UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
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 000-30444
SPORTS GROUP INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Florida 59-3474394
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7730 E. Greenway Rd., Suite 104
Scottsdale, Arizona 85260
(Address of principal executive offices)
(480) 443-0200
(Registrant's telephone number, including area code)
Check whether issuer (1) has filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
The number of shares outstanding of the registrant's Common Stock, $.001 per
value per share, as of November 10, 2000 was 10,710,050 shares.
<PAGE>
SPORTS GROUP INTERNATIONAL, INC.
Quarter Ended September 30, 2000
FORM 10-QSB
INDEX
PAGE NUMBER
-----------
PART I - FINANCIAL INFORMATION 2
ITEM 1. FINANCIAL STATEMENTS 3-6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION 7-11
PART II - OTHER INFORMATION 12
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 OF
SECURITY HOLDERS 12
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12-16
SIGNATURES 17
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
STATEMENT OF INFORMATION FURNISHED
The accompanying financial statements have been prepared in accordance with
Form 10-QSB instructions and applicable items of Regulation S-B, and in the
opinion of management, contain all adjustments (consisting of only normal and
recurring accruals) necessary to present fairly the Company's financial position
as of September 30, 2000 and the Company's results of operations and statement
of cash flows for the three months ended September 30, 2000 and 1999 and the
nine months ended September 30, 2000 and 1999. These results have been
determined on the basis of generally accepted accounting principles and
practices applied consistently with those used in the preparation of the
Company's 1999 Annual Report on Form 10-KSB.
Certain information and footnote disclosures normally included in financial
statements presented in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that the accompanying financial
statements be read in conjunction with the financial statements and related
notes thereto incorporated by reference in the Company's 1999 Annual Report on
Form 10-KSB.
2
<PAGE>
SPORTS GROUP INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2000 (unaudited)
--------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash $ 42,313
Trade and other accounts receivable, net of allowance 507,127
Inventories 224,064
Prepaid expenses and other assets 43,934
Deferred income taxes 91,001
Notes receivable - current portion, net of allowance 531,560
------------
Total current assets 1,439,999
PROPERTY AND EQUIPMENT, net 1,017,317
LEASE DEPOSITS 156,982
NOTES RECEIVABLE - less current portion 2,505,662
GOODWILL, net of accumulated amortization 5,158,512
DEFERRED INCOME TAXES 289,971
------------
TOTAL ASSETS $ 10,568,443
============
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable $ 757,977
Accrued liabilities 587,703
Line of credit 258,465
Notes payable - current portion 812,356
Acquisition notes payable 489,057
Confirmed bankruptcy liabilities - current portion 575,660
------------
Total current liabilities 3,481,218
NOTES PAYABLE - long-term portion 566,436
ACQUISITION NOTES PAYABLE - long-term portion 143,331
CONFIRMED BANKRUPTCY LIABILITIES - long term portion 691,242
DEPOSITS HELD UNDER CONTRACT 160,000
DEFERRED FRANCHISE FEE INCOME 390,000
------------
Total liabilities 5,432,227
------------
STOCKHOLDERS' EQUITY:
Series A preferred stock, $10.00 par value,
575,000 shares designated, 575,000 issued 5,750,000
Series B preferred stock, $10.00 par value,
650,000 shares designated, 650,000 issued 6,500,000
Common stock, $.001 par value, 100,000,000 shares
authorized, 10,710,050 issued and outstanding 10,710
Paid in capital 4,923,574
Accumulated deficit (12,048,068)
------------
Total stockholders' equity 5,136,216
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 10,568,443
============
3
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SPORTS GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
NINE AND THREE MONTHS ENDED SEPTEMBER 30, (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Three Months
-------------------------- --------------------------
REVENUES: 2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net product and store sales $ 5,165,502 $ 5,230,162 $ 904,420 $ 3,428,210
Franchise fees 843,543 392,485 246,400 269,853
Royalties 1,442,988 922,753 576,007 581,681
Rental income 180,300 280,800 56,700 23,694
----------- ----------- ----------- -----------
Total revenues 7,632,332 6,826,200 1,783,527 4,303,438
----------- ----------- ----------- -----------
EXPENSES:
Cost of product sales 1,799,661 2,283,985 264,375 1,502,420
Personnel expenses 2,493,310 1,606,168 664,309 1,022,558
Rent 1,128,152 1,267,810 261,486 747,122
Depreciation and amortization 371,662 282,949 87,979 211,278
General and administrative expenses 1,570,851 1,242,220 306,445 792,311
----------- ----------- ----------- -----------
Total expenses 7,363,636 6,683,132 1,584,593 4,275,689
----------- ----------- ----------- -----------
OPERATING (LOSS) INCOME 268,696 143,068 198,934 27,749
----------- ----------- ----------- -----------
OTHER (INCOME) AND EXPENSES
Gain on sales of assets (194,644) -- 130,356 --
Interest expense 207,242 129,863 59,267 52,720
Interest income (89,532) (17,784) (33,199) (9,662)
----------- ----------- ----------- -----------
Total other expense (income) (76,934) 112,079 156,424 43,058
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 345,630 30,989 42,510 (15,309)
INCOME TAX (BENEFIT) PROVISION -- 18,661 -- 18,661
----------- ----------- ----------- -----------
NET (LOSS) INCOME $ 345,630 $ 12,328 $ 42,510 $ (33,970)
=========== =========== =========== ===========
NET INCOME (LOSS) PER SHARE:
Basic $ (0.06) $ (0.08) $ (0.02) $ (0.07)
=========== =========== =========== ===========
Diluted $ (0.06) $ (0.08) $ (0.02) $ (0.07)
=========== =========== =========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 9,160,499 5,375,240 9,875,419 6,866,202
=========== =========== =========== ===========
Diluted 9,160,499 5,375,240 9,875,419 6,866,202
=========== =========== =========== ===========
</TABLE>
4
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SPORTS GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE
NINE MONTHS ENDED SEPTEMBER 30, (unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES: 2000 1999
----------- -----------
<S> <C> <C>
Net income (loss) $ 345,630 $ 12,328
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 371,662 282,949
Deferred income taxes -- 96,325
Gain on Sale of Assets (194,644) --
Changes in assets and liabilities:
Trade and other accounts receivable (198,749) (80,075)
Inventories (105,154) 37,738
Prepaids and other current assets (5,224) (23,058)
Accounts payable (194,478) (112,966)
Accrued liabilities (466,371) (4,876)
Deferred franchise fee income 95,528 29,456
----------- -----------
Net cash provided by (used in) operating activities (351,800) 237,821
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (441,056) (8,825)
Collections on notes receivable 149,372 92,797
Proceeds from sale of property and equipment 1,447,144 (6,500,000)
----------- -----------
Net cash provided by (used in) investing activities 1,155,460 (6,416,028)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings on notes payable 70,000 322,500
Principal repayments on notes payable (1,315,069) (358,879)
Payments on confirmed bankruptcy liabilities (160,542) (409,945)
Proceeds from the sale of preferred stock -- 6,500,000
Proceeds from the sale of common stock -- 211,750
----------- -----------
Net cash provided by (used in) financing activities (1,405,611) 6,265,426
----------- -----------
INCREASE (DECREASE) IN CASH (601,951) 87,219
CASH, BEGINNING OF PERIOD 644,264 19,467
----------- -----------
CASH, END OF PERIOD $ 42,313 $ 106,686
=========== ===========
</TABLE>
5
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SPORTS GROUP INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS, (continued)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (unaudited)
--------------------------------------------------------------------------------
SUPPLEMENTAL CASH FLOW INFORMATION: 2000 1999
---------- ----------
Interest paid $ 207,242 $ 53,748
========== ==========
Income taxes paid $ -- $ --
========== ==========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued as preferred stock dividends $ 869,178
==========
Sale of property & equipment under notes receivable $1,284,883 $ 65,000
========== ==========
6
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
FORWARD-LOOKING STATEMENTS
Certain of the information discussed in this quarterly report, and in particular
in this section entitled "Management's Discussion and Analysis or Plan of
Operation," contain forward-looking statements that involve risks and
uncertainties that might adversely affect the Company's operating results in the
future in a material way. The words "believes," "may," "likely," "expects,"
"anticipates," and similar expressions identify forward-looking statements,
which speak only as of the date the statement was made. Such forward-looking
statements are within the meaning of that term in Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Such statements may include, but are not limited to, projections of
revenues, including sales of franchises and corporate owned locations, income or
loss, plans for future operations, and financing needs or plans. Statements in
the Company's Annual Report on Form 10-KSB, including the Notes to the Company's
Consolidated Financial Statements and "Management Discussion and Analysis or
Plan of Operation", describe factors, among others, that could contribute to
such differences. Such factors include, without limitation, the effect of
national and regional economic and market conditions in the U.S. where the
Company franchises and operates store locations, costs of labor and employee
benefits, costs of marketing, the success or failure of marketing efforts, costs
of food and non-food items used in the operation of the Company's stores,
intensity of competition for locations and franchisees as well as customers,
perception of food safety, spending patterns and demographic trends, legal
claims and litigation, the availability of financing for the Company and its
franchisees at reasonable interest rates, and legislation and governmental
regulations affecting the Company's business. Many of these factors are beyond
the Company's control.
OVERVIEW
Sports Group International, Inc. (the "Company") operates and franchises,
under the Frullati Cafe and Bakery, Surf City Squeeze, Rollerz, and Tahi Mana
brand names, juice bars and health food cafes that serve blended fruit drinks,
sandwiches, salads, soups, baked goods, healthy snacks, and nutritional
supplements in shopping malls, airports, medical centers, office buildings and
health clubs throughout the United States and Canada. As of September 30, 2000,
the Company, through its subsidiaries, has approximately 209 total locations, of
which 200 are either franchised or licensed by third parties and 9 are directly
owned and operated by the Company or its subsidiaries. The Company's corporate
stores operate under the Frullati Cafe and Bakery, Rollerz, and Tahi Mana brand
names. The Company also sells proprietary smoothie mixes and other nutrients and
7
<PAGE>
supplements to its franchisees and licensees through its wholly owned
subsidiaries.
The Company derives its revenues primarily from initial franchise and
license fees, ongoing royalty payments, sales from its company-owned stores, and
sales of nutritional and health food products to its franchisees and licensees.
The Company's long-term strategy is to operate primarily as a franchisor, and
through strategic acquisitions and internal growth, to become one of the larger
franchisors of juice bars, healthy food cafes, and other retail food concepts in
the United States and select international markets that include Canada, the
Middle East, Australia, and certain Pacific Rim countries. The Company also
plans to operate a limited number of company-owned stores in certain key markets
where the stores can be geographically concentrated. Currently, the majority of
the company-owned stores are located in the Dallas-Ft. Worth, Texas and Phoenix,
Arizona metropolitan areas. The Company has not yet identified other areas where
it may wish to operate company-owned stores.
RESULTS OF OPERATIONS
There were no significant operations in Sports Group International, Inc.
prior to its merger with Surf City Squeeze Acquisition Corp. II ("SCAC") on
March 15, 1999. The Sports Group International, Inc. and SCAC transaction was
accounted for as a recapitalization of SCAC, with SCAC as the acquirer. The
results of operations and statement of cash flow for the three months and nine
months ended September 30, 1999 are those of SCAC for the entire period and
Selman Systems, Inc. from May 21, 1999 until September 30, 1999.
Total operating revenues for the nine months ended September 30, 2000
increased by $806,132 to $7,632,332 from $6,826,200 during the same period in
1999. The increase in operating revenues resulted from the Company's acquisition
of Selman Systems, Inc. ("Selman") on May 21, 1999 and Fru-Cor, Inc. ("Fru-Cor")
on July 7, 1999, compared to the operating revenues for the nine months ending
September 30, 1999 being primarily those of SCAC, with approximately four months
of revenues from Selman and three months of revenues from Fru-Cor. For the three
months ending September 30, 2000, total operating revenues decreased by
$2,519,911 to $1,783,527 from $4,303,438 during the same period in 1999. This
decrease in operating revenues resulted from the Company selling eighteen of its
corporate owned Frullati Cafe and Bakery locations during the nine months ended
September 30, 2000; eight of which were sold during the three months ended
September 30, 2000.
Cost of product sales decreased to $1,799,661 for the nine months ended
September 30, 2000, compared to $2,283,985 for the same period in 1999. For the
three months ended September 30, 2000, cost of product sales decreased to
$264,375, compared to $1,502,420 for the same period in 1999. These decreases
were primarily the result of the reduction in number of the Company's corporate
owned locations during 2000 as discussed in the preceding paragraph.
8
<PAGE>
Personnel costs increased by $887,142 to $2,493,310 for the nine months
ended September 30, 2000, compared to $1,606,168 for the same period in 1999.
This increase in personnel costs was primarily attributable to the additional
personnel costs associated with the company-owned stores owned by a subsidiary
of Selman and Fru-Cor for the full nine month period of 2000. For the three
months ended September 30, 2000, personnel costs decreased by $358,249 to
$664,309, compared to $1,022,558 for the same period of 1999. This decrease in
personnel costs for the three months ended September 30, 2000 was due to the
reduction in staff associated with the selling of the Company's corporate owned
locations.
Rent expense decreased by $139,658 to $1,128,152 for the nine months ended
September 30, 2000, compared to $1,267,810 for the same period of 1999. For the
three months ended September 30, 2000, rent expense decreased by $485,636 to
$261,486, compared to $747,122 during the same three month period of 1999. These
decreases in rent expense were primarily the result of the Company selling
eighteen of its corporate owned locations during the first nine months of 2000.
Depreciation and amortization expense increased $88,713 to $371,662 for the
nine months ended September 30, 2000, compared to $282,949 for the same period
of 1999. The increase in depreciation and amortization expenses was primarily
attributable to the depreciation of the company-owned stores owned by a
subsidiary of Selman and Fru-Cor and the amortization of goodwill attributable
to the purchase of Selman and Fru-Cor. For the three months ended September 30,
2000, depreciation and amortization decreased by $123,299 to $87,979, compared
to $211,278 during the same period of 1999. The decrease in depreciation and
amortization expenses for the three months ended September 30, 2000 was due to
the reduction in the Company's property and equipment balances resulting from
the sale of its corporate owned locations as discussed above.
General and administrative expenses increased by $328,361 to $1,570,851 for
the nine months ended September 30, 2000, compared to $1,242,220 for the same
period of 1999. The increase during the nine months ended September 30, 2000 was
primarily attributable to an increase in professional fees during the first
three months of 2000 due to the Company's legal proceedings discussed in more
detail in the Company's 1999 Form 10-KSB. For the three month period ending
September 30, 2000, general and administrative expenses decreased by $485,866 to
$306,445, compared to $792,311 during the same period of 1999. The decrease in
general and administrative expenses during the three months ended September 30,
2000 was primarily due to the closure of Selman's corporate headquarters in
Dallas, Texas, which closed in the fourth quarter of 1999, and the associated
reduction in administrative staff.
Total other income increased by $189,013 to $76,934 for the nine months
ended September 30, 2000, compared to a loss of $112,079 for the same period of
1999. For the three months ended September 30, 2000, total other income
decreased by $113,366 to a loss of $156,424, compared to a loss of $43,058
during the same period of 1999. The increase in other income for the nine months
ended September 30, 2000 was due to a one-time net gain on the sale of certain
9
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company-owned stores of $194,644. The decrease in other income for the three
months ended September 30, 2000 was due to a $130,356 one-time net loss
recognized on the sale of certain of the Company's corporate locations during
such three month period.
The Company's consolidated net income increased by $333,302 to $345,630 for
the nine months ended September 30, 2000, from net income of $12,328 for the
nine months ended September 30, 1999. For the three months ended September 30,
2000, the Company's consolidated net income increased by $76,480 to $42,510,
compared to operating loss of $33,970 during the same three month period of
1999. This increase in the Company's consolidated operating income for the nine
ended September 30, 2000 was primarily the result of a $194,644 one-time net
gain realized from the sale of eighteen of the Company's corporate stores. In
addition, for the nine and three month periods, the Company's operating margins
have improved due to the reduction in the number of corporate owned stores and
the corresponding increase in franchise and royalty income.
LIQUIDITY AND CAPITAL RESOURCES
The Company anticipates that it will have sufficient liquidity to sustain
its operations over the next 12 months. In late December 1999, the Company
obtained a $1,000,000 credit facility from a national banking institution. The
Company has drawn a significant portion of the $1,000,000 credit facility to
satisfy current obligations. The Company continues evaluating offers to sell its
remaining company-owned stores to raise additional cash for operating and
financing purposes.
The Company does not anticipate the need for significant capital
expenditures in the near future. However, if certain prospective store locations
would be better as company-owned stores rather than franchised locations, the
Company may require significant capital to build and open those prospective
stores. The Company purchased, through a newly formed wholly owned subsidiary,
Rollerz, Inc. ("Rollerz") for a note payable in the amount of $300,000. Rollerz
was owned by the Company's President and CEO. Rollerz owned the Rollerz brand
name and concept, recipes, and other related assets, and was operating the sole
corporate Rollerz store. Since the acquisition of Rollerz, Inc, the Company has
begun franchising the Rollerz concept with two franchise stores opening in the
4th quarter of 2000.
Net cash used by operating activities was approximately $351,800 for the
first nine months of 2000, compared to net cash provided by operating activities
of $237,821 for the corresponding period of 1999. The primary reason for this
change was a decrease in accrued liabilities of approximately $466,000 during
the nine months ended September 30, 2000 and a $194,644 one-time net gain
realized on the sale of eighteen company-owned Frullati Cafe & Bakery stores. In
certain instances when the Company sells corporate locations, a portion of the
purchase price is deferred and contingent on the purchaser obtaining a renewal
or extension of the commercial real estate lease for the Frullati Cafe & Bakery
location purchased. The uses of cash detailed above were partially offset by an
10
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increase in net income and depreciation and amortization during the first nine
months of 2000 compared to the first nine months of 1999.
Net cash provided by investing activities was approximately $1,155,460 for
the first nine months of 2000 compared to net cash used in investing activities
of $6,416,028 during the comparable period of 1999. The primary reason for this
increase was the receipt of $1,447,144 from the sale of eighteen company-owned
Frullati Cafe & Bakery stores in the first nine months of 2000. These proceeds
were partially offset by an increase of approximately $441,056 in purchases of
property and equipment arising from the purchase and/or development of
additional company-owned stores during the first nine months of 2000 under the
Tahi Mana brand name, and the purchase of the Rollerz concept and sole corporate
store as detailed above.
Net cash used in financing activities for the first nine months of 2000 was
approximately $1,405,611 compared to net cash provided by financing activities
of $6,265,426 during the same period of 1999. The significant reasons for this
decrease were an increase in the repayment of the Company's outstanding debt,
including principal repayments on notes payable of approximately $1,315,069
during the first nine months of 2000 compared to $358,879 in principal
repayments for the same period of 1999. Additionally, the Company received
$6,711,750 in proceeds from the sale of both its common and preferred stock
during the first nine months of 1999, and experienced a net reduction in
borrowings in the first nine months of 2000 compared to a net increase in
borrowings in the first nine months of 1999.
The Company believes that it can effectively implement its growth plans for
the current fiscal year's operations with the $1,000,000 credit facility
discussed above. Additionally, the Company renegotiated the $1,200,000 Fru-Cor
acquisition note in May, 2000 to provide for the repayment of the note over the
remainder of 2000. As of October 31, 2000, the principal balance of the Fru-Cor
acquisition note has been reduced to $300,000. The company is currently
finalizing a series of agreements with a potential master area developer for
certain franchise rights. One of these agreements provides for this party to
purchase $1.6 million of a newly designated series of the Company's Preferred
Stock by the end of this year. As of November 10, 2000, the Company has received
$500,000 under this agreement. Nevertheless, the Company is seeking additional
debt or equity financing from various sources, including investment banks and
private investors, to fund future expansion and for potential future
acquisitions.
The Company has never paid cash dividends on our common stock and does not
anticipate a change in this policy in the foreseeable future.
FACTORS THAT MAY AFFECT FUTURE RESULTS
Factors that may affect the Company's future results are described in
detail at pages 21-22 of the Company's Annual Report on Form 10-KSB for the year
ended December 31, 1999. SEE PART I, ITEM 2, MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - RISK FACTORS.
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PART II - OTHER INFORMATION
ITEM I. LEGAL PROCEEDINGS
NONE - The Company is currently only party to routine litigation that is
incidental to its principal business of franchising and operating retail juice
bars and healthy food cafes.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
NONE
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
2.1 Order Confirming First Modified Joint Plan of Reorganization
Proposed by the Debtor and the Official Committee of
Unsecured Creditors, incorporated by reference to the
Company's Registration Statement on Form 10-SB filed with
the Securities and Exchange Commission on December 20, 1999,
File No. 0-30444.
2.2 First Modified Joint Plan of Reorganization Proposed by the
Debtor and the Official Committee of Unsecured Creditors
dated May 13, 1997, as amended July 22, 1997, incorporated
by reference to the Company's Registration Statement on Form
10-SB filed with the Securities and Exchange Commission on
December 20, 1999, File No. 0-30444.
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2.3 Amended Disclosure Statement accompanying First Modified
Joint Plan of Reorganization Proposed by the Debtor and the
Official Committee of Unsecured Creditors dated May 13,
1997, as amended July 22, 1997, incorporated by reference to
the Company's Registration Statement on Form 10-SB filed
with the Securities and Exchange Commission on December 20,
1999, File No. 0-30444.
2.4 Share Purchase Agreement between Sports Group International,
Inc. and Surf City Acquisition Corporation II dated March
15, 1999, incorporated by reference to the Company's
Registration Statement on Form 10-SB filed with the
Securities and Exchange Commission on December 20, 1999,
File No. 0-30444.
2.5 Membership Interest Purchase Agreement between Sports Group
International, Inc. and Apache Peak Capital, L.LC., dated
March 12, 1999, incorporated by reference to the Company's
Registration Statement on Form 10-SB filed with the
Securities and Exchange Commission on December 20, 1999,
File No. 0-30444.
2.6 Share Purchase Agreement between Sports Group International,
Inc., Ziad S. Dalal and Selman Systems, Inc. dated May 21,
1999, incorporated by reference to the Company's
Registration Statement on Form 10-SB filed with the
Securities and Exchange Commission on December 20, 1999,
File No. 0-30444.
2.7 Stock Purchase Agreement between Selman Systems, Inc.,
Kenneth L. Musgrave, Ltd., Tony Condor and Larry Pearce
dated May 21, 1999, incorporated by reference to the
Company's Registration Statement on Form 10-SB filed with
the Securities and Exchange Commission on December 20, 1999,
File No. 0-30444.
3.1 Amended and Restated Articles of Incorporation of Sports
Group International, Inc., incorporated by reference to the
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Company's Registration Statement on Form 10-SB filed with
the Securities and Exchange Commission on December 20, 1999,
File No. 0-30444.
3.2 Bylaws of Sports Group International, Inc., incorporated by
reference to the Company's Registration Statement on Form
10-SB filed with the Securities and Exchange Commission on
December 20, 1999, File No. 0-30444.
4.1 Promissory Note with United Texas Bank, incorporated by
reference to the Company's Registration Statement on Form
10-SB filed with the Securities and Exchange Commission on
December 20, 1999, File No. 0-30444.
4.2 Bank One Promissory Note, incorporated by reference to the
Company's Registration Statement on Form 10-SB filed with
the Securities and Exchange Commission on December 20, 1999,
File No. 0-30444.
4.3 Promissory Note between SCAC and the Petersen Trust,
incorporated by reference to the Company's Registration
Statement on Form 10-SB filed with the Securities and
Exchange Commission on December 20, 1999, File No. 0-30444.
4.4 Consent and Waiver of Terms of Series A Preferred Stock,
incorporated by reference to the Company's Registration
Statement on Form 10-SB filed with the Securities and
Exchange Commission on December 20, 1999, File No. 0-30444.
10.1 Sports Group International, Inc.'s 1999 Stock Option Plan,
incorporated by reference to the Company's Registration
Statement on Form 10-SB filed with the Securities and
Exchange Commission on December 20, 1999, File No. 0-30444.
10.2 Employment Agreement between Mr. Kevin A. Blackwell and
Sports Group International, Inc. dated October 1, 1999,
incorporated by reference to the Company's Registration
Statement on Form 10-SB filed with the Securities and
Exchange Commission on December 20, 1999, File No. 0-30444.
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10.3 Employment Agreement between Mr. David A. Guarino and Sports
Group International, Inc. dated October 1, 1999,
incorporated by reference to the Company's Registration
Statement on Form 10-SB filed with the Securities and
Exchange Commission on December 20, 1999, File No. 0-30444.
10.4 Series B Preferred Stock and Warrant Purchase Agreement
between Sports Group International, Inc., Robert E. Petersen
and Margaret Petersen dated May 20, 1999, incorporated by
reference to the Company's Registration Statement on Form
10-SB filed with the Securities and Exchange Commission on
December 20, 1999, File No. 0-30444.
10.5 Warrant to purchase 1,000,000 shares of the Company's Common
Stock, incorporated by reference to the Company's
Registration Statement on Form 10-SB filed with the
Securities and Exchange Commission on December 20, 1999,
File No. 0-30444.
10.6 Master Franchise Agreement between Surf City Squeeze
Franchise Corp. and 1238176 Ontario, Inc. dated July 7,
1998, incorporated by reference to the Company's
Registration Statement on Form 10-SB filed with the
Securities and Exchange Commission on December 20, 1999,
File No. 0-30444.
10.7 Indemnification Agreement for Kathryn Blackwell,
incorporated by reference to the Company's Registration
Statement on Form 10-SB filed with the Securities and
Exchange Commission on December 20, 1999, File No. 0-30444.
10.8 Indemnification Agreement for Kevin Blackwell, incorporated
by reference to the Company's Registration Statement on Form
10-SB filed with the Securities and Exchange Commission on
December 20, 1999, File No. 0-30444.
15
<PAGE>
10.9 Indemnification Agreement for David Guarino, incorporated by
reference to the Company's Registration Statement on Form
10-SB filed with the Securities and Exchange Commission on
December 20, 1999, File No. 0-30444.
10.10 Indemnification Agreement for Robert Corliss, incorporated
by reference to the Company's Registration Statement on Form
10-SB filed with the Securities and Exchange Commission on
December 20, 1999, File No. 0-30444.
10.11 Indemnification Agreement for Don Plato, incorporated by
reference to the Company's Registration Statement on Form
10-SB filed with the Securities and Exchange Commission on
December 20, 1999, File No. 0-30444.
10.12 Compromise Settlement and Non-Modification Agreement between
Sports Group International, Inc., Selman Systems, Inc., and
Ziad S. Dalal, dated February 1, 2000, incorporated by
reference to the Company's Amendment No. 1 to its Form
10-SB/A Registration Statement filed with the Securities and
Exchange Commission on February 16, 2000.
11* Computation of Per Share Earnings - Located in the September
30, 2000 Statement of Operations filed herewith on page 4.
21 Subsidiary Information. (See Chart), incorporated by
reference to the Company's Registration Statement on Form
10-SB filed with the Securities and Exchange Commission on
December 20, 1999, File No. 0-30444.
27* Financial Data Schedule.
----------
* Filed herewith.
(b) Reports on Form 8-K
NONE
16
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SPORTS GROUP INTERNATIONAL, INC.
(Registrant)
By: /s/ Kevin Blackwell Date: November 13, 2000
---------------------------------
Kevin Blackwell
President, CEO, and Director
By: /s/ David Guarino Date: November 13, 2000
---------------------------------
David Guarino
Vice President, Chief Financial
Officer, and Director (Principal
Financial and Accounting Officer)
17
