**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-Q**





(Mark
      One)


x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934





**For
      the quarterly period ended March 31, 2008**





or





o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934




For
      the
      transition period from ______ to __________





*Commission
      File Number* : 0-27569





**NATURAL
      NUTRITION, INC.**


(Exact
      name of registrant as specified in its charter)





**Nevada**
            
            **65-0847995**(State
                or other jurisdiction of incorporation or organization)
            
            (IRS
                Employer Identification No.)**109
                North Post Oak Lane, Suite 422****Houston,
                TX 77024**(Address
                of principal executive offices)**(713)
                621-2737**(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
o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a small reporting company. See
      the definitions of “large accelerated filer,” “accelerated filer” and “small
      reporting company” in Rule 12b-2 of the Exchange Act.





Large
                accelerated filer o
            Accelerated
                filer oNon-accelerated
                filer o(Do not check if a
                small reporting company)
            Small
                reporting company x





Indicate
      by check whether the registrant is a shell company (as defined in Rule 12b-2
      of
      the Exchange Act). Yes
o No
x





The
      number of shares outstanding of our common stock at May 12, 2008 was
      38,446,355.





Transitional
      Small Business Disclosure Format (check one): Yes: o No: x









**NATURAL
      NUTRITION, INC.**


**FORM
      10-Q**





**INDEX**




Page
              NumberPART
                I - FINANCIAL INFORMATIONItem
                1. Financial StatementsConsolidated
                Balance Sheet as of March 31, 2008 (Unaudited)
            3Consolidated
                Statements of Operations for the three months ended March 31, 2008
                and
                2007 (Unaudited)
            4Consolidated
                Statements of Cash Flows for the three months ended March 31, 2008
                and
                2007 (Unaudited)
            5Notes
                to Consolidated Financial Statements (Unaudited)
            6-13Item
                2. Management's Discussion and Analysis or Plan of
                Operation
            14-17Item
                4T. Controls and Procedures
            17-18PART
                II - OTHER INFORMATIONItem
                1. Legal Proceedings
            18Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            18Item
                3. Defaults Upon Senior Securities
            18Item
                4. Submission of Matters to a Vote of Security Holders
            18Item
                5. Other Information
            18Item
                6. Exhibits
            19SIGNATURES
            20




2


**PART
                  I - FINANCIAL INFORMATION****ITEM
                  1. FINANCIAL STATEMENTS****NATURAL
                  NUTRITION, INC. AND SUBSIDIARIES****CONSOLIDATED
                  BALANCE SHEET**
  March
                  31, 2008
              
              December
                  31, 2007(Unaudited)
              
              (Audited)**ASSETS****CURRENT
                  ASSETS**Cash
              
              $
              1,957,687
              
              $
              1,923,429Trade
                  accounts receivable-net of $19,532 and $35,307 allowance for doubtful
                  accounts
              
              
              2,612,738
              
              
              1,860,411Notes
                  receivable
              
              
              1,203,404
              
              
              1,203,405Inventory-net
                  of allowance of $106,205 and $108,400
              
              
              1,903,187
              
              
              1,770,595Investment
                  in marketable securities
              
              
              1,459,271
              
              
              1,692,856Deferred
                  finance costs
              
              
              127,302
              
              
              134,977Prepaids,
                  accrued interest and other accounts receivable
              
              
              337,241
              
              
              287,984Total
                  current assets
              
              
              9,600,830
              
              
              8,873,657**NONCURRENT
                  ASSETS**Fixed
                  assets, net
              
              
              1,298,325
              
              
              1,361,530Intellectual
                  property, net
              
              
              3,994,684
              
              
              4,294,719Goodwill
              
              
              9,591,224
              
              
              9,900,198Total
                  noncurrent assets
              
              
              14,884,233
              
              
              15,556,447**TOTAL
                  ASSETS**
              
              $
              24,485,063
              
              $
              24,430,104**LIABILITIES
                  AND SHAREHOLDERS' DEFICIT****CURRENT
                  LIABILITIES**Accounts
                  payable and accrued liabilities
              
              $
              2,096,078
              
              $
              1,382,476Accrued
                  interest payable
              
              
              557,387
              
              
              275,503Current
                  portion of note payable--net of discount of $287,589 and
                  $318,501
              
              
              1,173,687
              
              
              1,210,539Deferred
                  taxes payable
              
              
              2,285,281
              
              
              2,419,767Total
                  current liabilities
              
              
              6,112,433
              
              
              5,288,285**NONCURRENT
                  LIABILITIES**Convertible
                  debenture payable-net of discount of $158,398 and $167,777
              
              
              15,242,499
              
              
              15,233,120Convertible
                  note payable-net of discount of $1,541,274 and $1,617,208
              
              
              6,290,344
              
              
              6,146,646Derivative
                  liabilities
              
              
              11,325,865
              
              
              12,184,777Deferred
                  taxes payable
              
              
              649,226
              
              
              649,226Capital
                  lease obligations
              
              
              131,064
              
              
              148,902Accrued
                  interest payable
              
              
              1,675,368
              
              
              1,483,384Total
                  liabilities
              
              
              41,426,799
              
              
              41,134,340**COMMITMENTS
                  AND CONTINGENCIES****SHAREHOLDERS'
                  DEFICIT**Preferred
                  stock, $.01 par value; 10,000,000 shares authorizedPreferred
                  stock Series A Convertible $0.01 par value;100,000
                  shares authorized, 93,161 and 94,443 shares issued and outstanding
                  and
                  noliquidation
                  or redemption value
              
              
              932
              
              
              944Common
                  stock, par value $0.001; 10,000,000,000 sharesauthorized;
                  38,446,355 and 37,196,387 issued and outstanding
              
              
              38,446
              
              
              29,757Additional
                  paid-in capital
              
              
              488,398
              
              
              497,074Retained
                  deficit
              
              
              (18,232,410
              )
              
              (18,511,466
              )Accumulated
                  other comprehensive income, foreign currency translation
                  adjustment
              
              
              762,898
              
              
              1,279,455Total
                  shareholders' deficit
              
              
              (16,941,736
              )
              
              (16,704,236
              )**TOTAL
                  LIABILITIES AND SHAREHOLDERS' DEFICIT**
              
              $
              24,485,063
              
              $
              24,430,104
  The
                  accompanying notes are an integral part of these consolidated financial
                  statements
  3


**NATURAL
                  NUTRITION, INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF OPERATIONS**
  **Three
                  Months ended March 31,****2008**
              
              **2007****REVENUE**Sales
                  revenue
              
              $
              4,172,022
              
              $
              -Fee
                  income
              
              
              -
              
              
              2,965Trading
                  gains
              
              
              17,331
              
              
              3,285Dividends
                  from marketable securities
              
              
              17,213
              
              
              7,159Interest
                  income from notes and debenture receivable
              
              
              43,367
              
              
              74,058Total
                  revenue
              
              
              4,249,933
              
              
              87,467**COST
                  OF GOODS SOLD**
              
              
              3,249,800
              
              
              -**GROSS
                  PROFIT**
              
              
              1,000,133
              
              
              87,467**OPERATING
                  EXPENSES**Salaries
                  and benefits
              
              
              341,822
              
              
              106,538Bad
                  debt expense
              
              
              1,390
              
              
              -Professional
                  fees
              
              
              182,276
              
              
              60,764Other
                  expenses
              
              
              315,965
              
              
              104,855Depreciation
                  and amortization
              
              
              208,829
              
              
              757Allocated
                  overhead from affiliated entity
              
              
              -
              
              
              101,199Total
                  operating expenses
              
              
              1,050,282
              
              
              374,113**OPERATING
                  LOSS**
              
              
              (50,149
              )
              
              (286,646
              )**OTHER
                  (INCOME) EXPENSE**Net
                  change in fair value of derivatives
              
              
              (858,912
              )
              
              40,368Interest
                  income
              
              
              (19,919
              )
              
              (9,519
              )Interest
                  expense
              
              
              601,527
              
              
              249,910Gain
                  on sale of notes receivable and other income
              
              
              (26,542
              )
              
              -Total
                  other (income) expense
              
              
              (303,846
              )
              
              280,759Income
                  (loss) before provision for income taxes
              
              
              253,697
              
              
              (567,405
              )**INCOME
                  TAX PROVISION (BENEFIT):**Current
              
              
              (25,360
              )
              
              -Deferred
              
              
              -
              
              
              -(25,360
              )
              
              -**NET
                  INCOME (LOSS) APPLICABLE TO COMMON SHARES**
              
              $
              279,057
              
              $
              (567,405
              )Basic
                  income (loss) per share
              
              $
              0.01
              
              $
              (0.04
              )Diluted
                  loss per share
              
              $
              0.00
              
              $
              -Weighted
                  shares outstanding - basic
              
              
              36,058,444
              
              
              15,724,640Weighted
                  shares outstanding - diluted
              
              
              133,555,419
              
              
              -**OTHER
                  COMPREHENSIVE INCOME****NET
                  INCOME (LOSS)**
              
              $
              279,057
              
              $
              (567,405
              )Foreign
                  currency translation adjustment
              
              
              (516,557
              )
              
              -**COMPREHENSIVE
                  LOSS**
              
              $
              (237,500
              )
              $
              (567,405
              )
  The
                  accompanying notes are an integral part of these consolidated financial
                  statements




4




**NATURAL
                  NUTRITION, INC. AND SUBSIDIARIES****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS**
  **Three
                  Months Ended March 31,****2008**
              
              **2007****CASH
                  FLOWS FROM OPERATING ACTIVITIES**Net
                  Income (loss)
              
              $
              279,057
              
              $
              (567,405
              )Adjustment
                  to reconcile net income to net cashprovided
                  (used) in operating activities:Depreciation
                  and amortization
              
              
              234,173
              
              
              757Non-cash
                  interest expense - derivatives
              
              
              123,900
              
              
              56,524Net
                  change in derivative liability
              
              
              (858,912
              )
              
              40,368Non-cash
                  income
              
              
              39,285
              
              
              -(Increase)
                  decrease in assets:Change
                  in trade receivables
              
              
              (752,326
              )
              
              -Other
                  accounts receivable
              
              
              (31,330
              )
              
              (4,766
              )Change
                  in inventory
              
              
              (132,592
              )
              
              -Notes
                  receivable
              
              
              (18,618
              )
              
              (178,921
              )Change
                  in due from affiliate
              
              
              21,669
              
              
              (29,167
              )Prepaid
                  and other
              
              
              (64,941
              )
              
              (50,730
              )Investment
                  in marketable securities
              
              
              194,300
              
              
              391,855Increase
                  (decrease) in liabilities:Change
                  in margin loan
              
              
              -
              
              
              (14,143
              )Accounts
                  payable
              
              
              492,370
              
              
              4,702Accrued
                  liabilities
              
              
              696,196
              
              
              144,262Notes
                  Payable - other
              
              
              -
              
              
              25,536Income
                  tax and deferred taxes
              
              
              (134,486
              )
              
              21,977Net
                  cash provided by (used in) operating activities
              
              
              87,745
              
              
              (159,151
              )**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Purchase
                  of fixed assets
              
              
              (34,934
              )
              
              -Sale
                  of asset
              
              
              -
              
              
              100,000Net
                  cash provided by (used in) investing activities
              
              
              (34,934
              )
              
              100,000**CASH
                  FLOWS FROM FINANCING ACTIVITIES**Payments
                  on notes payable, net
              
              
              (12,733
              )
              
              -Net
                  cash used in financing activities
              
              
              (12,733
              )
              
              -**EFFECT
                  OF EXCHANGE RATE CHANGE ON CASH**
              
              
              (5,820
              )
              
              -**NET
                  CHANGE IN CASH**
              
              
              34,258
              
              
              (59,151
              )**CASH,
                  BEGINNING OF YEAR**
              
              
              1,923,429
              
              
              148,691**CASH,
                  END OF YEAR**
              
              $
              1,957,687
              
              $
              89,540**SUPPLEMENTAL
                  INFORMATION**Interest
                  paid
              
              $
              3,759
              
              $
              710Taxes
                  paid
              
              $
              48,709
              
              $
              -Conversion
                  of debentures, preferred stock and stock for services:Convertible
                  debt and preferred stockPreferred
                  stock
              
              $
              (13
              )
              $
              -Common
                  stock
              
              $
              1,000
              
              $
              -Paid
                  in capital
              
              $
              (987
              )
              $
              -
  The
                  accompanying notes are an integral part of these consolidated financial
                  statements




5


**Natural
      Nutrition, Inc. and Subsidiaries**


**Notes
      to Consolidated Financial Statements**


**(Unaudited)**




**NOTE
      1**  **-
      BASIS OF PRESENTATION**





Our
      Consolidated Balance Sheet as of March 31, 2008, the Consolidated Statements
      of
      Operations for the three months ended March 31, 2008 and 2007, and the
      Consolidated Statements of Cash Flows for the three months ended March 31,
      2008
      and 2007 have not been audited. These statements have been prepared on a basis
      that is substantially consistent with the accounting principles applied in
      our
      Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007.
      In our opinion, these financial statements include all normal and recurring
      adjustments necessary for a fair presentation of Natural Nutrition, Inc. (the
      “Company”) and Subsidiaries. The results for the three months are not
      necessarily indicative of the results expected for the year.





As
      used
      herein, the “Company”, “management”, “we”, “our” refers to Natural Nutrition,
      Inc., or Natural Nutrition, Inc. together with its subsidiaries. The Company's
      fiscal year ends on December 31st.




Certain
      information and footnote disclosures normally included in financial statements
      prepared in accordance with accounting principles generally accepted in the
      United States of America have been omitted in accordance with the published
      rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”)
      for interim financial statements. The unaudited Consolidated Financial
      Statements and the notes thereto in this report should be read in conjunction
      with the audited Consolidated Financial Statements and notes thereto included
      in
      our Annual Report on Form 10-KSB for the fiscal year ended December 31,
      2007 (the “10-KSB”).





Natural
      Nutrition, Inc. (the “Company”) was incorporated in Florida on July 2, 1998. On
      August 25, 2005, the Company completed the closing of that certain Share
      Exchange Agreement, by and between the Company, CSI Business Finance, Inc.,
      a
      Texas corporation and now wholly-owned subsidiary of the Company herein referred
      to as ("CSI-BF") and the shareholder of CSI-BF (the "CSI-BF
      Shareholder").





On
      August
      25, 2005, the Company effectively exchanged with the CSI-BF Shareholder the
      issued and outstanding common stock of CSI in exchange for 100,000 shares of
      Series A Convertible Preferred Stock, par value $0.01 per share, of the Company,
      and CSI-BF became a wholly-owned subsidiary of the Company. Each share of the
      Company's Series A Preferred Stock is convertible into 780 shares of common
      stock of the Company, beginning one year after the effective date of the merger.
      The Preferred shares were subsequently distributed to the shareholders of
      Corporate Strategies, Inc., the former shareholder of CSI-BF. In addition,
      at
      the exchange date, 5,408,576 shares of common stock of the Company were issued
      to pay off notes and debentures. If the preferred shareholders were to convert
      to common stock as of the date of the merger, they would hold 97,500,000 shares,
      or ninety-two and one half percent (92.5%) of the issued and outstanding shares
      of common stock of the Company. This conversion would result in the Series
      A
      Preferred Shareholders effectively controlling the Company.





The
      Series A Convertible Preferred Shareholders and the holders of the common stock
      of the Company vote together and not as separate classes, and the Preferred
      Stock shall be counted on an "as converted" basis, thereby giving the Preferred
      Shareholders control of the Company. The transaction was accounted for as a
      reverse acquisition since control of the Company passed to the shareholders
      of
      the acquired company (CSI-BF).





The
      Company was subsequently renamed in 2005 to CSI Business Finance, Inc. (the
      Florida corporation). In September of 2006, CSI Business Finance, Inc. changed
      its name to Natural Nutrition, Inc. and simultaneously redomiciled from Florida
      to Nevada.





On
      January 29, 2008, our Board of Directors approved a 5 for 4 forward common
      stock
      split. All references to our common stock in this document are stated in shares
      after the forward stock split. Our Board of Directors had previously approved
      a
      1 for 25 reverse common stock split on May 23, 2006.





The
      accompanying consolidated financial statements for prior years contain certain
      reclassifications to conform with current year presentation. The
      unaudited consolidated financial statements include the accounts of the Company
      and its wholly-owned subsidiaries. All significant inter-company accounts and
      transactions have been eliminated in consolidation.




6





**NOTE
      2. INCOME (LOSS) PER COMMON SHARE AND STOCK BASED
      COMPENSATION**




**Net
      Income (Loss) Per Common Share**




In
      accordance with SFAS No. 128, "Earnings per Share", basic earnings per share
      are
      computed based on the weighted average shares of common stock outstanding during
      the periods.  Diluted earnings per share are computed based on the weighted
      average shares of common stock plus the assumed issuance of common stock for
      all
      potentially dilutive securities.





Basic
      and
      diluted earnings per share calculations are included below:




Three
                  Months EndedMarch
                  31,2008
              
              2007Income
                  (loss) from continuing operations
              
              $
              279,057
              
              $
              (567,405
              )Less
                  effect of derivatives and convertible note & debenture
              
              
              1,633
              
              
              96,892Net
                  loss
              
              $
              280,690
              
              $
              (470,513
              )Basic
                  weighted average shares
              
              
              36,058,444
              
              
              15,724,640Effect
                  of dilutive securities:Preferred
                  stock
              
              
              90,831,975
              
              
              92,081,925Convertible
                  note and debenture
              
              
              6,665,000
              
              
              5,415,000Diluted
                  weighted average shares
              
              
              133,555,419
              
              
              113,221,565Income
                  (loss) per share:Basic:
              
              $
              0.01
              
              $
              (0.04
              )Diluted:
              
              $
              0.00
              
              $
              -




(1)
            A
                secured convertible promissory note in the principal amount of $9,292,894
                was outstanding during the three months ended March 31, 2008, but
                its
                conversion shares were not included in the computation of diluted
                per
                share net income for the three months ended March 31, 2008 because
                they
                were anti-dilutive. There were no similar potentially dilutive shares
                outstanding for the three months ended March 31, 2007.




7




**NOTE
      3**  **-
      PURCHASE OF THE SENIOR DEBT OF INTERACTIVE NUTRITION INTERNATIONAL,
      INC.**




Effective
      May 31, 2007, Natural Nutrition, Inc., a Nevada corporation (the “ Company ”)
      closed
      on a purchase agreement (the “ Purchase
      Agreement ”)
      with
      Nesracorp. Inc., a company organized under the laws of Canada (the “ Vendor ”)
      pursuant to which the Company purchased from the Vendor, and the Vendor sold,
      assigned transferred and conveyed to the Company, all of Vendor’s right, title,
      benefit and interest in (a) all of the then outstanding principal and interest
      accrued thereon (the “ Indebtedness ”)
      owed
      to the Vendor by Interactive Nutrition International, Inc. (“ INII ”),
      a
      company organized under the laws of Canada and a wholly-owned subsidiary of
      the
      Company, under a promissory note in the original principal amount of Fifteen
      Million Canadian Dollars (Cdn$15,000,000) issued (in part) by INII to the Vendor
      on March 31, 2004 (the “ Subsidiary
      Note ”)
      and
      (b) a general security agreement, of even date with the Subsidiary Note, and
      a
      share pledge agreement, of even date with the Subsidiary Note, both granted
      concurrently by INII and its shareholder, the Company (as successor in interest
      to the now defunct Bio One Corporation) in connection with the Indebtedness
      (together, both instruments are hereinafter referred to as the “ Security ”)
      for a
      purchase price equal to (i) Seven Million Six Hundred Fifty Thousand Canadian
      Dollars (Cdn$7,650,000) and (ii) the execution by the Company of that certain
      Mutual Release.  The Company and the Vendor entered into an Assignment and
      Conveyance (“ Assignment ”),
      of
      even date with the Purchase Agreement, in order to properly effectuate the
      assignment by the Vendor to the Company of all of the right, title, benefit
      and
      interest in and to the Purchased Assets (as defined therein), which such
      Purchased Assets include, without limitation, the Indebtedness, the Security
      and
      all loan, security and other documentation relating to the Indebtedness and
      the
      Security purchased under the Purchase Agreement.  The Company and the
      Vendor executed the Purchase Agreement, the Mutual Release and the Assignment
      on
      May 25, 2007; however they closed the transactions upon the execution of the
      SPA
      (as defined and discussed herein below) on May 31, 2007.





On
      May
      31, 2007, the Company entered into a securities purchase agreement (the
“ SPA ”)
      with
      Cornell Capital Partners, LP (the “ Investor ”)
      pursuant to which the Company sold to the Investor, and the Investor purchased
      from the Company, a secured convertible promissory note (the “ Note ”)
      in the
      principal amount of Nine Million Two Hundred Ninety-Two Thousand Eight Hundred
      Ninety-Four United States Dollars (US$9,292,894), the proceeds of which shall
      be
      used by the Company to finance the consideration paid by the Company to the
      Vendor in connection with the Purchase Agreement and Assignment (as discussed
      herein above) and for other general corporate purposes.





The
      Note
      shall accrue interest at a rate equal to twelve percent (12%) per annum, except
      that from and after the occurrence and during the continuance of an Event of
      Default (as defined in the Note), the interest rate shall be increased to
      eighteen percent (18%). The Note shall mature, unless extended by the holder,
      upon the earlier of (i) June 1, 2012, (ii) the consummation of a Change of
      Control (as defined in the Note) and (iii) the occurrence of an Event of Default
      or any event that with the passage of time and the failure to cure would result
      in an Event of Default. The Company may prepay the Note at any time upon not
      less than thirty (30) days prior written notice to the holder; provided, that
      any such prepayments shall applied first to unpaid late charges on principal
      and
      interest, if any, then to unpaid interest and then unpaid principal thereon.
      Furthermore, the Note shall be convertible into fully paid and nonassessable
      shares of the Company’s common stock, par value $0.001 per share (the
“ Common
      Stock ”),
      at
      the holder’s discretion, at a conversion rate to be determined by dividing the
      amount to be converted by the lesser or (x) $0.05, subject to adjustment as
      provided herein and (y) eighty percent (80%) of the lowest daily weighted
      average price of the Company’s common stock, par value $0.001 per share
      (“ Common
      Stock ”)
      during
      the five (5) trading days immediately preceding the conversion date. The Company
      shall not effect any conversion, and the holder of shall not have the right
      to
      convert any portion of the Note to the extent that after giving effect to such
      conversion, the holder (together with the holder’s affiliates) would
      beneficially own in excess of 4.99% of the number of shares of Common Stock
      outstanding immediately after giving effect to such conversion.





All
      payments due under the Note shall be senior to all other Indebtedness (as
      defined in the Note) of the Company and its subsidiaries other than certain
      Permitted Indebtedness (as defined in the Note). So long as the Note is
      outstanding, the Company shall not, and the Company shall not permit any of
      its
      subsidiaries to, directly or indirectly (a) incur or guarantee, assume or suffer
      to exist any Indebtedness, other than (i) the Indebtedness evidenced by the
      Note and the Subsidiary Note and (ii) other Permitted Indebtedness, (b)
      allow or suffer to exist any mortgage, lien, pledge, charge, security interest
      or other encumbrance upon or in any property or assets (including accounts
      and
      contract rights) owned by the Company or any of its subsidiaries other than
      certain permitted liens, (c) redeem, defease, repurchase, repay or make any
      payments in respect of, by the payment of cash or cash equivalents (in whole
      or
      in part, whether by way of open market purchases, tender offers, private
      transactions or otherwise), all or any portion of any Permitted Indebtedness,
      whether by way of payment in respect of principal of (or premium, if any) or
      interest on, such Indebtedness if at the time such payment is due or is
      otherwise made or, after giving effect to such payment: (i) an event
      constituting an Event of Default has occurred and is continuing; or (ii) an
      event that with the passage of time and without being cured would constitute
      an
      Event of Default has occurred and is continuing; or (iii) make any payments
      to
      Turnaround Partners, Inc. (“ TAP ”),
      Corporate Strategies, Inc. (“ CSI ”)
      or any
      of their members, partners, employees, stockholders, or any of their respective
      affiliates, except (1) with the prior consent of the holder, (2) pursuant to
      either the Zeidman Agreement (as defined herein below) or that certain Connolly
      Agreement (as defined herein below), (3) reasonable rent and overhead charges
      allocable to the Company in respect of shared space with CSI, (4) so long as
      Mr.
      Timothy J. Connolly (“ Mr.
      Connolly ”)
      is
      serving as CEO of the Company, the reimbursement to Mr. Connolly for all direct
      expenses incurred by Mr. Connolly in connection with such service and (5)
      payments by CSI Business Finance, Inc., the Texas corporation and wholly-owned
      subsidiary of the Company (“ CSIBF ”)
      to Mr.
      Connolly for compensation payable to Mr. Connolly solely out of cash generated
      from CSIBF’s operations.





8


Until
      the
      Note has been converted, redeemed or otherwise satisfied in full in accordance
      with its terms, the Company shall not, directly or indirectly, redeem,
      repurchase, or declare or pay any cash dividend or distribution on, its capital
      stock without the prior express written consent of the holder or, dissolve,
      liquidate, consolidate with or into another person, or dispose of or otherwise
      transfer (whether in one transaction or in a series of transactions) all or
      substantially all of its assets (whether now owned or hereafter acquired) to
      or
      in favor of any person or acquire any assets or business or any interest in
      any
      person or entity in excess of One Hundred Thousand United States Dollars
      (US$100,000), except for purchases of inventory, raw materials and equipment
      in
      the ordinary course of business. So long as the Note is outstanding, for each
      accounting period identified in an exhibit to the Note, the Company shall
      maintain EBITDA for such accounting period which equals or exceeds the
      applicable EBITDA threshold for such accounting period. Our EBITDA for the
      three
      months ended March 31, 2008 was CDN$501,263 versus CDN$462,413 as required
      under
      the Exhibit to the Note.





In
      connection with the SPA, the Company also issued to the Investor warrants to
      purchase, in Investor’s sole discretion, Sixty-Two Million Five Hundred Eight
      Thousand One Hundred Seventy-Nine (62,508,179) shares of Common Stock at a
      price
      of $0.01 per share (the “ Warrant ”).
      So
      long as the Company is in default under any of the Transaction Documents (as
      defined in the SPA) or the shares underlying the Warrant are not subject to
      an
      effective registration statement, the holder may, in its sole discretion during
      such time, exercise the Warrant in whole or in part and, in lieu of making
      the
      cash payment otherwise contemplated to be made to the Company upon such exercise
      in payment of the Aggregate Exercise Price (as defined in the Warrant), elect
      instead to receive upon such exercise the net number of shares of Common Stock
      determined according to a specified formula set forth in the Warrant. The
      Company shall not effect the exercise of the Warrant, and the holder shall
      not
      have the right to exercise the Warrant, to the extent that after giving effect
      to such exercise, such person (together with such person’s affiliates) would
      beneficially own in excess of 4.99% of the shares of Common Stock outstanding
      immediately after giving effect to such exercise.





Contemporaneously
      with the execution and delivery of the SPA, the Company and the Investor
      executed and delivered a registration rights agreement (the “ RRA ”)
      pursuant to which the Company shall provide certain registration rights to
      Investor with respect to the Registrable Securities (as defined in the RRA)
      under the Securities Act of 1933, as amended and the rules and regulations
      promulgated thereunder, and applicable state securities laws. Specifically,
      if
      the Company shall receive at any time and from time to time after the aggregate
      principal amount of the Note is below One Million Five Hundred Thousand United
      States Dollars (US$1,500,000) in whatever form, including without limitation,
      the reduction of the outstanding balance by conversions by the Investor into
      shares of Common Stock or cash payments by the Company, a written request from
      the holders of at least fifty percent (50%) of the Registrable Securities then
      outstanding, that the Company file with the U.S. Securities and Exchange
      Commission (“ SEC ”)
      a
      registration statement covering the resale of the Registrable Securities, then
      the Company shall, within thirty (30) days of the receipt thereof, provide
      written notice of such request to all other holders of Registrable Securities,
      if any, and file with the SEC such registration statement, as soon as
      practicable, following receipt of the registration request. The registration
      statement shall register for resale at least thirty-three percent (33%) of
      the
      Company’s market capitalization based on the Company’s shares of Common Stock
      issued and outstanding and market price of the Company’s shares of Common Stock
      at the time of the registration request less any shares of Common Stock held
      by
      affiliates of the Company, or such greater amount as the Company in good faith
      believes the SEC may permit to be registered. The Company shall use its best
      efforts to have the registration statement declared effective by the SEC no
      later than such date as follows: (i) in the event that the registration
      statement is not subject to a review by the SEC, sixty (60) calendar days after
      the date of the registration request or (ii) in the event that the
      registration statement is subject to a review by the SEC, one hundred twenty
      (120) calendar days after the date of the registration request.





In
      connection with the SPA, the Company and the Investor also entered into an
      amended and restated security agreement, of even date with the SPA (the
“ 2007
      Security Agreement ”),
      pursuant to which the Company amended and restated that certain Security
      Agreement, dated September 9, 2005 (the “ 2005
      Security Agreement ”),
      to
      secure within the definition of “Obligations” as previously defined under the
      2005 Security Agreement, those obligations of the Company under the SPA, the
      Note and the Transaction Documents (as defined in the SPA). The Company and
      the
      Investor also entered into a securities pledge agreement, of even date with
      the
      SPA (the “ 2007
      Pledge Agreement ”),
      in
      order for the Company to pledge that certain Pledged Property (as defined
      therein), which includes the Subsidiary Note, to secure its obligations under
      the SPA, the Note and the Transaction Documents (as defined in the SPA).




In
      connection with the SPA, the Company, the Investor and Mr. Timothy J. Connolly,
      acting on behalf of CSI, entered into an agreement, of even date with the SPA
      (the “ Connolly
      Agreement ”),
      pursuant to which the Company granted to Mr. Connolly, on behalf of CSI, shares
      representing ten percent (10%) of the common stock of INII (the “ INII
      Stock ”)
      outstanding as of the date of the Agreement as compensation for management
      services performed by CSI to the Company. Such grant vested and the INII Stock
      has been deemed fully earned as of the date of the Agreement. As a condition
      to
      this grant, Mr. Connolly entered into a lock-up agreement and a securities
      pledge agreement with the Investor, whereby Mr. Connolly pledged the INII Stock
      as collateral to secure all obligations owed by the Company to the Investor.
      Effective as of December 31, 2007, the Company entered into a Purchase Agreement
      with Corporate Strategies, Inc. (Seller) and CSI Business Finance, Inc. pursuant
      to which the Seller conveyed, transferred and assigned to the Company all of
      its
      title to and rights in Seller’s ten percent (10%) interest in the total issued
      and outstanding capital stock of INII in exchange for the conveyance, transfer
      and assignment to the Seller by the CSI Business Finance, Inc. and the Company
      of certain Notes held by CSI Business Finance, Inc. and the Company plus a
      cash
      payment equal to One Hundred Ninety-Eight Thousand Eight Hundred Ninety-Nine
      Dollars and Ten Cents ($198,899.10). In addition, the Company assumed payment
      for all of the Seller’s office lease, equipment payments and any other payments
      related to the office space at 109 N. Post Oak Lane, Suite 422, Houston, Texas
      77024 for the remainder of the lease term and any renewals.





9


In
      connection with the SPA, the Company entered into a five (5) year employment
      agreement with Mr. Fred Zeidman pursuant to which Mr. Zeidman shall serve as
      a
      non-executive Chairman of the Board (the “ Zeidman
      Agreement ”).
      In
      consideration for his services, Mr. Zeidman shall receive, as compensation
      for
      all services rendered by Mr. Zeidman in performance of his duties or obligations
      under the Zeidman Agreement, a monthly base salary of Twelve Thousand Five
      Hundred United States Dollars (US$12,500). In addition to a base salary, Mr.
      Zeidman shall also have the right to receive an incentive fee equal to up to
      ten
      percent (10%) of the Net Proceeds (as defined therein) of the Sale (as defined
      therein) of INII. This bonus shall incrementally vest twenty percent (20%)
      per
      year on the anniversary date of the Zeidman Agreement, so long as (A) Mr.
      Zeidman’s employment with the Company has not terminated as of the applicable
      vesting date and (B) the actual financial results of INII for the twelve (12)
      month period prior to the applicable vesting date are not less than ninety
      percent (90%) of the pro forma EBITDA results of INII attached to the Zeidman
      Agreement as Exhibit
      A ; provided that
      upon a Sale prior to the fifth (5 th )
      anniversary of the commencement date, so long as Mr. Zeidman’s employment has
      not terminated prior to such Sale, then the remaining part of the bonus shall
      vest upon the consummation of such Sale. Mr. Zeidman is also entitled to be
      reimbursed by the Company for all reasonable and necessary expenses incurred
      by
      Mr. Zeidman in carrying out his duties under the Zeidman Agreement in accordance
      with the Company’s standard policies regarding such reimbursements. Mr. Zeidman
      is also entitled during the term of the Zeidman Agreement, upon satisfaction
      of
      all eligibility requirements, if any, to participate in all health, dental,
      disability, life insurance and other benefit programs now or hereafter
      established by the Company which cover substantially all other of the Company’s
      employees and shall receive such other benefits as may be approved from time
      to
      time by the Company.





Since
      the
      acquisition was completed on May 31, 2007, only the period from January 1
      through March 31, 2008 is included in our three months results of operations
      ending March 31, 2008.





The
      following unaudited pro forma financial information presents the consolidated
      results of operations for the three months ended March 31, 2008, as if the
      acquisition had occurred on January 1, 2007, after giving effect to certain
      adjustments. The pro forma information does not necessarily reflect the results
      of operations that would have occurred had the entities been a single company
      during this period.




Three
                  Months ended March 31,2008
              
              2007(Unaudited)
              
              (Unaudited)Net
                  sales
              
              $
              4,249,933
              
              $
              3,898,170Net
                  income
              
              $
              279,057
              
              $
              244,835Basic
                  shares outstanding
              
              
              36,058,444
              
              
              15,724,640Diluted
                  shares outstanding
              
              
              133,555,419
              
              
              113,221,565Income
                  per common share - basic
              
              $
              0.01
              
              $
              0.02Income
                  per common share - diluted
              
              $
              0.00
              
              $
              0.00


**NOTE
      4 - CONVERTIBLE DEBENTURES AND NOTES PAYABLE AND DERIVATIVE FINANCIAL
      INSTRUMENTS**




Effective
      September 9, 2005, the Company issued a secured convertible debenture (the
      "Debenture") to Cornell Capital Partners, LP in the amount of $15,635,199.
      Effective May 31, 2007, the convertible debenture was renegotiated and the
      due
      date was extended until June 1, 2012 and the fixed conversion price was reset.
      All other terms and conditions remained the same. The notes bear interest at
      5%,
      which is accrued until maturity on June 1, 2012. The note is convertible, at
      the
      option of the holders, into common stock of the Company at a price of $0.012
      per
      share, subject to standard anti-dilution provisions relating to splits, reverse
      splits and other transactions plus a reset provision whereby the conversion
      prices may be adjusted downward to a lower price per share based on the average
      of the three lowest closing prices for the five trading days prior to
      conversion. The Holder has the right to cause the notes to be converted into
      common stock, subject to an ownership limitation of 4.99% of the outstanding
      stock. The Company has the right to repurchase the Notes at 106% of the face
      amount.





On
      May
      31, 2007, the Company entered into a securities purchase agreement (the
“ SPA ”)
      with
      Cornell Capital Partners, LP (the “ Investor ”)
      pursuant to which the Company sold to the Investor, and the Investor purchased
      from the Company, a secured convertible promissory note (the “ Note ”)
      in the
      principal amount of Nine Million Two Hundred Ninety-Two Thousand Eight Hundred
      Ninety-Four United States Dollars (US$9,292,894), the proceeds of which shall
      be
      used by the Company to finance the consideration paid by the Company to the
      Vendor in connection with the Purchase Agreement and Assignment (as discussed
      herein above) and for other general corporate purposes.





10




The
      Note
      shall accrue interest at a rate equal to twelve percent (12%) per annum, except
      that from and after the occurrence and during the continuance of an Event of
      Default (as defined in the Note), the interest rate shall be increased to
      eighteen percent (18%). The Note shall mature, unless extended by the holder,
      upon the earlier of (i) June 1, 2012, (ii) the consummation of a Change of
      Control (as defined in the Note) and (iii) the occurrence of an Event of Default
      or any event that with the passage of time and the failure to cure would result
      in an Event of Default. The Company may prepay the Note at any time upon not
      less than thirty (30) days prior written notice to the holder; provided, that
      any such prepayments shall applied first to unpaid late charges on principal
      and
      interest, if any, then to unpaid interest and then unpaid principal thereon.
      Furthermore, the Note shall be convertible into fully paid and nonassessable
      shares of the Company’s common stock, par value $0.001 per share (the
“ Common
      Stock ”),
      at
      the holder’s discretion, at a conversion rate to be determined by dividing the
      amount to be converted by the lesser or (x) $0.05, subject to adjustment as
      provided herein and (y) eighty percent (80%) of the lowest daily weighted
      average price of the Company’s common stock, par value $0.001 per share
      (“ Common
      Stock ”)
      during
      the five (5) trading days immediately preceding the conversion date. The Company
      shall not effect any conversion, and the holder of shall not have the right
      to
      convert any portion of the Note to the extent that after giving effect to such
      conversion, the holder (together with the holder’s affiliates) would
      beneficially own in excess of 4.99% of the number of shares of Common Stock
      outstanding immediately after giving effect to such conversion.





The
      derivatives from the debenture and note payable have been accounted for in
      accordance with SFAS 133 and EITF No. 00-19, "Accounting for Derivative
      Financial Instruments Indexed to, and Potentially Settled in, a Company's Own
      Stock."





The
      Company has determined that the following instruments have derivatives requiring
      evaluation and accounting under the relevant guidance applicable to financial
      derivatives:





Cornell
                Debenture Payable issued 9/9/05 in the face amount of
                $15,635,199Cornell
                Note Payable issued 5/31/07 in the face amount of
                $9,292,894





The
      Company has identified that the above debenture and note have embedded
      derivatives. These embedded derivatives have been bifurcated from their
      respective host debt contracts and accounted for as derivative liabilities
      in
      accordance with EITF 00-19. When multiple derivatives exist within the
      Convertible Debentures, they have been bundled together as a single hybrid
      compound instrument in accordance with SFAS No. 133 Derivatives Implementation
      Group Implementation Issue No. B-15, "Embedded Derivatives: Separate Accounting
      for Multiple Derivative Features Embedded in a Single Hybrid
      Instrument."




The
      embedded derivatives within the Convertible Debenture and Note have been
      recorded at fair value at the date of issuance; and are marked-to-market each
      reporting period with changes in fair value recorded to the Company's income
      statement as "Net change in fair value of derivatives." The Company has utilized
      a third party valuation firm to fair value the embedded derivatives using a
      layered discounted probability-weighted cash flow approach. The fair value
      model
      utilized to value the various embedded derivatives in the Convertible Debenture
      and Note, comprises multiple probability-weighted scenarios under various
      assumptions reflecting the economics of the Convertible Debenture, such as
      the
      risk-free interest rate, expected Issuer stock price and volatility, likelihood
      of conversion and or redemption, and likelihood default status.





The
      fair
      value of the derivative liabilities are subject to the changes in the trading
      value of the Company's common stock, as well as other factors. As a result,
      the
      Company's financial statements may fluctuate from quarter-to-quarter based
      on
      factors, such as the price of the Company's stock at the balance sheet date
      and
      the amount of shares converted by the debenture holders. Consequently, our
      financial position and results of operations may vary from quarter-to-quarter
      based on conditions other than our operating revenues and expenses.





The
      conversion feature, reset provision and the Company’s optional early redemption
      right to the debenture payable have been bundled together as a single compound
      embedded derivative liability, and using a layered discounted
      probability-weighted cash flow approach, was initially fair valued at $413,603
      at September 9, 2005. As of May 31, 2007, the maturity date of the Cornell
      debenture dated September 9, 2005 was extended to June 1, 2012 and the fixed
      conversion price was reset to $0.012. This modification of the debt was tested
      under EITF 96-19, Debtors Accounting for a Modification or Exchange of Debt
      Instruments and EITF 06-06, Debtors Accounting for a Modification (or Exchange)
      of Convertible Debt Instruments to determine if an extinguishment had occurred.
      The Company’s third party valuation firm determined that the debt was not
      extinguished, so no gain or loss was recorded. The compound embedded derivative
      was valued at $3,816,671 at March 31, 2008 using the same methodology. For
      the
      period since December 31, 2007 through March 31, 2008, the change in fair value
      of the derivative liability was a decrease of $926,708, which has been
      classified as net change in fair value of derivative.





The
      above
      compound embedded derivative plus the loan costs paid the lender in the amount
      of $687,832 are recorded as a discount against the notional carrying amount
      of
      the debenture payable. The unamortized discount is being amortized over the
      term
      of the note using the effective interest method. Recorded in interest expense
      for this amortization is $9,379 at March 31, 2008 and $56,524 at March 31,
      2007.





11




The
      conversion feature, reset provision and the Company’s optional early redemption
      right to the note payable have been bundled together as a single compound
      embedded derivative liability, and using a layered discounted
      probability-weighted cash flow approach, was initially fair valued at $554,080
      at May 31, 2007. Using the same methodology, the single compound embedded
      derivative liability was valued at $4,085,622 at March 31, 2008. For the period
      since December 31, 2007 through March 31, 2008, the change in fair value of
      the
      derivative liability was a decrease of $225,336, which has been classified
      as
      net change in fair value of derivative.





In
      addition to the above, the Company issued warrants that resulted in a warrant
      derivative liability. This warrant derivative liability using the Black-Sholes
      Option Pricing Model was initially fair valued at $626,790 at May 31, 2007.
      Using the same methodology, the warrant derivative liability was valued at
      $3,423,573 at March 31, 2008. For the period since December 31, 2007 through
      March 31, 2008, the change in fair value of the derivative liability was an
      increase of $293,132, which has been classified as net change in fair value
      of
      derivative. The significant assumptions for the Black-Sholes Option Pricing
      Model at March 31, 2008 was the current stock price, 0% dividend yield, a risk
      free interest rate of 4.38% and a 350% volatility.





The
      above
      compound embedded derivative plus the warrant derivative plus the loan costs
      paid the lender in the amount of $1,004,289 are recorded as a discount against
      the notional carrying amount of the note payable. The unamortized discount
      is
      being amortized over the term of the note using the effective interest method.
      Recorded in interest expense for this amortization is $114,521 at March 31,
      2008
      and $-0- at March 31, 2007.





The
      significant assumptions for Natural Nutrition’s debenture and note utilized in
      valuing the embedded derivatives as of March 31, 2008:





-
            The
                stock price would increase at the cost of equity with a short-term
                volatility of 225%




-
            Registration
                default would occur only 5% of the
                time




-
            Other
                forms of default would occur 5% of the time, increasing .3% per
                quarter




-
            Alternative
                financing would be available starting at 0%, increasing 5% per quarter
                to
                a maximum of 20%




-
            Common
                Shares outstanding would increase 1% per
                quarter




-
            Exercise
                pricing reset events would occur 5% of the time with an adjustment
                factor
                to the warrant exercise price of
                0.9983




-
            Quarterly
                conversions of the debentures would be limited to the lesser of 4.99%
                of
                the outstanding stock or 25% of the average 22-day trading
                volume.




**NOTE
      5 - SEGMENT REPORTING**





Our
      company has two business segments: business services (which consist of lending
      services) and manufacturing and sales of nutritional products through our wholly
      owned subsidiary, Interactive Nutrition International, Inc. The Company intends
      to wind down the business services segment as these assets are monetized and
      devote these resources to expanding the international marketing, sales, and
      distribution of the Company’s nutritional products.





The
      Company's operations are conducted in the United States and Ottawa, Ontario,
      Canada.




12




**Business**
              
              **Nutritional****Services**
              
              **Products****Three
                  Months ended March, 2008**Revenue
              
              $
              77,911
              
              $
              4,172,022Interest
                  expense/(income)
              
              
              583,268
              
              
              (1,660
              )Income
                  (loss) before income tax
              
              
              (75,632
              )
              
              329,329Income
                  tax benefit
              
              
              -
              
              
              (25,360
              )Segment
                  assets
              
              
              10,264,595
              
              
              14,220,468Additions
                  to long-term assets
              
              
              21,156
              
              
              13,778Depreciation
                  and amortization
              
              
              757
              
              
              208,071**Three
                  Months ended March, 2007**Revenue
              
              $
              87,467
              
              $
              -Interest
                  expense/(income)
              
              
              240,391
              
              
              -Loss
                  before income tax
              
              
              567,405
              
              
              -Income
                  tax benefit
              
              
              -
              
              
              -Segment
                  assets
              
              
              12,463,695
              
              
              -Additions
                  to long-term assets
              
              
              -
              
              
              -Depreciation
                  and amortization
              
              
              757
              
              
              -




**NOTE
      6 - RELATED PARTY TRANSACTIONS**





Turnaround
      Partners, Inc., (formerly Emerge Capital Corp) and the Company are separate
      public entities that were previously under common control. On December 5, 2007,
      a new majority shareholder invested in Turnaround Partners, Inc. At that time,
      Timothy J. Connolly and Fred Zeidman resigned as officers and directors and
      Turnaround Partners, Inc is no longer affiliated with Natural Nutrition,
      Inc.





Brokerage
      fees





Corporate
      Strategies, Inc. previously had an arrangement whereby it introduced prospective
      financing clients to the Company. If a transaction was consummated, Corporate
      Strategies, Inc. earned a fee from the borrower. For the quarters ended March
      31, 2008 and 2007 such fees have totaled $-0- and $2,965, respectively. No
      fees
      are paid to Corporate Strategies, Inc. by the Company since they are paid by
      the
      borrower. No further fees are expected to be paid as the Company is no longer
      in
      the business of lending.





Allocation
      of operating expenses





Corporate
      Strategies, Inc., a wholly owned subsidiary of Turnaround Partners, Inc,
      previously performed certain administrative and management functions for the
      Company. Based on an estimation of efforts expended, the Company was allocated
      $-0- and $101,199 for the quarters ended March 31, 2008 and 2007, respectively.
      Corporate Strategies no longer provides these functions for the Company.





**NOTE
      7 - COMMON STOCK**





During
      the first three months of this year, we have issued 8,689,245 new shares of
      common stock. We issued 999,960 shares for the conversion of preferred stock
      into common stock and 7,689,285 shares as a result of the 5 for 4 stock split
      approved on January 28, 2008.




13




**ITEM
                2**.
            **MANAGEMENT'S
                DISCUSSION AND ANALYSIS OR PLAN OF
                OPERATION.**




**FORWARD-LOOKING
      STATEMENTS AND ASSOCIATED RISKS**





This
      Quarterly Report on Form 10-QSB, and the accompanying MD&A, contains
      forward-looking statements.  Statements contained in this report about
      Natural Nutrition, Inc.'s future outlook, prospects, strategies and plans,
      and
      about industry conditions and demand for our financial services are
      forward-looking.  All statements that express belief, expectation,
      estimates or intentions, as well as those that are not statements of historical
      fact, are forward looking. The words "proposed," "anticipates," "anticipated,"
      "will," "would," "should," "estimates" and similar expressions are intended
      to
      identify forward-looking statements.  Forward-looking statements represent
      our reasonable belief and are based on our current expectations and assumptions
      with respect to future events. While we believe our expectations and assumptions
      are reasonable, they involve risks and uncertainties beyond our control that
      could cause the actual results or outcome to differ materially from the expected
      results or outcome reflected in our forward-looking statements.  In light
      of these risks, uncertainties and assumptions, the forward-looking events
      discussed in this quarterly report may not occur.  Such risks and
      uncertainties include, without limitation, our successful efforts in the outcome
      of our litigation concerning our investment in INII, or the extension of our
      agreement in lieu of foreclosure, our success in trading marketable securities,
      our ability to maintain contracts that are critical to our operations, actual
      customer demand for our financing and related services, collection of accounts
      and notes receivable, our ability to obtain and maintain normal terms with
      our
      vendors and service providers and conditions in the capital markets and equity
      markets during the periods covered by the forward-looking
      statements.





The
      forward-looking statements contained in this report speak only as of the date
      hereof.  We undertake no obligation to publicly update or revise any
      forward-looking statements, whether as a result of new information, future
      events or any other reason.  All forward-looking
      statements attributable to Natural Nutrition, Inc. or any person acting on
      its
      behalf are expressly qualified in their entirety by the cautionary statements
      contained or referred to in our annual report filed on Form 10-KSB and in our
      future periodic reports filed with the SEC. The following M,D&A should be
      read in conjunction with these unaudited Consolidated Financial Statements
      of
      the Company, and the related notes thereto included elsewhere herein, and in
      conjunction with our audited financial statements, together with footnotes
      and
      the M,D&A, in our 2007 annual report filed on Form 10-KSB with the
      Securities Exchange Commission (the “SEC”).





**Overview**




On
      August
      25, 2005, Health Express USA, Inc., a Florida corporation, entered into a share
      exchange agreement with CSIBF and CSI, the stockholder of CSIBF. The transaction
      is being reflected as a reverse acquisition since control of the Company has
      passed to the shareholders of CSI. The Company was subsequently renamed in
      2005
      to CSI Business Finance, Inc. (the Florida corporation). In September of 2006,
      we changed our name from CSI Business Finance, Inc. to Natural Nutrition, Inc.
      and simultaneously migrated from Florida to Nevada.





On
      May
      23, 2006, our Board of Directors approved a 1 for 25 reverse split of our Common
      Stock. On January 29, 2008, our Board of Directors approved a 5 for 4 forward
      common stock split. All references to our common stock in this document are
      stated in shares after the forward stock split.





All
      significant intercompany accounts and transactions have been eliminated in
      consolidation.





Prior
      to
      and during a part of 2007, our
      Company, through our wholly-owned operating subsidiary, CSI Business Finance,
      Inc., primarily generated cash and revenue from financing and investing
      activities. These activities included equipment leasing, factoring and loan
      brokerage activities earned in originating and selling business leases,
      providing short term secured lending, and investing in marketable securities.
      Management of the Company mitigates its risk in lending by securing loans with
      pledged assets (collateral) that, when liquidated, have a reasonable probability
      of realizing proceeds that would retire the liability. In some instances, we
      obtain personal guarantees from individuals of net worth which are adequate
      to
      repay the liability in the event of default. We also traded marketable
      securities and options with available cash, and on margin. Because our trading
      involved leveraging, these transactions contained a considerable amount of
      risk.
      These activities and all new lending activities of CSIBF were discontinued
      in
      2007 following the settlement of the litigation and acquisition of the senior
      debt and operations of INII.





Our
      management will now concentrate its efforts on collecting the remaining notes
      receivable from CSIBF’s former operations. CSIBF was renamed iNutrition Inc. and
      is currently the marketing arm of INII. CSIBF’s mission is to grow the “direct
      to consumer” sales program for the INII sports nutrition and dietary supplement
      products. The core focus of all operations is now based on growing the business
      of INII, our largest asset, which was acquired pursuant to that certain
      agreement in lieu of foreclosure of a note
      purchased by the Company in March 2006. INII,
      a
      wholly-owned subsidiary of Natural Nutrition, Inc. (OTC Bulletin Board: NTNI),
      is a twelve (12) year-old specialty manufacturer of sports, nutritional and
      natural dietary supplement products. INII is an international leader in dietary
      supplements backed by over twelve (12) years of research and development. INII
      is authorized to sell sports nutrition products in over eighteen (18) countries
      throughout the world. All products are manufactured under strict Canadian
      government quality control measures.





14




Effective
      May 31, 2007, we closed on the Purchase Agreement with the Vendor pursuant
      to
      which the Company purchased from the Vendor, and the Vendor sold, assigned
      transferred and conveyed to the Company, certain Indebtedness owed to the Vendor
      by INII under that certain Subsidiary Note in the original principal amount
      of
      Fifteen Million Canadian Dollars (Cdn$15,000,000) issued (in part) by INII
      to
      the Vendor on March 31, 2004 and (b) a general security agreement, of even
      date
      with the Subsidiary Note, and a share pledge agreement, of even date with the
      Subsidiary Note, both granted concurrently by INII and its shareholder, the
      Company (as successor in interest to the now defunct Bio-One) in connection
      with
      the Indebtedness (together, both instruments are hereinafter referred to as
      the
“ Security ”)
      for a
      purchase price equal to (i) Seven Million Six Hundred Fifty Thousand Canadian
      Dollars (Cdn$7,650,000) and (ii) the execution by the Company of that certain
      Mutual Release.  The Company and the Vendor entered into that certain
      Assignment, of even date with the Purchase Agreement, in order to properly
      effectuate the assignment by the Vendor to the Company of all of the right,
      title, benefit and interest in and to the Purchased Assets (as defined therein),
      which such Purchased Assets include, without limitation, the Indebtedness,
      the
      Security and all loan, security and other documentation relating to the
      Indebtedness and the Security purchased under the Purchase Agreement.  The
      Company and the Vendor executed the Purchase Agreement, the Mutual Release
      and
      the Assignment on May 25, 2007; however, the parties closed the transactions
      upon the execution of the SPA on May 31, 2007.




Recent
      Accounting Pronouncements





In
      March
      2008, the FASB issued Statement No. 161, *Disclosures
      about Derivative Instruments and Hedging Activities - an amendment of FASB
      Statement No. 133* (SFAS
      161). This statement requires enhanced disclosures about an entity’s derivative
      and hedging activities and is effective for financial statements issued for
      fiscal years and interim periods beginning after November 15, 2008, with
      earlier application encouraged. The Company will adopt SFAS 161 in the first
      fiscal quarter of 2009. Since SFAS 161 requires only additional disclosures
      concerning derivatives and hedging activities, adoption of SFAS 161 will not
      have an impact on the Company’s consolidated financial condition, results of
      operations or cash flows.





**RESULTS
      OF OPERATIONS**





**Three
      Months Ended March 31, 2008 and March 31, 2007**





Interactive
      Nutrition International, Inc. (“INII”) was acquired by us on May 31,
      2007.





Sales
      revenue for the three months ended March 31, 2008 included sales for Interactive
      Nutrition International, Inc. (“INII”) of $4,172,022. This revenue was generated
      from sales of nutritional products from INII.





Fee
      income from brokerage fees earned in originating and selling business leases
      and
      loans was $0 for the three months ended March 31, 2008 versus $2,965 for the
      three months ended March 31, 2007. We intend to wind down this activity and
      make
      the primary focus of management as well as devoting the Company’s resources to
      expanding the international marketing, sales and distribution or INII’s
      nutritional products.





Interest
      Income was $43,367 for the three months ended March 31, 2008 as compared to
      $74,058 for the three months ended March 31, 2007. Interest income was derived
      mainly from notes receivable relating to investments. Dividend income was
      $17,213 for the three months ended March 31, 2008 and $7,159 for the three
      months ended March 31, 2007. Dividend income is primarily derived from various
      investments in marketable securities. For the three months ended March 31,
      2008,
      we recorded net trading gains from various investments in marketable securities
      in the amount of $17,331 as compared to $3,285 for the three months ended March
      31, 2008. We intend to wind down these activities and make the primary focus
      of
      management as well as devoting the Company’s resources to expanding the
      international marketing, sales and distribution or INII’s nutritional
      products.








**Cost
      of goods sold, selling, general and administrative expenses and other income
      and
      expenses**





INII





Cost
      of
      sales for our revenue in INII was $3,249,800. Cost of sales includes material,
      labor and manufacturing costs associated with the production of our
      products.





Selling,
      general and administrative expenses were $511,285 for the three months ended
      March 31, 2008. These expenses include salaries and benefits, professional
      fees
      and other ordinary expenses necessary to carry out our operations.




15





Houston
      operations





Our
      Houston operating expenses were approximately $330,924 for the three months
      ended March 31, 2008 as compared to $624,023 for three months ended March 31,
      2007. ****





Salaries
      and Benefits were $176,197 for the three months ended March 31, 2008 **** as **** compared
      to $106,538 for the three months ended March 31, 2007. **** The
      primary reason for the increase was the allocation of manpower due to the
      acquisition of INII in May 2007 including the assignment of a full time
      executive assistant to Natural Nutrition.




Professional
      fees were $107,727 for the three months ended March 31, 2008 **** as
      compared to $60,764 for the same period ending March 31, 2007. **** The
      primary reason for the increase is expenses incurred in 2007 relating to the
      acquisition and audit of INII. ****




Interest
      expense was $473,868 for the three months ended March 31, 2008 **** and
      $193,386 for the three months ended March 31, 2007. **** Interest
      expense primarily relates to the expense associated with the $15,635,199 five
      percent (5%) convertible debenture entered into in September 2005, three months
      interest on our May 31, 2007 note and interest on our margin loan.





The
      Company was allocated overhead from a former affiliate in the amount of $101,199
      for the three months ended March 31, 2007, as compared to $-0- for the three
      months ended March 31, 2008. The expenses included rent, office supplies, travel
      and other ordinary expenses necessary to carry out our corporate operations.
      The
      arrangement with the former affiliate was discontinued at the end of 2007 due
      to
      a change in ownership of the former affiliate.





We
      recorded income of $858,912 for the net change in fair value of our derivatives
      associated with our convertible debenture and note.





**Liquidity
      and Capital Resources**  ****





Operating
      Activities





We
      recorded net income for the three months ended March 31, 2008 in the amount
      of
      $279,057. During the three months ended March 31, 2008, our operations generated
      cash flow in the amount of $87,745. Cash generated by operating
      activities was
      primarily due to increases in accounts payable and accrued expenses, offset
      by
      increases in trade receivables. Cash also increased as a result of reductions
      in
      investments in marketable securities.





Investing
      Activities





We
      used
      cash totaling $34,934 for the acquisition of fixed assets during the three
      months ended March 31, 2008.





As
      of
      March 31, 2008, $1,400,000 of our short-term investments was invested in auction
      rate securities, or ARSs. The $1,400,000 we have invested in ARSs at March
      31,
      2008 is collateralized by portfolios of AAA municipal obligations.  Through
      May 15, 2008, auctions of these securities were not successful, resulting in
      our
      continuing to hold these securities and the issuers paying interest at the
      maximum contractual rate. Based on current market conditions, it is likely
      that auctions related to these securities will be unsuccessful in the near
      term. Unsuccessful auctions will result in our holding securities beyond
      their next scheduled auction reset dates and limiting the short-term liquidity
      of these investments. While these failures in the auction process have
      affected our ability to access these funds in the near term, we do not believe
      that the underlying securities or collateral have been affected. We believe
      that the higher reset rates on failed auctions provide sufficient incentive
      for
      the security issuers to address this lack of liquidity. If the credit
      rating of the security issuers deteriorates, we may be required to adjust the
      carrying value of these investments through an impairment charge. Excluding
      ARSs, at May 15, 2008, we had approximately $2,000,000 in cash and short-term
      investments. We believe the working capital available to us will be sufficient
      to meet our cash requirements for at least the next 12 months.







Financing
      Activities





We
      used
      cash totaling $12,733 for payment on notes payable during the three months
      ended
      March 31, 2008. The Company’s secured convertible promissory note in the amount
      of $9,292,894 requires that the Company maintain EBITDA for each accounting
      period which equals or exceeds the applicable EBITDA threshold for such
      accounting period. Our EBITDA for the three months ended March 31, 2008 was
      CDN$501,263 versus CDN$462,413 as required under Exhibit C of the Note.





The
      Company had working capital in the amount of $3,488,397 at March 31, 2008.
      Included in our working capital is $1,203,404 of short term notes receivable
      and
      $1,459,271 in investments in marketable securities.





16


Our
      cash
      flows for the periods are summarized below:





Three
                Months Ended
            
            Three
                Months EndedMarch
                31, 2008
            
            March
                31, 2007Net
                cash provided by (used in) operating activities
            
            $
            87,745
            
            $
            (159,151
            )Net
                cash provided by (used in) investing activities
            
            $
            (34,934
            )
            $
            100,000Net
                cash used in financing activities
            
            $
            (12,733
            )
            $
            -0-





Our
      cash
      increased by $34,258 since December 31, 2007.





Management
      believes the Company has adequate working capital and cash to be provided from
      operating activities to fund current levels of operations. We anticipate that
      our company will grow. As our business grows we believe that we will have to
      raise additional capital in the private debt and public equity markets to fund
      our investments.




**Off-Balance
      Sheet Arrangements**




The
      Company leases administrative office space in Houston, Texas at a current
      minimum annual cost of $74,032. The Company is also responsible for its share
      of
      property tax, maintenance and utility costs on the office building lease. The
      lease expires in January 2010.





INII
      leases its building and warehouse in Ottawa, Canada at a current minimum annual
      cost of $319,550. The Company is also responsible for its share of property
      tax,
      maintenance and utility costs on the warehouse lease. The leases expire on
      April
      30, 2009.




Future
      minimum payments under the office, building and warehouse leases described
      above, on a fiscal year basis are as follows:




2008
            
            $
            408,3522009
            
            
            185,4722010
            
            
            6,169$
            599,993


**Inflation**




The
      Company believes that inflation has not had a significant impact on operations
      since inception.




**ITEM
      4T. CONTROLS AND PROCEDURES**




**(A)
      Evaluation of Disclosure Controls and Procedures**




The
      Company maintains disclosure controls and procedures designed to ensure that
      information required to be disclosed in reports filed under the Securities
      Exchange Act of 1934, as amended, is recorded, processed, summarized,
      accumulated and communicated to the Company’s management, including its Chief
      Executive Officer ("CEO") (who also serves as its Interim Chief Financial
      Officer ("CFO")), as appropriate, to allow timely decisions regarding required
      disclosure.




As
      of the
      end of the period covered by this report, the Company's management carried
      out
      an evaluation, under the supervision and with the participation of the Company's
      Chief Executive Officer (“CEO”), of the effectiveness of the design and
      operation of the Company's system of disclosure controls and procedures pursuant
      to the Securities and Exchange Act, Rule 13a-15(e) and 15d-15(e) under the
      Exchange Act). Based on the material weaknesses described herein the Company's
      CEO has concluded that the Company's disclosure controls and procedures were
      not
      effective, as of the date of that evaluation, for the purposes of recording,
      processing, summarizing and timely reporting of material information required
      to
      be disclosed in reports filed by the Company under the Exchange Act.





Because
      of its size, the Company shares its accounting staff with another company
      located in the same suite in Houston, Texas and is comprised of its controller
      and a data entry clerk. The controller and data entry clerk are considered
      contract employees whom also work for the other company within the office suite
      as contract employees. We currently do not have the resources to hire full-time
      accounting personnel and do not anticipate hiring any full-time accounting
      personnel in the near future. Because of the structure of our staff, we have
      a
      failure to maintain effective controls over the selection, application and
      monitoring of our accounting policies to assure that certain complex equity
      transactions are accounted for in accordance with generally accepted accounting
      principles.




17




**(B)
      Changes**  **in
      Internal Controls over Financial Reporting**




In
      connection with the evaluation of the Company's internal controls during the
      Company's last fiscal quarter covered by this report, the Company's CEO has
      determined that there were no changes to the Company's internal controls over
      financial reporting that have materially affected, or are reasonably likely
      to
      materially effect, the Company's internal controls over financial
      reporting.





**Material
      Weaknesses Identified**




In
      connection with the audit of our Consolidated Financial Statements for the
      fiscal year ended December 31, 2007, our independent registered public
      accounting firm informed us that we had significant deficiencies constituting
      material weaknesses as defined by the standards of the Public Company Accounting
      Oversight Board, which had been identified in connection with the audit of
      our
      Consolidated Financial Statements for the fiscal years ended December 31,
      2007.





The
      material weaknesses identified by the auditor during the December 31, 2007
      audit
      were the lack of segregation of duties necessary to maintain proper checks
      and
      balances between functions and the lack of procedures to properly account for
      non-routine transactions including the write down of stock investment,
      impairment of an investment in a partnership and recording of the additional
      liability at the liquidation value for a series of preferred stock which was
      to
      be completely liquidated at December 31, 2007.





The
      absence of qualified full time accounting personnel was a contributing factor
      to
      the problems identified by the auditor. The specific circumstances giving rise
      to the weaknesses include utilizing the services of contract accountants on
      a
      part time basis in the absence of internal accounting personnel.





**PART
      II - OTHER INFORMATION**





**ITEM
      1**  **.
      LEGAL PROCEEDINGS**





None





**ITEM
      2**  **.
      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**




None.





**ITEM
      3**  **.
      DEFAULTS UPON SENIOR SECURITIES**




None.





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




None.





**ITEM
      5**  **.
      OTHER INFORMATION**




None.




18




**ITEM
      6. EXHIBITS AND REPORTS ON FORM 8-K**




(a)
            Documents
                Files As A Part of This Report:See
                Index to Consolidated Financial Statements attached which are filed
                as
                part of this Quarterly Report.(b)
            Exhibits:




**EXHIBIT
                NO.**
            **DESCRIPTION**
            **LOCATION**3.1
                and 3.2
            Articles
                of Incorporation and Conversion of Natural Nutrition, Inc.
            Incorporated
                by reference to Exhibits 3.1 and 3.2 to the Company’s Form 10-KSB as filed
                with the Securities and Exchange Commission on April 13, 20074.1
            CSI
                Business Finance, Inc. 2006 Stock Incentive Plan.
            Incorporated
                by reference as Exhibit 4.1 to the Company's Current Report on Form
                8-K as
                filed with the Securities and Exchange Commission on July 14,
                2006.10.1
            Purchase
                Agreement, dated effective December 31, 2007, by and among Natural
                Nutrition, Inc., CSI Business Finance, Inc. and Corporate Strategies,
                Inc.
            Incorporated
                by reference as Exhibit 109.1 to the Company's Current Report on
                8-K filed
                with the U.S. Securities and Exchange Commission on January 3,
                200810.2
            Agreement,
                dated January 24, 2008, by and between Global Virtual Opportunities
                and
                Natural Nutrition, Inc.
            Incorporated
                by reference as Exhibit 10.1 to the Company's Current Report on Form
                8-K
                as filed with the U.S. Securities and Exchange Commission on February
                1,
                200831.1
            Certificate
                pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section
                302 of
                the Sarbanes-Oxley Act of 2002
            Provided
                herein32.1
            Certificate
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002
            Provided
                herein






19





**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the Company has caused
      this Quarterly Report on Form 10-Q to be signed on its behalf by the
      undersigned, thereunto duly authorized.




Date:
                May 19, 2008
            Natural
                Nutrition, Inc.(Registrant)/s/
                Timothy J ConnollyTitles:Chief
                Executive Officer, Interim Chief Financial Officer, Principal Executive
                Officer and Interim Principal Financial and Accounting
                Officer







20