<PAGE>   1

                       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, 1999

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

             For the transition period from ________ to ___________

                        Commission file number: 333-14477

                       SPORTSNUTS.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>



                                 (801) 816-2500
                            Issuer's telephone number

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


               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, 1999, the Company
had outstanding 17,873,359 shares of common stock, par value $0.0001 per share.

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



<PAGE>   2

                                     PART I

                              FINANCIAL INFORMATION

The Financial Statements of the Company are prepared as of September 30, 1999.

ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-QSB

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                                  BALANCE SHEET

<TABLE>
<CAPTION>
                                                                                           (UNAUDITED)
                                                                                           SEPTEMBER 30
                                                                                              1999
                                                                                           ------------
<S>                                                                                        <C>
ASSETS
Current assets:

   Cash and cash equivalents                                                               $  2,106,996
   Accounts receivable                                                                           22,831
   Inventory                                                                                     35,733
   Other current assets                                                                          45,452
                                                                                           ------------
      Total current assets                                                                    2,211,012

Property and equipment, net                                                                     941,039
LSN database, net                                                                             3,162,500
Goodwill, net                                                                                   531,285
                                                                                           ------------
      Total assets                                                                         $  6,845,836
                                                                                           ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:

   Accounts payable                                                                        $    184,117
    Accrued liabilities                                                                          94,605
    Accrued compensation and other benefits                                                     102,360
    Contingent deposit                                                                           50,000
                                                                                           ------------
      Total current liabilities                                                                 431,082

Shareholders' equity:                                                                             1,787
   Common stock, 50,000,000 shares authorized, par value $.0001, 17,873,359 issued
   and outstanding at September 30, 1999

   Additional paid-in capital                                                                12,469,785
   Accumulated deficit                                                                       (6,031,818)

     Subscription receivable                                                                    (25,000)
                                                                                           ------------
      Total shareholders' equity                                                              6,414,754

      Total liabilities and shareholders' equity                                           $  6,845,836
                                                                                           ============
</TABLE>

See accompanying notes



<PAGE>   3

                       SPORTSNUTS.COM INTERNATIONAL, INC.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                   (UNAUDITED)
                                                                                THREE MONTHS ENDED
                                                                                   SEPTEMBER 30,
                                                                        ----------------------------------
                                                                            1999                  1998
                                                                        ------------          ------------
<S>                                                                     <C>                   <C>
Net sales                                                               $    560,030          $    158,721

Operating expenses:

   Cost of sales                                                             718,613               222,021
   General and administrative                                              1,169,517               239,127
   Selling and marketing                                                     924,418               182,455
   Research and development                                                  171,789
                                                                        ------------          ------------
      Total operating expense                                              2,984,337               643,603

           Operating loss                                                 (2,424,307)             (484,882)

 Other income (expenses):

      Interest Income                                                         40,715
      Interest expense                                                          (126)               (3,896)
                                                                        ------------          ------------
           Total other income (expense)                                       40,589                (3,896)

                                                                        ------------          ------------
 Loss from continuing operations before income taxes                      (2,383,718)             (488,778)

           Income tax benefit

                                                                        ------------          ------------
Net loss                                                                  (2,383,718)             (488,778)
                                                                        ------------          ------------


Loss per common share - basic and diluted                               $       (.14)         $       (.07)
                                                                        ============          ============

 Weighted average number of common and common equivalent shares           17,145,413             7,471,598
                                                                        ============          ============
</TABLE>


See accompanying notes


<PAGE>   4

                       SPORTSNUTS.COM INTERNATIONAL, INC.

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                  (UNAUDITED)
                                                                               NINE MONTHS ENDED
                                                                                 SEPTEMBER 30,
                                                                        ----------------------------------
                                                                            1999                  1998
                                                                        ------------          ------------
<S>                                                                     <C>                   <C>
Net sales                                                               $  1,023,471          $    463,104

Operating Expenses:

   Cost of sales                                                           1,163,029               452,882
   General and administrative                                              1,954,506               553,408
   Selling and marketing                                                   1,732,075               269,159
   Research and development                                                  296,426
                                                                        ------------          ------------
      Total operating expense                                              5,146,036             1,275,449

           Operating loss                                                 (4,122,565)             (812,345)

 Other income (expenses):

      Gain on Sale of Assets                                                                         5,040
      Interest income                                                         43,666
      Interest expense                                                        (4,486)              (64,661)
                                                                        ------------          ------------
           Total other income (expense)                                       39,180               (59,621)

                                                                        ------------          ------------
 Loss from continuing operations before income taxes                      (4,083,385)             (871,966)

           Income tax benefit                                                                       32,457
                                                                        ------------          ------------
Net loss after taxes                                                      (4,083,385)             (839,509)

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

Net loss                                                                $ (4,016,581)         $   (839,509)
                                                                        ============          ============


Loss per common share - basic and diluted                               $       (.29)         $       (.12)
                                                                        ============          ============

 Weighted average number of common and common equivalent shares           13,718,653             6,956,754
                                                                        ============          ============
</TABLE>


See accompanying notes



<PAGE>   5

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                               (UNAUDITED)
                                                                            NINE MONTHS ENDED
                                                                              SEPTEMBER 30,
                                                                    --------------------------------
                                                                        1999                1998
                                                                    -----------          -----------
<S>                                                                 <C>                  <C>
Cash flows from operating activities:
    Net loss                                                        $(4,016,581)         $  (839,509)
    Adjustments to reconcile net income to net cash used in
      operating activities
        Depreciation                                                    192,343               19,871
        Amortization of intangible assets                               146,500
        Non cash marketing expenses                                     114,000
        Deferred income taxes                                            (1,258)             (32,745)
        Minority interest                                               (66,804)
        Gain on disposal of fixed assets                                                      (5,040)
        Changes in operating assets and liabilities:
           Accounts receivable                                          (22,831)
           Inventory                                                    (19,149)             (16,490)
           Other current assets                                           1,908
           Accounts payable                                             (11,083)              38,733
           Other liabilities                                             65,745               (2,424)
                                                                    -----------          -----------
Net cash used in operating activities                                (3,617,210)            (837,604)

Cash flows from investing activities:

    Purchases of property and equipment                              (1,042,333)             (67,126)
    Purchase of Subsidiary                                             (100,000)
                                                                    -----------          -----------
           Net cash used in investing activities                     (1,142,333)             (67,126)

Cash flows from financing activities:
      Increase (decrease) in cash overdraft                             (47,683)              (2,306)
      Proceeds from issuance of long-term debt                                               439,163
      Net proceeds from issuance of common stock                      7,130,840              821,500
      Payments on stock subscription receivable                          85,000                1,930
      Principal payments of long-term debt                             (301,618)            (359,121)
                                                                    -----------          -----------

           Net cash provided by financing activities                  6,866,539              901,166
                                                                    -----------          -----------

Net increase (decrease) in cash and cash equivalents                  2,106,996               (3,564)
Cash and cash equivalents at the beginning of period                                          15,762
                                                                    -----------          -----------
Cash and cash equivalents at the end of period                      $ 2,106,996          $    12,198
                                                                    ===========          ===========
</TABLE>


See accompanying notes



<PAGE>   6

                       SPORTSNUTS.COM INTERNATIONAL, INC.

                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999
                                   (UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

SportsNuts.com International, Inc. (formerly Durwood, Inc.) (the "Company") is
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 has combined the three powerful forces of sports,
the Internet, and network marketing in an effort to build the largest, targeted
online customer base of global sports enthusiasts. To date, the Company has
derived revenues principally from four sources: (i) proceeds from enrollments of
club members, (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.
The Company was incorporated under the laws of the State of Delaware on July 12,
1996. Prior to the reorganization with SportsNuts.com, Inc., a privately held
Delaware corporation ("SportsNuts"), on April 6, 1999, the Company had not
commenced active business operations and was considered a development stage
company.

FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Article 10 of Regulation S-B.
Accordingly, certain information and footnote disclosures normally included in
complete financial statements have been condensed or omitted. In addition,
certain reclassifications have been made to the prior period to conform with the
current presentation. These financial statements should be read in conjunction
with the financial statements and footnotes thereto included in the Company's
1999 filing on Form 8-K/A.

In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
The results of operations for interim periods are not necessarily indicative of
the results of operations to be expected for the full year.

USE OF 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 in the financial statements and these accompanying
notes. Actual results could differ from those estimates.

NET LOSS PER COMMON SHARE

Net loss per common share is calculated by dividing the net loss by the weighted
average number of


<PAGE>   7

                       SPORTSNUTS.COM INTERNATIONAL, INC.

                    NOTES TO FINANCIAL STATEMENTS CONTINUED
                               SEPTEMBER 30, 1999
                                  (UNAUDITED)

shares of common stock issued and outstanding during the period. The Company
excluded 16,038,553 and 4,040,762 options from the weighted average shares
outstanding computation at September 30, 1998 and 1999, respectively, because
their effect would be anti-dilutive. In addition, the Company excluded 2,961,003
and 622,160 warrants from the weighted average shares outstanding computation at
September 30, 1998 and 1999, respectively, because their effect would be
anti-dilutive.

COMPREHENSIVE INCOME

Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income," requires that all items that are recognized under
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. There have been no items of other comprehensive income to
date.

2.  BASIS OF PRESENTATION

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, 1999 of approximately $6,031,818 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 year ended December 31, 1998 and the nine months ended
September 30, 1999 was $1,624,074 and $4,016,581 respectively. To date the
Company has funded its operations through a combination of short and long-term
loans and the private placement of its common stock. The Company anticipates a
significant net loss for the year ended December 31, 1999 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 membership revenues and
sales of its products and services at levels sufficient to cover its costs and
provide a return for investors, (ii) attract additional capital in order to
finance growth, (iii) further develop and successfully market commercial
products and services, and (iv) successfully compete with other comparable
companies having financial,


<PAGE>   8

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                    NOTES TO FINANCIAL STATEMENTS CONTINUED
                               SEPTEMBER 30, 1999
                                  (UNAUDITED)

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 through membership
revenues and sales of products and services.

3. REORGANIZATION

On April 6, 1999, the Company acquired a controlling interest in SportsNuts.com,
Inc. ("SportsNuts") a privately held company (hereafter, the "Reorganization"),
wherein, the Company issued its shares to accredited investors (the
"Participating Shareholders") for approximately eighty-one percent (81%) of the
outstanding capital stock of SportsNuts. The Reorganization was accounted for as
a reverse merger into a non-operating public company, wherein SportsNuts was
treated as the accounting acquirer. In conjunction with the Reorganization, the
Company changed its name from Durwood, Inc. to SportsNuts.com International,
Inc. Prior to the Reorganization, the Company conducted no active business.
SportsNuts is an internet-based, online sports club and retail distributor of
sports, outdoor, and fitness related products, services, and information.

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, $0.0001 par value (the "Common Stock"). The Forward
Split resulted in an increase in the outstanding shares of the Company's Common
Stock from 1,103,500 to 2,441,713 shares. Immediately prior to the
Reorganization, the Company sold to accredited investors 1,000,000 post Forward
Split shares of Common Stock at $1.00 per share to raise gross proceeds of
$1,000,000. As part of the Reorganization, the Company issued 7,651,252 shares
of Common Stock to the Participating Shareholders of SportsNuts in exchange for
their collective 11,683,000 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 who were
also accredited investors (each a "Participating Warrant Holder") warrants for
the purchase of 3,353,113 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 it was entitled to purchase pursuant to its SportsNuts warrants. In the
future, the Company may issue up to an additional 1,808,192 shares of Common
Stock to acquire the remaining 2,761,000 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. As compared to prior statements describing
the Reorganization on Forms 8-K and 10-QSB filed previously


<PAGE>   9

                       SPORTSNUTS.COM INTERNATIONAL, INC.

                    NOTES TO FINANCIAL STATEMENTS CONTINUED
                               SEPTEMBER 30, 1999
                                  (UNAUDITED)

with the Commission, the number of shares and warrants issued to Participating
Shareholders and Participating Warrant Holders has been increased to reflect
conversions by certain SportsNuts shareholders of their shares and warrants for
shares and warrants of the Company during the second quarter, subsequent to the
closing of the Reorganization. These transactions were treated by the company as
being effective as of April 6, 1999.

4. STOCKHOLDERS EQUITY

ISSUANCE OF COMMON STOCK

Effective July 1, 1999, the Company issued 90,750 shares to certain individuals
as compensation for fund raising activities.

Effective July 15, 1999, the Company issued 396,245 shares at a price of $2.00
per share, net of issuance costs of $47,549.

Effective July 28, 1999 the Company issued 944,882 shares, valued at $3,750,000,
to acquire the 100,000 shares of the issued and outstanding shares of
Sportzz.com, Inc. ("Sportzz"), a Utah Corporation. In addition, cash
consideration of $100,000 was paid to the Shareholder of Sportzz. See further
discussion in the Summary of Recent Merger section of this filing.

Effective August 18, 1999 the Company issued 750,000 shares at a price of $1.95
per share, net of issuance costs of $131,625. This was booked as a subscription
receivable at the end of the second quarter of 1999, with the receipt of funds
and issuance of shares occurring in the third quarter.

ISSUANCE OF WARRANTS AND OPTIONS

During the three-month period ended September 30, 1999, the Company issued
warrants to acquire 91,551 shares of Common Stock at a weighted-average exercise
price of $1.96 per share. The warrants expire two years from the date of grant.
Also during the three-month period ended September 30, 1999, the Company issued
to various non-employee directors, employees, and service providers options to
purchase 6,796,005 shares of Common Stock at a weighted-average exercise price
of $2.57 per share. Such options were issued pursuant to the Company's 1999
Stock Option Plan and expire five years from the date of grant.



<PAGE>   10

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 Exchange Act of 1934, including,
without limitation, statements regarding the Company's expectations, beliefs,
intentions, or future strategies that are signified by the words "expects,"
"anticipates," "intends," "believes," or similar language. Actual results could
differ materially from those projected in the forward looking statements.
Prospective investors should carefully consider the information set forth below
under the caption "Risk Factors" in addition to the other information set forth
herein. The Company cautions investors that its business and financial
performance is subject to substantial risks and uncertainties.

OVERVIEW

        SportsNuts.com is 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 has combined the
three powerful forces of sports, the Internet, and network marketing in an
effort to build the largest, targeted online customer base of global sports
enthusiasts. To date, the Company has derived revenues principally from four
sources: (i) proceeds from enrollments of club members, (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.

INTERNET REVENUE MODEL

        Electronic Commerce. The e-commerce revenue model is generally
characterized by four types of Internet retailers: (i) traditional retailers
which possess existing internal fulfillment and customer service capabilities
and have developed their own web site and reporting systems as an additional
venue to market their products and services, (ii) traditional retailers which
possess internal fulfillment and customer service capabilities but have formed
partnerships with Internet-based companies to outsource the Web promotion of
their products and services, (iii) retailers which market their products and
services exclusively through the Internet and have developed internal
fulfillment and customer service capabilities, and (iv) retailers which market
their products and services exclusively through the Internet and have outsourced
fulfillment and customer service obligations to third parties. These four models
suggest that strategic alliances are likely to be formed between retailers
possessing fulfillment and customer service capability without an e-commerce
presence and Internet-based retailers, such as SportsNuts.com, desiring to focus
on site promotion and implementation of systems but outsourcing fulfillment and
customer service obligations. In any event, the complete e-commerce business
model is similar to a traditional retailer inasmuch as Internet retailers
generate a gross profit margin and have incidental expenses related to the
electronic transaction.


<PAGE>   11

        Advertising. Although continuously evolving, the advertising model for
Internet-based companies relies heavily upon user demographics being captured to
provide advertisers return-on-investment feedback. Most Internet-based
advertising comes in the form of banner ads or identifying icons. Banner ads are
usually sold in blocks of 1,000 impressions (referred to as CPMs or "cost per
1,000 impressions"), averaging $30.00 per CPM. Targeted advertising (page
specific or user specific) can typically generate $60.00 per CPM. Advertisers
generally reward originating sites for "click throughs" (users following an
electronic link or pursuing an activity via their Web browser in order to
receive a prescribed economic benefit). Advertisers are constantly developing
new rate determinative criteria that allows advertisers to more precisely gauge
the level of exposure for their ads, including advertisements which appear
immediately while a new page is being loaded in the background of the Web
browser. Of available advertising space, most Internet sites sell less than 20%.
The Company anticipates that its emphasis on Web site development, together with
the increase in membership (in terms of sports enthusiasts and participants in
its network marketing operations) will likely generate advertising revenues
within the next twelve months.

NETWORK MARKETING REVENUE MODEL

        Distributor and Customer Enrollments. Companies which use network
marketing successfully are typically characterized by a sharp increase in
distributor enrollment once these companies achieve a critical mass of active
distributors within a geographic area. The Company's use of an aggressive media
promotion campaign is intended to accelerate the enrollment of distributors and
customers to achieve critical mass at an earlier stage.

        Product Sales. Product sales in companies involved in network marketing
are primarily a function of the number of distributors and customers affiliated
with the company. Because a certain level of product sales are generally
required for distributors to receive commissions, revenue projections can be
fairly predictable once an activity rate among all distributors is known.

        Sales Aids. Most companies involved in network marketing view
distributor sales aids as a significant profit center. Similar to product sales,
revenue from sales aids is primarily a function of the number of active
distributors affiliated with the company.

RESULTS OF OPERATIONS

Following is management's discussion of the relevant items affecting results of
operations for the periods ended September 30, 1999 and 1998.

        REVENUES. The Company generated net revenues of $560,030 during the
three month period ended September 30, 1999, a 353% increase from $158,721
during the third quarter of 1998. For the nine months ended September 30, 1999,
net revenues were $1,023,471, a 221% increase from $463,104 during the nine
months ended September 30, 1998. These increases were primarily due to
increased spending by the Company in marketing and sales, and the corresponding
expansion of the network marketing distributor force. Using sports radio
programs as a venue to reach prospective members, in April, 1999, the Company
began airing thirty-second radio advertisements in the Phoenix, Arizona
metropolitan area, using a well-known sports personality as a sponsor. The
Company has also begun airing additional advertisements on sports radio stations
in Orange County, California and Salt Lake City, Utah. In


<PAGE>   12
addition, in August of 1999, the Company entered into a contract with an
advertising agency to aggressively promote the SportNuts.com brand name.
Approximately $505,971 and $872,775, or 90% and 85% of revenues for the third
quarter and nine months ended September 30, 1999 were attributable to membership
sales from new distributors and customers. The Company anticipates that
membership sales will continue to grow, but as a percentage of overall revenues
will decline slightly over time as the Company launches its brokered Internet
service and continues to develop its Web site. With respect to the Web site,
over the next six months, the Company expects to begin receiving sufficient site
traffic to generate (i) advertising revenues, (ii) electronic commerce sales,
and (iii) revenues from other paid electronic services.

        COST OF SALES. Cost of Sales for the three month period ended September
30, 1999 were $718,613, a 321% increase from $222,021 during the third quarter
of 1998. Cost of sales for the nine month period ended September 30, 1999 were
$1,163,029, a 257% increase from $452,882 during the nine months ended September
30, 1998. Such costs consist primarily of commission payments to the network
marketing distribution force, as well as the cost of the distributor kits, sales
aids, and products sold through the distributor force and through e-commerce
transactions. The increase from the prior year is directly related to the
corresponding 353% increase in revenues, primarily in the network marketing
business, as described above. Cost of Sales are currently greater than revenues
due to a temporary structuring of the commission payments in the network
marketing business to provide a higher payout to distributors as an incentive to
generate a larger distributor base. The Company anticipates that cost of sales
will decline as a percentage of sales, and it will generate a positive gross
margin within the next six months as it restructures commissions within its
network marketing operations.

        GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
for the three-months ended September 30, 1999 were $1,169,517, a 489% increase
from $239,127 during the third quarter of 1998. For the nine months ended
September 30, 1999, general and administrative expenses were $1,954,506, a 353%
increase from $553,408 during the nine months ended September 30, 1998. These
increases were principally due to significant increases in personnel salaries
and benefits, professional fees, contract labor, amortization of intangible
assets, and rent and occupancy-related expense. Payroll expense and professional
fees accounted for approximately $433,106 and $248,209, respectively, of this
amount during the third quarter, as compared to $23,214 and $35,429 during the
third quarter of 1998. For the nine months ended September 30, 1999, payroll
expense and professional fees totaled $869,899 and $307,689 compared to $87,733
and $78,321 during the nine months ended September 30, 1998. In addition,
amortization of intangible assets associated with the acquisition of
Sportzz.com, Inc. totaled $146,500 during the third quarter.

        SELLING AND MARKETING EXPENSES. Selling and marketing expenses for the
three month period ended September 30, 1999 were $924,418, a 507% increase from
$182,455 during the third quarter of 1998. Selling and marketing expenses for
the nine month period ended September 30, 1999 were $1,732,075, a 644% increase
from $269,159 during the nine months ended September 30, 1998. These increases
were primarily attributable to (i) the Company's advertising campaign, (ii) an
increased focus during the third quarter in promoting the amateur sports
community feature on its web site, and (iii) promotional efforts with respect to
the Company's direct sales force in an attempt to increase branding awareness
and promote involvement in the network marketing operations of the Company.
During the third quarter, the Company entered into a contract with an
advertising agency to aggressively promote the SportsNuts.com brand name. Also
during this quarter, the Company created a sales force consisting of both
internal personnel and independent contractors to aggressively pursue
organizations in the amateur sports community to sign up to the amateur sports
administration and community feature on its web site. In addition, during the
second quarter and continuing through the third quarter, the Company initiated a
system-wide increase in sales bonuses available to distributors. The sales bonus
increases were intended to create incentives for distributors to enroll
additional customers with



<PAGE>   13

the Company in the short-term. Over the long term, the Company expects that
expenses incurred in connection with its sales force in the amateur sports
arena, as well as with its network marketing distribution force will constitute
a majority of the Company's selling expenses.

        PRODUCT DEVELOPMENT. Product research and development expenditures were
$171,789 and $296,426 during the third quarter and nine months ended September
30, 1999, as compared to none in the third quarter and nine months ended
September 30, 1998. 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. The Company acquired such personnel
primarily through the acquisition of Sportzz.com, Inc., as well as through
additional hiring of information systems personnel during 1999. In the prior
year, the Company's web site was developed and hosted by an outside party. 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 income totaled $40,589 for the three
months ended September 30, 1999, compared to net expense of $3,896 for the three
months ended September 30, 1998. For the nine months ended September 30, 1999,
net other income was $39,180, compared to net expense of $59,921 for the nine
months ended September 30, 1998. During most of 1999, the Company relied on
various loans to support its ongoing funding needs. Therefore, it incurred
interest expense during the year. During 1999, the Company was able to raise
equity capital, which resulted in having cash on deposit at various financial
institutions. Therefore, the Company realized interest income on these cash
balances during the year.

        EXPENSES RELATING TO PRIVATE OFFERINGS. During the third quarter 1999,
the Company conducted a private offering of its Common Stock solely to
accredited persons, receiving approximately $792,000 in gross proceeds (the
"Offering"). The Company has paid or is obligated to pay out approximately
$48,000 in cash commissions with respect to this Offering.

SUMMARY OF RECENT MERGER

        On July 28, 1999, the Company concluded an Agreement and Plan of Merger
with Sportzz.com, Inc., (the "Merger Agreement") a Utah corporation ("Sportzz"),
with a wholly-owned subsidiary of the Company, SportsNuts Merger Sub., Inc., a
Utah corporation ("Merger Sub"), ObjectSelect, L.C., a Utah limited liability
company, being the sole shareholder of Sportzz (the "Shareholder"), and the
members thereof, providing for a reverse triangular merger of Merger Sub into
Sportzz (collectively, the "Merger"), with the result that Sportzz became a
wholly-owned subsidiary of the Company. 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
local sports information including from leagues, schools, teams, and their
player rosters, game schedules, game results, photographs, articles, and
statistics.

        As part of the Merger, the Company issued 944,882 shares of its Common
Stock to the Shareholder of Sportzz, in consideration for the 100,000 shares of
the issued and outstanding Sportzz common stock. In addition, cash consideration
of $100,000 was paid to the Shareholder. Of this consideration $10,000 of the
cash, and one half of the shares of Common Stock were placed in escrow pending
completion of certain post closing covenants described in the Merger Agreement.
The Merger is more particularly described in the Company's Form 8-K filing made
with the Commission on August 12, 1999.

LIQUIDITY AND CAPITAL RESOURCES

        As of September 30, 1999. The Company's primary source of liquidity
consisted of $2,106,996 in cash and cash equivalents, $75,000 of which has been
pledged as collateral for


<PAGE>   14

the lease of office space in Phoenix, Arizona, and $35,000 of which has been
pledged as collateral for certain credit cards issued in the name of the Company
for business use. The Company holds most of its cash reserves in local sweep
accounts with various local financial institutions. Since inception,
SportsNuts.com has financed its operations through a combination of short and
long-term loans, and through the private placement of its Common Stock. All of
SportsNuts.com's loans outstanding have since been converted to Common Stock as
of September 30, 1999.

        The Company has sustained significant net losses which have resulted in
an accumulated deficit at September 30, 1999 of $6,031,818 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, 1998 and the nine months ended
September 30, 1999 was $1,624,074 and $4,016,581, respectively. The Company
anticipates a substantial net loss for the year ended December 31, 1999 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 after the end of 1999.

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

        The Company believes that its capital requirements are insufficient for
ongoing operations, with current cash reserves available to fund only the next
45 days of operations. Although efforts are presently underway to secure certain
short term financing to enable the Company to meet its ongoing obligations, the
Company requires considerable amounts of financing to make any significant
advancements in its business strategy. There is no agreement in place with any
source of financing, and there can be no assurance that the Company will be able
to raise any additional funds, or that such funds will be available on
acceptable terms. Funds raised through future equity financing will likely be
dilutive to current shareholders. Lack of additional funds will materially
affect the Company and its business, and may cause the Company to cease
operations. Consequently, shareholders could incur a loss of their entire
investment in the Company.

        YEAR 2000 COMPLIANCE

        The Company has assessed the impact of the Year 2000 on its information
technology ("IT") and non-IT systems. The Company believes it has allocated
sufficient resources from its operating capital to upgrade and test existing
systems so that they are Year 2000 compatible. The Company has tested all of its
IT systems and found them to be Year 2000 compliant in accordance with
manufacturer's standards. Based on its testing, management of the Company is not
aware of any instances of non-compliance with Year 2000 standards which would
materially impact the Company's business operations. The Company does not
anticipate significant further expenditures in connection with Year 2000
compliance efforts.


<PAGE>   15

        The Company's servers have all been tested for Year 2000 compliance and
each has been found to meet the National Software Testing Laboratories Standard.
All of the Company's operating systems have also been updated for Year 2000
compliance. With respect to the Company's hubs, switches, and PIX Firewall, each
have been found to meet the Information Technology Association of America
standards for Year 2000 compliance. Management has tested all of its IT systems
for Year 2000 compliance, and intends to work with its Internet retail
affiliates over the remainder of the year to monitor their Year 2000 compliance
activities. The Company also intends to continue to test and upgrade its IT
systems throughout the remainder of the year. Nevertheless, significant
uncertainty exists concerning the potential impact of the Year 2000 on computer
systems generally. Any year 2000 compliance problems of the Company or any of
its customers or such affiliates could have a material adverse effect upon the
Company's business, results of operations, or financial condition. (See "Risk
Factors - Year 2000 Compliance").

FORWARD LOOKING STATEMENTS AND RISK FACTORS

        FORWARD LOOKING STATEMENTS

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

        RISK FACTORS

        The risk factors described below are based on the Company following the
Reorganization of SportsNuts.com with the Company pursuing the business
conducted by SportsNuts.com and so the risk factors should be read in that
light.

        ADDITIONAL FINANCING REQUIREMENTS; POSSIBLE CESSATION OF Business. The
Company is currently experiencing a substantial shortage of operating capital,
with current cash reserves available to fund only the next 45 days of
operations. Although efforts are presently underway to secure certain short term
financing to enable the Company to meet its ongoing obligations, the Company
requires considerable amounts of financing to make any significant advancements
in its business strategy. There is no agreement in place with any source of
financing, and there can be no assurance that the Company will be able to raise
any additional funds, or that such funds will be available on acceptable terms.
Funds raised through future equity financing will likely be dilutive to current
shareholders. Lack of additional funds will materially affect the Company and
its business, and may cause the Company to cease operations. Consequently,
shareholders could incur a loss of their entire investment in the Company.


<PAGE>   16

        LACK OF EXTENSIVE OPERATING HISTORY. The SportsNuts.com business was
formed in 1996 and is subject to all risks inherent in the creation of a new
business and the development of new products and services, including the absence
of a history of significant operations and of proven products and services which
have been produced and sold over a significant period of time. SportsNuts.com is
continuing to establish many functions which are necessary to conduct business,
including without limitation, managerial and administrative structure, marketing
activities, financial systems and personnel recruitment. SportsNuts.com has a
limited operating history and limited sales revenues.

        DEVELOPMENT STAGE COMPANY. Since the date of its inception, the Company
has operated on a small scale 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 advertising revenues, product sales,
and the enrollment of distributors, with each such distributor attracting
additional customers to participate in the SportsNuts.com club or otherwise
purchase products and services from the Company. Although the Company has
generated increased activity on its Web Site and has increased the number of
distributors and customers on a monthly basis over the course of 1999, there can
be no assurance that the Company will continue to do so in the future or that
such increases will ultimately lead to the Company becoming profitable.

        DEPENDENCE ON KEY PERSONNEL. The Company's success depends, in large
part, upon the talents and skills of its management. 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. In addition, 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 its brand name or if the Company incurs significant
expenses promoting and maintaining its 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
"SportsNuts" 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 increases. Successfully promoting and positioning the SportsNuts brand
will depend largely on the effectiveness of the Company's marketing efforts and
ability to promote a sufficient variety and high quality of useful Products at
competitive prices. Consequently, the Company may need to increase its financial
commitment to creating and maintaining brand awareness among potential
customers.

        RELIANCE UPON INDEPENDENT DISTRIBUTORS. The Company's principal sales
force consists of independent distributors ("Distributors") who are not
employees of the Company. Relationships with Distributors are voluntarily
terminable by the Distributors, or the Company at any time. The Company's
revenue is substantially dependent upon the efforts of the Distributors,


<PAGE>   17

and any growth in future sales volume will require an increase in the
productivity of existing Distributors and/or growth in the total number of
Distributors. As is typical in the direct selling industry, there is turnover in
distributors from year to year, which requires the sponsoring and training of
new distributors by existing distributors to maintain or increase the overall
distributor force and motivate new and existing distributors. With respect to
the Company, the size of the distribution force can also be particularly
impacted by general economic and business conditions and a number of intangible
factors such as adverse publicity regarding the Company, or the public's
perception of products and services sold through the Company or its Web Site,
the content of the material and the overall theme of the Web Site, product
ingredients or components, the Distributors themselves, the Internet or
Internet-based companies in general, or network marketing. Because of the number
of factors that impact the sponsoring of new Distributors, and the fact that the
Company has little or no control over the level of sponsorship of new
Distributors, the Company cannot predict the timing or degree of those
fluctuations. There can be no assurance that the number or productivity of the
distributors will be sustained at current levels or increased in the future. In
addition, the number of Distributors as a percent of the population in a given
market could theoretically reach levels that become difficult to exceed due to
the finite number of persons inclined to pursue a network marketing business
opportunity. Since Distributors are independent contractors, the Company is not
in a position to provide the same level of direction, motivation and oversight
as it would with respect to its own employees.

        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, with respect to product sales, the use of sports, outdoor, and fitness
equipment and apparel is generally seasonal and therefore demand for these items
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 produces only a small
number of products sold from its Internet Web Site, and therefore relies upon
its electronic commerce retail vendors ("Affiliates") which sell products and
services through the Web Site to manufacture and/or supply all of the products
and services to SportsNuts.com customers. These Affiliates are primarily
manufacturer's representatives. The Company's profit margins and the ability for
consumers to receive existing products and services on a timely basis are
substantially dependent upon these Affiliates. The development of additional new
products and services 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 and
services from the Company's Web Site and could have a material adverse affect on
the Company's financial condition and results of operations.

        POTENTIAL EFFECTS OF ADVERSE PUBLICITY. The size of the distribution
force and the results of the Company's operations can be particularly impacted
by adverse publicity regarding the Company, including publicity regarding the
content of material displayed on the Web Site, activities and events sponsored
by the Company, the legality of the Company's distribution system, the quality
of the products and services distributed through the Company's Web Site,
regulatory investigations of the Company and the products distributed by
Affiliates who sell such


<PAGE>   18

products and services through the Web Site, actions by certain Distributors, and
the public's perception of the Distributors as representatives of the Company
and of direct selling and network marketing-based businesses generally.

        POTENTIAL NEGATIVE IMPACT OF DISTRIBUTOR ACTIONS. Actions by certain
Distributors can negatively impact the Company and its products and services.
The publicity resulting from Distributor activities such as inappropriate
earnings claims and product or service representations by Distributors can make
the sponsoring and retaining of Distributors more difficult, thereby negatively
impacting sales. There can be no assurance that these or actions of other
Distributors will not have a material adverse effect on the Company's business
or results of operations.

        MANAGEMENT OF GROWTH. 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, Affiliates, employees, Distributors, and
customers, expansion of facilities and computer systems necessary to accommodate
such growth, and additions and modifications to the Product lines 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.

        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 network marketing, 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 material adverse effect on the Company's business
and results of operations. While the regulations governing network marketing are
complex and vary from state to state, based on research conducted to date, the
Company believes that its method of distribution is in compliance in all
material respects with the laws and regulations relating to direct selling
activities of the states in which the Company currently operates, and intends to
modify its network marketing system to comply with various regulatory
authorities. The failure to comply in any one state could cause the Company to
pay fines as well as cease operations in that state, which in turn could
influence the decisions of regulatory authorities in other states and could have
a material adverse effect upon the Company's financial condition and results of
operations.


<PAGE>   19

        GOVERNMENTAL REGULATION OF NETWORK MARKETING IN GENERAL. The Company's
network marketing system is or may be 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 of determination that the
Company's business is not in compliance with government requirements could have
a material adverse effect upon the Company's financial condition and results of
operations.

        GOVERNMENT REGULATION OF PRODUCTS AND MARKETING. The Company is subject
to or affected by extensive governmental regulations not specifically addressed
to network marketing. Such regulations govern, among other things, (i) content
of material displayed on the Internet, (ii) product formulation, labeling,
packaging and importation, (iii) product claims and advertising, whether made by
the Company, the Company's Affiliates or Distributors of the Company, (iv) fair
trade and Distributor practices, and (v) taxes. Based on the Company's
experience and research (including assistance from legal counsel), the Company
believes that it is in material compliance with all regulations applicable to
the Company. Despite this belief, the Company could be found not to be in
material compliance with existing regulations as a result of, among other
things, the considerable interpretative and enforcement discretion given to
regulators or misconduct by its Distributors. Any assertion or determination
that the Company or any of its Distributors are not in compliance with existing
laws or regulations could potentially have a material adverse effect on the
Company's business and results of operations. In addition, in any jurisdiction,
the adoption of new laws or regulations or changes in the interpretation of
existing laws or regulations could generate negative publicity and/or have a
material adverse effect on the Company's business and results of operations. The
Company cannot determine the effect, if any, that future governmental
regulations or administrative orders may have on the Company's business and
results of operations. Regulatory action, whether or not it results in a final
determination adverse to the Company, has the potential to create negative
publicity, with detrimental effects on the retention, motivation, and
recruitment of distributors and, consequently, on the Company's sales and
earnings.

        GOVERNMENT REGULATION OF THE INTERNET. There are currently few laws or
regulations directly applicable to electronic commerce. Due to the increasing
popularity and use of the Internet, it is possible that a number of laws and
regulations may be adopted with respect to the Internet which could materially
increase the cost of transacting business on the World Wide Web. Although
transmissions from the Company's Web Site will originate from the States of Utah
and California, 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 and the World Wide Web 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 recent phenomenon, and
the Company relies on consumers who have historically used traditional means


<PAGE>   20

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

        RAPID TECHNOLOGICAL CHANGE. The Internet and on-line commerce 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


<PAGE>   21

Web site does not achieve market acceptance, the Company's business, operating
results, and financial condition would be adversely affected.

        RELIANCE ON CERTAIN DISTRIBUTORS. The Company's compensation plan allows
existing Distributors to sponsor new Distributors. The sponsoring of new
Distributors creates multiple Distributor levels in the network marketing
structure. Sponsored Distributors are referred to as "downline" Distributors
within the sponsoring Distributor's "downline network." If downline Distributors
also sponsor new Distributors, additional levels of downline Distributors are
created, with the new downline Distributors also becoming part of the original
sponsor's "downline network." As a result of this network marketing distribution
system, Distributors develop relationships with other Distributors. A few key
distributorships comprise the Company's highest Distributor levels. These
distributorships have developed extensive downline networks which consist of
many sub-networks. Together with such networks, these distributorships account
for substantially all of the Company's revenue attributable to direct sales.
Consequently, the loss of such a key Distributor together with a group of
leading Distributors in such Distributor's downline network, or the loss of a
significant number of distributors for any reason, could adversely affect sales
of products and services, impair the Company's ability to attract new
Distributors and adversely impact earnings and the business, and financial
condition of the Company.

        NO PROPRIETARY PRODUCTS/NON-EXCLUSIVE LICENSE FOR PRODUCT SALES. The
Company does not offer products or services through its Web Site that enjoy any
significant proprietary protection for the benefit of the Company. Moreover,
because written distribution agreements are not common for firms which sell
sporting goods, apparel, and outdoor products, many of the Company's Affiliates
distribute most of these products or services without licenses from the
manufacturer. The lack of proprietary protection and exclusive licenses
substantially diminishes the barriers to entry for potential competitors of the
Company, and could adversely affect the Company's future prospects for growth
and profitability.

        FAILURE TO EXPAND SALES OPERATIONS AND CHANNELS OF DISTRIBUTION WOULD
LIMIT COMPANY GROWTH. In order to maintain and increase the Company's current
and future market share and revenue, it will need to expand its direct and
indirect sales operations and channels of distribution. Failure to do so could
have a material adverse effect on the Company's business, results of operations,
and financial condition. The Company needs to expand its relationships with
domestic and international channel partners, product and service distribution
partners, value-added resellers, systems integrators, on-line and other
resellers, Internet service providers, and maintain strategic relationships with
key hardware and software vendors, its Distributors, and its customers.

        NO TRADEMARK REGISTRATION. Although the Company has submitted
applications for trademark protection for the name "SportsNuts.com" name and
related slogans, the U.S. Patent and Trademark Office ("USPTO") has not approved
the Company's applications for use of the name "SportsNuts.com," the Company's
logo, and such other related terms and slogans. 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 those of 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 required to


<PAGE>   22

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" or similar
name is likely to cause confusion with another trade name being used by another
company. The Company could also incur substantial costs to defend any legal
action taken against the Company pursuant to a trademark or service mark
dispute. If, in any legal action against the Company, its asserted trademarks,
or service marks should be found to infringe upon intellectual property rights
of a third party, the Company could be enjoined from further infringement and
could be required to pay damages. In the event a third party were to sustain a
valid claim against the Company, and in the event any 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 infringement of the rights of
others.

        COMPETITION. The Company competes with other sports-themed Internet
sites, sports clubs, and direct selling and electronic commerce-based
organizations, many of which have longer operating histories and higher
visibility, name recognition, and financial resources. Management envisions the
entry of many more direct selling organizations into the marketplace as this
channel of distribution expands over the next several years. Moreover, as use of
the Internet grows, Management also anticipates a rapid increase in the number
of firms selling goods and services over the Internet. There can be no assurance
that the Company will be able to successfully meet the challenges posed by this
increased competition. The Company's Affiliates compete in the intensely
competitive market for sports, outdoor, and fitness goods and apparel and
compete directly with companies that manufacture and market these goods and
services. Many competitors of the Company's Affiliates have much greater name
recognition and financial resources than the Company's Affiliates. While the
Company believes that consumers appreciate the convenience of ordering products
on the Internet, the buying habits of many consumers accustomed to purchasing
products through traditional retail channels are difficult to change. The
Company's offerings on its Web Site in each Product category are also relatively
small compared to the wide variety of products and services offered by other
electronic commerce companies. There can be no assurance that the Company's
business and results of operations will not be affected materially by market
conditions and competition in the future.

        PRODUCT LIABILITY. Although the Company does not manufacture any of the
products or services purchased or sold through its Web Site, it may be subject
to liability for losses caused by such products or services. 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.

        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. 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


<PAGE>   23

a material adverse effect on the Company's business, results of operations, and
financial condition.

        NO DIVIDENDS. To date, the Company has not paid a dividend on its Common
Stock. 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 future financing arrangements.

        CONCENTRATION OF VOTING POWER. Kenneth Forrest, the founder of the
Company, and certain other shareholders of the Company, may be able to 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% 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. Although current
shareholders of the Company do not hold preemptive rights to acquire additional
shares of Common Stock and, consequently, share amounts as a percentage of
Common Stock outstanding for existing shareholders are expected to decline after
consummation of the Offering, the Company cannot guarantee that certain persons,
either collectively or individually, will not be able to control the election of
the Board of Directors and that minority shareholders will not be adversely
affected as a result.

        PRIVATE CAPITAL/NEED FOR ADDITIONAL CAPITAL. SportsNuts.com presently
has limited operating capital with which to engage in its business. The amount
of capital available to SportsNuts.com is limited and is not be sufficient to
enable it to conduct its business operations without additional fund-raising.
The Company will likely be required to raise additional capital in order to fund
its anticipated growth. If the Company seeks new equity investors in order to
raise additional capital, it will dilute the ownership of the Company's
stockholders, and such dilution could be significant.

        ANTI-TAKEOVER PROVISIONS. The Restated Certificate of Incorporation of
the Company ("Certificate") 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 5,000,000 shares of
preferred stock with rights and preferences determined by the board of
directors, staggered terms for directors, and super-voting requirements. These
provisions could impede a non-negotiated change in control and thereby prevent
stockholders from obtaining a premium for their Common Stock.

        SECURITIES ELIGIBLE FOR PUBLIC TRADING. Of the 17,873,359 shares of the
Company's Common Stock outstanding at September 30, 1999, 2,441,713 are freely
tradeable or immediately eligible for resale under Rule 144 promulgated pursuant
to the Securities Act of 1933. Sales of substantial amounts of the freely
tradeable stock in the public market could adversely affect the market price of
the Common Stock.

        PRIVATE LIABILITY OF MANAGEMENT. The Company has adopted provisions in
its Certificate which limit the liability of its Officers and Directors and
provisions in its bylaws


<PAGE>   24

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 generally provides that its directors shall have no personal
liability to the Company or its stockholders for monetary damages for breaches
of their fiduciary duties as directors, except for breaches of their duties of
loyalty, acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of law, acts involving unlawful payment of
dividends or unlawful stock purchases or redemptions, or any transaction from
which a director derives an improper personal benefit. Such provisions
substantially limit the shareholders' ability to hold directors liable for
breaches of fiduciary duty.

        POTENTIAL ISSUANCE OF ADDITIONAL COMMON AND PREFERRED STOCK. The Company
is authorized to issue up to 50,000,000 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 will reduce
the proportionate ownership and voting power of the Common Stock offered hereby.
The Company will also be authorized to issue up to 5,000,000 shares of preferred
stock, the rights and preferences of which may be designated in series by the
Board of Directors. To the extent of such authorization, such designations may
be made without shareholder approval. The designation and issuance of series of
preferred stock in the future would create additional securities which would
have dividend and liquidation preferences over the 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 subject to significant fluctuations in response to
variations in operating results of the Company and other factors such as
investor perceptions of the Company, supply and demand, interest rates, general
economic conditions and those specific to the industry, developments with regard
to the Company's activities, future financial condition and management.

        APPLICABILITY OF LOW PRICED STOCK RISK DISCLOSURE REQUIREMENTS. The
Common Stock of the Company may be considered a low priced security under rules
promulgated under the Securities Exchange Act of 1934. Under these rules,
broker-dealers participating in transactions in low priced securities must first
deliver a risk disclosure document which describes the risks associated with
such stocks, the broker-dealer's duties, the customer's rights and remedies, 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.

        YEAR 2000 COMPLIANCE. Although the Company believes that it is Year 2000
compliant, it may be wrong. If the Company is wrong, it could face unexpected
expenses fixing Year 2000 problems or unanticipated Web site outages related to
the Year 2000, either of which


<PAGE>   25

could have a material adverse effect upon the Company's business, results of
operations, and financial condition. Furthermore, the Company's Web site is
integrated with equipment provided by third parties that may not be Year 2000
compliant. The Company is unable to make contingency plans covering the
possibility that a significant number of computers constituting the Internet may
fail to properly process dates for the year 2000 and that there may be a system
wide slowdown or breakdown. Any interruption or significant degradation of
Internet operations, whether due to Year 2000 problems or otherwise, could have
a material adverse effect upon the Company's business, results of operations, or
financial condition.

                                     PART II

                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        Not applicable.

ITEM 2. CHANGES IN SECURITIES

        Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        Not applicable.

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 document is incorporated by reference from the Form 8-K of
the Company filed August 12, 1999:

<TABLE>
<CAPTION>
Exhibit No.     Description
-----------     -----------
<S>             <C>
2.1             Agreement and Plan of Merger dated as of July 28, 1999 among
                SportsNuts.com International, Inc., SportsNuts Merger Sub.,
                Inc., Sportzz.com, Inc., ObjectSelect, L.C., and individual
                members thereof.
</TABLE>



<PAGE>   26

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

<TABLE>
<CAPTION>
Exhibit No.     Description
-----------     -----------
<S>             <C>
Exhibit 10.1    Advertising Agency Services Agreement, dated August 23, 1999
                between EURO RSCG/DSW Partners, LLC, and SportsNuts.com
                International, Inc.

Exhibit 10.2    Software Licence Agreement, dated September 30, 1999 between
                Brookline Technologies, Inc. and SportsNuts.com International,
                Inc.

Exhibit 10.3    Executive Employment Agreement dated September 1999 between
                David M. Hill and SportsNuts.com International, Inc.

Exhibit 27      Financial Data Schedule
</TABLE>



<PAGE>   27

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.



        Date: November 15, 1999             By /s/ DAVID M. HILL
                                               ---------------------------------
                                               David M. Hill
                                               Chief Financial Officer
<PAGE>   28

                EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.     Description
-----------     -----------
<S>             <C>
Exhibit 10.1    Advertising Agency Services Agreement, dated August 23, 1999
                between EURO RSCG/DSW Partners, LLC, and SportsNuts.com
                International, Inc.

Exhibit 10.2    Software Licence Agreement, dated September 30, 1999 between
                Brookline Technologies, Inc. and SportsNuts.com International,
                Inc.

Exhibit 10.3    Executive Employment Agreement dated September 1999 between
                David M. Hill and SportsNuts.com International, Inc.

Exhibit 27      Financial Data Schedule
</TABLE>