SECURITIES
AND EXCHANGE COMMISSION
 
 Washington,
D.C.  20549
 ______________________
 
 FORM
10-K
 
 [
X ] Annual Report under Section 13 or 15(d) of the Securities Exchange Act of
1934
 
 For the
fiscal year ended December 31, 2008
 
 OR
 
 [   ]   Transition
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
 
 For the
transition period from ________ to ___________
 
 Commission
file number: 333-14477
 
 SPORTSNUTS,
INC.
 (Name of
Small Business Issuer in Its Charter)
 
 
 Delaware
              
              87-0561426(State
      or Other Jurisdiction
                of
      Incorporation or Organization)
              
              (IRS
      Employer
                Identification
      No.)10757
      South, River Front Parkway, Suite 125South
      Jordan, Utah
              
              84095(Address
      of Principal Executive Offices)
              
              (Zip
      Code)
 
 
 
 (801) 816-2500Issuer’s
      Telephone Number, Including Area Code
 
 
 Securities
registered under Section 12(b) of the Exchange Act:  None
 
 Securities
registered under Section 12(g) of the Exchange
Act:  None
  
  
 Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined by Rule 405 of the
Securities ActYes [] No [ X
]
 
 Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Exchange Act.Yes [ ] No [ X ]
 
 Indicate by check mark 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
[   ]
 
 Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, non-accelerated
filer, or a smaller reporting company.  See definition
of  “large accelerated filer,”   “accelerated filer,”
and “smaller reporting company in Rule 12b-2 of the Exchange
Act.  (Check one):
 
 Large
Accelerated Filer [  ]    Accelerated Filer
[  ]     Non-Accelerated Filer
[  ]
 Smaller
reporting company  [ X ]
 
 Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).  Yes [X]  No [  ]
 
 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 30, 2009,
was approximately $231,000.  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 24, 2009, the Company had outstanding 121,674,854
shares of common stock, par value $0.002 per share.
 
 DOCUMENTS
INCORPORATED BY REFERENCE
 
 None.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  1
  FORWARD
LOOKING STATEMENTS
 
  THIS ANNUAL REPORT ON FORM 10-KSB, IN
PARTICULAR “ITEM 7 MANAGEMENT’SDISCUSSION 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 1A.”
 
 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.
 
  2
  
 BUSINESS
OVERVIEW
 
 DESCRIPTION
OF BUSINESS
 
 SportsNuts, Inc. (sometimes referred to
hereinafter as the “Company”) is a sports management and marketing company, with
a focus on community-based amateur athletics.  Incorporated in
Delaware on July 12, 1996, the Company helps organize and manage certain
community sports events, providing online registration, merchandise sales, event
sponsorship, and event coordination.
 
 Until March 1, 2007, the Company
offered computer hardware sales and related services through Secure Netwerks,
Inc., its wholly-owned subsidiary.  On that date, the Company spun-off
the shares of Secure Netwerks on a pro-rata basis to its shareholders such that
Secure Netwerks became an independent company.  Following the
spin-off, due to the substantially decreased level of revenues and operations of
the Company, SportsNuts, became a “shell company” as defined in 12b-2 of the
Securities Exchange Act of 1934.
 
 BUSINESS
FOCUS
 
 The Company targets organized sports
events with various marketing and technology services to increase consumer
satisfaction, athlete participation, corporate involvement, and purchasing
opportunities.  The Company also seeks to create increased awareness
of participating events within surrounding communities.  Through it’s
Internet properties, the Company provides online event registration, merchandise
sales, event website hosting, and the issuance of targeted e-mails to sports
participants who have requested information about upcoming sporting
events.  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.
 
 RESEARCH
& DEVELOPMENT
 
 Generally.  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.
 
 Software
Development.  The heart of the Company’s services is the sports
information management system user base. A database contains all the detailed
information that the Company gathers on every person who registers for a sports
event through the Company’s web site.  The database software holds and
manipulates all such information. This database is built with Sequel
software.  The Company has invested in this software in order to
insure reliability as well as scalability.  For the size of the
Company’s computer systems and the volume of throughput, Sequel 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.
 
 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
  3
  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 by the Company at 135 million fans, 76 million active participants, 4
million organized teams, and over $30 billion spent annually on products and
services.
 
 Amateur sports touch 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 tend 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 have 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.
 
 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.
 
  4
  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 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 2008, the Company has not
pursued any trademark applications for its name and brand.
 
 The Company’s online registration and
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 required 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
  5
  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.
 
 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 of its clients.  Any such
regulations or assessments could adversely affect the Company’s business,
financial condition, and results of operations.
 
 EMPLOYEES
 
 As of March 20, 2009, the Company
employed five persons on a part-time basis.  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.
 
 REPORTS
TO SECURITY HOLDERS
 
 SportsNuts is subject to the
information requirements of the Securities Exchange Act of 1934, as amended, and
in accordance therewith files quarterly and annual reports, as well as other
information with the Securities and Exchange Commission (“Commission”) under
File No. 333-14477.  Such reports and other information filed with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
at prescribed rates, and at various regional and district offices maintained by
the Commission throughout the United States.  Information about the
operation of the Commission’s public reference facilities may be obtained by
calling the Commission at 1-800-SEC-0330.  The Commission also
maintains a website at http://www.sec.gov that
contains reports and other information regarding the Company and other
registrants that file electronic reports and information with the
Commission.
 
 ITEM
1A: 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.
 
 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.  There is no
assurance that the Company will ever become profitable.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
  6
  software
systems and the data and information stored in connection
therewith.  The Company’s systems are vulnerable to damage by fire,
water (principally from overhead sprinkler systems that may be triggered by fire
or excessive heat within the building in which the Company and other co-tenants
operate), 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.  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 Company’s internet properties
and internet properties of the Company’s clients, 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.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 financial
resources available to the Company during 2008, 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 Company were required 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.
 
 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
  7
  to
generate profits, it is unlikely that the Company will be able to meet its
financial obligations and investors could lose their entire
investments.
 
 Likely Change of
Control.During 2009, it is likely that the Company may offer
certain of its creditors the right to convert their debts into common stock of
the Company based upon the current trading price of the Company’s Common
Stock.  The conversion of even a portion of these debts will result in
a change of control in favor of such creditors.  Such creditors will
likely also include Kenneth Denos, the Company’s former Chief Executive
Officer.
 
 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.
 
 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.
 
 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.  All of the Company’s outstanding shares are either
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 Directors of the Company will have the ability,
without seeking shareholder approval, to issue additional
  8
  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-dealer’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.
 
 ITEM
2:  DESCRIPTION OF PROPERTY
 
 The Company’s executive offices are
located in a 5,500 square foot facility in south Salt Lake County, Utah, twenty
minutes from the Salt Lake City International Airport and adjacent to Interstate
15.  The Company subleases this facility from an entity controlled by
Kenneth Denos, the Company’s former Chief Executive Officer.  Base
rent for use of this facility is $500.00 per month, on a month-to-month
lease.
 
 The Company believes that the size of
its executive offices is 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.
  9
  PART
II.
 
 ITEM
5:  MARKET FOR COMMON EQUITY,  RELATED STOCKHOLDER MATTERS
AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.
 
 
 (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 20, 2009, 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, 2008:
  High
                    
                    
                    LowFourth
      Quarter 2008
                    
                    $
                    0.00181
                    
                    
                    $
                    0.001Third
      Quarter 2008
                    
                    $
                    0.00187
                    
                    
                    $
                    0.00112Second
      Quarter 2008
                    
                    $
                    0.00363
                    
                    
                    $
                    0.0015First
      Quarter 2008
                    
                    $
                    0.0045
                    
                    
                    $
                    0.00263
 
 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, 2007:
 
 High
                    
                    
                    LowFourth
      Quarter 2007
                    
                    $
                    0.00487
                    
                    
                    $
                    0.0025Third
      Quarter 2007
                    
                    $
                    0.006
                    
                    
                    $
                    0.003Second
      Quarter 2007
                    
                    $
                    0.00637
                    
                    
                    $
                    0.003387First
      Quarter 2007
                    
                    $
                    0.01487
                    
                    
                    $
                    0.00231
 
 (2)
              Holders.
 
 As of March 20, 2009, the Company had
approximately 365 holders of record of its Common Stock.
 
 (3)
              Dividends.
 
 The Company 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.
 
 (b)
      Recent Sales of Unregistered
Securities.
 
 As of December 31, 2008, the Company
had outstanding -0- common stock purchase options granted to various officers,
directors, employees, and service providers of the Company pursuant
to
  10
  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.
 
 During 2000-2005 and continuing into
2008, Kenneth Denos, the Company’s former Chief Executive Officer, made various
cash loans to the Company totaling $68,500 in the aggregate.  These
loans are represented by unsecured promissory notes of the Company and bear
interest at the rate of ten percent (10%) per annum.
 
 During 2000-2005 and continuing into
2008, the Company has accrued payroll and other expenses owed to Kenneth Denos,
the Company’s former Chief Executive Officer, totaling $969,868 in the
aggregate.  These accruals are unsecured obligations of the
Company.  Interest has accrued on the unpaid expenses commencing
January 1, 2006 at the rate of twelve percent (12%) per annum.
 
 ITEM
6:  SELECTED FINANCIAL DATA
 
 As a smaller reporting company we are
not required to provide this information.
 
 ITEM 7:
              MANAGEMENT’S
      DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
 
 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 various
sports events, providing online registration, merchandise sales, event
sponsorship, and event coordination.
 
 SportsNuts endeavors 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 previously provided
computer hardware and related software sales through Secure Netwerks, Inc., the
Company’s wholly-owned subsidiary (“Secure Networks”).  On March 1,
2007, Secure Netwerks was spun off, on a pro-rata basis, to the shareholders of
SportsNuts.  The spin-off is described in a report on Form 8-K filed
by the Company with the Securities and Exchange Commission on January 19,
2007.
 
 The Company’s principal sources of
revenues during 2008 were (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)
computer hardware sales.  The ability to generate revenues during the
year 2007 and beyond depends substantially upon the revenues relating to the
Company’s amateur sports business, as the Company spun-off Secure Networks on
March 1, 2007.
  11
  
 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, 2008 and 2007.
 
 Revenues.  The
Company generated net revenues of $30,738 during the year ended December 31,
2008, which represents a 24% increase compared to $24,819 in net revenues during
the year 2007.  The increase is the result of increased participation
in events in which the company manages and also handles online
registrations.  Following the spin-off of Secure Netwerks on March 1,
2007, the Company’s sole source of revenues will be related to sports events and
services rendered pursuant thereto.  Accordingly, the Company
anticipates that future overall consolidated revenues will likely be
substantially lower than in prior periods.  Management therefore
believes that SportsNuts is considered a “shell company” as defined in Rule
126-2 of the Securities Exchange Act of 1934.
 
 Cost of Sales.  Cost
of sales for the year ended December 31, 2008 were $12,626, a 10% increase from
$11,508 during the year 2007.  This increase correlates with the
increase in revenues.  Cost of sales were 41% of revenues in 2008
compared to 46% in 2007.  The Company anticipates that cost of sales
will decrease in the future as a result of the spin-off of Secure Netwerks,
Inc.  Other costs of sales consisted of online registration services,
sports event management and promotional services, and sales commissions paid in
connection with hardware sales and leases.
 
 Salaries and Consulting
Expenses.  Salaries and consulting expenses for the year ended
December 31, 2008 were $136,220, a 1% increase from $134,935 during the year
2007.  No major change was expected in salaries and consulting and
management continues to make a concerted effort to decrease certain costs
associated with personnel salaries and benefits and contract labor.
 
 Professional
Fees.  Professional fees for the year ended December 31, 2008
were $7,715, a 6% decrease from $8,170 during 2007.  No major change
was expected in professional fees as the Company will continue to have audits
and reviews of the financial statements.  Contributing to professional
fees in 2007 was the legal and accounting fees associated with the spin-off of
Secure Netwerks.
 
 Selling, General and Administrative
Expenses.Selling, general and administrative expenses were
$4,713 for the year ended December 31, 2008, as compared to $12,770 during 2007,
a decrease of 63%.  The decrease is due to the company no longer
covering certain benefits of employees such as health
insurance.
  12
  Where
appropriate, the Company capitalizes certain systems development costs in
accordance with generally accepted accounting principles.
 
 Other Income
(Expense).  The Company had net other expense of $117,569 for
the year ended December 31, 2008 compared to net other expense of $117,824
during 2007.  The expenses incurred 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, 2008, the Company’s
primary source of liquidity consisted of $1,034 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, 2008 of
$23,949,846 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 Company generated a net loss for the year ended December
31, 2008 of $248,105 compared to a net loss in 2007 of $253,697.  The
Company anticipates a net loss for the year ended December 31, 2009 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.
 
 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 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 advancement in its business
strategy.  There is presently no agreement in place with any source of
financing and 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
substantially 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.
 
 ITEM 7A:QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 As a smaller reporting company we are
not required to provide this information.
  13
  
 ITEM 8:
              FINANCIAL STATEMENTS AND SUPPLEMENTARY
      DATA
 
 
 CONTENTS
 
 Report of Independent Registered Public Accounting
      Firm
              15Consolidated Balance Sheets
              17Consolidated Statements of
      Operations
              18Consolidated Statements of
      Stockholders’ Deficit
              19Consolidated Statements of Cash
      Flows
              20Notes to the Consolidated Financial
      Statements
              21
 
 
 
 
 
 
 
 
 
 
 
 
 
  14
 Table of Contents
  
 
 
 
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
 
 
 To the
Board of Directors and Shareholders
 SportsNuts,
Inc.
 South
Jordan, Utah
 
 We have
audited the accompanying balance sheet of SportsNuts, Inc. as of
December 31, 2008 and the related statement of operations, stockholders' deficit
and cash flows for the year then ended. These financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our
audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company has determined that it is not required to have, nor were we engaged to
perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting.  Accordingly, we express no such opinion.  An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audit
provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of SportsNuts, Inc. as of December 31,
2008 and the results of its operations and its cash flows for the year ended
December 31, 2008 in conformity with accounting principles generally accepted in
the United States of America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 7 to the
financial statements, 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 regard to these matters are also described in Note 7.  The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
 
 
 
 Chisholm,
Bierwolf, Nilson & Morrill LLC
 Bountiful,
Utah
 March 28,
2009
 
 
  15
 Table of Contents
  REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 
 Board of
Directors
 SportsNuts,
Inc. and Subsidiaries
 South
Jordan, Utah
 
 We have
audited the accompanying consolidated balance sheet of SportsNuts, Inc. and
Subsidiaries as of December 31, 2007 and the related consolidated statements of
operations, stockholders' deficit and cash flows for the years ended December
31, 2007 and 2006.  These consolidated 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 the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company has determined that it is not required to have, nor were we engaged to
perform, an audit of its internal control over financial
reporting.  Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting.  Accordingly, we express no such opinion.  An
audit also includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, 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 referred to above present fairly,
in all material respects, the consolidated financial position of SportsNuts,
Inc. and Subsidiaries as of December 31, 2007 and the consolidated results of
their operations and their cash flows for the years ended December 31, 2007 and
2006 in conformity with accounting principles generally accepted in the United
States of America.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 7
to the consolidated financial statements, 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 regard to these matters are also
described in Note 7.  The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
 
 
 
 
 Bouwhuis,
Morrill & Company, LLC
 Layton,
Utah
 March 24,
2008
  16
 Table of Contents
  SPORTSNUTS, INC. AND SUBSIDIARIESConsolidated
      Balance SheetsASSETSDecember
      31,
                                      
                                      
                                      December
      31,2008
                                      
                                      
                                      2007CURRENT
      ASSETSCash
      and cash equivalents
                                      
                                      $
                                      1,034
                                      
                                      
                                      $
                                      4,740Accounts
      receivable, net
                                      
                                      
                                      1,430
                                      
                                      
                                      
                                      3,872Advances
      due from related party
                                      
                                      
                                      25,303
                                      
                                      
                                      
                                      16,394Total
      Current Assets
                                      
                                      
                                      27,767
                                      
                                      
                                      
                                      25,006PROPERTY
      AND EQUIPMENT - NET
                                      
                                      
                                      -
                                      
                                      
                                      
                                      145TOTAL
      ASSETS
                                      
                                      $
                                      27,767
                                      
                                      
                                      $
                                      25,151LIABILITIES AND STOCKHOLDERS'
      DEFICITCURRENT
      LIABILITIESAccounts
      payable
                                      
                                      $
                                      8,591
                                      
                                      
                                      $
                                      13,020Due
      to related parties
                                      
                                      
                                      167,555
                                      
                                      
                                      
                                      166,770Accrued
      expenses
                                      
                                      
                                      2,068,263
                                      
                                      
                                      
                                      1,829,092Line
      of credit payable
                                      
                                      
                                      32,903
                                      
                                      
                                      
                                      27,709Notes
      payable - related parties
                                      
                                      
                                      667,166
                                      
                                      
                                      
                                      657,166Total
      Current Liabilities
                                      
                                      
                                      2,944,478
                                      
                                      
                                      
                                      2,693,757TOTAL
      LIABILITIES
                                      
                                      
                                      2,944,478
                                      
                                      
                                      
                                      2,693,757STOCKHOLDERS'
      DEFICITCommon
      stock, $0.002 par value; 200,000,000 sharesauthorized,
      121,674,854 shares issued and outstanding
                                      
                                      
                                      243,350
                                      
                                      
                                      
                                      243,350Additional
      paid-in capital
                                      
                                      
                                      20,789,785
                                      
                                      
                                      
                                      20,951,535Stock
      subscriptions receivable
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (161,750
                                      )Accumulated
      deficit
                                      
                                      
                                      (23,949,846
                                      )
                                      
                                      
                                      (23,701,741
                                      )Total
      Stockholders' Deficit
                                      
                                      
                                      (2,916,711
                                      )
                                      
                                      
                                      (2,668,606
                                      )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
                                      
                                      $
                                      27,767
                                      
                                      
                                      $
                                      25,151
 
 
 The
accompanying notes are an integral part of these consolidated financial
statements.
  17
 Table of Contents
  SPORTSNUTS, INC. AND
      SUBSIDIARIESConsolidated
      Statements of OperationsFor
      the Years EndedDecember
      31,2008
                                  
                                  
                                  2007NET
      SALES
                                  
                                  $
                                  30,738
                                  
                                  
                                  $
                                  24,819COST
      OF SALES
                                  
                                  
                                  12,626
                                  
                                  
                                  
                                  11,508GROSS
      MARGIN
                                  
                                  
                                  18,112
                                  
                                  
                                  
                                  13,311SELLING,
      GENERAL AND ADMINISTRATIVE EXPENSESSalaries
      and consulting
                                  
                                  
                                  136,220
                                  
                                  
                                  
                                  134,935Professional
      fees
                                  
                                  
                                  7,715
                                  
                                  
                                  
                                  8,170Selling,
      general and administrative
                                  
                                  
                                  4,713
                                  
                                  
                                  
                                  12,770Total
      Selling, General and Administrative Expenses
                                  
                                  
                                  148,648
                                  
                                  
                                  
                                  155,875LOSS
      FROM OPERATIONS
                                  
                                  
                                  (130,536
                                  )
                                  
                                  
                                  (142,564
                                  )OTHER
      INCOME (EXPENSES)Interest
      expense
                                  
                                  
                                  (118,895
                                  )
                                  
                                  
                                  (119,164
                                  )Interest
      income
                                  
                                  
                                  6
                                  
                                  
                                  
                                  13Other
      income
                                  
                                  
                                  1,320
                                  
                                  
                                  
                                  1,327Total
      Other Income (Expenses)
                                  
                                  
                                  (117,569
                                  )
                                  
                                  
                                  (117,824
                                  )LOSS
      BEFORE INCOME TAXES
                                  
                                  
                                  (248,105
                                  )
                                  
                                  
                                  (260,388
                                  )INCOME
      TAX EXPENSE
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -LOSS
      FROM CONTINUING OPERATIONS
                                  
                                  
                                  (248,105
                                  )
                                  
                                  
                                  (260,388
                                  )DISCONTINUED
      OPERATIONSIncome
      from subsidiarydiscontinued
      due to spin off
                                  
                                  
                                  -
                                  
                                  
                                  
                                  6,691NET
      LOSS
                                  
                                  $
                                  (248,105
                                  )
                                  
                                  $
                                  (253,697
                                  )BASIC
      AND DILUTED:Net
      loss per common share fromcontinuing
      operations
                                  
                                  $
                                  (0.00
                                  )
                                  
                                  $
                                  (0.00
                                  )Net
      loss per common share
                                  
                                  $
                                  (0.00
                                  )
                                  
                                  $
                                  (0.00
                                  )Weighted
      average shares outstanding
                                  
                                  
                                  121,674,854
                                  
                                  
                                  
                                  121,674,854
 The
accompanying notes are an integral part of these consolidated financial
statements.
  18
 Table of Contents
  SPORTSNUTS, INC. AND
      SUBSIDIARIESConsolidated
      Statements of Stockholders' DeficitFor
      the Period January 1, 2007 through December 31, 2008Additional
                        
                        
                        Stock
                        
                        
                        
                        
                        
                        TotalCommon
      Stock
                        
                        
                        Paid-in
                        
                        
                        Subscriptions
                        
                        
                        Accumulated
                        
                        
                        Stockholders'Shares
                        
                        
                        Amount
                        
                        
                        Capital
                        
                        
                        Receivable
                        
                        
                        Deficit
                        
                        
                        DeficitBalance,
      January 1, 2007
                        
                        
                        121,674,854
                        
                        
                        $
                        243,350
                        
                        
                        $
                        20,764,999
                        
                        
                        $
                        (161,750
                        )
                        
                        $
                        (23,448,044
                        )
                        
                        $
                        (2,601,445
                        )Spin-off
      of Secure Netwerks
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        186,536
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        186,536Net
      loss for year endedDecember
      31, 2007
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (253,697
                        )
                        
                        
                        (253,697
                        )Balance,
      December 31, 2007
                        
                        
                        121,674,854
                        
                        
                        
                        243,350
                        
                        
                        
                        20,951,535
                        
                        
                        
                        (161,750
                        )
                        
                        
                        (23,701,741
                        )
                        
                        
                        (2,668,606
                        )Write
      off subscriptions receivable againstadditional
      paid in capital
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (161,750
                        )
                        
                        
                        161,750
                        
                        
                        
                        -
                        
                        
                        
                        -Net
      loss for the year endedDecember
      31, 2008
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (248,105
                        )
                        
                        
                        (248,105
                        )Balance,
      December 31, 2008
                        
                        
                        121,674,854
                        
                        
                        $
                        243,350
                        
                        
                        $
                        20,789,785
                        
                        
                        $
                        -
                        
                        
                        $
                        (23,949,846
                        )
                        
                        $
                        (2,916,711
                        )
 The
accompanying notes are an integral part of these consolidated financial
statements.
  19
 Table of Contents
  SPORTSNUTS, INC. AND
      SUBSIDIARIESConsolidated
      Statements of Cash FlowsFor
      the Year EndedDecember
      31,2008
                              
                              
                              2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
                              
                              $
                              (248,105
                              )
                              
                              $
                              (253,697
                              )Adjustments
      to reconcile net loss to netcash
      used by operating activities:Depreciation
                              
                              
                              145
                              
                              
                              
                              993Changes
      in operating assets and liabilities:Accounts
      receivable
                              
                              
                              2,442
                              
                              
                              
                              (3,798
                              )Advances
      due from related party
                              
                              
                              (8,909
                              )
                              
                              
                              (9,445
                              )Other
      current assets
                              
                              
                              -
                              
                              
                              
                              (2,148
                              )Accounts
      payable and accrued expenses
                              
                              
                              234,742
                              
                              
                              
                              237,243Due
      to related parties
                              
                              
                              785
                              
                              
                              
                              6,647Net
      Cash Used by Operating Activities
                              
                              
                              (18,900
                              )
                              
                              
                              (24,205
                              )CASH
      FLOWS FROM INVESTING ACTIVITIES:
                              
                              
                              -
                              
                              
                              
                              -CASH
      FLOWS FROM FINANCING ACTIVITIES:Change
      in line of credit payable
                              
                              
                              5,194
                              
                              
                              
                              8,996Proceeds
      from notes payable - related parties
                              
                              
                              10,000
                              
                              
                              
                              6,615Net
      Cash Provided by Financing Activities
                              
                              $
                              15,194
                              
                              
                              $
                              15,611NET
      DECREASE IN CASH AND CASH EQUIVALENTS
                              
                              $
                              (3,706
                              )
                              
                              $
                              (8,594
                              )CASH
      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
                              
                              
                              4,740
                              
                              
                              
                              13,334CASH
      AND CASH EQUIVALENTS, END OF PERIOD
                              
                              $
                              1,034
                              
                              
                              $
                              4,740SUPPLEMENTAL
      CASH FLOW INFORMATIONCash
      Payments For:Interest
                              
                              $
                              3,309
                              
                              
                              $
                              5,413Income
      taxes
                              
                              $
                              -
                              
                              
                              $
                              -
 The
accompanying notes are an integral part of these consolidated financial
statements.
  20
 Table of Contents
 SPORTSNUTS, INC. AND
SUBSIDIARIES
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
  NOTE 1 -   ORGANIZATION AND SIGNIFICANT ACCOUNTING
POLICIES
 
 a.
              Organization
      and Description of Business
 
 SportsNuts,
      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
      acquire 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.
 
 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.
 
 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:
 
 Computer
      hardware
                    3
      yearsComputer
      software
                    3
      yearsOffice
      equipment
                    7
      years
 
 Depreciation
expense for the years ended December 31, 2008 and 2007 was $145 and $993,
respectively.
  21
 Table of Contents
 SPORTSNUTS,
INC. AND SUBSIDIARIES
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
  NOTE
      1 -
              ORGANIZATION
      AND SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 e.
              Accounts
      Receivable
 
 Accounts
      receivable are recorded net of the allowance for doubtful accounts of $-0-
      as of December 31, 2008 and 2007.  The Company generally offers
      30-day credit terms on sales to its customers and requires no
      collateral.  The Company maintains an allowance for doubtful
      accounts which is determined based on a number of factors, including each
      customer’s financial condition, general economic trends and management
      judgment.
 
 f.
              Revenue
      Recognition
 
 Revenue
      is recognized upon completion of services or delivery of goods where the
      sales price is fixed or determinable and collectibility is reasonably
      assured.  Advance customer payments are recorded as deferred
      revenue until such time as they are recognized.  The Company
      does not offer any cash rebates.  Returns or discounts, if any,
      are netted against gross revenues.  For the years ended December
      31, 2008 and 2007, sales are recorded net of the allowance for returns and
      discounts of $-0-.
 
 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 cost of sales
      in the consolidated statements of operations as it relates directly to the
      revenues associated with events managed by the
      Company.  Advertising expense for the years ended December 31,
      2008 and 2007 was $1,232 and $1,754,
  respectively.
 
 i.
              Basic
      and Fully Diluted Net Loss Per
Share
 
 For
      the Years Ended
                    December
      31,2008
                  
                  
                  2007Basic
      and fully diluted net loss per share:Loss
      (numerator)
                  
                  $
                  (248,105
                  )
                  
                  $
                  (253,697
                  )Shares
      (denominator)
                  
                  
                  121,674,854
                  
                  
                  
                  121,674,854Per
      share amount
                  
                  $
                  (0.00
                  )
                  
                  $
                  (0.00
                  )
 
 The
      basic income (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.
 
 
  22
 Table of Contents
 SPORTSNUTS,
INC. AND SUBSIDIARIES
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
  NOTE
      1 -
              ORGANIZATION
      AND SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 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, 2008 and 2007.
 
 At
December 31, 2008 the Company had net operating loss carryforwards of
approximately $9,340,000 that may be offset against future taxable income
through 2028.  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.
 
 Net
deferred tax assets consist of the following components as of December 31, 2008
and 2007:
  
  2008
                  
                  
                  2007Deferred
      tax assets:NOL Carryover
                  
                  $
                  8,143,000
                  
                  
                  $
                  8,059,000Valuation
    allowance
                  
                  
                  (8,143,000
                  )
                  
                  
                  (8,059,000
                  )Net
      deferred tax asset
                  
                  $
                  -
                  
                  
                  $
                  -
 
 The
income tax provision differs from the amount of income tax determined by
applying the U.S. federal and state income tax rates of 34% to pretax income
from continuing operations for the years ended December 31, 2008 and 2007 due to
the following:
 
 2008
                  
                  
                  2007Current
      Federal Tax
                  
                  $
                  -
                  
                  
                  $
                  -Current
      State Tax
                  
                  
                  -
                  
                  
                  
                  -Change
      in NOL Benefit
                  
                  
                  84,000
                  
                  
                  
                  87,000Valuation
      allowance
                  
                  
                  (84,000
                  )
                  
                  
                  (87,000
                  )$
                  -
                  
                  
                  $
                  -
 
 k.
              Stock
      Options and Warrants
 
 On
      January 1, 2006, the Company adopted Statement of Financial Accounting
      Standards (SFAS) No. 123 (Revised 2004), Share-Based Payment, which is a
      revision of SFAS No. 123, Accounting for Stock-Based
      Compensation.  SFAS 123 (R) supercedes Accounting Principles
      Board opinion (APB) No. 25, Accounting for Stock Issued to Employees, and
      amends SFAS No. 95, Statement of Cash
Flows.
  23
 Table of Contents
 SPORTSNUTS,
INC. AND SUBSIDIARIES
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
  
 NOTE
      1 -
              ORGANIZATION
      AND SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 l.
              Line
      of Credit
 
 The
      company has one line of credit outstanding at December 31,
      2008.  Following are the details of the line of
      credit:
 
 Line
      of credit is due on demand.Available
      credit line
                    
                    $
                    34,000Interest
      rate
                    
                    
                    8
                    %Balance
      outstanding at December 31, 2008
                    
                    $
                    32,902Balance
      outstanding at December 31, 2007
                    
                    $
                    27,709
 
 Accrued
      interest at December 31, 2008 and 2007 was
$-0-.
 
 m.
              Reclassifications
 
 Certain
amounts in the accompanying consolidated financial statements have been
reclassified to conform to the current year presentation.  These
reclassifications have no material affect on the consolidated financial
statements.
 
 n.
              Accrued
      Expenses
 
 Accrued
expenses consisted of the following:
 
 December
      31,2008
                                  
                                  
                                  2007Accrued
      compensation
                                  
                                  $
                                  1,362,779
                                  
                                  
                                  $
                                  1,233,599Accrued
      interest
                                  
                                  
                                  705,484
                                  
                                  
                                  
                                  595,493Total
      accrued expenses
                                  
                                  $
                                  2,068,263
                                  
                                  
                                  $
                                  1,829,092
 
 o.         Recent
Accounting Pronouncements
 
 In
February 2007, the Financial Accounting Standards Board (“FASB”) issued FASB
Statement No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities — Including an Amendment of FASB Statement No. 115, Accounting for
Certain Investments in Debt and Equity Securities” (“SFAS No. 159”). SFAS No.
159 permits an entity to choose to measure many financial instruments and
certain items at fair value. The objective of this standard is to improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reporting earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. SFAS No. 159 permits all entities to choose to measure eligible
items at fair value at specified election dates. Entities will report unrealized
gains and losses on items for which the fair value option has been elected in
earnings at each subsequent reporting date. The fair value option: (a) may be
applied instrument by instrument, with a few exceptions, such as investments
accounted for by the equity method; (b) is irrevocable (unless a new election
date occurs); and (c) is applied only to entire instruments and not to portions
of instruments. SFAS No. 159 is effective as of the beginning of an entity’s
first fiscal year that begins after November 15, 2007. Early adoption is
permitted. We are currently evaluating the impact that the adoption of SFAS No.
159 will have on our consolidated financial statements.
  24
 Table of Contents
 SPORTSNUTS,
INC. AND SUBSIDIARIES
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
  NOTE
      1 -
              ORGANIZATION
      AND SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 o.       Recent
Accounting Pronouncements (Continued)
 
 In
December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS
141(R)”). SFAS 141(R) replaces SFAS No. 141, “Business Combinations”, but
retains the requirement that the purchase method of accounting for acquisitions
be used for all business combinations. SFAS 141(R) expands on the disclosures
previously required by SFAS 141, better
 defines
the acquirer and the acquisition date in a business combination, and establishes
principles for recognizing and measuring the assets acquired (including
goodwill), the liabilities assumed and any non-controlling interests in the
acquired business. SFAS 141(R) also requires an acquirer to record an adjustment
to income tax expense for changes in valuation allowances or uncertain tax
positions related to acquired businesses. SFAS 141(R) is effective for all
business combinations with an acquisition date in the first annual period
following December 15, 2008; early adoption is not permitted. The impact of SFAS
141(R) will have on our consolidated financial statements will depend on the
nature and size of acquisitions we complete after we adopt SFAS
141(R).
 
 In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51” (SFAS 160). SFAS
160 requires that non-controlling (or minority) interests in subsidiaries be
reported in the equity section of the company’s balance sheet, rather than in a
mezzanine section of the balance sheet between liabilities and equity. SFAS 160
also changes the manner in which the net income of the subsidiary is reported
and disclosed in the controlling company’s income statement. SFAS 160 also
establishes guidelines for accounting for changes in ownership percentages and
deconsolidation. SFAS 160 is effective for financial statements for fiscal years
beginning on or after December 1, 2008 and interim periods within those years;
early adoption is not permitted. The adoption of SFAS 160 is not expected to
have a material impact on our financial position, results of operations or cash
flows.
 
 In March
2008, the FASB issued SFAS No. 161 “Disclosures about Derivative
Instruments and Hedging Activities-an amendment of FASB Statement No.
133” (SFAS 161), which amends and expands the disclosure requirements of
SFAS 133 to provide an enhanced understanding of an entity’s use of derivative
instruments, how they are accounted for under SFAS 133 and their effect on the
entity’s financial position, financial performance and cash flows. The
provisions of SFAS 161 are effective for the period beginning after November 15,
2008. The adoption of SFAS 161 is not expected to have a material impact on our
financial position, results of operations or cash flows.
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (SFAS 162), which will provide framework for
selecting accounting principles to be used in preparing financial statements
that are presented in conformity with U.S. generally accepted accounting
principles (GAAP) for nongovernmental entities. With the issuance of SFAS 162,
the GAAP hierarchy for nongovernmental entities will move from auditing
literature to accounting literature. The adoption of SFAS 162 is not expected to
have a material impact on our financial position, results of operations or cash
flows.
 
 In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts” (SFAS 163). SFAS 163 clarifies how SFAS No. 60,
“Accounting and Reporting by
Insurance Enterprises”, applies to financial guarantee insurance
contracts issued by insurance enterprises, and addresses the recognition and
measurement of premium revenue and claim liabilities. It requires expanded
disclosures about contracts, and recognition of claim liability
prior
  25
 Table of Contents
 SPORTSNUTS,
INC. AND SUBSIDIARIES
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
  NOTE
      1 -
              ORGANIZATION
      AND SIGNIFICANT ACCOUNTING POLICIES
(Continued)
 
 o.       Recent
Accounting Pronouncements (Continued)
 
 to an
event of default when there is evidence that credit deterioration has occurred
in an insured financial obligation. It also requires disclosure about (a) the
risk-management activities used by an insurance enterprise to evaluate credit
deterioration in its insured financial obligations, and (b) the insurance
enterprise's surveillance or watch list. The adoption of SFAS 163 is not
expected to have a material impact on our financial position, results of
operations or cash flows.
 
 p.       Concentrations
of Credit Risk
 
 Financial
instruments that potentially subject the Company to concentrations of credit
risks consist of cash and cash equivalents.  The Company places cash
and cash equivalents at well known quality financial
institutions.  Cash and cash equivalents at banks are insured by the
Federal Deposit Insurance Corporation for up to $250,000.  The Company
did not have any cash or cash equivalents in excess of this amount at December
31, 2008 and 2007.
 
 q.
              Financial
      Instruments
 
 Statement
of Financial Accounting Standards No. 107 (SFAS 107), “Disclosures about Fair
Value of Financial Instruments” requires disclosure of the fair value of
financial instruments held by the Company.  SFAS 107 defines the fair
value of a financial instrument as the amount at which the instrument could be
exchanged in a current transaction between willing parties.  The
following methods and assumptions were used to estimate fair value:
 
 The
carrying amount of cash equivalents, accounts receivable, accounts payable and
notes payable approximate fair value due to their short-term
nature.
 
  26
 Table of Contents
 SPORTSNUTS,
INC. AND SUBSIDIARIES
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
  NOTE
2-     NOTES PAYABLE - RELATED PARTIES
 
 Notes
      payable - related parties consisted of the following:December
      31,
                          2008
                        
                        
                        December
      31,
                          2007Note
      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
                        
                        
                        $
                        450,000Note
      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
                        
                        
                        
                        20,000Notes
      payable to related individuals, unsecured, interest at 10%, due on
      demand.
                        
                        
                        175,666
                        
                        
                        
                        165,666Notes
      payable to a related individual, unsecured, interest at 13%, due on
      demand.
                        
                        
                        21,500
                        
                        
                        
                        21,500Total
      notes payable - related parties
                        
                        
                        667,166
                        
                        
                        
                        657,166Less:
      current portion
                        
                        
                        (667,166
                        )
                        
                        
                        (657,166
                        )Long-term
      notes payable - related parties
                        
                        $
                        -
                        
                        
                        $
                        -Maturities
      of notes payable - related parties are as follows:Year Ending December 31,
                        
                        
                        
                        
                        
                        Amount2009
                        
                        
                        
                        
                        
                        $
                        667,166Total
                        
                        
                        
                        
                        
                        $
                        667,166
 
 Accrued
interest on notes payable for the years ended December 31, 2008 and 2007 was
$646,264 and $550,766, respectively.
 
 NOTE 3
-   COMMON AND PREFERRED STOCK TRANSACTIONS
 
 Effective
      March 11, 2005, the Company issued 10,000,000 shares of its common stock
      in exchange for the exercise of stock options held by employees and
      consultants of the Company.  The Company originally recorded a
      stock subscriptions receivable of $161,750.  During the year
      ended December 31, 2008, the Company wrote off the subscriptions
      receivable against additional paid in
capital.
 
 NOTE 4
-   OPTIONS AND WARRANTS
 
 The
Company has adopted FASB Statement 123(R), “Share-Based Payments” (“SFAS No.
123R”) to account for its stock options.  The Company estimates the
fair value of each stock award at the grant date by using the Black-Scholes
option pricing model.  The assumptions used to calculate the fair
value of options granted are evaluated and revised, as necessary, to reflect
market conditions and our experience.  Compensation expense is
recognized only for those
  
 Table of Contents
  NOTE 4
      -
              OPTIONS
      AND WARRANTS (Continued)
  
  options
expect to vest, with forfeitures estimated at the date of grant based on our
historical experience and future expectations.  No stock options or
warrants were granted during 2008.  At December 31, 2008 all options
had been cancelled.
  Employee Stock
Options
 
 The
following tables summarize the information regarding employee stock options at
December 31, 2007:
  Outstanding
      at December 31, 2006
                  
                  
                  16,750,000Granted
                  
                  
                  -Expired
                  
                  
                  (8,000,000
                  )Exercised
                  
                  
                  -Options
      outstanding at December 31, 2007
                  
                  
                  8,750,000
 
  The
following tables summarize the information regarding employee stock options at
December 31, 2008:
  Outstanding
      at December 31, 2007
                
                
                8,750,000Granted
                
                
                -Expired
                
                
                (8,750,000
                )Exercised
                
                
                -Options
      outstanding at December 31, 2008
                
                
                -
  NOTE 5
      -
              OPERATING
      LEASES
 
 The
      Company leased a storage unit on a month to month basis.  Rental
      expense for the years ended December 31, 2008 and 2007 was $1,404 and
      $1,376, respectively.
 
 NOTE
      6 -
              GOING
      CONCERN
 
 The
      accompanying consolidated 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, 2008 of approximately
      $23,950,000, has negative working capital, and negative cash flows from
      operations, all of which raise substantial doubt regarding the Company’s
      ability to continue as a going
concern.
 
 To date
the Company has funded its operations through a combination of loans and the
private placement of its common stock. The Company anticipates another net loss
for the year ended December 31, 2009 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
  27
 Table of Contents
 SPORTSNUTS,
INC. AND SUBSIDIARIES
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
  NOTE 6
-    GOING CONCERN (Continued)
 
 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.
 
 NOTE 7
-   RELATED PARTY TRANSACTIONS
 
 From
      time to time, the Company makes advances to a related company which has
      common management.  These advances are short term in nature and
      due on demand.  The Company made advances of $54,787 and
      $20,800, and received payments on these advances of $45,879 and $11,354,
      during the years ended December 31, 2008 and 2007,
      respectively.  The balance receivable at December 31, 2008 and
      2007 was $25,303 and $16,394, respectively.  These advances are
      not loaned to any officer or director of the
  Company.
 
 From
      time to time, an officer of the Company and an entity he owns paid for
      expenses of the Company for which he has not been
      reimbursed.  These unreimbursed expenses are disclosed as due to
      related parties.  The amount of unreimbursed expenses incurred
      were $894 and $6,647 during the years ended December 31, 2008 and 2007,
      respectively.  The balance due at December 31, 2008 and 2007 was
      $167,555 and $166,770, respectively.  Accrued interest on these
      amounts was $59,030 and 38,942 for the years ended December 31, 2008 and
      2007, respectively.
 
 NOTE 8
-   SEGMENT REPORTING
 
 SportsNuts,
      Inc.’s reportable segments are business units that offer different
      products and services.  The Company has two reportable business
      segments: online services and sports event management.  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
      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, 2008 and 2007 with
      respect to the reportable segments is as
  follows:
 
 December
      31, 2008
                    
                    
                    December
      31, 2007Online
                      Services
                    
                    
                    Sports
      Event
                      Management
                    
                    
                    Online
                      Services
                    
                    
                    Sports
      Event
                      ManagementCash
                    
                    $
                    676
                    
                    
                    $
                    358
                    
                    
                    $
                    2,531
                    
                    
                    $
                    2,209Total
      assets
                    
                    
                    2,106
                    
                    
                    
                    25,661
                    
                    
                    
                    6,403
                    
                    
                    
                    18,748Total
      liabilities
                    
                    
                    2,911,575
                    
                    
                    
                    32,903
                    
                    
                    
                    2,665,038
                    
                    
                    
                    28,719Revenues
                    
                    
                    4,261
                    
                    
                    
                    26,477
                    
                    
                    
                    3,335
                    
                    
                    
                    21,484Cost
      of goods sold
                    
                    
                    583
                    
                    
                    
                    12,043
                    
                    
                    
                    1,134
                    
                    
                    
                    10,374Other
      income (expense)
                    
                    
                    (114,653
                    )
                    
                    
                    (2,916
                    )
                    
                    
                    (114,515
                    )
                    
                    
                    (2,916
                    )Segment
      profit (loss) before tax effect and discontinued
operations
                    
                    
                    (250,834
                    )
                    
                    
                    2,729
                    
                    
                    
                    (260,709
                    )
                    
                    
                    321
 
  28
 Table of Contents
 SPORTSNUTS,
INC. AND SUBSIDIARIES
 Notes to
the Consolidated Financial Statements
 December
31, 2008 and 2007
  
 NOTE 9
- DISCONTINUED OPERATIONS
 
 During
the year ended December 31, 2007, the Company spun off its wholly owned
subsidiary, Secure Netwerks, Inc.  The Company has accounted for these
operations as discontinued.  The following is a summary of the income
(loss) from discontinued operations.
 
 For
      the Year Ended
                    December
      31, 2007NET
      SALES
                  
                  $
                  42,543COST
      OF SALES
                  
                  
                  24,967GROSS
      MARGIN
                  
                  
                  17,576OPERATING
      EXPENSESSalaries and
      consulting
                  
                  
                  4,967Professional
    fees
                  
                  
                  5,125Selling, general and
      administrative expenses
                  
                  
                  4,993Total Operating
      Expenses
                  
                  
                  15,085LOSS
      FROM OPERATIONS
                  
                  
                  2,491OTHER
      INCOME (EXPENSES)Interest
expense
                  
                  
                  (3,908
                  )Gain on settlement of
      debt
                  
                  
                  8,108Total Other Income
      (Expenses)
                  
                  
                  4,200INCOME
      FROM DISCONTINUED
                    OPERATIONS
                  
                  
                  6,691
 
 
  29
 Table of Contents
  ITEM 9:  CHANGES IN
AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
 
 None
 
 ITEM
9A:  CONTROLS AND PROCEDURES
  Management’s
Report on Disclosure Controls and Procedures
   We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports filed under the Securities Exchange Act of
1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms, and that such information is accumulated and communicated to our
management, to allow for timely decisions regarding required
disclosure.
   As of
December 31, 2008, the end of our fiscal year covered by this report, we carried
out an evaluation, under the supervision of our Chief Executive Officer and
Controller, of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on the foregoing, we concluded that our
disclosure controls and procedures were effective as of the end of the period
covered by this annual report.  Our board of directors has only one
member.  We do not have a formal audit committee.
   Management’s
Report on Internal Control over Financial Reporting
   Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) under the
Securities Exchange Act, as amended). In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of control procedures. The objectives of internal
control include providing management with reasonable, but not absolute,
assurance that assets are safeguarded against loss from unauthorized use or
disposition, and that transactions are executed in accordance with management’s
authorization and recorded properly to permit the preparation of consolidated
financial statements in conformity with accounting principles generally accepted
in the United States. Our management assessed the effectiveness of our internal
control over financial reporting as of December 31, 2008. In making this
assessment, our management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated
Framework. Our management has concluded that, as of December 31, 2008,
our internal control over financial reporting is effective in providing
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with US
generally accepted accounting principles.
   This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the Company’s registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only management’s report
in this annual report.
   Inherent
limitations on effectiveness of controls
   30
 Table of Contents
   Internal
control over financial reporting has inherent limitations which include but is
not limited to the use of independent professionals for advice and guidance,
interpretation of existing and/or changing rules and principles, segregation of
management duties, scale of organization, and personnel factors. Internal
control over financial reporting is a process which involves human diligence and
compliance and is subject to lapses in judgment and breakdowns resulting from
human failures. Internal control over financial reporting also can be
circumvented by collusion or improper management override. Because of its
inherent limitations, internal control over financial reporting may not prevent
or detect misstatements on a timely basis, however these inherent limitations
are known features of the financial reporting process and it is possible to
design into the process safeguards to reduce, though not eliminate, this risk.
Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and
presentation. Projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
   Changes
in Internal Control over Financial Reporting
   There
have been no significant changes in our internal controls over financial
reporting that occurred during the year ended December 31, 2008 that have
materially or are reasonably likely to materially affect, our internal controls
over financial reporting.
  ITEM
9B: OTHER INFORMATION
 
 None
 
 PART
III
 
 ITEM 10:
              DIRECTORS,
      EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE.
 
 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.  John D. Thomas, age 36, 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. Thomas’
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 2008.
 
 John D. Thomas, J.D., age 36,
Mr. Thomas has served as corporate counsel for SportsNuts, Inc., since January,
2005.  Mr. Thomas practices law specializing in general corporate law
and mergers and acquisitions for his law firm, John D. Thomas
P.C.  Since December, 2008, Mr. Thomas has served as a member of the
board of directors of Bayhill Capital, Inc. (BYHL.OB),  a filer of
reports pursuant to 13(a) and 15(d) of the Securities Exchange Act of
1934.  He has also been general legal counsel for Cancer Therapeutics,
Inc., a filer of reports pursuant to Sections 13(a) and 15(d) of the Securities
Exchange Act of 1934, since May, 2004.  Prior to his association with
Cancer Therapeutics, Mr. Thomas practiced
  31
 Table of Contents
  general
corporate law for various clients from May, 2003 until the present and from
November 1999 until August 2002.  Mr. Thomas holds a Juris Doctor
degree from Texas Tech University School of Law and is licensed to practice law
in Texas and Utah.
 
 Board
of Directors Meetings and Committees
 
 Although various items were reviewed
and approved by the Board of Directors during 2008, the Board held no formal
meetings during the fiscal year ended December 31, 2008.
 
 The Company does not have Audit or
Compensation Committees of the Board of Directors.  Because of the
lack of financial resources available to the Company, the Company also does not
have an “audit committee financial expert” as such term is described in Item 401
of Regulation S-B promulgated by the Securities and Exchange
Commission.
 
 Compensation
of Directors
 
 Although the Company anticipates
compensating the members of its 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.
 
 Code
of Ethics
 
 We have adopted a code of ethics that
applies to all of our executive officers and senior financial officers
(including our chief executive officer, chief financial officer and any person
performing similar functions).  A copy of our code of ethics is
publicly available on our website at www.sportsnuts.com under the
caption "INVESTORS." If we make any substantive amendments to our code of ethics
or grant any waiver,  including any implicit waiver,  from a
provision of the code to our
chief  executive  officer,  chief  financial  officer,  chief
accounting officer or controller,  we will disclose the nature of such
amendment or waiver in a report on Form 8-K.
 
 Section 16(a) Beneficial Ownership
Reporting Compliance
 
 We are
required to identify each person who was an officer, director or beneficial
owner of more than 10% of our registered equity securities during our most
recent fiscal year and who failed to file on a timely basis reports required by
Section 16(a) of the Securities Exchange Act of 1934.
 
 For the 2007 fiscal year we are unaware
of any officer, director or beneficial owner of more that 10% of our registered
equity securities who failed to file reports on a timely basis in accordance
with Section 16(a) of the Securities Exchange Act of 1934.
 
 ITEM
11:  EXECUTIVE COMPENSATION.
 
 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, 2008, 2007,
and 2006 of those persons who were the Company’s Chief Executive Officer and
other executive officers of the Company.
  32
 Table of Contents
  
 Summary
Compensation Table
 
 Annual Compensation
              
              Long-Term
                CompensationName
      and
                Principal
                Position
              Year
              Salary
              Bonus
              Securities
                Underlying
                Options
              All
      Other
                CompensationJohn
      D. Thomas
              2008
              $0
              $0
              $0
              $0CEO
              2007
              $0
              $0
              $0
              $0KennethDenos
              2007(1)
              $100,000
              $0
              $0
              $0Former
      CEO
              2006(2)
              $100,000
              $0
              $0
              $0
 (1)
Represents $100,000 in earned but unpaid salary during 2007.
 (2)
Represents $100,000 in earned but unpaid salary during 2006.
 
 
 Aggregated
Option Exercises in Last Fiscal Year and Year End Option Values
 
 Number
      of
                Unexercised
      Options at December 31, 2008
              Value
      of Unexercised
                In-the-Money
      Options
                at
      December 31, 2008(1)Name
              Shares
                Acquired
                On Exercise
              Value
                Realized
              Exercisable/
                Unexercisable
              Exercisable/
                UnexercisableKenneth
      Denos
              0
              0
              1,000,000/0
              0/0Kenneth
      Denos
              0
              0
              9,000,000/0
              0/0
 
 (1)  Based
on the closing sales price of the Common Stock on the NASD Electronic Bulletin
Board on December 31, 2008 of $0.00131.
  ITEM
12:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS.
 
 
 (a)
Security Ownership of Certain Beneficial Owners and Management.
 
 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 23, 2009 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 2008, and (iii) all persons who have served as a director or executive
officer of the Company during the calendar year 2008 as a group.  As
of such date, the Company had 121,321,086 shares of Common Stock
outstanding.  Unless indicated otherwise, the
  33
 Table of Contents
  address
for each officer, director, and 5% shareholder is c/o the Company, 10757 South,
River Front Parkway, South Jordan, Utah 84095.
 
 Common StockDirectors,
      Executive Officers,
                    5% Stockholders
                  Number
                  Percent of  Class(1)John
      D. Thomas(2)
                    Kenneth
      Denos(3)
                  0
                    24,467,953
                  0%
                    20.17%Prestbury
      Investment Holdings Limited(4)
                  25,000,000
                  20.6%Nigel
      Wray(5)
                  25,000,000
                  20.6%Nicholas
      Leslau(6)
                  25,000,000
                  20.6%Gardner
      Management, Inc. Profit Sharing Plan and Trust(7)
                  19,026,607
                  15.68%Moore,
      Clayton & Co., Inc.(8)
                  14,667,953
                  12.09%Todd
      Shell(9)
                  7,500,000
                  6.18%All
      directors and officers as a group
                    (1
      person)
                  0
                  0%
 
 (1) For
each shareholder, the calculation of percentage of beneficial ownership is based
upon 121,321,086 shares of Common Stock outstanding as of March 31, 2008, 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.
 
 (3)
Former Chief Executive Officer, Secretary, and Director of the
Company.  Includes 800,000 shares of Common Stock held directly by Mr.
Denos and 9,000,000 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, and certain promissory notes held by MCC
that are currently convertible into 13,596,524 shares of Common
Stock.
 
 (3)
Principal Shareholder of the Company.  Includes 25,000,000 shares held
directly by Prestbury Investment Holdings Limited (“PIHL”).
 
 (4)
Prinicipal of PIHL and, together with Mr. Nicholas Leslau, the controlling
shareholders of PIHL.  Includes 25,000,000 shares of Common Stock held
directly by PIHL.
 
 (5)
Principal of PIHL and, together with Mr. Nigel Wray, the controlling
shareholders of  PIHL.  Includes 25,000,000 shares of Common
Stock held directly by PIHL.
 
 (6)
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 6,752,712  shares of Common Stock issuable upon the exercise
of a Convertible Promissory Note held by the Trust.
 
 (7)
Principal Shareholder of the Company.  Includes 1,071,429 shares held
directly by MCC and certain promissory notes held by MCC that
are  convertible into 13,596,524 shares of Common Stock.
 
 (8)
Principal Shareholder of the Company.  Includes 5,000,000 shares of
Common Stock held directly by Mr. Shell and 2,500,000 shares of Common Stock
held by Kelli Shell, the wife of Mr. Shell.
  34
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  (b)
Securities Authorized for Issuance Under Equity Compensation Plans.
 
 
 Number
      of securities
                      to
      be issued upon
                      exercise
      of
                      outstanding
      options,
                      warrants
      and rights
                    
                    
                    Weighted-average
                      exercise
      price of
                      outstanding
      options,
                      warrants
      and rights
                    
                    
                    Number
      of securities remaining
                      available
      for future issuance
                      under
      equity compensation
                      plans
      (excluding securities
                      reflected
      in column (a))(a)
                    
                    
                    (b)
                    
                    
                    (c)Equity
      compensation
                      plans
      approved by
                      security
      holders
                    
                    
                    50,000,000
                    
                    
                    $
                    0.011
                    
                    
                    
                    19,400,000Equity
      compensation
                      plans
      not approved by
                      security
      holders
                    
                    
                    0
                    
                    
                    $
                    0
                    
                    
                    
                    0Total
                    
                    
                    50,000,000
                    
                    
                    $
                    0.011
                    
                    
                    
                    19,400,000
 
 (c)
Possible Change of Control.
 
 To reduce the Company’s debts, the
Company may attempt to convert certain of its liabilities into Common Stock
during 2009, depending upon the agreement of various creditors of the
Company.  These liabilities are the result of loans received by the
Company, accrued payroll expense for various employees of the Company, and
operating liabilities incurred but unpaid during the past five
years.  Although the Company will endeavor to obtain the highest
possible conversion price to such liabilities, the collective effect of
converting a substantial amount of this debt may result in a change of control
of the Company in favor of certain of the Company’s larger
creditors.
 
 
 ITEM
13:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
 
 During 2000-2008 and up to the date of
this filing, Kenneth I. Denos, the former Chief Executive Officer of the
Company, made various loans to the Company in his personal capacity and through
a professional corporation controlled by Mr. Denos.  These loans,
aggregating $68,500, were made for working capital purposes, are due upon
demand, and bear interest at the rate of ten percent (10%) per annum until
repaid.
 
 Since May 2000, Kenneth I. Denos, the
Company’s Former Chief Executive Officer, has not been paid a salary for his
services, although his salary payment obligation has been accrued on the books
of the Company.  As of December 31, 2008, such accrued payroll
liability and related expenses totaled $803,098.  Accordingly, the
Company may seek to convert some or all of Mr. Denos’ payroll liability into
stock of the Company, the result of which could be the issuance of a substantial
number of shares of Common Stock and substantial dilution to current
stockholders.
  35
 Table of Contents
  Commencing May 1, 2006, the Company
became a subtenant of Acadia Properties, Inc., an entity controlled by Kenneth
I. Denos, the Company’s Chief Executive Officer.  Acadia Properties
will charge the Company $500 per month for use of its facilities, telephones,
and limited use of office supplies.
 
 ITEM
14:  PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
 Change in Auditors
 
 On or
about January 1, 2009, we were notified that effective January 1, 2009, the
audit partner of Bouwhuis, Morrill & Company, LLC (“BMC”) our auditors,
joined Chisholm, Bierwolf & Nilson, LLC (“CBN”) which became Chisholm,
Bierwolf, Nilson & Morrill, LLC (“CBNM”).  As a result, BMC
resigned as our independent registered public accounting firm and CBNM was
formally engaged as our new independent registered public accounting
firm. The decision to retain CBNM as our certifying public accountant was
authorized and approved by our board of directors.
 
 During
the period from the engagement of the former auditors through the date of the
resignation of the former auditors, including the registrant’s most recent
fiscal year and the subsequent interim period, there were no disagreements with
the former auditors,  whether or not resolved, on any matter of
accounting principles or practices, financial statements disclosure, or auditing
scope or procedure, which, if not resolved to the former auditor’s satisfaction,
would have caused it to make reference to the subject matter of the
disagreement(s) in connection with its report.
 
 The
reports of BMC did not contain any adverse opinion or disclaimer of opinion and
were not qualified or modified as to uncertainty, audit scope or accounting
principles.
 
 Fees Billed For Audit and Non-Audit
Services
 
 The following table represents the
aggregate fees billed for professional audit services rendered to the Company by
Bouwhuis, Morrill & Company, LLC, our current independent auditor, (“BMC”)
for the audit of the Company’s annual financial statements for the years ended
December 31, 2008 and 2007, and all fees billed for other services rendered by
BMC during those periods.
 
 Year Ended December 31
                              
                              2008
                              
                              
                              2007Audit
      Fees(1)
                              
                              
                              7,100
                              
                              
                              
                              7,325Audit-Related
      Fees(2)
                              
                              
                              0
                              
                              
                              
                              0Tax
      Fees(3)
                              
                              
                              0
                              
                              
                              
                              0All
      Other Fees(4)
                              
                              
                              0
                              
                              
                              
                              0Total
      Accounting Fees and Services
                              
                              $
                              7,100
                              
                              
                              $
                              7,325
 
 (1)
Audit Fees. These are fees for professional services for the audit of the
Company’s annual financial statements, and for the review of the financial
statements included in the Company’s filings on Form 10-K, and for services that
are normally provided in connection with statutory and regulatory filings or
engagements. The amounts shown for BMC in 2007 relate to the audit of the
Company’s annual financial statements for the fiscal year ended December 31,
2007. The amounts shown for BMC in 2008 relate to the audit of the
Company’s annual financial statements for the fiscal year ended December 31,
2008.
 
 (2)  Audit-Related
Fees. These are fees for the assurance and related services reasonably related
to the performance of the audit or the review of the Company’s financial
statements.
  36
 Table of Contents
  
 (3)
Tax Fees. These are fees for professional services with respect to tax
compliance, tax advice, and tax planning.
 
 (4)
All Other Fees. These are fees for permissible work that does not fall within
any of the other fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax
Fees.
 
 ITEM
15:  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 
 (a)
              Documents
      Filed as a Part of this Report
 
 (1)
              Financial
      Statements
 
 See
      “Item 8 - Financial Statements Required by Form 10-K
  .”
 
 (2)
              Financial
      Statement Schedules
 
 The
following Financial Statement Schedules of the Company and its subsidiaries,
together with
 the
report of Bouwhuis Morrill & Company, LLC, the Company’s independent
registered public accounting firm, thereon are filed as part of this Report on
Form 10-K as listed below and should be read in conjunction with the
consolidated financial statements of the Company:
 
 Report of Chisholm, Bierwolf, Nilson
& Morrill, LLC, Independent Accountants, on Financial Statement Schedules
for 2008.
 
 Report of Bouwhuis Morrill &
Company, LLC, Independent Accountants, on Financial Statement Schedules fpr
2007.
 
 (3)
              Exhibits
 
 See
      “Index to Exhibits.”
 
 (b)
              Reports
      on Form 8-K
 
 No reports on Form 8-K were filed
during the year ended December 31, 2008.
 
 
 
 
 
  37
 Table of Contents
  INDEX
TO EXHIBITS
 
 
 Exhibit
                  Number
                Title of Document3.1
                Certificate of Incorporation of
      SportsNuts, Inc., a Delaware corporation. (1)3.2
                Bylaws
      of SportsNuts, Inc., a Delaware corporation. (1)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)99.1
                Certification
      by Chief Executive Officer and Chief Financial Officer, John D. Thomas,
      pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.99.2
                Certification
      by Chief Executive Officer and Chief Financial Officer, John D. Thomas,
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.
 
 
 (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 March 17, 2004.
 
 
 
 
 
  38
 Table of Contents
  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 31, 2009
              By:
              /s/
      John D. ThomasJohn
      D. ThomasChief
      Executive Officer