<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                             ----------------------

                                   FORM 10-QSB



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

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
                                                 --------------

                                       OR

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

             For the transition period from ________ to ___________

                        Commission file number: 333-14477

                       SPORTSNUTS.COM INTERNATIONAL, INC.
        (Exact name of small business issuer as specified in its charter)


               Delaware                                     87-0561426
               --------                                     ----------
     (State or other jurisdiction of                       (IRS Employer
      incorporation or organization)                     Identification No.)

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


                                 (801) 816-2500
                            -------------------------
                            Issuer's telephone number




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



<PAGE>   2

                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 March 31, 2000, the Company had
outstanding 18,398,360 shares of common stock, par value $0.0001 per share.

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




<PAGE>   3

                                     PART I

                              FINANCIAL INFORMATION



The Financial Statements of the Company are prepared as of March 31, 2000.

ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-QSB



                                    CONTENTS


<TABLE>
<S>                                                                                                          <C>
             Independent Accountants' Review Report.......................................................... 2

             Consolidated Balance Sheets..................................................................... 3

             Consolidated Statements of Operations........................................................... 5

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

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

             Notes to the Consolidated Financial Statements.................................................. 9
</TABLE>



                                        1

<PAGE>   4

                     INDEPENDENT ACCOUNTANTS' REVIEW REPORT


To the Board of Directors
SportsNuts.com International, Inc.
(A Development Stage Company)
Salt Lake City, Utah

We have reviewed the accompanying consolidated balance sheet of SportsNuts.com
International, Inc. (a development stage company) as of March 31, 2000 and the
related statements of operations, stockholders' equity (deficit) and cash flows
for the periods ended March 31, 2000 and 1999. These consolidated financial
statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
consolidated financial information consists principally of applying analytical
procedures to financial data, and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an opinion
regarding the consolidated financial statements taken as a whole. Accordingly,
we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States.

We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet of SportsNuts.com
International, Inc. (a development stage company) as of December 31, 1999, and
the related statements of operations, stockholders' equity (deficit), and cash
flows for the year then ended (not presented herein) and in our report dated
March 23, 2000, we expressed an unqualified opinion on those consolidated
financial statements.


HJ & Associates, LLC
Salt Lake City, Utah
May 10, 2000



                                        2

<PAGE>   5

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


                                     ASSETS




<TABLE>
<CAPTION>
                                                 March 31,          December 31,
                                                   2000                 1999
                                                -----------         -----------
<S>                                             <C>                 <C>
CURRENT ASSETS

   Cash and cash equivalents (Note 1)           $    49,592         $   148,647
   Accounts receivable, net (Note 1)                 22,613              15,523
   Inventory, net (Notes 1 and 2)                    21,456              23,936
   Prepaid expenses                                 161,135              53,067
                                                -----------         -----------

      Total Current Assets                          254,796             241,173
                                                -----------         -----------

PROPERTY AND EQUIPMENT (Note 1)

   Computer hardware                                565,379             564,018
   Computer software                                806,310             667,854
   Furniture and office equipment                   236,844             236,844
   Less - accumulated depreciation                 (363,409)           (244,907)
                                                -----------         -----------

      Total Property and Equipment                1,245,124           1,223,809
                                                -----------         -----------

OTHER ASSETS

   Restricted cash (Note 1)                          35,000             110,000
                                                -----------         -----------

      Total Other Assets                             35,000             110,000
                                                -----------         -----------

      TOTAL ASSETS                              $ 1,534,920         $ 1,574,982
                                                ===========         ===========
</TABLE>



        See Accountants' Review Report and the accompanying notes to the
                   reviewed consolidated financial statements.


                                        3

<PAGE>   6

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


                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)



<TABLE>
<CAPTION>
                                                                 March 31,          December 31,
                                                                  2000                 1999
                                                               ------------         ------------
<S>                                                            <C>                  <C>
CURRENT LIABILITIES

   Accounts payable                                            $  1,148,380         $    766,214
   Accrued expenses                                                 145,871              228,865
   Notes payable, current portion (Note 4)                           25,000                   --
   Notes payable, related parties (Note 3)                          542,000               25,000
                                                               ------------         ------------

      Total Current Liabilities                                   1,861,251            1,020,079
                                                               ------------         ------------

STOCKHOLDERS' EQUITY (DEFICIT)

   Common stock, $0.0001 par value; 50,000,000 shares
    authorized, 18,398,360 and 17,898,360 shares issued
    and outstanding, respectively                                     1,840                1,790
   Additional paid-in capital                                    13,461,106           12,494,031
   Accumulated deficit prior to the development stage           (13,136,035)         (11,940,918)
   Accumulated deficit since the inception of the
    development stage                                              (653,242)                  --
                                                               ------------         ------------

      Total Stockholders' Equity (Deficit)                         (326,331)             554,903
                                                               ------------         ------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
        (DEFICIT)                                              $  1,534,920         $  1,574,982
                                                               ============         ============
</TABLE>


        See Accountants' Review Report and the accompanying notes to the
                   reviewed consolidated financial statements.



                                        4

<PAGE>   7
                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                      Consolidated Statements of Operations




<TABLE>
<CAPTION>

                                                                                           From
                                                                                      Inception of the
                                                                                        Development
                                                                                         Stage on
                                                 For the Three Months Ended            March 1, 2000
                                                          March 31,                       Through
                                            -----------------------------------           March 31,
                                                2000                    1999                 2000
                                            -------------         -------------       ----------------
<S>                                         <C>                   <C>                   <C>
NET SALES                                   $          --         $          --         $         --
                                            -------------         -------------         ------------

EXPENSES

   General and administrative                   1,041,172                    --              550,898
   Selling and marketing                          187,435                    --               67,992
   Research and development                        63,995                    --               24,458
                                            -------------         -------------         ------------

      Total Expenses                            1,292,602                    --              643,348
                                            -------------         -------------         ------------

LOSS FROM OPERATIONS                           (1,292,602)                   --             (643,348)
                                            -------------         -------------         ------------

OTHER INCOME (EXPENSES)

   Interest expense                               (10,451)                   --              (10,194)
   Interest income                                  1,271                    --                  300
                                            -------------         -------------         ------------

      Total Other Income (Expenses)                (9,180)                   --               (9,894)
                                            -------------         -------------         ------------

LOSS FROM CONTINUING OPERATIONS
 BEFORE INCOME TAXES                           (1,301,782)                   --             (653,242)

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

LOSS FROM CONTINUING OPERATIONS                (1,301,782)                   --             (653,242)

LOSS FROM DISCONTINUED
 OPERATIONS (Note 9)                             (546,577)             (837,381)                  --
                                            -------------         -------------         ------------

NET LOSS                                    $  (1,848,359)        $    (837,381)        $   (653,242)
                                            =============         =============         ============

BASIC LOSS PER COMMON SHARE -
 BASIC AND DILUTED (Note 1)

   Loss from continuing operations          $       (0.07)        $       0.00
   Loss from discontinued operations                (0.03)               (0.09)
                                            -------------         -------------

      Basic Loss Per Share                  $       (0.10)        $      (0.09)
                                            =============         =============

WEIGHTED AVERAGE NUMBER OF COMMON
 SHARES OUTSTANDING                            18,398,360             9,715,657
                                            =============         =============
</TABLE>




        See Accountants' Review Report and the accompanying notes to the
                   reviewed consolidated financial statements.



                                        5

<PAGE>   8

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
            Consolidated Statements of Stockholders' Equity (Deficit)




<TABLE>
<CAPTION>

                                  Common Stock         Additional                                                    Total
                              ---------------------     Paid-In      Accumulated   Subscription      Minority    Stockholders'
                                 Shares      Amount     Capital        Deficit      Receivable       Interest   Equity (Deficit)
                              ----------    -------   -----------   -------------  ------------   ------------ -----------------
<S>                            <C>          <C>       <C>            <C>                          <C>           <C>
Balance, December 31, 1998     7,651,252    $   765   $ 1,651,646   $ (2,015,236)    $(85,000)   $         --  $   (447,825)

Recapitalization (Note 1)      2,441,713        245     1,549,253             --           --              --     1,549,498

Issuance of common stock for
 cash (net of issuance
 costs of $501,274)            4,978,245        498     5,610,218             --           --              --     5,610,716

Issuance of common stock for
 fund raising services
 (Note 5)                        531,000         53       621,697             --           --              --       621,750

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

Issuance of common stock for
 purchase of Sportzz.com         944,882         94     3,749,906             --           --              --     3,750,000

Issuance of common stock
 for exercise of warrants
 issued for fundraising
 services (Note 5)             1,351,268        135     1,026,829             --           --              --     1,026,964

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

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

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

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

Balance, December 31, 1999    17,898,360      1,790    12,494,031    (11,940,918)          --              --       554,903

Issuance of common stock
 for cash (net of issuance
 costs of $15,000)               500,000         50       234,950             --           --              --       235,000

Warrants issued below
  market value                        --         --       732,125             --           --              --       732,125

Net loss for the
 three months
 ended March 31, 2000                 --         --            --     (1,848,359)          --              --    (1,848,359)
                              ----------    -------   -----------   -------------    ---------   ------------  -------------
Balance, March 31, 2000       18,398,360    $ 1,840   $13,461,106   $(13,789,277)    $     --    $         --  $   (326,331)
                              ==========    =======   ===========   =============    =========   ============  =============
</TABLE>


        See Accountants' Review Report and the accompanying notes to the
                   reviewed consolidated financial statements.




                                        6

<PAGE>   9

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                      Consolidated Statements of Cash Flows



<TABLE>
<CAPTION>
                                                                                                  From
                                                                                            Inception of the
                                                                                               Development
                                                                                                Stage on
                                                            For the Three Months Ended        March 1, 2000
                                                                     March 31,                   Through
                                                         ------------------------------         March 31,
                                                            2000               1999               2000
                                                         -----------        -----------     ----------------
<S>                                                      <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net loss                                              $(1,848,359)       $  (837,381)       $  (653,242)
   Adjustments to reconcile net income to net
    cash used in operating activities:
      Depreciation                                           118,502             56,100             40,745
      Common stock issued for services and
        marketing expenses                                        --            114,000                 --
      Warrants issued below market value                     732,125                 --            450,000
      Deferred income taxes                                       --             (1,258)                --
   Changes in operating assets and liabilities:
      Accounts receivable                                     (7,090)                --             (1,020)
      Inventory                                                2,480             (4,403)                --
      Restricted cash                                         75,000                 --             75,000
      Other current assets                                  (108,068)           (22,375)           (22,729)
      Accounts payable                                       382,166             22,531             (2,575)
      Accrued expenses                                       (82,994)             1,258            (65,255)
                                                         -----------        -----------        -----------

         Net Cash Used in Operating Activities              (736,238)          (671,528)          (179,076)
                                                         -----------        -----------        -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Purchases of property and equipment                      (139,817)          (336,412)           (36,014)
                                                         -----------        -----------        -----------

         Net Cash Used in Investing Activities              (139,817)          (336,412)           (36,014)
                                                         -----------        -----------        -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Increase (decrease) in cash overdraft                          --            (47,683)                --
   Proceeds from issuance of notes payable                   575,000                 --            155,000
   Proceeds from issuance of common stock                    250,000          1,535,500                 --
   Stock offering costs                                      (15,000)          (100,000)                --
   Payments on stock subscription receivable                      --             85,000                 --
   Principal payments of notes payable                       (33,000)          (301,618)            (8,000)
                                                         -----------        -----------        -----------

         Net Cash Provided by Financing Activities       $   777,000        $ 1,171,199        $   147,000
                                                         -----------        -----------        -----------
</TABLE>



        See Accountants' Review Report and the accompanying notes to the
                  reviewed consolidated financial statements.



                                        7

<PAGE>   10

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                Consolidated Statements of Cash Flows (Continued)




<TABLE>
<CAPTION>


                                                                              From
                                                                         Inception of the
                                                                           Development
                                          For the Three Months Ended        Stage on
                                          --------------------------      March 1, 2000
                                           March 31,       March 31,         Through
                                            2000             1999             2000
                                          ---------        ---------     ----------------
<S>                                       <C>              <C>             <C>
NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                         $ (99,055)       $ 163,259       $ (68,090)

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

CASH AND CASH EQUIVALENTS AT END
 OF PERIOD                                $  49,592        $ 163,259       $  49,592
                                          =========        =========       =========

SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid for:

   Interest                               $     494        $   4,241       $      --
   Income taxes                           $      --        $      --       $      --
</TABLE>


        See Accountants' Review Report and the accompanying notes to the
                   reviewed consolidated financial statements.



                                        8

<PAGE>   11

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                      March 31, 2000 and December 31, 1999



NOTE 1 -   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

           a. Organization and Description of Business

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

           On April 6, 1999, the Company acquired (the "Reorganization")
           approximately eighty-one percent (81%) of the outstanding capital
           stock of SportsNuts, a privately held company. As a result of the
           Reorganization, the Company recorded a minority interest of $66,804
           in SportsNuts. The Reorganization was accounted for as a reverse
           merger into a non-operating public company, wherein SportsNuts was
           treated as the accounting acquirer. In conjunction with the
           Reorganization, the Company changed its name from Durwood, Inc. to
           SportsNuts.com International, Inc.

           In connection with the reorganization, the Company effected a 2.213
           for 1 forward stock split (the "forward Split") of all then currently
           outstanding shares of its common stock, $0.0001 par value (the
           "Common Stock"). All references to common stock have been
           retroactively restated. The Forward Split resulted in an increase in
           the outstanding shares of the Company's Common Stock from 1,103,500
           to 2,441,713 shares. As part of the Reorganization, the Company
           issued 7,651,252 shares of Common Stock to the Participating
           Shareholders of SportsNuts in exchange for their collective
           11,683,000 shares of SportsNuts common stock. Each participating
           Shareholder of SportsNuts received 0.654904748 shares of the
           Company's Common Stock in exchange for each share of common stock of
           SportsNuts. Additionally, the Company issued to holders of warrants
           in SportsNuts, warrants for the purchase of 3,353,113 shares of the
           Company's Common Stock. Each Participating Warrant Holder received
           the right to purchase 0.654904748 shares of the Company's Common
           Stock in exchange for each share of SportsNuts common stock they were
           entitled to purchase pursuant to their SportsNuts warrants. In the
           future, the Company may issue up to an additional 1,808,192 shares of
           Common Stock to acquire the remaining 2,761,000 shares of Common
           Stock of SportsNuts that were held by the remaining shareholders
           (other than the Company) as of the closing date of the
           Reorganization.

           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 network
           marketing 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 network
           marketing 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 network marketing operations (see Note 10).


                                        9

<PAGE>   12

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                      March 31, 2000 and December 31, 1999



NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

           a. Organization and Description of Business (Continued)

           On July 28, 1999, the Company issued 944,882 shares of its common
           stock valued at $3.97 per share to Sportzz.com, Inc. (Sportzz) in
           exchange for all of the issued and outstanding shares of Sportzz
           common stock. In addition, cash consideration of $100,000 was paid as
           part of the acquisition. The acquisition was accounted for as a
           purchase per APB No. 16. The Company recorded an impairment of
           goodwill of $3,474,035 because the estimated future cash flows from
           the acquisition cannot be readily determined.

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

           b. Accounting Method

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

           c. Cash and Cash Equivalents

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

           d. Inventory

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

           e. Property and Equipment

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

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

           Depreciation expense for the three months ended March 31, 2000 and
           1999 was $118,502 and $56,100, respectively.



                                       10

<PAGE>   13

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                      March 31, 2000 and December 31, 1999



NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Continued)

           f. Accounts Receivable

           Accounts receivable are recorded net of the allowance for doubtful
           accounts of $32,327 for March 31, 2000 and December 31, 1999.

           g. Sales Policy

           Substantially all of the Company's sales are on a cash-for-service
           basis. Occasionally, sales are made on account for the sale of
           promotional merchandise.

           h. Estimates

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

           i. Advertising

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

           j. Basic Loss Per Share


<TABLE>
<CAPTION>
                                                                                For the Three Months Ended
                                                                                        March 31,
                                                                             --------------------------------
                                                                                 2000                1999
                                                                             -------------       ------------
<S>                                                                          <C>                 <C>
                    Basic loss per share from continuing operations:

                               Loss (numerator)                              $  1,301,782        $         --
                               Shares (denominator)                            18,398,360           9,715,657
                               Per share amount                              $      (0.07)       $       0.00

                    Basic loss per share from discontinued operations:

                               Loss (numerator)                              $    546,577        $    837,381
                               Shares (denominator)                            18,398,360           9,715,657
                               Per share amount                              $      (0.03)       $      (0.09)
</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. Shares to be issued from warrants and
           options are not included in the computation because they would have
           an antidilutive effect on the net loss per common share.



                                       11

<PAGE>   14

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                      March 31, 2000 and December 31, 1999



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

           k. Provision for Taxes

           At March 31, 2000, the Company has net operating loss carryforwards
           of approximately $13,800,000 which will expire in 2012 through 2019.
           No tax benefit has been reported in the financial statements because
           future earnings against which to offset the loss carryforwards are
           not assured.

           l. Research and Development

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

           m. New Accounting Pronouncements

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

           n. Restricted Cash

           At March 31, 2000, the Company had $35,000 cash in a certificate of
           deposit pledged as collateral for certain credit cards of the
           Company.

NOTE 2 - INVENTORY

                  Inventory consisted of the following:



<TABLE>
<CAPTION>
                                                         March 31,      December 31,
                                                           2000            1999
                                                         ---------      ------------
<S>                                                      <C>             <C>
                    Finished goods                       $ 93,262        $ 95,742
                    Reserve for obsolete inventory        (71,806)        (71,806)
                                                         --------        --------
                             Total                       $ 21,456        $ 23,936
                                                         ========        ========
</TABLE>



                                       12

<PAGE>   15

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                      March 31, 2000 and December 31, 1999



NOTE 3 - NOTES PAYABLE - RELATED PARTIES

           Notes payable - related parties consisted of the following:



<TABLE>
<CAPTION>
                                                                                March 31,       December 31,
                                                                                  2000              1999
                                                                                ---------       ------------
<S>                                                                            <C>             <C>
           Note payable to an individual, unsecured,
            interest at 10%, principal and interest due
            January 2000                                                               --        $  25,000

           Note payable to a shareholder, secured by tangible and
            intangible assets of the Company, interest at 16%, principal
            and interest due April 1, 2000. Note is convertible into
            common stock of the Company as follows: 9,000,000 shares
            through April 1, 2000 (maturity date), 18,000,000 shares
            after the maturity date, 45,000,000 shares after 60 days from
            the maturity date or 90,000,000 shares after 90 days from the
            maturity date                                                         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 $0.05 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 $0.05 per share                                20,000               --

           Notes payable to related individuals, unsecured,
            non-interest bearing, due on demand                                    27,000               --

           Note payable to a related individual, unsecured,
            interest at 16%, due on demand                                         25,000               --
                                                                                ---------        ---------

                      Total notes payable - related parties                       542,000           25,000

                      Less: current portion                                      (542,000)         (25,000)
                                                                                ---------        ---------

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



                                       13

<PAGE>   16

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                      March 31, 2000 and December 31, 1999



NOTE 3 - NOTES PAYABLE - RELATED PARTIES (Continued)

           Maturities of notes payable - related parties are as follows:



<TABLE>
<CAPTION>
    Three Months Ended
          March 31,                                        Amount
    ------------------                                    --------
<S>                                                      <C>
            2001                                          $542,000
                                                          --------
           Total                                          $542,000
                                                          ========
</TABLE>

NOTE 4 - NOTES PAYABLE


           Notes payable consisted of the following:


<TABLE>
<CAPTION>
                                                                                March 31,     December 31,
                                                                                  2000            1999
                                                                                --------      ------------
<S>                                                                             <C>             <C>
           Note payable to an individual, unsecured, interest at 10%,
            principal and interest due June 26, 2000. Note is convertible
            into common stock of the Company at $0.05 per share                 $ 25,000        $    --

                      Total notes payable                                         25,000             --

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

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


           Maturities of notes payable are as follows:


<TABLE>
<CAPTION>
                             Year Ending
                               March 31,                               Amount
                             -----------                               -------
<S>                                                                    <C>
                                 2001                                  $25,000
                                                                       -------
                                Total                                 $ 25,000
                                                                       =======
</TABLE>

NOTE 5 - COMMON STOCK TRANSACTIONS

           Effective April 6, 1999, the Company issued 1,000,000 shares of
           common stock at a price of $1.00 per share. In connection with this
           stock issuance the Company incurred $50,000 in fundraising expenses.



                                       14

<PAGE>   17

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                      March 31, 2000 and December 31, 1999



NOTE 5 - COMMON STOCK TRANSACTIONS (Continued)

           Effective April 8, 1999, the Company issued 1,351,268 shares of
           common stock in connection with the exercise of warrants with an
           exercise price of $0.76. The warrant holder surrendered 119,799
           warrants to pay for the 1,351,268 warrants that were exercised. The
           common stock had a market value of $9.375 on the date of exercise.
           The warrants were originally issued for commissions related to
           raising money for the Company.

           Effective April 8, 1999, the Company issued 2,807,000 shares of
           common stock at a price of $1.00 per share. The Company paid
           commissions of $269,100, together with warrants to purchase 237,151
           shares of common stock at $1.00 per share and 440,250 shares of
           common stock.

           Effective June 15, 1999, the Company issued 750,000 shares of common
           stock at a price of $1.95 per share. The Company paid commissions of
           $131,625, together with warrants to purchase 67,500 shares of common
           stock at an exercise price of $1.95 per share.

           Effective July 1, 1999, the Company issued 421,245 shares of common
           stock at a price of $2.00 per share. The Company paid commissions of
           $50,549, together with warrants to purchase 24,051 shares of common
           stock at an exercise price of $2.00 per share and 90,750 shares of
           common stock.

           Effective July 28, 1999, the Company issued 944,882 shares, valued at
           $3,750,000, to acquire all of the issued and outstanding shares of
           Sportzz. The shares were valued at the current market price on the
           date of acquisition. In addition, cash consideration of $100,000 was
           paid to the shareholder of Sportzz (See Note 1).

           Effective January 1, 2000, the Company issued 500,000 shares of
           common stock at a price of $0.50 per share. The Company paid
           commissions of $15,000 in connection with the stock issuance.

NOTE 6 - OUTSTANDING STOCK OPTIONS AND WARRANTS

           The Company did not issue any stock options during the three months
           ended March 31, 2000. At March 31, 2000, the total number of options
           outstanding was 5,818,750 at a weighted average exercise price of
           $2.72 per share. The total number of fully-vested options as of March
           31, 2000 was 2,772,500. All other options vest ratably over a two or
           three-year period from the date of grant. All options expire five (5)
           years from the date of grant.



                                       15

<PAGE>   18

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                      March 31, 2000 and December 31, 1999


NOTE 6 - OUTSTANDING STOCK OPTIONS AND WARRANTS (Continued)

           During the three months ended March 31, 2000, the Company issued
           warrants to acquire 3,370,000 shares of common stock. Of this total,
           3,000,000 warrants were issued at an exercise price of $0.10 per
           share, and 370,000 warrants were issued at an exercise price of $0.05
           per share. The difference between the market value of the stock and
           the exercise price of these warrants at the date of grant was booked
           as an expense during the quarter. At March 31, 2000, the Company had
           5,695,745 outstanding warrants to purchase common stock at the
           weighted average price of $0.37 per share. Warrants issued through
           the year ending December 31, 1999 have been issued as commissions for
           fundraising and as incentives to purchase stock. As a result, any
           difference between the market value and the exercise price on the
           grant date has been classified as stock issuance costs. All warrants
           expire between 2-3 years from the date of grant.

NOTE 7 - OPERATING LEASES

           The Company leases three (3) different office and warehouse
           facilities under non-cancelable operating leases expiring in 2000 and
           2004. Rental expense for the three months ended March 31, 2000 and
           1999 was $30,324 and $8,500, 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 $2,056 and $5,306 for the three months ended March
           31, 2000 and 1999, respectively.

           Future minimum lease payments, by year and in the aggregate, under
           the non-cancelable operating leases with initial or remaining terms
           of one year or more are due as follows:


<TABLE>
<CAPTION>
      Year Ending
       December 31,                                             Amount
      -------------                                            --------
<S>                                                            <C>
           2000                                                $182,371
           2001                                                 179,069
           2002                                                 179,802
           2003                                                 176,783
           2004                                                  59,771
           2005 and thereafter                                       --
                                                               --------
           Total minimum lease payments                        $777,796
                                                               ========
</TABLE>



                                       16

<PAGE>   19

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                      March 31, 2000 and December 31, 1999



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,
           1999 of approximately $13,800,000 and has experienced periodic cash
           flow difficulties, all of which raise substantial doubt regarding the
           Company's ability to continue as a going concern.

           The net loss for the years ended December 31, 1999 and 1998 was
           $9,925,682 and $1,598,540, respectively. The net loss for the three
           months ended March 31, 2000 was $1,848,359. 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, 2000 and
           with the expected cash requirements for the coming year, there is
           substantial doubt as to the Company's ability to continue operations.

           The Company believes these conditions have resulted from the inherent
           risks associated with small startup technology-oriented companies.
           Such risks include, but are not limited to, the ability to (i)
           generate revenues and sales of its products and services at levels
           sufficient to cover its costs and provide a return for investors,
           (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 January 10, 1999, the Company entered into a one-year
           consulting agreement with RKD Consulting, L.C. to assist the Company
           in designing and implementing its accounting system and integrating
           the system with transactions occurring through its Web site. The
           Company agreed to compensate RKD Consulting, L.C. with an option to
           acquire 45,843 shares of common stock at an exercise price of $0.76
           per share. The option vested on a pro-rata quarterly basis from the
           date of the agreement. A principal member of RKD Consulting, L.C. is
           the brother of an Executive Officer and Director of the Company.



                                       17

<PAGE>   20

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                      March 31, 2000 and December 31, 1999



NOTE 9 - RELATED PARTY TRANSACTIONS (Continued)

           Effective May 15, 1999, the Company entered into a consulting
           agreement with Moore, Clayton & Co., a private investment and
           advisory firm, to receive strategic financial and marketing
           consulting services. The agreement provides for a retainer of $5,000
           per month, with consulting services to be drawn against the retainer
           at the rate of $200 per hour. The agreement also provides for the
           issuance of an option on a monthly basis to purchase 5,000 shares of
           common stock of the Company, at an exercise price of $1.00 per share.
           An Executive Co-Chairman of the Company is a principal of Moore,
           Clayton & Co.

           Effective July 1, 1999, the Company entered into a second consulting
           agreement with Moore, Clayton & Co., to run concurrently with the
           first agreement described in the paragraph above. The second
           agreement provides for a cash payment of $10,000 per month, with an
           option to purchase 986,250 shares of common stock, vesting ratably
           over a two-year period, at an exercise price of $2.63 per share. The
           second agreement also provides for reimbursement of expenses as they
           are incurred, together with a cash bonus equal to five percent (5%)
           of the gross value of certain transactions involving the Company
           (defined as an underwritten secondary public offering of at least $10
           million or a merger or acquisition with a company for cash or
           securities traded on a national securities exchange). An Executive
           Co-Chairman of the Company is a principal of Moore, Clayton & Co.

           Effective June 1, 1999, the Company entered into an agreement with an
           Executive Co-Chairman of the Company. The agreement provides for a
           cash bonus equal to five percent (5%) of the gross value of certain
           transactions involving the Company (defined as an underwritten
           secondary public offering of at least $10 million or a merger or
           acquisition with a company for cash or securities traded on a
           national securities exchange).

           Effective September 17, 1999, the Company granted an option to Moore,
           Clayton & Co. to purchase 200,000 shares of common stock at a
           purchase price of $2.13 per share. The option vests ratably over a
           three-year period from the date of grant. An Executive Co-Chairman of
           the Company is a principal of Moore, Clayton & Co.

           The Company is currently leasing certain of its equipment and is
           providing fee-based computer network and web hosting services to a
           third-party network marketing firm. The Company is also contemplating
           entering into an agreement with such firm to promote the
           SportsNuts.com site and its services. Two individuals who are
           directors and principal shareholders of the Company are directors and
           shareholders of this network marketing firm.

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



                                       18

<PAGE>   21

                       SPORTSNUTS.COM INTERNATIONAL, INC.
                          (A Development Stage Company)
                 Notes to the Consolidated Financial Statements
                      March 31, 2000 and December 31, 1999


NOTE 10 - DISCONTINUED OPERATIONS

           Effective March 1, 2000, the Company has elected to discontinue its
           network marketing 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 network marketing segment of the Company. The
           financial statements have been retroactively restated to reflect this
           event.


<TABLE>
<CAPTION>
                                                           For the Three Months Ended
                                                                   March 31,
                                                        -------------------------------
                                                          2000                   1999
                                                        ---------             ---------
<S>                                                     <C>                   <C>
           NET SALES                                    $  41,188             $ 141,304
                                                        ---------             ---------

           OPERATING EXPENSES

             Cost of sales                                 34,136               123,613
             General and administrative                   277,990               255,997
             Selling and marketing                        225,932               501,349
             Research and development                      50,421                94,629
                                                        ---------             ---------

                Total Operating Expenses                  588,479               975,588
                                                        ---------             ---------

           LOSS FROM OPERATIONS                          (547,291)             (834,284)
                                                        ---------             ---------

           OTHER INCOME (EXPENSES)

             Interest expense                                (257)               (3,097)
             Interest income                                  971                    --
                                                        ---------             ---------

               Total Other Income (Expense)                   714                (3,097)
                                                        ---------             ---------

           LOSS BEFORE INCOME TAX (EXPENSE)              (546,577)             (837,381)

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

           LOSS FROM DISCONTINUED OPERATIONS             (546,577)            $(837,381)
                                                        =========             =========
</TABLE>



                                       19

<PAGE>   22

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


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

OVERVIEW

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

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



                                       20

<PAGE>   23

        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;
network marketing sales team incentives; travel and other miscellaneous related
expenses. R&D expenses consist mainly of development expenses related to
creating new applications for the web site. In the coming year, the operating
expense structure is expected to change with the discontinuation of network
marketing operations. Wages and benefits, promotional, marketing, sales, travel
and other miscellaneous office expenses related to network marketing will no
longer continue after March 1, 2000. However, the Company anticipates that the
decrease in such expenses will be offset by increases in technology personnel
and development costs related to improving the amateur sports Internet site. In
addition, in order to execute the amateur sports Internet business, the Company
anticipates significant expenditures in business development to create strategic
alliances with third parties, and in developing a sales channel to the various
amateur sports organizations throughout the United States.

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

RESULTS OF OPERATIONS

        Following is management's discussion of the relevant items affecting
results of operations for the periods ended March 31, 2000 and 1999. The
balances discussed below for the first quarter ending March 31, 2000 include
both results from continuing operations and from operations that were
discontinued during the quarter, as indicated in Note 10 of the footnotes to the
consolidated financial statements.

        REVENUES. The Company generated net revenues of $41,188 during the three
month period ended March 31, 2000, a 71% decrease from $141,304 during the first
quarter of 1999. This decrease was due to the fact that the Company discontinued
its network marketing operations effective March 1, 2000. Historically, all
revenues generated by the Company have been through its network marketing
operations. Therefore, no such revenues were recognized subsequent to March 1
during the first quarter of 2000. Future revenues are expected to be generated
from the Company's amateur sports internet business, although the Company
anticipates that such revenues will be minimal during the remainder of the year
2000.

        COST OF SALES. Cost of Sales for the three month period ended March 31,
2000 were $34,136 a 72% decrease from $123,613 during the first quarter of 1999.
Such costs consist primarily of commission payments to the network marketing
distribution force, as well as the cost of the distributor kits, sales aids, and
products sold through the distributor force. The decrease from the prior year is
directly related to the corresponding 71% decrease in revenues, due to the
discontinuation of the Company's network marketing business as of March 1, 2000.

        GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
for the three-months ended March 31, 2000 were $1,319,162, a 415% increase from
$255,997 during the first quarter of 1999. This increase was principally due to
the recognition of $732,125 in expenses relating to issuances of warrants during
the first quarter of the year 2000. The company also realized significant
increases in personnel salaries and benefits, professional fees, contract labor,
and rent and occupancy-related expense. The number of employees at the Company
increased substantially throughout the past year, as the Company began to
assemble a management team and added other personnel to support the



                                       21
<PAGE>   24

Company's growth in its network marketing operations. In addition, the Company
acquired an amateur sports Internet subsidiary during 1999 which resulted in the
hiring of four employees in connection with this acquisition, as well as the
hiring of additional personnel to support the development and growth of this
Internet business. Payroll expense and professional fees accounted for
approximately $319,803 and $73,772, respectively, of general and administrative
expenses during the first quarter, as compared to $206,603 and $39,411 during
the first quarter of 1999.

        SELLING AND MARKETING EXPENSES. Selling and marketing expenses for the
three month period ended March 31, 2000 were $413,367, an 18 % decrease from
$501,349 during the first quarter of 1999. This decrease was primarily
attributable to the following: (1) The Company discontinued its network
marketing operations as of March 1, 2000, which eliminated selling and marketing
personnel and expenses related to this part of the business, (2) During the
first quarter of 1999 the Company incurred a one time selling & marketing charge
of $114,000 to buy out certain royalty obligations related to the network
marketing business, (3) the Company has attempted to curtail spending in this
area given its current financial position. Much of the marketing expense during
the first quarter of 2000 is the amortization of non-cancelable marketing
contracts that were entered into during 1999 for benefits provided through the
first quarter of the year 2000.

        PRODUCT DEVELOPMENT. Product research and development expenditures were
$114,416 during the three months ended March 31, 2000, as compared to $94,629
for the three months ended March 31, 1999, an increase of 21%. Product
development expenses related to the Company's web site consist primarily of
payroll, software and systems, and related costs for programmers and software
developers. Where appropriate, the Company capitalizes certain systems
development costs in accordance with generally accepted accounting principles.
The Company believes that significant investments in product development are
required to remain competitive. Accordingly, the Company expects to incur
increased expenditures with respect to product development in future periods.

        OTHER INCOME (EXPENSE). Net other expense totaled $8,466 for the three
months ended March 31, 2000, compared to net expense of $3,097 for the three
months ended March 31, 1999. This expense is comprised primarily of interest
expenses related to balances on Company credit cards and short term loans. The
increase in interest expense in the first quarter of 2000 is due to interest
accrued on various short term loans made to the Company during the quarter. Such
loans did not exist during the first quarter of the prior year.

        EXPENSES RELATING TO PRIVATE OFFERINGS. During the first quarter of the
year 2000, the Company issued 500,000 shares of common stock at a price of $.50
per share in a private placement to an accredited investor. In connection with
this stock issuance the Company incurred $15,000 in fundraising expenses.

LIQUIDITY AND CAPITAL RESOURCES

        As of March 31, 2000, the Company's primary source of liquidity
consisted of $84,592 in cash and cash equivalents, $35,000 of which has been
pledged as collateral for certain credit cards issued in the name of the Company
for business use. The Company holds most of its cash reserves in local sweep
accounts with various local financial institutions. Since inception,
SportsNuts.com has financed its operations through a combination of short and
long-term loans, and through the private placement of its Common Stock.

        The Company has sustained significant net losses which have resulted in
an accumulated deficit at March 31, 2000 of $13,789,277 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



                                       22
<PAGE>   25

for the year ended December 31, 1999 and the three months ended March 31, 2000
was $9,925,682 and $1,848,359, respectively. The Company anticipates a
substantial net loss for the year ended December 31, 2000 and with the expected
cash requirements for the coming weeks, without additional cash inflows from
investors, there is substantial doubt as to the Company's ability to continue
operations.

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

        The Company believes that its capital requirements are insufficient for
ongoing operations, with current cash reserves 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.



                                       23
<PAGE>   26

RISK FACTORS

        OPERATING RISKS

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

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

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

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

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

        SEASONALITY. While neither seasonal nor cyclical variations have
materially affected the



                                       24
<PAGE>   27

Company's results of operations in the past, the Company's short operating
history may have suppressed these factors. For example, increases in site
traffic will likely correspond with the three primary sports seasons (football,
basketball, and baseball) and therefore revenues can fluctuate greatly depending
upon the time of year. There can be no assurance that seasonal or cyclical
variations will not materially adversely affect the Company's results of
operations in the future.

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

        GROWTH MANAGEMENT. The Company anticipates that it will experience rapid
growth in the next few years of operations. The management challenges imposed by
this growth include entry into new markets, growth in the number of persons
accessing the Web Site, management of Affiliates, employees and customers,
expansion of facilities and computer systems necessary to accommodate such
growth, and additions and modifications to the products and services offered
through the Company's Web Site. To manage these changes effectively, the Company
may be required to hire additional management and operations personnel and to
improve its operational, financial, computer, and management systems. If the
Company is unable to manage growth effectively or hire or retain qualified
personnel, the Company's business and results of operations could be materially
adversely affected.

        REGULATION OF FUNDRAISING ACTIVITIES. Most states regulate fundraising
activities through "Charitable Solicitation" statutes. To the extent that the
Company is subject to such statutes, the Company may be required to file as a
paid solicitor or professional fundraiser and pay a filing fee in each state in
which it attempts to engage amateur sports teams and participants to sell
Internet advertising to local merchants and organizations. Moreover, inasmuch as
such statutes apply to any person engaged in such activities, every person who
engages in fundraising activities may be required to register as a paid
solicitor or professional fundraiser and pay a registration fee in each state in
which they attempt to sell banner advertising on behalf of the Company. Any
determination that would require state registration for 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 will likely originate from the States
of Utah and California, the government of the United States and the governments
of other states and foreign countries might attempt to regulate such
transmissions or assess taxes, fees, tariffs, duties, or other payments against
the Company, the Company's Affiliates, or customers purchasing products or
services through the Web Site.

        DEPENDENCE ON CONTINUED GROWTH IN USE OF THE INTERNET. The Company's
future success is substantially dependent upon continued growth in the use of
the Internet in order to support the volume of



                                       25
<PAGE>   28

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.

        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



                                       26
<PAGE>   29

the league management system (now in development) are not protected by any
copyright or patent, and the Company does not anticipate filing an application
with the United States Patent and Trademark Office ("USPTO") or the United
States Copyright Office for protection of these systems. Although the Company
believes that copyright and patent protection for these systems is either cost
prohibitive or unnecessary, it may be wrong. If the Company is wrong, it could
face unexpected expenses pursuing, defending, or otherwise becoming involved in
a copyright or patent dispute, any of which could have a material adverse effect
upon the Company's business, results of operations, and financial condition.

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

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


                                       27
<PAGE>   30

        PRODUCT LIABILITY. Although the Company does not manufacture any of the
products purchased or sold through its Web Site, it may be subject to liability
for losses caused by such products. While the Company maintains a general
commercial liability insurance policy, there is no guarantee that this policy
will provide coverage for or that any such coverage will be sufficient to
satisfy the claims of a successful product liability claim. Accordingly, a
successful products liability claim against the Company could have a material
adverse effect on the Company's business, results of operations, and financial
condition.

        INVESTMENT RISKS

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

        SECURITIES CLASS ACTION CLAIMS BASED UPON PRICE FLUCTUATION. Securities
class action claims have been brought against issuing companies in the past
after volatility in the market price of a company's securities. With respect to
the Company, such litigation could be very costly and divert the Company's
management's attention and resources, and any adverse determination in such
litigation could also subject the Company to significant liabilities, any or all
of which could have a material adverse effect on the Company's business, results
of operations, and financial condition.

        NO ACTIVE MARKET. Although the Company's shares are traded on the NASD
Electronic Bulletin Board, the Company believes that the public trading price
may be an inaccurate representation of the value of the Company because there is
no active public market for the shares and no analysts or NASD market makers
actively follow the Company. Consequently, to the extent that the shares became
available for public sale, the public share price could fluctuate substantially
based upon a small volume of public transactions in the Company's Common Stock.

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

        CONCENTRATION OF VOTING POWER. Certain shareholders of the Company
acting as a group may be able to control the election of the Company's Board of
Directors. In addition, pursuant to the Company's Certificate of Incorporation,
the Board of Directors has been divided into three classes, with only one class
subject to reelection in a given year. The Certificate of Incorporation requires
a vote of 66 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 proposed restatement of the Certificate of
Incorporation of the Company contains certain provisions which could be an
impediment to a non-negotiated change in control of the Company, namely an
ability, without stockholder approval, to issue up to 15,000,000 additional
shares of preferred stock with rights and preferences determined by the board of
directors, staggered terms for directors, and super-voting requirements. These
provisions could impede a non-negotiated change in



                                       28
<PAGE>   31

control and thereby prevent stockholders from obtaining a premium for their
Common Stock.

        SECURITIES ELIGIBLE FOR PUBLIC TRADING. Of the 18,398,360 shares of the
Company's Common Stock outstanding on March 31, 2000, as of the filing date of
this report on Form 10-QSB, 13,061,106 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 the freely tradeable stock in
the public market could adversely affect the market price of the Common Stock.
Moreover, the Company is currently exploring a possible repricing of stock
options issued under its 1998 and 1999 stock option plans (collectively, the
"Plans"), and the possible filing of an S-8 registration statement with respect
to these Plans, the result of which could be the sale of a substantial number of
shares in the public market, and consequently, an adverse effect upon the public
trading price of the Company's Common Stock.

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

        POTENTIAL ISSUANCE OF ADDITIONAL COMMON AND PREFERRED STOCK. Pursuant to
the Company's proposed Restated Certificate of Incorporation, the Company will
be authorized to issue up to 200,000 shares of Common Stock. To the extent of
such authorization, the Board of Directors of the Company will have the ability,
without seeking shareholder approval, to issue additional shares of Common Stock
in the future for such consideration as the Board of Directors may consider
sufficient. The issuance of additional Common Stock in the future may reduce the
proportionate ownership and voting power of the Common Stock offered hereby. The
Company will also be 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,
and certain market and other information, and make a suitability determination
approving the customer for low priced stock transactions based on the customer's
financial situation, investment experience and objectives. Broker-dealers must
also disclose these restrictions in writing to the customer, obtain specific
written consent of the customer, and provide



                                       29
<PAGE>   32

monthly account statements to the customer. With all these restrictions, the
likely effect of designation as a low priced stock will be to decrease the
willingness of broker-dealers to make a market for the stock, to decrease the
liquidity of the stock and to increase the transaction cost of sales and
purchases of such stock compared to other securities.

        RISKS RELATED TO NETWORK MARKETING OPERATIONS AND DISCONTINUANCE THEREOF

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

        RELIANCE UPON INDEPENDENT DISTRIBUTORS. Prior to the discontinuation of
its network marketing operations, the Company's principal sales force consisted
of independent distributors ("Distributors") who were not employees of the
Company. Relationships with Distributors were voluntarily terminable by the
Distributors, or the Company at any time. The Company's revenue was
substantially dependent upon the efforts of these Distributors.

        POTENTIAL NEGATIVE IMPACT OF DISTRIBUTOR ACTIONS. Although the Company
has discontinued its network marketing operations, actions by certain
Distributors may still negatively impact the Company and its products and
services. The publicity resulting from Distributor activities such as
inappropriate earnings claims and product representations by Distributors can
have a material adverse effect on the Company's future business or results of
operations.

        GOVERNMENT REGULATION OF DIRECT SELLING ACTIVITIES. Direct selling
activities are regulated by various governmental agencies. These laws and
regulations are generally intended to prevent fraudulent or deceptive schemes,
often referred to as "pyramid" or "chain sales" schemes, that promise quick
rewards for little or no effort, require high entry costs, use high pressure
recruiting methods and/or do not involve legitimate products. As is the case
with most companies which are involved in network marketing, the Company may
receive inquiries from various government regulatory authorities regarding the
nature of its business and other issues such as compliance with local business
opportunity and securities laws. Although the Company has not received any such
inquiry to date, there can be no assurance that the Company will not face such
inquiries in the future which, either as a result of findings adverse to the
Company or as a result of adverse publicity resulting from the instigation of
such inquiries, could have a material adverse effect on the Company's business
and results of operations. While the regulations governing network marketing are
complex and vary from state to state, based on research conducted to date, the
Company believes that its method of distribution was in compliance in all
material respects with the laws and regulations relating to direct selling
activities of the states in which the Company operated.

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



                                       31
<PAGE>   33

                                     PART II

                                OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS

        Not applicable.

ITEM 2. CHANGES IN SECURITIES

        Not applicable.

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. The principal amount
        of the Note is convertible into 9,000,000 shares of common stock of the
        Company through its date of maturity of April 1, 2000 ("Maturity Date").
        After the Maturity Date, the principal amount of the Note is convertible
        into 18,000,000 share of common stock. After sixty days from the
        Maturity Date, the principal amount of the Note is convertible into
        45,000,000 shares of common stock. After ninety days from the Maturity
        Date, the principal amount of the Note is convertible into 90,000,000
        shares of common stock. As of the date of the filing of this report,
        this note has not been repaid, and is convertible into 18,000,000 shares
        of Common Stock of the Company. The Convertible Promissory Note and
        Security Agreement have been filed as an exhibit to the Company's 1999
        annual report on form 10-KSB filed with the Securities and Exchange
        Commission on March 30, 2000.

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

        Not applicable.

ITEM 5. OTHER INFORMATION

        Not applicable.




                                       31

<PAGE>   34

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.com International, Inc., a Delaware
                       corporation.(1)

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

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

         10.2          Convertible Promissory Note and Security Agreement among
                       Moore, Clayton & Co., SportsNuts.com, Inc., and the
                       Company, dated February 4, 2000. (4)

         10.3          Convertible Promissory Note and Security Agreement among
                       George Napier, SportsNuts.com, Inc., and the Company,
                       dated March 10, 2000. (5)

         10.4          Convertible Promissory Note and Warrant granted to John
                       Schmitz and Stanley Aber, dated March 27, 2000.

         10.5          Financial Consulting Agreement, dated March 23, 2000,
                       among SportsNuts.com International, Inc., J.D. Holden
                       Associates, and The Sunvest Corporation.

         10.6          Employment Agreement with Kenneth Denos dated November
                       16, 1998.(6)

         10.7          Independent Contractor Agreement with Sharon Clayton
                       dated April 15, 1999 (7)

         10.8          Consulting Agreement with Moore, Clayton & Co. dated July
                       1, 1999.(8)

         10.9          Summary of Material Terms of Agreement between
                       SportsNuts.com International, Inc. and Pierre Boivin
                       dated July 1, 1999. (9)

         10.10         Advertising Agreement between EURO RSCG/DSW Partners, LLC
                       and the Company, dated August 23, 1999.(10)

         10.11         SportsNuts.com International, Inc. 1999 Stock Option Plan
                       (11)

         21.1          Subsidiaries of the Registrant. (12)

         27.1          Financial Data Schedule
</TABLE>


----------------------

        (1) Filed as an Exhibit to the Company's report on Form 8-K, filed with
        the Commission on April 20, 1999.

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

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

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

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


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



                                       32
<PAGE>   35

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

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

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

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

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

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



        SIGNATURES


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




SPORTSNUTS.COM INTERNATIONAL, INC.


        Date: May 15, 2000              By /s/ Kenneth I. Denos
                                          -------------------------------------
                                          Kenneth I. Denos
                                          Chief Financial Officer






                                       33

<PAGE>   36

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
        NUMBER         EXHIBITS
        ------         --------
<S>                    <C>
         3.1           Amended and Restated Certificate of Incorporation of
                       SportsNuts.com International, Inc., a Delaware
                       corporation.(1)

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

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

         10.2          Convertible Promissory Note and Security Agreement among
                       Moore, Clayton & Co., SportsNuts.com, Inc., and the
                       Company, dated February 4, 2000. (4)

         10.3          Convertible Promissory Note and Security Agreement among
                       George Napier, SportsNuts.com, Inc., and the Company,
                       dated March 10, 2000. (5)

         10.4          Convertible Promissory Note and Warrant granted to John
                       Schmitz and Stanley Aber, dated March 27, 2000.

         10.5          Financial Consulting Agreement, dated March 23, 2000,
                       among SportsNuts.com International, Inc., J.D. Holden
                       Associates, and The Sunvest Corporation.

         10.6          Employment Agreement with Kenneth Denos dated November
                       16, 1998.(6)

         10.7          Independent Contractor Agreement with Sharon Clayton
                       dated April 15, 1999 (7)

         10.8          Consulting Agreement with Moore, Clayton & Co. dated July
                       1, 1999.(8)

         10.9          Summary of Material Terms of Agreement between
                       SportsNuts.com International, Inc. and Pierre Boivin
                       dated July 1, 1999. (9)

         10.10         Advertising Agreement between EURO RSCG/DSW Partners, LLC
                       and the Company, dated August 23, 1999.(10)

         10.11         SportsNuts.com International, Inc. 1999 Stock Option Plan
                       (11)

         21.1          Subsidiaries of the Registrant. (12)

         27.1          Financial Data Schedule
</TABLE>


----------------------

        (1) Filed as an Exhibit to the Company's report on Form 8-K, filed with
        the Commission on April 20, 1999.

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

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

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

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


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

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

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

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

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

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

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