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 September 30, 2000


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

                       SPORTSNUTS.COM INTERNATIONAL, 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, Suite 550,
     10421 South 400 West,
     Salt Lake City, Utah                                    84095
     --------------------                                    -----------
Address of principal executive offices)                      Zip Code
</TABLE>
                           Issuer's telephone number
----------------------------------------------------------------------------
(Former name or former address and former fiscal year, if changed since last
report.)









<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 September 30, 2000, the Company
had outstanding 2,607,301 shares of common stock, par value $0.002 per share.

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









<PAGE>



                                     PART I

                              FINANCIAL INFORMATION

The Financial Statements of the Company are prepared as of September 30, 2000.

ITEM 1.        FINANCIAL STATEMENTS REQUIRED BY FORM 10-QSB



                                    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.............................. 9
</TABLE>
                                        1

<PAGE>



                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                           Consolidated Balance Sheets


                               ASSETS
                               ------
<TABLE>
<CAPTION>
                                                                             September 30,       December 31,
                                                                                  2000              1999
                                                                           ------------------  -----------------
                                                                           (Unaudited)
<S>                                                                        <C>                 <C>
CURRENT ASSETS

   Cash and cash equivalents (Note 1)                                      $           71,138  $         148,647
   Accounts receivable, net (Note 1)                                                   22,839             15,523
   Inventory, net (Notes 1 and 2)                                                      12,213             23,936
   Prepaid expenses                                                                    56,336             53,067
                                                                           ------------------  -----------------

     Total Current Assets                                                             162,526            241,173
                                                                           ------------------  -----------------

PROPERTY AND EQUIPMENT (Note 1)

   Computer hardware                                                                  518,789            564,018
   Computer software                                                                  721,809            667,854
   Furniture and office equipment                                                     226,520            236,844
   Less - accumulated depreciation                                                   (546,413)          (244,907)
                                                                           ------------------  -----------------

     Total Property and Equipment                                                     920,705          1,223,809
                                                                           ------------------  -----------------

OTHER ASSETS

   Restricted cash                                                                        -              110,000
                                                                           ------------------  -----------------

     Total Other Assets                                                                   -              110,000
                                                                           ------------------  -----------------

     TOTAL ASSETS                                                          $        1,083,231  $       1,574,982
                                                                           ==================  =================
</TABLE>





                                        2

<PAGE>



                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                     Consolidated Balance Sheets (Continued)


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------
<TABLE>
<CAPTION>
                                                                                September 30,      December 31,
                                                                                  2000               1999
                                                                           ------------------   ----------------
                                                                                  (Unaudited)
<S>                                                                        <C>                 <C>
CURRENT LIABILITIES

   Accounts payable                                                        $        1,253,364  $         766,214
   Accrued expenses                                                                   393,633            228,865
   Notes payable, current portion (Note 4)                                            115,000             -
   Notes payable, related parties (Note 3)                                            517,000             25,000
                                                                           ------------------  -----------------

     Total Current Liabilities                                                      2,278,997          1,020,079
                                                                           ------------------  -----------------

STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock, $0.002 par value; 200,000,000 shares
    authorized, 2,607,301 and 894,918 shares issued
    and outstanding, respectively                                                       5,215              1,790
   Preferred stock, $0.002 par value; 20,000,000 shares
    authorized, 178,000 and 0 shares issued and
    outstanding, respectively                                                             356              -
   Additional paid-in capital                                                      15,486,741         12,494,031
   Accumulated deficit prior to the development stage                             (13,136,034)       (11,940,918)
   Accumulated deficit since the inception of the
    development stage                                                              (3,552,044)            -
                                                                           ------------------  -----------------

     Total Stockholders' Equity (Deficit)                                          (1,195,766)           554,903
                                                                           ------------------  -----------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
       (DEFICIT)                                                           $        1,083,231  $       1,574,982
                                                                           ==================  =================

</TABLE>




                                       3
<PAGE>



                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              For the Three Months Ended
                                                                     September 30,
                                                       --------------------------------------
                                                              2000                1999
                                                       ------------------  ------------------
<S>                                                    <C>                 <C>
NET SALES                                              $           -       $           -
                                                       ------------------  ------------------

EXPENSES

   General and administrative                                     484,698             486,145
   Selling and marketing                                          199,718             240,620
   Research and development                                        61,925              66,254
                                                       ------------------  ------------------

     Total Expenses                                               746,341             793,019
                                                       ------------------  ------------------

LOSS FROM OPERATIONS                                             (746,341)           (793,019)
                                                       ------------------  ------------------

OTHER INCOME (EXPENSES)

   Interest expense                                               (36,453)               (63)
   Interest income                                                 -                  13,889
   Other income                                                        50              -
   Gain on forgiveness of debt                                      4,040              -
   Loss on sale of assets                                         (15,834)             -
                                                       -------------------  -----------------

     Total Other Income (Expenses)                                (48,197)            13,826
                                                       -------------------  -----------------

LOSS FROM CONTINUING OPERATIONS
 BEFORE INCOME TAXES                                             (794,538)          (779,193)

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

LOSS FROM CONTINUING OPERATIONS                                  (794,538)          (779,193)

LOSS FROM DISCONTINUED
OPERATIONS                                                         -              (1,604,525)
                                                       ------------------  ------------------

NET LOSS                                               $         (794,538) $      (2,383,718)
                                                       ==================  =================

BASIC LOSS PER COMMON SHARE -
 BASIC AND DILUTED (Note 1)
   Loss from continuing operations                     $           (0.44)  $           (0.91)
   Loss from discontinued operations                                0.00               (1.87)
                                                       ------------------  ------------------
     Basic Loss Per Share                              $           (0.44)  $           (2.78)
                                                       ==================  ==================

WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING                                             1,794,234             857,271
                                                       ==================  ==================
</TABLE>


                                       4

<PAGE>






                       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 Nine Months Ended              Through
                                                                   September 30,                   September 30,
                                                       --------------------------------------
                                                              2000                1999                 2000
                                                       ------------------  ------------------  -----------------
<S>                                                    <C>                 <C>                 <C>
NET SALES                                              $           -       $           -       $          -
                                                       ------------------  ------------------  -----------------

EXPENSES
   General and administrative                                   3,256,516            486,335           2,766,278
   Selling and marketing                                          629,493            240,620             510,015
   Research and development                                       205,185             66,254             165,648
                                                       ------------------  -----------------    ----------------

     Total Expenses                                             4,091,194            793,209           3,441,941
                                                       ------------------  ------------------   ----------------

LOSS FROM OPERATIONS                                           (4,091,194)          (793,209)         (3,441,941)
                                                       ------------------  ------------------   ----------------

OTHER INCOME (EXPENSES)
   Interest expense                                               (76,834)               (63)            (76,577)
   Interest income                                                  2,267             13,889               1,296
   Other income                                                     3,175                 -                3,175
   Gain on forgiveness of debt                                      4,040                 -                4,040
   Loss on sale of assets                                         (42,037)                -              (42,037)
                                                       --------------------------------------   ----------------

     Total Other Income (Expenses)                               (109,389)            13,826            (110,103)
                                                       ------------------  ------------------   ----------------

LOSS FROM CONTINUING OPERATIONS
 BEFORE INCOME TAXES                                           (4,200,583)          (779,383)         (3,552,044)

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

LOSS FROM CONTINUING OPERATIONS                                (4,200,583)          (779,383)         (3,552,044)

LOSS FROM DISCONTINUED
OPERATIONS (Note 10)                                             (546,577)                            (3,237,198)
                                                       -------------------  -----------------   ----------------

NET LOSS                                               $       (4,747,160) $      (4,016,581)   $     (3,552,044)
                                                       ==================  =================    ================

BASIC LOSS PER COMMON SHARE -
 BASIC AND DILUTED (Note 1)
   Loss from continuing operations                     $            (3.45) $           (1.14)
   Loss from discontinued operations                                (0.45)             (4.72)
                                                       ------------------  -----------------
     Basic Loss Per Share                              $            (3.90) $           (5.86)
                                                       ==================  =================
WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING                                             1,216,769             685,933
                                                       ==================  ==================
</TABLE>

                                        5

<PAGE>

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                         (A Development Stage Company)
           Consolidated Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
                                                       Preferred  Stock               Common Stock                   Additional
                                                       --------------------           --------------------            Paid-In
                                                       Shares         Amount          Shares         Amount           Capital
                                                       ------        --------         -------        ------          ------------
<S>                                                    <C>           <C>              <C>            <C>             <C>
Balance, December 31, 1998                                  -        $      -         382,563        $  765          $  1,651,646

Recapitalization (Note 1)                                   -               -         122,086           245             1,549,253

Issuance of common stock for cash                           -               -         248,912           498             5,610,218
(net of issuance costs of $501,274)

Issuance of common stock for                                -               -          26,550            53               621,697
fundraising services (Note 5)

Stock offering costs                                        -               -               -             -              (621,750)

Issuance of common stock for                                -               -          47,244            94             3,749,906
purchase of Sportzz.com

Issuance of common stock for                                -               -          67,563           135             1,026,829
exercise of warrants issued for
fundraising services (Note 5)

Stock offering costs                                        -               -               -             -            (1,026,964)

Receipt of cash for subscription                            -               -               -             -                     -
receivable

Minority interest in subsidiary                             -               -               -             -               (66,804)
(Note 1)

Net loss for the year ended                                 -               -               -             -                     -
Decenber 31, 1999                                    ---------       --------         -------       -------           -----------

Balance, December 31, 1999                                  -               -         894,918         1,790            12,494,031

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

Warrants issued below market value                          -               -               -             -             1,954,209
(unaudited)

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

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

Shares issued for services (unaudited)                      -               -         285,000           570               164,440

Shares issued for debt payment                              -               -         500,000         1,000                40,771
(unaudited)

Net loss for nine months ended                              -               -               -             -                     -
September 30, 2000 (unaudited)                        -------          ------       ---------       -------          ------------

Balance, September 30, 2000                           178,000          $  356       2,607,301       $ 5,215          $ 15,486,741
(unaudited)                                           =======          ======       =========       =======          ============
</TABLE>

<TABLE>
<CAPTION>
                                                     Accumulated        Subscription      Minority            Total Stockholder's
                                                       Deficit           Receivable       Interest              Equity (Deficit)
                                                       -------           ----------       --------              ----------------
<S>                                                <C>                 <C>                <C>                       <C>
Balance, December 31, 1998                         $(2,015,236)        $  (85,000)        $     -                   $ (447,825)

Recapitalization (Note 1)                                    -                  -               -                    1,549,498

Issuance of common stock for                                 -                  -               -                    5,610,716
cash (net of issuance costs of
$501,274)

Issuance of common stock for                                 -                  -               -                      621,750
fundraising services (Note 5)

Stock offering costs                                         -                  -               -                     (621,750)

Issuance of common stock for                                 -                  -               -                    3,750,000
purchase of Sportzz.com

Issuance of common stock for                                 -                  -               -                    1,026,964
exercise of warrants issued
for fundraising services
Note 5)

Stock offering costs                                         -                  -               -                   (1,026,964)

Receipt of cash for                                          -             85,000               -                       85,000
subscription receivable

Minority interest in                                         -                  -          66,804                            -
subsidiary (Note 1)

Net loss for the year ended
December 31, 1999                                   (9,925,682)                 -         (66,804)                  (9,992,486)
                                                   -----------         ----------         -------                   ----------

Balance, December 31, 1999                         (11,940,918)                 -               -                      554,903

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

Warrants issued below market                                 -                  -               -                    1,954,209
value (unaudited)

Preferred shares issued for                                  -                  -               -                      395,000
cash (unaudited)

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

Shares issued for services                                   -                  -               -                      165,010
(unaudited)

Shares issued for debt payment                               -                  -               -                       41,771
(unaudited)

Net loss for nine months ended
September 30, 2000 (unaudited)                      (4,747,160)                 -               -                   (4,747,160)
                                                   -----------         ----------         -------                  -----------
Balance, September 30, 2000                       $(16,688,078)       $  -                $     -               $   (1,195,766)
(unaudited)                                       ============        ===========         =======               ==============
</TABLE>

                                       6

<PAGE>





                 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 Nine Months Ended                     Through
                                                                        September 30,                      September 30,
                                                                -------------------------------------
                                                                       2000               1999                2000
                                                                ------------------  -----------------   -----------------
<S>                                                             <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net loss                                                     $       (4,747,160) $      (4,016,581)  $      (3,552,044)
   Adjustments to reconcile net income to net
    cash used in operating activities:
     Depreciation                                                          349,940            192,343             272,185
     Amortization of intangible assets                                                        146,500
     Common stock issued for services and
       marketing expenses                                                  165,010            114,000             165,010
     Warrants issued below market value                                  1,954,209             -                1,672,084
     Deferred income taxes                                                  -                  (1,258)             -
     Minority interest                                                      -                 (66,804)
     Loss on sale of fixed assets                                           42,037                                 42,037
     Gain on forgiveness of debt                                            (4,040)            -                   (4,040)
  Changes in operating assets and liabilities:
     Accounts receivable                                                    (7,316)           (22,831)             (1,247)
     Inventory                                                              11,723            (19,149)              9,243
     Restricted cash                                                       110,000             -                  110,000
     Other current assets                                                   (3,269)             1,908              82,070
     Accounts payable                                                      498,816            (11,083)            114,074
     Accrued expenses                                                      166,539             65,745             184,279
                                                                ------------------  ------------------  -----------------

       Net Cash Used in Operating Activities                            (1,463,511)        (3,617,210)           (906,349)
                                                                ------------------  -----------------   -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Proceeds from sale of fixed assets                                       43,318                  -              43,318
   Purchases of property and equipment                                    (139,817)        (1,042,333)            (36,014)
   Purchase of subsidiary                                                   -                (100,000)                  -
                                                                ------------------  -----------------   -----------------

       Net Cash Provided (Used) in Investing Activities                   (96,499)        (1,142,333)            ( 7,304)
                                                                ------------------  -----------------   -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
</TABLE>




                                        7

<PAGE>
<TABLE>
<S>                                                             <C>                 <C>                 <C>
   Decrease in cash overdraft                                               -                 (47,683)             -
   Proceeds from issuance of notes payable                                 709,500             -                  264,500
   Proceeds from issuance of common stock                                  475,001          7,130,840             225,001
   Proceeds from issuance of preferred stock                               395,000             -                  395,000
   Stock offering costs                                                    (34,500)            -                  (19,500)
   Payments on stock subscription receivable                                -                  85,000              -
   Principal payments of notes payable                                     (62,500)          (301,618)            (12,500)
                                                                ------------------  -----------------   -----------------

       Net Cash Provided by Financing Activities                $        1,482,501  $       6,866,539   $         852,501
                                                                ------------------  -----------------   -----------------
</TABLE>


                                         8

<PAGE>



                     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 Nine Months Ended                      Through
                                                                       September 30,                         September 30,
                                                                -------------------------------------
                                                                       2000               1999                 2000
                                                                ------------------  -----------------   -----------------
<S>                                                             <C>                 <C>                 <C>
NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                               $          (77,509) $       2,106,996   $         (46,544)

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                                                       148,647             -                  117,682
                                                                ------------------  -----------------   -----------------

CASH AND CASH EQUIVALENTS AT END
 OF PERIOD                                                      $           71,138  $       2,106,996   $          71,138
                                                                ==================  =================   =================


SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for:

   Interest                                                     $            2,821  $         4,361     $           2,821
   Income taxes                                                 $           -       $          -        $           -

Non-cash financing activiites:

   Common stock issued for services and marketing expenses      $          165,010  $       114,000     $         165,010
   Common stock issued to convert notes payable and interest    $           41,771  $           -       $          41,771
   Equipment exchanged for reduction of accounts payable        $            7,626  $           -       $           7,626
</TABLE>





                                           9

<PAGE>


                      SPORTSNUTS.COM INTERNATIONAL, INC.
                        (A Development Stage Company)
               Notes to the Consolidated Financial Statements


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

              a. Organization and Description of Business

              SportsNuts.com  International,  Inc. (formerly Durwood, Inc.) (the
              "Company")  was  incorporated  under  the  laws  of the  State  of
              Delaware  on July  12,  1996.  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 one of its segments
              (see Note 10).

              On April 6, 1999,  the  Company  acquired  (the  "Reorganization")
              approximately  eighty-one percent (81%) of the outstanding capital
              stock  of  SportsNuts.com, Inc. ("SportsNuts") a  privately  held
              company. As a result of the Reorganization,  the Company recorded
              a  minority  interest  of $66,804 in SportsNuts.  The Reorganiza-
              tion 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 Interna-
              tional, Inc.

              In  connection  with the  reorganization,  the Company  effected a
              2.213 for 1 forward stock split (the "forward  Split") of all then
              currently  outstanding  shares of its common  stock  (the  "Common
              Stock").  All  references to common stock have been  retroactively
              restated.  The  Forward  Split  resulted  in an  increase  in  the
              outstanding  shares of the  Company's  Common Stock from 55,175 to
              122,086 shares. As part of the Reorganization,  the Company issued
              382,563 shares of Common Stock to the  Participating  Shareholders
              of SportsNuts in exchange for their  collective  584,150 shares of
              SportsNuts  common  stock.  Each   participating   Shareholder  of
              SportsNuts  received  0.654904748  shares of the Company's  Common
              Stock in exchange  for each share of common  stock of  SportsNuts.
              Additionally,  the  Company  issued  to  holders  of  warrants  in
              SportsNuts,  warrants  for the  purchase of 167,656  shares of the
              Company's Common Stock. Each Participating Warrant Holder received
              the right to purchase  0.654904748  shares of the Company's Common
              Stock in exchange for each share of  SportsNuts  common stock they
              were entitled to purchase  pursuant to their SportsNuts  warrants.
              In the future,  the Company may issue up to an additional  138,111
              shares of Common Stock to acquire the remaining  210,887 shares of
              Common  Stock  of  SportsNuts  that  were  held  by the  remaining
              shareholders  (other than the  Company) as of the closing  date of
              the Reorganization.

              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 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,

                                         10

<PAGE>


                            SPORTSNUTS.COM INTERNATIONAL, INC.
                             (A Development Stage Company)
                     Notes to the Consolidated Financial Statements


              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

NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

              Reorganization until March 1, 2000, when the Company determined to
              discontinue its direct sales operations (see Note 10).

              a. Organization and Description of Business (Continued)

              On July 28, 1999,  the Company  issued 47,244 shares of its common
              stock  valued  at  $79.40  per share  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.
              The Company  recorded an  impairment  of goodwill of  $3,474,035
              because the  estimated  future cash flows from the acquisition
              cannot be readily determined.

              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.

              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:


                                       11

<PAGE>


                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
<TABLE>
<S>                                                                      <C>
                               Computer hardware                         3 years
                               Computer software                         3 years
                               Office equipment                          7 years
</TABLE>
              Depreciation  expense for the nine months ended September 30, 2000
              and 1999 was $349,940 and $192,343, respectively.

NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

              f. Accounts Receivable

              Accounts receivable are recorded net of the allowance for doubtful
              accounts of $22,032 at September  30, 2000 and $32,327 at December
              31, 1999.

              g. Sales Policy

              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.

              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.

              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 Nine Months Ended
                                                                         September 30,
                                                                         ---------------------------------------
                                                                             2000                  1999
                                                                         -----------------     -----------------
<S>                                                                      <C>                   <C>
              Basic loss per share from continuing operations:                 (Unaudited)           (Unaudited)

                     Loss (numerator)                                    $       4,200,583     $         779,383
                     Shares (denominator)                                        1,216,769               685,933
                     Per share amount                                    $           (3.45)    $           (1.14)

              Basic loss per share from discontinued operations:

                     Loss (numerator)                                    $         546,577     $       3,237,198
                     Shares (denominator)                                        1,216,769               685,933
                     Per share amount                                    $           (0.45)    $           (4.72)
</TABLE>

                                    12

<PAGE>


                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


              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. Shares to be issued from warrants and
              options are not  included in the  computation  because  they would
              have an antidilutive effect on the net loss per common share.




                                   13

<PAGE>


                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued))

              k. Provision for Taxes

              At  September  30,  2000,  the  Company  has  net  operating  loss
              carryforwards  of approximately  $16,600,000  which will expire in
              2012  through  2019.  No tax  benefit  has  been  reported  in the
              financial  statements  because  future  earnings  against which to
              offset the loss carryforwards are not assured.

              l. Research and Development

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

              m. New Accounting Pronouncements

              In June  1998,  the FASB  issued  SFAS No.  133,  "Accounting  for
              Derivative  Instruments  and Hedging  Activities"  which  requires
              companies to record derivatives as assets or liabilities, measured
              at fair market value.  Gains or losses  resulting  from changes in
              the values of those  derivatives  would be accounted for depending
              on the use of the  derivative  and whether it qualifies  for hedge
              accounting.  The key  criterion  for hedge  accounting is that the
              hedging   relationship  must  be  highly  effective  in  achieving
              offsetting  changes in fair value or cash  flows.  SFAS No. 133 is
              effective for all fiscal  quarters of fiscal years beginning after
              June 15, 1999.  Management believes the adoption of this statement
              will  have  no  material   impact  on  the   Company's   financial
              statements.

              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  adjustments are of a normal recurring
              nature.

NOTE 2 -      INVENTORY

              Inventory consisted of the following:
<TABLE>
<CAPTION>
                                                                         September 30,           December 31,
                                                                              2000                  1999
                                                                         -----------------     -----------------
                                                                         (Unaudited)
<S>                                                                      <C>                   <C>

                     Finished goods                                      $          16,283     $          95,742
                     Reserve for obsolete inventory                                 (4,070)              (71,806)
                                                                         -----------------     -----------------

                              Total                                      $          12,213     $          23,936
                                                                         =================     =================
</TABLE>


                                      14

<PAGE>


                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 3 - NOTES PAYABLE - RELATED PARTIES

              Notes payable - related parties consisted of the following:
<TABLE>
<CAPTION>
                                                                                   September 30,           December 31,
                                                                                       2000                  1999
                                                                                   -----------------     --------------
                                                                                   (Unaudited)
<S>                                                                                <C>                   <C>
              Note payable to an individual, unsecured,
               interest at 10%, principal and interest due
               January 2000.                                                       $          -          $      25,000

              Note payable to a shareholder,  secured by tangible and intangible
               assets of the Company,  interest at 16%,  principal  and interest
               due April 1, 2000. As of August 1, 2000, the Principal  amount of
               the Note is convertible into 4,500,000
              shares of common stock of the Company.                                        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,
               non-interest bearing, due on demand.                                          27,000                -
                                                                                                                   -
                                                                                   ----------------      -----------------

                     Total notes payable - related parties                                  517,000                25,000

                     Less: current portion                                                 (517,000)              (25,000)
                                                                                   ----------------      ----------------

                     Long-term notes payable                                       $          -          $          -
                                                                                   ================      ================

</TABLE>
                                       15

<PAGE>


                       SPORTSNUTS.COM INTERNATIONAL, INC.
                         (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


NOTE 3 -      NOTES PAYABLE - RELATED PARTIES (Continued)

              Maturities of notes payable - related parties are as follows:
<TABLE>
<CAPTION>
                           Year Ending
                          September 30,                                                         Amount
                     -------------------------------                                           ---------
<S>                                                                                           <C>
                               2001                                                           $517,000
                                                                                              ----------

                                Total                                                         $517,000
                                                                                              ==========
</TABLE>

NOTE 4 -      NOTES PAYABLE

              Notes payable consisted of the following:
<TABLE>
<CAPTION>
                                                                                  September 30,          December 31,
                                                                                      2000                 1999
                                                                                  -----------------     ----------------
                                                                                  (Unaudited)
<S>                                                                               <C>                   <C>
              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             $        -

              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             $        -

              Note payable to an individual, unsecured,
               interest at 16%, due on demand.                                    $  15,000             $        -
                                                                                  ----------            -----------

                     Total notes payable                                            115,000                      -

                     Less: current portion                                         (115,000)                     -
                                                                                  ---------             -----------

                     Long-term notes payable                                      $       -             $        -
                                                                                  =========             ===========
</TABLE>

              Maturities of notes payable are as follows:
<TABLE>
<CAPTION>
                            Year Ending
                           September 30,                                                        Amount
                     ------------------------------                                            ---------
<S>                                                                                            <C>
                                  2001                                                         $ 115,000
                                                                                               ---------
                                 Total                                                         $ 115,000
                                                                                               =========
</TABLE>

                                       16

<PAGE>


                       SPORTSNUTS.COM INTERNATIONAL, INC.
                         (A Development Stage Company)
                 Notes to the Consolidated Financial Statements

NOTE 5 -      COMMON AND PREFERRED STOCK TRANSACTIONS (Continued)

              Effective  January 1, 2000,  the Company  issued  25,000 shares of
              common  stock at a price of $10.00 per  share.  The  Company  paid
              commissions of $15,000 in connection with the stock issuance.

              Effective  April 10, 2000,  the Company  issued  50,000  shares of
              nonvoting  convertible  preferred  stock at a price  of $2.00  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 one (1) share of common stock.
              The Company paid cash  commissions  of $10,000 in connection  with
              the transaction.

              Effective  May 1,  2000,  the  Company  issued  128,000  shares of
              nonvoting  convertible  preferred  stock at a price  of $2.00  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 one (1) share of common stock.
              The  Company is  obligated  to pay $5,000 in cash  commissions  in
              connection with the transaction.

              Effective May 2, 2000,  the Company issued 15,000 shares of common
              stock in  satisfaction  of an obligation for  consulting  services
              received by the Company.  No  commissions  were paid in connection
              with the transaction.

              Effective July 15, 2000, the Company issued 50,000 shares of
              common stock in satisfaction of obligations for consulting
              services received by the Company.  No commissions were paid in
              connection with the transaction

              Effective July 15, 2000,  the  Company  issued  200,000 shares of
              common stock in satisfaction of an obligation for consulting
              services received by the Company.  No  commissions  were paid in
              connection with the transaction.


<PAGE>

              Effective  August 15 through  September 28, 2000, the Company sold
              and  issued   1,402,382  shares  of  its  Common  Stock  to  seven
              accredited investors.  No commissions were paid in connection with
              these transactions.

              Effective September 1, 2000, the Company issued 20,000 shares of
              common stock in satisfaction of an obligation for consulting
              services received by the Company.  No  commissions  were paid in
              connection with the transaction.


NOTE 6 -      OUTSTANDING STOCK OPTIONS AND WARRANTS

              During the nine  months  ended  September  30,  2000,  the Company
              issued  options to acquire  2,245,000  shares of common stock.  At
              September 30, 2000,  the total number of options  outstanding  was
              2,290,000 at a weighted average exercise price of $0.89 per share.
              The total number of fully-vested  options as of September 30, 2000
              was  584,000.  All  other  options  vest  ratably  over  a two  or
              three-year  period from the date of grant. All options expire five
              (5) years from the date of grant.

              During the nine  months  ended  September  30,  2000,  the Company
              issued  warrants to acquire  1,225,167  shares of common stock. Of
              this total, 1,040,000 warrants were issued at an exercise price of
              $2.00 per share,  18,500 warrants were issued at an exercise price
              of $1.00 per share,  and 166,667 were issued at an exercise  price
              of $0.75 per share. The difference between the market value of the
              stock  and the  exercise  price of these  warrants  at the date of
              grant was booked as an expense  during the  quarter.  At September
              30,  2000,  the  Company  had  1,291,027  outstanding  warrants to
              purchase common stock at a weighted average exercise

                                       17

<PAGE>


                       SPORTSNUTS.COM INTERNATIONAL, INC.
                         (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


              price of $2.64 per share.  Warrants issued through the nine months
              ending  September  30,  2000 have been issued as  commissions  for
              fundraising or as incentives to purchase stock.  As a result,  any
              difference  between the market value and the exercise price on the
              grant  date  has been  classified  as stock  issuance  costs.  All
              warrants expire between 2-5 years from the date of grant.

NOTE 7 - OPERATING LEASES

              During the year 2000, the Company leased four (4) different office
              and warehouse  facilities  under  non-cancelable  operating leases
              expiring  in 2000 and 2004.  Rental  expense  for the nine  months
              ended  September  30,  2000  and  1999 was  $95,174  and  $95,616,
              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 $6,045 and $9,794 for the nine months
              ended September 30, 2000 and 1999, 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>
              2000                                      $182,371
              2001                                       179,069
              2002                                       179,802
              2003                                       176,783
              2004                                        59,771
              2005 and thereafter                              -
                                                        --------

                   Total minimum lease payments         $777,796
                                                        ========
</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  September  30,  2000  of  approximately
              $16,600,000 and has experienced  periodic cash flow  difficulties,
              all of which  raise  substantial  doubt  regarding  the  Company's
              ability to continue as a going concern.

              The net loss for the years  ended  December  31, 1999 and 1998 was
              $9,925,682 and $1,598,540, respectively. The net loss for the nine
              months  ended  September  30,  2000  was  $4,747,160.  To date the
              Company has funded its  operations  through a combination of short
              and long-term loans and the private placement of its common

                                       18

<PAGE>


                       SPORTSNUTS.COM INTERNATIONAL, INC.
                         (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


              stock. The Company anticipates another net loss for the year ended
              December 31, 2000 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,

NOTE 8 - GOING CONCERN (Continued)

              (ii) attract additional capital in order to finance growth,  (iii)
              further develop and successfully  market  commercial  products and
              services,  and (iv)  successfully  compete  with other  comparable
              companies  having  financial,  production and marketing  resources
              significantly greater than those of the Company.

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

NOTE 9 -      RELATED PARTY TRANSACTIONS

              Effective  May 15,  1999,  the Company  entered  into a consulting
              agreement  with  Moore,  Clayton & Co., a private  investment  and
              advisory  firm,  to  receive  strategic  financial  and  marketing
              consulting services. The agreement, now terminated, provided for a
              retainer of $5,000 per month, with consulting services to be drawn
              against  the  retainer  at the rate of $200 per hour.  The Company
              paid  $60,000 and is  obligated  to pay an  additional  $15,000 to
              Moore,  Clayton & Co. in connection with this Agreement.  A former
              director of the Company is a principal of Moore, Clayton & Co.

              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  February  4,  2000,  the  Company  sold  and  issued  a
              promissory note secured by certain tangible and intangible  assets
              of the company  ("MCC  Note") to Moore,  Clayton & Co. in exchange
              for $20,000 in cash proceeds.  As of August 1, 2000, the principal
              amount of the MCC Note is convertible into 20,000 shares of Common
              Stock  of the  Company.  A former  director  of the  Company  is a
              principal of Moore, Clayton & Co.


                                       19

<PAGE>


                       SPORTSNUTS.COM INTERNATIONAL, INC.
                         (A Development Stage Company)
                 Notes to the Consolidated Financial Statements


              During 1999,  a director  and officer of the Company  advanced the
              Company $43,942 on a short-term  basis. The entire balance,  along
              with the balance of $27,582 due at December 31, 1998, was paid off
              along with  interest  of $156  during  1999.  The balance due this
              individual at December 31, 1999 was $-0-.

              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.




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 Nine Months Ended
                                                                                   September 30,
                                                                         ---------------------------------
                                                                              2000                1999
                                                                         -----------           -----------
                                                                         (Unaudited)           (Unaudited)
<S>                                                                      <C>                   <C>
              NET SALES                                                  $ 41,188              $1,023,471
                                                                         --------              ----------

              OPERATING EXPENSES

                Cost of sales                                              34,136              1,163,029
                General and administrative                                277,990              1,460,153
                Selling and marketing                                     225,932              1,488,458
                Research and development                                   50,421                241,186
                                                                         --------             ----------

                   Total Operating Expenses                               588,479              4,352,826
                                                                          -------             ----------

              LOSS FROM OPERATIONS                                       (547,291)           (3,329,355)
                                                                        ---------            ----------

              OTHER INCOME (EXPENSES)

                Interest expense                                             (257)               (4,423)
                Interest income                                               971                29,776
                                                                        ---------            ----------

                  Total Other Income (Expense)                                714                25,353
                                                                        ---------            ----------

              LOSS BEFORE INCOME TAX (EXPENSE)                           (546,577)           (3,304,002)
</TABLE>

                                       20

<PAGE>


                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
<TABLE>
<S>                                                                      <C>                 <C>

              INCOME TAX (EXPENSE)                                                -                  -
                                                                         ----------          ---------

              Minority interest                                                   -            66,804
                                                                         ----------          ---------

              LOSS FROM DISCONTINUED OPERATIONS                          $   (546,577)    $   3,237,198)
                                                                         ============     =============
</TABLE>


                                       21

<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.com International, Inc. (hereafter, "SportsNuts.com" 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

         Historically,  SportsNuts.com had been an online,  personalized  sports
community   offering   a   comprehensive   bundle  of  sports,   outdoors,   and
fitness-related products,  services, and information in a club environment.  The
Company had attempted to combine the three forces of sports,  the Internet,  and
direct  sales in an effort to build a targeted  online  customer  base of sports
enthusiasts.  Through March 1, 2000, the Company  derived  revenues  principally
from four  sources:  (i) proceeds from  enrollments  of  distributors  and their
customers,  (ii) recurring monthly purchases of promotional  products offered by
the Company, (iii) purchases of sales aids by independent distributors, and (iv)
purchases  of sports,  outdoors,  and  fitness-related  products  and  services.
Virtually  all of the  revenues  generated  through  February 29, 2000 have been
through the Company's direct selling  operations.  Effective March 1, 2000, with
the discontinuation of its direct selling operations, the Company began focusing
exclusively  upon building an Internet  portal to the amateur sports market.  In
connection with this change in focus, the Company anticipates  generating future
revenues    primarily    from   the   following    four   sources   (i)   online
registration/administration  service  fees,  (ii)  amateur  sports  organization
fundraising and  sponsorships,  (iii) website  advertising,  and (iv) e-commerce
commissions.   Therefore,   future   sources  of  revenue  are  expected  to  be
substantially  different from those realized through the end of February,  2000.
The  ability  to  generate  revenues  during  the year 2000 and  beyond  depends
substantially upon the Company's ability to attract users and traffic to its web
site which, in turn, may encourage the use of online registration,  fundraising,
sponsorships,  advertising and e-commerce. The Company's ability to attract such
traffic requires significant systems development, marketing and personnel costs,
which  requires  substantial  funding.  If the  Company is unable to obtain such
funding, its ability to generate revenues will be significantly impaired.

         Cost of sales have historically  been comprised of commission  payments
to the direct sales  distribution  force, as well as the cost of the distributor
kits, sales aids, and products sold through the  distribution  force and through
e-commerce  transactions.  The  Company  anticipates  that  the  expenses  which
comprise cost of goods sold in the future will change dramatically,  and will no
longer include distributor  commissions,  distributor kits, sales aids and other
such  products sold through the direct sales  business.  Future  expenses  which
comprise cost of goods sold are expected to be principally  comprised of systems
costs to  administer  the revenue  generating  features  on the  amateur  sports
Internet  site,  as well as  potential  fee sharing  expenses  to  organizations
involved in fundraising and online registration/administration.


                                     22

<PAGE>



         General   and   administrative   expenses   had   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;
direct selling sales team  incentives;  travel and other  miscellaneous  related
expenses.  R&D  expenses  consist  mainly of  development  expenses  related  to
creating new  applications  for the web site. In the coming year,  the operating
expense  structure is expected to change as a result of the  discontinuation  of
the  Company's  direct  sales  operations.  Wages  and  benefits,   promotional,
marketing,  sales,  travel and other  miscellaneous  office expenses  related to
direct  selling  were  discontinued  after March 1, 2000.  However,  the Company
anticipates  that the decrease in such  expenses  will be offset by increases in
technology  personnel  and  development  costs  related to improving the amateur
sports  Internet  site.  In  addition,  in order to execute the  amateur  sports
Internet business, the Company anticipates significant  expenditures in business
development to create strategic alliances with third parties,  and in developing
a sales  channel to the various  amateur  sports  organizations  throughout  the
United States.

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

Results of Operations

         Following is  management's  discussion of the relevant items  affecting
results of operations  for the periods ended  September 30, 2000,  and 1999. The
balances  discussed below for the nine months ending  September 30, 2000 include
both  results  from   continuing   operations  and  from  operations  that  were
discontinued  during the period, as indicated in Note 10 of the footnotes to the
consolidated financial statements.

         Revenues.  The Company generated no net revenues during the three month
period  ended  September  30,  2000,  as compared  to $560,030  during the third
quarter of 1999. For the nine months ended September 30, 2000, net revenues were
$41,188,  a 96% decrease from  $1,023,471  during the first nine months of 1999.
This  decrease  was due to the fact that the  Company  discontinued  its  direct
selling operations effective March 1, 2000. Historically, all revenues generated
by the Company had been through its direct  selling  operations.  Therefore,  no
such revenues were recognized  subsequent to March 1 during the first quarter of
2000.  Future  revenues are expected to be generated from the Company's  amateur
sports internet  business,  although the Company  anticipates that such revenues
will be minimal, if any, during the remainder of the year 2000.

         Cost of Sales.  The Company had no Cost of Sales during the three month
period  ended  September  30,  2000,  as compared  to $718,613  during the third
quarter of 1999.  For the nine month period ended  September  30, 2000,  cost of
sales were $34,136,  a 97% decrease from $1,163,029 during the first nine months
of 1999.  Such costs  consisted  primarily of commission  payments to the direct
sales  distribution  force, as well as the cost of the distributor  kits,  sales
aids,  and products sold through the  distributor  force.  The decrease from the
prior year is directly related to the corresponding decrease in revenues and the
discontinuation of the Company's direct selling business as of March 1, 2000.

         General  and  Administrative   Expenses.   General  and  administrative
expenses for the three  months ended  September  30, 2000 were  $484,698,  a 59%
decrease from  $1,169,517  during the third quarter of 1999. For the nine months
ended September 30, 2000, general and administrative expenses

                                       23

<PAGE>



were $3,534,506,  a 81% increase from $1,954,506 during the first nine months of
1999.  This increase was  principally  due to the  recognition  of $1,954,209 in
expenses  relating to issuances of warrants  during the first nine months of the
year 2000. The company also realized significant increases in professional fees,
contract labor, and rent and occupancy-related  expense. The number of employees
at the Company increased substantially  throughout 1999, as the Company began to
assemble a management  team and added other  personnel to support the  Company's
growth  in its  direct  sales  operations.  Due to  the  discontinuation  of the
Company's  direct  selling  operations,  since  March 1,  2000,  the  number  of
employees has declined sharply. Payroll expenses and professional fees accounted
for approximately $204,553 and $145,260, respectively, of this amount during the
third  quarter of 2000,  as compared to $618,499 and  $257,485  during the third
quarter of 1999. For the nine months ended  September 30, 2000,  payroll expense
and professional fees totaled approximately $703,711 and $328,952, respectively,
of general and  administrative  expenses as compared to $1,242,270  and $316,965
during the first nine months of 1999.

         Selling and Marketing Expenses.  Selling and marketing expenses for the
three month period ended  September 30, 2000 were $199,718,  a 78% decrease from
$924,418  during the third quarter of 1999.  Selling and marketing  expenses for
the nine month period ended  September  30, 2000 were  $855,425,  a 51% decrease
from  $1,732,075  during  the first  nine  months  of 1999.  This  decrease  was
primarily attributable to the following: (1) The Company discontinued its direct
selling  operations as of March 1, 2000, which eliminated  selling and marketing
personnel  and  expenses  related to this part of the  business,  (2) During the
first nine  months of 1999 the Company  incurred a one time  selling & marketing
charge of $114,000 to buy out certain royalty  obligations related to the direct
sales business,  (3) the Company has attempted to curtail  spending in this area
given its current financial  position.  Much of the marketing expense during the
first  nine  months  of 2000 is the  amortization  of  non-cancelable  marketing
contracts that were entered into during 1999 for benefits  provided  through the
first nine months of the year 2000.

         Product Development.  Product research and development expenditures for
the three month period ended  September  30, 2000 were  $61,925,  a 64% decrease
from  $171,789  during  the third  quarter  of 1999.  Research  and  development
expenses  were  $255,606  during the nine months ended  September  30, 2000,  as
compared  to  $296,426  for the first nine  months of 1999,  a decrease  of 14%.
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.   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). Net other expense totaled $108,675 for the nine
months ended September 30, 2000, compared to net other income of $39,180 for the
nine months ended  September  30, 1999.  This expense is comprised  primarily of
interest  expenses  related to balances on Company  credit  cards and short term
loans.  The increase in interest expense in the first nine months of 2000 is due
to interest  accrued on various short term loans made to the Company  during the
period. Such loans did not exist during the first nine months of the prior year.
Furthermore,  during the first nine months of 2000,  certain fixed assets of the
company were either sold or transferred  to vendors in order to reduce  accounts
payable. The applicable losses have been recorded as other expenses.

     Expenses Relating to Private Offerings. During the first nine months of the
year 2000, the Company issued 1,427,383  shares of Common Stock,  178,000 shares

                                     24

<PAGE>



of Preferred Stock, warrants to acquire 1,225,167 shares of Common Stock at
a weighted average exercise price of $1.81 per share, and convertible promissory
notes of an aggregate principal amount of $590,000 in exchange for cash proceeds
of $911,772 in a private placement of its debt and equity securities to fourteen
accredited investors.  In connection with these issuances,  the Company incurred
$37,000 in finder's fees and fundraising expenses.

Liquidity and Capital Resources

         As of September  30, 2000,  the Company's  primary  source of liquidity
consisted of $71,138 in cash and cash equivalents. The Company holds most of its
cash reserves in local sweep accounts with various 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 September 30, 2000 of  $16,688,078  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,  1999 and the nine  months  ended
September 30, 2000 was  $9,925,682  and  $4,747,160,  respectively.  The Company
anticipates a substantial net loss for the year ended December 31, 2000 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 small startup  technology-oriented  companies.  Such risks
include, but are not limited to, the ability to (i) generate revenues from 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 completely  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 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  significantly
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.


FORWARD LOOKING STATEMENTS AND RISK FACTORS

Forward Looking Statements

         When used in this report, the words,  "believes,"  "plans,"  "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

                                       25

<PAGE>



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 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.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  and  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.

                                       26

<PAGE>



         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 create substantial activity through its Web Site
to generate  revenues,  and there is no assurance that the Company will do so in
the future or that such revenue  generation  will ultimately lead to the Company
becoming profitable.

         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.

         Reliance Upon Manufacturer-Suppliers.  The Company does not manufacture
any of the products sold from its Internet Web Site,  and therefore  relies upon
the Internet retail  affiliates  ("Affiliates")  who sell these products through
the Web Site to manufacture  and/or supply all of the products to its customers.
These  Affiliates are primarily  manufacturer's  representatives.  The Company's
profit margins and the ability for consumers to receive  existing  products on a
timely basis are substantially dependent upon these Affiliates.  The development
of  additional  new products in the future will likewise be dependent in part on
the  services of suitable  Affiliates.  The failure of any one of the  Company's
Affiliates  to produce and deliver  quality  products  and  services in a timely
manner on a consistent basis could  negatively  affect the sale of products from
the Company's Web Site and could have a material adverse effect on the Company's
financial condition and results of operations.

          Growth  Management.  The Company  anticipates  that it will experience
rapid  growth in the next few years of  operations.  The  management  challenges
imposed by this growth  include entry into new markets,  growth in the number of
persons  accessing  the  Web  Site,  management  of  Affiliates,  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

                                       27

<PAGE>



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 relatively
few  laws  or  regulations  directly  applicable  to  the  Internet.  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 or  providing  services
through the Internet.  Although  transmissions  from the Company's Web Site will
likely  continue to  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.

         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,  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

                                       28

<PAGE>



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

         Competition and Technological Change. The market for 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

                                       29

<PAGE>



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.

         Product Liability. Although the Company does not manufacture any of the
products  purchased or sold through its Web site, it may be subject to liability
for  losses  caused by such  products.  While the  Company  maintains  a general
commercial  liability  insurance policy,  there is no guarantee that this policy
will  provide  coverage  for or that any such  coverage  will be  sufficient  to
satisfy the claims of a  successful  product  liability  claim.  Accordingly,  a
successful  products  liability  claim against the Company could have a material
adverse effect on 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  Company's
management's  attention 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.  Consequently, to the extent that the shares became
available for public sale, the public share price could fluctuate  substantially
based upon a small volume of public transactions in the Company's Common Stock.

         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.

                                       30

<PAGE>



         Concentration  of  Voting  Power.  According  to the terms of a certain
convertible promissory 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  majority  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 now or in the future,  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  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 19,822,000 additional 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 2,607,301 shares of the
Company's  Common  Stock  outstanding  on  September  30,  2000,   approximately
1,010,000 are freely tradeable or immediately eligible for resale under Rule 144
promulgated  pursuant  to the  Securities  Act of  1933,  as  amended.  Sales of
significant  amounts of the freely  tradeable  stock in the public  market could
adversely affect the market price of the Common Stock.  Moreover, the Company is
currently  intends to file an S-8  registration  statement  with  respect to the
Company's  stock  option  plan,  the  result  of  which  could  be the sale of a
substantial 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.  Pursuant
to  the  Company's  Restated  Certificate  of  Incorporation,   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 the Common Stock offered hereby. 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

                                       31

<PAGE>



designation and issuance of series of Preferred Stock in the future would create
additional securities which would have dividend and liquidation preferences over
Common Stock.

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

         Applicability  of Low Priced Stock Risk  Disclosure  Requirements.  The
Common Stock of the Company may be considered a low priced  security under rules
promulgated  under the  Securities  Exchange  Act of 1934.  Under  these  rules,
broker-dealers participating in transactions in low priced securities must first
deliver a risk  disclosure  document which  describes the risks  associated with
such stocks,  the broker- dealers's duties,  the customer's rights and remedies,
and 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.

         Risks Related to Direct Selling Operations and Discontinuance Thereof

         Possible   Liability   to   Distributors.   In   connection   with  the
discontinuation of its direct selling operations,  the Company may be subject to
liability for sales of products and memberships to its independent  distributors
during the previous  twelve months.  State and/or federal laws governing  direct
selling may require the Company to refund all or part of the funds received from
distributors   for  product  sales  in  the  event  of  a  termination   of  the
distributor's  independent sales agreement. If the Company were forced to refund
monies to its  distributors  and  repurchase  product  inventory,  the Company's
business,  operating  results,  and  financial  condition  would  be  materially
adversely affected.

         Potential Negative Impact of Actions by Former  Distributors.  Although
the Company has  discontinued  its direct sales  operations,  actions by certain
former distributors may still negatively impact the Company and its products and
services.   The  publicity   resulting  from  distributor   activities  such  as
inappropriate  earnings claims and product  representations  by distributors can
have a material  adverse effect on the Company's  future  business or results of
operations.

         Government  Regulation of Direct  Selling  Activities.  Direct  selling
activities  are  regulated  by  various  governmental  agencies.  These laws and
regulations are generally  intended to prevent  fraudulent or deceptive schemes,
often  referred to as "pyramid" or "chain  sales"  schemes,  that promise  quick
rewards for little or no effort,  require  high entry costs,  use high  pressure
recruiting  methods and/or do not involve  legitimate  products.  As is the case
with most  companies  which are  involved  in direct  selling,  the  Company may
receive inquiries from various government  regulatory  authorities regarding the
nature of its business and other issues such as compliance  with local  business
opportunity and securities laws.  Although the Company has not received any such
inquiry to date,  there can be no assurance  that the Company will not face such
inquiries  in the future  which,  either as a result of findings  adverse to the
Company or as a result of adverse  publicity  resulting from the  instigation of
such inquiries, could have a

                                       32

<PAGE>



material  adverse  effect on the Company's  business and results of  operations.
While the regulations  governing  direct selling are complex and vary from state
to state,  based on research  conducted to date,  the Company  believes that its
method of distribution was in compliance in all material  respects with the laws
and regulations relating to direct selling activities of the states in which the
Company operated.

         Governmental  Regulation  of Direct  Selling in General.  The Company's
direct sales system (now  discontinued)  was subject to or affected by extensive
government regulation of marketing practices and federal and state regulation of
the  offer  and  sale  of  business  franchises,  business  opportunities,   and
securities.   In  addition,  the  Internal  Revenue  Service  and  state  taxing
authorities  in any of the  states or U.S.  territories  where the  Company  has
Distributors  could  classify the  Distributors  as employees of the Company (as
opposed to independent  contractors).  Any assertion or  determination  that the
Company's  direct  selling  operations  were not in compliance  with  government
requirements  could have a material adverse effect upon the Company's  financial
condition and results of operations.



                                     PART II

                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      On May 11, 2000, the Phoenix Suns Limited Partnership, a Delaware
Limited Partnership,  filed a claim against the Company in the Superior Court of
Arizona,  Maricopa  County.  The purpose of the claim was a judicial  attempt to
collect monies from the Company for advertising services rendered in the America
West Arena in Phoenix, Arizona during the 1999-2000 basketball season. The claim
seeks to recover $72,500, not including up to $5,000 in legal fees and costs.

ITEM 2. CHANGES IN SECURITIES

      Recent Sales of Unregistered Securities

      Effective August 15 through  September 28, 2000, the Company sold
and issued 1,402,383  shares of its Common Stock to seven accredited  investors.
No  commissions  were paid in connection  with these  transactions.  The Company
believes that these transactions were exempt from the registration provisions of
the  Securities  Act of 1933  pursuant to Section  4(2) of such Act and Rule 506
promulgated thereunder.

      Effective  August  16,  2000,  the  Company  sold  and  issued  a
promissory  note to an  accredited  investor  in  exchange  for  $50,000 in cash
proceeds.  The Note is convertible into shares of Common Stock of the Company at
a ratio of one share for each $0.25 of principal and interest  outstanding under
the Note at the time of conversion.  No commissions were paid in connection with
this  transaction.  In connection with this transaction, the Company also issued
warrants  to  purchase  100,000  shares of  Common  Stock of the  Company  at an
exercise price of $0.75 per share.  The Company  believes that this  transaction
was exempt

                                     33

<PAGE>



from the  registration  provisions  of the  Securities  Act of 1933  pursuant to
Section 4(2) of such Act and Rule 506 promulgated thereunder.

        Beginning in April, 1999 and continuing throughout 1999 until the
end of the second  quarter,  2000,  the Company  has granted  options to various
officers, directors, employees, and service providers of the Company to purchase
2,290,000 shares of its Common Stock pursuant to the Company's 1999 Stock Option
Plan ("Plan").  The Company believes that the options granted under the Plan are
exempt from  registration  under the  Securities Act of 1933 pursuant to Section
4(2) of such Act.

ITEM 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 September  30, 2000,  the
principal amount of the Note,  together with interest as accrued, is convertible
into approximately  4,979,342 shares of common stock. The Convertible Promissory
Note and 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.

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 8-K:

        The following documents are filed as exhibits to this Form 10-QSB:



                                       34

<PAGE>


INDEX TO EXHIBITS
<TABLE>
<CAPTION>

              Number       Exhibits
<S>           <C>          <C>
              3.1          Amended and Restated Certificate of Incorporation of
                           SportsNuts.com International, Inc., a Delaware
                           corporation.(1)

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

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

              10.2         Co-Branding Agreement between MyFamily.com, Inc. and
                           the Company, dated September 12, 2000.

              10.3         Consulting Agreement between the Company and Eslie
                           Barlow, dated July 15, 2000. (4)

              10.4         Consulting Agreement between the Company and Todd
                           Shell, dated July 15, 2000. (5)

              10.5         Convertible Promissory Note and Warrant granted to
                           John Schmitz and Stanley Aber, dated
                           March 27, 2000. (6)

              10.6         Financial Consulting Agreement, dated March 23, 2000,
                           between Moore, Clayton & Co. and SportsNuts.com
                           International, Inc. (7)

              10.7         Employment Agreement with Kenneth Denos dated
                           November 16, 1998. (8)

              10.8         SportsNuts.com Internatinoal, Inc. 1999 Stock Option
                           Plan. (9)

              21.1         Subsidiaries of the Registrant. (10)

              27.1         Financial Data Schedule
</TABLE>
---------------

              (1) Filed as an Exhibit to the Company's quarterly report on Form
              10-QSB, filed with the Commission on August 18, 2000.

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

              (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 September 8, 2000.

              (5) Filed as an Exhibit to the Company's  registration  statement
              on Form S-8, filed with the Commission on September 8, 2000.

              (6) Filed as an Exhibit to the Company's quarterly report on Form
              10-QSB, filed with the Commission on May 15, 2000.

              (7) Filed as an Exhibit to the Company's quarterly report on Form
              10-QSB, filed with the Commission on August 18, 2000.

              (8) Filed as an Exhibit to the Company's quarterly report on Form
              10-QSB, filed with the Commission on May 19, 1999.

              (9) Filed as an Exhibit to the Company's quarterly report on Form
              10-QSB, filed with the Commission on November 15, 1999.

              (10)  Filed as an Exhibit to the  Company's  quarterly  report on
              Form 10-QSB, filed with the Commission on May 19, 1999.

                                       35

<PAGE>







          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.COM INTERNATIONAL, INC.

Dated:  November 9, 2000                  By: /s/ Kenneth I. Denos
                                          ------------------------------------
                                             Kenneth I. Denos
                                             Chief Financial Officer

                                       36

<PAGE>

Exhibit Index

<TABLE>
<CAPTION>

              Number       Exhibits
<S>           <C>          <C>
              3.1          Amended and Restated Certificate of Incorporation of
                           SportsNuts.com International, Inc., a Delaware
                           corporation.(1)

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

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

              10.2         Co-Branding Agreement between MyFamily.com, Inc. and
                           the Company, dated September 12, 2000.

              10.3         Consulting Agreement between the Company and Eslie
                           Barlow, dated July 15, 2000. (4)

              10.4         Consulting Agreement between the Company and Todd
                           Shell, dated July 15, 2000. (5)

              10.5         Convertible Promissory Note and Warrant granted to
                           John Schmitz and Stanley Aber, dated
                           March 27, 2000. (6)

              10.6         Financial Consulting Agreement, dated March 23, 2000,
                           between Moore, Clayton & Co. and SportsNuts.com
                           International, Inc. (7)

              10.7         Employment Agreement with Kenneth Denos dated
                           November 16, 1998. (8)

              10.8         SportsNuts.com Internatinoal, Inc. 1999 Stock Option
                           Plan. (9)

              21.1         Subsidiaries of the Registrant. (10)

              27.1         Financial Data Schedule
</TABLE>
---------------

              (1) Filed as an Exhibit to the Company's quarterly report on Form
              10-QSB, filed with the Commission on August 18, 2000.

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

              (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 September 8, 2000.

              (5) Filed as an Exhibit to the Company's  registration  statement
              on Form S-8, filed with the Commission on September 8, 2000.

              (6) Filed as an Exhibit to the Company's quarterly report on Form
              10-QSB, filed with the Commission on May 15, 2000.

              (7) Filed as an Exhibit to the Company's quarterly report on Form
              10-QSB, filed with the Commission on August 18, 2000.

              (8) Filed as an Exhibit to the Company's quarterly report on Form
              10-QSB, filed with the Commission on May 19, 1999.

              (9) Filed as an Exhibit to the Company's quarterly report on Form
              10-QSB, filed with the Commission on November 15, 1999.

              (10)  Filed as an Exhibit to the  Company's  quarterly  report on
              Form 10-QSB, filed with the Commission on May 19, 1999.