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,  2001

              [ ] 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______ to ___________

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

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

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

            The Towers at South Towne II,
            10421 South 400 West, Suite 550,
            Salt Lake City, Utah                             84095
            ----------------------------------               -----------------
            (Address of principal executive offices)
</TABLE>

                                (801) 816-2500 )
                                 --------------
                           Issuer's telephone number )
--------------------------------------------------------------------------------
(Former name or former address and former fiscal year, if change since last
report.)



<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, 2001, the Company
had outstanding 20,114,004 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, 2001.

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............................... 10
</TABLE>


<PAGE>



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

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

   Cash and cash equivalents (Note 1)                                      $           38,974  $              651
   Accounts receivable, net (Note 1)                                                    2,270               7,361
   Inventory, net (Notes 1 and 2)                                                       6,542              11,650
   Prepaid expenses                                                                    14,943              27,917
                                                                           ------------------  ------------------

     Total Current Assets                                                              62,729              47,579
                                                                           ------------------  ------------------

PROPERTY AND EQUIPMENT (Note 1)

   Computer hardware                                                                  722,534            518,789
   Computer software                                                                  721,809            721,809
   Furniture and office equipment                                                     193,819            189,019
   Less - accumulated depreciation                                                 (1,010,326)          (652,429)
                                                                           ------------------  -----------------

     Total Property and Equipment                                                     627,836            777,188
                                                                           ------------------  -----------------
OTHER ASSETS

   Goodwill, net (Note 12)                                                            162,286             -
                                                                           ------------------  -----------------

     Total Other Assets                                                               162,286             -
                                                                           ------------------  -----------------

     TOTAL ASSETS                                                          $          852,851  $         824,767
                                                                           ==================  =================
</TABLE>

      See the accompanying notes to the consolidated financial statements.


                                        2

<PAGE>



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


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>

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

   Accounts payable                                                        $          890,514  $       1,197,146
   Accrued expenses                                                                   673,118            465,647
   Capital leases, current portion (Note 13)                                           51,121             -
   Notes payable, current portion (Note 4)                                            167,000            115,000
   Notes payable, related parties (Note 3)                                            459,000            529,500
                                                                           ------------------  -----------------

     Total Current Liabilities                                                      2,240,753          2,307,293
                                                                           ------------------  -----------------

LONG-TERM LIABILITIES

   Capital leases (Note 13)                                                           266,182             -
                                                                           ------------------  -----------------

     Total Long-Term Liabilities                                                      266,182             -
                                                                           ------------------  -----------------

     TOTAL LIABILITIES                                                              2,506,935          2,307,293
                                                                           ------------------  -----------------

STOCKHOLDERS' EQUITY (DEFICIT)

   Preferred stock, $0.002 par value; 20,000,000 shares
    authorized, 178,000 shares issued and outstanding                                     356                356
   Common stock, $0.002 par value; 200,000,000 shares
    authorized, 20,114,004 and 3,397,095 shares issued
    and outstanding, respectively                                                      40,228              6,794
   Stock subscription receivable                                                       (1,600)            -
   Additional paid-in capital                                                      18,894,190         17,708,296
   Accumulated deficit prior to the development stage                             (13,139,071)       (13,139,071)
   Accumulated deficit since the inception of the
    development stage                                                              (7,448,187)        (6,058,901)
                                                                           ------------------  -----------------

     Total Stockholders' Equity (Deficit)                                          (1,654,084)        (1,482,526)
                                                                           ------------------  -----------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
       (DEFICIT)                                                           $          852,851  $         824,767
                                                                           ==================  =================
</TABLE>

      See the accompanying notes to the consolidated financial statements.


                                        3

<PAGE>



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

<TABLE>
<CAPTION>
                                                                               For the Three Months Ended
                                                                                       September 30,
                                                                           -------------------------------------
                                                                                 2001                 2000
                                                                           ------------------  -----------------
<S>                                                                       <C>                 <C>
NET SALES                                                                  $           22,187  $          -
                                                                           ------------------  -----------------

OPERATING EXPENSES
   Cost of Sales                                                                       12,853             -
   General and administrative                                                         406,113            484,698
   Selling and marketing                                                               85,163            199,718
   Research and development                                                            51,167             61,925
                                                                           ------------------  -----------------

     Total Operating Expenses                                                         555,296            746,341
                                                                           ------------------  -----------------

LOSS FROM OPERATIONS                                                                 (533,109)          (746,341)
                                                                           ------------------  -----------------

OTHER INCOME (EXPENSES)
   Interest expense                                                                   (37,336)           (36,453)
   Interest income                                                                        177             -
   Other income                                                                         5,175                 50
   Gain on forgiveness of debt                                                        203,219              4,040
   Loss on sale of assets                                                              -                 (15,834)
                                                                           ------------------  -----------------

     Total Other Income (Expenses)                                                    171,235            (48,197)
                                                                           ------------------  -----------------

LOSS FROM CONTINUING OPERATIONS
 BEFORE INCOME TAXES                                                                 (361,874)          (794,538)

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

NET LOSS                                                                   $         (361,874) $        (794,538)
                                                                           ==================  =================

BASIC LOSS PER COMMON SHARE -
 BASIC AND DILUTED (Note 1)
   Loss from continuing operations                                         $            (0.02) $           (0.44)

   Loss from discontinued operations                                                   -                  -
                                                                           ------------------  -----------------
     Basic Loss Per Share                                                  $            (0.02) $           (0.44)
                                                                           ==================  =================

WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING                                                                16,163,243          1,794,234
                                                                           ==================  =================
</TABLE>


      See the accompanying notes to the consolidated financial statements.


                                        4

<PAGE>



                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                Consolidated Statements of Operations (Continued)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                    From
                                                                                               Inception of the
                                                                                                 Development
                                                                                                  Stage on
                                                                                                March 1, 2000
                                                             For the Nine Months Ended             Through
                                                                  September 30,                 September 30,
                                                       ---------------------------------------------------------
                                                             2001                2000               2001
                                                       ------------------  ------------------  -----------------
<S>                                                    <C>                 <C>                 <C>
NET SALES                                              $          155,565  $           -       $         155,565
                                                       ------------------  ------------------  -----------------

OPERATING EXPENSES
   Cost of Sales                                                   70,752              -                  70,752
   General and administrative                                   1,052,306           3,256,516          6,213,602
   Selling and marketing                                          552,439             629,493          1,134,098
   Research and development                                       148,538             205,185            361,296
                                                       ------------------  ------------------    ---------------

     Total Operating Expenses                                   1,824,035           4,091,194          7,779,748
                                                       ------------------  ------------------  -----------------

LOSS FROM OPERATIONS                                           (1,668,470)         (4,091,194)        (7,624,183)
                                                       ------------------  ------------------  -----------------

OTHER INCOME (EXPENSES)
   Interest expense                                               (97,261)            (76,834)          (206,768)
   Interest income                                                    423               2,267              1,720
   Other income                                                    31,889               3,175             39,639
   Gain on forgiveness of debt                                    344,133               4,040            377,958
   Loss on sale of assets                                          -                  (42,037)           (36,553)
                                                       ------------------  ------------------  -----------------

     Total Other Income (Expenses)                                279,184            (109,389)           175,996
                                                       ------------------  ------------------  -----------------

LOSS FROM CONTINUING OPERATIONS
 BEFORE INCOME TAXES                                           (1,389,286)         (4,200,583)        (7,448,187)

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

LOSS FROM CONTINUING OPERATIONS                                (1,389,286)         (4,200,583)        (7,448,187)

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

NET LOSS                                               $       (1,389,286) $       (4,747,160) $      (7,448,187)
                                                       ==================  ==================  =================

BASIC LOSS PER COMMON SHARE -
 BASIC AND DILUTED (Note 1)
   Loss from continuing operations                     $            (0.13) $            (3.45)
   Loss from discontinued operations                               -                    (0.45)
                                                       ------------------  ------------------
     Basic Loss Per Share                              $            (0.13) $            (3.90)
                                                       ==================  ==================

WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING                                            10,598,005           1,216,769
                                                       ==================  ==================
</TABLE>
      See the accompanying notes to the consolidated financial statements.


                                        5

<PAGE>



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


                                                                                                                   Additional
                                                                                                                    Paid-In
                                                         Preferred Stock             Common Stock                   Capital
                                                      ------------------------      ----------------------       ------------
                                                       Shares           Amount      Shares         Amount
<S>                                                  <C>         <C>              <C>              <C>           <C>

Balance, December 31, 1999                                      - $          -       894,918      $ 1,790        $ 12,494,031
Issuance of common stock for cash (net of
issuance costs of $15,000)                                      -            -        927,383        1,855            458,146
Warrants issued below market value                              -            -              -            -          3,592,418
Preferred shares issued for cash                          178,000          356              -            -            394,644
Stock offering costs                                            -            -              -            -           (19,500)
Shares issued for services                                      -            -        945,800        1,892            720,035
Shares issued for debt payment                                  -            -        504,200        1,008             50,771
Shares issued for exercise of stock options                     -            -         50,000          100              7,900
Shares issued for exercise of warrants                          -            -         74,794          149              9,851
Net loss for the year ended December 31, 2000                   -            -              -            -                  -
                                                    -------------   ----------     ----------     --------      -------------

Balance, December 31, 2000                                178,000          356      3,397,095        6,794         17,708,296
Issuance of common stock for cash (unaudited)                   -            -      1,000,000        2,000             98,000
Warrants/Options issued below market value (unaudited)          -            -              -            -            253,199
Shares issued for services (unaudited)                          -            -      4,525,000        9,050            216,350
Shares issued for exercise of stock options
  (unaudited)                                                   -            -      3,460,000        6,920             88,980
Shares issued for exercise of warrants for cash
  (unaudited)                                                   -            -        712,206        1,425             63,575
Shares issued for exercise of warrants for services
  rendered (unaudited)                                          -            -        990,000        1,980            210,622
Shares issued for debt payment (unaudited)                      -            -        229,703          459             16,768
Shares issued to an officer for debt payment and
  compensation (unaudited)                                      -            -      2,000,000        4,000             56,000
Shares issued for purchase of Rocky Mountain
Sports Alliance (unaudited)                                     -            -      3,800,000        7,600            182,400
Net loss for the nine months ended September 30,
  2001 (unaudited)                                              -            -              -           -                   -
                                                    ------------- ------------    -----------    ---------      -------------
Balance, September 30, 2001 (unaudited)                   178,000 $        356     20,114,004    $  40,228      $  18,894,190
                                                    ============= ============    ===========    =========      =============
</TABLE>

      See the accompanying notes to the consolidated financial statements.


                                        6A

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

<TABLE>
<CAPTION>
                                                                                       Stock               Total
                                                                 Accumulated        Subscription       Stockholder's
                                                                   Deficit           Receivable       Equity (Deficit)
                                                                 --------------   ---------------    -------------------
<S>                                                              <C>              <C>                 <C>
Balance, December 31, 1999                                       $ (11,940,918)   $             -        $    554,903
Issuance of common stock for cash (net of issuance costs of
$15,000)                                                                      -                 -             460,001
Warrants issued below market value                                            -                 -           3,592,418
Preferred shares issued for cash                                              -                 -             395,000
Stock offering costs                                                          -                 -            (19,500)
Shares issued for services                                                    -                 -             721,927
Shares issued for debt payment                                                -                 -              51,779
Shares issued for exercise of stock options                                   -                 -               8,000
Shares issued for exercise of warrants                                        -                 -              10,000
Net loss for the year ended December 31, 2000                       (7,257,054)                            (7,257,054)
                                                              ----------------- -----------------       -------------

Balance, December 31, 2000                                         (19,197,972)                 -          (1,482,526)
Issuance of common stock for cash (unaudited)                                 -                 -             100,000
Warrants/Options issued below market value (unaudited)                        -                 -             253,199
Shares issued for services (unaudited)                                        -                 -             225,400
Shares issued for exercise of stock options (unaudited)                       -            (1,600)             94,300
Shares issued for exercise of warrants for cash (unaudited)                   -                 -              65,000
Shares issued for exercise of warrants for services rendered
   (unaudited)                                                                -                 -             212,602
Shares issued for debt payment (unaudited)                                    -                 -              17,227
Shares issued to an officer for debt payment and
compensation (unaudited)                                                      -                 -              60,000
Shares issued for purchase of Rocky Mountain Sports
Alliance (unaudited)                                                          -                 -             190,000
Net loss for the nine months ended September 30, 2001
   (unaudited)                                                       (1,389,286)                -          (1,389,286)
                                                                ---------------  ----------------     ---------------
Balance, September 30, 2001 (unaudited)                         $  (20,587,258)  $         (1,600)    $    (1,654,084)
                                                                ===============  ================     ===============
</TABLE>

      See the accompanying notes to the consolidated financial statements.


                                        6B

<PAGE>

                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                             From
                                                                                                         Inception of the
                                                                                                           Development
                                                                                                            Stage on
                                                                                                          March 1, 2000
                                                                       For the Nine Months Ended            Through
                                                                            September 30,                 September 30,
                                                                -------------------------------------   -----------------
                                                                      2001              2000                  2001
                                                                ------------------  -----------------   -----------------
<S>                                                            <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net loss                                                     $       (1,389,286) $      (4,747,160)  $      (7,448,187)
   Adjustments to reconcile net loss to net
    cash used in operating activities:
     Depreciation                                                          357,683            349,940             742,471
     Amortization of goodwill                                               18,032                -                18,032
     Common stock issued for services                                      270,400            165,010             992,327
     Warrants issued below market value                                    253,199          1,954,209           3,560,455
     Loss on sale of fixed assets                                              -               42,037              36,553
     Gain on forgiveness of debt                                          (344,133)            (4,040)           (377,959)
     Warrants exercised for services                                       212,602                -               212,602
     Options exercised for services                                          3,342                -                 3,342

   Changes in operating assets and liabilities:
     Accounts receivable                                                     5,091             (7,316)             19,322
     Inventory                                                               5,108             11,723              14,914
     Restricted cash                                                           -              110,000             110,000
     Other current assets                                                   21,776             (3,269)            132,265
     Accounts payable and accrued expenses                                 269,474            665,355             623,411
     Capital leases payable                                                (13,302)               -               (13,302)
     Advances payable                                                       30,849                -                30,849
     Deferred revenue                                                      (22,043)               -               (22,043)
                                                                ------------------  -----------------   -----------------

       Net Cash Used in Operating Activities                              (321,208)        (1,463,511)         (1,364,948)
                                                                ------------------  -----------------   -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:

   Proceeds from sale of fixed assets                                          -               43,318              79,714
   Purchases of property and equipment                                         -             (139,817)            (36,014)
                                                                ------------------  -----------------   -----------------
       Net Cash Provided (Used) in
       Investing Activities                                                    -              (96,499)             43,700
                                                                ------------------  -----------------   -----------------
</TABLE>




      See the accompanying notes to the consolidated financial statements.

                                       7

<PAGE>

                                SPORTSNUTS, INC.
                  (Formerly SportsNuts.com International, Inc.)
                          (A Development Stage Company)
                Consolidated Statements of Cash Flows (Continued)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                              From
                                                                                                         Inception of the
                                                                                                           Development
                                                                                                             Stage on
                                                                                                          March 1, 2000
                                                                       For the Nine Months Ended             Through
                                                                             September 30,                September 30,
                                                                -------------------------------------   -----------------
                                                                      2001               2000                2001
                                                                ------------------  -----------------   -----------------
<S>                                                            <C>                 <C>                 <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of notes payable - related parties                 4,000            455,000              59,000
   Proceeds from issuance of notes payable                                  -                 254,500             222,000
   Proceeds from issuance of common stock                                  100,000            475,001             343,009
   Proceeds from issuance of preferred stock                                -                 395,000             395,000
   Proceeds from exercise of stock options                                  81,600             -                   81,600
   Proceeds from exercise of stock warrants                                 65,000             -                   65,000
   Cash received upon acquisition of subsidiary                             20,420             -                   20,420
   Stock offering costs                                                     -                 (34,500)            (19,500)
   Cash received from capital lease                                         96,011             -                   96,011
   Principal payments of notes payable - related parties                    (7,500)           (62,500)            (20,000)
                                                                ------------------  -----------------   -----------------

       Net Cash Provided by Financing Activities                $          359,531  $       1,482,501   $       1,242,540
                                                                ------------------  -----------------   -----------------

NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                               $           38,323  $         (77,509)  $         (78,708)

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF PERIOD                                                           651            148,647             117,682
                                                                ------------------  -----------------   -----------------

CASH AND CASH EQUIVALENTS AT END
 OF PERIOD                                                      $           38,974  $          71,138   $          38,974
                                                                ==================  =================   =================

SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:

   Interest                                                     $            2,298  $           2,821   $           5,319
   Income taxes                                                 $              -    $             -     $             -

Non-Cash Investing and Financing Activities:

   Common stock issued for services                             $          270,400  $         165,010   $         992,327

   Common stock issued to convert notes
   payable and interest                                         $           17,227  $          41,771   $          58,998

</TABLE>



      See the accompanying notes to the consolidated financial statements.


                                        8

<PAGE>


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

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

   Common stock issued for reduction of
   accounts payable                                             $           15,000  $             -     $          25,000

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

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

   Common stock issued for options exercised
   by conversion of accounts payable and
   other liabilities                                            $            9,358  $             -     $           9,358

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

</TABLE>

      See the accompanying notes to the consolidated financial statements.


                                        9

<PAGE>


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


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

              a. Organization and Description of Business

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

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

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

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

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

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

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

                                       10

<PAGE>


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


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

              b. Accounting Method

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

              c. Cash and Cash Equivalents

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

              d. Inventory

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

              e. Property and Equipment

              Property  and  equipment  are  stated  at cost.  Expenditures  for
              ordinary  maintenance  and repairs are  charged to  operations  as
              incurred.   Major  additions  and  improvements  are  capitalized.
              Depreciation is computed using the  straight-line  and accelerated
              methods over estimated useful lives as follows:
<TABLE>
<S>                                                        <C>
                               Computer hardware            3 years
                               Computer software            3 years
                               Office equipment             7 years
</TABLE>
              Depreciation  expense for the nine months ended September 30, 2001
              and 2000 was $357,683 and $349,940 respectively.

              f. Accounts Receivable

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

              g. Revenue Recognition

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

              h. Estimates

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

                                       11

<PAGE>


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


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

              i. Advertising

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

              j. Basic Loss Per Share
<TABLE>
<CAPTION>
                                                                                 For the Nine Months Ended
                                                                                        September 30,
                                                                         ---------------------------------------------
                                                                                     2001                 2000
                                                                         --------------------------------------------
<S>                                                                      <C>                   <C>
              Basic loss per share from continuing operations:

                     Net loss (numerator)                                $      (1,389,286)    $      (4,200,583)
                     Shares (denominator)                                       10,598,005             1,216,769
                     Per share amount                                    $           (0.13)    $           (3.45)

              Basic loss per share from discontinued operations:

                     Net loss (numerator)                                $          -          $        (546,577)
                     Shares (denominator)                                           -                  1,216,769
                     Per share amount                                    $          -          $           (0.45)
</TABLE>
              The basic loss per share of common  stock is based on the weighted
              average number of shares issued and outstanding  during the period
              of the  financial  statements.  Common  shares to be  issued  from
              preferred  stock,  warrants,  and options are not  included in the
              computation  because they would have an antidilutive effect on the
              net loss per common share.

              k.  Provision for Taxes

              The Company  accounts  for income  taxes under the  provisions  of
              Statement  of  Financial  Accounting  Standards  (SFAS)  No.  109,
              Accounting  for Income  Taxes,  using the  liability  method.  The
              estimated  future tax effect of  differences  between the basis in
              assets  and  liabilities  for  tax  and  accounting   purposes  is
              accounted for as deferred taxes. In accordance with the provisions
              of SFAS No. 109, a valuation  allowance  would be  established  to
              reduce  deferred  tax assets if it were more  likely than not that
              all, or some  portion,  of such  deferred  tax assets would not be
              realized.  A  full  allowance  against  deferred  tax  assets  was
              provided as of September 30, 2001.

              At  September  30,  2001,  the  Company  had  net  operating  loss
              carryforwards  of  approximately  $12,300,000  that may be  offset
              against  future  taxable income through 2020. No tax benefits have
              been reported in the financial  statements,  because the potential
              tax benefits of the net operating  loss carry  forwards are offset
              by a valuation allowance of the same amount.

              Due to the change in ownership provisions of the Tax Reform Act of
              1986,  net operating  loss  carryforwards  for Federal  income tax
              reporting  purposes  are subject to annual  limitations.  Should a
              change in ownership occur, net operating loss carryforwards may be
              limited as to use in the future.


                                       12

<PAGE>


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


NOTE 1 -      ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

              l. Research and Development

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

              m.  Stock Options and Warrants

              As permitted by FASB  Statement  123  "Accounting  for Stock Based
              Compensation"  (SFAS No. 123), the Company  elected to measure and
              record  compensation  cost relative to employee stock option costs
              in accordance with Accounting Principles Board ("APB") Opinion 25,
              "Accounting   for  Stock   Issued  to   Employees,"   and  related
              interpretations  and  make pro  forma  disclosures  of net  income
              (loss)  and basic  earnings  (loss) per share as if the fair value
              method  of  valuing  stock  options  had been  applied.  Under APB
              Opinion 25,  compensation  cost is  recognized  for stock  options
              granted to employees when the option price is less than the market
              price of the underlying  common stock on the date of grant.  As of
              September 30, 2001, there were 4,550,000 options outstanding which
              were granted to  employees,  all of which were granted at exercise
              prices equal to or above the market price on the grant date.

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

              n.  Unaudited Consolidated Financial Statements

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

NOTE 2 -      INVENTORY

              Inventory consisted of the following:
<TABLE>
<CAPTION>
                                                                          September 30,          December 31,
                                                                              2001                   2000
                                                                         -----------------     -----------------
                                                                              (Unaudited)
<S>                                                                     <C>                   <C>
              Finished goods                                             $           8,723     $          15,533
              Reserve for obsolete inventory                                        (2,181)               (3,883)
                                                                         -----------------     -----------------

                        Total                                            $           6,542     $          11,650
                                                                         =================     =================
</TABLE>


                                       13

<PAGE>


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

NOTE 3 -      NOTES PAYABLE - RELATED PARTIES

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

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

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

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

              Notes payable to related individuals, unsecured,
               interest at 12%, due on demand.                                              -                   12,500
                                                                                ----------------     -----------------

                     Total notes payable - related parties                               459,000               529,500

                     Less: current portion                                              (459,000)             (529,500)
                                                                                ----------------     -----------------

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

              Maturities of notes payable - related parties are as follows:
<TABLE>
<CAPTION>
                         Year Ending
                         September 30,                                                                      Amount
              -------------------------------------                                                  -----------------
<S>                                                                                                 <C>
                         2002                                                                        $         459,000
                                                                                                     -----------------

                         Total                                                                       $         459,000
                                                                                                     =================
</TABLE>



                                       14

<PAGE>


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



NOTE 4 -      NOTES PAYABLE

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

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

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

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

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

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

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

                     Total notes payable                                                  167,000               115,000

                     Less: current portion                                               (167,000)              (115,000)
                                                                                -----------------     ------------------

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



                                       15

<PAGE>


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





NOTE 4 -      NOTES PAYABLE (Continued)

              Maturities of notes payable are as follows:
<TABLE>
<CAPTION>
                       Year Ending
                       September 30,                                                                 Amount
              --------------------------------                                                 -----------------
<S>                                                                                            <C>
                           2002                                                                $         167,000
                                                                                               -----------------

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

NOTE 5 -      COMMON AND PREFERRED STOCK TRANSACTIONS

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

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

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

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

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

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

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

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

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

                                       16

<PAGE>


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

NOTE 5 -      COMMON AND PREFERRED STOCK TRANSACTIONS (Continued)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       17

<PAGE>


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


NOTE 5 -      COMMON AND PREFERRED STOCK TRANSACTIONS (Continued)

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

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

              Effective  May 15,  2001,  the Company  issued  229,703  shares of
              common stock valued at $0.075 per share in  satisfaction  of notes
              payable due to an individual by the Company.
              Effective May 16, 2001, the Company sold and issued 500,000 shares
              of its common stock at a price of $0.10 per share.

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

              Effective  July 30, 2001,  the Company  issued  630,000  shares of
              common  stock at a price of $0.024 in exchange for the exercise of
              stock options held by a consultant of the Company.

              Effective  August 15, 2001, the Company issued 2,000,000 shares of
              common stock valued at $0.0075 in  satisfaction of obligations for
              expense  reimbursements  due to an  officer  of the  Company.  The
              difference  between the issue price and the market  price has been
              included in general and  administrative  expenses in the financial
              statements.

              Effective  August 20, 2001, the Company issued 3,000,000 shares of
              common  stock  valued  at  $0.03  per  share  in  satisfaction  of
              obligations for consulting services received by the Company.

              Effective  September 19, 2001, the Company issued 50,000 shares of
              common  stock at a price of $0.03 in exchange  for the exercise of
              stock options held by certain employees of the Company.

              Effective  September 25, 2001, the Company issued 1,800,000 shares
              of common  stock at a price of $0.012 in exchange for the exercise
              of stock options held by a consultant of the Company.

NOTE 6 -      OPTIONS AND WARRANTS

              Employee Stock Options
              ----------------------

              The following tables summarize the information  regarding employee
              stock options at September 30, 2001:
<TABLE>
<S>                                                                                            <C>
                      Options outstanding at December 31, 2000                                           2,195,000
                      Options granted                                                                    2,485,000
                      Options exercised                                                                  (130,000)
                                                                                                -----------------
                      Options outstanding at September 30, 2001                                          4,550,000
                                                                                                ==================

                      Weighted average exercise price of options
                      outstanding at September 30, 2001                                         $             0.09
                                                                                                ==================
</TABLE>

                                      18

<PAGE>


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

NOTE 6 -      OPTIONS AND WARRANTS (Continued)
<TABLE>
<CAPTION>

                                     Number of         Weighted                        Number of
                                     Options           Average          Weighted       Options           Weighted
                                    Outstanding       Remaining         Average      Exercisable at      Average
                Exercise            September 30,    Contractual       Exercise       September 30,     Exercise
                       Prices         2001            Life             Price            2001             Price
              -----------------  ----------------  --------------  ---------------  ----------------   ------------
<S>           <C>                      <C>                <C>      <C>                     <C>        <C>
              $            0.03         2,435,000            4.45  $          0.03                 -   $       0.03
              $            0.16         2,115,000            3.78  $          0.16           414,000   $       0.16
</TABLE>

              The Company applies APB Opinion 25 and related  Interpretations in
              accounting for its plan.  Accordingly,  no  compensation  cost has
              been recognized for its stock option plan. Had  compensation  cost
              for the Company's  stock-based  compensation  plan been determined
              based on the fair value at the grant  dates for awards  under such
              plan consistent with the method of FASB Statement 123, "Accounting
              for  Stock-Based  Compensation"  (SFAS No. 123), the Company's net
              loss and basic loss per common  share would have been as indicated
              below:
<TABLE>
<CAPTION>
                                                                                      September 30,
                                                                       -------------------------------------------------
                                                                                2001                     2000
                                                                       --------------------    -------------------------
<S>                                                                    <C>                      <C>
              Net loss as reported                                     $        (1,389,286)     $        (4,747,160)
              Pro forma net loss                                                (1,463,152)              (4,747,160)
              Basic loss per share as reported                                       (0.13)                   (3.90)
              Pro forma basic loss per share                                         (0.14)                   (3.90)
</TABLE>

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

              Non-Employee Stock Options
              --------------------------

              On April 6, 2001,  the Company  issued  options to acquire  20,000
              shares of common  stock.  These options were issued at an exercise
              price of $0.03.  On April 25, 2001,  the Company issued options to
              acquire  900,000  shares of common  stock at an exercise  price of
              $0.05.  On July 10, 2001,  the Company  issued  options to acquire
              2,500,000 shares of common stock as follows: 630,000 options at an
              exercise  price of $0.024 and  1,870,000  options  at an  exercise
              price of $0.012.  The options  issued in 2001 have  maturities  of
              five  years.  The  options  issued  were to  non-employees  of the
              Company. The following tables summarize the information  regarding
              non-employee  options  outstanding  at September 30, 2001. All the
              options are exercisable at September 30, 2001.

                                       19

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

NOTE 6 -      OPTIONS AND WARRANTS (Continued)
<TABLE>
<S>                                                                                            <C>
                      Options outstanding at January 1, 2001                                                -
                      Options granted                                                                    3,420,000
                      Options exercised                                                                 (3,330,000)
                                                                                                ------------------
                      Options outstanding at September 30, 2001                                             90,000
                                                                                                ==================
                      Weighted average exercise price of non-employee
                      options outstanding at September 30, 2001                                 $            0.014
                                                                                                ==================
</TABLE>

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

              $            0.03            20,000            4.45  $         0.03             20,000   $       0.03
              $           0.012            70,000            4.71  $         0.012            70,000   $      0.012
</TABLE>

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

              As a result of applying  SFAS No. 123,  the Company had an expense
              of $156,434  during the nine months ended  September 30, 2001. The
              expense is included in the  general and  administrative  amount in
              the statement of operations.

              Warrants

              During the nine  months  ended  September  30,  2001,  the Company
              issued warrants to acquire 1,275,000 shares of common stock. These
              warrants  were issued at exercise  prices  ranging  from $0.016 to
              $0.152.  All warrants issued were to non-employees of the Company.
              The following tables summarize the information  regarding warrants
              outstanding   at  September   30,  2001.   All  the  warrants  are
              exercisable at September 30, 2001.
<TABLE>
<S>                                                                                                    <C>
                               Warrants outstanding at December 31, 2000                                  2,047,558
                               Warrants granted                                                           1,275,000
                               Warrants expired                                                            (22,185)
                               Warrants exercised                                                       (1,702,206)
                                                                                                       -----------
                               Warrants outstanding at September 30, 2001                                1,598,167
                                                                                                       ===========
                               Weighted average exercise price of warrants
                                 outstanding at September 30, 2001                                     $      1.40
                                                                                                       ===========
</TABLE>

                                                        20

<PAGE>


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


NOTE 6 -      OPTIONS AND WARRANTS (Continued)
<TABLE>
<CAPTION>
                                                             Number of            Weighted
                                                             Warrants             Average             Weighted
                                                          Outstanding at          Remaining           Average
                                                           September 30,        Contractual          Exercise
                      Range of Exercise Prices               2001                Life                Price
                      ------------------------          ------------------  ------------------  ------------------
<S>                   <C>                                       <C>                      <C>    <C>
                      $0.016 - $0.096                              373,000                0.14  $             0.05
                      $0.75 - $1.00                                185,167                1.22  $             0.77
                      $2.00                                      1,040,000                1.53  $             2.00
</TABLE>

              The  Company  applies  SFAS No.  123 for  warrants  issued,  which
              requires  the Company to estimate  the fair value of each  warrant
              issued at the grant date by using the Black-Scholes  pricing model
              with the following assumptions:
<TABLE>
<S>                                                                                                 <C>
                      Risk-free interest rate                                                        3.43% - 6.68%
                      Expected life                                                                  1 - 36 Months
                      Expected volatility                                                              1.04 - 3.15
                      Dividend yield                                                                           0.0
</TABLE>

              As a result of applying  SFAS No. 123,  the Company had an expense
              of $96,765 and $3,126,710  during the nine months ended  September
              30,  2001 and 2000,  respectively.  The expense is included in the
              general and administrative amount in the statement of operations.

NOTE 7 -       OPERATING LEASES

              The  Company  leases two (2)  different  office  facilities  under
              non-cancelable  operating leases expiring in 2004.  Rental expense
              for the nine months ended September 30, 2001 and 2000 was $101,294
              and $95,174, 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 $4,976 and $6,045 for the nine months
              ended September 30, 2001 and 2000, respectively.

                                       21

<PAGE>


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

NOTE 7 -       OPERATING LEASES (continued)

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

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


NOTE 8 -      GOING CONCERN

              The accompanying  financial statements have been prepared assuming
              that  the  Company  will  continue  as  a  going  concern,   which
              contemplates   the  realization  of  assets  and  satisfaction  of
              liabilities  in the normal  course of  business.  The  Company has
              sustained  significant  net  losses  which  have  resulted  in  an
              accumulated   deficit  at  December  31,  2000  of   approximately
              $19,200,000 and has experienced  periodic cash flow  difficulties,
              all of which  raise  substantial  doubt  regarding  the  Company's
              ability to continue as a going concern.

              The net loss for the nine months ended September 30, 2001 and 2000
              was $1,389,286 and $4,747,160,  respectively.  To date the Company
              has  funded  its  operations  through a  combination  of short and
              long-term loans and the private placement of its common stock. The
              Company  anticipates  another net loss for the year ended December
              31, 2001 and with the expected  cash  requirements  for the coming
              year,  there is substantial  doubt as to the Company's  ability to
              continue operations.

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

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

NOTE 9 -      RELATED PARTY TRANSACTIONS

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


                                       22

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

NOTE 9 -      RELATED PARTY TRANSACTIONS (continued)

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

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

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

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



NOTE 10 -     DISCONTINUED OPERATIONS

              Effective  March 1, 2000, the Company  elected to discontinue  its
              direct  sales  operations  and  concentrate  solely on building an
              Internet  portal to the amateur sports market.  The following is a
              summary of the loss from  discontinued  operations  resulting from
              the  elimination  of the direct sales segment of the Company.  The
              financial  statements have been retroactively  restated to reflect
              this event.
<TABLE>
<CAPTION>
                                                                                    For the Nine Months
                                                                                     Ended September 30,
                                                                         ---------------------------------------
                                                                                    2001           2000
                                                                         -------------------   -----------------
                                                                               (Unaudited)
<S>                                                                      <C>                   <C>
              NET SALES                                                  $                -    $          41,188
                                                                         -------------------   -----------------
              OPERATING EXPENSES
                Cost of sales                                                             -               34,136
                General and administrative                                                -              277,990
                Selling and marketing                                                     -              225,932
                Research and development                                                  -               50,421
                                                                         -------------------   -----------------
                   Total Operating Expenses                                               -              588,479
                                                                         -------------------   -----------------
              LOSS FROM OPERATIONS                                                        -             (547,291)
                                                                         -------------------   -----------------
              OTHER INCOME (EXPENSES)
                Interest expense                                                          -                 (257)
                Interest income                                                           -                  971
                                                                         -------------------   -----------------
                  Total Other Income (Expense)                                            -                  714

              LOSS BEFORE INCOME TAX (EXPENSE)                                            -             (546,577)

              INCOME TAX (EXPENSE)                                                        -                    -
                                                                         -------------------   -----------------
              LOSS FROM DISCONTINUED OPERATIONS                          $                -    $        (546,577)
                                                                         ===================   =================
</TABLE>
                                       23

<PAGE>


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

NOTE 11 - SEGMENT REPORTING

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

              The policies applied to determine the segment  information are the
              same as those  described in the summary of significant  accounting
              policies (Note 1). All significant intersegment  transactions have
              been eliminated in the consolidated financial statements.

              Financial  information  as  of  and  for  the  nine  months  ended
              September 30, 2001 with respect to the  reportable  segments is as
              follows:
<TABLE>
<CAPTION>
                                                                                                   Information
                                                             Online             Sports Event         Technology
                                                            Services              Management        Consulting
                                                          -----------------  ------------------  ------------------
<S>                                                      <C>                 <C>                 <C>
              Cash                                        $          20,568  $            9,054  $            9,352
              Fixed assets, net                                     442,573               4,157             181,106
              Total assets                                          614,619              15,711             424,535
              Total liabilities                                   2,208,040              11,517             479,710
              External revenues                                       2,611             123,791              29,163
              Cost of goods sold                                     -                   64,134               6,618
              Other income (expense)                                292,874                 213            (13,903)
              Segment profit (loss) before tax effect           (1,328,624)             (5,488)            (55,175)
</TABLE>

NOTE 12 -     BUSINESS COMBINATION

              On April 15, 2001,  the Company  acquired  Rocky  Mountain  Sports
              Alliance (RMSA) by exchanging 3,800,000 shares of its common stock
              for all of the common stock of RMSA. The transaction was accounted
              for  as  a  purchase  in   accordance   with  APB  16,   "Business
              Combinations."  The excess of the total  acquisition cost over the
              fair  value  of the net  assets  acquired  of  $180,318  is  being
              amortized over 5 years by the straight-line  method.  Amortization
              expense  amounted to $18,032 for the nine months  ended  September
              30, 2001.


                                       24

<PAGE>

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

NOTE 12 -     BUSINESS COMBINATION (Continued)

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

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

              The unaudited pro forma  consolidated  results include the amounts
              for the  Company  and RMSA  and nine  months  of  amortization  of
              goodwill.
<TABLE>
<CAPTION>
                                                                               September 30, 2001
<S>                                                                          <C>
                     Sales                                                   $         155,565
                     Net loss                                                       (1,435,171)
                                                                             ------------------

                     Basic and diluted earnings per share                    $           (0.14)
                                                                             ==================
</TABLE>

              The unaudited pro forma results of operations are not  necessarily
              indicative of what the results would have been had the acquisition
              actually occurred on the dates indicated,  and are not necessarily
              representative of future results of operations.

NOTE 13 -     CAPITAL LEASES

              Obligations  under the capital  lease at September 30, 2001 are as
follows:
<TABLE>
<S>                                                                                             <C>
                     Payable in  monthly  principal  and  interest  payments  of
                     $7,351 for 60 months beginning June 30, 2001,
                     interest rate of 11.76%, secured by fixed assets                            $          411,656

                     Less amounts representing taxes and interest                                          (94,353)
                                                                                                 ------------------
                     Total capital leases                                                                   317,303

                     Less current portion                                                                  (51,121)
                                                                                                 ------------------
                     Capital leases - long-term portion                                          $          266,182
                                                                                                 ------------------
</TABLE>
              Future principal  obligations of the capital leases payable are as
follows:
<TABLE>
<CAPTION>
                     Year Ending
                     September 30,                                                                     Amount
              --------------------------                                                         ------------------
<S>                  <C>                                                                         <C>
                     2002                                                                        $           51,121
                     2003                                                                                    58,989
                     2004                                                                                    68,248
                     2005                                                                                    79,144
                     2006                                                                                    59,801
                                                                                                 ------------------
                   Total capital leases                                                          $          317,303
                                                                                                 ==================
</TABLE>
              Depreciation  expense of  $22,638  associated  with the  equipment
              under  capital  lease was  expensed  during the nine months  ended
              September 30, 2001.

                                       25

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

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

Overview

         SportsNuts, Inc. and its subsidiaries  (collectively,  the "Company" or
"SportsNuts")  provides  unique  solutions  to the  challenges  faced by amateur
athletes and the  organizations  in which they  participate.  The Company  helps
organize  and  manage  a  wide  variety  of  sports  events,   providing  online
registration,   event  sponsorship,  event  coordination,   online  and  offline
promotion,  and  merchandise  sales.  The Company has also  developed a suite of
Internet-based tools that enable teams,  leagues, and players to build their own
online sports  communities.  Community  members publish  schedules,  statistics,
pictures,  videos, and articles for free--all in a safe, secure, and easy-to-use
website.

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

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

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


                                       26

<PAGE>




         General   and   administrative   expenses   have  been   comprised   of
administrative wages and benefits; occupancy and office expenses; outside legal,
accounting and other  professional fees; travel and other  miscellaneous  office
and   administrative   expenses.   Selling  and   marketing   expenses   include
selling/marketing  wages and benefits;  advertising  and  promotional  expenses;
travel and other miscellaneous related expenses.  R&D expenses consist mainly of
development  expenses  related to creating new technology  applications.  In the
future, the Company anticipates significant expenditures in business development
to create  strategic  alliances  with third  parties,  and in developing a sales
channel  to the  various  amateur  sports  organizations  throughout  the United
States.

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

Results of Operations

         Following is  management's  discussion of the relevant items  affecting
results of  operations  for the periods ended  September 30, 2001 and 2000.  The
balances  discussed  below include both results from  continuing  operations and
from  operations  that were  discontinued  during the period ended September 30,
2000,  as indicated in Note 10 of the  footnotes to the  consolidated  financial
statements.

         Revenues.  The Company  generated  net  revenues of $22,187  during the
three month period ended  September  30, 2001,  compared with $0 in net revenues
for the third quarter of 2000. For the nine months ended September 30, 2001, net
revenues  were  $155,565,  a 278%  increase  compared to $41,188 in net revenues
during  the first nine  months of 2000.  This  increase  was due to sales of the
Company's online services,  sports event management and promotion revenues,  and
information  technology consulting revenues.  The Company anticipates that these
three areas will  constitute the principal  source of the Company's  revenue for
the foreseeable future.

         Cost of Sales. Cost of sales for the three month period ended September
30, 2001 was $12,853, compared to $0 for the third quarter of 2000. For the nine
month  period  ended  September  30,  2001,  cost of sales was  $70,752,  a 107%
increase  from $34,136  during the first nine months of 2000.  This  increase is
attributable  to expenses  incurred  pursuant to the  delivery of the  Company's
online  registration  services  and  sports  promotional  services,   and  sales
commissions paid in connection with technology consulting projects.

         General  and  Administrative   Expenses.   General  and  administrative
expenses for the three  months ended  September  30, 2001 were  $406,113,  a 16%
decrease  from  $484,698   during  the  third  quarter  of  2000.   General  and
administrative  expenses  for the nine  months  ended  September  30,  2001 were
$1,052,306,  a 70% decrease from  $3,534,506  during the nine month period ended
September 30, 2000.  This decrease 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.  Management  continues  to make a  concerted  effort to
decrease  certain  costs  associated  with  personnel   salaries  and  benefits,
professional  fees,  contract  labor,  and rent and  occupancy-related  expense.
Payroll expense and professional  fees accounted for  approximately  $82,495 and
$118,957,  respectively, of general and administrative expenses during the third
quarter of 2001,  as compared to $204,553 and $145,260  during the third quarter
of 2000.  For the nine  months  ended  September  30, 2001  payroll  expense and
professional fees totaled approximately $229,790 and 231,886,  respectively,  of
general and administrative  expenses as compared to $703,711 and $328,952 during
the first nine months of 2000.

         Selling and Marketing Expenses.  Selling and marketing expenses for the
three month period ended  September 30, 2001 were  $85,163,  a 57% decrease from
$199,718  during the third quarter of 2000. For the nine months ended  September
30, 2001,  selling and  marketing  expenses were  $552,439,  a 35% decrease from
$855,425  during the first nine  months of 2000.  This  decrease  was  primarily
attributable to the  discontinuation  of the direct sales operations as of March
1, 2000, in which distributor  related marketing  expenses were eliminated.  The
Company  anticipates  that  selling  and  marketing  expenses in the future will
increase as a sales channel to the amateur sports  organizations  throughout the
United States is developed.

                                      27
<PAGE>


         Product Development. Product research and development expenditures were
$51,167 during the three months ended September 30, 2001, as compared to $61,925
for the three months ended  September  30, 2000, a decrease of 17%. For the nine
months ended September 30, 2001, product development  expenses were $148,538,  a
42% decrease from $255,606 for the nine months ended September 30, 2000. Product
development  expenses  related to the  Company's  web site consist  primarily of
payroll,  software and systems,  and related costs for  programmers and software
developers.  Product development  expenses related to the Company's  information
technology  consulting consists primarily of payroll and systems development for
the web site  hosting  services.  Where  appropriate,  the  Company  capitalizes
certain  systems   development  costs  in  accordance  with  generally  accepted
accounting  principles.  The Company  believes that  significant  investments in
product development are required to remain competitive. Accordingly, the Company
expects to incur increased  expenditures with respect to product  development in
future periods.

         Other  Income  (Expense).  The Company had net other income of $279,184
for the nine months ended  September  30, 2001  compared to net other expense of
$108,675  during  the first  nine  months of 2000.  This  income  was  generated
principally from the forgiveness of certain accounts payable by creditors of the
Company in exchange for structured  cash payments or cash  settlements  for less
than the face amount of the obligations. Expenses incurred in this category were
comprised  primarily of interest  expenses related to balances on Company credit
cards and short term loans.

          Sports Event Management  Revenues.  Rocky Mountain Sports  Alliance,
Inc.,("RMSA"),  a wholly owned subsidiary of the Company,  is the Company's
offline promotional,  management,  and sponsorship services provider. During the
three and nine months ended September 30, 2001, RMSA generated net revenues
of $13,646 and  $123,791,  respectively.  RMSA  currently  holds the rights to a
number of sports events throughout Utah and the surrounding  intermountain area.
Most revenues were a result of registration  fees for these various events.  The
Company anticipates that its online revenues will continue to be enhanced by the
value-added   services  that  RMSA  provides  to  its   affiliated   events  and
participating organizations.

         Information  Technology  Consulting Revenues.  Synerteck  Incorporated,
("Synerteck"),  a wholly  owned  subsidiary  of the Company,  is the  technology
services  provider for the Company  with respect to a variety of  organizations,
both sports and non-sports related,  that require Information  Technology ("IT")
services.  During the three and nine months ended September 30, 2001,  Synerteck
generated  net  revenues of $8,333 and  $29,163,  respectively.  These  services
include  website  hosting,  website design and  maintenance,  computer  hardware
leasing, and hardware and software programming and related services.

Liquidity and Capital Resources

         As of September  30, 2001,  the Company's  primary  source of liquidity
consisted of $38,974 in cash and cash equivalents. The Company holds most of its
cash reserves in local sweep accounts with local financial  institutions.  Since
inception,  the Company has financed its  operations  through a  combination  of
short and  long-term  loans,  and through the  private  placement  of its Common
Stock.

         The Company has sustained significant net losses which have resulted in
an  accumulated  deficit at September 30, 2001 of  $20,587,258  and is currently
experiencing  a  substantial   shortfall  in  operating   capital  which  raises
considerable  doubt about the Company's  ability to continue as a going concern.
The net loss for the year ended  December  31,  2000 and the nine  months  ended
September 30, 2001 was  $7,257,054  and  $1,389,286,  respectively.  The Company
anticipates a substantial net loss for the year ended December 31, 2001 and with
the expected cash  requirements  for the coming weeks,  without  additional cash
inflows from investors,  there is substantial  doubt as to the Company's ability
to continue operations.

                                       28

<PAGE>



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

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

FORWARD LOOKING STATEMENTS AND RISK FACTORS

Forward Looking Statements

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

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

Risk Factors

         Operating Risks

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



                                       29

<PAGE>


         Dependence on Key Personnel.  The Company's  success depends,  in large
part,  upon the talents and skills of its management  and key personnel.  To the
extent  that any of its key  personnel  are unable or refuse to  continue  their
association with the Company, a suitable replacement would have to be found. The
competition  for  qualified  personnel  in the  computer  software  and Internet
markets is intense, and there are limited numbers of such qualified personnel in
the  metropolitan  Salt Lake City area.  There is no assurance  that the Company
would  be  able to  find  suitable  replacements  for  its  existing  management
personnel or technical personnel or that such replacements could be obtained for
an amount affordable to the Company.

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

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

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

         Seasonality.  The  Company  expects  that  it will  experience  a sharp
increase in commercial activity during the spring and winter months, principally
due to spring recreational athletic leagues,  tournaments,  and events operating
during that period.  During the winter months,  winter games events,  basketball
tournaments,  leagues,  and  events,  and other  winter  events are  expected to
generate increases in revenue as compared to the summer and fall periods.  There
can be no assurance  that the Company can decrease  its  selling,  general,  and
administrative  expenses  during  periods  of  decreased  revenue  and  that the
Company's  results of  operations  during these  periods will not be  materially
adversely affected.

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




                                       30

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

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

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

         Risk  of  Computer  System  Failure.  The  success  of the  Company  is
substantially dependent upon its ability to deliver high quality,  uninterrupted
access to its Web Site,  which  requires  that the Company  protect its computer
hardware and software systems and the data and information  stored in connection
therewith.  The  Company's  systems are  vulnerable  to damage by fire,  natural
disaster, power loss,  telecommunications failures,  unauthorized intrusion, and
other catastrophic events. Any substantial interruption in the Company's systems
would  have a  material  adverse  effect on the  Company's  business,  operating
results,  and  financial   condition.   Although  the  Company  carries  general
commercial  insurance coverage,  such coverage may not be adequate to compensate
for the  losses  that may occur.  In  addition,  the  Company's  systems  may be
vulnerable to computer viruses,  physical or electronic break-ins,  sabotage, or
other  problems  caused by third  parties  which  could  lead to  interruptions,
delays,  loss of data, or cessation in service to persons desiring to access the
Company's Web Site.  The  occurrence of any of these risks could have a material
adverse effect upon the Company's business, results of operations, and financial
condition.

         Electronic Data Transmission  Security Risks. A significant  barrier to
the  electronic  transmission  of  confidential  data over the  Internet  is the
perception that such data may not be secure.  The Company relies upon encryption
and authentication technology to provide the security necessary to effect secure
transmissions  of  confidential  information.  There  can be no  assurance  that
advances in decryption  technology,  computer espionage,  and other developments
will not result in a breach or compromise of the algorithms  used by the Company
to protect  transaction  data of persons  accessing the Web Site,  and therefore
lead to the  misappropriation  of such data by third  parties.  Any such breach,
compromise, or misappropriation could damage the Company's reputation and expose
the Company to a risk of loss or litigation  and possible  liability,  and could
have  a  material  adverse  effect  upon  the  Company's  business,  results  of
operations, or financial condition.
                                       31
<PAGE>
         Rapid  Technological  Change.  The Internet and on-line  industries are
characterized  by rapid  technological  change,  changing market  conditions and
customer demands, and the emergence of new industry standards and practices that
could render the Company's  existing Web Site and the services provided pursuant
thereto obsolete.  The Company's future success will substantially depend on its
ability to enhance its existing  services,  develop new services,  and otherwise
respond to technological  advances in a timely and cost-effective manner. If the
Company is unable, for technical,  legal,  financial, or other reasons, to adapt
in a timely  manner in  response  to  changing  market  conditions  or  customer
requirements,  or if the Company's Web Site does not achieve market  acceptance,
the Company's  business,  operating  results,  and financial  condition would be
adversely affected.

         No Proprietary Protection for Technology.  The Company's statistical
information system and the league management system are not protected by any
copyright or patent,  and the Company does not anticipate  filing an application
with the United  States  Patent and  Trademark  Office  ("USPTO")  or the United
States  Copyright  Office for protection of these systems.  Although the Company
believes that  copyright and patent  protection for these systems is either cost
prohibitive or  unnecessary,  it may be wrong. If the Company is wrong, it could
face unexpected expenses pursuing,  defending, or otherwise becoming involved in
a copyright or patent dispute, any of which could have a material adverse effect
upon the Company's business, results of operations, and financial condition.

         Uncertain  Protection of Trade Names and Related Intangible Assets. The
Company has submitted applications to the USPTO for trademark protection for the
name  "SportsNuts.com"  with  respect to the  following  classes of products and
services: (i) vitamins,  minerals,  and herbal supplements;  (ii) sporting goods
and apparel; (iii) Internet communication,  education,  and entertainment;  (iv)
miscellaneous goods and services.  Currently the mark "E-Sports Mall" is pending
registration.  The  Company  has also  registered  the  Internet  domain  names,
"www.sportsnuts.com,"  and  "www.sportsnuts.net."  Given  the lack of  resources
available to the Company, the Company has not vigorously pursued finalization of
its  trademark   applications  and  the  status  of  such  applications  is  now
substantially in doubt. If the Company is unsuccessful in obtaining the right of
full usage of its name from the USPTO,  other  companies with names,  marks,  or
slogans similar to SportsNuts or  SportsNuts.com  could seek to require that the
Company  obtain a license  from them or require  the Company to change its name,
either of which could entail  substantial  costs.  Additionally,  if the Company
were requried to change its name, it could lose all goodwill associated with the
"SportsNuts"  mark.  In addition,  future  products and services  offered by the
Company may need to be marketed under different  names if the mark  "SportsNuts"
causes  confusion  with another  trade name being used by another  company.  The
Company  could also incur  substantial  costs to defend any legal  action  taken
against the Company  pursuant to a trademark  or service  mark  dispute.  If any
legal action  against the Company,  its asserted  trademarks,  or service  marks
should be found to infringe upon intellectual  property rights of a third party,
the Company could be enjoined from further infringement and could be required to
pay  damages.  In the event a third party were to sustain a valid claim  against
the  Company,  and in the  event  a  required  license  were  not  available  on
commercially reasonable terms, the Company's financial operations and results of
operations  could be  materially  adversely  affected.  Litigation,  which could
result in  substantial  cost to and  diversion of resources of the Company,  may
also be necessary to enforce  intellectual  property rights of the Company or to
defend the Company against claimed infringements of the rights of others.

         Competition and Technological Change. The market for Internet products,
services,  and  advertising  within the amateur  sports  market is new,  rapidly
evolving,   and  intensely  competitive  and  will  continue  to  undergo  rapid
technological  change.  The  Company  must  continue  to enhance and improve the
functionality  and  features  of its  online  services  and  sports  information
management software. If new industry needs,  standards, or practices emerge, the
Company's  existing  services,  technology,  and  systems  may become  obsolete.
Developing   and  enhancing  the  Company's   proprietary   technology   entails
significant  technical and business risks, in addition to substantial  costs. If
the Company faces delays in introducing new services, products and enhancements,
its users may  forego  the use of the  Company's  services  and use those of its
competitors.  The Company  currently  competes  with many other  amateur  sports

                                       32

<PAGE>



information  and product web sites and the Company  anticipates  competition  to
intensify in the future.  Barriers to entry may not be significant,  and current
and new  competitors may be able to launch new web sites quickly at a relatively
low cost. Accordingly, the Company believes that its success will depend heavily
upon  achieving   significant  market  acceptance  before  its  competitors  and
potential  competitors  introduce  competing  services.  Many  of the  Company's
competitors,  as well as potential  entrants  into the Internet  amateur  sports
market, have longer operating histories,  larger customer or user bases, greater
brand  recognition and significantly  greater  financial,  marketing,  and other
resources than the Company.  Furthermore,  several of the Company's  competitors
have acquired certain key sponsorships and  relationships  with a few well-known
amateur sports  organizations  which may impede the Company's growth and thereby
have  a  material  adverse  effect  upon  the  Company's  business,  results  of
operations, and financial condition.


         Investment Risks

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

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

         No Active Market.  Although the Company's shares are traded on the NASD
Electronic  Bulletin Board,  the Company  believes that the public trading price
may be an inaccurate representation of the value of the Company because there is
no active  public  market for the shares and no analysts  or NASD market  makers
actively follow the Company.

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

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

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



                                       33

<PAGE>
         Securities Eligible for Public Trading. Of the 20,114,004 shares of the
Company's  Common  Stock  outstanding  at  September  30,  2001,   approximately
13,000,000 are freely  tradeable or  immediately  eligible for resale under Rule
144  promulgated  pursuant to the Securities  Act of 1933, as amended.  Sales of
substantial  amounts  of  freely  tradeable  stock in the  public  market  could
adversely  affect the market  price of the Common  Stock.  The  Company has also
filed a  registration  statement with respect to its 2000 Stock Option Plan, the
result  of which  could be the sale of a  significant  number  of  shares in the
public market, and consequently, an adverse effect upon the public trading price
of the Company's Common Stock.

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

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

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

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



                                       34

<PAGE>

                                     PART II

                                OTHER INFORMATION

ITEM 1.        LEGAL PROCEEDINGS

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

               On  December  15,  2000,   North  Star  Printing,   a  Utah  sole
proprietorship  ("NSP"),  filed a  complaint  against  the Company in the Fourth
Judicial District Court of Utah County,  State of Utah, regarding the collection
of monies allegedly owed to NSP by the Company for printing  services  rendered.
The NSP complaint sought to recover  $7,271.49,  including costs and interest at
the rate of 18% per annum on invoices  more than 30 days past due. On August 31,
2001,  the dispute  with NSP was settled for a one- time cash  payment  from the
Company of $1,500.00.

               On September 13, 2001, Bowne of Los Angeles, Inc. ("Bowne") filed
a  complaint  against  the  Company  in  the  Superior  Court  of the  State  of
California,  Los Angeles  County,  regarding the collection of monies  allegedly
owed to Bowne by the  Company  for  printing,  editing,  and  electronic  filing
services.  The Bowne complaint sought to recover $25,933.77,  including pre- and
post-judgment  interest,  costs, and $660.00 in attorneys fees. On September 24,
2001, the Company and Bowne entered into a Stipulation  for Entry of Judgment in
the amount of  $25,933.77,  together with interest at 10% per annum from October
20, 1999 and attorneys  fees  incurred by Bowne.  The  Stipulation  for Entry of
Judgment will be withheld pending the Company's timely payment of fifty two (52)
installments of $500.00 per month in settlement of the dispute.

ITEM 2.        CHANGES IN SECURITIES

               Recent Sales of Unregistered Securities

               Effective  August 15, 2001, the Company sold and issued 2,000,000
shares  of its  Common  Stock to an  accredited  investor  in  exchange  for the
conversion  of  $15,000.00  in amounts  owed by the  Company  to such  investor,
together with all interest  accrued  thereon.  No  commissions  or  underwriting
discounts  were given or paid in connection  with the  transaction.  The Company
believes that this  transaction was exempt from the  registration  provisions of
the  Securities  Act of 1933  pursuant to Section  4(2) of such Act and Rule 506
promulgated thereunder.

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES

               Effective  February  1,  2000,  the  Company  sold  and  issued a
promissory note secured by certain tangible and intangible assets of the Company
("Note")  in exchange  for  $450,000 in cash  proceeds.  As of May 1, 2000,  the
Company  is in  default  with  respect  to the Note.  As of April 1,  2001,  the
principal amount of the Note,  together with interest as accrued, is convertible
into  approximately   5,395,562  shares  of  common  stock.  The  Note  and  its
accompanying  Security  Agreement have been filed as an exhibit to the Company's
1999  annual  report on form  10-KSB  filed  with the  Securities  and  Exchange
Commission on March 30, 2000.

                                       35

<PAGE>

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

               Not applicable.

ITEM 5.       OTHER INFORMATION

              Not applicable.

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K:

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

INDEX TO EXHIBITS
<TABLE>
<CAPTION>

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

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

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

     10.2      SportsNuts, Inc. Amended and Restated 2000 Stock Option Plan. (4)

     21.1      Subsidiaries of the Registrant. (5)

</TABLE>
-----------------------
(1) Filed as an Exhibit to the Company's Quarterly Report on Form 10-QSB,  filed
with the Commission on August 14, 2001.

(2) Filed as an Exhibit to the Company's Quarterly Report on Form 10-QSB,  filed
with the Commission on August 14, 2001.

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

(4) Filed as an Exhibit to the Company's Quarterly Report on Form 10-QSB,  filed
with the Commission on May 11, 2001.

(5) Filed as an Exhibit to the Company's Quarterly Report on Form 10-QSB,  filed
with the Commission on August 14, 2001.

          SIGNATURES

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

                                        SPORTSNUTS, INC.

Date:  November 13, 2001                By:  /s/ Kenneth I. Denos
                                        ----------------------------------------
                                        Kenneth I. Denos
                                        Chief Financial Officer

                                       36

<PAGE>

Exhibit Index
<TABLE>
<CAPTION>

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

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

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

     10.2      SportsNuts, Inc. Amended and Restated 2000 Stock Option Plan. (4)

     21.1      Subsidiaries of the Registrant. (5)
</TABLE>

(1) Filed as an Exhibit to the Company's Quarterly Report on Form 10-QSB,  filed
with the Commission on August 14, 2001.

(2) Filed as an Exhibit to the Company's Quarterly Report on Form 10-QSB,  filed
with the Commission on August 14, 2001.

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

(4) Filed as an Exhibit to the Company's Quarterly Report on Form 10-QSB,  filed
with the Commission on May 11, 2001.

(5) Filed as an Exhibit to the Company's Quarterly Report on Form 10-QSB,  filed
with the Commission on August 14,, 2001.


                                       37