SECURITIES AND EXCHANGE COMMISSION

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

                                   FORM 10-QSB

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                                  Act of 1934

                  For the quarterly period ended June 30, 2001

            [ ] Transition Report Pursuant to Section 13 or 15(d) of
                  the SecuritiesExchange Act of 1934

             For the transition period from ________ to ___________
             Commission file number: 333-14477

                                SPORTSNUTS, INC.
                                ----------------
        (Exact name of small business issuer as specified in its charter)
<TABLE>
<S>                                                         <C>

     Delaware                                               87-0561426
     --------                                               ----------

     (State or other jurisdiction of                        (IRS Employer
     incorporation or organization)                         Identification No.)

    The Towers at South Towne II,
    10421 South 400 West, Suite 550
    Salt Lake City, UT                                      84094
    -------------------------------------                   ---------------
   (Address of principal executive offices)
</TABLE>
                                 (801) 816-2500
                                 --------------
                          (Issuer's telephone number )


  --------------------------------------------------------------------------
  (Former name or former address and former fiscal year, if change since last
                                    report.)


                                        1

<PAGE>






                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Check whether the registrant  has filed all documents and reports  required
to be filed by Sections  12, 13, or 15(d) of the  Exchange Act of 1934 after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

                      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 June 30, 2001, the Company had
outstanding 12,634,004 shares of common stock, par value $0.002 per share.

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







                                        2

<PAGE>



                                     PART I

                              FINANCIAL INFORMATION

The Financial Statements of the Company are prepared as of June 30, 2001.

                                    CONTENTS

<TABLE>
<S>                                                                          <C>
Consolidated Balance Sheets.................................................. 2

Consolidated Statements of Operations........................................ 4

Consolidated Statements of Stockholders' Equity (Deficit).................... 6

Consolidated Statements of Cash Flows........................................ 7

Notes to the Consolidated Financial Statements.............................. 10
</TABLE>

                                        1

<PAGE>



                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                           Consolidated Balance Sheets

                                     ASSETS

<TABLE>
<CAPTION>
                                         JUNE 30,              December 31,
                                         2001                  2000
                                         ---------------       ----------------
                                         (Unaudited)
<S>                                      <C>                   <C>
CURRENT ASSETS

   Cash and cash equivalents (Note 1)    $      148,256         $           651
   Accounts receivable, net (Note 1)             10,913                   7,361
   Inventory, net (Notes 1 and 2)                 6,542                  11,650
   Prepaid expenses                              10,509                  27,917
                                           ------------            ------------

     Total Current Assets                       176,220                  47,579

PROPERTY AND EQUIPMENT (Note 1)

   Computer hardware                            722,534                 518,789
   Computer software                            721,809                 721,809
   Furniture and office equipment               193,819                 189,019
   Less - accumulated depreciation             (881,882)               (652,429)
                                          -------------           -------------
     Total Property and Equipment               756,280                 777,188
                                          -------------           -------------

OTHER ASSETS

   Goodwill, net (Note 12)                      171,302                  -
                                          -------------           -------------

     Total Other Assets                         171,302                  -
                                          -------------           -------------

     TOTAL ASSETS                        $    1,103,802         $       824,767
                                         ==============         ===============
</TABLE>

            See the accompanying notes to the consolidated financial
                                  statements.


                                       2

<PAGE>



                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                     Consolidated Balance Sheets (Continued)


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------

<TABLE>
<CAPTION>
                                                        June 30,                December 31,
                                                        2001                    2000
                                                        ---------------         ---------------
                                                        (Unaudited)
<S>                                                    <C>                      <C>
CURRENT LIABILITIES

   Accounts payable                                     $     1,097,927         $    1,197,146
   Accrued expenses                                             597,693                465,647
   Capital leases, current portion (Note 13)                     56,471                 -
   Notes payable, current portion (Note 4)                      167,000                115,000
   Notes payable, related parties (Note 3)                      459,000                529,500
                                                         --------------         --------------

     Total Current Liabilities                                2,378,091              2,307,293
                                                         --------------         --------------

LONG-TERM LIABILITIES

   Capital leases (Note 13)                                     275,784                 -
                                                        ---------------         --------------

     Total Long-Term Liabilities                                275,784                 -
                                                        ---------------         --------------

     TOTAL LIABILITIES                                        2,653,875              2,307,293
                                                        ---------------         --------------

STOCKHOLDERS' EQUITY (DEFICIT)

   Preferred stock, $0.002 par value; 20,000,000 shares
    authorized, 178,000 shares issued and outstanding              356                     356
   Common stock, $0.002 par value; 200,000,000 shares
    authorized, 12,634,004 and 3,397,095 shares issued
    and outstanding, respectively                               25,268                   6,794
   Stock subscription receivable                                (1,600)                 -
   Additional paid-in capital                               18,651,286              17,708,296
   Accumulated deficit prior to the development stage      (13,139,071)            (13,139,071)
   Accumulated deficit since the inception of the
    development stage                                       (7,086,312)             (6,058,901)
                                                       ---------------          --------------

     Total Stockholders' Equity (Deficit)                   (1,550,073)             (1,482,526)
                                                       ---------------          --------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
       (DEFICIT)                                       $     1,103,802          $      824,767
                                                       ===============          ==============
</TABLE>


            See the accompanying notes to the consolidated financial
                                  statements.


                                        3

<PAGE>



                                SPORTSNUTS, INC.
                 (Formerly SportsNuts.com International, Inc.)
                         (A Development Stage Company)
                     Consolidated Statements of Operations
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                   For the Three Months Ended
                                                                           June 30,
                                                            ---------------------------------------
                                                                  2001                   2000
                                                            ---------------         ---------------
<S>                                                         <C>                     <C>
NET SALES                                                   $       133,377         $        -
                                                            ---------------         ---------------

OPERATING EXPENSES
   Cost of Sales                                                     57,898                  -
   General and administrative                                       390,459               1,724,666
   Selling and marketing                                            274,617                 248,306
   Research and development                                          49,929                  79,264
                                                            ---------------         ---------------

     Total Operating Expenses                                       772,903               2,052,236
                                                            ---------------         ---------------

LOSS FROM OPERATIONS                                               (639,526)             (2,052,236)
                                                            ---------------         ---------------

OTHER INCOME (EXPENSES)
   Interest expense                                                 (33,086)                (29,930)
   Interest income                                                      146                   1,006
   Other income                                                      21,414                   3,100
   Gain on forgiveness of debt                                      139,116                  -
   Loss on sale of assets                                            -                      (26,203)
                                                            ---------------         ---------------

     Total Other Income (Expenses)                                  127,590                 (52,027)
                                                            ---------------         ---------------

LOSS FROM CONTINUING OPERATIONS
 BEFORE INCOME TAXES                                               (511,936)             (2,104,263)

INCOME TAX EXPENSE                                                   -                       -
                                                            ---------------         ---------------

NET LOSS                                                    $      (511,936)        $    (2,104,263)
                                                            ===============         ===============

BASIC LOSS PER COMMON SHARE -
 BASIC AND DILUTED (Note 1)
   Loss from continuing operations                          $         (0.05)        $         (2.26)

   Loss from discontinued operations                                 -                       -
                                                            ---------------         ---------------
     Basic Loss Per Share                                   $         (0.05)        $         (2.26)
                                                            ===============         ===============

WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING                                              10,873,488                 929,643
                                                            ===============         ===============
</TABLE>



            See the accompanying notes to the consolidated financial
                                  statements.


                                        4

<PAGE>
                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                Consolidated Statements of Operations (Continued)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                    From
                                                                                              Inception of the
                                                                                                 Development
                                                                                                  Stage on
                                                                                                March 1, 2000
                                                               For the Six Months Ended             Through
                                                                           June 30,                June 30,
                                                       --------------------------------------  -----------------
                                                               2001                2000             2001
                                                       ------------------  ------------------  -----------------
<S>                                                    <C>                 <C>                 <C>
NET SALES                                              $          133,377  $           -       $         133,377
                                                       ------------------  ------------------  -----------------

OPERATING EXPENSES
   Cost of Sales                                                   57,898              -                  57,898
   General and administrative                                     647,623           2,768,801          5,807,488
   Selling and marketing                                          467,138             432,776          1,048,935
   Research and development                                        96,078             143,260            310,129
                                                       ------------------  ------------------    ---------------

     Total Operating Expenses                                   1,268,737           3,344,837          7,224,450
                                                       ------------------  ------------------  -----------------

LOSS FROM OPERATIONS                                           (1,135,360)         (3,344,837)        (7,091,073)
                                                       ------------------  ------------------  -----------------

OTHER INCOME (EXPENSES)
   Interest expense                                               (59,925)            (40,382)          (169,432)
   Interest income                                                    247               2,277              1,543
   Other income                                                    26,714               3,100             34,464
   Gain on forgiveness of debt                                    140,913              -                 174,739
   Loss on sale of assets                                          -                  (26,203)           (36,553)
                                                       ------------------  ------------------  -----------------

     Total Other Income (Expenses)                                107,949             (61,208)             4,761
                                                       ------------------  ------------------  -----------------

LOSS FROM CONTINUING OPERATIONS
 BEFORE INCOME TAXES                                           (1,027,411)         (3,406,045)        (7,086,312)

INCOME TAX EXPENSE                                                 -                   -                  -
                                                       ------------------  ------------------  -----------------

LOSS FROM CONTINUING OPERATIONS                                (1,027,411)         (3,406,045)        (7,086,312)

LOSS FROM DISCONTINUED
OPERATIONS (Note 10)                                               -                 (546,577)            -
                                                       ------------------  ------------------  -----------------

NET LOSS                                               $       (1,027,411) $       (3,952,622) $      (7,086,312)
                                                       ==================  ==================  =================

BASIC LOSS PER COMMON SHARE -
 BASIC AND DILUTED (Note 1)
   Loss from continuing operations                     $            (0.13) $            (3.68)
   Loss from discontinued operations                               -                    (0.59)
                                                       ------------------  ------------------
     Basic Loss Per Share                              $            (0.13) $            (4.27)
                                                       ==================  ==================

WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING                                             7,769,265             924,808
                                                       ==================  ==================
</TABLE>

            See the accompanying notes to the consolidated financial
                                  statements.


                                        5

<PAGE>

                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
            Consolidated Statements of Stockholders' Equity (Deficit)

<TABLE>
<CAPTION>
                                                                                   Additional
                                                                                     Paid-In
                                     Preferred Stock          Common Stock           Capital
                                   ---------------------     ------------------  -------------
                                   Shares      Amount       Shares      Amount
                                   --------- -----------    ---------   --------
<S>                                <C>       <C>            <C>         <C>       <C>
Balance, December 31, 1999                 - $         -      894,918   $ 1,790   $ 12,494,031

Issuance of common stock for cash
(net of issuance costs of $15,000)         -           -      927,383     1,855        458,146

Warrants issued below market value         -           -            -         -      3,592,418

Preferred shares issued for cash     178,000         356            -         -        394,644

Stock offering costs                       -           -            -         -       (19,500)

Shares issued for services                 -           -      945,800     1,892        720,035

Shares issued for debt payment             -           -      504,200     1,008         50,771

Shares issued for exercise of stock
options                                    -           -       50,000       100          7,900

Shares issued for exercise of warrants     -           -       74,794       149          9,851

Net loss for the year ended December
31, 2000                                   -           -            -         -              -
                                    --------    --------    ---------   --------   -----------

Balance, December 31, 2000           178,000         356    3,397,095     6,794     17,708,296

Issuance of common stock for cash
(unaudited)                                -           -    1,000,000     2,000         98,000

Warrants/Options issued below
market value (unaudited)                   -           -            -         -        183,435

Shares issued for services (unaudited)     -           -    1,525,000     3,050        132,350

Shares issued for exercise of stock
options (unaudited)                        -           -      980,000     1,960         55,840

Shares issued for exercise of warrants
for cash (unaudited)                       -           -      712,206     1,425         63,575

Shares issued for exercise of warrants
for services rendered (unaudited)          -           -      990,000     1,980        210,622

Shares issued for debt payment
(unaudited)                                -           -      229,703       459         16,768

Shares issued for purchase of Rocky        -
Mountain Sports Alliance (unaudited)                   -    3,800,000     7,600        182,400

Net loss for the six months ended
June 30, 2001 (unaudited)                  -           -            -         -              -
                                     -------  ----------  -----------   -------  -------------
Balance, June 30, 2001 (unaudited)   178,000  $      356   12,634,004   $25,268  $  18,651,286
                                     =======  ========== ============   =======  =============
</TABLE>

            See the accompanying notes to the consolidated financial
                                  statements.


                                        6(A)

<PAGE>

                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
            Consolidated Statements of Stockholders' Equity (Deficit)
                                   (continued)

<TABLE>
<CAPTION>
                                                      Stock               Total
                                   Accumulated    Subscription        Stockholder's
                                    Deficit        Receivable        Equity (Deficit)
                                  ------------    --------------     ----------------
<S>                               <C>             <C>                <C>
Balance, December 31, 1999        $ (11,940,918)   $            -     $ 554,903

Issuance of common stock for cash
(net of issuance costs of $15,000)             -                -       460,001

Warrants issued below market value             -                -     3,592,418

Preferred shares issued for cash               -                -       395,000

Stock offering costs                           -                -       (19,500)

Shares issued for services                     -                -       721,927

Shares issued for debt payment                 -                -        51,779

Shares issued for exercise of stock
options                                        -                -         8,000

Shares issued for exercise of warrants         -                -        10,000

Net loss for the year ended December
31, 2000                              (7,257,054)                    (7,257,054)
                                   --------------   -------------  -------------

Balance, December 31, 2000           (19,197,972)               -    (1,482,526)

Issuance of common stock for cash
(unaudited)                                    -                -       100,000

Warrants/Options issued below
market value (unaudited)                       -                -        183,435

Shares issued for services (unaudited)         -                -        135,400

Shares issued for exercise of stock
options (unaudited)                            -          (1,600)         56,200

Shares issued for exercise of warrants
for cash (unaudited)                           -                -         65,000

Shares issued for exercise of warraants
for services rendered (unaudited)              -                -        212,602

Shares issued for debt payment
(unaudited)                                    -                -         17,227

Shares issued for purchase of Rocky            -
Mountain Sports Alliance (unaudited)                            -        190,000

Net loss for the six months ended
June 30, 2001 (unaudited)             (1,027,411)                     (1,027,411)
                                   -------------     -------------    ----------
Balance, June 30, 2001 (unaudited$  (20,225,383)     $     (1,600)    (1,550,073)
                                   =============     =============   ===========
</TABLE>

            See the accompanying notes to the consolidated financial
                                  statements.


                                        6(B)

<PAGE>


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


                                                                                                               From
                                                                                                         Inception of the
                                                                                                             Development
                                                                                                             Stage on
                                                                                                            March 1, 2000
                                                                    For the Six Months Ended                   Through
                                                                             June 30,                          June 30,
                                                                -------------------------------------   -----------------
                                                                      2001               2000                   2001
                                                                ------------------  -----------------   -----------------
<S>                                                             <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net loss                                                     $       (1,027,411) $      (3,952,622)  $      (7,086,312)
   Adjustments to reconcile net loss to net
    cash used in operating activities:
     Depreciation                                                          229,239            235,489             614,027
     Amortization of goodwill                                                9,016             -                    9,016
     Common stock issued for services                                      135,400             37,500             857,327
     Warrants issued below market value                                    183,435          1,889,625           3,490,691
     Loss on sale of fixed assets                                           -                  26,203              36,553
     Gain on forgiveness of debt                                          (139,116)            -                 (172,942)
     Warrants exercised for services                                       212,602             -                  212,602
     Options exercised for services                                          3,342             -                    3,342

   Changes in operating assets and liabilities:
     Accounts receivable                                                    (3,552)            (6,874)             10,679
     Inventory                                                               5,108             10,326              14,914
     Restricted cash                                                        -                 110,000             110,000
     Other current assets                                                   26,210            (36,286)            136,699
     Accounts payable and accrued expenses                                 179,945            436,921             533,882
     Advances payable                                                       32,499             -                   32,499
     Deferred revenue                                                      (22,043)            -                  (22,043)
                                                                ------------------  -----------------   -----------------

       Net Cash Used in Operating Activities                              (175,326)        (1,249,718)         (1,219,066)
                                                                ------------------  -----------------   -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Proceeds from sale of fixed assets                                       -                  35,885              79,714
   Purchases of property and equipment                                      -                (139,817)            (36,014)
                                                                ------------------  -----------------   -----------------

       Net Cash Provided (Used) in
       Investing Activities                                                 -                (103,932)             43,700
                                                                ------------------  -----------------   -----------------

</TABLE>

            See the accompanying notes to the consolidated financial
                                  statements.

                                        7
<PAGE>



                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                Consolidated Statements of Cash Flows (Continued)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                               From
                                                                                                         Inception of the
                                                                                                             Development
                                                                                                             Stage on
                                                                                                            March 1, 2000
                                                                   For the Six Months Ended                    Through
                                                                         June 30,                              June 30,
                                                                -------------------------------------   -----------------
                                                                       2001               2000                   2001
                                                                ------------------  -----------------   -----------------
<S>                                                             <C>                 <C>                 <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of notes payable - related parties                 4,000            622,000               4,000
   Proceeds from issuance of notes payable                                  -                  -                  277,000
   Proceeds from issuance of common stock                                  100,000            645,000             343,009
   Proceeds from issuance of preferred stock                                -                  -                  395,000
   Proceeds from exercise of stock options                                  45,000             -                   45,000
   Proceeds from exercise of stock warrants                                 65,000             -                   65,000
   Cash received upon acquisition of subsidiary                             20,420             -                   20,420
   Stock offering costs                                                     -                 (34,500)            (19,500)
   Cash received from capital lease                                         96,011             -                   96,011
   Principal payments of notes payable - related parties                    (7,500)           (25,000)            (20,000)
                                                                ------------------  -----------------   -----------------
       Net Cash Provided by Financing Activities                $          322,931  $       1,207,500   $       1,205,940
                                                                ------------------  -----------------   -----------------
NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                               $          147,605  $        (146,150)  $          30,574

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                                                           651            148,647             117,682
                                                                ------------------  -----------------   -----------------
CASH AND CASH EQUIVALENTS AT END
 OF PERIOD                                                      $          148,256  $           2,497   $         148,256
                                                                ==================  =================   =================

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:

   Interest                                                     $            1,105  $           2,235   $           4,126
   Income taxes                                                 $           -       $          -        $          -

Non-Cash Investing and Financing Activities:

   Common stock issued for services                             $          135,400  $          -        $         857,327

   Common stock issued to convert notes
   payable and interest                                         $           17,227  $          -        $          58,998

</TABLE>

            See the accompanying notes to the consolidated financial
                                  statements.


                                       8
<PAGE>



                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                Consolidated Statements of Cash Flows (Continued)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                              From
                                                                                                         Inception of the
                                                                                                            Development
                                                                                                            Stage on
                                                                                                           March 1, 2000
                                                                     For the Six Months Ended               Through
                                                                             June 30,                       June 30,
                                                                -------------------------------------   -----------------
                                                                       2001               2000                2001
                                                                ------------------  -----------------   -----------------
<S>                                                             <C>                 <C>                 <C>
SUPPLEMENTAL CASH FLOW INFORMATION (continued)

   Equipment exchanged for reduction of
   accounts payable                                             $           -       $          -        $           7,626

   Common stock issued for reduction of
   accounts payable                                             $           -       $          -        $          10,000

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

   Common stock issued for options exercised
   through services rendered                                    $            3,342  $          -        $           3,342

   Common stock issued for options exercised
   by conversion of accounts payable and
   other liabilities                                            $            7,858  $          -        $           7,858

   Common stock issued for options exercised
   for stock subscription receivable                            $            1,600  $          -        $           1,600

</TABLE>

            See the accompanying notes to the consolidated financial
                                  statements.


                                       9

<PAGE>

                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

              a. Organization and Description of Business

              SportsNuts,  Inc. (formerly  SportsNuts.com  International,  Inc.)
              (the  "Company") was  incorporated  under the laws of the State of
              Delaware on July 12, 1996.  On April 15, 2001 the Company  changed
              its name from  SportsNuts.com  International,  Inc. to SportsNuts,
              Inc.  Prior  to  the  reorganization  with  SportsNuts.com,   Inc.
              ("SportsNuts"), a privately held Delaware corporation, on April 6,
              1999, the Company had not commenced active business operations and
              was considered a development stage company.  On March 1, 2000, the
              Company  reentered the development  stage when it discontinued the
              operations of its direct sales division (see Note 10).

              On April 6, 1999,  the  Company  acquired  (the  "Reorganization")
              approximately  eighty-one percent (81%) of the outstanding capital
              stock of SportsNuts,  a privately held company. The Reorganization
              was accounted for as a reverse merger into a non-operating  public
              company,   wherein   SportsNuts  was  treated  as  the  accounting
              acquirer.  In  conjunction  with the  Reorganization,  the Company
              changed   its  name   from   Durwood,   Inc.   to   SportsNuts.com
              International, Inc. and effected a 2.213 for 1 forward stock split
              of all the  outstanding  shares  of its  common  stock on April 6,
              1999.  All  references  to common  stock  have been  retroactively
              restated.

              On June 25, 2000, the Company effected a 1-for-20 reverse split of
              all outstanding  shares of Common and Preferred Stock, and amended
              and restated its Certificate of  Incorporation  to restate its par
              value at $0.002 per Common and Preferred  share. All references to
              shares   outstanding  and  other  equity   instruments  have  been
              retroactively restated.

              SportsNuts was  incorporated  in the state of Utah on November 13,
              1996 and began operations on January 1, 1997. Its primary business
              involved  the  sales  and   distribution  of  sporting  goods  and
              health/nutritional  products, using the Internet, through a direct
              sales distribution strategy. The strategy also included creating a
              personalized  sports community offering a comprehensive  bundle of
              sports,  outdoors  and  fitness-related  products,   services  and
              information  in a club  environment  on its web site.  The  direct
              sales distributor force sold club memberships with access to these
              products and services on the Web Site.

              This  business  strategy had  continued  since its  inception  and
              subsequent  to the  Reorganization  until March 1, 2000,  when the
              Company determined to discontinue its direct sales operations (see
              Note 10).

              On July 28, 1999,  the Company  issued 47,244 shares of its common
              stock to certain shareholders of Sportzz.com,  Inc. ("Sportzz") in
              exchange for all of the issued and  outstanding  shares of Sportzz
              common stock. In addition, cash consideration of $100,000 was paid
              as part of the acquisition. The acquisition was accounted for as a
              purchase per APB No. 16.

              Sportzz  was  incorporated  in the State of Utah on April 7, 1999.
              Immediately  prior  to the  merger,  Sportzz  was  engaged  in the
              development of Internet based database  management and application
              development  software,  and it  maintained  an  Internet  web site
              employing its products for purposes of inputting,  searching,  and
              retrieving  amateur  sports  information  from  leagues,  schools,
              teams,  and their player rosters,  game  schedules,  game results,
              photographs, articles, and statistics.

                                       10

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

              b. Accounting Method

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

              c. Cash and Cash Equivalents

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

              d. Inventory

              Inventory is stated at the lower of cost  (computed on a first-in,
              first-out  basis) or  market.  The  inventory  cost  includes  all
              expenses necessary to place the inventory in a saleable condition.

              e. Property and Equipment

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

<TABLE>
<S>                                                      <C>
                               Computer hardware         3 years
                               Computer software         3 years
                               Office equipment          7 years
</TABLE>

              Depreciation  expense  for the six months  ended June 30, 2001 and
              2000 was $229,239 and $235,489 respectively.

              f. Accounts Receivable

              Accounts receivable are recorded net of the allowance for doubtful
              accounts of $7,181 at June 30, 2001 and $24,922 as of December 31,
              2000.

              g. 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.

              h. 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.

                                       11

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

              i. Advertising

              The  Company   follows  the  policy  of  charging   the  costs  of
              advertising to expense as incurred.

              j. Basic Loss Per Share

<TABLE>
<CAPTION>
                                                                             For the Six Months Ended
                                                                                     June 30,
                                                                         ---------------------------------------
                                                                             2001                     2000
                                                                         ------------------    -----------------
<S>                                                                      <C>                   <C>
              Basic loss per share from continuing operations:

                     Loss (numerator)                                    $       1,027,411     $       3,406,045
                     Shares (denominator)                                        7,769,265               924,808
                     Per share amount                                    $           (0.13)    $           (3.68)

              Basic loss per share from discontinued operations:

                     Loss (numerator)                                    $          -          $         546,577
                     Shares (denominator)                                           -                    924,808
                     Per share amount                                    $          -          $           (0.59)
</TABLE>

              The basic loss per share of common  stock is based on the weighted
              average number of shares issued and outstanding  during the period
              of the  financial  statements.  Common  shares to be  issued  from
              preferred  stock,  warrants,  and options are not  included in the
              computation  because they would have an antidilutive effect on the
              net loss per common share.

              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 June 30, 2001.

              At June 30, 2001, the Company had net operating loss carryforwards
              of  approximately  $12,000,000  that may be offset  against future
              taxable income through 2020. 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.


                                       12

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

              l. Research and Development

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

              m.  Stock Options and Warrants

              As permitted by FASB  Statement  123  "Accounting  for Stock Based
              Compensation"  (SFAS No. 123), the Company  elected to measure and
              record  compensation  cost relative to employee stock option costs
              in accordance with Accounting Principles Board ("APB") Opinion 25,
              "Accounting   for  Stock   Issued  to   Employees,"   and  related
              interpretations  and  make pro  forma  disclosures  of net  income
              (loss)  and basic  earnings  (loss) per share as if the fair value
              method  of  valuing  stock  options  had been  applied.  Under APB
              Opinion 25,  compensation  cost is  recognized  for stock  options
              granted to employees when the option price is less than the market
              price of the underlying  common stock on the date of grant.  As of
              June 30, 2001, there were 4,600,000 options outstanding which were
              granted to employees, all of which were granted at exercise prices
              equal to or above the market price on the grant date.

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

              n.  Unaudited Consolidated Financial Statements

              The accompanying unaudited financial statements include all of the
              adjustments,  which,  in the opinion of management,  are necessary
              for  a  fair  presentation.  Such  adjustements  are  of a  normal
              recurring nature.

NOTE 2 -      INVENTORY

              Inventory consisted of the following:
<TABLE>
<CAPTION>
                                                                          June 30,                December 31,
                                                                            2001                   2000
                                                                         -----------------     -----------------
                                                                              (Unaudited)
<S>                                                                      <C>                   <C>

              Finished goods                                             $           8,723     $          15,533
              Reserve for obsolete inventory                                        (2,181)               (3,883)
                                                                         -----------------     -----------------

                        Total                                            $           6,542     $          11,650
                                                                         =================     =================

</TABLE>

                                       13


<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000

NOTE 3 - NOTES PAYABLE - RELATED PARTIES

              Notes payable - related parties consisted of the following:
<TABLE>
<CAPTION>
                                                                                     June 30,           December 31,
                                                                                       2001                 2000
                                                                                  -------------         ------------
                                                                                 (Unaudited)
<S>                                                                              <C>                   <C>
              Note payable to a shareholder,  secured by tangible and intangible
               assets of the Company,  interest at 16%,  principal  and interest
               due April 1, 2000. Note is convertible into common
               stock of the Company at $.10 per share.                             $    450,000         $    450,000

              Note payable to a related  individual,  secured by tangible assets
               of the Company,  interest at 16%,  principal and interest due May
               1, 2000. Note is convertible into common stock of the
               Company at $1.00 per share.                                                -                   20,000

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

              Notes payable to related individuals, unsecured,
               interest at 10%, due on demand.                                             9,000              27,000

              Notes payable to related individuals, unsecured,
               interest at 12%, due on demand.                                             -                  12,500
                                                                                    ------------         -----------
                     Total notes payable - related parties                               459,000             529,500

                     Less: current portion                                              (459,000)           (529,500)
                                                                                    ------------         ------------
                     Long-term notes payable                                      $        -             $     -
                                                                                  ==============         ============
</TABLE>

              Maturities of notes payable - related parties are as follows:

<TABLE>
<CAPTION>
                      Year Ending
                         June 30,                                                                  Amount
              --------------------------------                                                 -----------------
<S>                                                                                            <C>
                         2002                                                                  $         459,000
                                                                                               -----------------

                         Total                                                                 $         459,000
                                                                                               =================

</TABLE>

                                       14

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000

NOTE 4 - NOTES PAYABLE

              Notes payable consisted of the following:
<TABLE>
<CAPTION>
                                                                                   June 30,             December 31,
                                                                                    2001                    2000
                                                                                 -----------------     -----------------
                                                                                 (Unaudited)
<S>                                                                              <C>                    <C>
              Note payable to an individual,  secured by tangible  assets of the
               Company, interest at 16%, principal and interest due May 1, 2000.
               Note is convertible into common stock of the
               Company at $1.00 per share.                                        $          20,000                  -

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

              Note  payable  to  an  individual,  unsecured,  interest  at  10%,
               principal  and interest due June 26,  2000.  Note is  convertible
               into common stock of the Company at $1.00
               per share.                                                                    50,000                50,000

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

              Notes payable to individuals, unsecured,
               interest at 10%, due on demand.                                               22,000                  -

              Notes payable to an individual, unsecured,
               interest at 12%, due on demand.                                                5,000                  -

              Note payable to an individual, unsecured,
               interest at 16%, due on demand.                                                 -                   15,000
                                                                                    ----------------     ----------------
                     Total notes payable                                                    167,000               115,000

                     Less: current portion                                                 (167,000)             (115,000)
                                                                                   ----------------      ----------------
                     Long-term notes payable                                       $           -         $             -
                                                                                   ================      ================
</TABLE>


                                       15

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000

NOTE 4 - NOTES PAYABLE (Continued)

              Maturities of notes payable are as follows:
<TABLE>
<CAPTION>
                     Year Ending
                       June 30,                                                                      Amount
              ---------------------------                                                      -----------------
<S>                                                                                            <C>

                           2002                                                                $         167,000
                                                                                               -----------------
                          Total                                                                $         167,000
                                                                                               =================
</TABLE>

NOTE 5 -      COMMON AND PREFERRED STOCK TRANSACTIONS

              Effective  January 1, 2000,  the Company  issued  25,000 shares of
              common stock at a price of $10.00 per share.

              Effective  April 10, 2000,  the Company  issued  50,000  shares of
              nonvoting  convertible  preferred  stock at a price  of $2.26  per
              share,  together with warrants to acquire 250,000 shares of common
              stock at an  exercise  price of $2.00  per  share.  Each  share of
              preferred  stock is  convertible  into two (2)  shares  of  common
              stock.

              Effective  May 1,  2000,  the  Company  issued  128,000  shares of
              nonvoting  convertible  preferred  stock at a price  of $2.20  per
              share,  together with warrants to acquire 725,000 shares of common
              stock at an  exercise  price of $2.00  per  share.  Each  share of
              preferred  stock is  convertible  into two (2)  shares  of  common
              stock.

              Effective May 2, 2000,  the Company issued 15,000 shares of common
              stock valued at $2.50 per share in  satisfaction  of an obligation
              for consulting services received by the Company.

              Effective July 5, 2000, the Company issued 50,000 shares of common
              stock valued at  approximately  $0.63 per share in satisfaction of
              obligations for consulting services received by the Company.

              Effective  July 15, 2000,  the Company  issued  200,000  shares of
              common   stock  valued  at   approximately   $0.41  per  share  in
              satisfaction  of obligations for consulting  services  received by
              the Company.

              Effective  August 15 through  September 28, 2000, the Company sold
              and  issued   1,402,383  shares  of  its  Common  Stock  to  seven
              accredited investors.

              Effective  September 1, 2000,  the Company issued 20,000 shares of
              common  stock  valued  at  $0.75  per  share  in  satisfaction  of
              obligations for consulting services received by the Company.

              Effective  October 1, 2000,  the Company  issued 100,000 shares of
              common  stock  valued  at  $1.25  per  share  in  satisfaction  of
              obligations for consulting services received by the Company.

              Effective  October 5, 2000,  the Company  issued 100,000 shares of
              common   stock  valued  at   approximately   $1.16  per  share  in
              satisfaction  of obligations for consulting  services  received by
              the Company.

                                       16

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000

NOTE 5 -      COMMON AND PREFERRED STOCK TRANSACTIONS (Continued)

              Effective  November 6, 2000,  the Company  issued 15,000 shares of
              common   stock  valued  at   approximately   $2.39  per  share  in
              satisfaction of obligations for public relations services received
              by the Company.

              Effective  November 20, 2000, the Company issued 450,000 shares of
              common  stock valued at  approximately  $0.63 in  satisfaction  of
              obligations for consulting services received by the Company.

              Effective  December 19, 2000,  the Company issued 74,794 shares of
              common stock at a price of approximately $0.13 in exchange for the
              exercise of warrants held by certain individuals.

              Effective  December 29, 2000,  the Company issued 50,000 shares of
              common  stock at a price of $0.16 in exchange  for the exercise of
              stock options held by certain employees of the Company.

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

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

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

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

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

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

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

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

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

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

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

                                         17

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000


NOTE 5 -      COMMON AND PREFERRED STOCK TRANSACTIONS (Continued)

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

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

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

NOTE 6 -      OPTIONS AND WARRANTS

              Employee Stock Options

              The following tables summarize the information  regarding employee
              stock options at June 30, 2001:
<TABLE>
<S>                                                                                            <C>
                      Options outstanding at December 31, 2000                                           2,195,000
                      Options granted                                                                    2,485,000
                      Options exercised                                                                   (80,000)
                                                                                                -----------------
                      Options outstanding at June 30, 2001                                               4,600,000
                                                                                                ==================
</TABLE>

<TABLE>
<CAPTION>
                                     Number of         Weighted                        Number of
                                     Options           Average          Weighted       Options           Weighted
                Range of            Outstanding       Remaining         Average       Exercisable at     Average
                Exercise             June 30,        Contractual       Exercise        June 30,         Exercise
                       Prices         2001            Life             Price            2001             Price
              -----------------  ----------------  --------------  ---------------  ----------------   ------------
<S>           <C>                      <C>                  <C>    <C>                       <C>       <C>
              $     0.03 - 0.16         4,600,000            4.40  $          0.09           434,000   $       0.15
</TABLE>
              The Company applies APB Opinion 25 and related  Interpretations in
              accounting for its plan.  Accordingly,  no  compensation  cost has
              been recognized for its stock option plan. Had  compensation  cost
              for the Company's  stock-based  compensation  plan been determined
              based on the fair value at the grant  dates for awards  under such
              plan consistent with the method of FASB Statement 123, "Accounting
              for  Stock-Based  Compensation"  (SFAS No. 123), the Company's net
              loss and basic loss per common  share would have been as indicated
              below:
<TABLE>
<CAPTION>
                                                                                June 30,
                                                              ----------------------------------------------------
                                                                       2001                              2000
                                                              -------------------------------   ------------------------
<S>                                                           <C>                               <C>
              Net loss as reported                            $        (1,027,411)              $    (3,952,622)
              Pro forma net loss                                       (1,101,277)                   (3,952,622)
              Basic loss per share as reported                              (0.13)                        (4.27)
              Pro forma basic loss per share                                (0.14)                        (4.27)
</TABLE>

                                       18

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000



NOTE 6 -      OPTIONS AND WARRANTS (Continued)

              The Company  estimates  the fair value of each stock option at the
              grant date and re-valuation date by using the Black-Scholes option
              pricing model based on the following assumptions:
<TABLE>
<S>                                                                                                  <C>
                      Risk free interest rate                                                        4.63% - 6.12%
                      Expected life                                                                      4-5 Years
                      Expected volatility                                                              2.18 - 2.33
                      Dividend yield                                                                           0.0
</TABLE>
              Non-Employee Stock Options

              On April 6, 2001,  the Company  issued  options to acquire  20,000
              shares of common  stock.  These options were issued at an exercise
              price of $0.03.  On April 25, 2001,  the Company issued options to
              acquire 900,000 shares of common stock.  These options were issued
              at an exercise  price of $0.05.  The  options  issued in 2001 have
              maturities  of  five  years.  The  options  issued  were  to  non-
              employees of the  Company.  The  following  tables  summarize  the
              information  regarding non- employee  options  outstanding at June
              30, 2001. All the options are exercisable at June 30, 2001.
<TABLE>
<S>                                                                                             <C>
                      Options outstanding at January 1, 2001                                                -
                      Options granted                                                                     920,000
                      Options exercised                                                                  (900,000)
                                                                                                -----------------

                     Options outstanding at June 30, 2001                                                 20,000
                                                                                               =================
</TABLE>

<TABLE>
<CAPTION>
                                     Number of        Weighted                         Number of
                                     Options          Average          Weighted        Options           Weighted
                                    Outstanding       Remaining        Average       Exercisable at      Average
                 Exercise            June 30,        Contractual       Exercise        June 30,         Exercise
                   Price              2001              Life             Price            2001             Price
              -----------------  ----------------  --------------  ---------------  ----------------   ------------
<S>          <C>                           <C>               <C>   <C>                        <C>      <C>

              $            0.03            20,000            4.70  $          0.03            20,000   $       0.03
</TABLE>
              The  Company   applies   SFAS  No.  123  for  options   issued  to
              non-employees,  which  requires  the Company to estimate  the fair
              value of each option  issued at the grant date by using the Black-
              Scholes pricing model with the following assumptions:
<TABLE>
<S>                                                                                                    <C>
                               Risk free interest rate                                                 4.63% - 5.22%
                               Expected life                                                           1 - 60 Months
                               Expected volatility                                                       2.29 - 2.36
                               Dividend yield                                                                   0.0
</TABLE>

              As a result of applying  SFAS No. 123,  the Company had an expense
              of $91,916  during the six months ended June 30, 2001. The expense
              is  included  in the  general  and  administrative  amount  in the
              statement of operations.


                                       19

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000



NOTE 6 -      OPTIONS AND WARRANTS (Continued)

              Warrants

              During the six months  ended June 30,  2001,  the  Company  issued
              warrants  to  acquire  1,050,000  shares  of common  stock.  These
              warrants  were issued at  exercise  prices  ranging  from $0.04 to
              $0.152.  All warrants issued were to non-employees of the Company.
              The following tables summarize the information  regarding warrants
              outstanding at June 30, 2001. All the warrants are  exercisable at
              June 30, 2001.

<TABLE>
<S>                                                                                                  <C>
                               Warrants outstanding at December 31, 2000                                  2,047,558
                               Warrants granted                                                           1,050,000
                               Warrants expired                                                            (20,982)
                               Warrants exercised                                                       (1,702,206)
                                                                                                       -----------
                               Warrants outstanding at June 30, 2001                                     1,374,370
                                                                                                       ===========


                               Weighted average exercise price of warrants
                                 outstanding at June 30, 2001                                        $         1.66
                                                                                                      =============
</TABLE>

<TABLE>
<CAPTION>
                                                              Number of           Weighted
                                                              Warrants            Average             Weighted
                                                            Outstanding at        Remaining           Average
                                                             June 30,           Contractual          Exercise
                      Range of Exercise Prices                2001               Life                Price
                      ------------------------          ------------------  ------------------  ------------------
<S>                   <C>                                      <C>                       <C>    <C>
                      $0.056 - $0.096                              148,000                0.39  $             0.08
                      $0.75 - $1.00                                185,167                1.47  $             0.77
                      $2.00                                      1,040,000                1.78  $             2.00
                      $15.20 - $40.00                                1,203                0.08  $            40.00
</TABLE>

              The  Company  applies  SFAS No.  123 for  warrants  issued,  which
              requires  the Company to estimate  the fair value of each  warrant
              issued at the grant date by using the Black-Scholes  pricing model
              with the following assumptions:

<TABLE>
<S>                                                                                                  <C>
                      Risk-free interest rate                                                        3.61% - 6.68%
                      Expected life                                                                  1 - 36 Months
                      Expected volatility                                                              1.04 - 3.10
                      Dividend yield                                                                           0.0
</TABLE>

              As a result of applying  SFAS No. 123,  the Company had an expense
              of $91,519  and  $1,889,625  during the six months  ended June 30,
              2001 and  2000,  respectively.  The  expense  is  included  in the
              general and administrative amount in the statement of operations.

NOTE 7 -       OPERATING LEASES

              The Company leases two (2) different office facilities under
              non-cancelable operating leases expiring in 2004.  Rental expense

                                       20

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000

NOTE 7 -       OPERATING LEASES (Continued)

              for the six months ended June 30, 2001 and 2000 was $78,233
              and $73,881, respectively.

              The Company also has operating leases on certain office equipment.
              Office  equipment  leases  are  generally  for a term  of 48 to 60
              months.  Lease  expense  was  $3,674 and $4,334 for the six months
              ended June 30, 2001 and 2000, respectively.

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

              2001                                                                              $        135,934
              2002                                                                                       136,852
              2003                                                                                       133,648
              2004                                                                                        54,729
              2005 and thereafter                                                                           -
                                                                                                -----------------

                   Total minimum lease payments                                                 $        461,163
                                                                                                ================
</TABLE>


NOTE 8 -      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,  2000  of   approximately
              $19,200,000 and has experienced  periodic cash flow  difficulties,
              all of which  raise  substantial  doubt  regarding  the  Company's
              ability to continue as a going concern.

              The net loss for the six months  ended June 30,  2001 and 2000 was
              $1,027,411 and $3,952,622,  respectively.  To date the Company has
              funded its operations through a combination of short and long-term
              loans and the private  placement of its common stock.  The Company
              anticipates  another net loss for the year ended December 31, 2001
              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.

                                        21

<PAGE>
                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000

NOTE 9 -      RELATED PARTY TRANSACTIONS

              Effective  February  1,  2000,  the  Company  sold  and  issued  a
              promissory note secured by certain tangible and intangible  assets
              of the Company ("GMI Note") to the Gardner Management, Inc.

              Profit  Sharing  Plan and Trust,  a principal  shareholder  of the
              Company,  in exchange for $450,000 in cash proceeds.  As of August
              1, 2000, the principal  amount of the GMI Note is convertible into
              4,500,000  shares of Common Stock.  On March 31, 2000, the Company
              filed the GMI Note with the Securities and Exchange  Commission as
              an Exhibit to the  Company's  annual report on Form 10-KSB for the
              year ended December 31, 1999.

              Effective  July 15,  2000,  the  Company  entered  into a one-year
              consulting agreement with Eslie Barlow, a principal shareholder of
              the  Company,   to  receive  strategic   consulting  and  advisory
              services. The Company issued 200,000 shares of common stock to Mr.
              Barlow in connection with this Agreement.

              Effective  August 7, 2000,  the  Company  sold  500,000  shares of
              common  stock to Eslie  Barlow,  a  principal  shareholder  of the
              Company, at a price of $.10 per share.

              Effective  August 7, 2000,  the Company  issued  500,000 shares of
              common  stock to Eslie  Barlow,  a  principal  shareholder  of the
              Company,  in satisfaction of notes payable and interest due to Mr.
              Barlow valued at approximately $.10 per share.

NOTE 10 -     DISCONTINUED OPERATIONS

              Effective  March 1, 2000, the Company  elected to discontinue  its
              direct  sales  operations  and  concentrate  solely on building an
              Internet  portal to the amateur sports market.  The following is a
              summary of the loss from  discontinued  operations  resulting from
              the  elimination  of the direct sales segment of the Company.  The
              financial  statements have been retroactively  restated to reflect
              this event.
<TABLE>
<CAPTION>
                                                                                    For the Six Months
                                                                                      Ended June 30,
                                                                         ---------------------------------------
                                                                                    2001             2000
                                                                         -------------------   -----------------
                                                                                (Unaudited)
<S>                                                                      <C>                   <C>

              NET SALES                                                  $                -    $          41,188
                                                                         -------------------   -----------------
              OPERATING EXPENSES
                Cost of sales                                                             -               34,136
                General and administrative                                                -              277,990
                Selling and marketing                                                     -              225,932
                Research and development                                                  -               50,421
                                                                         ------------------   ------------------
                   Total Operating Expenses                                               -              588,479
                                                                         ------------------   ------------------
              LOSS FROM OPERATIONS                                                        -             (547,291)
                                                                         ------------------   ------------------
              OTHER INCOME (EXPENSES)
                Interest expense                                                          -                 (257)
                Interest income                                                           -                  971
                                                                         ------------------   ------------------
                  Total Other Income (Expense)                                            -                  714
                                                                         ------------------   ------------------
              LOSS BEFORE INCOME TAX (EXPENSE)                                            -             (546,577)
              INCOME TAX (EXPENSE)                                                        -               -
                                                                         ------------------   ------------------
           LOSS FROM DISCONTINUED OPERATIONS                             $                -   $        (546,577)
                                                                         ==================   ==================
</TABLE>
                                       22

<PAGE>


                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000



NOTE 11 - 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 six months ended June 30,
              2001 with respect to the reportable segments is as follows:
<TABLE>
<CAPTION>
                                                                                                    Information
                                                             Online             Sports Event         Technology
                                                            Services              Management        Consulting
                                                          -----------------  ------------------  ------------------
<S>                                                       <C>                <C>                 <C>
              Cash                                        $          41,606  $           26,356  $           80,294
              Fixed assets, net                                     553,823               4,371             198,086
              Total assets                                          782,080              39,246             466,289
              Total liabilities                                   2,337,744               9,382             480,880
              External revenues                                       2,403             110,144              20,830
              Cost of goods sold                                     -                   51,947               5,950
              Other income (expense)                                111,402                  90             (3,543)
              Segment profit (loss) before tax effect           (1,033,003)              20,182            (14,590)
</TABLE>

NOTE 12 -     BUSINESS COMBINATION

              On April 15, 2001,  the Company  acquired  Rocky  Mountain  Sports
              Alliance (RMSA) by exchanging 3,800,000 shares of its common stock
              for all of the common stock of RMSA. The transaction was accounted
              for  as  a  purchase  in   accordance   with  APB  16,   "Business
              Combinations."  The excess of the total  acquisition cost over the
              fair  value  of the net  assets  acquired  of  $180,318  is  being
              amortized over 5 years by the straight-line  method.  Amortization
              expense amounted to $9,016 for the six months ended June 30, 2001.

              The results of operations of RMSA are included in the consolidated
              financial statements from the date of acquisition.

              Unaudited pro forma consolidated results of operations for the six
              months ended June 30, 2001 as though RMSA had been  acquired as of
              January 1, follows:

              The unaudited pro forma  consolidated  results include the amounts
              for the  Company  and  RMSA  and six  months  of  amortization  of
              goodwill.
                                       23

<PAGE>
                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                       June 30, 2001 and December 31, 2000

NOTE 12 -     BUSINESS COMBINATION (Continued)
<TABLE>
<CAPTION>
                                                                                June 30, 2000
                                                                             -----------------
<S>                                                                          <C>

                     Sales                                                   $         133,377
                     Net loss                                                       (1,073,296)
                                                                             ------------------

                     Basic and diluted earnings per share                    $           (0.14)
                                                                             ==================
</TABLE>
              The unaudited pro forma results of operations are not  necessarily
              indicative of what the results would have been had the acquisition
              actually occurred on the dates indicated,  and are not necessarily
              representative of future results of operations.

NOTE 13 -     CAPITAL LEASES

              Obligations under the capital lease at June 30, 2001 are as
              follows:

<TABLE>
<S>                                                                        <C>
                    Payable in monthly principal and interest payments
                    of $7,351 for 60 months beginning June 30, 2001,
                    interest rate of 11.76%, secured by fixed assets        $          441,060

                    Less amounts representing taxes and interest                      (108,805)
                                                                            ------------------
                    Total capital leases                                               332,255
                    Less current portion                                               (56,471)
                                                                            ------------------
                    Capital leases - long-term portion                      $          275,784
                                                                            ------------------
</TABLE>
             Future principal obligations of the capital leases payable are as
             follows:
<TABLE>
<CAPTION>
                    Year Ending
                    June 30,                                                    Amount
                    -----------                                            -------------------
<S>                                                                        <C>
                    2002                                                    $           56,471
                    2003                                                                58,880
                    2004                                                                66,192
                    2005                                                                74,412
                    2006                                                                76,300
                                                                            ------------------
                         Total capital leases                               $          332,255
                                                                            ==================
</TABLE>
           Depreciation expense of $5,659 associated with the equipment under
           capital lease was expensed during the six months ended June 30, 2001.

                                   24

<PAGE>
ITEM 2.  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. (hereafter, "SportsNuts" or the "Company") should
be read in conjunction with the Unaudited 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, Inc. and its subsidiaries  (collectively,  the "Company" or
"SportsNuts")  provides  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,   event  sponsorship,  event  coordination,   online  and  offline
promotion,  and  merchandise  sales.  The Company has also  developed a suite of
Internet-based tools that enable teams,  leagues, and players to build their own
online sports  communities.  Community  members publish  schedules,  statistics,
pictures,  videos, and articles for free--all in a safe, secure, and easy-to-use
website.

         The  Company  believes  that it is the  emerging  technology  leader in
sports  information  systems and the only organization of its kind to complement
its Internet solutions with offline marketing, sales, and support. The Company's
mission is to become the ultimate resource for amateur athletes,  fans, coaches,
and sports event administrators.

         The  Company's  principal  sources of revenues are (i) online  services
targeted to sports  organizations and their members,  (ii) offline  promotional,
management, and sponsorship services provided in connection with community-based
sports events, and (iii) information technology consulting revenues. The ability
to  generate   revenues   during  the  remainder  of  2001  and  beyond  depends
substantially  upon the  Company's  resources  available to market to and engage
organizations and their members to receive these services.  Such efforts require
significant systems development,  marketing and personnel costs, which, in turn,
requires  substantial  funding. If the Company is unable to obtain such funding,
its ability to generate revenues will be significantly impaired.

         Expenses which comprise cost of goods sold are principally comprised of
offline costs  associated  with the management and promotion of sporting  events
which the company has an active  role.  Also  included in cost of goods sold are
commissions  paid  for  information  technology  consulting  contracts.  As more
organizations  utilize the online services,  future expenses included in cost of
goods sold will be costs to administer  the revenue  generating  features on the
amateur  sports  Internet  site,  as well as potential  fee sharing  expenses to
organizations  involved  in sports  event  management,  fundraising,  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

                                       25

<PAGE>



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 periods ended June 30, 2001 and 2000. The balances
discussed  below  include  both  results  from  continuing  operations  and from
operations  that were  discontinued  during the period ended June 30,  2000,  as
indicated in Note 10 of the footnotes to the consolidated financial statements.

         Revenues.  The Company  generated  net revenues of $133,377  during the
three month period ended June 30, 2001, compared with $0 in net revenues for the
second  quarter of 2000.  For the six months ended June 30,  2001,  net revenues
were $133,377,  a 224% increase  compared to $41,188 in net revenues  during the
first six months of 2000. This increase was due to sales of the Company's online
services,  sports event  management  and  promotion  revenues,  and  information
technology  consulting revenues.  The Company anticipates that these three areas
will  constitute  the  principal  source  of  the  Company's   revenue  for  the
foreseeable future.

         Cost of Sales.  Cost of sales for the three month period ended June 30,
2001 was  $57,898,  compared to $0 for the second  quarter of 2000.  For the six
month period ended June 30, 2001, cost of sales was $57,898, a 70% increase from
$34,136 during the first half of 2000. This increase is attributable to expenses
incurred pursuant to the delivery of the Company's online registration  services
and sports promotional  services,  and sales commissions paid in connection with
technology consulting projects.

         General  and  Administrative   Expenses.   General  and  administrative
expenses for the three months ended June 30, 2001 were $390,459,  a 77% decrease
from $1,724,666  during the second quarter of 2000.  General and  administrative
expenses  for the six months ended June 30, 2001 were  $647,623,  a 79% decrease
from  $3,046,791  during the six months ended June 30, 2000.  This  decrease was
principally  due to the  recognition  of  $1,889,625  in  expenses  relating  to
issuances of warrants  during the first six months of the year 2000.  Management
continues to make a concerted  effort to decrease  certain costs associated with
personnel salaries and benefits, professional fees, contract labor, and rent and
occupancy-related  expense.  Payroll expense and professional fees accounted for
approximately $77,861 and $80,088,  respectively,  of general and administrative
expenses during the second quarter of 2001, as compared to $284,990 and $125,223
during  the  second  quarter of 2000.  For the six  months  ended June 30,  2001
payroll  expense  and  professional  fees  totaled  approximately  $147,295  and
112,929,  respectively,  of general and  administrative  expenses as compared to
$741,550 and $215,294 during the first six months of 2000.

         Selling and Marketing Expenses.  Selling and marketing expenses for the
three month  period  ended June 30, 2001 were  $274,617,  an 11%  increase  from
$248,306  during the second  quarter of 2000.  For the six months ended June 30,
2001, selling and marketing expenses were $467,138, a 29% decrease from $658,708
during the six month period ended June 30, 2000. The decrease as compared to the
first six months of 2000 was primarily  attributable to the  discontinuation  of
the direct sales  operations as of March 1, 2000, in which  distributor  related
marketing  expenses were  eliminated.  The Company  anticipates that selling and
marketing expenses in the future will increase as a sales channel to the amateur
sports organizations throughout the United States is developed.


                                         26

<PAGE>



         Product Development. Product research and development expenditures were
$49,929  during the three months ended June 30, 2001, as compared to $79,264 for
the three  months  ended June 30,  2000,  a decrease of 37%.  For the six months
ended June 30, 2001, product  development  expenses were $96,078, a 50% decrease
from  $193,681  for the six months  ended  June 30,  2000.  Product  development
expenses  related  to the  Company's  web site  consist  primarily  of  payroll,
software and systems, and related costs for programmers and software developers.
Product  development  expenses related to the Company's  information  technology
consulting  consists  primarily of payroll and systems  development  for the web
site  hosting  services.  Where  appropriate,  the Company  capitalizes  certain
systems  development  costs in accordance  with  generally  accepted  accounting
principles.  The  Company  believes  that  significant  investments  in  product
development are required to remain competitive. Accordingly, the Company expects
to incur increased  expenditures  with respect to product  development in future
periods.

         Other  Income  (Expense).  The Company had net other income of $107,949
for the six months ended June 30, 2001  compared to net other expense of $60,494
during the six months ended June 30, 2001. This income was generated principally
from the forgiveness of certain  accounts payable by creditors of the Company in
exchange for structured cash payments or cash settlements for less than the face
amount of the  obligations.  Expenses  incurred in this category were  comprised
primarily of interest  expenses  related to balances on Company credit cards and
short term loans.

Liquidity and Capital Resources

         As of  June  30,  2001,  the  Company's  primary  source  of  liquidity
consisted of $148,256 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 June  30,  2001  of  $20,225,383  and is  currently
experiencing  a  substantial   shortfall  in  operating   capital  which  raises
considerable  doubt about the Company's  ability to continue as a going concern.
The net loss for the year ended  December 31, 2000 and the six months ended June
30, 2001 was $7,257,054 and $1,027,411,  respectively. The Company anticipates a
substantial  net loss for the year ended December 31, 2001 and with the expected
cash  requirements  for the coming weeks,  without  additional cash inflows from
investors,  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 requirements are insufficient for
ongoing  operations,  with current cash reserves virtually  exhausted.  Although
efforts are presently  underway to secure certain short term financing to enable
the Company to meet its ongoing obligations,  the Company requires  considerable
amounts  of  financing  to make any  significant  advancements  in its  business
strategy. There is 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 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.

Acquisition of Sports Management Company

                                           27

<PAGE>



         Effective  April 15,  2001,  the Company  signed an agreement to aquire
Rocky Mountain Sports Alliance,  Inc. ("RMSA"), a sports management firm located
in Salt Lake  City,  Utah.  The RMSA  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  SportsNuts 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.  The Company also  anticipates  that its online  revenues will be
enhanced by the  value-added  services that the RMSA provides to its  affiliated
events and participating  organizations.  During the second quarter of 2001, the
RMSA  generated  $110,144 in net  revenues.  The Company filed a report with the
Securities and Exchange  Commission on Form 8-K on June 5, 2001  summarizing the
acquisition of the RMSA.

Creation of Consulting Subsidiaries

         During the second quarter of 2001, the Company began certain consulting
activities through two wholly-owned subsidiares:  Synerteck Incorporated, a Utah
corporation  ("Synerteck"),  and Sports  Management  Partners,  Inc., a Delaware
corporation  ("SMP").  Synerteck was created to be a technology partner with the
Company for a variety of organizations, both sports and non-sports related, that
require Information  Technology ("IT") services.  These services include website
hosting, website design and maintenance, computer hardware leasing, and hardware
and software  programming  and related  services.  During the second  quarter of
2001,  Synerteck  generated $20,830 in net revenues.  SMP was created to provide
consulting services to sports organizations,  principally  management consulting
and strategic advisory services,  and the facilitation of introductions to SMP's
contacts  within the sports  industry.  SMP generated no net revenues during the
second quarter of 2001.


FORWARD LOOKING STATEMENTS AND RISK FACTORS

Forward Looking Statements

         When used in this report, the words,  "believe," "plan," "expects," and
similar expressions are intended to identify  forward-looking  statements within
the  meaning of  Section  27A of the  Securities  Act of 1933,  as amended  (the
"Securities  Act") and Section 21E of the  Securities  Exchange Act of 1934,  as
amended (the "Exchange  Act").  Such statements are subject to certain risks and
uncertainties,  including those discussed below, that could cause actual results
to differ  materially from those  projected.  These  forward-looking  statements
speak only as of the date hereof.  All of these  forward-looking  statements are
based on estimates and  assumptions  made by  management  of the Company,  which
although  believed to be reasonable,  are inherently  uncertain and difficult to
predict.  There  can be no  assurance  that the  benefits  anticipated  in these
forward-looking statements will be achieved.

         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.

Risk Factors

         Operating Risks

     Defaults in Senior Securities. Effective February 1, 2000, the Company sold
and issued a promissory note secured by certain  tangible and intangible  assets
of the Company ("Note") in exchange

                                       28

<PAGE>

for $450,000 in cash proceeds. As of May 1, 2000, the Company is in default with
respect to the Note. 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.  To the
extent  that any of its key  personnel  are unable or refuse to  continue  their
association with the Company, a suitable replacement would have to be found. The
competition  for  qualified  personnel  in the  computer  software  and Internet
markets is intense, and there are limited numbers of such qualified personnel in
the  metropolitan  Salt Lake City area.  There is no assurance  that the Company
would  be  able to  find  suitable  replacements  for  its  existing  management
personnel or technical personnel or that such replacements could be obtained for
an amount affordable to the Company.

         Dependence  on Market  Awareness  of  Brand.  If the  Company  fails to
successfully  promote the "SportsNuts" or "SportsNuts.com"  brand name or if the
Company incurs  significant  expenses promoting and maintaining this brand name,
there could be a material adverse effect on the Company's  business,  results of
operations,  and financial condition.  Due in part to the emerging nature of the
market for Internet management solutions and the substantial resources available
to many of the Company's competitors, there may be a time-limited opportunity to
achieve and maintain a significant  market  share.  Developing  and  maintaining
awareness  of the  Company's  brand name is  critical  to  achieving  widespread
acceptance of the Company's management and reporting systems.  Furthermore,  the
importance of brand  recognition  will increase as competition in the market for
the  Company's  products  and services  increases.  Successfully  promoting  and
positioning the Company's brand will depend largely on the  effectiveness of the
Company's marketing efforts, event management  capabilities,  and its ability to
attract  a large  number  of  amateur  sports  enthusiasts  to its Web site on a
consistent basis.  Consequently,  the Company may need to increase its financial
commitment to creating and maintaining brand awareness among consumers.

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

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

         Seasonality.  While  neither  seasonal  nor  cyclical  variations  have
materially  affected  the  Company's  results  of  operations  in the past,  the
Company's  short  operating  history  may have  suppressed  these  factors.  For
example, increases in site traffic will likely correspond with the three primary
sports seasons (football,  basketball,  and baseball) and therefore revenues can
fluctuate  greatly  depending  upon the time of year.  There can be no assurance
that seasonal or cyclical  variations will not materially  adversely  affect the
Company's results of operations in the future.

     Growth  Management.  The Company  anticipates that it will experience rapid
growth in the next few years of operations. The management challenges imposed by
this growth include entry into new
                                       29

<PAGE>



markets,  growth in the number of persons accessing the Web Site,  management of
affiliated  sports   organizations,   employees  and  customers,   expansion  of
facilities  and computer  systems  necessary  to  accommodate  such growth,  and
additions and  modifications  to the products and services  offered  through the
Company's  Web Site.  To manage these  changes  effectively,  the Company may be
required to hire additional  management and operations  personnel and to improve
its operational,  financial, computer, and management systems. If the Company is
unable to manage growth effectively or hire or retain qualified  personnel,  the
Company's  business  and results of  operations  could be  materially  adversely
affected.

         Regulation of Fundraising Activities.  Most states regulate fundraising
activities through "Charitable  Solicitation"  statutes.  To the extent that the
Company is subject to such  statutes,  the  Company may be required to file as a
paid solicitor or professional  fundraiser and pay a filing fee in each state in
which it  attempts  to engage  amateur  sports  teams and  participants  to sell
Internet advertising to local merchants and organizations. Moreover, inasmuch as
such statutes apply to any person engaged in such  activities,  every person who
engages  in  fundraising  activities  may  be  required  to  register  as a paid
solicitor or professional fundraiser and pay a registration fee in each state in
which they  attempt to sell banner  advertising  on behalf of the  Company.  Any
determination  that would require state registration for amateur sports teams or
participants  may have a  material  adverse  effect on the  Company's  business,
financial condition, and results of operations.

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

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

         Risk  of  Computer  System  Failure.  The  success  of the  Company  is
substantially dependent upon its ability to deliver high quality,  uninterrupted
access to its Web Site,  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,  natural
disaster, power loss,  telecommunications failures,  unauthorized intrusion, and
other catastrophic events. Any substantial interruption in the Company's systems
would  have a  material  adverse  effect on the  Company's  business,  operating
results,  and  financial   condition.   Although  the  Company  carries  general
commercial  insurance coverage,  such coverage may not be adequate to compensate
for the losses that may occur. In addition,

                                       30

<PAGE>



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  Web Site.  The  occurrence of any of
these risks could have a material  adverse  effect upon the Company's  business,
results of operations, and financial condition.

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

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

         No Proprietary  Protection for  Technology.  The Company's  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 submitted applications to the USPTO for trademark protection for the
name  "SportsNuts.com"  with  respect to the  following  classes of products and
services: (i) vitamins,  minerals,  and herbal supplements;  (ii) sporting goods
and apparel; (iii) Internet communication,  education,  and entertainment;  (iv)
miscellaneous goods and services.  Currently the mark "E-Sports Mall" is pending
registration.  The  Company  has also  registered  the  Internet  domain  names,
"www.sportsnuts.com,"  and  "www.sportsnuts.net."  Given  the lack of  resources
available to the Company, the Company has not vigorously pursued finalization of
its trademark  applications and the status of such  applications is presently in
doubt.  If the Company is  unsuccessful  in obtaining the right of full usage of
its name from the USPTO,  other companies with names,  marks, or slogans similar
to SportsNuts or SportsNuts.com  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

                                      31

<PAGE>



service marks should be found to infringe upon intellectual property rights of a
third party,  the Company could be enjoined from further  infringement and could
be required to pay  damages.  In the event a third party were to sustain a valid
claim  against  the  Company,  and in the  event a  required  license  were  not
available on commercially  reasonable terms, the Company's financial  operations
and results of operations could be materially  adversely  affected.  Litigation,
which could  result in  substantial  cost to and  diversion  of resources of the
Company,  may also be necessary to enforce  intellectual  property rights of the
Company or to defend the Company against claimed  infringements of the rights of
others.

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

         Investment Risks

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

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

         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
no active  public  market for the shares and no analysts  or NASD market  makers
actively follow the Company.

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

         Concentration of Voting Power.  According to the terms of a certain
convertible promissory

                                       32

<PAGE>

note sold and issued by the Company to Gardner  Management  Profit  Sharing Plan
and Trust  ("Trust"),  the Trust  possesses  voting  rights  with  respect  to a
substantial  portion  of the voting  shares of the  Company.  Consequently,  the
trustee of the Trust possesses the ability to unilaterally  control the election
of the  Company's  Board of  Directors.  In addition,  pursuant to the Company's
Certificate of Incorporation, the Board of Directors has been divided into three
classes,  with  only one  class  subject  to  reelection  in a given  year.  The
Certificate  of  Incorporation  requires  a vote of 66 2/3% of the shares of the
Company  to  amend  the   provision   governing   the  election  of   directors.
Consequently,  even if a shareholder or group of shareholders  were to acquire a
majority of the outstanding  shares of the Company,  such acquisition  would not
necessarily  lead to a change in control of the  Company.  However,  the Company
cannot guarantee that certain persons, either collectively or individually, will
not be able to control the election of the Board of Directors  and that minority
shareholders will not be adversely affected as a result.

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

         Securities Eligible for Public Trading. Of the 12,634,004 shares of the
Company's Common Stock outstanding at June 30, 2001, approximately 7,500,000 are
freely  tradeable or immediately  eligible for resale under Rule 144 promulgated
pursuant to the Securities Act of 1933, as amended. Sales of substantial amounts
of freely tradeable stock in the public market could adversely affect the market
price of the Common Stock.  The Company has also filed a registration  statement
with  respect to its 2000 Stock  Option  Plan,  the result of which could be the
sale of a significant  number of shares in the public market,  and consequently,
an adverse effect upon the public trading price of the Company's Common Stock.

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

         Potential  Issuance  of  Additional  Common and  Preferred  Stock.  The
Company is authorized to issue up to 200,000,000  shares of Common Stock. To the
extent of such  authorization,  the Board of  Directors of the Company will have
the ability, without seeking shareholder approval, to issue additional shares of
common stock in the future for such  consideration as the Board of Directors may
consider  sufficient.  The issuance of additional Common Stock in the future may
reduce the  proportionate  ownership and voting power of existing  shareholders.
The Company is also  authorized  to issue up to  20,000,000  shares of preferred
stock,  the rights and  preferences  of which may be designated in series by the
Board of Directors.  To the extent of such authorization,  such designations may
be made without shareholder approval.  The designation and issuance of series of
preferred  stock in the future would create  additional  securities  which would
have dividend and liquidation preferences over common stock.

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

                                          33

<PAGE>



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.


                                            34

<PAGE>



                                     PART II

                                OTHER INFORMATION

ITEM 1.        LEGAL PROCEEDINGS

               On  August  18,  2000,  Mediaworks,   Inc.,  a  Utah  corporation
("Mediaworks"),  filed a complaint  against  the Company in the Fourth  Judicial
District Court of Utah County, State of Utah, regarding the collection of monies
allegedly  owed to  Mediaworks  by the  Company  for media  production  services
rendered.  The Mediaworks  complaint seeks to recover $8,409.77,  including pre-
and post- judgment  interest,  costs, and attorneys fees. On September 19, 2001,
the  Company  filed an  answer  and  counterclaim  to the  Mediaworks  complaint
alleging breach of contract for media production services that were paid for but
not  performed  by  Mediaworks.  The  Company's  counterclaim  seeks to  recover
$9,409.78,  including costs and attorneys  fees. On October 5, 2000,  Mediaworks
filed a reply to the Company's counterclaim.

               On  December  15,  2000,   North  Star  Printing,   a  Utah  sole
proprietorship  ("NSP"),  filed a  complaint  against  the Company in the Fourth
Judicial District Court of Utah County,  State of Utah, regarding the collection
of monies allegedly owed to NSP by the Company for printing  services  rendered.
The NSP complaint  seeks to recover  $7,271.49,  including costs and interest at
the rate of 18% per annum on invoices  more than 30 days past due. On January 5,
2001, the Company filed an answer to the NSP complaint. The Company is scheduled
to appear at a pre-trial conference regarding the matter on August 31, 2001.

               On December 22, 2000,  CMD Realty  Investment  Fund IV, L.P.,  an
Illinois limited partnership  ("CMD"),  filed a forcible detainer action against
SportsNuts.com,  Inc., a controlled  subsidiary of the Company  ("SNC"),  in the
Maricopa County Superior Court,  State of Arizona,  regarding a lease of certain
office  space in Phoenix,  Arizona.  On January 23, 2001,  the court  rendered a
final  judgment  against SNC,  finding it guilty of forcible  entry and detainer
under  Arizona law. The judgment  awarded CMD right to  possession of the leased
premises  and  granted  judgment  in favor of CMD in the sum of  $19,356.89  for
unpaid rent and other charges, costs, and expenses. CMD subsequently drew upon a
letter of credit posted by SNC for the leased premises to pay the judgment.  CMD
also  retained  its right  against  SNC to recover  rent and other costs for the
remainder  of the  lease,  which  continues  until  June  30,  2004 at a rate of
$5,150.42 per month.  The judgment also required CMD to mitigate its damages and
attempt to re-lease the property. SNC vacated the leased premises on January 25,
2001.


ITEM 2.   CHANGES IN SECURITIES

          (a)  Recent Sales in Unregistered Securities.
          Effective May 15, 2001, the Company sold and issued 500,000 shares
if its Common Stock to an accredited investor in exchange for $50,000 in cash
proceeds.  The Company believes the transaction was exempt from the registra-
tion provisions of the Securities Act of 1933 pursuant to (i) Rule 903 promul-
gated pursuant to such act and (ii) Section 4(2) of such Act and Rule 506 pro-
mulgated thereunder.

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES

               Effective  February  1,  2000,  the  Company  sold  and  issued a
promissory note secured by certain 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.  As of April 1,  2001,  the
principal amount of the Note,  together with interest as accrued, is convertible
into  approximately   5,395,562  shares  of  common  stock.  The  Note  and  its
accompanying  Security  Agreement 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.



                                   35

<PAGE>

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

               Not applicable.

ITEM 5.        OTHER INFORMATION

               Not applicable.

ITEM 6.        EXHIBITS AND REPORTS ON FORM 10-QSB

INDEX TO EXHIBITS
<TABLE>
<CAPTION>
               Number       Exhibits
<S>            <C>          <C>
               3.1          Amended and Restated Certificate of Incorporation of SportsNuts, Inc. (1)

               3.2          Amended and Restated Bylaws of SportsNuts, Inc., a Delaware corporation (2).

               10.1         Convertible Promissory Note and Security Agreement among Gardner
                            Management Profit Sharing Plan and Trust, SportsNuts.com, Inc., Sportzz.com,
                            Inc., and the Company, including amendments, dated February 1, 2000. (3)

               10.2         Consulting Agreement with Mark Johnson dated November 22, 2000. (4)

               10.6         SportsNuts, Inc. Amended and Restated 2000 Stock Option Plan (5)

               10.7         Term Lease Master Agreement between Sports Management Partner IBM dated
                            May 31, 2001.

               21.1         Subsidiaries of the Registrant.
</TABLE>


-----------

  (1) Filed as an Exhibit to the Company's  quarterly  report on Form 10-QSB,
  filed with the Commission on May 15, 2001.

  (2) Filed as an Exhibit to the Company's  quarterly  report on Form 10-QSB,
  filed with the Commission on May 15, 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  Registration  Statement on Form S-8,
  filed with the Commission on December 21, 2000.

  (5) Filed as an Exhibit to the Company's  quarterly  report on Form 10-QSB,
  filed with the Commission on May 15, 2001.

          SIGNATURES

               Pursuant to the  requirements  of the Securities  Exchange Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

                                           SPORTSNUTS, INC.

Date:  August 14, 2001                     By:  /s/ Kenneth I. Denos
                                          -----------------------------------
                                                Kenneth I.Denos
                                                Chief Financial Officer


                                       36
<PAGE>

Exhibit Index
<TABLE>
<CAPTION>

Number  Exhibits
------  ---------
<S>     <C>
3.1     Amended and Restated Certificate of Incorporation of SportsNuts, Inc.(1)

3.2     Amended and Restated Bylaws of SportsNuts, Inc., a Delaware corp. (2)

10.1    Convertible Promissory Note and Security Agreement among
        Gardner Management Profit Sharing Plan and Trust,
        SportsNuts.com, Inc., Sportzz.com, Inc., and the Company,
        including amendments, dated February 1, 2000. (3)

10.2    Consulting Agreement with Mark Johnson dated November 22, 2000. (4)

10.6    SportsNuts, Inc. Amended and Restated 2000 Stock Option Plan.   (5)

10.7    Term Lease Master Agreement between Sports Management Partner IBM dated
        May 31, 2001.

21.1    Subsidiaries of the Registrant.

</TABLE>

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(1) Filed as an Exhibit to the Company's quarterly report on Form 10-QSB,
filed with the Commission on May 15, 2001.

(2) Filed as an Exhibit to the Company's quarterly report on Form 10-QSB,
filed with the Commission on May 15, 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  Registration  Statement  on Form S-8,
filed with the Commission on December 21, 2000.

(5) Filed as an Exhibit to the Company's quarterly report on Form 10- QSB,
filed with the Commission on May 15, 2001.


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