SECURITIES
      AND EXCHANGE COMMISSION





Washington,
      D.C.  20549


______________________


Amendment
      No. 1


To





FORM
      10-KSB





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





For
      the
      fiscal year ended December 31, 2006





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











Check
      whether the issuer is not required
      to file reports pursuant to Section 13 or 15(d) of the Exchange
      Act.  [     ]





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





Check
      if there is no disclosure of
      delinquent filers in response to Item 405 of Regulation S-B is not contained
      in
      this form, and no disclosure will be contained, to the best of the registrant’s
      knowledge, in definitive proxy or information statements incorporated by
      reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.
      [    ]





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
      Company’s revenues for the fiscal
      year ending December 31, 2006 were $335,961.





The
      aggregate market value of the
      Company’s voting stock held by non-affiliates computed by reference to the
      closing price as quoted on the NASD Electronic Bulletin Board on March 1, 2007,
      was approximately $200,000.  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 1, 2007, the Company had outstanding 121,321,086
      shares of common stock, par value $0.002 per share.








DOCUMENTS
      INCORPORATED BY
      REFERENCE





None.








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








AMENDMENT
      NO. 1 EXPLANATION




This
      amendment to t he Company ’s Form 10-KSB for the fiscal year ended December 31,
      2006 amends the certifications pursuant to Sections 906 and 302 of the
      Sarbanes-Oxley Act of 2002. Furthermore, corrections to the disclosure notes
      following the financial statements have been amended. No changes have been
      made
      to the financial statements of SportsNuts, Inc., herein.





























TABLE
      OF CONTENTS


PART
                I.
            1ITEM
                1:  DESCRIPTION OF
                BUSINESS
            1ITEM
                2:  DESCRIPTION OF
                PROPERTY
            10ITEM
                3:  LEGAL
                PROCEEDINGS
            10ITEM
                4:  SUBMISSION ON
                MATTERS TO A VOTE OF SECURITY HOLDERS
            10PART
                II.
            11ITEM
                5:  MARKET FOR
                COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
            11ITEM
                6:  MANAGEMENT’S
                DISCUSSION AND ANALYSIS
            12ITEM
                7:  FINANCIAL
                STATEMENTS
            16ITEM
                8: CHANGES IN AND
                DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                DISCLOSURE
            33ITEM
                8A: CONTROLS AND
                PROCEDURES
            33ITEM
                8B: OTHER
                INFORMATION
            33PART
                III
            33ITEM
                9:   DIRECTORS, OFFICERS, PROMOTERS AND CONTROL PERSONS;
                COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
            33ITEM
                10:  EXECUTIVE
                COMPENSATION
            35ITEM
                11:  SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANGEMENT AND RELATED
                STOCKHOLDER MATTERS
            36ITEM
                12:  CERTAIN
                RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
                INDEPENDENCE
            37ITEM
                13:  EXHIBITS
            38ITEM
                14:  PRINCIPAL
                ACCOUNTANT FEES AND SERVICES
            39INDEX
                TO
                EXHIBITS
            40SIGNATURES
            41

















FORWARD
                LOOKING
                STATEMENTS





THIS
      ANNUAL REPORT ON FORM 10-KSB, IN
      PARTICULAR “ITEM 6. 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
      1.  DESCRIPTION OF BUSINESS.”





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





PART
      I.





ITEM
      1:  DESCRIPTION OF
      BUSINESS





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





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





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





1





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.





Dependence
      on Key
      Personnel.  The Company’s success depends, in large part, upon
      the talents and skills of its management and key personnel.  Kenneth
      Denos, the Chief Executive Officer of the Company, has deferred his entire
      salary since the second quarter of 2000, and has since provided legal and
      consulting services to various of his clientele to supplement his
      income.  As a result, Mr. Denos has not been able to devote his full
      time and attention to the activities of the Company and will be unable to do
      so
      until the Company is able to pay him a full salary on a regular
      basis.   In addition, to the extent that any of the Company’s key
      personnel are unable or refuse to continue their association with the Company,
      a
      suitable replacement would have to be found.  There is no assurance
      that the Company would be able to find suitable replacements for its existing
      management personnel or technical personnel or that such replacements could
      be
      obtained for an amount affordable to the Company.





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
      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


2


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 2006, 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 requried to change its name,
      it could lose all goodwill associated with the “SportsNuts” mark.  In
      addition, future products and services offered by the Company may need to be
      marketed under different names if the mark “SportsNuts” causes confusion with
      another trade name being used by another company.  The Company could
      also incur substantial costs to defend any legal action taken against the
      Company pursuant to a trademark or service mark dispute.   If any
      legal action against the Company, its asserted trademarks, or service marks
      should be found to infringe upon intellectual property rights of a third party,
      the Company could be enjoined from further infringement and could be required
      to
      pay damages.  In the event a third party were to sustain a valid claim
      against the Company, and in the event a required license were not available
      on
      commercially reasonable terms, the Company’s financial operations and results of
      operations could be materially adversely affected.  Litigation, which
      could result in substantial cost to and diversion of resources of the Company,
      may also be necessary to enforce intellectual property rights of the Company
      or
      to defend the Company against claimed infringements of the rights of
      others.





Investment
      Risks





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





Likely
      Change of
      Control.During 2007, 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 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


3


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 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.


4





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





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





5








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 Networks,
      Inc., its wholly-owned subsidiary.  On that date, the Company spun-off
      the shares of Secure Networks on a pro-rata basis to its shareholders such
      that
      Secure Networks 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 its
      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


6





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





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





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





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


7


resources
      necessary to improve the quality of the instructional
      environment.  Finally, youth sports are constantly in need of funding
      for equipment, facilities, and transportation.





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





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





Parents/Adult
      Recreation
      Sports.  The Company estimates that the 32 million children and
      teens participating in amateur sports will have at least one non-participant
      supporter, most likely a parent.  Although most youth and high school
      athletes have more than one parent who follows their activities, many parents
      with children who play sports typically have more than one child participating
      in organized amateur sports.  Many of these adults also participate in
      recreational sports themselves.  The Company 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 2006, 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,


8


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 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 1, 2007, 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


9


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
      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 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.
  10


PART
      II.






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




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


(1)           
        Market Information.
  The
      Company’s
      Common Stock is listed on the NASD Electronic Bulletin Board (“Bulletin Board”)
      under the symbol “SPCI.”  The Company’s stock has been traded on the
      Bulletin Board since approximately January, 1997.  As of March 1,
      2006, 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,
      2006:





High
            
            Low


Fourth
                Quarter 2006
            $
                0.0046
            $
                0.0023Third
                Quarter 2006
            $
                0.0121
            $
                0.0021Second
                Quarter 2006
            $
                0.0057
            $
                0.0028First
                Quarter 2006
            $
                0.0092
            $
                0.004





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, 2005:





High
            
            Low


Fourth
                Quarter 2005
            $
                0.0064
            $
                0.0045Third
                Quarter 2005
            $
                0.011
            $
                0.005Second
                Quarter 2005
            $
                0.065
            $
                0.0085First
                Quarter 2005
            $
                0.035
            $
                0.003




(2)           
        Holders.




As
      of March 1, 2007, 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.


11


(b)
        Recent
        Sales of Unregistered Securities.
  As
      of
      December 31, 2006, the Company had outstanding 18,150,000 common stock purchase
      options granted to various officers, directors, employees, and service providers
      of the Company pursuant to the Company’s 2000 Stock Option Plan
      (“Plan”).  The Company believes that the options granted under the
      Plan are exempt from registration under the Securities Act of 1933 pursuant
      to
      Section 4(2) of such Act.





During
      2000-2005 and continuing into 2007, Kenneth Denos, the Company’s Chief Executive
      Officer, made various cash loans to the Company totaling $88,000 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 2007, the Company has accrued payroll and other
      expenses owed to Kenneth Denos, the Company’s Chief Executive Officer, and other
      employees of the Company totaling $1,061,318 in the aggregate.  These
      accruals are unsecured obligations of the Company and the Company has issued
      each person to whom service-based compensation is owed a promissory note
      representing such payments.  Interest has accrued on these notes
      commencing January 1, 2006 at the rate of eight percent (8%) per
      annum.




ITEM
        6:  MANAGEMENT’S DISCUSSION AND ANALYSIS OF
        FINANCIAL


CONDITION AND RESULTS OF OPERATIONS




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





Overview





SportsNuts
      is a sports management and
      marketing company, with a focus on community-based amateur athletics, providing
      unique solutions to the challenges faced by athletes and the organizations
      in
      which they participate.  The Company helps organize and manage 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.


12





The
      Company previously provided
      computer hardware and related software sales through Secure Networks, Inc.,
      the
      Company’s wholly-owned subsidiary (“Secure Networks”).  On March 1,
      2007, Secure Networks 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 2006 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.





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, 2006 and 2005.





Revenues.  The
      Company generated net revenues of $335,961 during the year ended December 31,
      2006, which represents a 47% decrease compared to $638,525 in net revenues
      during the year 2005.  The decrease is mainly the result of 4 large
      sales of computer hardware by Secure Netwerks which were associated with
      equipment leases during 2005.  These transactions contributed
      approximately $227,000 in revenues during the year ended December 31,
      2005.  Although Secure Netwerks continues to pursue equipment leases,
      nothing that large materialized during 2006.  Along with event
      administration, other sources of revenue were the sales of the Company’s online
      services, information technology consulting, and computer hardware
      sales.  Following the spin-off of Secure Networks 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.


13





Cost
      of Sales.  Cost
      of sales for the year ended December 31, 2006 were $288,247, a 40% decrease
      from
      $480,842 during the year 2005.  This decrease correlates to the
      decrease in revenues but the percentage change is lower due to the change in
      sales mix.  The sales of computer hardware during the year 2006 were
      $258,376 compared to $419,575 during 2005.  Hardware sales do not
      yield as high a margin as other products offered by the Company thus
      contributing to the increased cost of sales percentage.  Cost of sales
      were 86% of revenues in 2006 compared to 75% in 2005.  The Company
      anticipates that cost of sales will decrease in 2007 as a result of the spin-off
      of Secure Networks, 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, 2006 were $170,190, a 34% decrease from $259,339 during the year
      2005.  Management continues to make a concerted effort to decrease
      certain costs associated with personnel salaries and benefits and contract
      labor.  Payroll expense accounted for approximately $147,329 of
      salaries and consulting expenses during 2006, as compared to $251,508 during
      2005.





Professional
      Fees.  Professional fees for the year ended December 31, 2006
      were $27,375, a 12% decrease from $31,098 during 2005.  This decrease
      was primarily attributable to legal fees incurred during 2005 related to
      negotiations with various vendors.  Contributing to professional fees
      in 2006 was the legal and accounting fees associated with the planned spin-off
      of Secure Netwerks





Selling,
      General and Administrative
      Expenses.Selling, general and administrative expenses were
      $99,314 for the year ended December 31, 2006, as compared to $258,464 during
      2005, a decrease of 62%.  The main reason for the decrease is due to
      the change in one of the largest expense categories in general and
      administrative expenses, rent and utilities expense, which went from $71,282
      in
      2005 to $24,470 in 2006.  This anticipated decrease will be offset in
      the future by increased product development expenses related to the Company’s
      Internet services which 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.





Other
      Income
      (Expense).  The Company had net other income of $58,458 for the
      year ended December 31, 2006 compared to net other income of $712,555 during
      2005.  The income was attributable primarily from the write off of
      certain debts of the Company which amounted to $236,608 in 2006 compared to
      $740,640 in 2005.  Other 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, 2006, the Company’s
      primary source of liquidity consisted of $13,334 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, 2006
      of
      $23,448,044 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, 2006 of $190,707 compared to net income in 2005 of $321,337. The net income
      in 2005 was mainly the result of the write off of certain large debts of the
      Company which will not occur in the future.  The Company anticipates a
      net loss for the year ended December 31, 2007 and with the expected cash
      requirements for the coming months, without additional




14




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.





15








ITEM
        7: FINANCIAL STATEMENTS REQUIRED BY FORM 10-KSB

















CONTENTS





Report
                of Independent Registered Public Accounting Firm
            17Consolidated
                Balance Sheet
            18Consolidated
                Statements of Operations
            19Consolidated
                Statements of Stockholders’ Deficit
            20Consolidated
                Statements of Cash Flows
            21Notes
                to the Consolidate Financial Statements
            23












































16


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, 2006 and the related consolidated statements
      of
      operations, stockholders' deficit and cash flows for the years ended December
      31, 2006 and 2005.  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, 2006 and the consolidated results
      of
      their operations and their cash flows for the years ended December 31, 2006
      and
      2005 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
      23,
      2007





17


SPORTSNUTS,
                  INC. AND
                  SUBSIDIARIESConsolidated
                  Balance
                  SheetASSETSDecember
                  31,2006CURRENT
                  ASSETSCash
                  and cash
                  equivalents
              
              $
              13,334Accounts
                  receivable,
                  net
              
              
              37,957Advances
                  due from related party
                  (Note 8)
              
              
              6,949Prepaid
                  expenses
              
              
              5,027Total
                  Current
                  Assets
              
              
              63,267PROPERTY
                  AND EQUIPMENT -
                  NET
              
              
              1,138TOTAL
                  ASSETS
              
              $
              64,405LIABILITIES
                  AND STOCKHOLDERS'
                  DEFICITCURRENT
                  LIABILITIESAccounts
                  payable
              
              $
              32,257Due
                  to related parties (Note
                  8)
              
              
              160,123Accrued
                  expenses
              
              
              1,683,225Line
                  of credit
                  payable
              
              
              18,713Notes
                  payable (Note
                  3)
              
              
              55,850Notes
                  payable - related parties
                  (Note 2)
              
              
              715,682Total
                  Current
                  Liabilities
              
              
              2,665,850STOCKHOLDERS'
                  DEFICITCommon
                  stock, $0.002 par value;
                  200,000,000 sharesauthorized,
                  121,674,854
                  shares issued and outstanding,respectively
              
              
              243,350Additional
                  paid-in
                  capital
              
              
              20,764,999Stock
                  subscriptions
                  receivable
              
              
              (161,750
              )Accumulated
                  deficit
              
              
              (23,448,044
              )Total
                  Stockholders'
                  Deficit
              
              
              (2,601,445
              )TOTAL
                  LIABILITIES AND
                  STOCKHOLDERS' DEFICIT
              
              $
              64,405


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


18





SPORTSNUTS,
                  INC. AND
                  SUBSIDIARIESConsolidated
                  Statements of
                  OperationsFor
                  the Years
                  EndedDecember
                  31,2006
              
              
              2005NET
                  SALES
              
              $
              335,961
              
              
              $
              638,525COST
                  OF
                  SALES
              
              
              288,247
              
              
              
              480,842GROSS
                  MARGIN
              
              
              47,714
              
              
              
              157,683OPERATING
                  EXPENSESSalaries
                  and
                  consulting
              
              
              170,190
              
              
              
              259,339Professional
                  fees
              
              
              27,375
              
              
              
              31,098Selling,
                  general and
                  administrative
              
              
              99,314
              
              
              
              258,464Total
                  Operating
                  Expenses
              
              
              296,879
              
              
              
              548,901LOSS
                  FROM
                  OPERATIONS
              
              
              (249,165
              )
              
              
              (391,218
              )OTHER
                  INCOME
                  (EXPENSES)Interest
                  expense
              
              
              (153,599
              )
              
              
              (131,951
              )Impairment
                  of
                  goodwill
              
              
              (52,696
              )
              
              
              -Interest
                  income
              
              
              5,103
              
              
              
              5,246Gain
                  on settlement of
                  debt
              
              
              236,608
              
              
              
              740,640Other
                  income
              
              
              23,042
              
              
              
              98,620Total
                  Other Income
                  (Expenses)
              
              
              58,458
              
              
              
              712,555INCOME
                  (LOSS) BEFORE INCOME
                  TAXES
              
              
              (190,707
              )
              
              
              321,337INCOME
                  TAX
                  EXPENSE
              
              
              -
              
              
              
              -NET
                  INCOME
                  (LOSS)
              
              $
              (190,707
              )
              
              $
              321,337BASIC
                  AND
                  DILUTED:Net
                  income (loss) per common
                  share
              
              $
              (0.00
              )
              
              $
              0.00Weighted
                  average shares
                  outstanding
              
              
              121,674,854
              
              
              
              119,757,046
   The
      accompanying notes are an integral part of these consolidated financial
      statements.


19




SPORTSNUTS,
                  INC. AND
                  SUBSIDIARIESConsolidated
                  Statements of
                  Stockholders' DeficitAdditional
              
              
              Stock
              
              
              
              
              
              TotalCommon
                  Stock
              
              
              Paid-in
              
              
              Subscriptions
              
              
              Accumulated
              
              
              Stockholders'Shares
              
              
              Amount
              
              
              Capital
              
              
              Receivable
              
              
              Deficit
              
              
              DeficitBalance,
                  December 31,
                  2004
              
              
              111,674,854
              
              
              $
              223,350
              
              
              $
              20,656,267
              
              
              $
              (61,750
              )
              
              $
              (23,578,674
              )
              
              $
              (2,760,807
              )Stock
                  options compensation
                  expense
              
              
              -
              
              
              
              -
              
              
              
              28,732
              
              
              
              -
              
              
              
              -
              
              
              
              28,732Exercise
                  of stock
                  options
              
              
              10,000,000
              
              
              
              20,000
              
              
              
              80,000
              
              
              
              (100,000
              )
              
              
              -
              
              
              
              -Net
                  income for year
                  endedDecember
                  31,
                  2005
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              321,337
              
              
              
              321,337Balance,
                  December 31,
                  2005
              
              
              121,674,854
              
              
              
              243,350
              
              
              
              20,764,999
              
              
              
              (161,750
              )
              
              
              (23,257,337
              )
              
              
              (2,410,738
              )Net
                  loss for the year
                  endedDecember
                  31,
                  2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (190,707
              )
              
              
              (190,707
              )Balance,
                  December 31,
                  2006
              
              
              121,674,854
              
              
              $
              243,350
              
              
              $
              20,764,999
              
              
              $
              (161,750
              )
              
              $
              (23,448,044
              )
              
              $
              (2,601,445
              )


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


20


SPORTSNUTS,
                  INC. AND
                  SUBSIDIARIESConsolidated
                  Statements of Cash
                  FlowsFor
                  the Years
                  EndedDecember
                  31,2006
              
              
              2005CASH
                  FLOWS FROM OPERATING
                  ACTIVITIES:Net
                  income
                  (loss)
              
              $
              (190,707
              )
              
              $
              321,337Adjustments
                  to reconcile net
                  income (loss) to netcash
                  used by operating
                  activities:Depreciation
              
              
              10,573
              
              
              
              41,028Warrants/options
                  issued below
                  market value
              
              
              -
              
              
              
              28,732Gain
                  on settlement of
                  debt
              
              
              (236,608
              )
              
              
              (740,640
              )Impairment
                  of
                  goodwill
              
              
              52,696
              
              
              
              -Changes
                  in operating assets and
                  liabilities:Accounts
                  receivable
              
              
              19,626
              
              
              
              91,021Advances
                  due from related
                  party
              
              
              15,263
              
              
              
              (2,336
              )Other
                  current
                  assets
              
              
              5,591
              
              
              
              (3,388
              )Accounts
                  payable and accrued
                  expenses
              
              
              262,351
              
              
              
              131,510Due
                  to related
                  parties
              
              
              6,412
              
              
              
              22,761Net
                  Cash Used by Operating
                  Activities
              
              
              (54,803
              )
              
              
              (109,975
              )CASH
                  FLOWS FROM INVESTING
                  ACTIVITIES:
              
              
              -
              
              
              
              -CASH
                  FLOWS FROM FINANCING
                  ACTIVITIES:Change
                  in line of credit
                  payable
              
              
              (10,058
              )
              
              
              199Proceeds
                  from notes
                  payable
              
              
              -
              
              
              
              55,850Proceeds
                  from notes payable -
                  related parties
              
              
              11,492
              
              
              
              106,524Net
                  Cash Provided by Financing
                  Activities
              
              $
              1,434
              
              
              $
              162,573NET
                  INCREASE (DECREASE) IN CASH
                  AND CASH EQUIVALENTS
              
              $
              (53,369
              )
              
              $
              52,598CASH
                  AND CASH EQUIVALENTS,
                  BEGINNING OF PERIOD
              
              
              66,703
              
              
              
              14,105CASH
                  AND CASH EQUIVALENTS, END OF
                  PERIOD
              
              $
              13,334
              
              
              $
              66,703





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


21


SPORTSNUTS,
                  INC. AND
                  SUBSIDIARIESConsolidated
                  Statements of Cash
                  Flows (Continued)For
                  the Years
                  EndedDecember
                  31,2006
              
              
              2005SUPPLEMENTAL
                  CASH FLOW
                  INFORMATIONCash
                  Payments
                  For:Interest
              
              $
              5,909
              
              
              $
              5,574Income
                  taxes
              
              $
              -
              
              
              $
              -Non-cash
                  investing and financing
                  activities:Common
                  stock issued for stock
                  subscriptions receivable
              
              $
              -
              
              
              $
              100,000




























































































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


22
 SPORTSNUTS,
            INC. AND SUBSIDIARIES
 Notes
            to
            the Consolidated Financial Statements
 December
            31, 2006 and 2005


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.





During
      February 2004, the Company acquired Secure Networks, Inc. from an individual
      for
      2,500,000 shares of SportsNuts, Inc.’s common stock making it a wholly owned
      subsidiary.  Goodwill of $52,696 was recognized as a result of this
      acquisition.  As of December 31, 2006, we have determined that there
      has been an impairment of goodwill and the entire amount has been written
      off.





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.


23
 SPORTSNUTS,
            INC. AND SUBSIDIARIES
 Notes
            to
            the Consolidated Financial Statements
 December
            31, 2006 and 2005


NOTE
                1 -
            ORGANIZATION
                AND SIGNIFICANT ACCOUNTING POLICIES (Continued)





d.
            Property
                and Equipment




Property
        and equipment are stated at cost. Expenditures for ordinary maintenance and
        repairs are charged to operations as incurred. Major additions and improvements
        are capitalized. Depreciation is computed using the straight-line and
        accelerated methods over estimated useful lives as follows:


Computer
                  hardware
              3
                  yearsComputer
                  software
              3
                  yearsOffice
                  equipment
              7
                  years




Depreciation
      expense for the years ended December 31, 2006 and 2005 was $10,573 and $41,028,
      respectively.





e.
            Accounts
                Receivable





Accounts
                receivable are recorded net of the allowance for doubtful accounts
                of
                $3,938 as of December 31, 2006.





f.
            Revenue
                Recognition





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





g.
            Estimates





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





h.
            Advertising





The
                Company follows the policy of charging the costs of advertising to
                expense
                as incurred. Advertising expense is included in selling and marketing
                expenses in the consolidated statements of operations. Advertising
                expense for the years ended December 31, 2006 and 2005 was $4,395
                and
                $4,545, respectively.





i.
            Goodwill





Based
                on SFAS No. 142, the Company has determined that the goodwill of
                $52,696
                associated with the acquisition of Secure Networks has been impaired
                and
                was written off as of December 31, 2006.


24
 SPORTSNUTS,
            INC. AND SUBSIDIARIES
 Notes
            to
            the Consolidated Financial Statements
 December
            31, 2006 and 2005


NOTE
                1 -
            ORGANIZATION
                AND SIGNIFICANT ACCOUNTING POLICIES (Continued)





j.
            Basic
                Net Loss Per Share





For
                the Years Ended
              December
                31,2006
            
            
            2005Basic
                net income (loss) per share:Income
                (Loss) (numerator)
            
            $
            (190,707
            )
            
            $
            321,337Shares
                (denominator)
            
            
            121,674,854
            
            
            
            119,757,046Per
                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 income (loss) per common
                share.





k.
            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, 2006.





At
      December 31, 2006 the Company had net operating loss carryforwards of
      approximately $14,000,000 that may be offset against future taxable income
      through 2026.  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.





l.
            Research
                and Development





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





m.
            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.


25
 SPORTSNUTS,
            INC. AND SUBSIDIARIES
 Notes
            to
            the Consolidated Financial Statements
 December
            31, 2006 and 2005


NOTE
                1 -
            ORGANIZATION
                AND SIGNIFICANT ACCOUNTING POLICIES (Continued)





n.
            Gain
                on Settlement of Debt





The
                gain on settlement of debt arises from the write-off of certain old
                accounts and notes payable by the Company pursuant to a legal opinion
                from
                the Company’s attorney and CEO.  The Company is continuing to
                negotiate with additional creditors to settle other old accounts
                payable
                at a discount.  The gain on settlement of debt associated with
                these write-offs amounted to $236,608 and $740,640, respectively
                at
                December 31, 2006 and 2005.





o.
            Line
                of Credit





The
                company has one line of credit outstanding at December 31, 2006.
                Following
                are the details of the line of credit:





Line
                of credit is due on demandAvailable
                credit line
            
            $
            34,000Interest
                rate
            
            
            18
            %Balance
                outstanding at December 31, 2006
            
            $
            18,713





p.
            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.





q.
            Accrued
                Expenses





Accrued
      expenses consisted of the following at December 31, 2006:





Accrued
                compensation
            
            $
            1,105,212Accrued
                interest
            
            
            527,307Other
                accrued expenses
            
            
            50,706Total
                accrued expenses
            
            $
            1,683,225





r.
            Recent
                Accounting Pronouncements





In
      February, 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No. 155, Accounting for
      Certain Hybrid Financial Instruments.  SFAS No. 155 eliminates
      the temporary exemption of bifurcation requirements to securitized financial
      assets, contained in SFAS No. 133, Accounting for Derivative
      Instruments and Hedging Activities.  As a result, similar
      financial instruments are accounted for similarly regardless of the form of
      the
      instruments.  In addition, in instances where a derivative would
      otherwise have to bifurcated, SFAS No. 155 allows a preparer on an
      instrument-by-instrument basis to elect fair value measurement at acquisition,
      at issuance, or when a previously recognized financial instrument is subject
      to
      remeasurement.  The adoption of SFAS No. 155 has not materially
      affected the Company’s reported loss, financial condition or cash
      flows.





In
      March,
      2006, the FASB issued SFAS No. 156, Accounting for Servicing
      of
      Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers
      and
      Servicing of Financial Assets and Extinguishments of
      Liabilities.  The pronouncement establishes standards whereby
      servicing assets and servicing liabilities are initially measured at fair value,
      where


26
 SPORTSNUTS,
            INC. AND SUBSIDIARIES
 Notes
            to
            the Consolidated Financial Statements
 December
            31, 2006 and 2005





NOTE
                1 -
            ORGANIZATION
                AND SIGNIFICANT ACCOUNTING POLICIES (Continued)





r.
            Recent
                Accounting Pronouncements (Continued)





applicable.  In
      addition, SFAS No. 156 allows subsequent measurement of servicing assets and
      liabilities at fair value, and where applicable, derivative instruments used
      to
      mitigate risks inherent with servicing assets and liabilities are likewise
      measured at fair value.  The adoption of SFAS No. 156 has not
      materially affected the Company’s reported loss, financial condition, or cash
      flows.





In
      March,
      2006, the FASB issued Interpretation No. 48, (“FIN 48”) Accounting for Uncertainty
      in Income
      Taxes, an interpretation of SFAS No. 109, Accounting for Income
      Taxes.  FIN 48 prescribes criteria for the recognition and
      measurement of a tax position taken or expected to be taken in a tax
      return.  Accordingly, tax positions are analyzed to determine whether
      it is more likely than not they will be sustained when examined by the
      appropriate tax authority.  Positions that meet the
      more-likely-than-not criteria are measured to determine the amount of benefit
      to
      be recognized, whereas those positions that do not meet the more-likely-than-not
      criteria are derecognized in the financial statements.  The adoption
      of FIN 48 has not materially affected the Company’s reported loss, financial
      condition, or cash flows.





In
      September, 2006, the FASB issued SFAS No. 157, Fair Value
      Measurements.  The statement defines fair value, determines
      appropriate measurement methods, and expands disclosure requirements about
      those


measurements.  The
      adoption of SFAS No. 157 has not materially affected the Company’s reported
      loss, financial condition, or cash flows.





In
      September, 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans.  This statement
      requires an employer to recognize the overfunded or underfunded status of a
      defined benefit postretirement plan as an asset or liability in its statement
      of
      financial position and to recognize changes in that funded status in the year
      of
      change through comprehensive income.  In addition, SFAS No. 158
      requires an employer to measure the funded status of a plan as of the date
      of
      its year-end statement of financial position.   The adoption of
      SFAS No. 158 has not materially affected the Company’s reported loss, financial
      condition, or cash flows.


27
 SPORTSNUTS,
            INC. AND SUBSIDIARIES
 Notes
            to
            the Consolidated Financial Statements
 December
            31, 2006 and 2005




NOTE 2
                -
            ORGANIZATION
                AND SIGNIFICANT ACCOUNTING POLICIES (Continued)




Notes
                  payable – related parties consisted of the following:
              
              December
                  31,
                2006Note
                  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
              
              $
              450,000Note
                  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.
              
              
              20,000Notes
                  payable to related individuals, unsecured,
                Interest
                  at 10%, due on demand.
              
              
              192,916Notes
                  payable to a related individual, unsecured,
                Interest
                  at 13%, due on demand.
              
              
              21,500Notes
                  payable to a related individual, unsecured,
                Interest
                  at 24%, due on demand.
              
              
              31,266Total
                  notes payable – related parties
              
              
              715,682Less:
                  current portion
              
              
              (715,682
              )Long-term
                  notes payable – related parties
              
              $
              -


Maturities
                of notes payable – related parties are as follows:Year
                Ending
              December
                31,
            
            Amount2007
            
            $
            715,682Total
            
            $
            715,682







28
 SPORTSNUTS,
            INC. AND SUBSIDIARIES
 Notes
            to
            the Consolidated Financial Statements
 December
            31, 2006 and 2005




NOTE 3
                -
            NOTES
                PAYABLE





Notes
                payable consisted of the following:December
                31,
              2006Notes
                payable to individuals, unsecured, interest
              At
                10%, due on demand.
            
            $
            48,750Note
                payable to a company, unsecured, interest
              At
                10%, due on demand.
            
            
            7,100Total
                notes payable
            
            
            55,850Less:
                current portion
            
            
            (55.850
            )Long-term
                notes payable
            
            $
            -





Maturities
                of notes payable are as follows:Year
                Ending
              December
                31,
            
            Amount2007
            
            $
            55,850Total
            
            $
            55,850





NOTE 4
                -
            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 has recorded a stock subscription
                receivable of $100,000 as payment which has not yet been received.




NOTE 5
                -
            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 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
      2006.




29
 SPORTSNUTS,
            INC. AND SUBSIDIARIES
 Notes
            to
            the Consolidated Financial Statements
 December
            31, 2006 and 2005




NOTE 5
                -
            OPTIONS
                AND WARRANTS (Continued)





Employee
      Stock
      Options





The
      following tables summarize the information regarding employee stock options
      at
      December 31, 2006:





Outstanding
                at December 31, 2006
            
            
            18,150,000Granted
            
            
            -Expired
            
            
            1,400,000Exercised
            
            
            -Options
                outstanding at December 31, 2006
            
            
            16,750,000Weighted
                average exercise price of options
              Outstanding
                at December 31, 2006
            
            $
            0.01





Exercise
              Prices
            
            
            Number
                of
              Options
              Outstanding
              December
                31,
              2006
            
            
            Weighted
              Average
              Remaining
              Contractual
              Life
                (Yrs)
            
            
            Weighted
              Average
              Exercise
              Price
            
            
            Number
                of
              Options
              Exercisable
                at December 31,
              2006
            
            
            Weighted
              Average
              Exercise
              Price$
            0.005
            
            
            
            8,750,000
            
            
            
            1.83
            
            
            $
            0.005
            
            
            
            8,750,000
            
            
            $
            0.005$
            0.020
            
            
            
            8,000,000
            
            
            
            0.25
            
            
            $
            0.020
            
            
            
            8,000,000
            
            
            $
            0.020







NOTE
                6 -
            OPERATING
                LEASES




The
                Company leased two (2) different facilities under non-cancelable
                operating
                leases expiring in 2005. Rental expense for the years ended December
                31,
                2006 and 2005 was $24,470 and $55,070, respectively.





NOTE
                7 -
            GOING
                CONCERN





The
                accompanying financial statements have been prepared assuming that
                the
                Company will continue as a going concern, which contemplates the
                realization of assets and satisfaction of liabilities in the normal
                course
                of business. The Company has sustained significant net losses which
                have
                resulted in an accumulated deficit at December 31, 2006 of approximately
                $23,400,000, 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, 2007 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


30
 SPORTSNUTS,
            INC. AND SUBSIDIARIES
 Notes
            to
            the Consolidated Financial Statements
 December
            31, 2006 and 2005


December
        31, 2007 and with the expected cash requirements for the coming year, there
        is
        substantial doubt as to the Company’s ability to continue
        operations.
 
 The
                  Company believes these conditions have resulted from the inherent
                  risks
                  associated with small startup technology-oriented companies. Such
                  risks
                  include, but are not limited to, the ability to (i) generate revenues
                  and
                  sales of its products and services at levels sufficient to cover
                  its costs
                  and provide a return for investors, (ii) attract additional capital
                  in
                  order to finance growth, (iii) further develop and successfully
                  market
                  commercial products and services, and (iv) successfully compete
                  with other comparable companies having financial, production and
                  marketing
                  resources significantly greater than those of the Company.




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




NOTE 8
                -
            RELATED
                PARTY TRANSACTIONS




From
                time to time, the Company makes advances to a related company. These
                advances are short term in nature and due on demand. The balance
                receivable at December 31, 2006 was $6,949.





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
                balance
                due at December 31, 2006 was $160,123.




NOTE 9
                -
            SEGMENT
                REPORTING




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







The
                policies applied to determine the segment information are the same
                as
                those described in the summary of significant accounting policies
                (Note
                1). All significant intersegment transactions have been eliminated
                in the
                consolidated financial statements. Financial information as of and
                for the
                year ended December 31, 2006 with respect to the reportable segments
                is as
                follows:





Online
              Services
            
            
            Sports
                Event
              Management
            
            
            Information
              Technology
              ConsultingCash
            
            $
            3,204
            
            
            $
            490
            
            
            $
            9,640Fixed
                assets, net
            
            
            -
            
            
            
            982
            
            
            
            156Total
                assets
            
            
            4,212
            
            
            
            8,421
            
            
            
            51,772Total
                liabilities
            
            
            2,404,173
            
            
            
            18,713
            
            
            
            242,964Revenues
            
            
            16,059
            
            
            
            17,920
            
            
            
            301,982Cost
                of goods sold
            
            
            8,513
            
            
            
            9,343
            
            
            
            280,391Other
                income (expense)
            
            
            77,537
            
            
            
            (886
            )
            
            
            (18,193
            )Segment
                profit (loss) before tax effect
            
            
            (98,736
            )
            
            
            (11,994
            )
            
            
            (79,977
            )






31










Financial
                information as of and for the year ended December 31, 2005 with respect
                to
                the reportable segments is as follows:




Online
              Services
            
            Sports
                Event
              Management
            
            Information
              Technology
              ConsultingCash
            
            $
                1,637
            
            $
                1,598
            
            $
                63,468Fixed
                assets, net
            
            8,800
            
            1,819
            
            1,092Total
                assets
            
            67,243
            
            35,899
            
            118,381Total
                liabilities
            
            2,372,268
            
            37,797
            
            222,196Revenues
            
            22,685
            
            140,396
            
            475,444Cost
                of goods sold
            
            11,616
            
            93,641
            
            375,585Other
                income (expense)
            
            729,627
            
            (4,028)
            
            (13,044)Segment
                profit (loss) before tax effect
            
            343,108
            
            (8,629)
            
            (13,142)





32


ITEM8:CHANGES
      IN AND DISAGREEMENTS
      WITH ACCOUNTANTS





None





ITEM
      8A:  CONTROLS AND
      PROCEDURES





The
      Company's principal executive officer and principal financial officer, based
      on
      their evaluation of the Company's disclosure controls and procedures (as defined
      in Rules 13a-14 (c) and 15d-14(c) of the Securities Exchange Act of 1934) as
      of
      December 31, 2006 have concluded that the Company's disclosure controls and
      procedures are adequate and effective to ensure that material information
      relating to the Company and its consolidated subsidiaries are recorded,
      processed, summarized and reported within the time periods specified by the
      SEC's rules and forms, particularly during the period in which this annual
      report has been prepared.





The
      Company's principal executive officer and principal financial officer have
      concluded that there were no significant changes in the Company's internal
      controls or in other factors that could significantly affect these controls
      for
      the year ended December 31, 2006, the date of their most recent evaluation
      of
      such controls, and that there were no significant deficiencies or material
      weaknesses in the Company's internal controls.





ITEM
      8B:  OTHER
      INFORMATION





None








PART
      III




ITEM
      9:  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND
      CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
      ACT.


Pursuant
      to
      the Company's Delaware Certificate of Incorporation and Bylaws, the Company's
      Board of Directors (the "Board") has been divided into three classes, with
      only
      a single class subject to re-election each year.  The initial
      re-election of the Board under this procedure requires the directors to be
      nominated to serve a one-, two-, or three-year term.  Thereafter, any
      director, whether elected or re-elected, will serve a three-year
      term.  Each of the Company’s eight directorships has been
      divided  into one of these three classes, with one class containing
      two directorships and two classes containing three
      directorships.  Kenneth I. Denos, age 39, is the Chief Executive
      Officer of the Company and currently the only executive officer of the Company
      and the only member of the Board of Directors.  A short summary of Mr.
      Denos’ business experience is below.  His term of office will expire
      at the next annual shareholders meeting.  No annual shareholders’
meeting is planned for the year 2006.





Kenneth
      Denos, age 39, has
      worked with SportsNuts since November, 1998, and has served as the Company’s
      Chief Executive Officer, General Counsel, Secretary, and a member of the Board
      of Directors since April, 1999.  Mr. Denos also serves on the Board of
      Directors of Moore, Clayton & Co.,


33


Inc.,
      an
      international strategic and advisory firm with offices in Los Angeles, Houston,
      Salt Lake City, San Francisco, New York City, South Africa, and
      London.  Mr. Denos is an executive officer of Equus II Incorporated
      (NYSE: EQS), a business development company based in Houston and traded on
      the
      New York Stock Exchange.  Previously, from 1996 to 1998, Mr. Denos
      practiced with the Salt Lake City-based law firm of Jones, Waldo, Holbrook
&
McDonough, concentrating on growing technology and Internet-based companies,
      providing assistance in corporate governance, debt and equity financing, joint
      ventures, licensing, mergers, acquisitions, and securities law
      compliance.  Mr. Denos holds a Bachelor of Arts degree from the
      University of Utah in Business Finance and Political Science, and holds a Master
      of Business Administration Degree from the University of Utah School of Business
      and a Juris Doctor from the University of Utah College of Law.  Prior
      to practicing with Jones, Waldo, he was special projects manager at Utah
      Technology Finance Corporation, a technology based venture lending
      agency.





Board
      of Directors Meetings and Committees





Although
      various items were reviewed
      and approved by the Board of Directors during 2004, the Board held no meetings
      during the fiscal year ended December 31, 2006.





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 2006 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.





34


ITEM
      10:  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, 2006,
      2005,
      and 2004 of those persons who were the Company’s Chief Executive Officer and
      other executive officers of the Company.





Summary
      Compensation Table





Annual
                Compensation
            
            Long-Term
              CompensationName
                and
              Principal
              Position
            Year
            Salary
            Bonus
            Securities
              Underlying
              Options
            All
                Other
              CompensationKennethDenos
              CEO
            2006(1)
              2005(2)
              2004(3)
            $100,000(1)
              $100,000(2)
              $100,000(3)
            $0
              $0
              $0
            $0
              $0
              $0
            $0
              $0
              $0





(1)
      Represents $100,000 in earned but unpaid salary during 2006.


(2)
      Represents $100,000 in earned but unpaid salary during 2005.


(3)
      Represents $100,000 in earned but unpaid salary during 2004.








Aggregated
      Option Exercises in Last Fiscal Year and Year End Option Values





Number
                of
              Unexercised
                Options at December 31, 2006
            Value
                of Unexercised
              In-the-Money
                Options
              at
                December 31, 2006(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, 2006 of $0.00287.











35




ITEM
      11:  SECURITY OWNERSHIP OS 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 1, 2007 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 2006, and (iii) all persons who have served as a director or executive
      officer of the Company during the calendar year 2006 as a group.  As
      of such date, the Company had 121,321,086 shares of Common Stock
      outstanding.  Unless indicated otherwise, the 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)Kenneth
                Denos(2)
            25,667,953
            19.12%Prestbury
                Investment Holdings Limited(3)
            25,000,000
            22.39%Nigel
                Wray(4)
            25,000,000
            22.39%Nicholas
                Leslau(5)
            25,000,000
            22.39%Gardner
                Management, Inc. Profit Sharing Plan and Trust(6)
            19,026,607
            16.07%Moore,
                Clayton & Co., Inc.(7)
            14,667,953
            11.71%Todd
                Shell(8)
            7,500,000
            6.72%All
                directors and officers as a group
              (1
                person)
            25,667,953
            19.12%





(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 1, 2006, and
      shares of Common Stock subject to options, warrants and/or conversion rights
      held by the shareholder that are currently exercisable or exercisable within
      60
      days, which are deemed to be outstanding and to be beneficially owned by the
      shareholder holding such options, warrants, or conversion rights.  The
      percentage ownership of any shareholder is determined by assuming that the
      shareholder has exercised all options, warrants and conversion rights to obtain
      additional securities and that no other shareholder has exercised such
      rights.  Except as otherwise indicated below, the persons and entity
      named in the table have sole voting and investment power with respect to all
      shares of Common Stock shown as beneficially owned by them, subject to
      applicable community property laws.





(2)
      Chief
      Executive Officer, Secretary, and Director of the Company.  Includes
      2,000,000 shares of Common Stock held directly by Mr. Denos and 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”).


36





(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.











(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 2007, 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
      12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.





During
      2000-2006 and up to the date of
      this filing, Kenneth I. Denos, the Chief Executive Officer of the Company,
      made
      various loans to the Company in his personal capacity and through a
      professional


37


corporation
      controlled by Mr. Denos.  These loans, aggregating $94,266, 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 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, 2006, such accrued payroll liability and
      related expenses totaled $683,098.  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.





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
      13:  EXHIBITS AND REPORTS ON FORM 8-K.





(a)
            Documents
                Filed as a Part of this Report





(1)
            Financial
                Statements





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





(2)
            Financial
                Statement Schedules





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





Report
      of Bouwhuis Morrill &
Company, LLC, Independent Accountants, on Financial Statement
      Schedules.





(3)
            Exhibits





See
                “Index to Exhibits.”





(b)
            Reports
                on Form 8-K





No
      reports on Form 8-K were filed
      during the quarter ended December 31, 2006.





38


ITEM
      14:  PRINCIPAL ACCOUNTANT
      FEES AND SERVICES





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, 2006and
      2005,
      and all fees billed for other services
      rendered by BMCduring
      those
      periods.








Year
                Ended December
                31
            2006
            2005Audit
                Fees(1)
            $
                7 , 849
            $12,090Audit-Related
                Fees(2)
            0
            0Tax
                Fees(3)
            0
            0All
                Other Fees(4)
            0
            2,365Total
                Accounting Fees and
                Services
            $
                7, 849
            $14,455





(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-QSB, and for services that are normally provided in
      connection with statutory and regulatory filings or engagements.The
      amounts shown forBMCin
      2005relate
      to (i) the audit of the Company’s
      annual financial statements for the fiscal year ended December 31,
      2004,
      and (ii) the review of the financial
      statements included in the Company’s filings on Form 10-QSB for the first,
      second and third quarters of 2005.The
      amounts shown for BMCin
      2006relate
      to (i) the audit of the Company’s
      annual financial statements for the fiscal year ended December 31,
      2005,
      and (ii) the review of the financial
      statements included in the Company’s filings on Form 10-QSB for the first,
      second and third quarters of 2006.





(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.





(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.











39


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.

















40


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:January
      10,
      2008By:/s/John D.
      Thomas


John
                D.
                Thomas


Chief
                Executive Officer




















41