Securities and Exchange Commission
Washington, D.C., 20549
FORM 10-QSB
(Mark one)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal quarter ended September 30, 1998
Commission file Number 0-28416
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
=========================================================
SBI Communications, Inc.
(Name of small business issuer specified in its charter)
=========================================================
Delaware 58-1700840
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Post Office Box 729-103 Firetower Road-Leesburg,Georgia 31763
(Address of Principal executive offices) (Zip code)
(912)759-9176
Issuer's telephone number
=========================================================
Securities registered pursuant to 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock and Preferred Stock
Common Stock $0.001 Par Value - Preferred Stock $5.00 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [ X ] NO [ ]
As of September 30, 1998 the Registrant had 5,570,430 shares of
its $0.001 par value Common Stock Outstanding.
=========================================================
November 11, 1998
=========================================================
<PAGE>
Table Of Contents
SBI COMMUNICATIONS, INC.
FORM 10-QSB
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements 3
Consolidated Balance Sheets as of
December 31, 1997 and
and September 30, 1998
Consolidated Statements of Operations 4
for the nine months ended September
30, 1997 and 1998
Consolidated Statement of Changes 4
in Shareholders' Equity for the nine
months ended September 30, 1998
Consolidated Statements of Cash Flows 5
for the nine months ended September 30,
1997 and 1998
Notes to Consolidated Financial State- 6
ments
Item 2. Management's Discussion and Analysis 8
of Financial Condition and Results
of Operations Condition
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote 12
of Security Holders
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
2
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Financial Statements
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
September 30, Dec. 31,
1998 1997
---- ----
ASSETS
------
<C> <C>
<S>
Current assets:
Cash $ 485 $ 22,228
Accounts receivable, - 250
Note receivable from affiliates 3,600 9,617
Inventories 79,444 86,065
----------- ----------
83,529 118,160
Property and equipment, net of accumulated
depreciation 7,458,345 6,782,223
Other assets:
Deferred loan costs 5,071 21,109
Deposits 63,065 63,065
----------- ----------
$ 7,610,010 $ 6,984,557
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Note payable to trust managed by a shareholder $ 150,000 $ 150,000
Mortgage note payable-current portion (Note 5) 1,050,000 239,701
Capitalized leases-current portion 17,284 17,491
Accrued wages due to principal shareholder
(Note 2) 355,000 290,000
Advances due to principal shareholder 12,698 -
Account payable and accrued expenses 169,071 150,442
----------- ----------
1,754,053 847,634
Capitalized leases, long-term portion 61,459 62,216
Other notes payable 52,438 52,438
----------- ----------
Total liabilities 1,867,950 962,288
----------- ----------
Stockholders' equity:
Preferred stock, par value $5.00; 10,000,000
shares authorized; 1,653,000 and 1,693,000
shares issued and outstanding at September 30,
1998 and December 31, 1997, respectively 8,265,000 8,465,000
Common stock, par value $.001; 40,000,000
shares authorized; 5,570,439 shares issued
and outstanding at September 30, 1998 and
5,345,439 as of December 31, 1997 5,570 5,345
Paid in capital 3,667,118 3,467,343
Accumulated deficit (6,195,628) (5,915,419)
----------- ----------
5,742,060 6,022,269
----------- ----------
$ 7,610,010 $ 6,984,557
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
STATEMENTS OF LOSS
<CAPTION>
Nine Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues:
Bingo hall rent - $ 75,000 $ - $ 271,171
Kitchen, gift shop, and other revenues - 14,404 - 90,296
Other income 2,000 593 2,360
------ ----------- ---------- ----------
- 91,404 593 363,827
------ ----------- ---------- ----------
Expenses:
Cost of sales - kitchen and gift shop - 33,522 - 132,939
Administrative salaries and
related expenses - 37,136 73,133 117,000
Facility costs - 30,036 22,971 59,451
Other general and administrative - 76,001 65,098 358,152
Production costs - 1,813 - 10,011
Depreciation and amortization - 5,859 88,539 229,733
Interest and finance expenses 25,972 31,061 72,076
------ ----------- ---------- ----------
- 288,526 ($ 280,802) 971,834
------ ----------- ---------- ----------
Net loss - ($ 197,122) ($ 280,209) ($ 608,007)
====== =========== =========== ===========
Net loss per share (Note 4) $ 0.00 ($ 0.04) ($ 0.05) ($ 0.11)
====== =========== =========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
4
<PAGE>
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
1998 1997
---- ----
Revenues:
Bingo hall rent $ - $196,171
Kitchen and gift shop revenues - 75,892
Other income 593 360
----------- -----------
593 272,423
----------- -----------
Expenses:
Cost of sales - kitchen and gift shop - 99,417
Administrative salaries and related expenses 73,133 79,864
Facility costs 22,971 29,415
Other general and administrative 65,098 282,151
Production costs - 2,483
Depreciation and amortization 88,539 143,874
Interest and finance expenses 31,061 46,104
----------- -----------
280,802 683,308
----------- -----------
Net loss ($ 280,209) ($ 410,885)
=========== ===========
Net loss per share ($ 0.05) ($ 0.08)
=========== ===========
See accompanying notes to consolidated financial statements.
5
<PAGE>
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
1998 1997
---- ----
Cash flows from operating activities:
Net (loss) ($ 280,209) ($ 410,885)
Adjustments to reconcile net loss to cash
provided (used) by operating activities:
Depreciation and amortization 72,500 143,874
Amortization of deferred loan costs 16,038 16,309
Charge offs of long-term receivables - 8,178
Change in accounts receivable, trade 768 89,861
Change in inventories 6,621 -
Change in prepaid expenses ( 12,172)
Change in accounts payable and accrued expenses 83,629 126,226
------------ ------------
Cash (used) by operating activities ( 100,653) 38,609
------------ ------------
Cash flows from investing activities:
Proceeds from repayment of notes receivable from
affiliate 5,499 -
Purchase of real estate ( 748,622) ( 17,618)
------------ ------------
Cash (used) by investing activities ( 743,123) ( 17,618)
------------ ------------
Cash flows from financing activities:
Loans from shareholders/affiliates 12,698 34,054
Proceeds From Mortgaged (see note 5) $1,050,000 -
Mortgage loan repayments ( 239,701) -
Capital lease repayments ( 964) ( 3,327)
Cash flows provided by financing activities $ 822,033 30,727
------------ ------------
Net increase (decrease) in cash ( 21,743) ( 25,500)
Cash at beginning of period 22,228 42,327
------------ ------------
Cash at end of period $ 485 $ 16,827
============ ============
Supplemental information:
Income taxes paid $ - $ -
============ ============
Interest paid $ 28,311 $ 32,102
============ ============
Items not requiring use of cash:
Preferred stock converted ( $200,000) 0.00
Issuance of common stock $200,000 0.00
------------ ------------
Paid in capital $ - -
============ ============
See accompanying notes to consolidated financial statements.
6
<PAGE>
SBI COMMUNICATIONS, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
Note 1 - Selected disclosures
The accompanying unaudited consolidated financial statements,
which are for interim periods, do not included all disclosures
provided in the annual consolidated financial statements. These
unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and the
footnotes thereto contained in the Form 10-KSB for the year ended
December 31, 1997 of SBI Communications, Inc. (the "Company"), as
filed with the Securities and Exchange Commission. The December
31, 1997 balance sheet was derived from the unaudited
consolidated financial statements, but does not include all
disclosures required by generally accepted accounting principles.
In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (which
are of a normal recurring nature) necessary for a fair
presentation of the financial statements. The results of
operations and cash flow for the Nine months ended September 30,
1998 and 1997 are not necessarily indicative of the results to be
expected for the full year. There were no activity in the third
quarter.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reporting amount
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.
Note 2 - Related party transactions
The Company accrued salaries payable to the Company's principal
shareholder totaling $97,500 for the three quarters ended
September 30, 1998 and 1997, respectively. All amounts owed to
the shareholder are payable on demand.
Note 3 - Net loss per share
The Company's net loss per share was calculated using 5,570,439
and 5,345,439 weighted average shares outstanding for each of the
quarters ended September 30, 1998 and December 31, 1997,
respectively. Although convertible preferred stock is a common
stock equivalent, with a conversion rate of approximately 10
shares of common stock (based upon an approximate market price
for common stock of $0.50) for each share of preferred stock,
preferred stock conversion has not been included in the
calculation of earnings per share in that to do so would be
antidilutive.
Note 4 - Preferred stock activity
In July, 1996, 5,000 shares of preferred stock with a par value
of $25,000 were to be issued to cover $20,000 in closing costs
7
<PAGE>
relating to the mortgage note receivable. The Company
inadvertently issued 25,000 shares rather than 5,000 shares, and
both parties agreed that the related certificate would be
returned and reissued. In that the certificate had not been
returned as of December 31, 1996, the full 25,000 shares were
treated as outstanding at that time, with a related reduction in
paid in capital. In the first quarter of 1997, the certificate
was returned, and a new certificate for 5,000 shares was issued.
The stockholders' equity section of the balance sheet as of March
31, 1997, has been adjusted to reflect the reduced number of
preferred shares outstanding, with a corresponding adjustment to
paid in capital.
Note 5 - Mortgage
The company borrowed $1,050,000.00 to pay State of Alabama, on
behalf of Cranberry-Magnetite, the previous owner tax liability
of $748,422.00 and to pay the second mortgage to National
Mortgage of $263,275. The company is also securing a loan to
refinance the property, renovate and expand the company business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SBI Communications, Inc. (the "Company"), was originally
organized in the State of Utah on September 23, 1983, under the
corporate name of Alpine Survival Products, Inc. Its name was
subsequently changed to Justin Land and Development, Inc. during
October, 1984, and then to Supermin, Inc. on November 20, 1985.
On September 29, 1986, Satellite Bingo, Inc. was the surviving
corporate entity in a statutory merger with Supermin, Inc., a
Utah corporation. In connection with the above merger, the former
shareholders of Satellite Bingo, Inc. acquired control of the
merged entity and changed the corporate name to Satellite Bingo,
Inc. Through shareholder approval dated March 10, 1988, the name
was changed to its current name of SBI Communications, Inc. On
January 1, 1993, the Company executed a plan of merger that
effectively changed the Company's state of domicile from Utah to
Delaware. Although the Company is currently a Delaware
corporation, on January 31, 1997, the stockholders and Board of
Directors approved a plan to change the Company's corporate
domicile to the State of Nevada. Management anticipates executing
the plan during last quarter of 1998 or first quarter 1999.
The Company plans to lease to charities bingo halls operations
and to provide interactive satellite delivered bingo games, game
shows and other similar telecommunication gaming products or
services to television viewers throughout the United States. The
Company has also developed a system that can be integrated into
all standard communications channels including the World Wide Web
for interactive play. Our Web site address which will be
available 24 hours a day is http://www.sbicommunications.com
http://www.abingo.com http://www.globalot.com. Currently, the
Company's only operations are the leasing of the property located
in Piedmont, Alabama. Under local ordinances, the property must
be leased to a charity in order to conduct and operate bingo
games. At this time the company has two commercial leases for the
property.
8
<PAGE>
Frontier Palace
Because the Piedmont Jaycees did not perform as represented, and
their management did not develop business, gross revenues were
50% of their projections, and agreement in their premises lease:
Jaycees salaries exceeded budgets; operations schedule was not
full time. Therefore, their lease was allowed to not be renewed
at the end of 1997.
At the same time, local political influences developed negative
local law changes as a reaction to the Piedmont Jaycees
operation. Local ordinances are being adopted to limit all
charity bingo operations and the amount of employees and
establish a requirement of near gross proceeds being donated for
charitable purposes regardless of reasonable and necessary
operation expenses with no revenues to the employees of the
charity .
In reaction to the above political/legal trends, management has
negotiated two business leases of the premises. Because
management is working with technical computer advisors and
systems designers in the Boca Raton/Fort Lauderdale, Florida
area, management believes that their observations of the local
charity Bingo market appears to be more hospitable in Southeast
Florida, rather than northeast Alabama
Two business enterprises have agreed to lease the premises at a
gross rent of $65,000.00 per month, subject only to the company
paying real estate taxes (approximately $35,000.00 per year,
insurance $25,000.00 per year and the usual exterior, structural
maintenance, estimated at no more that $20,000.00 per year).
Gross rental income then is at $780,000.00 per year with
estimated expenses and contingencies at $80,000.00 per year,
indication gross income at $700,000.00.
The two tenants are credible business operations with a history
and financial capability, as follows:
(1) Regency Communications, Inc. for operation of a
telecommunication marketing center and advertising/video studio
as part of their marketing efforts. Rent at $40,000.00 per month
or $480,000 per year, plus agreement to jointly manage the
property and develop complimentary products.
(2) Consolidated Trust, S.A. is a company with an operations
history in Birmingham, Alabama. Their management seeks a large
location for storage and offices. Their agreed rental dose not
includes use of the kitchen and snack bar facilities, and is at a
gross rent of $25,000.00 per month or $300,000.00 per year.
Internet Web Site
The company established a secure web site allowing individuals to
join "A Bingo Shopping Club for a fee of $19.95 per month which
is a shopping club for a variety of products, services, Bingo
game related events and items, travel and consumer goods; the
opportunity is primarily a shopping club. No charge is made for
Bingo cards, and for allowing members to play an on-going
Globalot Bingo game, with winnings credited to the member's
account or delivered to the member at their option. Payment for
membership will be made by credit card, bank check, debit/ATM
cards and by lec billing or "900" telephone number. The web site
is hosted by a Coral Gables educational organizations.
Fulfillment of the operation is by sites and organizations in
Fort Lauderdale, Florida. The company will at some point host its
9
<PAGE>
own web site with server and tee access to the Internet. The
company will generate additional revenues by offering advertising
and its web services to others.
Satellite Bingo.
The company has developed a pay-per-view television game show to
be operate by SBI, at a studio within the Piedmont, Alabama
property, or within a production studio, as is most efficient.
The charge for a weekly two hour broadcast is $9.95 per
subscriber per broadcast; SBI receives $5.00 with the
broadcaster/network company paid the balance.
The Company believes that the $5 billion plus U. S. bingo
industry is fragmented and inefficient, yet potentially
profitable. The Company's strategy, therefore, is to consolidate
a portion of the industry to build a national chain of bingo
centers in lucrative markets. The Company believes that its
industry experience, economies of scale and financial resources
will provide a competitive advantage over competing bingo
operations, which should enable the Company to effectively
execute its long-term growth plan. The Company currently has only
one bingo center located in Piedmont, Alabama. The Company
intends to continue its expansion through acquisitions and
developments in other selected markets throughout the United
States.
RESULTS OF OPERATION
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS
ENDED SEPTEMBER 30, 1997.
The Company generated revenues of $0.00 during its third quarter
of 1998 ended September 30, 1998, as compared to $91,404 in the
comparable period of the prior fiscal year, which represents a
decrease. The revenue stream also benefitted from the money
generated by the kitchen and gift shop that was not open during
the second quarter of last year. The Company expects quarterly
revenues to continue to increase upon the successful operation of
the Company's Web site and broadcasting of it's interactive
programming.
Direct operating costs of the Company's bingo center totaled
$28,526 during the third quarter of 1998 versus $288,526 in the
comparable 1997 quarter, which represents a 90% decrease. The
Company's general and administrative expenses also decreased.
Further analysis of the direct operating costs showed that
approximately 36% of the current period's costs were comprised of
depreciation and amortization, which are relatively fixed
expenses. The balance is primarily comprised of legal, wages and
management fee costs.
General & Administrative (G&A) expenses totaled $0.00 during the
third quarter of 1998 as compared to $76,001 in the year ago
period, a decrease. This expense decrease was due to the bingo
facility being close for renovation.
The Company did not record any tax expense during the current
quarter or comparable year-ago period due to losses incurred. The
Company's tax loss carryforward balance at the end of fiscal 1996
was in excess of $5 million and, as such, the Company does not
expect to incur any federal income tax liability until this
carryforward is depleted by operational profits.
Net loss for the third fiscal quarter of 1998 was $280,209, which
equated to loss per share of ($.05) Net loss for the comparable
10
<PAGE>
quarter of 1997 was $197,122 which equated to loss per share of
($0.04). The increased loss of approximately .01 per share was
due to closing the facility.
All of the Company's revenue comes from operation of the bingo
hall or interest income on cash therefrom. The following table
summarizes revenue categories in the Company's statement of
income (rounded to the nearest whole dollar).
Amount of Total Revenue
Nine Months Ended September 30, 1998 1997
---- ----
Revenues:
Bingo hall rent/administrative fees .00 271,171
Kitchen and gift shop revenues .00 90,296
Other Income .00 2,360
Total Revenue .00 $363,827
In 1995, the Company charged a flat $75,000 per month in rent,
plus management fees as deemed appropriate. In February, 1996,
the lease with the current charity was amended to reflect a
minimum payment of $25,000 per month, with adjustments up to
$75,000 per month if the charity generates sufficient annual cash
flow to afford to pay the increased rent. Although the charity
generated cash flow that would allow greater rent, management
allowed such excess to be applied toward unpaid rents and did not
increase the rent charge for 1997.
Management collected scheduled rent payments of $225,000 and
contingent rent of 46,171 for a total of $271,171 from the
Jaycees for nine months ended September 30, 1997. No rent has
been collected through third quarter 1998.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1998, the Company had cash and cash equivalents
of $83,529, a decrease of $34,635 from the end of fiscal 1997.
The decrease was mainly due to the Company not operating in
Piedmont in 1998. The Company does expect to make further
investments in its Piedmont, Alabama facility in order to meet
strong customer demands.
The Company expects its cash position to begin to increase
assuming continued collection of its amounts due from future
charity. There can be no assurance of the foregoing. The Company
intends to finance future acquisitions primarily through the use
of stock and, to a lesser extent, cash and notes.
Accounts receivables totaled $0.00 at September 30, 1997. This
was down from $250 at year end 1997. The Company collects most of
its receivables from participating charities within one to four
weeks from the time earned. The contingent rent will be
collected, when earned, during two major months within the year.
Current liabilities totaled $1,867,950 at the end of the quarter,
but less than 10% of this total represented trade payables.
Approximately 10% of total liabilities are comprised of a long-
term note payable on which the Company is currently making
payments. The Company has no other long-term debt. The Company
had total assets of over $7.1 million and total liabilities of
$1,021,097 at the end of the third quarter, with shareholder
equity of $6.1 million. The Company believes that its current
11
<PAGE>
capital resources, together with expected positive operational
cash flows, will support operational requirements for the next
year.
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not involved in any legal proceedings.
ITEM 2. CHANGES IN SECURITIES
In July, 1996, 5,000 shares of preferred stock with a par value
of $25,000 were to be issued to cover $20,000 in closing costs
relating to the mortgage note receivable. The Company
inadvertently issued 25,000 shares rather than 5,000 shares, and
both parties agreed that the related certificate would be
returned and reissued. In the first quarter of 1997, the
certificate was returned, and a new certificate for 5,000 shares
was issued. In January 1998 the Company issued 25,000 shares of
its common stock to cover the cost of software programing
relating to PandaAmerica. The Company also converted 40,000
shares of preferred shares to 200,000 shares of the company
common stock. The Company issued 20,000 shares of preferred stock
to The Peter Pappas Trust in lieu of a cash payment for
$25,000.00 of interest due on loan.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
CHANGE IN MANAGEMENT. In September 1998, Mr. Mel Ray resigned as
a director.
EXHIBITS AND REPORTS ON FORM 8-K
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS:
EXHIBITS DESCRIPTION
11 Statement re: computation of per share
earnings
27 Financial data schedule
99 Form 8-K
(B) REPORTS ON FORM 8-K:
Attached
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange
Act of 1934, the registrant caused this report to be signed on
its behalf by the undersigned, hereunto duly authorized.
SBI Communications, Inc.
Date: November 11, 1998 By: /s/Ronald Foster
-------------------------------------
Ronald Foster Chairman of the
Board and Chief Executive Officer
(principal executive officer)
13
EXHIBIT 11
SBI COMMUNICATIONS, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE NINE MONTHS ENDED
SEPTEMBER 30 , 1997 AND 1998
Nine Months Nine Months
Ended Ended
Sept. 30, 1997 Sept. 30, 1998
-------------- --------------
Shares outstanding: 5,345,439 5,570,439
Weighted average shares outstanding 5,345,439 5,570,439
Net loss $ (741,717) $ 280,209)
Preferred Dividend -- --
-------------- --------------
Total (741,717) (280,209)
Net loss per share $ (0.14) $ (0.05)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report November 11, 1998
SBI Communications, Inc
(Exact name of registrant as specified in its charter)
..........................................................................
Delaware 0-28416 58-1700840
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification)
.P. O. Box 729 - Leesburg, Georgia 31763
(Address of principal executive offices) (Zip Code)
(912) 759-9176
Registrant's telephone number, including area code
..........................................................................
The company's board of directors accepted the resignation of Mr.
Mel Ray as director as of September 10, 1998.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SBI COMMUNICATIONS, INC. FOR THE QUARTERLY
PERIOD ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 485
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 79,444
<CURRENT-ASSETS> 83,529
<PP&E> 7,458,345
<DEPRECIATION> 88,538
<TOTAL-ASSETS> 7,610,010
<CURRENT-LIABILITIES> 817,950
<BONDS> 1,050,000
0
8,265,000
<COMMON> 5,570
<OTHER-SE> 5,742,060
<TOTAL-LIABILITY-AND-EQUITY> 7,610,010
<SALES> 0
<TOTAL-REVENUES> 593
<CGS> 0
<TOTAL-COSTS> 182,168
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,061
<INCOME-PRETAX> (280,209)
<INCOME-TAX> 0
<INCOME-CONTINUING> (280,209)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (280,209)
<EPS-BASIC> (0.05)
<EPS-DILUTED> (0)
</TABLE>
