SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                             ----------------------

                                   FORM 10-KSB

[X] Annual Report under Section 13 or 15(d) of the Securities Exchange Act
    of 1934

                   For the fiscal year ended December 31, 2002

                                       OR

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

             For the transition period from ________ to ___________

                        Commission file number: 333-14477

                                SPORTSNUTS, INC.
        (Exact name of small business issuer as specified in its charter)

        Delaware                                            87-0561426
        --------                                            ----------
        (State or other jurisdiction of               (IRS Employer
        incorporation or organization)                 Identification No.)

    11585 South State Street, Suite 102
             Draper, Utah                                      84020
    ------------------------------------               ------------------
    (Address of principal executive offices)                (Zip Code)

                             (801) 816-2500 Issuer's
                                telephone number

         The Towers at South Towne II, 10421 South 400 West, Suite 550,
                           Salt Lake City, Utah 84095
    -----------------------------------------------------------------------
                   (Former name or former address and former
                   fiscal year, if changed since last report.)

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

    Securities registered under Section 12(g) of the Exchange Act:  None



<PAGE>



    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 reports), 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 not 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. [ X ]

    The Company's revenues for the fiscal year ending December 31, 2002
were $615,165.

    The aggregate market value of the Company's voting stock held by
non-affiliates computed by reference to the closing price as quoted on the NASD
Electronic Bulletin Board on March 1, 2003 was approximately $143,717. For
purposes of this calculation, voting stock held by officers, directors, and
affiliates has been excluded.


                      APPLICABLE ONLY TO CORPORATE ISSUERS

    State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. As of March 1, 2003, the
Company had outstanding 98,271,086 shares of common stock, par value $0.002 per
share.


                       DOCUMENTS INCORPORATED BY REFERENCE

         None.


     Transitional Small Business Disclosure Format (check one)  [  ] Yes [x] No





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                                TABLE OF CONTENTS

Part I
         Item 1 - DESCRIPTION OF BUSINESS......................................1
                  CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS............1
         Item 2 - DESCRIPTION OF PROPERTY.....................................12
         Item 3 - LEGAL PROCEEDINGS...........................................12
         Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.........12

Part II
         Item 5 - MARKET FOR COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS.........................................13
         Item 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS.........................14
         Item 7 - FINANCIAL STATEMENTS........................................18
         Item 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE.........................41

Part III
         Item 9 - DIRECTORS, OFFICERS, PROMOTERS AND CONTROL PERSONS;
                  COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT...........41
         Item 10 - EXECUTIVE COMPENSATION.....................................42
         Item 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                   MANAGEMENT AND RELATED STOCKHOLDERS MATTERS................43
         Item 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............45
         Item 13 - EXHIBITS AND REPORTS ON FORM 8-K...........................45
         Item 14 - CONTROLS AND PROCEDURES....................................46

SIGNATURES....................................................................47








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                           FORWARD LOOKING STATEMENTS

     THIS ANNUAL  REPORT ON FORM 10-KSB,  IN  PARTICULAR  "ITEM 7.  MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF  OPERATIONS"  AND
"ITEM 1. BUSINESS," INCLUDE  "FORWARD-LOOKING  STATEMENTS" WITHIN THE MEANING OF
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE STATEMENTS
REPRESENT THE COMPANY'S EXPECTATIONS OR BELIEFS CONCERNING,  AMONG OTHER THINGS,
FUTURE REVENUE, EARNINGS, AND OTHER FINANCIAL RESULTS, PROPOSED ACQUISITIONS AND
NEW PRODUCTS,  ENTRY INTO NEW MARKETS,  FUTURE OPERATIONS AND OPERATING RESULTS,
FUTURE  BUSINESS  AND MARKET  OPPORTUNITIES.  THE COMPANY  WISHES TO CAUTION AND
ADVISE READERS THAT THESE STATEMENTS  INVOLVE RISK AND UNCERTAINTIES  THAT COULD
CAUSE ACTUAL  RESULTS TO DIFFER  MATERIALLY  FROM THE  EXPECTATIONS  AND BELIEFS
CONTAINED  HEREIN.  FOR A SUMMARY OF  CERTAIN  RISKS  RELATED  TO THE  COMPANY'S
BUSINESS, SEE "RISK FACTORS." UNDER "ITEM 1. DESCRIPTION OF BUSINESS."

     Unless the context  requires  otherwise,  references  to the Company are to
SportsNuts, Inc. and its subsidiaries.

                                     PART I.

ITEM 1.  DESCRIPTION OF BUSINESS

Cautionary Factors That May Affect Future Results  (Cautionary  Statements Under
the Private Securities Litigation Reform Act of 1995)

     The  disclosure  and  analysis set forth herein  contains  certain  forward
looking  statements,   particularly   statements  relating  to  future  actions,
performance or results of current and anticipated  products and services,  sales
efforts,  expenditures,  and financial  results.  From time to time, the Company
also provides forward-looking  statements in other publicly-released  materials,
both written and oral.  Forward-looking  statements provide current expectations
or  forecasts  of  future  events  such as new  products  or  services,  product
approvals,  revenues, and financial performance. These statements are identified
as any statement  that does not relate  strictly to historical or current facts.
They use words such as "anticipates," "intends," "plans," "expects," "will," and
other words and phrases of similar  meaning.  In all cases,  a broad  variety of
assumptions can affect the realization of the expectations or forecasts in those
statements. Consequently, no forward-looking statement can be guaranteed. Actual
future results may vary materially.

     The  Company  undertakes  no  obligation  to  update  any   forward-looking
statements,  but investors are advised to consult any further disclosures by the
Company on this subject in its  subsequent  filings  pursuant to the  Securities
Exchange  Act of 1934.  Furthermore,  as  permitted  by the  Private  Securities
Litigation Reform Act of 1995, the Company provides these cautionary  statements
identifying  risk factors,  listed below,  that could cause the Company's actual
results to differ  materially  from expected and historical  results.  It is not
possible to foresee or identify all such factors. Consequently, this list should
not be considered an exhaustive statement of all potential risks,  uncertainties
and inaccurate assumptions.


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RISK FACTORS

    Operating Risks

     Defaults in Senior Securities. Effective February 1, 2000, the Company sold
and issued a promissory  note secured by virtually  all tangible and  intangible
assets of the Company ("Note") in exchange for $450,000 in cash proceeds.  As of
May 1, 2000,  the Company is in default with  respect to the Note.  Although the
Note holder continues to be supportive of the Company and its management, if the
holder of the Note  determines  to foreclose  upon the Note,  the Company  would
likely be forced to sell all of its  tangible and  intangible  assets to satisfy
the  obligation  represented  by the Note and  would,  therefore,  likely  cease
operations  entirely.  The Note and Security  Agreement  executed in  connection
therewith  have been filed as an exhibit to the Company's  1999 annual report on
Form 10-KSB filed with the Securities and Exchange Commission on March 30, 2000.

     Default in Capital Computer Lease. The Company's  wholly-owned  subsidiary,
Sports Management  Partners,  Inc. ("SMP"), is presently in default with respect
to a capital  computer  lease with IBM Credit Corp.  signed on May 31, 2001. The
lease concerns various computer hardware  components leased by SMP in connection
with efforts to provide hardware  management  solutions to sports  organizations
but does not include  hardware  used by the Company with respect to its Internet
technology  solutions or the  Company's  Local Area  Network.  The equipment was
repossessed by IBM in June, 2002, but no settlement has been reached to date.

     Dependence on Key Personnel.  The Company's success depends, in large part,
upon the talents and skills of its management  and key personnel.  To the extent
that any of its key personnel are unable or refuse to continue their association
with the Company, a suitable replacement would have to be found. The competition
for  qualified  personnel  in the  computer  software  and  Internet  markets is
intense,  and there are  limited  numbers  of such  qualified  personnel  in the
metropolitan  Salt Lake City area.  There is no assurance that the Company would
be able to find suitable  replacements for its existing management  personnel or
technical  personnel or that such  replacements  could be obtained for an amount
affordable to the Company.

     Additional Financing Required.  The Company will likely require substantial
additional capital in the future for expansion, business development, marketing,
computer  software and systems,  overhead,  administrative,  and other expenses.
There is no assurance that the Company will be able to raise additional funds or
that financing will be available on acceptable  terms.  Lack of additional funds
could significantly affect the Company and its business.  Further,  funds raised
through  future equity  financing  could be  substantially  dilutive to existing
shareholders.

     Company Not  Currently  Profitable.  The Company was  organized on July 12,
1996.  Since the date of its  inception,  the Company has  incurred  substantial
losses and has not yet generated a profit. To achieve any significant measure of
profitability, the Company must create substantial activity through its Web Site
to generate  revenues,  and there is no assurance that the Company will do so in
the future or that such revenue  generation  will ultimately lead to the Company
becoming profitable.

     Revenues Subject to Seasonal Fluctuation.  The Company expects that it will
experience a sharp increase in commercial  activity during the spring and winter
months, principally due to spring

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recreational  athletic  leagues,  tournaments,  and events operating during that
period. During the winter months, winter games events,  basketball  tournaments,
leagues,  and events, and other winter events are expected to generate increases
in revenue as compared to the summer and fall periods. There can be no assurance
that the Company can decrease its selling,  general, and administrative expenses
during periods of decreased revenue and that the Company's results of operations
during these periods will not be materially adversely affected.

     Growth  Management.  The Company  anticipates that it will experience rapid
growth in the next few years of operations. The management challenges imposed by
this  growth  include  entry into new  markets,  growth in the number of persons
utilizing   its   Internet   properties,   management   of   affiliated   sports
organizations,  employees and  customers,  expansion of facilities  and computer
systems necessary to accommodate such growth, and additions and modifications to
the products and services offered through the Company's Internet properties.  To
manage these changes effectively, the Company may be required to hire additional
management and operations  personnel and to improve its operational,  financial,
computer,  and  management  systems.  If the Company is unable to manage  growth
effectively or hire or retain qualified  personnel,  the Company's  business and
results of operations could be materially adversely affected.

     Government  Regulation  of the  Internet.  There are  currently few laws or
regulations  directly applicable to electronic  commerce.  Due to the increasing
popularity  and use of the  Internet,  it is possible  that a number of laws and
regulations  may be adopted with respect to the Internet which could  materially
increase  the  cost  of   transacting   business  on  the   Internet.   Although
transmissions  from the Company's Web Site originate from the State of Utah, the
government of the United States and the  governments of other states and foreign
countries might attempt to regulate such  transmissions  or assess taxes,  fees,
tariffs,   duties,  or  other  payments  against  the  Company,   the  Company's
Affiliates,  or customers  purchasing products or services through the Web Site.
Any such  regulations  or  assessments  could  adversely  affect  the  Company's
business, operating results, and financial condition.

     Dependence on Continued Growth in Use of the Internet. The Company's future
success  is  substantially  dependent  upon  continued  growth in the use of the
Internet  in order to  support  the volume of  activity  necessary  to  generate
advertising  revenue and the sale of its products and services.  Rapid growth in
the use of the  Internet  is a  relatively  recent  phenomenon,  and the Company
relies on consumers who have  historically  used traditional  means of media and
commerce  for  entertainment  and the  purchase of goods and  services.  For the
Company to be successful,  these consumers must accept and utilize novel ways of
conducting business and exchanging  information.  There can be no assurance that
communication  or commerce over the Internet will become more widespread or that
the Internet will otherwise become a viable commercial marketplace. Moreover, to
the extent that the Internet  continues to experience  significant growth in the
number  of users  and  frequency  of use,  there  can be no  assurance  that the
Internet  infrastructure  will continue to be able to support the demands placed
upon it by such growth,  or that the  performance or reliability of the Internet
will not be adversely  affected  thereby.  In addition,  certain factors such as
Internet  commerce  security and the speed of Internet  transmissions  may deter
existing as well as potential  customers  from engaging in  transactions  on the
Internet.  The  occurrence  of any of these  risks  could  adversely  affect the
Company's business, operating results, and financial condition.

     Risk  of  Computer   System   Failure.   The  success  of  the  Company  is
substantially dependent upon its ability to deliver high quality,  uninterrupted
access to its technology  applications,  which requires that the Company protect
its computer hardware and software systems and the data and information

                                        3

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stored in connection  therewith.  The Company's systems are vulnerable to damage
by fire, natural disaster, power loss, telecommunications failures, unauthorized
intrusion,  and other catastrophic  events. Any substantial  interruption in the
Company's  systems  would  have a  material  adverse  effect  on  the  Company's
business,  operating  results,  and  financial  condition.  Although the Company
carries general commercial insurance coverage, such coverage may not be adequate
to compensate for the losses that may occur. In addition,  the Company's systems
may be  vulnerable  to  computer  viruses,  physical  or  electronic  break-ins,
sabotage,  or  other  problems  caused  by third  parties  which  could  lead to
interruptions, delays, loss of data, or cessation in service to persons desiring
to access the  Company's  Internet  properties.  The  occurrence of any of these
risks could have a material adverse effect upon the Company's business,  results
of operations, and financial condition.

     Electronic Data Transmission  Security Risks. A significant  barrier to the
electronic transmission of confidential data over the Internet is the perception
that such  data may not be  secure.  The  Company  relies  upon  encryption  and
authentication  technology  to provide the security  necessary to effect  secure
transmissions  of  confidential  information.  There  can be no  assurance  that
advances in decryption  technology,  computer espionage,  and other developments
will not result in a breach or compromise of the algorithms  used by the Company
to protect  transaction data of persons accessing the Web Site or other Internet
properties of the Company,  and therefore lead to the  misappropriation  of such
data by third parties. Any such breach,  compromise,  or misappropriation  could
damage the  Company's  reputation  and  expose the  Company to a risk of loss or
litigation and possible liability, and could have a material adverse effect upon
the Company's business, results of operations, or financial condition.

     Rapid  Technological  Change.  The  Internet  and  on-line  industries  are
characterized  by rapid  technological  change,  changing market  conditions and
customer demands, and the emergence of new industry standards and practices that
could  render  the  Company's  existing  technology  platform  and the  services
provided   pursuant  thereto   obsolete.   The  Company's  future  success  will
substantially  depend on its ability to enhance its existing  services,  develop
new services,  and otherwise  respond to technological  advances in a timely and
cost-effective  manner.  If  the  Company  is  unable,  for  technical,   legal,
financial, or other reasons, to adapt in a timely manner in response to changing
market  conditions  or customer  requirements,  or if the  Company's  technology
applications do not achieve market acceptance, the Company's business, operating
results, and financial condition would be adversely affected.

     No Proprietary Protection for Technology. The Company's online registration
system, statistical information system, and the league management system are not
protected by any copyright or patent, and the Company does not anticipate filing
an application  with the United States Patent and Trademark  Office ("USPTO") or
the United States Copyright Office for protection of these systems. Although the
Company  believes  that  copyright  and patent  protection  for these systems is
either  cost  prohibitive  or  unnecessary,  it may be wrong.  If the Company is
wrong,  it could face  unexpected  expenses  pursuing,  defending,  or otherwise
becoming  involved in a copyright or patent  dispute,  any of which could have a
material adverse effect upon the Company's business,  results of operations, and
financial condition.

     Uncertain  Protection  of Trade Names and Related  Intangible  Assets.  The
Company has  registered  the Internet  domain names,  "www.sportsnuts.com,"  and
"www.sportsnuts.net."  Given  the lack of  resources  available  to the  Company
during 2002, the Company has not pursued trademark  applications of its name and
brand.  Consequently,  other companies with names,  marks, or slogans similar to
SportsNuts  could seek to require that the Company obtain a license from them or
require the Company to change its name, either of which could entail substantial
costs. Additionally, if the

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Company were requried to change its name, it could lose all goodwill  associated
with the "SportsNuts" mark. In addition, future products and services offered by
the  Company  may  need  to be  marketed  under  different  names  if  the  mark
"SportsNuts"  causes  confusion  with  another  trade name being used by another
company.  The  Company  could also incur  substantial  costs to defend any legal
action  taken  against the  Company  pursuant  to a  trademark  or service  mark
dispute. If any legal action against the Company,  its asserted  trademarks,  or
service marks should be found to infringe upon intellectual property rights of a
third party,  the Company could be enjoined from further  infringement and could
be required to pay  damages.  In the event a third party were to sustain a valid
claim  against  the  Company,  and in the  event a  required  license  were  not
available on commercially  reasonable terms, the Company's financial  operations
and results of operations could be materially  adversely  affected.  Litigation,
which could  result in  substantial  cost to and  diversion  of resources of the
Company,  may also be necessary to enforce  intellectual  property rights of the
Company or to defend the Company against claimed  infringements of the rights of
others.

     Competition and Technological  Change.  The market for computer  technology
products,  services,  and  advertising  within the amateur sports market is new,
rapidly evolving,  and intensely  competitive and will continue to undergo rapid
technological  change.  The  Company  must  continue  to enhance and improve the
functionality  and  features  of its  online  services  and  sports  information
management software. If new industry needs,  standards, or practices emerge, the
Company's  existing  services,  technology,  and  systems  may become  obsolete.
Developing   and  enhancing  the  Company's   proprietary   technology   entails
significant  technical and business risks, in addition to substantial  costs. If
the Company faces delays in introducing new services, products and enhancements,
its users may  forego  the use of the  Company's  services  and use those of its
competitors.  The Company  currently  competes  with many other  amateur  sports
information  and product web sites and the Company  anticipates  competition  to
intensify in the future.  Barriers to entry may not be significant,  and current
and new  competitors  may be able to launch  new web  sites  and new  operations
quickly at a relatively  low cost.  Accordingly,  the Company  believes that its
success will depend heavily upon achieving  significant market acceptance before
its competitors and potential competitors introduce competing services.  Many of
the  Company's  competitors,  as well as  potential  entrants  into the Internet
amateur sports market, have longer operating histories,  larger customer or user
bases, greater brand recognition and significantly greater financial, marketing,
and other  resources  than the Company.  Furthermore,  several of the  Company's
competitors have acquired certain key sponsorships and relationships  with a few
well-known  amateur sports  organizations  which may impede the Company's growth
and thereby have a material adverse effect upon the Company's business,  results
of operations, and financial condition.

    Investment Risks

     Speculative  Investment.  The shares of the  Company's  common  stock are a
speculative  investment.  To date, the Company has generated  substantial losses
and has yet to achieve a profit. If the Company fails to generate profits, it is
unlikely  that the Company will be able to meet its  financial  obligations  and
investors could lose their entire investments.

     Securities  Class Action  Claims Based Upon Price  Fluctuation.  Securities
class action  claims have been  brought  against  issuing  companies in the past
after volatility in the market price of a company's securities.  With respect to
the Company,  such  litigation  could be very costly and divert the attention of
the Company's  management and resources,  and any adverse  determination in such
litigation could also subject the Company to significant liabilities, any or all
of which could have a material adverse effect on the Company's business, results
of operations, and financial condition.

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     No Active  Market.  Although  the  Company's  shares are traded on the NASD
Electronic  Bulletin Board,  the Company  believes that the public trading price
may be an inaccurate representation of the value of the Company because there is
little or no trading  volume in the  Company's  shares and no  analysts  or NASD
market makers actively follow the Company.

     No  Dividends.  The Company  does not  anticipate  paying  dividends on its
Common  Stock in the  foreseeable  future,  and may be  restricted  from  paying
dividends in the future pursuant to subsequent financing arrangements.

     Concentration  of Voting Power.  Pursuant to the Company's  Certificate  of
Incorporation,  the Board of Directors has been divided into three classes, with
only one class  subject  to  reelection  in a given  year.  The  Certificate  of
Incorporation  requires a vote of 66 2/3% of the shares of the  Company to amend
the  provision  governing  the election of  directors.  Consequently,  even if a
shareholder  or  group  of  shareholders  were  to  acquire  a  majority  of the
outstanding  shares of the Company,  such acquisition would not necessarily lead
to a change in control of the Company.  However,  the Company  cannot  guarantee
that certain persons,  either collectively or individually,  will not be able to
control the election of the Board of Directors  and that  minority  shareholders
will not be adversely affected as a result.

     Anti-Takeover  Provisions.   The  Company's  Certificate  of  Incorporation
contains  certain  provisions  which could be an impediment to a  non-negotiated
change in  control  of the  Company,  namely  an  ability,  without  stockholder
approval,  to issue up to 20,000,000  shares of preferred  stock with rights and
preferences determined by the board of directors, staggered terms for directors,
and  super-voting  requirements.  These provisions could impede a non-negotiated
change in control and thereby prevent  stockholders from obtaining a premium for
their Common Stock.

     Securities  Eligible for Public  Trading.  Of the 98,271,086  shares of the
Company's Common Stock  outstanding at March 1, 2003,  approximately  60,000,000
are  freely  tradeable  or  immediately  eligible  for  resale  under  Rule  144
promulgated  pursuant  to the  Securities  Act of  1933,  as  amended.  Sales of
substantial  amounts  of  freely  tradeable  stock in the  public  market  could
adversely  affect the market  price of the Common  Stock.  The  Company has also
filed a  registration  statement with respect to its 2000 Stock Option Plan, the
result  of which  could be the sale of a  significant  number  of  shares in the
public market, and consequently, an adverse effect upon the public trading price
of the Company's Common Stock.

     Private Liability of Management.  The Company has adopted provisions in its
Certificate  of  Incorporation  which limit the  liability  of its  officers and
directors and provisions in its bylaws which provide for  indemnification by the
Company of its  officers  and  directors  to the  fullest  extent  permitted  by
Delaware  corporate law. The Company's  Certificate of  Incorporation  generally
provides that its directors  shall have no personal  liability to the Company or
its  stockholders for monetary damages for breaches of their fiduciary duties as
directors, except for breaches of their duties of loyalty, acts or omissions not
in good faith or which involve  intentional  misconduct or knowing  violation of
law, acts involving unlawful payment of dividends or unlawful stock purchases or
redemptions,  or any  transaction  from  which a director  derives  an  improper
personal benefit. Such provisions  substantially limit the shareholders' ability
to hold directors liable for breaches of fiduciary duty.

     Potential Issuance of Additional Common and Preferred Stock. The Company is
authorized to issue up to 200,000,000  shares of Common Stock.  To the extent of
such authorization, the Board of

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Directors  of the Company  will have the ability,  without  seeking  shareholder
approval,  to issue  additional  shares of common  stock in the  future for such
consideration as the Board of Directors may consider sufficient. The issuance of
additional Common Stock in the future may reduce the proportionate ownership and
voting power of existing  shareholders.  The Company is also authorized to issue
up to 20,000,000  shares of preferred stock, the rights and preferences of which
may be  designated  in series by the Board of  Directors.  To the extent of such
authorization,  such designations may be made without shareholder approval.  The
designation and issuance of series of preferred stock in the future would create
additional securities which would have dividend and liquidation preferences over
common stock.

     Volatility  of Stock  Prices.  In the event  that  there is an  established
public market for the Company's  Common Stock,  market prices will be influenced
by many factors and will be more subject to significant fluctuations in response
to  variations  in  operating  results of the Company and other  factors such as
investor perceptions of the Company,  supply and demand, interest rates, general
economic conditions and those specific to the industry, developments with regard
to the Company's activities, future financial condition and management.

     Applicability of Low Priced Stock Risk Disclosure Requirements.  The Common
Stock of the  Company  may be  considered  a low  priced  security  under  rules
promulgated  under the  Securities  Exchange  Act of 1934.  Under  these  rules,
broker-dealers participating in transactions in low priced securities must first
deliver a risk  disclosure  document which  describes the risks  associated with
such stocks,  the  broker-dealers's  duties, the customer's rights and remedies,
certain  market  and other  information,  and make a  suitability  determination
approving the customer for low priced stock transactions based on the customer's
financial situation,  investment experience and objectives. Broker- dealers must
also disclose these  restrictions  in writing to the customer,  obtain  specific
written consent of the customer,  and provide monthly account  statements to the
customer. With all these restrictions, the likely effect of designation as a low
priced stock will be to decrease the  willingness  of  broker-dealers  to make a
market for the stock, to decrease the liquidity of the stock and to increase the
transaction  cost of  sales  and  purchases  of such  stock  compared  to  other
securities.


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<PAGE>



BUSINESS OVERVIEW


DESCRIPTION OF BUSINESS

     SportsNuts,  Inc.  (the  "Company")  is a sports  management  and marketing
company,  with a focus on community-based  amateur  athletics,  providing unique
solutions to the  challenges  faced by athletes and the  organizations  in which
they participate. The Company helps organize and manage a wide variety of sports
events,  providing online registration and merchandise sales, event sponsorship,
event coordination,  and targeted promotion using technology and strategic media
relationships.   The  Company  is  the  emerging  technology  leader  in  sports
information  systems and the only  organization  of its kind to  complement  its
technology  solutions with offline marketing,  sales, and support. The Company's
mission is to become the  ultimate  resource  for  amateur and  community  event
coordinators, administrators, athletes, fans and coaches.

     The Company seeks to make events more profitable and efficient by promoting
such events through various media channels,  attracting corporate  sponsorships,
and providing  technology tools to decrease  administrative and personnel costs.
The Company also provides  additional  avenues for revenue  generation,  such as
merchandise sales through the Company's online sports mall.

     The Company  also  provides  technology-based  services to sports and other
organizations  through  Synerteck   Incorporated,   the  Company's  wholly-owned
subsidiary  ("Synerteck").   Synerteck  offers  a  wide  variety  of  technology
services, including web site design, programming, and hosting, wide area network
or local area network  configuration,  hardware  lease  brokering,  and hardware
configuration.

BUSINESS FOCUS

     The  Company  targets  organized  sports  events  with its  broad  range of
marketing and technology  services to increase  consumer  satisfaction,  athlete
participation,  corporate involvement, and purchasing opportunities. Through its
relationships with radio, print, and direct mail providers, the Company seeks to
create   increased   awareness  of  participating   events  within   surrounding
communities.  Through its Internet properties, the Company provides online event
registration  and  merchandise  sales,  event  website  hosting,   and  targeted
promotion from banner advertising and the issuance of targeted e-mails to sports
participants who have requested  information  about upcoming sporting events. In
addition, through its affiliations with resorts, hotels, restaurants,  and other
leisure  service   providers,   the  Company  also  seeks  to  offer  discounts,
promotions,  and  giveaways  that  constitute a  substantial  incentive to event
participants,  thereby increasing the allure of events sponsored by the Company.
Event  administrators  can access  and  download  customizable  reports on their
events,  requesting a full financial  breakdown or simply creating a report that
displays the name and t-shirt size of each participant.


TECHNOLOGY DEVELOPMENT

     Databases. The heart of the Company's operations and services is the sports
information  management  system user base. A database  contains all the detailed
information that the Company gathers on every single registered Internet user on
its site. The database software holds and manipulates all such information. This
database is built with Oracle  software,  the most robust and reliable  Internet
solution  available.  The  Company has  invested in Oracle  software in order to
insure reliability as well as

                                        8

<PAGE>



scalability.  Oracle  databases  are  typically the fastest and are easily moved
from one computer platform to another.  The database can efficiently provide any
of the stored  information when it is  automatically  requested by the Company's
Web site,  software  applications  or  manually  requested  by an  employee  for
corporate use. When the processing demand of the database servers is being taxed
to the  pre-determined  limits, the Company intends to move the database to more
powerful,  alpha  processor-based  computer  systems  in order to  maintain  the
efficiency, speed and quality of service.

     Software Applications.  A custom designed program comprises the backbone of
the  Company's  sports  information  management  system.  This program  collects
information about athletes,  teams and leagues,  individual athlete  statistics,
team  statistics,  and  schedules.  The program  stores this  information in the
database and posts it on the Company's Web site. An  administrative  part of the
program  allows certain  pre-established  users to access the user interface and
upload  the most up to date  information  to the  Company's  database  and site.
Coaches and other  administrators can upload biographical  information,  photos,
articles,  announcements  and other  information  about athletes,  game results,
teams, schools, etc. so that it can be viewed on the Web.

MARKET ANALYSIS/OPPORTUNITIES

     The market for products and services  among amateur  sports  enthusiasts in
the United  States is rapidly  evolving and intensely  competitive  with a large
number of competitors in the Internet sports industry. However, the niche market
in  which  the  Company  competes   possesses   relatively  few  amateur  sports
organizations  that can  provide a  comprehensive  marketing  and  technological
approach to organizations that seek to increase participation and attendance for
their events. However, there can be no assurance that the Company can maintain a
competitive  position  against  current or future  competitors as they enter the
markets  in  which it  competes,  particularly  those  with  greater  financial,
marketing,  service, support, technical and other resources than those possessed
by the Company.  The Company's failure to maintain a competitive position within
the market  could  have a material  adverse  effect on its  business,  financial
condition, results of operations and cash flows.

     The Reach of Amateur  Sports.  Amateur  sports in the  United  States has a
massive   following,   estimated  at  135  million  fans,   76  million   active
participants,  4 million organized teams, and over $30 billion spent annually on
products and services.

     Amateur  sports  touches  multiple  audiences  (athletes,   fans,  coaches,
officials, sports physicians,  athletic directors, community sports writers) who
generally want to enhance the experience for themselves and the participants. At
the  grass-roots  level,   amateur  sports  tends  to  generate  more  emotional
involvement  than any other  activity with the exception of academic  education.
The dreams of millions of athletes are pursued  through sports and many families
live  vicariously  through sports in various  supporting  roles.  Amateur sports
typically  require a substantial  investment of time and money.  The demographic
profile  of  amateur  sports   enthusiasts  is  therefore   strong  relative  to
recreational spending.

     The  Internet.  Sports  has been a core  staple in the  development  of the
Internet.  Over thirty  million  users in the United  States access the Internet
each day for  sports-related  information.  The administration of amateur sports
organizations  and events and the information  management of amateur sports data
lend  itself to unique  marketing  approaches  that can be  greatly  facilitated
through  various  web-  based   solutions,   but  are  currently  not  addressed
efficiently by any single organization.


                                        9

<PAGE>



    Market Segmentation/User Needs

     Generally.  The Company has divided the grass roots  amateur  sports market
into three  specific  segments:  (i) Youth Sports (ages 5-13),  (ii) High School
Sports (ages 14-18),  and (iii) Adult Recreation Sports (ages 19+). As discussed
below,  the Company  believes that there are  approximately  76 million  persons
within these three categories, or roughly thirty percent of the U.S. population.
Each segment has  specific  interests  and needs,  but they all share the common
goal of improving the amateur athletic experience by strengthening  coaching and
playing skills and providing  easier access to reliable  information and quality
products and services.

     Youth Sports.  The Company  estimated  that there are roughly three million
organized  youth sports teams in the United States.  Each team has an average of
12 players (36 million total  players).  However,  since most children play more
than one sport, the Company estimates that the number of unique  participants in
this segment to be 24 million.

     Youth sports are typically less organized and managed far less  efficiently
than high school or adult recreational sports. The registration,  rostering, and
scheduling process is costly and cumbersome for youth sports  organizations.  In
addition,  game and event information is usually difficult to obtain,  including
time and location of contest, profile of the opposing team, and a summary of the
event itself. Coaching at the youth sports level is often highly erratic, with a
large number of children either inspired by or alienated toward organized sports
for life  during  this  period.  Youth  coaches  require a variety of  resources
necessary  to improve the  quality of the  instructional  environment.  Finally,
youth sports are  constantly in need of funding for equipment,  facilities,  and
transportation.

     High School  Sports.  The Company  estimates  that there are  approximately
20,000 high  schools in the United  States,  with  approximately  25 teams of 20
athletes  each per school  across all sports and grade levels (10 million  total
players).  As with youth sports,  since most teens play more than one sport, the
Company  estimates  that the  number of  unique  participants,  together  with a
significant  number of non-  athlete  participants  (e.g.  drill  team  members,
cheerleaders, and equipment managers) in this segment to be 8 million.

     Competition  becomes  significantly more important relative to youth sports
as athletes reach their teenage years. Nevertheless, current methods of tracking
the history or performance of an individual or team are difficult or impossible,
and broad comparison and ranking systems are largely unavailable.  Moreover, the
scouting process is often unreliable, time consuming, and cost prohibitive. High
school  athletes  desire  the  type of  tangible  performance  measurements  and
statistics available through the Company's sports information management system.
In addition,  those prep athletes with  aspirations to participate in collegiate
athletics  are  highly   interested  in   scholarship   and  college   placement
opportunities  afforded by  increased  exposure to college  recruiters.  As with
youth sports,  high school  sports  programs are also  chronically  underfunded.
Finally,  because of the increased intensity level of high school sports and the
resulting injuries, these athletes will likely require access to sports medicine
services, which is currently not available from any comprehensive source online.

     Parents/Adult  Recreation Sports. The Company estimates that the 32 million
children  and  teens  participating  in  amateur  sports  will have at least one
non-participant  supporter,  most likely a parent.  Although most youth and high
school  athletes  have more than one parent who follows their  activities,  many
parents  with  children  who play  sports  typically  have  more  than one child
participating in organized amateur sports. Many of these adults also participate
in recreational sports themselves. The Company

                                       10

<PAGE>



believes that an additional 12 million adults who  participate  in  recreational
sports do not currently have children  engaged in amateur  sports.  Accordingly,
the  Company   estimates  that  44  million  U.S.  adults  follow  a  child  who
participates   in  amateur  sports  and/or   personally   participate  in  adult
recreational sports.

     Because  competition  as well as exercise  is at the heart of adult  sports
participation,   a  source  for  statistical  information  is  likely  to  be  a
significant attraction within this category.  These persons are also more likely
to utilize sports medicine  services,  given their increased  susceptibility  to
aches, soreness, and injury due to age and increasing fragility. Sports-oriented
adults have  significant  purchasing power relative to the youth sports and high
school  sports  segment,  particularly  with credit card  transactions  over the
Internet.  Adults desire a wide range of and sufficient  information  concerning
products and services that cater to their interests.


INTELLECTUAL PROPERTY

     The Company has registered the Internet domain names, "www.sportsnuts.com,"
and  "www.sportsnuts.net."  Given the lack of resources available to the Company
during 2002, the Company has not pursued any trademark applications for its name
and brand.

     The Company's online registration,  statistical information system, and the
league management  systems are not protected by any copyright or patent, and the
Company  does not  anticipate  filing an  application  with the U.S.  Patent and
Trademark  Office or the United States Copyright Office for protection of any of
these  systems.   Although  the  Company  believes  that  copyright  and  patent
protection for these systems is either cost  prohibitive or unnecessary,  it may
be wrong. If the Company is wrong, it could face unexpected  expenses  pursuing,
defending,  or otherwise becoming involved in a copyright or patent dispute, any
of which  could have a material  adverse  effect  upon the  Company's  business,
results of operations, and financial condition.

     Because the Company has no formal  trademark  protection,  other  companies
with names,  marks, or slogans similar to SportsNuts  could seek to require that
the  Company  obtain a license  from them or require  the  Company to change its
name,  either of which could  entail  substantial  costs.  Additionally,  if the
Company were requried to change its name, it could lose all goodwill  associated
with the "SportsNuts" mark. In addition, future products and services offered by
the  Company  may  need  to be  marketed  under  different  names  if  the  mark
"SportsNuts"  causes  confusion  with  another  trade name being used by another
company.  The  Company  could also incur  substantial  costs to defend any legal
action  taken  against the  Company  pursuant  to a  trademark  or service  mark
dispute.  If, in any legal action against the Company,  its asserted trademarks,
or service marks should be found to infringe upon  intellectual  property rights
of a third party,  the Company could be enjoined from further  infringement  and
could be required to pay  damages.  In the event a third party were to sustain a
valid claim  against the Company,  and in the event a required  license were not
available on commercially  reasonable terms, the Company's financial  operations
and results of operations could be materially  adversely  affected.  Litigation,
which could  result in  substantial  cost to and  diversion  of resources of the
Company,  may also be necessary to enforce  intellectual  property rights of the
Company or to defend the Company against claimed  infringements of the rights of
others.



                                       11

<PAGE>



GOVERNMENT REGULATION

     There  are  currently  few  laws  or  regulations  directly  applicable  to
information  technology or electronic commerce. Due to the increasing popularity
and use of the Internet,  it is possible  that a number of laws and  regulations
may be adopted with respect to the Internet which could materially  increase the
cost of transacting  business on the Internet.  Although  transmissions from the
Company's Internet  properties  originate from the State of Utah, the government
of the United States and the  governments of other states and foreign  countries
might attempt to regulate such  transmissions  or assess taxes,  fees,  tariffs,
duties,  or other payments  against the Company,  its  affiliates,  or customers
purchasing  products  or  services  through its  Internet  properties.  Any such
regulations  or  assessments  could  adversely  affect the  Company's  business,
financial condition, and results of operations.


EMPLOYEES

     As of March 1,  2003,  the  Company  employed  eleven  persons on a full or
part-time basis. In order to execute the Company's business  strategy,  however,
the Company will likely require a significant increase in employees and contract
personnel.  Competition for qualified  personnel in the  information  technology
industry is intense,  particularly  among  technical  personnel in the Salt Lake
City metropolitan area. The Company believes that its future success will depend
in part on its  continued  ability to  attract,  hire,  and retain a  sufficient
number of highly skilled personnel.


 ITEM 2: DESCRIPTION OF PROPERTY

     The Company's executive offices are located in a 5,000 square foot facility
in south  Salt  Lake  County,  Utah,  twenty  minutes  from the Salt  Lake  City
International Airport and adjacent to Interstate 15. Base rent for this facility
is  $4,000.00  per month,  exclusive of utilities  and other  occupancy  related
charges,  on a  three-year  lease  beginning  January  1,  2003.  The base  rent
increases  to  $4,250.00   and   $4,500.00  for  the  second  and  third  years,
respectively, of the lease term.

     The Company  believes that the size of its  executive  offices are adequate
for its business, technology, and operational needs for the intermediate future.
In the aggregate, however, the Company believes that additional office space may
be  necessary  in the  near  future  to  accommodate  its  growth.  The  current
commercial  real estate  market in Salt Lake City has  sufficient  capacity that
management  believes  that the Company  should not  experience  any  significant
difficulty in procuring additional office space as needed.


ITEM 3: LEGAL PROCEEDINGS

                 None.


ITEM 4: SUBMISSION ON MATTERS TO A VOTE OF SECURITY HOLDERS

                 None.


                                       12

<PAGE>



                                    PART II.


ITEM 5:  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     (a) Market for Common Equity and Related Stockholder Matters.

         (1) Market Information.

     The Company's Common Stock is listed on the NASD Electronic  Bulletin Board
("Bulletin  Board") under the symbol "SPCI." The Company's stock has been traded
on the Bulletin Board since  approximately  January,  1997. As of March 1, 2003,
there was no active public market for the Company's  Common Stock. The following
table sets forth,  for the  periods  indicated,  the high and low closing  sales
prices,  as to Bulletin  Board  prices of shares of the  Company's  Common Stock
during the calendar year ended December 31, 2002:
<TABLE>
<CAPTION>
                                           High                                   Low
<S>                                     <C>                                     <C>
Fourth Quarter 2002                     $ 0.011                                 $ 0.005
Third Quarter 2002                      $ 0.021                                 $ 0.005
Second Quarter 2002                     $ 0.04                                  $ 0.021
First Quarter 2002                      $ 0.041                                 $ 0.022

         The following table sets forth, for the periods indicated, the high and
low closing sales prices, as to Bulletin Board prices of shares of the Company's
Common Stock during the calendar year ended December 31, 2001:
</TABLE>
<TABLE>
<CAPTION>

                                          High                                    Low
<S>                                     <C>                                     <C>
Fourth Quarter 2000                     $ 0.05                                  $ 0.02
Third Quarter 2000                      $ 0.07                                  $ 0.02
Second Quarter 2000                     $ 0.32                                  $ 0.03
First Quarter 2000                      $ 0.516                                 $ 0.047
</TABLE>

        (2) Holders.

     As of March 1, 2003,  the Company had  approximately  375  shareholders  of
record.

        (3) Dividends.

     Because the Company is in its early growth stage,  it has not paid any cash
dividends on its Common Stock since  inception  and does not  anticipate  paying
cash  dividends in the  foreseeable  future.  The Company  anticipates  that any
future  earnings  will be retained for use in  developing  and/or  expanding the
business.


                                       13

<PAGE>

    (b) Recent Sales of Unregistered Securities.

     Effective  December 31, 2002,  the Company issued  3,150,000  shares of its
Common Stock in exchange for the  cancellation  of a debt owed by the Company of
$31,500 to an accredited investor. No underwriting  discounts were given or paid
in connection with the  transaction.  The Company  believes that the transaction
was exempt from  registration  pursuant to Section 4(2) of the Securities Act of
1933.

     As of  December  31,  2002,  the  Company  has  granted  options to various
officers, directors, employees, and service providers of the Company to purchase
22,460,000  shares of its Common  Stock  pursuant  to the  Company's  2000 Stock
Option Plan ("Plan").  The Company  believes that the options  granted under the
Plan are exempt from  registration  under the Securities Act of 1933 pursuant to
Section 4(2) of such Act.

ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

     The  following  discussion  of  the  financial  condition  and  results  of
operations of SportsNuts,  Inc. and its  subsidiaries  (hereafter  collectively,
"SportsNuts"  or the "Company")  should be read in conjunction  with the Audited
Financial  Statements and related Notes thereto included herein. This discussion
may contain forward-looking  statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the  Securities  Exchange Act of 1934,
including, without limitation,  statements regarding the Company's expectations,
beliefs,  intentions,  or  future  strategies  that are  signified  by the words
"expects,"  "anticipates,"  "intends,"  "believes," or similar language.  Actual
results  could differ  materially  from those  projected in the forward  looking
statements.  Prospective investors should carefully consider the information set
forth  below  under  the  caption  "Risk  Factors"  in  addition  to  the  other
information set forth herein.  The Company cautions  investors that its business
and financial performance is subject to substantial risks and uncertainties.

Overview

     SportsNuts is a sports  management and marketing  company,  with a focus on
community-based amateur athletics,  providing unique solutions to the challenges
faced by athletes and the organizations in which they  participate.  The Company
helps  organize and manage a wide  variety of sports  events,  providing  online
registration and merchandise sales, event sponsorship,  event coordination,  and
targeted  promotion  using  technology and strategic  media  relationships.  The
Company is the emerging  technology leader in sports information systems and the
only  organization  of its kind to  complement  its  technology  solutions  with
offline  marketing,  sales, and support.  The Company's mission is to become the
ultimate resource for amateur and community event coordinators,  administrators,
athletes, fans and coaches.

     The Company seeks to make events more profitable and efficient by promoting
such events through various media channels,  attracting corporate  sponsorships,
and providing  technology tools to decrease  administrative and personnel costs.
The Company also provides  additional  avenues for revenue  generation,  such as
merchandise sales through the Company's online sports mall.

     The Company  also  provides  technology-based  services to sports and other
organizations  through  Synerteck   Incorporated,   the  Company's  wholly-owned
subsidiary  ("Synerteck").   Synerteck  offers  a  wide  variety  of  technology
services, including web site design, programming, and hosting, wide area network
or local area network  configuration,  hardware  lease  brokering,  and hardware
configuration.



                                       14

<PAGE>



     The  Company's  principal  sources  of  revenues  are (i)  online  services
targeted to sports  organizations and their members,  (ii) offline  promotional,
management, and sponsorship services provided in connection with community-based
sports events, and (iii) information technology consulting services. The ability
to generate revenues during the year 2003 and beyond depends  substantially upon
the Company's resources available in order to market to and engage organizations
and their members to receive these services.  Such efforts  require  significant
systems  development,  marketing and personnel costs,  which, in turn,  requires
substantial  funding.  If the  Company  is unable to obtain  such  funding,  its
ability to generate revenues will be significantly impaired.

     Expenses  which  comprise cost of goods sold are  principally  comprised of
offline costs  associated  with the management and promotion of sporting  events
which the company has an active  role.  Also  included in cost of goods sold are
commissions  paid  for  information  technology  consulting  contracts.  As more
organizations  utilize  the  Company's  technology  services,   future  expenses
included  in cost of  goods  sold  will be  personnel  and  materials  costs  to
administer  these  services,  as well  as  potential  fee  sharing  expenses  to
organizations  involved in sports event management,  and online registration and
administration.

     General and  administrative  expenses have been comprised of administrative
wages and benefits; occupancy and office expenses; outside legal, accounting and
other   professional   fees;   travel   and  other   miscellaneous   office  and
administrative    expenses.    Selling   and    marketing    expenses    include
selling/marketing  wages and benefits;  advertising  and  promotional  expenses;
travel and other miscellaneous related expenses.  R&D expenses consist mainly of
development  expenses  related to creating new technology  applications.  In the
future, the Company anticipates significant expenditures in business development
to create  strategic  alliances  with third  parties,  and in developing a sales
channel  to the  various  amateur  sports  organizations  throughout  the United
States.

     Because  the  Company  has  incurred   losses,   income  tax  expenses  are
immaterial.  No  tax  benefits  have  been  booked  related  to  operating  loss
carryforwards,  given the  uncertainty of the Company being able to utilize such
loss carryforwards in future years. The Company anticipates incurring additional
losses during the coming year.

Results of Operations

     Following  is  management's  discussion  of the  relevant  items  affecting
results of operations for the years ended December 31, 2002 and 2001.

     Revenues.  The Company  generated net revenues of $615,165  during the year
ended December 31, 2002, which  represents a 133% increase  compared to $264,529
in net revenues  during the year 2001.  This  increase was  primarily due to new
sports events and other entertainment  events acquired by the Company which were
managed and promoted during 2002. Also contributing was the increase in sales of
the Company's online services,  sports event management and promotion  revenues,
and information  technology  consulting  revenues.  The Company anticipates that
these three areas will constitute the principal source of the Company's  revenue
for the foreseeable future.

     Cost of Sales.  Cost of sales for the year  ended  December  31,  2002 were
$337,996 a 210%  increase  from  $109,067  during the year 2001.  This  increase
correlates  to the increase in revenues and is mainly  attributable  to expenses
incurred pursuant to the delivery of the Company's online registration services,
sports event management and promotional services,  and sales commissions paid in
connection with technology consulting projects.

     General and Administrative  Expenses.  General and administrative  expenses
for the year  ended  December  31,  2002 were  $1,395,291,  a 7%  increase  from
$1,303,964 during the year 2001. This

                                       15

<PAGE>



increase was principally due to the recognition of $380,791 in expenses relating
to issuances of warrants  during the year 2002.  The warrants were attached to a
line of credit  established by the Company for the  development of future sports
events.  Without  expenses  related  to  warrants,  general  and  administrative
expenses would have been $1,014,500,  a 22% decrease  compared to the year 2001.
Management  continues  to make a  concerted  effort to  decrease  certain  costs
associated with personnel  salaries and benefits,  professional  fees,  contract
labor, and rent and occupancy-related  expense. Payroll expense and professional
fees accounted for approximately $458,988 and $358,021, respectively, of general
and  administrative  expenses  during 2002, as compared to $335,344 and $307,030
during 2001. The increase is mainly due to  administrative  expenses  associated
with a major sales  initiative which started in 2002.  Furthermore,  in order to
retain the cash  resources of the Company,  certain  consultants  of the Company
were paid in stock in which the market value was expensed as professional fees.

     Selling and Marketing Expenses. Selling and marketing expenses for the year
ended December 31, 2002 were $366,343, a 45% decrease from $671,624 during 2001.
This decrease was primarily  attributable to the public relations campaign which
was started in the year 2001. The Company anticipates that selling and marketing
expenses in the future will  increase as a sales  channel to the amateur  sports
organizations  throughout  the United  States is  developed.  The  Company  also
continues to focus on the sales of its technology consulting services.

     Product  Development.  Product research and development  expenditures  were
$186,655 during the year ended December 31, 2002, as compared to $208,884 during
2001, a decrease of 11%. Product  development  expenses related to the Company's
Internet  services  consist  primarily of payroll,  software  and  systems,  and
related  costs for  programmers  and software  developers.  Product  development
expenses related to the Company's  information  technology  consulting  consists
primarily of payroll and systems  development for the web site hosting services.
Where appropriate,  the Company capitalizes certain systems development costs in
accordance with generally accepted accounting  principles.  The Company believes
that  significant  investments  in product  development  are  required to remain
competitive.  Accordingly,  the Company expects to incur increased  expenditures
with respect to product development in future periods.

     Other Income  (Expense).  The Company had net other  expense of $42,519 for
the year ended December 31, 2002 compared to net other income of $325,770 during
2001. The income during 2001 was generated  principally  from the forgiveness of
certain  accounts payable by creditors of the Company in exchange for structured
cash  payments  or cash  settlements  for  less  than  the  face  amount  of the
obligations.  Expenses  incurred in this  category were  comprised  primarily of
interest  expenses  related to balances on Company  credit  cards and short term
loans.

Liquidity and Capital Resources

     As of  December  31,  2002,  the  Company's  primary  source  of  liquidity
consisted of $40,573 in cash and cash equivalents. The Company holds most of its
cash reserves in local sweep accounts with local financial  institutions.  Since
inception,  the Company has financed its  operations  through a  combination  of
short and  long-term  loans,  and through the  private  placement  of its Common
Stock.

     The Company has sustained  significant net losses which have resulted in an
accumulated  deficit  at  December  31,  2002 of  $22,614,851  and is  currently
experiencing  a  substantial  shortfall in operating  capital which raises doubt
about the Company's ability to continue as a going concern. The net loss for the
years  ended  December  31,  2002  and  2001  was  $1,713,639  and   $1,703,240,
respectively. The Company anticipates a net loss for the year ended December 31,
2003 and with the expected  cash  requirements  for the coming  months,  without
additional  cash inflows from an increase in revenues  combined  with  continued
cost-cutting or a receipt of cash from capital investment,  there is substantial
doubt as to the Company's ability to continue operations.

                                       16

<PAGE>



     The Company believes these conditions have resulted from the inherent risks
associated  with the small  startup  technology-oriented  companies.  Such risks
include,  but are not limited to, the ability to (i) generate revenues and sales
of its products and services at levels sufficient to cover its costs and provide
a return for  investors,  (ii)  attract  additional  capital in order to finance
growth,  (iii) further develop and successfully  market commercial  products and
services,  and (iv) successfully  compete with other comparable companies having
financial,  production and marketing resources  significantly greater than those
of the Company.

     The Company has made  substantial  progress in developing  its business and
revenue  models during the year 2002. In addition,  the Company has  implemented
stringent  cost-cutting  efforts  and  is  presently  working  with  sources  of
investment   capital  to  fund  operating   losses  until  the  Company  reaches
profitability.  Presently,  however,  the  Company  believes  that  its  capital
resources are  insufficient  for ongoing  operations,  with minimal current cash
reserves.  The Company will likely require  considerable amounts of financing to
make any significant  advancements in its business strategy.  There is presently
no agreement in place with any source of financing and,  although  management is
optimistic  about the Company's  ability to secure  investment,  there can be no
assurance that the Company will be able to raise any additional  funds,  or that
such funds will be available on acceptable  terms.  Funds raised  through future
equity  financing  will  likely be  dilutive  to current  shareholders.  Lack of
additional  funds will materially  affect the Company and its business,  and may
cause the Company to cease operations. Consequently,  shareholders could incur a
loss of their entire investment in the Company.




                                       17

<PAGE>



ITEM 7.              FINANCIAL STATEMENTS REQUIRED BY FORM 10-KSB



                                                  CONTENTS

Independent Auditors' Reports.................................................19

Consolidated Balance Sheet................................................... 20

Consolidated Statements of Operations........................................ 22

Consolidated Statements of Stockholders' Equity (Deficit).................... 23

Consolidated Statements of Cash Flows........................................ 25

Notes to the Consolidated Financial Statements............................... 27

                                       18

<PAGE>
                          INDEPENDENT AUDITOR'S REPORT

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
SPORTSNUTS, INC.


We have audited the accompanying consolidated balance sheets of SportsNuts, Inc.
as of December 31, 2002 and the related  consolidated  statements of operations,
stockholders'  equity and cash flows for the years then  ended.  These  consoli-
dated financial  statements are the responsibility of the Company's  management.
Our  responsibility  is to express an  opinion on these  consolidated  financial
statements based on our audits.

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

In our opinion, the consolidated  financial statements have been prepared assum-
ing that the Company will continue as a going  concern.  As discussed in Note 7,
the Company has negative  working  capital,  negative cash flows from operations
and recurring  operating losses which raises substantial doubt about its ability
to continue as a going  concern.  Management's  plans in those  matters are also
described in Note 7. The  consolidated  fianncial  statements do not include any
adjustments that might result from the outcome of this uncertainty.


Chisholm & Associates
North Salt Lake, Utah
March 10, 2003

                                       19

<PAGE>



                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                           Consolidated Balance Sheets


                                                      ASSETS
<TABLE>
<CAPTION>

                                                                                                   December 31,
                                                                                                      2002
                                                                                               -----------------
<S>                                                                                           <C>
CURRENT ASSETS

   Cash and cash equivalents (Note 1)                                                          $          40,573
   Accounts receivable, net (Note 1)                                                                      13,216
   Advances due from Related Party (Note 8)                                                               55,589
   Prepaid expenses                                                                                        5,561
                                                                                               -----------------
     Total Current Assets                                                                                114,939
                                                                                               -----------------
PROPERTY AND EQUIPMENT (Note 1)

   Computer hardware                                                                                     513,247
   Computer software                                                                                     761,809
   Furniture and office equipment                                                                        193,819
   Less - accumulated depreciation                                                                    (1,363,413)
                                                                                               -----------------
     Total Property and Equipment                                                                        105,462
                                                                                               -----------------
OTHER ASSETS

   Goodwill, net (Note 10)                                                                               153,270
                                                                                               -----------------
     Total Other Assets                                                                                  153,270
                                                                                               -----------------
     TOTAL ASSETS                                                                              $         373,671
                                                                                               =================
</TABLE>


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


                                       20

<PAGE>



                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                     Consolidated Balance Sheets (Continued)


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
                                                                                                    December 31,
                                                                                                       2002
                                                                                                 ----------------
<S>                                                                                            <C>
CURRENT LIABILITIES

   Accounts payable                                                                            $         765,456
   Accrued expenses                                                                                      862,879
   Capital leases, current portion (Note 11)                                                             321,247
   Notes payable, current portion (Note 3)                                                               110,000
   Notes payable, related parties (Note 2)                                                               568,666
                                                                                               -----------------
     Total Current Liabilities                                                                         2,628,248
                                                                                               -----------------
                                                                                               -----------------
     TOTAL LIABILITIES                                                                                 2,628,248
                                                                                               -----------------
STOCKHOLDERS' EQUITY (DEFICIT)

   Preferred stock, $0.002 par value; 20,000,000 shares
    authorized, 178,000 shares issued and outstanding                                                        356
   Common stock, $0.002 par value; 200,000,000 shares
    authorized, 98,268,854 shares issued and
    outstanding, respectively                                                                            196,538
   Additional paid-in capital                                                                         20,163,380
   Accumulated deficit                                                                               (22,614,851)
                                                                                               -----------------
     Total Stockholders' Equity (Deficit)                                                             (2,254,577)
                                                                                               -----------------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
       (DEFICIT)                                                                               $         373,671
                                                                                               =================
</TABLE>

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


                                       21

<PAGE>



                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                      Consolidated Statements of Operations


<TABLE>
<CAPTION>

                                                                                    For the Years Ended
                                                                                        December 31,
                                                                           -------------------------------------
                                                                                 2002                  2001
                                                                           -------------------------------------

<S>                                                                        <C>                 <C>
NET SALES                                                                  $          615,165  $         264,529

OPERATING EXPENSES
   Cost of Sales                                                                      337,996            109,067
   General and administrative                                                       1,395,291          1,303,964
   Selling and marketing                                                              366,343            671,624
   Research and development                                                           186,655            208,884
                                                                           ------------------  -----------------
     Total Operating Expenses                                                       2,286,285          2,293,539
                                                                           ------------------  -----------------
LOSS FROM OPERATIONS                                                               (1,671,120)        (2,029,010)
                                                                           ------------------  -----------------
OTHER INCOME (EXPENSES)
   Interest expense                                                                  (128,892)          (133,053)
   Interest income                                                                        839                535
   Other income                                                                        49,789             36,914
   Gain on settlement of debt (Note 1)                                                164,232            421,374
   Loss on disposal of assets                                                        (128,487)            -
                                                                           ------------------  -----------------

     Total Other Income (Expenses)                                                    (42,519)           325,770
                                                                           ------------------  -----------------
LOSS BEFORE INCOME TAXES                                                           (1,713,639)        (1,703,240)

INCOME TAX EXPENSE                                                                     -                  -
                                                                           ------------------  -----------------
NET LOSS                                                                   $       (1,713,639) $      (1,703,240)
                                                                           ==================  =================

BASIC LOSS PER COMMON SHARE -
   BASIC AND DILUTED (Note 1)
     Loss from continuing operations                                       $            (0.02) $           (0.10)
                                                                           ------------------  -----------------
         Basic Loss Per Share                                              $            (0.02) $           (0.10)
                                                                           ==================  =================

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING                                                                 73,869,676         16,343,197
                                                                           ==================  =================
</TABLE>


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


                                       22

<PAGE>
                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
            Consolidated Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>

                                            Preferred Stock                    Common Stock
                                         ----------------------       ------------------------------------
                                         Shares      Amount            Shares                Amount
                                         --------- ------------       ---------------       --------------
<S>                                       <C>     <C>                      <C>             <C>
Balance, December 31, 2000                 178,000 $        356             3,397,095       $        6,794
Issuance of common stock for cash                -            -            15,000,000               30,000
Warrants/Options issued below market value       -            -                     -                    -
Shares issued for services                       -            -             4,525,000                9,050
Shares issued for exercise of stock options      -            -             3,460,000                6,920
Shares issued for exercise of warrants for
cash                                             -            -               712,206                1,425
Shares issued for exercise of warrants for
services rendered                                -            -               990,000                1,980
Shares issued for debt payment                   -            -            12,784,553               25,569
Shares issued to an officer for debt payment
and compensation                                 -            -             2,000,000                4,000
Shares issued for purchase of Rocky
Mountain Sports Alliance                         -            -             3,800,000                7,600

Net loss for the year ended December 31,
2001                                             -            -                    -                     -
                                           ------- ------------            ----------        -------------

Balance, December 31, 2001                 178,000          356            46,668,854               93,338
Issuance of common stock for cash                -            -            40,550,000               81,100
Warrants/Options issued below market value       -            -                     -                    -
Shares issued for services                       -            -            11,050,000               22,100

Net loss for the year ended December 31,
2002                                             -            -                     -                    -
                                           ------- ------------            ----------        -------------

Balance, December 31, 2002                 178,000 $        356            98,268,854        $     196,538
                                           ======= ============            ==========        =============
</TABLE>

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


                                       23

<PAGE>

                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
      Consolidated Statements of Stockholders' Equity (Deficit) (Continued)

<TABLE>
<CAPTION>

                                                             Additional
                                                               Paid-In          Accumulated       Total Stockholders'
                                                               Capital            Deficit           Equity (Deficit)
                                                             ---------------   ---------------    ------------------
<S>                                                           <C>             <C>                    <C>
Balance, December 31, 2000                                     $  17,708,296   $   (19,197,972)       $  (1,482,526)
Issuance of common stock for cash                                    210,000                 -              240,000
Warrants/Options issued below market value                           283,954                 -              283,954
Shares issued for services                                           216,350                 -              225,400
Shares issued for exercise of stock options                           88,980                 -               95,900
Shares issued for exercise of warrants for cash                       63,575                 -               65,000
Shares issued for exercise of warrants for services rendered         210,622                 -              212,602
Shares issued for debt payment                                       146,612                 -              172,181
Shares issued to an officer for debt payment and compensation         56,000                 -               60,000
Shares issued for purchase of Rocky Mountain Sports Alliance         182,400                 -              190,000
Net loss for the year ended December 31, 2001                              -        (1,703,240)          (1,703,240)
                                                               -------------    --------------       --------------
Balance, December 31, 2001                                        19,166,789       (20,901,212)          (1,640,729)
Issuance of common stock for cash                                    324,400                 -              405,500
Warrants/Options issued below market value                           380,791                 -              380,791
Shares issued for services                                           291,400                 -              313,500
Net loss for the year ended December 31, 2002                              -        (1,713,639)          (1,713,639)
                                                               -------------   ---------------     ----------------
Balance, December 31, 2002                                     $ 20,163,380    $  (22,614,851)     $     (2,254,577)
                                                               =============   ===============     ================

</TABLE>


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


                                       24

<PAGE>



                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                      Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                             For the Years Ended
                                                                                                 December 31,
                                                                                    --------------------------------------
                                                                                           2002               2001
                                                                                   -----------------   ------------------
<S>                                                                                <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net loss                                                                         $      (1,713,639)  $      (1,703,240)
   Adjustments to reconcile net loss to net
    cash used in operating activities:
     Depreciation                                                                             304,942             484,945
     Amortization of goodwill                                                                  -                   27,048
     Common stock issued for services                                                         313,500             270,400
     Warrants/options issued below market value                                               380,791             283,954
     Gain on settlement of debt                                                              (164,232)           (421,374)
     Loss on disposal of assets                                                               128,487              -
     Warrants exercised for services                                                           -                  212,602
     Options exercised for services                                                            -                    4,942

   Changes in operating assets and liabilities:
     Accounts receivable                                                                         (998)             (4,857)
     Advances due from related party                                                          (55,589)             -
     Inventory                                                                                 -                   11,650
     Other current assets                                                                       7,777              23,382
     Advances payable                                                                          -                   31,399
     Deferred revenue                                                                          -                  (22,043)
     Accounts payable and accrued expenses                                                    311,509             395,777
                                                                                     ----------------     ---------------
       Net Cash Used in Operating Activities                                                 (487,452)           (405,415)
                                                                                     ----------------     ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:

   Purchases of Property & Equipment                                                          (40,000)             -
                                                                                     ----------------     ---------------
       Net Cash Used in Investing Activities                                                  (40,000)             -
                                                                                     ----------------     ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:

   Proceeds from issuance of notes payable - related parties                                   92,666               4,000
   Proceeds from issuance of common stock                                                     405,500             240,000
   Proceeds from exercise of stock options                                                     -                   81,600
   Proceeds from exercise of stock warrants                                                    -                   65,000
   Cash received upon acquisition of subsidiary                                                -                   20,420
   Cash received from capital lease                                                            -                   96,011
   Principal payments on capital lease                                                         -                   (9,908)
   Principal payments of notes payable - related parties                                      (15,000)             (7,500)
                                                                                    -----------------   -----------------
       Net Cash Provided by Financing Activities                                    $         483,166   $         489,623
                                                                                    =================   =================
</TABLE>



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


                                       25

<PAGE>



                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                Consolidated Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>

                                                                                              For the Years Ended
                                                                                                  December 31,
                                                                                    --------------------------------------
                                                                                         2002                2001
                                                                                    -----------------   -----------------
<S>                                                                                <C>                  <C>
NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                                                   $         (44,286)  $          84,208

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                                                                           84,859                 651
                                                                                    -----------------   -----------------

CASH AND CASH EQUIVALENTS AT END
 OF PERIOD                                                                          $          40,573   $          84,859
                                                                                    =================   =================

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:

   Interest                                                                         $          10,976   $          28,888
   Income taxes                                                                     $          -        $          -

Non-Cash Investing and Financing Activities:

   Common stock issued for services                                                 $         313,500   $         270,400

   Common stock issued to convert notes
   payable and interest                                                             $          -        $         172,181

   Common stock issued for reduction of
   accounts payable                                                                 $          -        $          15,000

   Common stock issued for warrants exercised
   through services rendered                                                        $          -        $         212,602

   Common stock issued for options exercised
   through services rendered                                                        $          -        $           4,942

   Common stock issued for options exercised
   by conversion of accounts payable and
   other liabilities                                                                $          -        $           9,358

   Property and equipment purchased under a
   capital lease                                                                    $          -        $         203,745
</TABLE>

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


                                       26

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

              a.      Organization and Description of Business

              SportsNuts, Inc. (formerly SportsNuts.com International, Inc.)
              (the "Company") was incorporated under the laws of the State of
              Delaware on July 12, 1996. On April 15, 2001 the Company changed
              its name from SportsNuts.com International, Inc. to SportsNuts,
              Inc. Prior to the reorganization with SportsNuts.com, Inc.
              ("SportsNuts"), a privately held Delaware corporation, on April 6,
              1999, the Company had not commenced active business operations and
              was considered a development stage company.

              The Company's primary business is providing unique solutions to
              the challenges faced by amateur athletes and the organizations in
              which they participate. The Company helps organize and manage a
              wide variety of sports events, providing online registration and
              merchandise sales, event sponsorship, event coordination, and
              online and offline promotion. The Company is the emerging
              technology leader in sports information systems and the only
              organization of its kind to compliment its technology solutions
              with offline, marketing, sales, and support. The Company's mission
              is to become the ultimate resource for event coordinators,
              administrators, athletes, fans, and coaches.

              Effective April 15, 2001, the Company issued 3,800,000 shares of
              its common stock to aquire Rocky Mountain Sports Alliance, Inc.
              ("RMSA") in exchange for all of the issued and outstanding shares
              of RMSA common stock. The acquisition was accounted for as a
              purchase per APB No. 16. The RMSA is a sports management firm
              located in Salt Lake City, Utah and currently holds the rights to
              a number of sports events throughout Utah and the surrounding
              intermountain area. Management believes that the addition of the
              RMSA to the Company's technology solutions gives the Company a
              unique position in the amateur sports industry in being able to
              provide offline as well as online support to teams, leagues, and
              sports organizations.

              During the second quarter of 2001, the Company began certain
              consulting activities through two wholly-owned subsidiares:
              Synerteck Incorporated, a Utah corporation ("Synerteck"), and
              Sports Management Partners, Inc., a Delaware corporation ("SMP").
              Synerteck was created to be a technology partner with the Company
              for a variety of organizations, both sports and non-sports
              related, that require Information Technology ("IT") services.
              These services include website hosting, website design and
              maintenance, computer hardware leasing, and hardware and software
              programming and related services. SMP was created to provide
              consulting services to sports organizations, principally
              management consulting and strategic advisory services, and the
              facilitation of introductions to SMP's contacts within the sports
              industry.

              b.      Accounting Method

              The Company's consolidated financial statements are prepared using
              the accrual method of accounting. The Company has elected a
              December 31 year end.

              c.      Cash and Cash Equivalents

              Cash Equivalents include short-term, highly liquid investments
              with maturities of three months or less at the time of
              acquisition.






                                       27

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

              d.      Property and Equipment

              Property and equipment are stated at cost. Expenditures for
              ordinary maintenance and repairs are charged to operations as
              incurred. Major additions and improvements are capitalized.
              Depreciation is computed using the straight-line and accelerated
              methods over estimated useful lives as follows:
<TABLE>
<S>                            <C>                                       <C>
                               Computer hardware                         3 years
                               Computer software                         3 years
                               Office equipment                          7 years
</TABLE>
              Depreciation expense for the years ended December 31, 2002 and
              2001 was $304,942 and $484,945, respectively.

              e.      Accounts Receivable

              Accounts receivable are recorded net of the allowance for doubtful
              accounts of $34,069 for the year ended December 31, 2002.

              f.      Revenue Recognition

              Substantially all of the Company's sales are on a cash-for-service
              basis. Occasionally, sales are made on account for the sale of
              promotional merchandise. Revenue is recognized upon completion of
              the service or upon delivery of the goods.

              g.      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 and disclosure of contingent assets and
              liabilities at the date of the financial statements and the
              reported amounts of revenues and expenses during the reporting
              period. Actual results could differ from those estimates.

              h.      Advertising

              The Company follows the policy of charging the costs of
              advertising to expense as incurred. Advertising expense is
              included in selling and marketing expenses in the consolidated
              statements of operations.














                                       28

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

              i.      Basic Loss Per Share
<TABLE>
<CAPTION>

                                                                            For Years Ended December 31,
                                                                         ----------------------------------------
                                                                               2002                 2001
                                                                         ------------------    ------------------
<S>                                                                      <C>                   <C>
              Basic loss per share from continuing operations:

                     Loss (numerator)                                    $      (1,713,639)    $      (1,703,240)
                     Shares (denominator)                                       73,869,676            16,343,197
                     Per share amount                                    $           (0.02)    $           (0.10)
</TABLE>
              The basic loss per share of common stock is based on the weighted
              average number of shares issued and outstanding during the period
              of the financial statements. Common shares to be issued from
              preferred stock, warrants, and options are not included in the
              computation because they would have an antidilutive effect on the
              net loss per common share.

              j.     Provision for Taxes

              The Company accounts for income taxes under the provisions of
              Statement of Financial Accounting Standards (SFAS) No. 109,
              Accounting for Income Taxes, using the liability method. The
              estimated future tax effect of differences between the basis in
              assets and liabilities for tax and accounting purposes is
              accounted for as deferred taxes. In accordance with the provisions
              of SFAS No. 109, a valuation allowance would be established to
              reduce deferred tax assets if it were more likely than not that
              all, or some portion, of such deferred tax assets would not be
              realized. A full allowance against deferred tax assets was
              provided as of December 31, 2002.

              At December 31, 2002 the Company had net operating loss
              carryforwards of approximately $13,800,000 that may be offset
              against future taxable income through 2022. No tax benefits have
              been reported in the financial statements, because the potential
              tax benefits of the net operating loss carry forwards are offset
              by a valuation allowance of the same amount.

              Due to the change in ownership provisions of the Tax Reform Act of
              1986, net operating loss carryforwards for Federal income tax
              reporting purposes are subject to annual limitations. Should a
              change in ownership occur, net operating loss carryforwards may be
              limited as to use in the future.

              k.     Research and Development

              The Company follows the policy of charging research and
              development costs to expense as incurred.













                                       29

<PAGE>


                                SPORTSNUTS, INC.
                 (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

              l.     Stock Options and Warrants

              As permitted by FASB Statement 123 "Accounting for Stock Based
              Compensation" (SFAS No. 123), the Company elected to measure and
              record compensation cost relative to employee stock option costs
              in accordance with Accounting Principles Board ("APB") Opinion 25,
              "Accounting for Stock Issued to Employees," and related
              interpretations and make pro forma disclosures of net income
              (loss) and basic earnings (loss) per share as if the fair value
              method of valuing stock options had been applied. Under APB
              Opinion 25, compensation cost is recognized for stock options
              granted to employees when the option price is less than the market
              price of the underlying common stock on the date of grant. As of
              December 31, 2002, there were 22,320,000 options outstanding which
              were granted to employees, 22,070,000 of which were granted at
              exercise prices equal to or above the market price on the grant
              date. 250,000 options were granted at an exercise price of $0.01
              below the market price on the grant date.

              For purposes of the pro forma disclosures and to measure and
              record consideration paid to non- employees in the form of stock
              options or warrants, the Company applies FASB Statement 123,
              "Accounting for Stock-Based Compensation" ("SFAS No. 123"), which
              requires the Company to estimate the fair value of each dilutive
              instrument (stock options and warrants) award at the grant date by
              using the Black-Scholes option pricing model.

              m.     Gain on Settlement of Debt

              The gain on settlement of debt arises from the forgiveness of
              certain accounts payable by creditors of the Company in exchange
              for structured cash payments or cash settlements for less than the
              face amount of the obligations. The Company is continuing to
              negotiate with additional creditors to settle other old accounts
              payable at a discount.


                                       30

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001

NOTE 2 -      NOTES PAYABLE - RELATED PARTIES

              Notes payable - related parties consisted of the following:
<TABLE>
<CAPTION>

                                                                                                  December 31,
                                                                                                    2002
                                                                                               ----------------
<S>                                                                                           <C>
              Note payable to a shareholder, secured by tangible and intangible
               assets of the Company, interest at 16%, principal and interest
               due April 1, 2000, past due. Note is convertible into common
               stock of the Company at $.10 per share.                                         $         450,000

              Note payable to a related individual, secured by tangible assets
               of the Company, interest at 16%, principal and interest due May
               4, 2000, past due. Note is convertible into common stock of the
               Company at $1.00 per share.                                                                20,000

              Notes payable to related individuals, unsecured,
               interest at 10%, due on demand.                                                            98,666
                                                                                               -----------------
                     Total notes payable - related parties                                               568,666

                     Less: current portion                                                              (568,666)
                                                                                               -----------------
                     Long-term notes payable                                                   $          -
                                                                                               =================
</TABLE>


              Maturities of notes payable - related parties are as follows:
<TABLE>
<CAPTION>

                       Year Ending
                       December 31,                                                                Amount
                       ------------                                                            -----------------
<S>                      <C>                                                                   <C>
                         2003                                                                  $         568,666
                                                                                               -----------------
                         Total                                                                 $         568,666
                                                                                               =================
</TABLE>

                                       31

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001

NOTE 3 -      NOTES PAYABLE

              Notes payable consisted of the following:
<TABLE>
<CAPTION>

                                                                                                December 31,
                                                                                                    2002
                                                                                              ------------------
<S>            <C>                                                                             <C>
              Note payable to an individual, secured by tangible assets of the
               Company, interest at 16%, principal and interest due May 1, 2000,
               past due.  Note is convertible into common stock of the
               Company at $1.00 per share.                                                     $          20,000

              Note payable to an individual, unsecured, interest at 10%,
               principal and interest due June 26, 2000, past due. Note is
               convertible into common stock of the Company at $1.00
               per share.                                                                                 25,000

              Note payable to an individual, unsecured, interest at 18%,
               principal and interest due August 15, 2001, past due. Note is
               convertible into common stock of the Company at $0.25
               per share.                                                                                 50,000

              Notes payable to individuals, unsecured,
               interest at 10%, due on demand.                                                            15,000
                                                                                               -----------------
                     Total notes payable                                                                 110,000

                     Less: current portion                                                              (110,000)
                                                                                               -----------------
                     Long-term notes payable                                                   $               -
                                                                                               =================
</TABLE>

              Maturities of notes payable are as follows:
<TABLE>
<CAPTION>

                     Year Ending
                     December 31,                                                                    Amount
               ------------------------                                                         -----------------
<S>                     <C>                                                                    <C>
                         2003                                                                  $         110,000
                                                                                                -----------------
                        Total                                                                  $         110,000
                                                                                               =================
</TABLE>





                                       32

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001

NOTE 4 -      COMMON AND PREFERRED STOCK TRANSACTIONS

              Effective January 2, 2001, the Company issued 350,000 shares of
              common stock valued at $0.219 per share in satisfaction of
              obligations for public relations services received by the Company.

              Effective January 3, 2001, the Company issued 300,000 shares of
              common stock at a price of approximately $0.083 in exchange for
              the exercise of warrants held by certain individuals.

              Effective January 8, 2001, the Company issued 80,000 shares of
              common stock at a price of $0.16 in exchange for the exercise of
              stock options held by certain employees and consultants of the
              Company.

              Effective January 12, 2001, the Company issued 37,402 shares of
              common stock at a price of approximately $0.1337 in exchange for
              the exercise of warrants held by certain individuals.

              Effective February 2, 2001, the Company issued 300,000 shares of
              common stock at a price of approximately $0.083 in exchange for
              the exercise of warrants held by certain individuals.

              Effective February 15, 2001, the Company issued 74,804 shares of
              common stock at a price of approximately $0.1337 in exchange for
              the exercise of warrants held by certain individuals.

              Effective February 21, 2001, the Company sold and issued 500,000
              shares of its common stock at a price of $0.10 per share.

              Effective March 14, 2001, the Company issued 200,000 shares of
              common stock at a price of $0.25 in exchange for the exercise of
              warrants held by certain individuals for services rendered.

              Effective April 1, 2001, the Company issued 1,175,000 shares of
              common stock valued at $0.05 per share in satisfaction of
              obligations for consulting services received by the Company.

              Effective April 15, 2001, the Company issued 3,800,000 shares of
              common stock , valued at $0.05 per share to acquire the Rocky
              Mountain Sports Alliance.

              Effective May 1, 2001, the Company issued 900,000 shares of common
              stock at a price of $0.05 in exchange for the exercise of stock
              options held by a consultant of the Company.

              Effective May 15, 2001, the Company issued 229,703 shares of
              common stock valued at $0.075 per share in satisfaction of notes
              payable due to an individual by the Company.

              Effective May 16, 2001, the Company sold and issued 500,000 shares
              of its common stock at a price of $0.10 per share.

              Effective May 31, 2001, the Company issued 790,000 shares of
              common stock at a price of approximately $0.21 in exchange for the
              exercise of warrants held by certain individuals for services
              rendered.

              Effective July 30, 2001, the Company issued 630,000 shares of
              common stock at a price of $0.024 in exchange for the exercise of
              stock options held by a consultant of the Company.






                                       33

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001

NOTE 4 -      COMMON AND PREFERRED STOCK TRANSACTIONS (Continued)

              Effective August 15, 2001, the Company issued 2,000,000 shares of
              common stock valued at $0.0075 in satisfaction of obligations for
              expense reimbursements due to an officer of the Company. The
              difference between the issue price and the market price has been
              expensed as general and administrative expenses in the financial
              statements.

              Effective August 20, 2001, the Company issued 3,000,000 shares of
              common stock valued at $0.03 per share in satisfaction of
              obligations for consulting services received by the Company.

              Effective September 19, 2001, the Company issued 50,000 shares of
              common stock at a price of $0.03 in exchange for the exercise of
              stock options held by certain employees of the Company.

              Effective September 25, 2001, the Company issued 1,800,000 shares
              of common stock at a price of $0.012 in exchange for the exercise
              of stock options held by a consultant of the Company.

              Effective November 15, 2001, the Company sold and issued
              14,000,000 shares of its common stock at a price of $0.01 per
              share.

              Effective November 15, 2001, the Company issued 286,850 shares of
              common stock valued at $0.10 per share in satisfaction of notes
              and interest payable due to an individual by the Company.

              Effective November 15, 2001, the Company issued 12,268,000 shares
              of common stock valued at $0.01 per share in satisfaction of
              interest payable due to an individual by the Company.

              Effective January 7, 2002, the Company sold and issued 1,000,000
              shares of its common stock at a price of $0.01 per share.

              Effective January 22, 2002, the Company sold and issued 2,500,000
              shares of its common stock at a price of $0.01 per share.

              Effective February 4, 2002, the Company sold and issued 1,400,000
              shares of its common stock at a price of $0.01 per share.

              Effective February 15, 2002, the Company sold and issued 500,000
              shares of its common stock at a price of $0.01 per share.

              Effective March 12, 2002, the Company sold and issued 5,500,000
              shares of its common stock at a price of $0.01 per share.

              Effective April 1, 2002, the Company issued 10,000,000 shares of
              common stock valued at $0.03 per share in satisfaction of
              obligations for consulting services received by the Company.

              Effective May 1, 2002, the Company issued 300,000 shares of common
              stock valued at $0.02 per share in satisfaction of obligations for
              consulting services received by the Company.

              Effective May 22, 2002, the Company sold and issued 1,500,000
              shares of its common stock at a price of $0.01 per share.







                                       34

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001

NOTE 4 -      COMMON AND PREFERRED STOCK TRANSACTIONS (Continued)

              Effective August 22, 2002, the Company sold and issued 25,000,000
              shares of its common stock at a price of $0.01 per share.

              Effective December 31, 2002, the Company sold and issued 3,150,000
              shares of its common stock at a price of $0.01 per share.

              Effective December 31, 2002, the Company issued 750,000 shares of
              common stock valued at $0.01 per share in satisfaction of
              obligations for consulting services received by the Company.


NOTE 5 -      OPTIONS AND WARRANTS

              Employee Stock Options

              The following tables summarize the information regarding employee
              stock options at December 31, 2002:
<TABLE>
<S>                                                                                            <C>
                      Options outstanding at December 31, 2001                                           8,005,000
                      Options granted                                                                   15,450,000
                      Options forfeited                                                                 (1,135,000)
                                                                                                ------------------
                      Options outstanding at December 31, 2002                                          22,320,000
                                                                                                ==================
                      Weighted average exercise price of options
                      outstanding at December 31, 2002                                          $             0.03
                                                                                                ==================
</TABLE>

<TABLE>
<CAPTION>

                                     Number of         Weighted                        Number of
                                     Options           Average          Weighted       Options           Weighted
                                    Outstanding       Remaining         Average      Exercisable at      Average
                  Exercise           December 31,    Contractual       Exercise        December 31,      Exercise
                   Prices               2002            Life             Price            2002             Price
              -----------------    --------------    ------------  ---------------  ----------------   ------------
<S>           <C>                      <C>                   <C>   <C>                       <C>       <C>
              $            0.02        18,775,000            4.12  $          0.02         1,862,500   $       0.02
              $            0.03         2,575,000            3.29  $          0.03         1,202,500   $       0.03
              $            0.16           970,000            2.55  $          0.16           724,998   $       0.16
</TABLE>

              The Company applies APB Opinion 25 and related Interpretations in
              accounting for its plan. Accordingly, an expense of $2,500 has
              been recognized for its stock option plan during the year ended
              December 31, 2002. Had compensation cost for the Company's
              stock-based compensation plan been determined based on the fair
              value at the grant dates for awards under such plan consistent
              with the method of FASB Statement 123, "Accounting for Stock-Based
              Compensation" (SFAS No. 123), the Company's net loss and basic
              loss per common share would have been as indicated below:
<TABLE>
<CAPTION>

                                                                                       December 31,
                                                                       ---------------------------------------------
                                                                                2002                    2001
                                                                       --------------------     --------------------

<S>                                                                    <C>                      <C>
              Net loss as reported                                     $        (1,713,639)     $         (1,703,240)
              Pro forma net loss                                                (2,022,054)               (1,848,043)
              Basic loss per share as reported                                       (0.02)                     (0.1)
              Pro forma basic loss per share                                         (0.03)                     (0.1)
</TABLE>


                                       35

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001

NOTE 5 -      OPTIONS AND WARRANTS (Continued)

              The Company estimates the fair value of each stock option at the
              grant date and re-valuation date by using the Black-Scholes option
              pricing model based on the following assumptions:
<TABLE>
<S>                                                                                                  <C>
                      Risk free interest rate                                                        3.93% - 6.12%
                      Expected life                                                                      4-6 Years
                      Expected volatility                                                              2.18 - 2.89
                      Dividend yield                                                                           0.0
</TABLE>

              Non-Employee Stock Options

              The following tables summarize the information regarding
              non-employee options outstanding at December 31, 2002.
<TABLE>
<S>                                                                                                    <C>
                      Options outstanding at December 31, 2001                                           1,640,000
                      Options granted                                                                      370,000
                      Options forfeited                                                                 (1,990,000)
                                                                                                       -----------
                      Options outstanding at December 31, 2002                                              20,000
                                                                                                       ===========
</TABLE>
<TABLE>
<S>                                                                                             <C>
                      Weighted average exercise price of non-employee
                      options outstanding at December 31, 2002                                  $             0.02
                                                                                                ==================
</TABLE>


<TABLE>
<CAPTION>

                                    Number of         Weighted                        Number of
                                    Options           Average          Weighted       Options            Weighted
                                   Outstanding        Remaining        Average      Exercisable at       Average
                 Exercise           December 31,     Contractual       Exercise      December 31,        Exercise
                  Price                2002            Life             Price           2002              Price
              -----------------   ---------------    ------------  ---------------  ----------------   ------------
<S>           <C>                      <C>                   <C>  <C>                        <C>       <C>
              $            0.02            20,000            4.19  $          0.02             5,000   $       0.02
</TABLE>


              The Company applies SFAS No. 123 for options issued to
              non-employees, which requires the Company to estimate the fair
              value of each option issued at the grant date by using the Black-
              Scholes pricing model with the following assumptions:
<TABLE>
<S>                                                                                                    <C>
                               Risk free interest rate                                                 3.93% - 5.22%
                               Expected life                                                           1 - 60 Months
                               Expected volatility                                                       2.29 - 2.77
                               Dividend yield                                                                    0.0
</TABLE>

              As a result of applying SFAS No. 123, the Company had an expense
              of $9,631 and $187,190 during the years ended December 31, 2002
              and 2001, respectively. The expense is included in the general and
              administrative amount in the statement of operations.








                                       36

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001

NOTE 5 -      OPTIONS AND WARRANTS (Continued)

              Warrants

              During the year ended December 31, 2002, the Company issued
              warrants to acquire 27,339,500 shares of common stock. These
              warrants were issued at exercise prices ranging from $0.01 to
              $0.03. The warrants were issued as follows:  7,500,000 attached to
              common stock issued for cash, and 19,839,500 related to services
              rendered. The following tables summarize the information regarding
              warrants outstanding at December 31, 2002. All the warrants are
              exercisable at December 31, 2002.

<TABLE>
<S>                                                                                                     <C>
                               Warrants outstanding at December 31, 2001                                  9,975,167
                               Warrants granted                                                          27,339,500
                               Warrants expired                                                            (118,500)
                                                                                                     --------------
                               Warrants outstanding at December 31, 2002                                 37,196,167
                                                                                                     ==============
                   Weighted average exercise price of warrants
                                 outstanding at December 31, 2002                                      $       0.08
                                                                                                     ==============
</TABLE>
<TABLE>
<CAPTION>


                                                            Number of            Weighted
                                                            Warrants              Average              Weighted
                                                          Outstanding at         Remaining             Average
                                                            December 31,         Contractual           Exercise
                      Range of Exercise Prices               2002                 Life                 Price
                      ------------------------            --------------         ------------   ---------------------
<S>                   <C>     <C>                               <C>                       <C>   <C>
                      $0.01 - $0.10                             36,089,500                1.06  $             0.02
                      $0.75                                         66,667                0.72  $             0.75
                      $2.00                                      1,040,000                0.30  $             2.00
</TABLE>

              The Company applies SFAS No. 123 for warrants issued, which
              requires the Company to estimate the fair value of each warrant
              issued at the grant date by using the Black-Scholes pricing model
              with the following assumptions:
<TABLE>
<S>                                                                                                  <C>
                      Risk-free interest rate                                                        3.43% - 6.68%
                      Expected life                                                                  1 - 36 Months
                      Expected volatility                                                              1.04 - 3.15
                      Dividend yield                                                                           0.0
</TABLE>

              As a result of applying SFAS No. 123, the Company had an expense
              of $368,659 and $96,765 during the years ended December 31, 2002
              and 2001, respectively. The expense is included in the general and
              administrative amount in the statement of operations.


                                       37

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001

NOTE 6 -       OPERATING LEASES

              The Company leases two (2) different facilities under
              non-cancelable operating leases expiring in 2005. Rental expense
              for the years ended December 31, 2002 and 2001 was $85,092 and
              $124,452, respectively.

              The Company also has operating leases on certain office equipment.
              Office equipment leases are generally for a term of 48 to 60
              months. Lease expense was $2,368 and $6,277, respectively for the
              years ended December 31, 2002 and 2001.

              Future minimum lease payments, by year and in the aggregate, under
              the non-cancelable operating leases with initial or remaining
              terms of one year or more are due as follows:
<TABLE>
<CAPTION>
               Year Ending
              December 31,                                                                            Amount
              --------------                                                                    ------------
<S>           <C>                                                                              <C>
              2003                                                                              $     48,000
              2004                                                                                    51,000
              2005                                                                                    54,000
              2006 and thereafter                                                                          -
                                                                                                ------------

                   Total minimum lease payments                                                 $    153,000
                                                                                                ============
</TABLE>

NOTE 7 -      GOING CONCERN

              The accompanying financial statements have been prepared assuming
              that the Company will continue as a going concern, which
              contemplates the realization of assets and satisfaction of
              liabilities in the normal course of business. The Company has
              sustained significant net losses which have resulted in an
              accumulated deficit at December 31, 2002 of approximately
              $22,600,000 and has experienced periodic cash flow difficulties,
              all of which raise substantial doubt regarding the Company's
              ability to continue as a going concern.

              The net loss for the years ended December 31, 2002 and 2001 was
              $1,713,639 and $1,703,240, respectively. To date the Company has
              funded its operations through a combination of short and long-term
              loans and the private placement of its common stock. The Company
              anticipates another net loss for the year ended December 31, 2003
              and with the expected cash requirements for the coming year, there
              is substantial doubt as to the Company's ability to continue
              operations.

              The Company believes these conditions have resulted from the
              inherent risks associated with small startup technology-oriented
              companies. Such risks include, but are not limited to, the ability
              to (i) generate revenues and sales of its products and services at
              levels sufficient to cover its costs and provide a return for
              investors, (ii) attract additional capital in order to finance
              growth, (iii) further develop and successfully market commercial
              products and services, and (iv) successfully compete with other
              comparable companies having financial, production and marketing
              resources significantly greater than those of the Company.

              The Company is attempting to improve these conditions by way of
              financial assistance through issuances of additional equity and by
              generating revenues through sales of products and services.







                                       38

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001

NOTE 8 -      RELATED PARTY TRANSACTIONS

              Effective August 15, 2001, the Company issued 2,000,000 shares of
              common stock valued at $0.0075 per share in satisfaction of
              obligations for expense reimbursements due to an officer of the
              Company.

              Effective November 15, 2001, the Company converted interest of
              $122,680 as accrued on a promissory note issued by the Company and
              held by a principal shareholder of the Company into 12,268,000
              shares of restricted Common Stock of the Company.

              During 2002, the Company paid $55,589 in advances to a company
              with a common officer. The balance receivable at December 31, 2002
              is $55,589. Subsequently, the Company received $44,231 as payments
              towards these advances.

NOTE 9 - SEGMENT REPORTING

              SportsNuts, Inc.'s reportable segments are business units that
              offer different products and services. The Company has three
              reportable business segments: online services, sports event
              management and information technology consulting. The online
              services segment provides internet team and league management for
              amateur sports organizations and online registrations for sporting
              events. The sports event management segment creates, promotes and
              manages sporting events. The information technology consulting
              segment provides services related to computer hardware, software
              and websites.

              The policies applied to determine the segment information are the
              same as those described in the summary of significant accounting
              policies (Note 1). All significant intersegment transactions have
              been eliminated in the consolidated financial statements.

              Financial information as of and for the year ended December 31,
              2002 with respect to the reportable segments is as follows:
<TABLE>
<CAPTION>
                                                                                                    Information
                                                             Online             Sports Event         Technology
                                                            Services              Management        Consulting
                                                          -----------------  ------------------  ------------------
<S>                                                       <C>               <C>                  <C>
              Cash                                        $          35,993  $            1,741  $            2,839
              Fixed assets, net                                     102,376               3,086               -
              Total assets                                          297,868              64,276              11,527
              Total liabilities                                   2,231,506              39,657             357,085
              External revenues                                      42,052             468,278             104,835
              Cost of goods sold                                      1,455             321,313              15,228
              Other income (expense)                                106,595               (571)           (148,543)
              Segment profit (loss) before tax effect           (1,499,208)            (15,883)           (198,548)
</TABLE>

NOTE 10 -     BUSINESS COMBINATION

              On April 15, 2001, the Company acquired Rocky Mountain Sports
              Alliance (RMSA) by exchanging 3,800,000 shares of its common stock
              for all of the common stock of RMSA. The transaction was accounted
              for as a purchase in accordance with APB 16, "Business
              Combinations." The results of operations of RMSA are included in
              the consolidated financial statements from the date of
              acquisition.



                                       39

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                 Notes to the Consolidated Financial Statements
                           December 31, 2002 and 2001

NOTE 10 -     BUSINESS COMBINATION (Continued)

              Based on SFAS No. 142 as described in Note 1, the Company has
              determined that the goodwill associated with the acquisition of
              RMSA will no longer be amortized. Furthermore, the Company has
              determined that there has been no impairment in goodwill since
              December 31, 2001.


NOTE 11 -     CAPITAL LEASES IN DEFAULT

              In May 2001, the Company  entered into a capital lease  agreement
              with IBM Credit Corp.  (IBM).  During 2001, the Company defaulted
              on  the  lease.  In  June  2002,  IBM  repossessed  the  computer
              equipment.  The Company has recognized a loss on the repossession
              of  $130,171.  The balance of the lease  payable at December  31,
              2002 of $321,247 is the balance which was  outstanding as of June
              2002,  the date of the  repossesssion.  As of the report date, no
              settlement  has  been  negotiated  with  IBM  in  regards  to the
              remaining balance due on the lease.

              Terms under the original lease agreement are as follows:

<TABLE>
<S>                                                                                              <C>
                     Payable in monthly principal and interest payments of
                     $7,351 for 60 months beginning June 30, 2001,
                     interest rate of 11.76%, secured by fixed assets                            $          419,007

                     Less amounts representing taxes and interest                                          (97,760)
                                                                                                 -----------------
                     Total capital leases                                                        $         321,247
                                                                                                 =================
</TABLE>

              Depreciation expense of $33,957 associated with the equipment
              under capital lease was expensed during the year ended
              December 31, 2002.











                                       40

<PAGE>
ITEM 8:  Changes in and Disabareements with Accountants on Accounting
         and Financial Disclosure.

     On February 14, 2002, the Company  discontinued the relationship  with HJ &
Associates,  LLC as its independent public accountants.  The Company has engaged
Chisholm & Associates as its new independent public accountants. The decision to
change  the  Company's  accounting  firm from HJ is the  affiliation  of Neal A.
Hansen,  CPA with  Chisholm & Associates  in January,  2002. As an audit manager
with HJ, Mr. Hansen was involved to a great degree in prior audits and resulting
preparation of the Company's  financial  statements.  The Company  believes that
continuing to work with Mr.  Hansen and reliance upon Chisholm & Associates  for
future audit needs will  provide  both  continuity  and cost  efficiency  to the
preparation  of its  financial  statements.  The Company filed a report with the
Securities and Exchange  Commission on Form 8-K on February 14, 2002 summarizing
the change in its certifying accountant

                                    PART III

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

     Pursuant to the Company's Delaware Certificate of Incorporation and Bylaws,
the  Company's  Board of  Directors  (the  "Board")  has been divided into three
classes,  with only a single class subject to re-election each year. The initial
re-election  of the Board under this  procedure  requires  the  directors  to be
nominated to serve a one-, two-, or three-year term.  Thereafter,  any director,
whether  elected or re-  elected,  will  serve a  three-year  term.  Each of the
Company's eight  directorships has been divided into one of these three classes,
with one class  containing two  directorships  and two classes  containing three
directorships.  Kenneth I. Denos, age 35, is the Chief Executive  Officer of the
Company and  currently  the only  executive  officer of the Company and the only
member  of the  Board of  Directors.  A short  summary  of Mr.  Denos'  business
experience  is  below.  His  term of  office  will  expire  at the  next  annual
shareholders  meeting.  No annual  shareholders  meeting is planned for the year
2003.

     Kenneth Denos,  age 35, serves as the Company's  Chief  Executive  Officer,
General  Counsel,  Secretary,  and has been a member of the  Board of  Directors
since  April,  1999.  Mr.  Denos also serves on the Board of Directors of Moore,
Clayton & Co., Inc., an  international  strategic and advisory firm with offices
in Los Angeles,  Salt Lake City, New York City, London, and Wolfsburg,  Germany.
Previously, from 1996 to 1998, Mr. Denos practiced with the Salt Lake City-based
law firm of  Jones,  Waldo,  Holbrook  &  McDonough,  concentrating  on  growing
technology  and  Internet-based  companies,  providing  assistance  in corporate
governance,  debt and equity  financing,  joint  ventures,  licensing,  mergers,
acquisitions,  and securities law compliance. Mr. Denos holds a Bachelor of Arts
degree from the  University of Utah in Business  Finance and Political  Science,
and holds a Master of Business Administration Degree from the University of Utah
School of Business  and a Juris  Doctor from the  University  of Utah College of
Law. Prior to practicing with Jones,  Waldo, he was special  projects manager at
Utah Technology Finance Corporation, a technology based venture lending agency.

Board of Directors Meetings and Committees

     Although various items were reviewed and approved by the Board of Directors
during 2002,  the Board held no meetings  during the fiscal year ended  December
31, 2002.

     The Company does not have Audit or  Compensation  Committees of the Board o
Directors.

Compensation of Directors

     Although the Company  anticipates  compensating the members of the Board of
Directors in the future at industry  levels,  current  members are not paid cash
compensation for their service as directors. Each director may be reimbursed for
certain  expenses  incurred  in  attending  Board  of  Directors  and  committee
meetings.  Directors may also be granted stock options under the Company's  2000
Stock Option Plan.

                                       41

<PAGE>

Item 10:  Executive Compensaiton

     The following table sets forth certain information regarding the annual and
long-term compensation for services rendered in all capacities during the fiscal
year ended  December  31,  2002,  2001,  and 2000 of those  persons who were the
Company's Chief Executive Officer and other executive officers of the Company.

Summary Compensation Table
<TABLE>
<CAPTION>

                                                                                      Long-Term
                                 Annual Compensation                                Compensation
                                 -------------------                                ------------

      Name and                                                                      Securities             All Other
      Principal            Year                Salary               Bonus            Underlying           Compensation
       Position                                                                        Options
-------------------     ------------     -------------------  ----------------     -----------------  --------------------
<S>                     <C>              <C>                  <C>                           <C>       <C>
Kenneth Denos           2002             $       100,000 (1)  $              0              8,000,000 $                  0
CEO                     2001                     150,000 (2)                 0              2,000,000                    0
                        2000                     148,750 (3)                 0                650,000                    0

</TABLE>

(1) Represents $100,000 in earned but unpaid salary during 2002.
(2) Represents $150,000 in earned but unpaid salary during 2001.
(3) Represents $64,375 in salary paid during 2000 and $86,250 in earned but
    unpaid salary during 2000.

Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>

                                                          Percentage of
                                  Number of               Total Options
                                 Securities                Granted to             Exercise
                                  Underlying                 Employees               Price              Expiration
Name                           Options Granted           in Fiscal Year           per Share               Date
--------------------------    ----------------           ----------------         ---------            ----------
<S>                              <C>                        <C>                    <C>                  <C>
Kenneth Denos                     8,000,000                  59.39%                 $0.01               03/31/07
</TABLE>
-------------------------------------------------------------------------
Option Exercises in Last Fiscal Year and Year End Option Values
<TABLE>
<CAPTION>

                                                                        Number of              Value of Unexercised
                                                                       Unexercised             In-the-Money Options
                                                                         Options              at December 31, 2002(1)
                                                                      at December 31,
                                                                           2002
                                 Shares
                                Acquired              Value            Exercisable/                Exercisable/
         Name                  On Exercise          Realized          Unexercisable                Unexercisable
---------------------          -----------          --------        -----------------             ---------------
<S>                                <C>                  <C>         <C>                               <C>
Kenneth Denos                       0                   0               650,000/0                       0/0
Kenneth Denos                       0                   0           1,500,000/500,000                   0/0
Kenneth Denos                       0                   0               0/8,000,000                      0/0
</TABLE>

(1) Based on the closing sales price of the Common Stock on the NASD Electronic
    Bulletin Board on December 31, 2002 of $0.01.




                                       42

<PAGE>



Item 11: Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters.

    (a) Security Ownership of Certain Beneficial Owners and Management.

SportsNuts, Inc.

     The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock (par value $0.002 per share) as of March
1, 2003 by (i) each person (or group of affiliated  persons) who is known by the
Company  to  beneficially  own more  than 5% of the  outstanding  shares  of the
Company's  Common  Stock,  (ii) each  person  who has  served as a  director  or
executive  officer of the Company  during the calendar year 2001,  and (iii) all
persons who have served as a director or executive officer of the Company during
the calendar year 2002 as a group.  As of such date,  the Company had 98,271,086
shares of Common Stock outstanding.  Unless indicated otherwise, the address for
each officer, director, and 5% shareholder is c/o the Company, 11585 South State
Street, Suite 102, Draper, Utah 84020.

<TABLE>
<CAPTION>
SPORTSNUTS, INC.                                                                   Common Stock
                                                                                   ------------
              Directors, Executive Officers,
                      5% Stockholders                                Number                 Percent of  Class(1)
              --------------------------------                     ----------               --------------------
<S>                                                                <C>                          <C>
Kenneth Denos(2)                                                   26,414,698                     21.72%
Prestbury Investment Holdings Limited(3)                           25,000,000                     25.44%
Gardner Management, Inc. Profit Sharing Plan and                   17,699,046                     17.07%
Trust(4)
Moore, Clayton & Co., Inc.(5)                                      19,598,031                     16.78%
Nicholas Brigstocke(6)                                             10,000,000                      9.68%
Buckley Barlow(7)                                                  17,666,667                     15.24%
Chris Chambers(8)                                                  10,000,000                      9.68%
                                                                   ----------                    -------
All directors and officers as a group                              26,414,698                     21.72%
(1 person)
</TABLE>


(1) For each shareholder, the calculation of percentage of beneficial ownership
is based upon 98,271,086 shares of Common Stock outstanding as of March 1, 2003,
and shares of Common Stock subject to options, warrants and/or conversion rights
held by the shareholder that are currently exercisable or exercisable within 60
days, which are deemed to be outstanding and to be beneficially owned by the
shareholder holding such options, warrants, or conversion rights. The percentage
ownership of any shareholder is determined by assuming that the shareholder has
exercised all options, warrants and conversion rights to obtain additional
securities and that no other shareholder has exercised such rights. Except as
otherwise indicated below, the persons and entity named in the table have sole
voting and investment power with respect to all shares of Common Stock shown as
beneficially owned by them, subject to applicable community property laws.

(2) Chief Executive Officer, Secretary, and Director of the Company. Includes
2,000,000 shares of Common Stock held directly by Mr. Denos and 4,816,667 shares
of Common Stock issuable upon exercise of options held by Mr. Denos that are
currently exercisable or will become exercisable within 60 days. Because Mr.
Denos is a member of the Board of Directors of Moore, Clayton & Co., Inc.
("MCC"), this number also includes 1,071,429 shares held directly by MCC,
warrants held by MCC to acquire 5,000,000 shares of Common Stock that are
currently exercisable or will become exercisable within 60 days and certain
promissory notes held by MCC that are currently convertible into 13,526,602
shares of Common Stock Excludes 5,833,333 shares of Common Stock issuable upon
exercise of options held by Mr. Denos that are not currently exercisable and
will not become exercisable within 60 days.

(3) Principal Shareholder of the Company. Includes 25,000,000 shares held
directly by Prestbury Investment Holdings Limited.


                                       43

<PAGE>



(4) Principal Shareholder of the Company. Includes 12,273,895 shares of Common
Stock held directly by Gardner Management, Inc. Profit Sharing Plan and Trust
and 5,425,151 shares of Common Stock issuable upon the exercise of a Convertible
Promissory Note held by the Trust.

(5) Principal Shareholder of the Company. Includes 1,071,429 shares held
directly by MCC, 5,000,000 shares issuable from the exercise of warrants held by
MCC and certain promissory notes held by MCC that are convertible into
13,526,602 shares of Common Stock.

(6) Principal Shareholder of the Company. Includes 5,000,000 shares of Common
Stock held directly by Mr. Brigstocke and 5,000,000 shares of Common Stock
issuable upon the exercise of warrants held by Mr. Brigstocke.

(7) Principal Shareholder of the Company. Includes 15,000,000 shares of Common
Stock issuable upon the conversion of warrants held by Mr. Barlow and 2,666,667
shares of Common Stock issuable from the exercise of options held by Mr.Barlow
that are currently exercisable or will become exercisable within 60 days.

(8) Principal Shareholder of the Company. Includes 5,000,000 shares of Common
Stock held directly by Mr. Chambers and 5,000,000 shares of Common Stock
issuable upon the exercise of warrants held by Mr. Chambers.

SportsNuts.com, Inc.

         The Company currently holds a controlling interest in SportsNuts.com,
Inc., a privately-held Delaware corporation ("SNC"). At some point in the
future, the Company intends to acquire 100% of the shares of SNC Common Stock.
Pursuant to this proposed share acquisition, the Company anticipates issuing
0.032745 shares of the Company's Common Stock in exchange for each share of SNC
common stock.

         The following table sets forth certain information regarding the
beneficial ownership of SNC common stock (par value $0.001 per share) as of
March 1, 2003, by (i) each person (or group of affiliated persons) who is known
by the Company to beneficially own more than 5% of the outstanding shares of the
Company's Common Stock, (ii) each person who has served as a director or
executive officer of the Company during the calendar year 2001, and (iii) all
persons who have served as a director or executive officer of the Company during
the calendar year 2001 as a group. As of such date, SNC had 15,900,742 shares of
common stock outstanding, 73.47% of which was held by the Company. Unless
indicated otherwise, the address for each officer, director, and 5% shareholder
is c/o the Company, 11585 South State Street, Draper, Utah 84020.

<TABLE>
<CAPTION>
SPORTSNUTS.COM, INC.                                                                Common Stock
                                                                                    --------------
                Directors, Executive Officers,
                       5% Stockholders                                   Number                 Percent of Class(1)
                --------------------------------                        --------                -------------------
<S>                                                                     <C>                          <C>
Kenneth Denos(2)                                                        183,713                      1.16%
Prestbury Investment Holdings Limited(3)                                   -                           -
Gardner Management, Inc. Profit Sharing Plan and                           -                           -
Trust(4)
Moore, Clayton & Co., Inc.(5)                                              -                           -
Nicholas Brigstocke(6)                                                     -                           -
Buckley Barlow(7)                                                          -                           -
Chris Chambers(8)                                                          -                           -
                                                                        -------                      -----
All directors and officers as a group                                   183,713                      1.16%
(1 person)
</TABLE>

** Less than one percent


                                       44

<PAGE>



(1) For each shareholder, the calculation of percentage of beneficial ownership
is based upon 15,900,742 shares of SNC common stock outstanding as of March 1,
2003, and shares of SNC common stock subject to options or warrants held by the
shareholder that are currently exercisable or exercisable within 60 days, which
are deemed to be outstanding and to be beneficially owned by the shareholder
holding such options or warrants. The percentage ownership of any shareholder is
determined by assuming that the shareholder has exercised all options and
warrants to obtain additional SNC securities and that no other shareholder has
exercised such rights. Except as otherwise indicated below, the persons and
entity named in the table have sole voting and investment power with respect to
all shares of SNC common stock shown as beneficially owned by them, subject to
applicable community property laws.

(2) Chief Executive Officer, Secretary, and Director of the Company. Includes
183,713 shares of SNC common stock held directly by Mr. Denos.

(3) Principal Shareholder of the Company

(4) Principal Shareholder of the Company.

(5) Principal Shareholder of the Company.

(6) Principal Shareholder of the Company.

(7) Principal Shareholder of the Company.

(8) Principal Shareholder of the Company.


    (b) Related Stockholder Matters.

        (1)      Equity Compensation Plan Information
<TABLE>
<CAPTION>

                                 Number of securities          Weighted-average          Number of securities remaining
                                   to be issued upon          exercise price of          available for future issuance
                                      exercise of            outstanding options,          under equity compensation
                                 outstanding options,        warrants and rights          plans (excluding securities
                                  warrants and rights                                       reflected in column (a))
                                ---------------------        --------------------        -------------------------------
<S>                                        <C>                       <C>                              <C>
Equity compensation
plans approved by                          0                          -                                0
security holders
Equity compensation
plans not approved by                      0                          -                                0
security holders
                        Total              0                          -                                0
</TABLE>


Item 12: Certain Relationships and Related Transactions.

     Effective  November 15, 2001, the Company converted interest of $122,680 as
accrued on a  promissory  note  issued by the  Company  and held by a  principal
shareholder of the Company into 12,268,000  shares of restricted Common Stock of
the Company.


Item 13: Exhibits and Reports on Form 8-K

   (a) Documents Filed as a Part of this Report

       (1)      Financial Statements

                                       45

<PAGE>



       See "Item 7 - Financial Statements Required by Form 10-KSB."

       (2)      Financial Statement Schedules

          The  following  Financial  Statement  Schedules of the Company and its
     subsidiaries,  together  with the  report  of  Chisholm  &  Associates  the
     Company's independent accountants, thereon are filed as part of this Report
     on Form 10-KSB as listed below and should be read in  conjunction  with the
     consolidated financial statements of the Company:

     Report of Chisholm &  Associates,  Independent  Accountants,  on  Financial
     Statement Schedules.

       (3)      Exhibits

       See "Index to Exhibits."

   (b) Reports on Form 8-K

        No reports on Form 8-K were filed during the quarter ended December 31,
2002.


Item 14: Controls and Procedures.

     The Company has in place  adequate  controls and  procedures to ensure that
information  required to be  disclosed  by the Company is  recorded,  processed,
summarized,  and reported within the time periods specified under the Securities
and Exchange Commission's Rules and Forms.













                                       46

<PAGE>


INDEX TO EXHIBITS
<TABLE>
<CAPTION>
    Number             Exhibits
    ------             --------
<S>                    <C>

      3.1              Amended and Restated Certificate of Incorporation of
                          SportsNuts, Inc., a Delaware corporation.(1)
      3.2              Amended and Restated Bylaws of SportsNuts, Inc.,
                          a Delaware corporation.(2)
     10.1              Convertible Promissory Note and Security Agreement among
                          Gardner Management, Inc. Profit Sharing Plan and
                          Trust, SportsNuts.com, Inc., Sportzz.com, Inc., and
                          the Company, including amendments, dated February 1,
                          2000.(3)
     10.2              SportsNuts, Inc. 2000 Stock Option Plan. (4)
     21.1              Subsidiaries of the Registrant.(5)
</TABLE>
---------------

(1) Filed as an Exhibit to the Company's quarterly report on Form 10-QSB, filed
with the Commission on August 14, 2001.

(2) Filed as an Exhibit to the Company's quarterly report on Form 10-QSB, filed
with the Commission on August 14, 2001.

(3) Filed as an Exhibit to the Company's annual report on Form 10-KSB, filed
with the Commission on March 30, 2000.

(4) Filed as an Exhibit to the Company's Quarterly Report on Form 10-QSB, filed
with the Commission on May 11, 2001.

(5) Filed as an Exhibit to the Company's quarterly report on Form 10-QSB, filed
with the Commission on August 14, 2001.


                                   SIGNATURES

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

                                         SPORTSNUTS, INC


Dated: March 28, 2003                    By:    /s/ Kenneth I. Denos
                                         ---------------------------------------
                                                Kenneth I. Denos
                                                Chief Executive Officer


     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the Company and in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
     Signature                       Title                                             Date
     ----------                      ---------------------------------------           ------------------------
<S>                                  <C>                                                <C>
 /s/ Kenneth I. Denos                Chief Executive Officer and sole Director          March 28, 2003
                                     (Principal Executive Officer)
                                     (Principal Financial and Accounting
                                      Officer)
</TABLE>



                                       47

<PAGE>