SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**Form 10-KSB**

**Annual Report Pursuant to Section 13 or 15(d) of**

**the Securities Exchange Act of 1934**

(Mark One)

[ X ] Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2001

[   ] Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ___________________ to ______________

Commission File Number 333-48746

**e Nutrition, Inc.**

(Name of small business issuer in its charter)

|**Nevada**

(State or other jurisdiction of incorporation or organization) | **87-0567853**

(I.R.S. Employer I.D. No.)
|-------------------------------------------------------------------------- | ------------------------------------------

**2250 West Center St. Springville, UT 84663**

(Address and Zip Code of principal executive offices)

Issuer's telephone number, including area code: **801- 489-0222**

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

Securities registered under Section 12(g) of the Exchange Act:

$.001 par value, common voting shares

(Title of class)

Check whether the Issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was required to file such report(s), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [ X ]   No [   ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is contained in this form, and
no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this form 10-KSB or any amendment to this Form 10-KSB. [    ]

The issuer's revenue for its most recent fiscal year was: $188,245

The aggregate market value of the issuer's voting stock held as of March 12, 2002, by non-affiliates of the issuers was
$538,200

As of March 12, 2002, issuer had 12,225,000 shares of its $.001 par value common stock outstanding.

Transitional Small Business Format:   Yes [   ]   No [ X ]

Documents incorporated by reference: none

**PART I**

**Item 1.  Description of Business.**

**General**

We were originally formed as a Nevada corporation on March 13, 1996, under the name of Zachman Enterprises, Inc. to
pursue the business of consulting.  Due to a lack of management and funding, the business was unsuccessful.  On June 14,
2000, we changed our name to e Nutrition, Inc. to focus on marketing and distributing nutritional supplements. We are not
in any way affiliated with the website eNutrition.com.

**Our business**

We are a direct mail marketing company engaged in the development and marketing of nutritional supplements.  We do
not manufacture the products we sell and we do not carry a large inventory.  We depend on independent nutritional product
formulators who specialize in nutritional supplements for the manufacture of our products.  Our strategy is to out source all
or most of our operations so that we can focus on the marketing of our products.

We named the company, e Nutrition, to affiliate ourselves with the growing crowd of businesses doing commerce on the
internet.  Although, our main focus has been with direct mail, we intend to sell our products on the internet through third
parties.

We commenced limited operations in June 2000 by securing the exclusive rights to market the nutritional supplement,
HI-Q.  On November 20, 2000, we purchased the rights to the HI-Q products for $10,000.  HI-Q is a food supplement
which focuses on providing the human brain with the essential nutrients we believe it needs to function at optimum
capacity.  HI-Q was previously marketed by HomeQuest, Inc. and Insight USA, Inc.  Both of these companies marketed the
product through multi-level marketing plans during the period of 1997-1999.

We are a marketing company and do not have any expertise in nutritional science.  The products we currently market were
developed by Mr. Howard Ruff in conjunction with Albion Laboratories and Dr. Harvey Ashmead, founder of Albion
Laboratories.  Albion Laboratories is acclaimed as the pioneer in nutritional technology and is the world's major producer
of patented amino acid chelated minerals used to benefit plants, animals, and humans.  We consult with Albion
Laboratories for expertise on nutritional science.

**Our products**

We intend to pursue the growing U.S. market for nutritional supplements.  HI-Q Golden and other HI-Q brain food
supplements focus on the specific nutrients we believe are required by the human brain in order to function at peak
capacity.  The HI-Q product line includes the following:

- HI-Q Smart Start, a chewable tablet formulated for younger children who cannot swallow capsules

- HI-Q Junior, to be taken by children under 12

- HI-Q Teen, formulated for teenagers

- HI-Q Prime, formulated for adults

- HI-Q Golden, formulated for seniors

At the present time, we are only marketing HI-Q Prime and HI-Q Golden and anticipate commencing marketing activities
on our remaining products and are seeking additional nutritional products to include in our marketing activities.

Our products are a blend of vitamins, chelated minerals, botanicals and other nutrients. Chelation bonds mineral molecules
to amino acids then transports the mineral to the cells where it is needed. Chelated minerals are far more readily assimilated
by the body.  The developer of HI-Q incorporated all of the nutritional supplements he believed to be "brain foods" and
combined these supplements with additional supplements to create age specific products.

**Item 2.  Description of Property.**

The Company does not currently own any property.  The Company maintains limited office space provided by Steven L.
White.  The office space is provided on a rent-free basis and meets the current needs of the Company.  Until such time as
the Company pursues a viable business opportunity and recognizes income, it will not seek independent office space.

**Item 3.  Legal Proceedings.**

No legal proceedings are threatened or pending against the Company or any of its officers or directors.  Further, none of
the Company's officers or directors or affiliates of the Company are parties against the Company or have any material
interests in actions that are adverse to the Company's interests.

**Item 4.  Submission of Matters to a Vote of Securities Holders.**

No matters were submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders.

**PART II**

**Item 5.  Market for Common Equity and Related Stockholder Matters.**

The Company's common stock is listed on the Over the Counter Bulletin Board ("OTCBB"), under the symbol "ENUT".
As of March 12, 2002, the Company had 47 shareholders holding 12,225,000 shares of common stock.  Of the issued and
outstanding common stock, 575,000 are free trading, the balance are restricted stock as that term is used in Rule 144.     ****CLOSING BID**

**CLOSING ASK******
**High**
**Low**
**High**
Low**2001**August 2 (first
available) through
September 28
0.1000
0.0500
None
NoneOctober 1 through
December 31
0.1000
0.1000
None
NoneThe above quotations, as provided by the National Quotation Bureau, LLC, represent prices between dealers and do not
include retail markup, markdown or commission.  In addition, these quotations do not represent actual transactions.

The Company has not paid, nor declared, any dividends since its inception and does not intend to declare any such
dividends in the foreseeable future. The Company's ability to pay dividends is subject to limitations imposed by Nevada
law. Under Nevada law, dividends may be paid to the extent that the corporation's assets exceed its liabilities and it is able
to pay its debts as they become due in the usual course of business.

**Item 6.  Management's Discussion and Analysis.**

**Twelve Month periods Ended December 31, 2001 and December 31, 2000.**

The Company had revenue from continuing operations for the years ended December 31, 2001 and 2000 of $188,245 and
$94,680 respectively.  Increase is due to the Company expanding its operations.  The Company also had interest income of
$355 during the year ended December 31, 2001 with no interest income in the year ended December 31, 2000.  Cost of
goods sold for the years ended December 31, 2001 and 2000 was $80,592 and $35,271 respectively.

General and administrative expenses for the years ended December 31, 2001 and 2000 consisted of general corporate
administration, legal and professional expenses, and accounting and auditing costs and wages.  These expenses were
$213,841 and $63,941 respectively.

As a result of the foregoing factors, the Company realized a net loss of $105,833 for the year ended December 31, 2001 as
compared to a net loss of $4,532 for the same period in 2000.

**Liquidity and Capital Resources**

At December 31, 2001 the Company had $6,532 cash in hand, royalties receivable of $2,291, and $6,288 in trademark and
formula assets for a total of $15,111 in assets and total current liabilities of $191.

The Company believes that its current cash needs can be met with the cash on hand and continued operations.  However,
should the Company find it necessary to raise additional capital, the Company may sell common stock of the Company or
enter into debt financing agreements.

The Company filed an SB-2 Registration Statement with the Securities and Exchange Commission that became effective
on March 26, 2001.  The Company has no commitments for any capitol expenditures within the next 12 months.  The
Company sold 575,000 shares and raised $115,000. The Company closed the offering on June 4, 2001.  Expenses
associated with the offering were $20,000.

At December 31, 2001, total stockholders' equity was $14,920.

**Item 7.  Financial Statements.**

The financial statements of the Company appear at the end of this report beginning with the Index to Financial Statements
on page F-1.

**Item 8.  Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.**

None.

**PART III**

**Item 9.  Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the
Exchange Act.**

The following table sets forth the name, age, position and office term of the executive officer and director of the Company.**Name**
**Age**
**Positions**
**Since**Steven L. White
48
Sole Officer and Director
June 2000All directors serve until the next annual stockholders meeting or until their successors are duly elected and qualified.  All
officers serve at the discretion of the Board of Directors.

Set forth below is a brief biography of Mr. Steven L. White, president, chief executive officer and director.

**Steven L. White, Director, President, Secretary/Treasurer.**

Mr. White earned his Bachelor of Science Degree from Brigham Young University in 1980 with a major in accounting and
a minor in English.  He is a member of the American Institute of Certified Public Accountants and has been employed by
one national and two local CPA firms.  Since 1983, Mr. White has been employed in private accounting and has been the
controller of several small businesses which include Phoenix Ink, LLC, a financial newsletter publisher, from 1999 to
present; HomeQuest, Inc., an educational software marketing company, from 1993 to 1998; InfoLink Technologies, Inc., a
software development company, from 1991 to 1992; Jefferson Institute, Inc., an investment seminar company, from 1986
to 1990 and Video Ventures, Inc., a publicly held video rental company, from 1983 to 1985.  Mr. White is the President
and a director of New Horizon Education, Inc, a publicly traded company, and of Excel Publishing, Inc., a publicly traded
company.

**Item 10.  Executive Compensation**

****Steven L. White, officer and controlling shareholder of the Company, was paid $0 and $5,000 in compensation from the
Company for the years ended December 31, 2001 and 2000, respectively.

No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by
the Company for the benefit of its employees.

**Employment Contracts and Termination of Employment and Change in Control Arrangement.**

There are no compensatory plans or arrangements, including payments to be received from the Company, with respect to
any person named in Cash Compensation set out above which would in any way result in payments to any such person
because of his resignation, retirement, or other termination of such person's employment with the Company or its
subsidiaries, or any change in control of the Company, or a change in the person's responsibilities following a change of
control of the Company.

**Item 11.  Security Ownership of Certain Beneficial Owners and Management.**

The following table sets forth as of March 12, 2002, the number and percentage of the 12,225,000 shares of outstanding
common stock which, according to the information supplied to the Company, were beneficially owned by (i) each person
who is currently a director of the Company, (ii) each executive officer, (iii) all current directors and executive officers of
the Company as a group and (iv) each person who, to the knowledge of the Company, is the beneficial owner of more than
5% of the outstanding common stock.  Except as otherwise indicated, the persons named in the table have sole voting and
dispositive power with respect to all shares beneficially owned, subject to community property laws where applicable.**Name and Address**
**Amount**
**Percentage**Steven L. White (1)

2250 West Center St.

Springville, UT 84663
8,505,000
69.57GJM Trading Partners, Ltd.

6041 South Syracuse Way #307

Englewood CO. 80111
650,000
5.31One World Through Youth Foundation

1310 East 1600 South

Mapleton, UT 84664
1,000,000
8.17Officers, Directors and Nominees as a
Group:

3 People
10,155,000
83.06(1) Officer and/or director. 5,000 of these shares are held in the name of Sparrow, Inc., a company owned and controlled by
Steven L. White.

**Item 12.  Certain Relationships and Related Transactions.**

The Company maintains a limited office space provided by Steven L. White.  The office space is provided on a rent-free
basis and meets the current needs of the Company.  Until such time as the Company requires a larger office, it will not seek
additional office space.

****The Company paid a total of $14,096 to Sparrow, Inc. during the year ended December 31, 2001.  Sparrow, Inc. is owned
by the Company's president, Steven L. White.

**Item 13.  Exhibits and Reports on Form 8-K.**

**Reports on Form 8-K**

No reports on Form 8-K were filed during the quarter ended December 31, 2001.

**Exhibits**

None

**SIGNATURES**

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

e Nutrition, Inc.

Date: March 22, 2002    By: /s/ Steven L. White

Steven L. White

President, Secretary/Treasurer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Date: March 22, 2002    By: /s/ Steven L. White

Steven L. White, Director

**e NUTRITION, INC.**

[A Development Stage Company]

**CONTENTS**

****PAGE**-- Independent Auditors' Report
9-- Balance Sheet, December 31, 2001
10-- Statements of Operations, for the years ended December
31, 2001 and 2000, and for the period from inception on
March 13, 1996 through December 31, 2001
11-- Statement of Stockholders' Equity, from inception on
March 13, 1996 through December 31, 2001
12-- Statements of Cash Flows, for the years ended December
31, 2001 and 2000, and for the period from inception on
March 13, 1996 through December 31, 2001
13-- Notes to Financial Statements
14- 18**
INDEPENDENT AUDITORS' REPORT

Board of Directors

**e NUTRITION, INC.**

Springville, Utah

We have audited the accompanying balance sheet of e Nutrition, Inc. [a development stage company] at December 31,
2001, and the related statements of operations, stockholders' equity and cash flows for the years ended December 31, 2001
and 2000 and for the period from inception on March 13, 1996 through December 31, 2001.  These financial statements are
the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements
based on our audit.

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

In our opinion, the financial statements audited by us present fairly, in all material respects, the financial position of e
Nutrition, Inc. [a development stage company] as of December 31, 2001, and the results of its operations and its cash flows
for the years ended December 31, 2001 and 2000 and for the period from inception on March 13, 1996 through December
31, 2001, in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As
discussed in Note 6 to the financial statements, the Company has incurred losses since its inception and has not yet been
successful in establishing profitable operations, raising substantial doubt about its ability to continue as a going concern.
Management's plans in regards to these matters are also described in Note 6.  The financial statements do not include any
adjustments that might result from the outcome of these uncertainties.

**PRITCHETT, SILER & HARDY, P.C.**

January 18, 2002

Salt Lake City, Utah

**e NUTRITION, INC.**

[A Development Stage Company]

**BALANCE SHEET****ASSETS**
**December 31,****2001****CURRENT ASSETS:**Cash in bank
$ 6,532Royalties receivable
2,291___________Total Current Assets
8,823___________**OTHER ASSETS:******Trademarks, formulas, etc., net
6,288___________$ 15,111___________**LIABILITIES AND STOCKHOLDERS' EQUITY****CURRENT LIABILITIES:**Accounts payable
$ 191___________Total Current Liabilities
191___________**STOCKHOLDERS' EQUITY:**Preferred stock, $.001 par value, 5,000,000 shares
authorized, no shares issued and outstanding
-Common stock, $.001 par value, 50,000,000 shares
authorized, 12,225,000 shares issued and outstanding
12,225Capital in excess of par value
114,275(Deficit) accumulated during the development stage
(111,580)___________Total Stockholders' Equity
14,920___________$ 15,111___________The accompanying notes are an integral part of this financial statement.

**e NUTRITION, INC.**

[A Development Stage Company]

**STATEMENTS OF OPERATIONS**

**For the Year Ended
December 31,**
**For the Year Ended
December 31,**
**From Inception on March
13, 1996 Through
December 31,****2001**
**2000**
**2001****REVENUE,**net
$ 188,245
$ 94,680
$ 282,925**COST OF GOODS**SOLD,
net
80,592
35,271
115,863___________
___________
___________**GROSS PROFIT**
107,653
59,409
167,062**EXPENSES:******General and Administrative
213,841
63,941
278,997___________
___________
___________**LOSS FROM
OPERATIONS**
(106,188)
(4,532)
(111,935)**OTHER INCOME:******Interest income
355
-
355___________
___________
___________**LOSS BEFORE INCOME
TAXES**
(105,833)
(4,532)
(111,580)**CURRENT TAX
EXPENSE**
-
-
-**DEFERRED TAX
EXPENSE**
-
-
-___________
___________
___________**NET LOSS**
$ (105,833)
$ (4,532)
$ (111,580)___________
___________
___________**LOSS PER COMMON
SHARE**
$ (.01)
$ (.00)
$ (.03)___________
___________
___________The accompanying notes are an integral part of these financial statements.

**e NUTRITION, INC.**

[A Development Stage Company]

**STATEMENT OF STOCKHOLDERS' EQUITY**

**FROM THE DATE OF INCEPTION ON MARCH 13, 1996**

**THROUGH DECEMBER 31, 2001**

**Preferred Stock**

**Common Stock**

**Capital in
Excess of Par
Value**
**Deficit
Accumulated
During the
Development
Stage****Shares**
**Amount**
**Shares**
**Amount**BALANCE,
March 13, 1996
-
$ -
-
$ -
$ -
$ -Issuance of
1,000,000
shares of
common stock
for cash at $.001
per share,
March 1996
-
-
1,000,000
1,000
-
-Net loss for the
period ended
December 31,
1996
-
-
-
-
-
-__________
__________
__________
__________
__________
__________BALANCE,
December 31,
1996
-
-
1,000,000
1,000
-
-Net loss for the
year ended
December 31,
1997
-
-
-
-
-
(491)__________
__________
__________
__________
__________
__________BALANCE,
DECEMBER
31, 1997
-
-
1,000,000
1,000
-
(491)Net loss for the
year ended
December 31,
1998
-
-
-
-
-
(431)__________
__________
__________
__________
__________
__________BALANCE,
DECEMBER
31, 1998 - - -
-
-
1,000,000
1,000
-
(922)Issuance of
500,000 shares
of common
stock for cash at
$.001 per share,
February 1999
-
-
500,000
500
-
-Net loss for the
year ended
December 31,
1999
-
-
-
-
-
(293)__________
__________
__________
__________
__________
__________BALANCE,
DECEMBER
31, 1999
-
-
1,500,000
1,500
-
(1,215)Issuance of
10,000,000
shares of
common stock
for cash at $.001
per share, June
2000
-
-
10,000,000
10,000
-
-Issuance of
150,000 shares
of common
stock for cash at
$.10 per share,
June 2000
-
-
150,000
150
14,850
-Contributed
Capital
-
-
-
-
5,000
-Net loss for the
year ended
December 2000
-
-
-
-
-
(4,532)__________
__________
__________
__________
__________
__________BALANCE,
DECEMBER
31, 2000
-
-
11,650,000
11,650
19,850
(5,747)Issuance of
575,000 shares
of common
stock for cash at
$.20 per share
net of offering
costs of
$20,000, May
2001
-
-
575,000
575
94,425
-Net loss for the
year ended
December 2001
-
-
-
-
-
(105,833)__________
__________
__________
__________
__________
__________BALANCE,
DECEMBER
31, 2001 -
-
$ -
12,225,000
$ 12,225
$ 114,275
$ (111,580)__________
__________
__________
__________
__________
__________The accompanying notes are an integral part of this financial statement.

**e NUTRITION, INC.**

[A Development Stage Company]

**STATEMENTS OF CASH FLOWS**

**For the Year Ended
December 31,**
**For the Year Ended
December 31,**
**From Inception on March
13, 1996 Through
December 31,****2001**
**2000**
**2001****Cash Flows From
Operating Activities:******Net loss
$ (105,833)
$ (4,532)
$ (111,580)Adjustments to reconcile net
loss to net cash used by
operating activities:Amortization expense
3,336
376
3,712Changes in assets and
liabilities:(Increase) in royalties
receivable
(2,291)
-
(2,291)(Increase) decrease in
inventory
1,472
(1,472)
-(Increase) decrease in
prepaid assets
713
(713)
-Increase (decrease) in
accounts payable
(1,711)
1,902
191__________
__________
__________Net Cash Used by
Operating Activities
(104,314)
(4,439)
(109,968)__________
__________
__________**Cash Flows From Investing
Activities:**(Increase) in other
intangibles
-
(10,000)
(10,000)__________
__________
__________Net Cash Used by Investing
Activities
-
(10,000)
(10,000)__________
__________
__________**Cash Flows From
Financing Activities:**Proceeds from issuance of
common stock
115,000
25,000
141,500Capital contributions
-
5,000
5,000Stock offering costs
(9,250)
(10,750)
(20,000)__________
__________
__________Net Cash Provided by
Financing Activities
105,750
19,250
126,500__________
__________
__________**Net Increase (Decrease) in
Cash**
1,436
4,811
6,532**Cash at Beginning of
Period**
5,096
285
-__________
__________
__________**Cash at End of Period**
$ 6,532
$ 5,096
$ 6,532__________
__________
__________**Supplemental Disclosures
of Cash Flow Information:******Cash paid during the period
for:Interest
$ -
$ -
$ -Income taxes
$ -
$ -
$ -**Supplemental Schedule of Noncash Investing and Financing Activities:**

For the year ended December 31, 2001:

None

For the year ended December 31, 2000:

None

The accompanying notes are an integral part of these financial statements.

**e NUTRITION, INC.**

[A Development Stage Company]

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Organization -** e Nutrition, Inc. ("the Company") was organized under the laws of the State of Nevada on March 13, 1996
as Zacman enterprises, Inc. but subsequently changed its name to e Nutrition, Inc.  The Company markets nutritional
products in Utah and is considered a development stage company as defined in Statement of Financial Accounting
Standards No. 7. The Company has, at the present time, not paid any dividends and any dividends that may be paid in the
future will depend upon the financial requirements of the Company and other relevant factors.

**Cash and Cash Equivalents -** For purposes of the statement of cash flows, the Company considers all highly liquid debt
investments purchased with a maturity of three months or less to be cash equivalents.

**Revenue Recognition -** Revenue from sales is recognized upon shipment of the products.  The Company currently ships
products only after receipt of cash or an approved credit card number. Royalty revenue is recognized when the licensee
ships the related product.

**Amortization -**Trademarks, formulas, etc. are being amortized on a straight-line basis over the estimated useful life of
three years.

**Advertising -** Advertising and promotional costs are expensed as incurred and amounted to $58,432 and $39,378 for the
years ended December 31, 2001 and 2000, respectively.

**Loss Per Share -** The computation of loss per share is based on the weighted average number of shares outstanding during
the period presented in accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share".  [See
Note 7]

**Stock Offering Costs -** Costs related to proposed stock offerings are deferred until the offering is completed and are offset
against the proceeds of the offering as a reduction of capital in excess of par value.  In the event a stock offering is
unsuccessful, the costs related to the offering will be written-off directly to expense.

**Accounting Estimates** **-** The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amount
of revenues and expenses during the reported period.  Actual results could differ from those estimated.

**Recently Enacted Accounting Standards -**Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations", SFAS No. 142, "Goodwill and Other Intangible Assets", SFAS No. 143, "Accounting for Asset Retirement
Obligations", and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", were recently
issued.  SFAS No. 141, 142, 143 and 144 have no current applicability to the Company or their effect on the financial
statements would not have been significant.

**e NUTRITION, INC.**

[A Development Stage Company]

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 2 - TRADEMARKS, FORMULAS, ETC.**

The Company entered into an agreement to purchase all of the HI-Q trademarks, formulas, and associated rights, benefits,
royalties, and uses in November 2000.  The following is a summary as of December 31,

**2001**Trademarks, formulas, etc.
$ 10,000Less: Accumulated Amortization
(3,712)___________$ 6,288___________During the years ended December 31, 2001 and 2000, the Company expensed $3,336 and $376, respectively, as
amortization expense.

**NOTE 3 - CAPITAL STOCK**

**Common Stock -**During March 1996, in connection with its organization, the Company issued 1,000,000 shares of its
previously authorized, but unissued common stock.  The shares were issued for $1,000 cash (or $.001 per share).

During February 1999, the Company issued 500,000 shares of common stock for $500 cash (or $.001 per share).

During June 2000, the Company issued 10,000,000 shares of common stock to its president for $10,000 cash (or $.001 per
share).

During June 2000, the Company issued 150,000 shares of common stock for $15,000 cash (or $.10 per share).

During November 2000, the Company's president contributed an additional $5,000 to capital.

During May 2001, the Company completed a public stock offering of 575,000 shares of common stock for $115,000 cash
(or $.20 per share).  Stock offering costs of $20,000 were netted against the proceeds as a reduction to capital in excess of
par value. This offering was registered with the Security and Exchange Commission on Form SB-2.

**e NUTRITION, INC.**

[A Development Stage Company]

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 4 - INCOME TAXES**

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes".  SFAS No. 109 requires the Company to provide a net deferred tax asset/liability equal to
the expected future tax benefit/expense of temporary reporting differences between book and tax accounting methods and
any available operating loss or tax credit carryforwards.  At December 31, 2001, the Company has available unused
operating loss carryforwards of approximately $111,600, which may be applied against future taxable income and which
expire in various years through 2021.

The amount of and ultimate realization of the benefits from the operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future earnings of the Company, and other future events, the effects of
which cannot be determined.  Because of the uncertainty surrounding the realization of the loss carryforwards the Company
has established a valuation allowance equal to the tax effect of the loss carryforwards and, therefore, no deferred tax asset
has been recognized for the loss carryforwards.  The net deferred tax assets are approximately $37,900 as of December 31,
2001 with an offsetting valuation allowance of the same amount resulting in a change in the valuation allowance of
approximately $35,900 during 2001.

**NOTE 5 - RELATED PARTY TRANSACTIONS**

**Management Compensation -** An officer and controlling shareholder of the Company was paid $0 and $5,000 in
compensation from the Company for the years ended December 31, 2001 and 2000, respectively.

**Related Company -** The Company paid a total of $14,096 to Sparrow, Inc. during the year ended December 31, 2001 for
consulting and administrative services rendered.  Sparrow, Inc. is owned by the Company's president.

**Equity Transactions -**During June 2000, the Company issued 10,000,000 shares of common stock to its president for
$10,000 cash (or $.001 per share).  During November 2000, the Company's president contributed additional capital to the
Company in the amount of $5,000.

**Officer** **-** The Company's president and controlling shareholder also performs services for other Companies, which are
owned or controlled by Howard J. Ruff, an individual with whom the Company has various agreements [See Note 8].

**NOTE 6 - GOING CONCERN**

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles,
which contemplate continuation of the Company as a going concern. However, the Company has incurred losses since its
inception and has not yet been successful in establishing profitable operations. These factors raise substantial doubt about
the ability of the Company to continue as a going concern.  In this regard, management is proposing to raise any necessary
additional funds not provided by operations through loans or through additional sales of its common stock.  There is no
assurance that the Company will be successful in raising this additional capital or achieving profitable operations.  The
financial statements do not include any adjustments that might result from the outcome of these uncertainties.

**e NUTRITION, INC.**

[A Development Stage Company]

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 7 - LOSS PER SHARE**

The following data shows the amounts used in computing loss per share:

**For the Year Ended
December 31,**
**For the Year Ended
December 31,**
**From Inception on March
13, 1996 Through
December 31,****2001**
**2000**
**2001**Loss from continuing
operations available to
common shareholders
(numerator)
$ (105,833)
$ (4,532)
$ (111,580)__________
__________
__________Weighted average number of
common shares outstanding
used in loss per share for the
period (denominator)
12,001,301
7,195,753
4,035,359__________
__________
__________**NOTE 8 - COMMITMENTS AND CONTINGENCIES**

The Company has entered into various agreements with Howard J. Ruff or entities beneficially owned and controlled by
him.  The following summarizes the details of each agreement.

**Original License Agreement -**The Company had entered into a License Agreement with Phoenix Ink, LLC, which
granted the Company the exclusive right to engage in the business of manufacturing and selling nutritional products under
the trade name HI-Q.  This license began on June 6, 2000 and was to continue for one year and was renewable annually.
The Company paid the sum of $5,000 as an initial payment.  The Company further paid a quarterly amount of $5,000 for
the duration of the agreement and a $1.00 royalty for each bottle manufactured.  This agreement was cancelled in
November 2000 under terms of a purchase agreement the Company entered into with Phoenix Ink, LLC.  The Company
paid Phoenix Ink, LLC a total of $14,000 under the terms of this agreement.  Howard J. Ruff, with whom the Company
also had a marketing agreement, is a controlling member of Phoenix Ink, LLC through beneficial ownership.

**Purchase Agreement -**The Company entered into a purchase agreement with Phoenix Ink. LLC, for the sale and purchase
of all HI-Q trademarks, product formulations and associated assets, benefits, rights, royalties, and uses of the HI-Q
products on November 20, 2000.  The Company paid $10,000 to fulfill the agreement that nullified the original license
agreement with Phoenix Ink, LLC entered into on June 6, 2000.

**Distribution Agreement -**The Company had entered into an agreement with HI-Q Distribution, Inc. who would undertake
for the Company the order taking, order fulfillment, customer service, and shipping of the Company's HI-Q product orders
on an as needed basis.  This agreement commenced on October 1, 2000, was open ended, and terminable by either party at
any time. The Company was billed for time spent at HI-Q Distribution's regular billing rate.  The Company paid HI-Q
Distribution, Inc. a total of $107,805 and  $15,773 for the years ended of December 31, 2001 and 2000, respectively.  Hi-Q
Distribution, Inc. is owned or controlled by Howard J. Ruff, with whom the Company also had a marketing agreement.
This agreement was cancelled on September 1, 2001.

**e NUTRITION, INC.**

[A Development Stage Company]

**NOTES TO FINANCIAL STATEMENTS**

**NOTE 8 - COMMITMENTS AND CONTINGENCIES [Continued]**

**Marketing Agreement -**The Company had entered into a marketing agreement with Howard J. Ruff in which he would
consult and oversee the marketing of the HI-Q nutritional products.  This agreement commenced on June 6, 2000 and was
to continue for one year.  The Company paid two dollars for each bottle of HI-Q sold by the efforts of Howard J. Ruff on a
weekly basis.  This excludes bottles used for promotional efforts. The Company paid Howard J. Ruff a total of $21,541 and
$7,105 for the years ended December 31, 2001 and 2000, respectively.  This agreement was cancelled on September 1,
2001.

**License Agreement -**The Company entered into a License Agreement with HI-Q Nutrition, Inc., which grants them the
exclusive right to engage in the business of manufacturing, marketing and distributing nutritional products under the trade
name HI-Q.  This license began on September 1, 2001 and was good for ninety days.  The Company received an initial sum
of $5,000 upon the execution of this agreement.  The Company will also receive $1.00 royalty for each bottle sold,
excluding inventories on hand at the time of this agreement. Howard J. Ruff, with whom the Company had a marketing
agreement, is a controlling shareholder of Hi-Q Nutrition, Inc.  The Company had royalty income of $7,612 for the year
ended December 31, 2001 and has royalties receivable of $2,291 at December 31, 2001.  This agreement has been extended
through June 30, 2002.

**NOTE 9 - CONCENTRATIONS**

The Company currently purchases all of its HI-Q products from two companies.  Management believes there are other
sources available with which it could contract to produce its products. Accordingly, management believes the loss of these
vendors would not have a material impact on the operations of the Company.

The distribution of the Company's products, which includes order taking, order fulfillment, customer service and shipping
is contracted out and handled by one company (HI-Q Nutrition, Inc.).**