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                                    Exhibit F

                          Audited Financial Statements
                          June 30, 1998, 1997 and 1996

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<PAGE>




                     Desert Springs Acquisition Corporation

                          (a Development Stage Company)

                              Financial Statements

                             June 30, 1998 and 1997









<PAGE>




                                    CONTENTS



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>


                   [LETTERHEAD OF CROUCH, BIERWOLF & CHISHOLM]
                         Certified Public Accountants

                          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, 1998 and 1997 and the
related  statements of operations,  stockholders'  equity and cash flows for the
years ended June 30, 1998,  1997 and 1996 and from inception of the  development
stage on July 1, 1991 through June 30, 1998. 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, 1998 and 1997 and the
results of its operations and cash flows for the years ended June 30, 1998, 1997
and 1996 and from  inception  of the  development  stage on July 1, 1991 through
June 30, 1998 in conformity with generally accepted accounting principles.


/s/ CROUCH, BIERWOLF & CHISHOLM

Salt Lake City, Utah
October 31, 1998



<PAGE>

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

<TABLE>
<CAPTION>
                                     ASSETS

                                                                     June 30
                                                             ----------------------
                                                                1998         1997
                                                             ---------    ---------
<S>                                                          <C>          <C>    
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 and 1,942 500 shares
   issued and outstanding respectively                             254          194

  Additional paid-in capital                                   425,981      420,041

  Retained Deficit                                            (461,087)    (455,087)
                                                             ---------    ---------
     Total Stockholders' Equity                                (34,852)     (34,852)
                                                             ---------    ---------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $    --      $    --
                                                             =========    =========
</TABLE>



    The accompanying notes are an integral part of these financial statements

                                       -4-


<PAGE>



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

<TABLE>
<CAPTION>
                                                                                    From
                                                                              Inception of the
                                                                              Development Stage
                                               For the Years Ended             on July 1, 1991
                                                     June 30                       Through
                                    -----------------------------------------      June 30,
                                       1998            1997          1996           1998
                                    -----------    -----------    -----------    -----------
<S>                                 <C>            <C>            <C>            <C>      
REVENUES                            $      --      $      --      $      --      $      --
                                    -----------    -----------    -----------    -----------
EXPENSES
     GENERAL & ADMINISTRATIVE             6,000         22,234         25,034         56,454
                                    -----------    -----------    -----------    -----------
NET LOSS FROM OPERATIONS                 (6,000)       (22,234)       (25,034)       (56,454)

NET LOSS FROM
     DISCONTINUED OPERATIONS               --             --             --         (404,633)
                                    -----------    -----------    -----------    -----------
NET LOSS                            $    (6,000)   $   (22,234)   $   (25,034)   $  (461,087)
                                    ===========    ===========    ===========    ===========

LOSS PER SHARE                      $     (0.00)   $     (0.01)   $     (0.02)   $     (0.38)
                                    ===========    ===========    ===========    ===========

WEIGHTED AVERAGE
     SHARES OUTSTANDING               2,074,500      1,942,500      1,673,000      1,205,011
                                    ===========    ===========    ===========    ===========
</TABLE>


    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, 1998

<TABLE>
<CAPTION>
                                              Common Stock            Additional
                                        ------------------------       Paid-in      Accumulated
                                         Shares          Amount        Capital        Deficit
                                        ---------      ---------      ---------      ---------
<S>                                     <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)
                                        =========      =========      =========      =========
</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
                                            1998          1997          1996       June 30, 1998
                                          --------      --------      --------     -------------
<S>                                       <C>           <C>           <C>            <C>      
Cash Flows From Operating Activities

  Net Income/(loss)                       $ (6,000)     $(22,234)     $(25,034)      $(56,454)
  Less non-cash items:

     Stock issued for services               6,000          --          12,520         18,520
     Increase in accounts payable             --          22,234        12,514         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 Cashflow Information:
  Cash Paid For:
     Interest                             $   --        $   --        $   --         $   --
                                          ========      ========      ========       ========
     Income Taxes                         $   --        $   --        $   --         $   --
                                          ========      ========      ========       ========
</TABLE>

                                      -7-

<PAGE>

                     Desert Springs Acquisition Corporation
                          (A Development Stage Company)
                        Notes to the Financial Statements
                             June 30, 1998 and 1997

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


                                      -8-

<PAGE>


                     Desert Springs Acquisition Corporation
                          (A Development Stage Company)
                        Notes to the Financial Statements
                             June 30, 1998 and 1997

NOTE 1 - Summary of Significant Accounting Policies (Continued)

     based on the weighted  average number of shares  outstanding at the date of
     the financial statements.

     e.   Provision for Income Taxes

          No provision  for income taxes have been recorded due to net operating
     loss carryforwards  totaling  approximately  $1,103,234 that will be offset
     against future taxable income.  These NOL carryforwards  begin to expire in
     the year 1999. 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


                                      -9-

<PAGE>


                     Desert Springs Acquisition Corporation
                          (A Development Stage Company)
                        Notes to the Financial Statements
                             June 30, 1998 and 1997

NOTE 3 - Stockholders' Equity (Continued)

     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.

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-