UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934.
For the quarter ended March 31, 2000 Commission file number 000-27931
DESERT HEALTH PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Arizona 86-0699108
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8221 E Evans Rd
Scottsdale, Arizona 85260
(Address of principal executive offices) (Zip Code)
(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 ______
As of July 5, 2000, there were 7,538,971 shares of common stock outstanding.
<PAGE>
DESERT HEALTH PRODUCTS, INC.
FOR THE QUARTER ENDED
MARCH 31, 2000
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheet as of March 31, 2000 3
Income Statement of Operations
ending March 31, 2000 4
Statement of Cash Flow for the three months 5
ending March 31, 2000
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 6-12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults by the Company upon its
Senior Securities 13
Item 4. Submission of Matter to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports of Form 8-K 13
SIGNATURES 14
<PAGE>
<TABLE>
DESERT HEALTH PRODUCTS, INC.
BALANCE SHEET AS OF
MARCH 31, 2000
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ASSETS
<S> <C>
Current Assets
Cash $ 38,885
Accounts Receivable 31,856
Inventory 143,672
----------
Total Current Assets 214,413
Property and Equipment
Furniture and equipment
and Leasehold Improvements 115,007
Less: Accumulated Depreciation (4,943)
-----------
110,064
Other Assets
Intangibles, net of amortization 1,035,285
Notes receivable 318,440
Deposits 10,000
Other 36,177
-----------
1,462,902
______________
TOTAL ASSETS 1,787,379
============
</TABLE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C>
Current Liabilities
Accounts Payable 152,677
Advances 212
Current Portion of LongTerm Debt 362,480
--------------
Total Current Liabilities 515,369
Long term Liabilities
Notes Payable 52,487
--------------
Total Liabilities 567,856
Stockholders Equity
Common Stock, $.001 par value,
25,000,000 shares authorized and
7,388,971 shares issued and outstanding 7,389
Subscription receivable (1,000)
Preferred Stock, $.001 par value,
10,000,000 authorized and
1,448,500 shares issued and outstanding 1,448
Additional Paid in Capital 2,439,809
Accumulated Deficit (1,228,123)
-------------
1,219,523
-------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,787,379
===========
</TABLE>
<PAGE>
<TABLE>
DESERT HEALTH PRODUCTS, INC.
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDING MARCH 31, 2000
<S> <C>
Revenue $ 61,631
Cost of Sales (38,302)
------------
Gross Profit 23,329
Operating Expenses 426,824
------------
Loss from Operations (403,495)
Other Expense
Interest Expense 2,197
------------
Net Loss before provision for income taxes (405,692)
=============
Beginning Accumulated Deficit (822,431)
============
Ending Accumulated Deficit (1,228,123)
============
Earnings per common share $ (0.05)
============
</TABLE>
<PAGE>
<TABLE>
DESERT HEALTH PRODUCTS, INC.
STATEMENT OF CASH FLOW
FOR THE THREE MONTHS ENDING MARCH 31, 2000
<S> <C>
Cash Flows from Operating Activities
Cash received from customers $ 61,630
Cash paid to suppliers and employees (309,925)
-------------
Net Cash Provided (Used) in Operating Activities (248,295)
Cash Flows from Investing Activities
Cash used for purchase of intangibles, furniture
and equipment (34,525)
------------
Net Cash Provided by Investing Activities (34,525)
Cash Flows from Financing Activities
Cash provided by notes and loans 155,000
Issuance of stock 86,500
Payments on notes and loans (44,398)
------------
Net cash Provided by financing activities 197,102
Net Increase (Decrease) in Cash and Cash Equivalents (85,718)
Beginning Cash and Cash Equivalents 124,603
----------
Ending Cash and Cash Equivalents $ 38,885
==========
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion and analysis should be read in conjunction with
the Company's financial statements and the notes thereto contained elsewhere
in this filing.
Overview
The Company, an Arizona corporation, (the "Company") was formed in 1991
to develop dietary supplement products from natural plant extracts. The
Company is focusing its development efforts on certain plants and plant
extracts that are widely used throughout the United States and Europe to
treat a variety of diseases and physical conditions. The Company identifies
and quantifies the properties within plant sources that are believed to
provide therapeutic or other health benefits and to produce dietary
supplements.
Herbal supplements are multi-molecule compositions extracted or
otherwise derived from plants. Herbal products have been used for centuries
throughout the world to treat a variety of diseases and physical conditions.
In recent years, health consciousness and the increasing popularity of "all
natural" products have contributed to a growth in public interest in herbal
therapies.
The worldwide market for natural dietary supplements is substantial.
According to NUTRITION BUSINESS JOURNAL, in 1996 approximately 28 billion was
spent in the United States for non-prescription, plant-derived dietary
supplements, with sales, according to the BOSTON GLOBE, having increased over
20% annually in the last few years. In addition, according to THE WALL STREET
JOURNAL EUROPE, approximately $18 billion was spent in Europe for
prescription and over-the-counter ("OTC") multi-molecule, plant-derived
products.
The Company has implemented a commercialization strategy for its
nutritional products. The first element of this strategy entails the
development of consistent proprietary dietary supplement products. In the
United States, dietary supplements are considered food products under the
Dietary Supplement Health and Education Act of 1994 ("DSHEA") and, as such,
are not regulated as drugs by the United States Food and Drug Administration
(the "FDA") and do not require FDA approval prior to commercialization.
General
The Products
AsthmaCalmT - AsthmaCalm is a natural dietary supplement designed to aid
in the relief of asthma and pulmonary congestion associated with difficult
breathing.
Blueberry/Grape Seed Complex - is one of the most potent natural
antioxidants.
Liver p.s.T - Liver p.s. is a comprehensive formulation to support liver
health, stimulate bile flow and promote detoxification functions.
Migrasafe-NT - is a natural migraine preventive.
<PAGE>
OsteoDense PlusT - OsteoDense Plus is formulated to help increase bone
density.
Snore ReliefT - Desert Health's Snore formula is a unique combination
of all natural herbs and enzymes that gently work together to prevent
snoring. The product is 100$ natural, easy to take caplets with no reported
side effects or allergies. This product is available to our international
customers.
Allergy ReliefT - Desert Health Products, Inc.'s, Allergy formula
differs from over-the-counter or prescription medications as it is a 100%
natural formulation derived from only the highest quality botanicals. To
date, we have no reports of side effects, intolerance or allergic reactions.
Supplements for Women - Essential Support FemAid Systems products focus
on female nutrition and hormone health. This line of nutritional products
helps women balance their natural hormonal fluctuations from normal menstrual
cycles through menopause. Each of the four support programs is individually
formulated to provide the right combination of nutrients for one of four
distinct hormonal phases: (Phase 1) Normal Menstruation; (Phase 2) Pre-
menstrual syndrome or PMS; (Phase 3) Perimenopause; and (Phase 4) Menopause.
Additional products contain plant, herb and amino acid combinations show to
offer relief from fatigue (Vitality Support), inadequate sleep (Sleep
Support), and stress (Calm Support)
Ayurvedic - We also have a line of 19 unique formulated Ayurvedic herbal
products.
Enhanced Performance IIr According to current studies, 20 to 30 million
men suffer from impotence. Studies have shown that more than 75% of all men
who experience diminished sexual performance can return to peak levels
quickly and easily without medical treatments, surgery or devices. Many men
over 40 today have low levels of testosterone, and testosterone deficit is
the primary hormonal cause of male impotence. If you increase your
testosterone level you also increase your libido for sex, and that is what
this product does. Enhanced Performance II contains many different herbs
which release free testosterone in the body for both men and women. Contains
among other things Avena Sativa, Saw Palmetto, Ginkgo Biloba, Sarsaparilla,
Damiana, L-Arginine, Nettles, Quebracho, Boron, and Zinc.
Glucosamine Complex - The Arthritis Pain Reliever Glucosamine sulfate is
an amino sugar necessary for the construction of connective tissue.
Glucosamine sulfate actually helps to rebuild the damaged cartilage in the
joint. Unfortunately, people in various injured or pathogenic states often
have difficulty manufacturing enough amino sugars. A young athlete under
connective tissue stress or an older osteoarthritis patient will both have
higher turnover rates of amino sugars. Thus, they may not be producing enough
amino sugars to replace those which are lost. For these types of situations,
supplementation with glucosamines could be the ideal way to compensate for
lowered Glucosamine levels. Glucosamine sulfate has even been compared to the
powerful pain reliever ibuprofen. Ibuprofen offered faster pain relief,
Glucosamine sulfate showed greater overall pain reduction.
<PAGE>
Shark Cartilage Sharks rarely, if ever, get cancer. It is the large
amount of cartilage that gives sharks their immunity to cancer. Current
research and published scientific papers now show that Shark Cartilage will
inhibit the formation of the new blood capillary network needed to feed a
growing tumor. Without a capillary network to feed a tumor and remove its
wasted products, a tumor in metastasis will not grow. Without new and
replacement capillaries, tumors will slowly shrink in size. Scientists
published findings that an extract of Shark Cartilage contains a protein
substance that strongly inhibits the development of a new blood network. This
inhibitor is a large protein molecule found most abundantly in Shark
Cartilage. Most people who have well formed blood networks will not need new
vascularization unless a blood vessel-dependent malady such as a tumor begins
to develop. Deny the network, and you will probably stop the tumor. Pregnant
women and people who have recently experienced a heart attack should
obviously not take Shark Cartilage.
NaturaLeanTM Would you like to have a product that helps you lose weight
and also lower your blood cholesterol? We have it. Research has shown that
reducing fat intake is essential for building health and longevity. Excess
dietary fat is the primary cause of obesity, heart disease, high blood
pressure, diabetes, arteriosclerosis and other diseases. This unique weight-
loss product helps reduce the amount of fat your body absorbs from the food
you eat. This natural supplement binds with fat in the digestive system and
prevents it from passing into the bloodstream. Instead, the fat is eliminated
by normal body functions. It does not interfere with the absorption of the
valuable oils, vitamins and minerals your body needs. NaturaLean also
contains cholesterol lowering agents.
Lyco/MenTM Prostate cancer is the second leading cancer killer of men.
Approximately one out of nine men will develop prostate cancer during their
lifetimes. Prostate cancer symptoms include an enlarged prostate caused by
cancerous cells. Desert Health is proud to introduce a supplement designed
with a synergistic blend of nutrients that support male prostate health based
on current scientific knowledge. Desert Health Saw Palmetto Lyco/Men is great
news for men over the age of 40. Starting at this age, the prostate may not
show any pathological change or it may undergo progressive enlargement.
Nature provides us with extraordinary nutrients for optimum prostate health.
We make it our business to keep our male consumers healthy with our
dynamically formulated Saw Palmetto Lyco/Men.
NiteLean PlusTM Lose Weight While You Sleep Obesity is clearly
associated with high blood pressure, elevated levels of cholesterol, adult
diabetes, increased risk of cancer of the colon, rectum and prostate in men,
and cancer of the gallbladder, the bile passages, breasts, cervix, uterus and
ovaries in women. Now it is time to consider NiteLean Plus, a new and
exciting weight loss program that is designed to enable you to lose weight
while you sleep. This new and exciting product is a tested and proven safe
weight loss program, with all natural ingredients that have been shown to be
effective in stimulating the body to burn up excess calories by causing the
body to increase the production of growth hormones that allow your system to
dispose of extra calories.
Brain BoostTM Your brain is a computer. Probably the most hard-working
organ in your body, it controls everything you do. And because it complains
little, and it demands no maintenance, we take it for granted. Unlike any
other organ in our body, we expect it to come with a lifetime warranty. But
does it? It remembers that the capital of Hungary is Budapest, not Bucharest,
but it forgets where you left the remote control. And, whatever you may
think, we need to take care of it. We look after our eyes, we moisturize our
skin, and we spend a lot of money showing our teeth to the dentist. Isn't it
time we pay more attention to this piece of hardware we call the BRAIN -and
its software we call the MIND? Your upgrade is called Brain Boost. A totally
<PAGE>
new "formula" incorporates several natural phytochemicals such as the
patented Leci PS, Phosphatidyl Serine, Ginkgo Biloba and Coenzyme Q10 known
as the "spark of life" or the "energy enzyme".
Melatonin Time-Released Melatonin is a pharmaceutical grade supplement
designed to improve sleep. It is chemically identical to the Melatonin
produced by the human body during the hours of darkness. Because sleep is so
important to overall health, our Time-Released Melatonin may also help
strengthen your immune system, protect you from disease and reduce the
effects of aging. Desert Health's Time-Released Melatonin is unique because
of its time-release delivery system. It supplies Melatonin throughout the
night, the way your own body does. This powerful supplement is ideal for
everyone who seeks deeper and more nourishing sleep. It can also help you
counter the effects of jet lag or shift work. Thousands of clinical trials
have shown that Melatonin is completely safe and non-addictive. It produces
no "sleeping pill hangover" and is without any side effects.
Desert BoostTM -The Whole Desert In One Caplet For the first time in
history you can now get all the nutrients from Pollen, Propolis, Royal Jelly
and Aloe Vera in one caplet. Now you don't have to take all those pills to
increase your energy and immune system, rejuvenate your body and skin. Our
Desert Boost caplet will do all these things and much more.
Euro FiberTM Euro Fiber wafers help fill the need for today's diet.
These fiber wafers contain a complete profile of all four types of dietary
fiber, cellulose, pectin, hemicellulose and lignin. This fiber is a great
snack or dieting aid, giving a full, satisfying feeling.
Selenium PlusTM Selenium improves the function of white cells (T
lymphocytes) which are the body's chief defense against viruses and cancer.
Selenium supplements are not effective for preventing skin cancer but may
help protect against cancers of the lung, colon, rectum and prostate,
according to an article in The Journal of the American Medical Association.
Progesterone/Yam Cream Leading medical researchers have discovered that
wild yam may have important health benefits associated with misery and
discomfort of PMS, menopause and prevention of osteoporosis. A feeling of
euphoria, well being, happiness and energy may be experienced with this
moisturizing skin cream, which stimulates the body's own production and
regulation of Estrogen, Progesterone, Testosterone and other hormones.
Aloe Vera and Propolis Cream Aloe Vera has traditionally been used to
successfully treat burns and cuts. Desert Health utilizes only the highest
grade and quality of Aloe plants and employs the latest "cold process" method
in aloe processing technology to ensure quality products. unequaled in the
industry.
Shampoo/Conditioner with Pollen Our Shampoo/Conditioner with Pollen is
highly concentrated. You need only a few drops to give your hair a luxurious
lather. The Shampoo has no alcohol or water added to its base of Aloe Vera
and Royal Jelly. The Aloe and Pollen formula gives your hair a beautiful
shine, body and manageability.
<PAGE>
Grape Seed Complex Grape Seed Complex is a powerful, free-radical
scavenger that can boost your body's defense system against numerous health
disorders. The Grape Seed Extract, Grape Skin Extract, Ester-C, Aloe Vera and
Wild Yam are synergistically blended and provide a wonderful anti-oxidant and
immune building supplement.
Super Minerals w/AloeTM Minerals are the basic building blocks of life.
Without them, health deteriorates, disease sets in and body functions fail.
Our minerals come in two different flavors, Kiwi and Lemon. Our minerals are
naturally chelated in their "organic" form and that allows them to be rapidly
assimilated for our health.
AlcotrolTM Many nations have tried to combat its epidemic alcohol
problem with everything from expensive therapies to prohibition. The Chinese
have long relied on a simple remedy, an extract of kudzu root. This herb is
extraordinarily effective and it takes away the cravings for alcohol, an
American study indicates. Desert Health's product has kudzu root.
Pau d'Arco A bitter herb that contains a natural antibacterial agent, it
has a healing effect and cleanses the blood. Good for smoker's cough, warts,
all types of infections, diabetes, ulcers, rheumatism, allergies, tumors and
liver disease. Especially good for pain connected with cancer. It is a
detoxifier and enhances the immune system.
Aloe Vera Juice Aloe Vera is believed to improve digestion and
assimilation of food. Aloe Vera is also known for its ability to stimulate
the growth of living cells, is reputed to enhance the immune system and to
improve the appearance and condition of both skin and hair. Our Aloe Vera
Juice has added natural orange flavor and honey.
Ultra Aloe BlendTM Our Ultra Aloe Blend is a nutritious drink of Aloe
Vera, Chlorella and Herbs synergistically blended for maximum utilization and
specifically formulated for detoxification. It also contains Honey, Ginkgo
Biloba and Ginseng.
Animal Oriented Products
Heat Lotion Contains a large percentage of Aloe Vera along with Methyl
Salicylate which helps to naturally relieve strains and sprains and also
helps reduce swelling in large and small animals.
Shampoo with Essential Oils Shampoo w/Essential Oils works well for
horses allergic to flies. For best results use at least once a week. Buffered
to the average pH of the skin of mammals and is mild to the skin and eyes.
Leaves the coat bright and sparkling.
<PAGE>
Shampoo with Blueing Shampoo with Blueing is a concentrated shampoo
containing Aloe Vera that may aid in relief of minor scrapes and skin
irritations. Shampoo with Blueing uses a safe blueing agent which helps take
out yellow, grays and greens, instead of using chemicals used in UV
absorbers. This product is designed to remove dirt, oil, perspiration, and
reduce matting without drying or irritating the skin. Aloe Vera, Protein,
Jojoba Oil and Panthenol help to promote a healthy, shiny manageable coat.
Shampoo with Blueing leaves the lighter color animals looking brighter and
whiter, but it also works well with darker color animals which leaves the
coat looking brilliant and healthy.
Aloe Coat ConditionerTM Aloe Coat Conditioner applies natural
emollients and glossing agents to the coat. Aloe Coat Conditioner leaves the
coat sparkling and maintains the healthy good looks of the coat between
shampooing. Aloe Coat Conditioner is an effective product for use on show
animals - leaving the coat sparkling. Conditioner is pH buffered to condition
the skin of the animal and is mild to the eyes. Aloe Vera contained in this
formula is a natural healing agent for minor scrapes and skin irritations.
Highly effective for the mane and tail feeling like silk and reducing
tangles.
Vet Cream Vet Cream contains 80% Aloe Vera Gel and allows the
application of a high concentration of this natural agent in a manner that
will enable the aloe vera to remain in close contact with the affected area.
Most skin conditions, whether they are the result of injury, diseases,
topical bacteria or fungi, will cause the traumatized area to become very
dry. This cream contains natural lubricants and proteins to help alleviate
the dry condition.
Hoof & Nail Conditioner and Rebuilder Hoof & Nail Conditioner and
Rebuilder is a cream for the treatment of the hoof with natural proteins and
lubricants in a base of aloe vera which helps to promote healthy growth and
for the application to any hoof or nail suffering damage. Works well to
promote healthy nails and skin. It is also used for chapped lips and is
soothing and healthy for people who have their hands in water resulting in
irritated red skin.
Aloe Vera Gel Aloe Vera Gel is designed to apply the highest
concentration of Aloe Vera to an affected area in the event of an injury or
condition for which the use of Aloe Vera is indicated. This product provides
an immediate soothing effect. Aloe Vera Gel has also been used on people for
the treatment of sunburns and cooking burns with immediate relief. It is
especially soothing for sunburns when kept in the refrigerator for a cooling
effect. This product has also been used for dry skin in the mane. Just rub it
in close to the skin. Non-greasy.
Pet Deodorizer and Conditioner Pet Deodorizer is used on animals that
produce an offensive odor. This product not only rids the animal of the odor
with the latest odor control technology called neutronic odor control, but
leaves a very fresh smell, while also conditioning the coat of the animal
giving it additional softness.
Pet Supplement Pet Supplement contain Honeybee Pollen, a source of
Vitamins, Proteins, Enzymes and Amino Acids. The vitamins contained in
honeybee pollen include Inositol, Vitamin B-12, Vitamin D, Biotin, Thiamin,
Nicotonic Acid, Folic Acid, Vitamin B-6, Vitamin C and Panthothentic Acid.
Honeybee Pollen also contains all essential amino acids and a variety of
enzymes necessary for metabolic action in both humans and animals. Pet
Supplements also contains Trace Minerals which completes a balanced
<PAGE>
combination of natural elements essential to the development and well-being
of pets. This product was designed to meet the nutritional and dietary needs
of pets of all ages, sizes and physical conditions and maintains proper body
weight, energy and metabolism.
Spray Bandage Spray cleansed area and allow the product to bridge over
the fur. Allow to dry to form protective barrier. Traveling with your horse,
Spray Bandage is a must! The Spray Bandage applies Aloe Vera directly to the
wound while forming a light protective barrier over the area - keeps wound
clean and insect free - while Aloe Vera helps promote healing. Water
resistant, but easily removed with soap and water. On a wound that requires
stitches, Spray Bandage can be used to keep the dirt and insects out while
aiding the healing process. This product can be used over medication.
Trailering your horse, Spray Bandage is a must!
Results of Operations for the three months ended March 31, 2000
The total gross profit was $23,329 and operating expenses from
continuing operations were $426,824 for the three months ended March 31,
2000. This represents a $(403,495) in loss from operations for the three
months ending March 31, 2000
Forward-Looking Statements and Associated Risks
This Quarterly Report on Form 10-QSB contains forward-looking statements
made pursuant to the safe harbor provisions of the Securities Litigation
Reform Act of 1995. These forward looking statements are based largely on
the Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the Company's control, including, but
not limited to, economic, competitive and other factors affecting the
Company's operations, markets, products and services, expansion strategies
and other factors discussed elsewhere in this report and the documents filed
by the Company with the Securities and Exchange Commission. Actual results
could differ materially from these forward-looking statements. In light of
these risks and uncertainties, there can be no assurance that the forward-
looking information contained in this report will in fact prove accurate.
The Company does not undertake any obligation to revise these forward-looking
statements to reflect future events or circumstances.
Liquidity and Capital Reserves
As of March 31, 2000 (Unaudited)
As of March 31, 2000, the Company's assets were $1,787,379 and its
liabilities were $567,856, resulting in stockholders' equity of $1,219,523
for the three months ending March 31, 2000.
The Company has continued to fund its deficit cash flow from private
placements of the Company's common stock. It is anticipated that loans and
the sale of the Company's stock will continue until such time as the Company
generates sufficient revenues from its operations to cover operating
expenses.
<PAGE>
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None.
Item 3. Defaults by the Company upon its Senior Securities.
None.
Item 4. Submission of Matter to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports of Form 8-K.
Form 8-K filed on February 9, 2000
Form 8-K filed on March 15, 2000
Form 8-K filed on July 5, 2000
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DESERT HEALTH PRODUCTS, INC.
(Registrant)
By:/s/ Johnny Shannon
Johnny Shannon
President
Date: July 6, 2000
