  the  common  stock  of  this  issuer  may  be  traded  in the
foreseeable  future over the counter.  If so  shareholders  and the public would
experience a young,  sporadic and potentially  volatile trading market for them.
Quotations  for, and  transactions  in the  Securities  so traded are capable of
rapid  fluctuations,  resulting  from the  influence  of  supply  and  demand on
relatively thin volume. There may be buyers at a time when there are no sellers,
and sellers when there are no buyers, resulting in significant variations of bid
and ask  quotations by  market-making  dealers,  attempting to adjust changes in
demand and supply.  A young  market is also  particularly  vulnerable  to "short
selling",  sell orders by persons  owning no shares of stock,  but  intending to
drive down the market  price so as to purchase  the shares to be  delivered at a
price  below the price at which the shares  were sold  "short".  Such future and
foreseeable  trading may not occur.  There is no assurance of any future trading
in or of the securities of this Issuer.

     Of the Company's issued and outstanding 2,542,500 shares of Common Stock as
of June 30, 1999, all shares,  subject to an exception for the 1,634,500  shares
owned by affiliates of the Issuer,  might be presently  sold in compliance  with
Rule 144, in brokerage transactions, at such time as there may be trading in the
common stock of this Issuer. Rule 144 provides among other things and subject to
certain limitations that a person holding  "Restricted  Securities" for a period
of two years, who is not an affiliate of the Issuer,  may sell those securities,
free of restriction in brokerage  transactions.  Further, shares issued pursuant
to 1933 Act Registration,  again subject to exceptions for affiliate  ownership,
are  not  "Restricted   Securities"  and  are  freely   tradeable  in  brokerage
transaction.  Affiliates  are  permitted  by Rule  144 to  sell  affiliate-owned
securities  (Restricted  Securities  held for more than one year and  Registered
Affiliate Control Securities however long held) in limited amounts.  Possible or
actual sales of the  Company's  Common  Stock under Rule 144 or otherwise  might
have a depressive  effect upon the price of the Company's  Common Stock, at such
time,  if and when  the  common  stock of this  Issuer  might  be  tradeable  in
brokerage transactions.

(b)  Holders.

     Management  calculates  that  the  approximate  number  of  holders  of the
Company's Common Stock, as of June 30, 1999 was 686.

(c)  Dividends.

     No cash  dividends have been paid by the Company on its Common Stock and no
such payment is anticipated in the foreseeable  future.  No other dividends have
been paid or declared by the Issuer and none are anticipated.

        Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 6


<PAGE>

                        Item 6. Selected Financial Data.


     The following information is provided as of the Date of this Report:
<TABLE>
<CAPTION>
====================================================================================================================================
                June 30                             1999               1998               1997               1996              1995
====================================================================================================================================

<S>                                           <C>                <C>                <C>                <C>                <C>
Total Assets                                          0                  0                  0                  0                  0
------------------------------------------------------------------------------------------------------------------------------------

Revenues                                              0                  0                  0                  0                  0
------------------------------------------------------------------------------------------------------------------------------------

Operating Expenses                                    0              6,000             22,234             25,034              1,314
------------------------------------------------------------------------------------------------------------------------------------

Net Earnings or (Loss)                                0             (6,000)           (22,234)           (25,034)            (1,314)
------------------------------------------------------------------------------------------------------------------------------------
Per Share Earnings
  or (Loss)                                       (0.00)             (0.00)             (0.01)             (0.02)             (0.00)
------------------------------------------------------------------------------------------------------------------------------------
Average Common Shares
  Outstanding                                 2,542,500          2,074,500          1,942,500          1,942,500            690,500
====================================================================================================================================
</TABLE>


          Item 7.   Management's  Discussion and Analysis of Financial Condition
                    and Results of Operations .



(a)  Results of Operations.

     The Issuer has no current  business,  and has had no operations in the last
fiscal year. During the period covered by this report, the Issuer had no plan of
development  or for  achieving  profitability.  A  comparison  of the  financial
statements  from 1995 to the present  reflect  legal and  professional  expenses
incurred  in  connection  with  fundamental  corporate   maintenance,   required
governmental filings, and auditing.

(b)  Liquidity and Capital Resources.

     The Issuer has no capital resource and no liquidity.  (Reference is made to
Auditors Report of June 30, 1999 and 1998, filed herewith.)

(c)  Reverse  Acquisitions.  A  reverse  acquisition  is one in which a  private
business  is  acquired by a public  corporation  in  exchange  for a transfer of
control of the public company to the owners of the private targeted  acquisition
company.  The public  company  acquires the private  company,  in form,  but the
private company acquires the public company in substance.  This corporation,  by
its very nature and current  status,  is a potential  participant in one or more
reverse acquisition transactions, at some undetermined future time. There are no
present activities,  discussions or negotiations,  planned or in progress,  with
any  entity or  interest  group,  for any  direct or  reverse  acquisitions,  or
business combinations, of any kind.


        Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 7
<PAGE>


              Item 8. Financial Statements and Supplementary Data.

     Reference  is made to  Auditors  Report  of June 30,  1999  and 1998  filed
herewith.  Those financial statements,  attached thereto are incorporated herein
by this reference as though fully set forth herein.

                     Item 9. Change of Registrant's Auditor.

     Todd D. Chisholm,  CPA remains the Company's  Auditor,  having prepared the
previous  annual  audit of June 30, 1995,  1996,  1997 and 1998.  The  Company's
previous  Audit was conducted by Gandre & Armstrong P.C and dated  September 25,
1989.  There has been no  disagreement  or  dispute of any kind or sort with any
auditor as to any matter.


        Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 8
<PAGE>


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                                    PART III


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        Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 9
<PAGE>


                   Item 10. Directors and Executive Officers.

     The Directors  and  Executive  Officers of the Company are set forth below.
All Officers and Directors shall serve until the next meeting of shareholders or
until their successors be elected or appointed.

                JAMES L. BARTEL                             President/Director

                MITCHELL MILGATEN                           Secretary/Director

     James  Bartel  also  serves as a Director  of  American  Premier  Financial
Corporation.  No Director has resigned or declined to stand for  re-election  at
any time during the last year because of any  disagreement  on any matter of any
sort involving any aspect of Registrant's operations, policies or practices.

                        Item 11. Executive Compensation.

     On September  18,  1995,  the Issuer  entered  certain  financial  services
agreements with Traders Exchange,  Inc.,  Polyandrous  Trading Group,  Inc., and
James Bartel,  whereby these consultants would receive and did receive stock for
various  services at a rate of $0.01 per share.  During 1996,  1,252,000  shares
were  issued,  valued in the  aggregate  at $12,520.  During  1996,  Mr.  Bartel
received  400,000 shares pursuant to these  agreements.  Except as so disclosed,
none of the Company's Officers or Directors  presently receive any compensation,
nor has any plan of compensation been adopted.

    Item 12. Security Ownership of Certain Beneficial Owners and Management.

                                  COMMON STOCK

     To the best of Registrant's  knowledge and belief the following  disclosure
presents,  as of the date of this report,  June 30, 1999,  the total  beneficial
security  ownership of all  Directors  and  Nominees,  naming  them,  and by all
Officers and Directors as a group, without naming them, of Registrant,  known to
or discoverable by Registrant,  and the total security ownership of all persons,
entities  and  groups,  known  to or  discoverable  by  Registrant,  to  be  the
beneficial  owner or owners of more than five  percent  of any  voting  class of
Registrant's stock. More than one person,  entity or group could be beneficially
interested  in the same  securities,  so that the total of all  percentages  may
accordingly exceed one hundred percent.  Registrant has only one class of stock,
namely Common Voting Equity Shares.

                       PLEASE SEE TABLE ON FOLLOWING PAGE


       Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 10
<PAGE>


           SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS AND 5% OWNERS
<TABLE>
<CAPTION>
============================================================================================
        Name and Address of Beneficial Owner            Amount and Nature           Percent
                                                          of Ownership             of Class
--------------------------------------------------------------------------------------------
<S>                                                        <C>                      <C>
      JAMES L. BARTEL President/Director (1)                 782,500                 40.28
      5160 South Valley View, Suite 106
      Las Vegas NV 89118

============================================================================================
All Officers and Directors as a Group                        782,500                 40.28
============================================================================================
      Traders Exchange                                       395,000                 20.33
      P.O. Box 65724 / 242 Fall St
      Salt Lake City UT 84116
--------------------------------------------------------------------------------------------
      Polyandrous Trading Group                              452,000                 23.27
      3131 Southwest Freeway #46
      Houston TX 77098
--------------------------------------------------------------------------------------------
      American Premier Financial Corp.(1)                     12,500                  0.64
      5160 South Valley View, Suite 106
      Las Vegas NV 89118
============================================================================================
Total Shares Issued and Outstanding                        2,542,500                100.00
============================================================================================
</TABLE>

(1) These shares represent the separate  holdings as indicated.  James Bartel is
the  President  of  American,  but is not  American's  majority  or  controlling
shareholder. American is a publicly held corporation.

            Item 13. Certain Relationships and Related Transactions.

     Mr. Bartel has paid various expenses of the Issuer in the amount of $7,551.
A payable exists to mr. Bartel in this amount. On September 18, 1995, the Issuer
entered  certain  financial  services  agreements with Traders  Exchange,  Inc.,
Polyandrous  trading Group,  Inc., and James Bartel,  whereby these  consultants
would receive and did receive stock for various  services at a rate of $0.01 per
share.  During 1996,  1,252,000  shares were issued,  valued in the aggregate at
$12,520.  On March 1, 1998, the Company issued 600,000 shares of common stock at
a rate of $0.01 per share in exchange for $6,000 in services.


       Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 11
<PAGE>


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                                     PART IV


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       Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 12
<PAGE>


   Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.


(a)  Financial Statements.    Reference  is made to Auditors  Report of June 30,
                              1999  and  1998,   filed  with   herewith.   Those
                              financial  statements,  attached  as  Exhibit  "F"
                              thereto are incorporated  herein by this reference
                              as though fully set forth herein.

(b)  Form 8-K Reports.        No Reports on Form 8-K were filed  during the last
                              quarter covered by this Annual Report.

(c)  Exhibits.                Please see Exhibit Index, following.


                                  Exhibit Index

                       Financial Statements and Documents
                    Furnished as a part of this Annual Report

Exhibit 1.                    Articles  of  Amendment - Bartel  Financial  Group
                              Incorporated.

Exhibit 2.                    Articles of Amendment - Desert Springs Acquisition
                              Corporation.

Exhibit F.                    Audited Financial  Statements - June 30, 1999, and
                              1998.


       Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 13
<PAGE>


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

                 Supplementary Information to be Furnished With
              Reports Filed Pursuant to Section 15(d) of the Act by
                Registrants which Have Not Registered Securities
                       Pursuant to Section 12 of the Act.

No annual report or proxy material has been sent to security holders.

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

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

June 30, 1999.


                         Desert Springs Acquisition Corp
                             A COLORADO CORPORATION


                                       by


/s/                                               /s/
------------------------------                    ------------------------------
James L. Bartel                                                Mitchell Milgaten
PRESIDENT/DIRECTOR                                           SECRETARY/TREASURER


       Desert Springs Acquisition Corp. June 30, 1999 Form 10-KSB        Page 14
<PAGE>


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                                    Exhibit 1

                              Articles of Amendment

                          Bartel Financial Group, Inc.


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


<PAGE>


                                    MAIL TO:
                          Colorado Secretary of State
                               Corporation Office
                            1560 Broadway, Suite 200
                             Denver, Colorado 80202
                                 (303) 866-2361



                              ARTICLES OF AMENDMENT
                                     to the
                            ARTICLES OF INCORPORATION

Pursuant to the provisions of the Colorado  Corporation  Code,  the  undersigned
corporation adopts the following of Amendments to its Articles of Incorporation:

     FIRST: The name of the corporation is (note 1) WTS III Capital Corporation

     SECOND:  The  following  amendment  to the  Articles of  Incorporation  was
adopted on November 30 1987, as prescribed by the Colorado  Corporation Code, in
the manner marked with an X below:

     ______    Such  amendment  was adopted by the board of  directors  where no
               shares have been issued.

       XX      Such  amendment  was adopted by a vote of the  shareholders.  The
     ------    number  of shares  voted for the  amendment  was  sufficient  for
               approval.

     1.   The name of this  corporation,  shall be changed  from WTS III Capital
          Corporation to Bartel Financial Group, Inc;

     2.   The  number  of  shares  of common  stock  that  this  corporation  is
          authorized  to issue  shall be  increased  to a total of Five  hundred
          Million (500,000,000) shares of stock; and

     3.   The extent to which  Directors of this  corporation may be held liable
          to this  corporation  or its  shareholders  for  monetary  damages for
          breach of  fiduciaty  duties  shall be limited to the  fullest  extent
          permitted by the Colorado Corporation Code.

     THIRD:  The  manner,  if not set  forth in such  amendment,  in  which  any
exchange, reclassification, or cancellation of issued shares provided for in the
amendment shall be effected, is as follows:  N/A

     FOURTH:  The manner in which such amendment effects a change in the amount
of  stated  capital,  and the  amount  of  stated  capital  as  changed  by such
amendment, are as follow:     N/A


                                  WTS III, Capital Corporation
                                  -------------------------------------(Note 1)

                                  By  James Bartel
                                  -------------------------------------

                                  and --------------------------------- (Note 2)

                                  ------------------------------------- (Note 3)


     Notes:    1.   Exact corporate name of corporation adopting the Articles of
                    Amendments. ( If this is a change of name amendment the name
                    before this amendment is filed)

               2.   Signatures   and  titles  of   policers   signing   for  the
                    corporation.

               3.   Where no shares have been issued, signature of director

<PAGE>


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


                                    Exhibit 2

                              Articles of Amendment

                        Desert Springs Acquisition Corp.


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


<PAGE>

                              ARICLES OF AMENDMENT
                                     TO THE
                            ARTICLES OF INCORPORATION
                                       OF
                          Bartel Financial Group, Inc.


     Pursuant  to  the  provisions  of  the  Colorado   Corporation   Code,  the
undersigned  corporation  adopts the  following  Articles  of  Amendment  to its
Articles of Incorporation:

     First: The name of the Corporation is Bartel Financial Group, Inc.

     Second:  The  following  amendment  to the  Articles of  Incorporation  was
adopted on July 11, 1995, as prescribed by the Colorado Corporation Code, in the
following manner:

[x] Such Amendment was adopted by vote of the shareholders. The number of shares
voted for the amendment was sufficient for approval.

     1. The Name of the Corporation is Desert Springs Acquisition Corp


     Third:  In all other respects,  the Articles as originally  filed remain in
full force and effect as stated.

     We, the undersigned, being the Presiedent and Secretary this Corporation do
make and file these  Articles of  Amendment,  for the  purpose of  Amending  the
Articles of Incorporation as originally filed pursuant the Colorado  Corporation
Code,  and  accordingly  have set our hand  hereunto  this Day in  certification
thereof: August 31, 1995.


James Bartel                                                    Mitchel Milgaten
PRESIDENT                                                              SECRETARY



<PAGE>





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


                                   Exhibit F

                          Audited Financial Statements
                             June 30, 1999 and 1998


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





<PAGE>


                     Desert Springs Acquisition Corporation

                         ( a Development Stage Company)

                              Financial Statements

                             June 30, 1999 and 1998


<PAGE>


                                 C O N T E N T S


Accountants' Report ......................................................... 3

Balance Sheets     4

Statements of Operations .................................................... 5

Statements of Stockholders' Equity........................................... 6

Statements of Cash Flows .................................................... 7

Notes to the Financial Statements ........................................... 8


<PAGE>


                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders
Desert Springs Acquisition Corporation

We have audited the  accompanying  balance sheets of Desert Springs  Acquisition
Corporation (a  development  stage company) as of June 30, 1999 and 1998 and the
related  statements of operations,  stockholders'  equity and cash flows for the
years ended June 30, 1999,  1998 and 1997 and from inception of the  development
stage on July 1, 1991 through June 30, 1999. These financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on these  financial  statements  based  on our  audits.  The  financial
statement for the period October 3, 1986 (inception)  through June 30, 1989 were
audited by other  accountants,  who gave an unqualified  opinion on their report
dated September 25, 1989.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Desert  Springs  Acquisition
Corporation (a  development  stage company) as of June 30, 1999 and 1998 and the
results of its operations and cash flows for the years ended June 30, 1999, 1998
and 1997 and from  inception  of the  development  stage on July 1, 1991 through
June 30, 1999 in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  As discussed in Note 2, the Company=s
recurring losses and lack of working capital raise  substantial  doubt about its
ability to continue as a going  concern.  Management=s  plans in regard to those
matters are also  described in Note 2. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.


Salt Lake City, Utah
September 21, 1999


<PAGE>


                     Desert Springs Acquisition Corporation
                          (A Development Stage Company)
                                 Balance Sheets


                                     ASSETS

                                                           June 30
                                               ---------------------------------
                                                  1999                   1998
                                               -----------           -----------

ASSETS                                         $        --           $        --
                                               -----------           -----------

   TOTAL Assets                                $        --           $        --
                                               ===========           ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES

  Accounts payable                                      $  27,301     $  27,301
  Accounts payable - related party (Note 6)                 7,551         7,551
                                                        ---------     ---------

     Total Liabilities                                     34,852        34,852
                                                        ---------     ---------

STOCKHOLDERS' EQUITY

  Common stock, $.0001 par value;
   500,000,000 shares authorized;
   2,542,500 shares issued and
   outstanding respectively                                   254           254
  Additional paid-in capital                              425,981       425,981
  Retained Deficit                                       (461,087)     (461,087)
                                                        ---------     ---------

     Total Stockholders' Equity                           (34,852)      (34,852)
                                                        ---------     ---------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $      --     $      --
                                                        =========     =========


    The accompanying notes are an integral part of these financial statements

                                       -4-
<PAGE>


                     Desert Springs Acquisition Corporation
                          (A Development Stage Company)
                            Statements of Operations


                                                                     From
                                                                Inception of the
                                                               Development Stage
                                 For the Years Ended            on July 1, 1991
                                     June 30,                      Through
                     -----------------------------------------     June 30
                        1999           1998           1997           1999
                     ------------   -----------    ----------- -----------------




REVENUES             $         --   $        --    $        --    $        --
                     ------------   -----------    -----------    -----------


EXPENSES
  GENERAL
   & ADMINISTRATIVE            --         6,000         22,234         56,454
                     ------------   -----------    -----------    -----------

NET LOSS FROM
  OPERATIONS                   --        (6,000)       (22,234)       (56,454)

NET LOSS FROM
 DISCONTINUED
  OPERATIONS                   --            --             --       (404,633)
                     ------------   -----------    -----------    -----------


NET LOSS             $         --   $    (6,000)   $   (22,234)   $  (461,087)
                     ============   ===========    ===========    ===========

LOSS PER SHARE       $      (0.00)  $     (0.00)   $     (0.01)   $     (0.33)
                     ============   ===========    ===========    ===========

WEIGHTED AVERAGE
 SHARES OUTSTANDING     2,542,500     2,074,500      1,942,500      1,396,081
                     ============   ===========    ===========    ===========


    The accompanying notes are an integral part of these financial statements

                                       -5-


<PAGE>


                     Desert Springs Acquisition Corporation
                          (A Development Stage Company)
                       Statements of Stockholders' Equity
             From Inception, of the Development Stage On July 1,1991
                              through June 30, 1999


<TABLE>
<CAPTION>
                                                     Common Stock                 Additional
                                               -------------------------            Paid-in         Accumulated
                                               Shares             Amount            Capital            Deficit
                                               ------             ------          ----------        -----------
<S>             <C> <C>                        <C>              <C>                <C>                <C>
Balance on June 30, 1991                       690,500          $      69          $ 404,564          $(404,633)

Contributions from
 shareholders                                       --                 --                624                 --

Net loss for the year
 ended June 30, 1992                                --                 --                 --               (624)

Contributions from
 shareholders                                       --                 --                624                 --

Net loss for the year
 ended June 30, 1993                                --                 --                 --               (624)
                                             ---------          ---------          ---------          ---------
Balance on June 30, 1993                       690,500                 69            405,812           (405,881)

Contributions from
 shareholders                                       --                 --                624                 --

Net loss for the year
 ended June 30, 1994                                --                 --                 --               (624)
                                             ---------          ---------          ---------          ---------
Balance on June 30, 1994                       690,500                 69            406,436           (406,505)

Contributions from
 shareholders                                       --                 --              1,210                 --

Net loss for the year
 ended June 30,1995                                 --                 --                 --             (1,314)
                                             ---------          ---------          ---------          ---------
Balance on June 30, 1995                       690,500                 69            407,646           (407,819)

Stock issued for services (Note 3)           1,252,000                125             12,395                 --

Net loss for the year ended
 June 30, 1996                                      --                 --                 --            (25,034)
                                             ---------          ---------          ---------          ---------
Balance on June 30, 1996                     1,942,500                194            420,041           (432,853)

Net loss for the year ended
 June 30, 1997                                      --                 --                 --            (22,234)
                                             ---------          ---------          ---------          ---------
Balance on June 30, 1997                     1,942,500                194            420,041           (455,087)

Stock issued for services (Note 3)             600,000                 60              5,940                 --

Net loss for the year ended
 June 30, 1998                                      --                 --                 --             (6,000)
                                             ---------          ---------          ---------          ---------
Balance on June 30, 1998                     2,542,500                254            425,981           (461,087)

Net loss for the year ended
 June 30, 1999                                      --                 --                 --                 --
                                             ---------          ---------          ---------          ---------
Balance on June 30, 1999                     2,542,500          $     254          $ 425,981          $(461,087)
                                             =========          =========          =========          =========
</TABLE>


    The accompanying notes are an integral part of these financial statements

                                       -6-

<PAGE>


                     Desert Springs Acquisition Corporation
                          (A Development Stage Company)
                            Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                                      From
                                                                                                Inception of the
                                                   For the Years Ended                         development stage
                                                        June 30                                 on July 1, 1991
                                             -----------------------------                          Through
                                               1999              1998                 1997       June 30, 1999
                                             -----------       -----------       ------------  -----------------
<S>                                          <C>               <C>               <C>                <C>
Cash Flows From Operating Activities

  Net lncome/ (loss)                         $        --       $    (6,000)      $    (22,234)      $(56,454)
  Less non-cash items:

   Stock issued for services                          --             6,000                 --         18,520
   Increase in accounts payable                       --                --             22,234         34,852
                                             -----------       -----------       ------------       --------

     Net Cash Provided (Used) by
      Operating Activities                            --                --                 --         (3,082)
                                             -----------       -----------       ------------       --------

Cash Flows from Investing Activities

     Net Cash Provided (Used) by
      Investing Activities                            --                --                 --             --
                                             -----------       -----------       ------------       --------

  Cash Flows from Financing Activities


    Contributions by Shareholders                     --                --                 --          3,082
                                             -----------       -----------       ------------       --------

     Net Cash Provided (Used) by
      Financing Activities                            --                --                 --          3,082
                                             -----------       -----------       ------------       --------


     Net Change in Cash                               --                --                 --             --
                                             -----------       -----------       ------------       --------

Cash and Cash Equivalents at
 Beginning of Period                                  --                --                 --             --
                                             -----------       -----------       ------------       --------

Cash and Cash Equivalents at
 End of Period                               $        --       $        --       $         --       $     --
                                             ===========       ===========       ============       ========

Supplemental Cash Flow Information:
  Cash Paid For:
   Interest                                  $        --       $        --       $         --       $     --
                                             ===========       ===========       ============       ========
   Income Taxes                              $        --       $        --       $         --       $     --
                                             ===========       ===========       ============       ========
</TABLE>

    The accompanying notes are an integral part of these financial statements

                                       -7-


<PAGE>


                     Desert Springs Acquisition Corporation
                          (A Development Stage Company)
                        Notes to the Financial Statements
                             June 30, 1999 and 1998

NOTE 1 -  Summary Of Significant Accounting Policies

          a.   Organization

               Desert  Springs  Acquisition  Corporation  (the  Company),  is  a
          Colorado  Corporation  organized  October 3, 1986, as successor to WTS
          III Capital  Corporation  (WTS).  WTS was organized as a "Blank Check"
          company and conducted a public offering of its securities  pursuant to
          a Registration  statement on Form S-18 filed with the Denver  Regional
          Office of the Securities and Exchange  Commission  which was effective
          on August 11, 1987.  The offering  closed after receipt of the maximum
          proceeds of $300,000.

               On October 7, 1987 WTS acquired 100% of Bartel  Financial  Group,
          Inc. (BFG, Utah), a Utah corporation in a reverse acquisition.

               The Company and its  wholly-owned  subsidiary BFG (Utah),  had no
          employees and conducted business solely through BFG Publishers,  Inc.,
          a Utah  corporation,  which  is  the  wholly-owned  subsidiary  of BFG
          (Utah).  Through  BFG  Publishers,  Inc.,  the  Company was engaged in
          publishing  and  distributing   investment  advisory   newsletters  to
          approximately 15,000 subscribers. During the fiscal year June 30, 1991
          the subsidiary companies  discontinued their operations and eventually
          were dissolved by the State of Utah. The Company,  therefore began the
          development  stage on July 1,  1991.  On July 11,  1995,  the Board of
          Directors   changed  the  name  of  the  Company  to  Desert   Springs
          Acquisition   Corporation   and  is   currently   seeking  a  business
          opportunity or merger candidate.

          b.   Fiscal Year End

               The Company has elected a fiscal year closing of June 30.

          c.   Recognition of Revenue

               The Company recognizes income and expense on the accrual basis of
               accounting.

          d.   Earnings (Loss) Per Share

               The computation of earnings per share of common stock is based on
               the weighted average number of shares  outstanding at the date of
               the financial statements.


                                      -8-
<PAGE>


                     Desert Springs Acquisition Corporation
                          (A Development Stage Company)
                        Notes to the Financial Statements
                             June 30, 1999 and 1998

NOTE 1 -  Summary of Significant Accounting Policies (Continued)

          e.   Provision for Income Taxes

               No  provision  for  income  taxes have been  recorded  due to net
          operating loss carryforwards totaling approximately $461,087 that will
          be offset against future taxable income. These NOL carryforwards begin
          to expire in the year 2001.  No tax benefit  has been  reported in the
          financial  statements  because the Company  believes there is a 50% or
          greater chance the carryforward will expire unused.  Accordingly,  Per
          FASB 109 the  potential  tax  benefits  of the loss  carryforward  are
          offset by the valuation of the same amount.

          f.   Cash and Cash Equivalents

               The  company   considers  all  highly  liquid   investments  with
          maturities of three months or less to be cash equivalents.

NOTE 2 -  Going Concern

               The accompanying financial statements have been prepared assuming
          that the Company will continue as a going concern.  The Company has no
          assets and has had  recurring  operating  losses for the past  several
          years  and  is  dependent  upon  financing  to  continue   operations.
          Management's  plan is to find a viable business to merge with in order
          to provide working capital as needed. The financial  statements do not
          include  any  adjustments  that might  result from the outcome of this
          uncertainty.

NOTE 3 - Stockholders' Equity

               Beginning  in 1992,  the  stock  transfer  fees have been paid by
          shareholders.  The shareholders do not expect repayment,  and thereby,
          they have contributed the amounts to the Company.

               On July 11, 1995, the Board authorized a reverse stock split of 1
          for 200. These financial  statements have been retroactively  restated
          to reflect the split.

               On September 18, 1995,  the Company  entered a financial  service
          agreement with Traders  Exchange,  Inc.,  James Bartel and Polyandrous
          Trading Group,  Inc.  whereby these  consultants  will provide various
          services for stock at a rate of $.01 per share.  1,252,000 shares were
          issued during 1996 valued at $12,520.

               On March 1, 1998,  the Company  issued  600,000  shares of common
          stock at a rate of $.01 per share in exchange for $6,000 in services.


                                      -9-
<PAGE>


                     Desert Springs Acquisition Corporation
                          (A Development Stage Company)
                        Notes to the Financial Statements
                             June 30, 1999 and 1998

NOTE 4 -  Development Stage Company

               The  Company  is  a  development  stage  company  as  defined  in
          Financial   Accounting   Standards   Board  Statement  No.  7.  It  is
          concentrating  substantially all of its efforts in raising capital and
          searching  for a business  operation  with which to merge or assets to
          acquire, in order to generate significant operations.

NOTE 5 -  Related Party Transactions

               James  Bartel,  an officer of the  Company,  has paid for various
          expenses of the Company in the amount of $7,551.  A payable  currently
          exists to Mr. Bartel in the same amount.

               As  described  in Note 3,  James  Bartel,  an  officer  and major
          shareholder  has entered into a financial  service  agreement with the
          Company.  During 1996,  Mr.  Bartel  received  400,000  shares for the
          services provided under this agreement.


                                      -10-