SOUTHERN GROUP INTERNATIONAL INC
10SB12G/A, 2000-09-27
NON-OPERATING ESTABLISHMENTS
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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549




                                   FORM 10-SB
                                 Amendment No.5




                   GENERAL FORM FOR REGISTRATION OF SECURITIES
                            OF SMALL BUSINESS ISSUERS

        Under Section 12(b) or (g) of the Securities Exchange Act of 1934


                       Southern Group International, Inc.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its charter)


        Florida                                                  65-06001272
-------------------------------                              -------------------
(State or other jurisdiction of                                (IRS Employer
Incorporation or organization)                               Identification No.)



                      69 Mall Drive, Commack, NY 11725
               ---------------------------------------------------
               (Address of principal executive offices) (Zip code)


                    Issuer's telephone number (631) 543-2800


           Securities to be registered under Section 12(b) of the Act:

Title of each class                         Name of each exchange on which
to be so registered                         each class is to be registered
-------------------                         ------------------------------
      None                                                 N/A



           Securities to be registered under Section 12(g) of the Act:

                         Common Stock, $.0001 par value
                         ------------------------------
                                (Title of class)


<PAGE>



                 Southern Group International, Inc. Form 10-SB

Table of Contents                                                         Page
-----------------                                                         ----
                                     Part I

Item 1.  Description of Business                                            1

Item 2.  Management's Discussion and Analysis or Plan of Operations        17

Item 3.  Description of Property                                           18

Item 4.  Security Ownership of Certain Beneficial Owners and Management    18

Item 5.  Directors, Executive Officers, Promoters, and Control Persons.    20

Item 6.  Executive Compensation                                            21

Item 7. Description for Officers, Directors, Promoters, or Affiliates      21

Item 8.  Description of Securities                                         22

                                    Part II

Item 1.  Market Price and Dividends on the Registrant's Common             23
 Equity and other Shareholder Matters.

Item 2.  Legal Proceedings                                                 23

Item 3.  Changes in and Disagreements with Accountants.                    24

Item 4.  Recent Sales of Unregistered Securities                           24

Item 5.  Indemnification of Directors and Officers                         25

Item 6. Signature Page of officers of the Company                          22

                                    Part F/S

Exhibit 1.   Independent Auditors Report and Financial Statements         F-1

Exhibit 2.   2.1 Articles of Incorporation
             2.2 By-Laws of the Company

                                        i



<PAGE>



PART 1

Item 1.  Description of Business.

     Southern  Group  International,  Inc. a Florida  corporation  ("SGI" or the
"Company") was incorporated on August 10, 1995 as Future Vision Products,  Inc..
On August 11, 1995 the company  changed  its name to Hydrogen  Technology,  Inc.
with no change of control or ownership.  On January 4, 1996,  present management
took   control  of  the  Company   and  changed  its  name  to  Southern   Group
International,  Inc.("SGI"). SGI is in the development stage with no significant
assets or liabilities and has been essentially  inactive,  since inception.  Its
only  activities  have been  organizational  ones,  directed at  developing  its
business plan and  conducting a limited search for business  opportunities.  The
Company has not commenced  commercial  operations.  The Company has no full-time
employees and owns no real estate or personal property.

Forward-Looking Statement

         This registration Statement contains certain forward-looking statements
and information relating to Southern Group International, Inc. that are based on
the beliefs of its  management as well as  assumptions  made by and  information
currently  available  to its  management.  When used in this  report,  the words
"anticipate",  "believe',  "expect", "intend", "plan" and similar expression, as
they  relate to  Southern  Group  International,  Inc.  to its  management,  are
intended  to identify  forward  looking  statements.  These  statements  reflect
management's  current  view of Southern  Group  International,  Inc.  concerning
future events and are subject to certain risks,  uncertainties  and assumptions,
including  among many others:  a general  economic  downturn;  a downturn in the
securities  market; a general lack of interest for any reason in going public by
means of transactions  involving public blank check companies;  federal or state
laws  or  regulations  having  an  adverse  effect  on  blank  check  companies,
Securities  and exchange  Commission  regulations  which  affect  trading in the
securities of "penny stocks," and other risks and uncertainties.

         Should  any of these  risks or  uncertainties  materialize,  or  should
underlying assumptions prove incorrect,  actual results may vary materially form
those  described in this report as anticipated,  estimated or expected.  Readers
should realize that Southern  Group  International,  Inc. is in the  development
stage, with only very limited assets, and that for Southern Group International,
Inc. to succeed  requires  that it either  originate a successful  business (for
which it lacks the  funds) or  acquire a  successful  business.  Southern  Group
International,  Inc.  realization  of its  business  aims as stated  herein will
depend  in the near  future  principally  on the  successful  completion  of its
acquisition of a business, as discussed below.

Exchange Act Registration

         The Company has elected to initiate the process of voluntarily becoming
a reporting  company under the Securities  Exchange Act of 1934 (the "'34 Act"),
by filing this Form 10-SB registration  statement.  Following the effective date
of this registration statement,  the Company will be required to comply with the
periodic reporting  requirements of the '34 Act. If the Company's  obligation to
file periodic  reports under the '34 Act is  suspended,  the Company  intends to
continue to file such reports on a voluntary basis.


                                       1
<PAGE>


         The Company is a "blind pool" or "blank check" Company,  whose business
plan is to seek, investigate,  and if warranted,  acquire one or more properties
or  businesses,  and to pursue  other  related  activities  intended  to enhance
shareholder  value.  The  acquisition of a business  opportunity  may be made by
purchaser, merger, and exchange of stock, or otherwise, and may encompass assets
or a business entity, such as a corporation,  joint venture, or partnership. The
Company has very limited  capital,  and it is unlikely  that the Company will be
able to take advantage of more than one such business  opportunity.  The Company
intends to seek opportunities demonstrating the potential of long-term growth as
opposed to short-term  earnings.  However,  at the present time, the Company has
not identified  any business  opportunity  that it plans to pursue,  nor has the
Company  reached  any  agreement  or  definitive  understanding  with any person
concerning  an  acquisition.  Presently  the  Company's  stock is trading on the
National Quotation Pink Sheets.

         Alternatively,  the Company may be referred to as a "shell corporation"
and once trading on the NASD  Bulletin  Board,  a "trading and  reporting  shell
corporation."  Shell  corporations  have zero or nominal assets and typically no
stated or contingent  liabilities.  Private companies wishing to become publicly
trading  may  wish to  merge  with a shell  (a  "reverse  merger")  whereby  the
shareholders of the private  Company become the majority of the  shareholders of
the combined Company. The private Company may purchase for cash all or a portion
of the  common  share of the  shell  corporation  from its  major  stockholders.
Typically,  the Board and officers of the private  Company  become the new Board
and officers of the combined  Company and often the name of the private  Company
becomes the name of the combined Company.

         Prior  to the  effective  date of this  registration  statement,  it is
anticipated   that  the   Company's   officers   and   directors   will  contact
broker-dealers  and other persons with whom they are acquainted who are involved
with corporate finance matters to advise them of the Company's  existence and to
determine if any  companies or  businesses  that they  represent  have a general
interest in considering a merger or acquisition with a blind pool or blank check
or shell entity. No direct  discussions  regarding the possibility of merger are
expected to occur until after the effective date of this registration statement.
No  assurance  can be given that the Company  will be  successful  in finding or
acquiring a desirable  business  opportunity,  given the limited  funds that are
expected to be available  for  acquisitions.  Furthermore,  no assurance  can be
given  that  any  acquisition,  which  does  occur,  will be on  terms  that are
favorable to the Company or its current stockholders.


                                       2
<PAGE>


         The  Company's  search will be directed  toward small and  medium-sized
enterprises,  which have a desire to become  public  corporations.  In  addition
these  enterprises  may wish to satisfy,  either  currently or in the reasonably
near future,  the minimum tangible asset  requirement in order to qualify shares
for trading on NASDAQ or on an exchange  such as the  American  Stock  Exchange.
(See  "Investigation  and  Selection  of Business  Opportunities").  The Company
anticipates that the business  opportunities  presented to it will (i) either be
in the process of formation,  or be recently  organized  with limited  operating
history or a history of losses  attributable  to  under-capitalization  or other
factors; (ii) experiencing financial or operating difficulties; (iii) be in need
of funds to develop new products or services or to expand into a new market,  or
have plans for rapid expansion through acquisition of competing businesses; (iv)
or other  similar  characteristics.  The  Company  intends  to  concentrate  its
acquisition  efforts  on  properties  or  businesses  that  it  believes  to  be
undervalued  or that it believes  may realize a  substantial  benefit from being
publicly  owned.  Given the above  factors,  investors  should  expect  that any
acquisition  candidate may have little or no operating history,  or a history of
losses or low profitability.

         The  Company  does not propose to  restrict  its search for  investment
opportunities  to  any  particular  geographical  area  or  industry,  and  may,
therefore,  engage in  essentially  any  business,  to the extent of its limited
resources. This included industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical, communications and
others. The Company's  discretion in the selection of business  opportunities is
unrestricted,  subject  to the  availability  of  such  opportunities,  economic
conditions, and other factors.

         As a consequence of this  registration of its  securities,  any entity,
which has an interest in being  acquired  by, or merging  into the  Company,  is
expected to be an entity that desires to become a public Company and establish a
public trading market for its  securities.  In connection  with such a merger or
acquisition, it is highly likely that an amount of stock constituting control of
the  Company  would  either be issued by the  Company or be  purchased  from the
current  principal  stockholders  of the Company by the acquiring  entity or its
affiliates.  If stock is purchased from the current principal stockholders,  the
transaction  is very  likely to be a private  transaction  rather  than a public
distribution of securities, but is also likely to result in substantial gains to
the current  principal  stockholders  relative to their  purchase price for such
stock.  In the  Company's  judgment,  none of the officers and  directors  would
thereby become an  "underwriter"  within the meaning of the Section 2(11) of the
Securities  Act of 1933,  as  amended  as long as the  transaction  is a private
transaction  rather  than a public  distribution  of  securities.  The sale of a
controlling  interest by certain  principal  shareholders  of the Company  would
occur at a time when  minority  stockholders  are  unable to sell  their  shares
because of the lack of a public market for such shares.

         Depending upon the nature of the transaction,  the current officers and
directors of the Company may resign their  management  and board  positions with
the Company in connection  with a change of control or acquisition of a business
opportunity (See "Form of Acquisition," below, and "Risk Factors - The Company -
Lack of  Continuity of  Management").  In the event of such a  resignation,  the
Company's  current  management would thereafter have no control over the conduct
of the Company's business.


                                       3
<PAGE>


         It  is  anticipated  that  business  opportunities  will  come  to  the
Company's attention from various sources,  including its officers and directors,
its other stockholders, professional advisors such as attorneys and accountants,
securities  broker-dealers,   venture  capitalists,  members  of  the  financial
community,  and others who may present unsolicited proposals. The Company has no
plan,  understandings,  agreements,  or commitments with any individual for such
person to act as a finder of opportunities for the Company.

         The  Company  does not  foresee  that it will  enter  into a merger  or
acquisition  transaction  with any business with which its officers or directors
are currently affiliated.  Should the Company determine in the future,  contrary
to the forgoing  expectations,  that a transaction with an affiliate would be in
the best  interests  of the  Company  and its  stockholders,  the Company is, in
general, permitted by Florida law to enter into a transaction if:

 The material facts as to the  relationship  or interest of the affiliate and as
to the  contract  or  transaction  are  disclosed  or are  known to the Board of
Directors,  and the Board in good faith  authorizes,  approves or  ratifies  the
contract  or  transaction  by  the  affirmative   vote  of  a  majority  of  the
disinterested directors, even though the disinterested directors constitute less
than a quorum; or

The material facts as to the relationship or interest of the affiliate and as to
the  contract or  transaction  are  disclosed  or are known to the  stockholders
entitled to vote  thereon,  and the  contract  or  transaction  is  specifically
authorized, approved or ratified in good faith by vote of the stockholders; or

The  contract  or  transaction  is fair as to the  Company  as of the time it is
authorized, approved or ratified, by the Board of Directors or the stockholders.

Investigation and Selection of Business Opportunities

         To a large extent,  a decision to  participate  in a specific  business
opportunity may be made upon  management's  analysis of the quality of the other
Company's  management  and  personnel,  the  anticipated  acceptability  of  new
products  or  marketing  concepts,  the  merit  of  technological  changes,  the
perceived benefit the business  opportunity will derive from becoming a publicly
held entity, and numerous other factors which are difficult,  if not impossible,
to analyze through the application of any objective criteria. In many instances,
it  is  anticipated  that  the  historical  operations  of a  specific  business
opportunity  may not  necessarily  be indicative of the potential for the future
because of a variety of factors,  including,  but not  limited to, the  possible
need  to  expand  substantially,  shift  marketing  approaches,  change  product
emphasis,  change or  substantially  augment  management,  raise capital and the
like.


                                       4
<PAGE>


         It is anticipated  that the Company will not be able to diversify,  but
will  essentially  be limited to the  acquisition  of one  business  opportunity
because of the Company's limited financing.  This lack of  diversification  will
not permit the Company to offset potential losses from one business  opportunity
against  profits  from  another,  and should be  considered  an  adverse  factor
affecting any decision to purchase the Company's securities.

         Certain  types of business  acquisition  transactions  may be completed
without any  requirement  that the Company first submit the  transaction  to the
stockholders  for  their  approval.  In the event the  proposed  transaction  is
structured in such a fashion that stockholder approval is not required,  holders
of the  Company's  securities  (other  than  principal  stockholders  holding  a
controlling  interest)  should not  anticipate  that they will be provided  with
financial  statements or any other  documentation prior to the completion of the
transaction.   Other  types  of  transactions  require  prior  approval  of  the
stockholders.

         In the event a proposed  business  combination or business  acquisition
transaction is structured in such a fashion that prior  stockholder  approval is
necessary,  the  Company  will be  required  to  prepare a Proxy or  Information
Statement describing the proposed  transaction,  file it with the Securities and
Exchange  Commission  for  review  and  approval,  and  mail a copy of it to all
Company  stockholders  prior to holding a  stockholders  meeting for purposes of
voting  on the  proposal.  Minority  shareholders  who do not vote in favor of a
proposed  transaction  will then have the right, in the event the transaction is
approved  by  the  required  number  of  stockholders,   to  exercise  statutory
dissenters' rights and elect to be paid the fair value of their shares.

         The analysis of business  opportunities  will be undertaken by or under
the  supervision  of the  Company's  officers  and  directors,  none of whom are
professional business analysts (See "Management"). Although there are no current
plans to do so, Company management might hire an outside consultant to assist in
the  investigation  and  selection  of business  opportunities,  and might pay a
finder's fee.  Since Company  management has no current plans to use any outside
consultants or advisors to assist in the investigation and selection of business
opportunities,  no policies have been adopted  regarding use of such consultants
or advisors,  the criteria to be used in selecting such consultants or advisors,
the  services to be provided,  the term of service,  or the total amount of fees
that may be paid.  However,  because of the limited resources of the Company, it
is likely that any such fee the Company agrees to pay would be paid in stock and
not in cash.

         Otherwise,  in  analyzing  potential  business  opportunities,  Company
management anticipates that it will consider,  among other things, the following
factors:

Potential for growth and profitability, indicated by new technology,
anticipated market expansion, or new products;

The Company's  perception of how any  particular  business  opportunity  will be
received by the investment community and by the Company's stockholders;


                                       5
<PAGE>


Whether,  following the business  combination,  the  financial  condition of the
business  opportunity  would be, or would  have a  significant  prospect  in the
foreseeable  future of  becoming,  sufficient  to enable the  securities  of the
Company  to  qualify  for  listing on an  exchange  or on a  national  automated
securities quotation system, such as NASDAQ, so as to permit the trading of such
securities  to be exempt  from the  requirements  of Rule  15g-9  adopted by the
Securities and Exchange Commission (See "Risk Factors - The Company - Regulation
of Penny Stocks").

Capital  requirements  and  anticipated  availability  of required  funds, to be
provided  by the  Company or from  operations,  through  the sale of  additional
securities,  through  joint  ventures  or  similar  arrangements,  or from other
sources;

The extent to which the business opportunity can be advanced;

Competitive  position  as  compared  to  other  companies  of  similar  size and
experience  within the  industry  segment as well as within  the  industry  as a
whole;

Strength and diversity of existing management  or management  prospects that are
scheduled for recruitment;

The cost of participation by the Company  as compared  to the perceived tangible
and intangible values and potential; and

The accessibility of required management  expertise,  personnel,  raw materials,
services, professional assistance, and other required items.

         In regard to the  possibility  that the  shares  of the  Company  would
qualify  for  listing on NASDAQ,  the  current  standards  for  initial  listing
include, among other requirements, that the Company (1) have net tangible assets
of at least $4.0 million,  or a market  capitalization of $50.0 million,  or net
income of not less that $0.75 million in its latest fiscal year or in two of the
last three fiscal years; (2) have a public float (i.e., shares that are not held
by any officer, director or 10% stockholder) of at least 1.0 million shares; (3)
have a  minimum  bid  price of at least  $4.00;  (4) have at least 300 round lot
stockholders (i.e., stockholders who own not less than 100 shares); and (5) have
an operating history of at least one year or have a market  capitalization of at
least $50 million.  Many, and perhaps most, of the business  opportunities  that
might be  potential  candidates  for a  combination  with the Company  would not
satisfy the NASDAQ listing criteria.

         No one of the  factors  described  above  will  be  controlling  in the
selection of a business opportunity,  and management will attempt to analyze all
factors  appropriate to each  opportunity  and make a  determination  based upon
reasonable  investigative  measures and available  data.  Potentially  available
business  opportunities  may occur in many  different  industries and at various
stages  of  development,  all  of  which  will  make  the  task  of  comparative
investigation and analysis of such business  opportunities  extremely  difficult
and complex.  Potential  investors must recognize that, because of the Company's
limited capital available for investigation and management's  limited experience
in  business  analysis,  the Company may not  discover  or  adequately  evaluate
adverse facts about the opportunity to be acquired.


                                       6
<PAGE>


         The Company is unable to predict when it may  participate in a business
opportunity.  It expects,  however,  that the analysis of specific proposals and
the selection of a business opportunity may take several months or more.

         Prior to making a decision to  participate  in a business  opportunity,
the Company will  generally  request that it be provided with written  materials
regarding the business  opportunity  containing as much relevant  information as
possible.  Including,  but not  limited  to,  such  items  as a  description  of
products,   services  and  Company  history;   management   resumes;   financial
information; available projections, with related assumptions upon which they are
based; an explanation of proprietary products and services; evidence of existing
patents,  trademarks,  or service marks, or rights thereto; present and proposed
forms of compensation to management;  a description of transactions between such
Company and its affiliates during the relevant periods; a description of present
and required  facilities;,  an analysis of risks and competitive  conditions;  a
financial  plan  of  operation  and  estimated  capital  requirements;   audited
financial  statements,  or  if  they  are  not  available,  unaudited  financial
statements, together with reasonable assurance that audited financial statements
would be able to be produced within a reasonable period of time not to exceed 60
days following completion of a merger or acquisition transaction; and the like.

         As  part  of  the  Company's  investigation,  the  Company's  executive
officers and directors may meet  personally  with  management and key personnel,
may visit and  inspect  material  facilities,  obtain  independent  analysis  or
verification of certain information provided, check references of management and
key personnel,  and take other reasonable  investigative measures, to the extent
of the Company's limited financial resources and management expertise.

         It is possible that the range of business  opportunities  that might be
available  for  consideration  by the Company  could be limited by the impact of
Securities and Exchange  Commission  regulations  regarding purchase and sale of
"penny stocks." The regulations  would affect,  and possibly impair,  any market
that might develop in the Company's  securities  until such time as they qualify
for  listing  on NASDAQ or on an  exchange  which  would make them  exempt  from
applicability of the "penny  stock" regulations.  See "Risk Factors - Regulation
of Penny Stocks."

         Company  management  believes that various types of potential merger or
acquisition  candidates might find a business combination with the Company to be
attractive.  These include  acquisition  candidates  desiring to create a public
market for their shares in order to enhance liquidity for current  stockholders,
acquisition  candidates  which have long-term  plans for raising capital through
public sale of  securities  and believe that the possible  prior  existence of a
public  market  for  their  securities  would  be  beneficial,  and  acquisition
candidates  which  plan  to  acquire   additional  assets  through  issuance  of
securities rather than for cash, and believe that the possibility of development
of a public market for their  securities  will be of assistance in that process.
Acquisition  candidates,  which have a need for an immediate cash infusion,  are
not likely to find a potential  business  combination  with the Company to be an
attractive alternative.


                                       7
<PAGE>


Form of Acquisition

         It is  impossible  to  predict  the  manner  in which the  Company  may
participate in a business opportunity.  Specific business  opportunities will be
reviewed  as well as the  respective  needs and  desires of the  Company and the
promoters of the opportunity  and, upon the basis of the review and the relative
negotiating  strength of the Company and such promoters,  the legal structure or
method deemed by management to be suitable will be selected.  Such structure may
include, but is not limited to leases,  purchase and sale agreements,  licenses,
joint ventures and other contractual arrangements.  The Company may act directly
or indirectly through an interest in a partnership, corporation or other form of
organization.  Implementing such structure may require the merger, consolidation
or  reorganization  of the Company with other  corporations or forms of business
organization.  In  addition,  the present  management  and  stockholders  of the
Company  most likely will not have  control of a majority of the voting stock of
the Company following a merger or reorganization  transaction. As part of such a
transaction,  the Company's  existing directors may resign and new directors may
be appointed without any vote by stockholders.

         It is likely  that the Company  will  acquire  its  participation  in a
business opportunity through the issuance of Common Stock or other securities of
the Company.  Although the terms of any such transaction cannot be predicted, it
should be noted that in  certain  circumstances  the  criteria  for  determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal  Revenue  Code of 1986 as  amended,  depends  upon the  issuance to the
stockholders of the acquired  Company of a controlling  interest  (i.e.,  80% or
more) of the common stock of the combined  entities  immediately  following  the
reorganization.  If a transaction  were  structured  to take  advantage of these
provisions  rather than other "tax free" provisions  provided under the Internal
Revenue Code, the Company's current  stockholders  would retain in the aggregate
20% or less of the total  issued and  outstanding  shares.  This could result in
substantial  additional dilution in the equity of those who were stockholders of
the Company prior to such reorganization. Any such issuance of additional shares
might also be done simultaneously with a sale or transfer of shares representing
a  controlling  interest in the Company by the current  officers,  directors and
principal stockholders. See "Description of Business - General."

         It is anticipated that any new securities issued in any  reorganization
would be issued in reliance upon one or more exemptions from registration  under
applicable  federal and state securities laws to the extent that such exemptions
are available.  In some  circumstances,  however, as a negotiated element of the
transaction,  the Company may agree to register  such  securities  either at the
time the  transaction is  consummated  or under certain  conditions at specified
times thereafter.  The issuance of substantial  additional  securities and their
potential  sale into any  trading  market  that might  develop in the  Company's
securities may have a depressive effect upon such market.


                                       8
<PAGE>


         The Company will  participate in a business  opportunity only after the
negotiation  and  execution of a written  agreement.  Although the terms of such
agreement  cannot  be  predicted,  generally  such an  agreement  would  require
specific  representations and warranties by all of the parties thereto,  specify
certain events of default,  detail the terms of closing and the conditions which
must be satisfied by each of the parties thereto prior to such closing,  outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.

         As a general  matter,  the  Company  anticipates  that it,  and/or  its
principal  stockholders  will enter into a letter of intent with the management,
principals or owners of a prospective  business  opportunity  prior to signing a
binding  agreement.  Such a letter  of  intent  will set  forth the terms of the
proposed  acquisition  but will not bind any of the  parties to  consummate  the
transaction.  Execution  of a letter of intent  will by no means  indicate  that
consummation  of an acquisition is probable.  Neither the Company nor any of the
other  parties  to the  letter  of  intent  will  be  bound  to  consummate  the
acquisition  unless and until a definitive  agreement is executed.  Even after a
definitive agreement is executed,  it is possible that the acquisition would not
be  consummated  should any party  elect to exercise  any right  provided in the
agreement to terminate it on specific grounds.

         It  is  anticipated  that  the   investigation  of  specific   business
opportunities   and  the   negotiation,   drafting  and  execution  of  relevant
agreements,  disclosure documents and other instruments will require substantial
management time and attention and substantial  costs for accountants,  attorneys
and others.  If a decision  is made not to  participate  in a specific  business
opportunity,  the  costs  incurred  in the  related  investigation  would not be
recoverable.  Moreover,  because many  providers  of goods and services  require
compensation at the time or soon after the goods and services are provided,  the
inability of the Company to pay until an  indeterminate  future time may make it
impossible to produce goods and services.

Investment Company Act and Other Regulation

         The Company may  participate  in a business  opportunity by purchasing,
trading or selling  the  securities  of such  business.  The  Company  does not,
however,  intend to  engage  primarily  in such  activities.  Specifically,  the
Company intends to conduct its activities so as to avoid being  classified as an
"investment  Company" under the Investment  Company Act of 1940 (the "Investment
Act"),  and  therefore  to  avoid  application  of the  costly  and  restrictive
registration  and other  provisions of the Investment  Act, and the  regulations
promulgated thereunder.

         The  Company's  plan of  business  may  involve  changes in its capital
structure,  management,  control and business,  especially if it consummates the
reorganization  as  discussed  above.  Each of these areas is  regulated  by the
Investment Act, in order to protect purchasers of investment Company securities.
Since the Company will not register as an investment Company,  stockholders will
not be afforded these protections.


                                       9
<PAGE>


Competition

         The Company expects to encounter substantial competition in its efforts
to locate attractive business combination opportunities.  The competition may in
part come from business development companies,  venture capital partnerships and
corporations, small investment companies, brokerage firms, and the like. Some of
these  types of  organizations  are likely to be in a better  position  than the
Company to obtain access to attractive  business  acquisition  candidates either
because they have greater experience, resources and managerial capabilities than
the Company,  because they are able to offer immediate access to limited amounts
of cash,  or for a variety of other  reasons.  The Company also will  experience
competition  from other public  "blind pool"  companies,  some of which may also
have funds available for use by an acquisition candidate.

Administrative Offices


         The Company  currently  maintains  a mailing  address at 69 Mall Drive,
Commack, NY 11725. The Company's telephone number is (631) 543-2800.  Other than
this mailing address,  the Company does not currently  maintain any other office
facilities,  and does not anticipate the need for maintaining  office facilities
at any time in the  foreseeable  future.  The Company pays no rent or other fees
for the use of the mailing address.


Employees

         The Company is in the development stage and currently has no employees.
Management of the Company expects to use consultants,  attorneys and accountants
as necessary,  and does not anticipate a need to engage any full-time  employees
so long as it is seeking and  evaluating  business  opportunities.  The need for
employees  and their  availability  will be  addressed  in  connection  with the
decision  whether  or  not  to  acquire  or  participate  in  specific  business
opportunities.

Risk Factors

         Conflicts of Interest.  Certain conflicts of interest may exist between
the Company and its officers and directors.  They have other business  interests
to which they currently devote attention, and are expected to continue to do so.
As a result,  conflicts of interest may arise that can be resolved  only through
their exercise of judgement in a manner which is consistent with their fiduciary
duties to the Company. See "Management," and "Conflicts of Interest."

         It  is  anticipated  that  the  Company's  principal  shareholders  may
actively  negotiate or  otherwise  consent to the purchase of a portion of their
common stock as a condition  to, or in  connection  with,  a proposed  merger or
acquisition  transaction.  In this process, the Company's principal shareholders
may consider their own personal  pecuniary benefit rather than the best interest
of  other  Company  shareholders.  Depending  upon  the  nature  of  a  proposed
transaction,  Company shareholders other than the principal shareholders may not
be afforded the  opportunity to approve or consent to a particular  transaction.
See "Conflicts of Interest."


                                       10
<PAGE>


Possible Need for Additional Financing.

         The Company has very limited funds, and such funds, may not be adequate
to take advantage of any available business opportunities. Even if the Company's
currently available funds prove to be sufficient to pay for its operations until
it is able to acquire an interest in, or complete a transaction with, a business
opportunity,  such funds will clearly not be  sufficient to enable it to exploit
the opportunity. Thus, the ultimate success of the Company will depend, in part,
upon its availability to raise additional capital. In the event that the Company
requires modest amounts of additional capital to fund its operations until it is
able to complete a business acquisition or transaction, such funds, are expected
to be  provided  by the  principal  shareholders.  However,  the Company has not
investigated  the   availability,   source,  or  terms  that  might  govern  the
acquisition of the additional  capital which is expected to be required in order
to exploit a business  opportunity,  and will not do so until it has  determined
the level of need for such  additional  financing.  There is no  assurance  that
additional  capital will be available from any source or, if available,  that it
can be  obtained on terms  acceptable  to the  Company.  If not  available,  the
Company's  operations  will be limited to those  that can be  financed  with its
modest capital.

Regulation. of Penny Stocks.

         The Company's  securities,  when available for trading, will be subject
to a Securities and Exchange  Commission rule that impose special sales practice
requirements upon  broker-dealers who sell such securities to persons other than
established  customers or  accredited  investors.  For purpose of the rule,  the
phrase "accredited  investor" means, in general terms,  institutions with assets
in  excess  of  $5,000,000,  or  individuals  having a net  worth in  excess  of
$1,000,000  or having an annual  income that  exceeds  $200,000  (or that,  when
combined with a spouse's income, exceeds $300,000).  For transactions covered by
the rule, the broker dealer must make special suitability  determination for the
purchaser and receive the purchasers  written agreement to the transaction prior
to the sale. Consequently,  the rule may affect the ability of broker-dealers to
sell the Company's  securities  and also may affect the ability of purchasers of
the  Company's  securities  to sell such  securities  in any  market  that might
develop therefor.

         In  addition,  the  Securities  and Exchange  Commission  has adopted a
number of rules to regulate "penny stocks." Such rules include Rule 3a51-1 under
the Securities Act of 1933, an Rules 15g-1,  15g-2,  15g-3, 15g-4, 15g-5, 15g-6,
and 15g-7 under the  Securities  Exchange Act of 1934,  as amended.  Because the
securities of the Company may  constitute  "penny  stocks" within the meaning of
the rules, the rules would apply to the Company and to its securities. The rules
may  further  affect the  ability of the  Company's  shareholders  to sell their
shares in any public market, which might develop.

Shareholders  should  be  aware  that,  according  to  Securities  and  Exchange
Commission  Release No.  34-29093,  the market for penny  stocks has suffered in
recent years form patterns of fraud and abuse. Such patterns include (I) control
of the market for the  security  by one or a few  broker-dealers  that are often
related  to  the  promoter  or  issuer;  (ii)  manipulation  of  prices  through
prearranged  matching  of  purchases  and sales and false and  misleading  press
releases;  (iii) "boiler room" practices  involving  high-pressure sales tactics
and unrealistic price projections by inexperienced sales persons; (iv) excessive
and undisclosed bid-ask differential and markups by selling broker-dealers;  and
(v) the wholesale dumping of the same securities by promoters and broker dealers
after prices have been manipulated to a desired level,  along with the resulting
inevitable  collapse of those prices and with consequent  investor  losses.  The
Company's  management is aware of the abuses that have occurred  historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker  dealers who  participate  in
the market,  management will strive within the confines of practical limitations
to prevent the  described  patterns form being  established  with respect to the
Company's securities.


                                       11
<PAGE>


No Operating History.

         The  Company  was formed in August 10,  1995,  as a blind pool or blank
check entity, for the purpose of registering its common stock under the 1934 Act
and  acquiring a business  opportunity.  The Company has no  operating  history,
revenues  from  operations,  or assets  other than a modest  amount of cash from
private sales of stock. The Company faces all of the risks of a new business and
the special risks inherent in the investigation,  acquisition, or involvement in
a new business opportunity.  The Company must be regarded as a new or "start-up"
venture with all of the unforeseen costs,  expenses,  problems, and difficulties
to which such ventures are subject.

No Assurance of Success or Profitability.

         There is no  assurance  that  the  Company  will  acquire  a  favorable
business  opportunity.  Even if the Company should become involved in a business
opportunity, there is no assurance that it will generate revenues or profits, or
that the market  price of the  Company's  outstanding  shares will be  increased
thereby.

Possible Business --Not Identified and Highly Risky.

         The Company has not  identified and has no commitments to enter into or
acquire a specific  business  opportunity.  As a result, it is only able to make
general  disclosures  concerning  the risks and hazards of  acquiring a business
opportunity, rather than providing disclosure with respect to specific risks and
hazards  relating to a particular  business  opportunity.  As a general  matter,
prospective  investors can expect any potential business opportunity to be quite
risky. See Item 1 " Description of Business."

Type of Business Acquired.

         The type of business to be  acquired  may be one that  desires to avoid
effecting  its  own  public  offering  and  the  accompanying  expense,  delays,
uncertainties,  and  federal  and state  requirements  which  purport to protect
investors.  Because of the Company's limited capital, it is more likely than not
that any  acquisition  by the Company will involve  other  parties whose primary
interest is the acquisition of control of a publicly  traded Company.  Moreover,
any business opportunity acquired may be currently unprofitable or present other
negative factors.


                                       12
<PAGE>


Impracticability of Exhaustive Investigation.

         The Company's limited funds and lack of full-time  management will make
it impracticable to conduct a complete and exhaustive investigation and analysis
of a  business  opportunity  before the  Company  commits  its  capital or other
resources thereto. Management decisions,  therefore, will likely be made without
detailed feasibility studies,  independent analysis, market surveys and the like
which,  if the Company had more funds  available to it, would be desirable.  The
Company will be  particularly  dependent in making  decisions  upon  information
provided by the promoter, owner, sponsor, or others associated with the business
opportunity  seeking the Company's  participation.  A significant portion of the
Company's  available funds may be expended for investigative  expenses and other
expenses   related  to   preliminary   aspects  of  completing  an   acquisition
transaction,  whether or not any business opportunity investigated is eventually
acquired.

Lack of Diversification.

         Because of the limited financial  resources that the Company has, it is
unlikely  that  the  Company  will be  able to  diversify  its  acquisitions  or
operations.  The Company's  probable  inability to diversify its activities into
more than one area will  subject the Company to economic  fluctuations  within a
particular business or industry and therefore increase the risks associated with
the Company's operations.

Need for Audited Financial Statements.

         The Company will require audited financial statements from any business
that it proposes to acquire.  Since the Company will be subject to the reporting
provisions of the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act"),  it will be  required  to include  audited  financial  statements  in its
periodical  reports for any existing business it may acquire.  In addition,  the
lack of audited financial statements would prevent the securities of the Company
from becoming  eligible for listing on NASDAQ,  the automated  quotation  system
sponsored by the  Association  of Securities  Dealers,  Inc., or on any existing
stock  exchange.  Moreover,  the lack of such financial  statements is likely to
discourage  broker-dealers from becoming or continuing to serve as market makers
in the securities of the Company. Finally, without audited financial statements,
the  Company  would  almost  certainly  be  unable to offer  securities  under a
registration  statement  pursuant to the Securities Act of 1933, and the ability
of the Company to raise capital would be  significantly  limited.  Consequently,
acquisitions  prospects  that do not have,  or are unable to provide  reasonable
assurances  that they will be able to obtain,  the required  audited  statements
would not be considered by the Company to be appropriate for acquisition.


                                       13
<PAGE>


Other Regulations

         An acquisition made by the Company may be of a business that is subject
to regulation or licensing by federal,  state, or local authorities.  Compliance
with such  regulations  and  licensing  can be expected to be a  time-consuming,
expensive process and may limit other investment opportunities of the Company.

Dependence upon Management; Limited Participation of Management.

         The  Company  will be entirely  dependant  upon the  experience  of its
officers and directors in seeking,  investigating,  and acquiring a business and
in making  decisions  regarding the Company's  operations.  It is possible that,
from time to time,  the  inability  of such  persons  to devote  their full time
attention  to the  business of the Company  could  result in a delay in progress
toward implementing its business plan. See "Management."  Because investors will
not be able to evaluate the merits of possible future  business  acquisitions by
the  Company,  they should  critically  assess the  information  concerning  the
Company's officers and directors.

Lack of Continuity in Management.

         The  Company  does not  have an  employment  agreement  with any of its
officers or  directors,  and as a result,  there is no assurance  that they will
continue to manage the Company in the future.  In connection with acquisition of
a business  opportunity,  it is likely the current officers and directors of the
Company may resign.  A decision to resign will be based upon the identity of the
business  opportunity and the nature of the transaction,  and is likely to occur
without the vote or consent of the stockholders of the Company.

Indemnification of Officers and Directors.

         The Company's articles of Incorporation provide for the indemnification
of its, directors, officers, employees, and agents, under certain circumstances,
against attorney's fees and other expenses incurred by them in any litigation to
which they become a party arising from their  association  with or activities on
behalf  of the  Company.  The  Company  will  also  bear  the  expenses  of such
litigation for any of its directors,  officers,  employees, or agents, upon such
person's  promise to repay the Company  therefor if it is ultimately  determined
that any such  person  shall not have been  entitled  to  indemnification.  This
indemnification policy could result in substantial  expenditures by the Company,
which it will be unable to recoup.


                                       14
<PAGE>


Dependence upon Outside Advisors.

         To supplement  the business  experience of its officers and  directors,
the  Company  may  be  required  to  employ   accountants,   technical  experts,
appraisers,  attorneys,  or other consultants or advisors.  The selection of any
such  advisors  will, be made by the  Company's  officers,  without any input by
shareholders. Furthermore, it is anticipated that such persons may be engaged on
an "as needed" basis without a continuing  fiduciary or other  obligation to the
Company.  In the event the officers of the Company consider it necessary to hire
outside  advisors,  they may elect to hire persons who are affiliates,  if those
affiliates are able to provide the required services.

Leveraged Transactions.

         There is a possibility  that any acquisition of a business  opportunity
by the Company may be leveraged, i.e. the Company may finance the acquisition of
the  business  opportunity  by  borrowing  against  the  assets of the  business
opportunity to be acquired,  or against the projected future revenues or profits
of the  business  opportunity.  This could  increase the  Company's  exposure to
larger losses. A business opportunity  acquired through a leveraged  transaction
is profitable only if it generates enough revenues to cover the related debt and
expenses. Failure to make payments on the debt incurred to purchase the business
opportunity could result in the loss of a portion or all of the assets acquired.
There is no assurance that any business opportunity acquired through a leveraged
transaction  will  generate  sufficient  revenues to cover the related  debt and
expenses.

Competition.

         The  search  for  potentially   profitable  business  opportunities  is
intensely  competitive.  The  Company  expects  to  be  at a  disadvantage  when
competing  with  many  firms  that  have  substantially  greater  financial  and
management  resources  and  capabilities  than the  Company.  These  competitive
conditions  will  exist  in  any  industry  in  which  the  Company  may  become
interested.

No Foreseeable Dividends.

         The Company  has not paid  dividends  on its Common  Stock and does not
anticipate paying such dividends in the foreseeable future.

Loss of Control by Present Management and Stockholders.

         In  conjunction  with  completion  of a  business  acquisition,  it  is
anticipated  that the Company will issue an amount of the  Company's  authorized
but unissued  Common Stock that  represents  the greater  majority of the voting
power and equity of the Company.  In conjunction  with such a  transaction,  the
Company's current Officers,  Directors,  and principal  shareholders  could also
sell all,  or a portion,  of their  controlling  block of stock to the  acquired
Company's  stockholders.  Such a transaction  would result in a greatly  reduced
percentage of ownership of the Company by its current shareholders. As a result,
the acquired Company's  stockholders would control the Company, and it is likely
that they would replace the Company's management with persons who are unknown to
the Company at this time.


                                       15
<PAGE>


No Public Market Exists.

         There is currently no public market for the Company's common stock, and
no assurance can be given that a market will develop or that a shareholder  will
ever be able to liquidate his investment without  considerable delay, if at all.
If a market should develop,  the price may be highly  volatile.  Factors such as
those  discussed in this "Risk  Factors"  section may have a significant  impact
upon the market price of the securities  offered hereby.  Owing to the low price
of  the  securities,   many  brokerage  firms  may  not  be  willing  to  effect
transactions in the securities.  Even if a purchasers  finds a broker willing to
effect  a  transaction  in  theses  securities,  the  combination  of  brokerage
commissions,  state  transfer  taxes,  if any, and any other  selling  costs may
exceed the selling price. Further, many leading institutions will not permit the
use of such securities as collateral for any loans.

Rule 144 Sales.

     All of the  presently  outstanding  shares of Common Stock are  "restricted
securities"  within the meaning of Rule 144 under the Securities Act of 1933, as
amended.  As restricted  shares,  these shares may be resold only pursuant to an
effective  registration statement or under the requirements of Rule 144 or other
applicable state securities laws. Rule 144 provides in essence that a person who
has held  restricted  securities  for a  prescribed  period,  may under  certain
conditions,  sell every three  months,  in brokerage  transactions,  a number of
shares  that does not exceed  the  greater  of 1.0% of a  Company's  outstanding
common stock or the average weekly trading volume during the four calendar weeks
prior to sale. There is no limit on the amount of restricted securities that may
be sold by a non-affiliate  after,  the restricted  securities have been held by
the owner,  for a period of at least two  years.  A sale under Rule 144 or under
any other  exemption  from the Act, if  available,  or  pursuant  to  subsequent
registrations  of common  stock of present  shareholders,  may have a depressive
effect upon the price of the Common Stock in any market that may develop.  As of
the date hereof 645,800, of the currently  outstanding shares of common stock of
the Company have been held by the current  owners,  thereof for a period of more
than two years.  Accordingly,  such shares are currently available for resale in
accordance with the provisions of Rule 144.

Blue Sky Consideration.

         Because the securities  registered  hereunder have not been  registered
for resale under the Blue Sky laws of any state,  the holders of such shares and
persons who desire to purchase them in any trading  market that might develop in
the future,  should be aware,  that there may be significant  state Blue Sky law
restrictions  upon  the  ability  of  investors  to sell the  securities  and of
purchasers  to purchase the  securities.  Some  jurisdictions  may not allow the
trading  or  resale  of  blind  pool  or  "blank  check"  securities  under  any
circumstances.  Accordingly,  investors should consider the secondary market for
the Company's securities to be a limited one.


                                       16
<PAGE>


Item 2.  Management's Discussion and Analysis or Plan of Operations.

Liquidity and Capital Resources

         The Company remains in the development stage and, since inception,  has
experienced  no  significant   change  in  liquidity  or  capital  resources  or
stockholders  equity other than the receipt of proceeds in the amount of $63,064
for its inside capitalization  funds.  Substantially all of such funds have been
used to pay expenses incurred by the Company.

         The  Company  intends  to seek to  carry  out its plan of  business  as
discussed herein. In order to do so, it will require  additional  capital to pay
ongoing expenses,  including  particularly legal and accounting fees incurred in
conjunction with preparation and filing of this  registration  statement on form
10-SB,  and in conjunction  with future  compliance with its on-going  reporting
obligations.

Results of Operations


         During the period  from August 10, 1995  (inception)  through  June 30,
2000,  the  Company  has  engaged  in  no  significant   operations  other  than
organizational   activities,   acquisition  of  capital  and   preparation   for
registration  of its securities  under the  Securities  Exchange Act of 1934, as
amended. During this period, the Company received no revenues.


         For the current fiscal year, the Company  anticipates  incurring a loss
as a result  of  expenses  associated  with  registration  and  compliance  with
reporting  obligations  under the Securities  Exchange Act of 1934, and expenses
associated  with locating and  evaluating  acquisition  candidates.  The Company
anticipates  that until a business  combination is completed with an acquisition
candidate,  it will not  generate  revenues.  The Company  may also  continue to
operate at a loss after  completing a business  combination,  depending upon the
performance of the acquired business.

Need for Additional Financing

         The  Company's  existing  capital  will not be  sufficient  to meet the
Company's  cash needs,  including the costs of completing its  registration  and
complying with its continuing reporting obligation under the Securities Exchange
Act of 1934. Accordingly, additional capital will be required.

         No commitments to provide additional funds have been made by management
or other stockholders, and the Company has no plans, proposals,  arrangements or
understandings  with  respect to the sale or issuance of  additional  securities
prior to the location of a merger or acquisition candidate.  Accordingly,  there
can be no assurance that any  additional  funds will be available to the Company
to allow it to cover its expenses.  Notwithstanding the forgoing,  to the extent
that additional funds are required, the Company anticipates receiving such funds
in the form of  advancements  from  current  shareholders  without  issuance  of
additional  shares or other  securities,  or through  the private  placement  of
restricted  securities  rather than through a public offering.  The Company does
not currently contemplate making a Regulation S offering.


                                       17
<PAGE>


         Regardless of whether the Company's  cash assets prove to be inadequate
to meet the Company's  operational  needs,  the Company might seek to compensate
providers of services by issuance of stock in lieu of cash.  For  information as
to the  Company's  policy in regard to  payment  for  consulting  services,  see
"Certain Relationships and Transactions."

Year 2,000 compliance Issues

         To date,  the  Company has not been  effected by Year 2,000  compliance
problems.  We conducted a comprehensive Year 2,000 investigation with respect to
our  internal   business-critical   systems.   This  investigation   encompassed
information  technology  systems and equipment with embedded  technology such as
fax machines and telephone  systems.  None of these systems were affected by the
passage into the Year 2,000. Nonetheless,  we have no assurance that we will not
experience  isolated  system  failures  as a  result  of third  party  technical
problems.

 Item 3. Description of Property.


         The Company  currently  maintains  a mailing  address at 69 Mall Drive,
Commack, NY 11725. The Company pays no rent for the use of this mailing address.
The Company does not believe that it will need to maintain an office at any time
in the foreseeable future in order to carry out its plan of operations described
herein. The Company's telephone number is (631) 543-2800

Item 4.  Security Ownership of Certain Beneficial Owners and Management.


Beneficial Ownership

         The  following  table sets forth,  as of the date of this  Registration
Statement,  the stock  ownership  of each  executive  officer  and  director  of
Southern Group  International,  Inc., of all executive officers and directors of
the  Company  as  a  group,   and  of  each  person  known  by  Southern   Group
International,  Inc. to be a beneficial owner of 5% or more of its Common Stock.
Except as otherwise noted, each person listed below is the sole beneficial owner
of the  shares and has sole  investment  and voting  power for such  shares.  No
person  listed  below  has any  options,  warrant  or  other  right  to  acquire
additional securities of the Company, except as may be otherwise noted.


                                       18
<PAGE>

                                      # of Shares        % of Class
Name and Address                  Owned Beneficially        Owned
----------------                  ------------------     ----------
Surinder Rametra                      475,000(4)             38%
27 Riesling Ct
Commack, NY 11725

Beresford Overseas Limited(5)         300,000                24%
P.O. Box 174
St. James Chambers
Athol Street
Douglas, Isle of Man 1M99 1PP

Nirmala Rametra(1)                    152,000(4)             12%
27 Riesling Court
Commack, NY 11725

Seema Wasil(2)                         27,000(2)            ***
27 Riesling Court
Commack, NY 11725

Rahul Rametra                           2,000(3)            ***
209 Crombie Street
Huntington Station, NY 11746

All Directors and                      29,000               5.3%
Executive officers (3)persons)

*** Less than 1%

(1)  Nirmala Rametra is the wife of Surinder Rametra.

(2)  Seema   Wasil  is  the   Secretary   and   Director   of   Southern   Group
     International,Inc.  and is the  daughter  of  Surinder  Rametra and Nirmala
     Rametra.

(3)  Rahul Rametra is a Director of Southern Group  International,  Inc. and the
     nephew of Surinder Rametra and Nirmala Rametra.

(4)  Does not include 57,000 shares held by S&N  Associates,  Inc. a corporation
     of which Surinder Rametra and Nirmala Rametra are the sole shareholders.

(5)  Phillips  Scales and Arthur Corwther both of who reside in the Isle of Man,
     are the sale  record and  beneficial  shareholders  of  Beresford  Overseas
     Limited.

All of the above  disclaim  any  beneficial  ownership in shares owned by family
members.

Changes in Control

         A  change  in  control  of  the  Company  will   probably   occur  upon
consummation  of  a  business  combination,  which  is  anticipated  to  involve
significant change in ownership of stock of the company, membership of the board
of  directors.  The extent of any such shance or control in  ownership  or board
composition cannot be predicted at this time.




                                       19
<PAGE>

Item 5.  Directors, Executive Officers, Promoters, and Control Persons.

The directors and executive officers serving the Company are as follows:

Name                       Age              Position Held and Tenure
----                       ---              ------------------------
Konrad C. Kim              29               President, Director

Seema Wasil                30               Secretary, Director

Rahul Rametra              27               Director

         The directors  named above will serve until the next annual  meeting of
the Company's  stockholders or until their  successors are duly elected and have
qualified.   Directors  will  be  elected  for  one-year  terms  at  the  annual
stockholders meeting.  Officers will hold their positions at the pleasure of the
board of directors,  absent any  employment  agreement,  of which none currently
exists or is contemplated.  There is no arrangement or understanding between any
of the  directors  or officers of the Company and any other  person  pursuant to
which any director or officer was or is to be selected as a director or officer,
and there is no arrangement,  plan or understanding as to whether non-management
shareholders  will exercise their voting rights to continue to elect the current
directors to the Company's board. There are also no arrangements,  agreements or
understandings  between   non-management   shareholders  that  may  directly  or
indirectly participate in or influence the management of the Company's affairs.

         The  directors  and officers  will devote  their time to the  Company's
affairs on an "as needed" basis,  which,  depending on the circumstances,  could
amount to as little as two hours per month,  or more than forty hours per month,
but more than  likely will fall within the range of five to ten hours per month.
There are no agreements or understandings  for any officer or director to resign
at the request of another  person,  and none of the  officers or  directors  are
acting on behalf of, or will act at the direction of, any other person.

Biographical Information


         Konrad  C.  Kim-  received  a  Bachelor  of  Science  degree  from  the
University  of Wisconsin in 1992.  From 1995 - 1997 he was a Consultant  Systems
Administrator  for SONY  Entertainment,  Columbia  House,  and The Village Voice
newspaper.  From  1997 - 1999 he was a  Technical  Systems  Analyst  at  Moody's
Investor's Services. Since 1999 he has been a Systems Engineer at Gateway.com.


         Seema  Wasil-  earned a Bachelors  Degree in  Accounting  from  Hofstra
University  in 1991 and a Masters  Degree in Special  Education  from Hofstra in
1993.  From 1995 to  1998 she  worked in the  Accounting  and  Public  Relations
departments  of Atec Group,  Inc. a publicly  traded  Company.  From 1999 to the
present, she has been a Vice-President of Stern Capital Partners, Ltd, a private
consulting firm.

                                       20
<PAGE>

         Rahul Rametra- received a Bachelors Degree from State University of New
York,  Stony Brook in 1995and  earned a Masters Degree in Finance from C.W. Post
University in 1998. He has been employed by ATEC Group,  Inc.  since 1995 and is
currently  a sales  representative  for Atec  Group,  Inc.  and Chief  Operating
Officer of Nexar, Inc. a subsidiary of Atec Group, Inc.


Conflicts of Interest


         The  directors  and officers  will devote  their time to the  Company's
affairs on an "as needed" basis,  which,  depending on the circumstances,  could
amount to as little as two hours per month,  or more than forty hours per month,
but more likely will fall within the range of five to ten hours per month. There
are no agreements or understandings for any officer or director to resign at the
request of another  person,  and none of the officers or directors are acting on
behalf  of, or will act at the  direction  of,  any other  person.  There may be
occasions when the time requirements of the Company's business conflict with the
demands of the officers other business and investment activities. Such conflicts
may require that the Company attempt to employ additional personnel. There is no
assurance  that the  services of such persons will be available or that they can
be obtained upon terms favorable to the Company.


         The officers,  directors and principal  shareholders of the Company may
actively  negotiate  for the  purchase of a portion of their  common  stock as a
condition  to,  or  in  connection   with,  a  proposed  merger  or  acquisition
transaction.  It is  anticipated  that a substantial  premium may be paid by the
purchaser  in  conjunction  with any sale of shares by the  Company's  officers,
directors  and principal  shareholders  made as a condition to, or in connection
with, a proposed merger or acquisition transaction.  The fact that a substantial
premium may be paid to members of Company  management  to acquire  their  shares
creates a conflict  of  interest  for them and may  compromise  their  state law
fiduciary duties to the Company's other  shareholders.  In making any such sale,
members of Company  management may consider their own personal pecuniary benefit
rather  than  the  best  interests  of  the  Company  and  the  Company's  other
shareholders,  and the other  shareholders  are not  expected to be afforded the
opportunity  to  approve  or  consent  to  any  particular  buy-out  transaction
involving shares held by members of Company management.

Item 6.  Executive Compensation.

         No officer or director has received any compensation  from the Company.
Until the Company acquires  additional  capital,  it is not anticipated that any
officer or  director  will  receive  compensation  from the  Company  other than
reimbursement for out-of-pocket  expenses incurred on behalf of the Company. See
"Certain  Relationships  and  Related  Transactions."  The  Company has no stock
option,  retirement,  pension,  or  profit-sharing  programs  for the benefit of
directors, officers or other employees, but the Board of Directors may recommend
adoption of one or more such programs in the future.

Item 7.  Certain Relationships and Related Tranasactions.

         The Company has adopted a policy under which any consulting or finder's
fee  that  may be  paid to a third  party  for  consulting  services  to  assist
management  in evaluating a prospective  business  opportunity  would be paid in
stock rather than in cash. Any such issuance of stock would be made on an ad hoc
basis. Accordingly, the Company is unable to predict whether, or in what amount,
such stock issuance might be made.


                                       21
<PAGE>


         It is not currently  anticipated  that any salary,  consulting  fee, or
finder's  fee  shall  be paid to any of the  Company's  directors  or  executive
officers,  or to any other  affiliate of the Company  except as described  under
"Executive Compensation" above.

         Although management has no current plans to cause the Company to do so,
it is possible that the Company may enter into an agreement  with an acquisition
candidate requiring the sale of all or a portion of the Common Stock held by the
Company's  current  stockholders  to the  acquisition  candidate  or  principals
thereof,  or to other individuals or business entities,  or requiring some other
form of payment to the Company's current  stockholders,  or requiring the future
employment  of specified  officers  and payment of salaries to them.  It is more
likely  than  not  that  any  sale  of  securities  by  the  Company's   current
stockholders  to an  acquisition  candidate  would  be at a price  substantially
higher than that  originally paid by such  stockholders.  Any payment to current
stockholders  in the context of an  acquisition  involving  the Company would be
determined  entirely by the largely  unforeseeable  terms of a future  agreement
with an unidentified business entity.

Item 8.  Description of Securities

Common Stock

         The  Company's  Articles of  incorporation  authorize  the  issuance of
80,000,000 shares of Common Stock par value $.0001. Each record holder of Common
Stock  is  entitled  to one vote for each  share  held on all  matters  properly
submitted to the  stockholders  for their vote. The Articles of Incorporation do
not permit cumulative voting for the election of directors.

         Holders of  outstanding  shares of Common  Stock are  entitled  to such
dividends as may be declared  from time to time by the Board of Directors out of
legally  available  funds;  and,  in the event of  liquidation,  dissolution  or
winding up of the  affairs of the  Company,  holders  are  entitled  to receive,
ratably,  the  net  assets  of  the  Company  available  to  stockholders  after
distribution  is made to the  preferred  stockholders,  if  any,  who are  given
preferred rights upon liquidation. Holders of outstanding shares of Common Stock
have no  preemptive,  conversion  or  redemptive  rights.  All of the issued and
outstanding shares of Common Stock are, and all unissued shares when offered and
sold will be, duly authorized,  validly issued,  fully paid, and non-assessable.
To the extent that additional  shares of the Company's  Common Stock are issued,
the relative interests of then existing stockholders may be diluted.

Preferred Stock

         The  Company's  Articles of  Incorporation  authorize  the  issuance of
10,000,000  shares preferred stock par value $0.0001.  The Board of Directors of
the  Company is  authorized  to issue the  preferred  stock from time to time in
series and is further  authorized to establish such series, to fix and determine
the variations in the relative rights and preferences as between series,  to fix
voting  rights,  if any, for each  series,  and to allow for the  conversion  of
preferred  stock into Common Stock.  The Company has issued no preferred  stock.
The  Company  anticipates  that  preferred  stock  may  be  utilized  in  making
acquisitions.


                                       22
<PAGE>


Reports to Stockholders

         The Company  plans to furnish it's  stockholders  with an annual report
for each fiscal year ending December 31 containing  financial statements audited
by its independent certified public accountants. In the event the Company enters
into a business combination with another Company, it is the present intention of
management to continue furnishing annual reports to stockholders.  Additionally,
the Company  may, in its sole  discretion,  issue  unaudited  quarterly or other
interim  reports to its  stockholders  when it deems  appropriate.  The  Company
intends to comply with the periodic  reporting  requirements  of the  Securities
Exchange Act of 1934.

Transfer Agent

         The Company's  Transfer  Agent is Manhattan  Transfer  Registrar Co, 58
Dorchester Rd, Lake Ronkonkoma, NY 11779.

                                    Part II

Item 1. Market Price and Dividends on the  Registrant's  Common equity and other
Shareholder Matters


         There has been no  established  public trading market for the Company's
securities  since its  inception  on August 10,  1995.  However,  the  Company's
securities are traded on the National  Quotation  Bureau pink sheets with no bid
and no offer.  The company's  trading  symbol is SGPI. As of June 30, 2000 there
were  1,402,200  shares  outstanding,  and the  Company has 65  shareholders  of
record. No dividends have been paid to date and the Company's Board of directors
does not anticipate paying dividends in the foreseeable future.



Item 2.  Legal Proceedings.

         The Company is not a party to any  pending  legal  proceedings,  and no
such proceedings are known to be contemplated.

Item 3.  Changes in and Disagreements with Accountants.

         The Company has had no changes in or disagreements  with accountants on
matters of accounting or financial disclosure.

                                       23
<PAGE>


Item 4.  Recent Sales of Unregistered Securities.

         The following  unregistered  securities of the Company have been issued
in the past three years:


a) On May 6, 1999, the Company issued  600,000  restricted  shares at a purchase
price of $.10 per share for an aggregate consideration of $60,000 as follows:

         1.       42,500 shares to Amit Rametra who was an officer and
                  director at that time and who subsquently resigned as
                  such

         2.       300,000 shares to Beresford Overseas, Ltd.

         3.       25,000 shares to Seema Wasil, an officer and director;

         4.       25,000 shares to Munish Rametra, a non-affiliate;

         5.       57,500 shares to S & N Associates, Inc., a corporation
                  wholly owned by Surinder Rametra and Nirmala Rametra,
                  his wife.

         6.       150,000 shares to Nirmala Rametra, wife of Surinder
                  Rametra.

b) On June 29, 2000,  the Company  issued 78,200 shares of  unregistered  common
stock to an affiliate  and 78,200 shares to a  non-affiliate,  both of which are
shareholders  for an aggregate of 156,400 shares in  consideration of conversion
of loans in the  aggregate  amount of  $15,640  owed to such  shareholders  at a
conversion  rate of $.10 per share.  Said  shares  were  issued  pursuant  to an
exemption from registration under Section 4(2) of the Act.


    All of these shares were exempt from  registration  pursuant to Section 4(2)
of the Securities Act of 1933, as amended.

Item 5.  Indemnification of Directors and Officers

         The Articles of  Incorporation  and the Bylaws of the Company,  provide
that the  Company  will  indemnify  its  officers  and  directors  for costs and
expenses  incurred  in  connection  with  the  defense  of  actions,  suits,  or
proceedings where the officer or director acted in good faith and in a manner he
reasonably  believed  to be in the  Company's  best  interest  and is a party by
reason of his status as an officer or director,  absent a finding of  negligence
or misconduct in the performance of duty.

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors,  officers or persons controlling the Company,
we have  been  informed  that in the  opinion  of the  Securities  and  Exchange
Commission,  such  indemnification  is against public policy as expressed in the
Act and is therefore unenforceable.

Part F/S

         The Financial Statements of Southern Group International, Inc. required
by  regulation  S-B commence on page F-1 hereof and are  incorporated  herein by
reference.

                                    Part III

Items 1 & 2       Index to Exhibits and Description of Exhibits
Item 1            Articles of Incorporation.*
Item 2            By-Laws*


* Previously filed


                                       24
<PAGE>


                                   Signatures



In  accordance  with  Section 12 of the  Securities  Exchange  Act of 1934,  the
registrant  caused this  Amendment  No. 5 to the  registration  statement  to be
signed on its behalf by the undersigned, thereunto duly authorized.




                                            Southern Group International, Inc.



Date: August 10, 2000                    By:
                                                 ----------------------------
                                                 Konrad C. Kim, President



























                                       25
<PAGE>






                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                              FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                AND FOR THE PERIOD AUGUST 10, 1995 (INCEPTION) TO
                                  JUNE 30, 2000


















                                       F-1
<PAGE>

                                TABLE OF CONTENTS

                                                                   Page No.

ACCOUNTANT'S REPORT..................................................   F-3

FINANCIAL STATEMENTS

    Balance sheets...................................................   F-4

    Statements of Operations.........................................   F-5

    Statements of Changes in Stockholders' Equity....................   F-6

    Statements of Cash Flows.........................................   F-7

    Notes to Financial Statements....................................  F-10















                                       F-2

<PAGE>


                               STEWART H. BENJAMIN
                        CERTIFIED PUBLIC ACCOUNTANT, P.C.

                              27 SHELTER HILL ROAD
                               PLAINVIEW, NY 11803
                            TELEPHONE: (516) 933-9781
                            FACSIMILE: (516) 827-1203

To the Board of Directors and Shareholders

Southern Group International, Inc.
Hauppauge, New York

I have reviewed the accompanying balance sheets of Southern Group International,
Inc. (a  development  stage company) as of March 31, 2000 and December 31, 1999,
and the related statements of operations,  stockholders'  equity and cash flows,
for the three  months  ended  March 31,  2000 and 1999,  and for the period from
August 10, 1995 (inception), to March 31, 2000, in accordance with Statements on
Standards for Accounting and Review Services,  issued by the American  Institute
of Certified  Public  Accountants.  All information  included in these financial
statements  is  the   representation   of  the   management  of  Southern  Group
International, Inc.

A review  consists  principally  of  inquiries of Company  personnel  analytical
procedures  applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion  regarding the financial  statements taken
as a whole. Accordingly, I do not express such an opinion.

Based on my reviews, I am not aware of any material modifications that should be
made  to the  accompanying  financial  statements  in  order  for  them to be in
conformity with generally accepted accounting principles.

Stewart H. Benjamin
Certified Public Accountant, P.C.


Plainview, New York
July 31, 2000

                                       F-3
<PAGE>

                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A Development Stage Company)

                                 Balance Sheets

                                     ASSETS

<TABLE>
<CAPTION>
                                                                              June 30,                     December 31,
                                                                                2000                           1999
                                                                             (Unaudited)                    (Audited)
                                                                         --------------------          ---------------------
<S>                                                                    <C>                           <C>
Current assets
    Cash                                                               $              21,242         $                1,976
    Securities available-for-sale  (Notes 1 & 2)                                          --                         29,531
                                                                         --------------------          ---------------------
                                                                       $              21,242         $               31,507
                                                                         ====================          =====================


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
    Loan payable (Note 3)                                              $                  --         $                2,831
    Loans payable, related parties (Note 4)                                               --                         15,039
                                                                         --------------------          ---------------------

Total liabilities                                                                         --                         17,870
                                                                         --------------------          ---------------------

Stockholders' equity  (Note 5)
    Preferred stock, $.0001 par value, 10,000,000 shares
        authorized and zero shares issued and outstanding                                 --                             --
    Common stock, $.0001 par value; authorized -
        80,000,000 shares; issued and outstanding -
        1,402,200 shares in 2000 and 1,245,800 in 1999                                   140                            125
    Additional paid-in capital                                                        78,564                         62,939
    Deficit accumulated during the development stage                                 (57,462)                       (72,083)
    Unrealized gain on marketable securities                                              --                         22,656
                                                                         --------------------          ---------------------

Total stockholders' equity                                                            21,242                         13,637
                                                                         --------------------          ---------------------

                                                                       $              21,242         $               31,507
                                                                         ====================          =====================

</TABLE>








             See accompanying notes and accountant's review report.

                                       F-4

<PAGE>
                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A Development Stage Company)

                            Statements of Operations

<TABLE>
<CAPTION>
                                                            Six Months                   Six Months               Aug. 10, 1995
                                                               Ended                       Ended                  (inception) to
                                                             June 30,                     June 30,                   June 30,
                                                               2000                         1999                       2000
                                                        --------------------        ---------------------      ---------------------
<S>                                                   <C>                         <C>                        <C>
Costs and expenses
    General and administrative:
        Bank charges                                  $                  42       $                   85     $                1,674
        Filing fees                                                     300                          250                        900
        Edgar filing service fees                                       305                          677                      1,045
        Legal fees                                                       --                       10,000                     10,500
        Accounting fees                                               1,250                        1,100                      3,350
        Transfer agent fees                                              --                           --                      2,360
        Miscellaneous                                                    --                           --                         64
                                                        --------------------        ---------------------      ---------------------

Total costs and expenses                                              1,897                       12,112                     19,893
                                                        --------------------        ---------------------      ---------------------

Other income (expenses)
    Gain on sale of marketable securities                            17,089                           --                     17,089
    Impairment of investment in related party                            --                           --                    (50,000)
    Interest income                                                      81                           --                         81
    Interest expense                                                   (652)                      (1,989)                    (4,739)
                                                        --------------------        ---------------------      ---------------------

Total other income (expenses)                                        16,518                       (1,989)                   (37,569)
                                                        --------------------        ---------------------      ---------------------

Net income (loss)                                     $              14,621       $              (14,101)    $              (57,462)
                                                        ====================        =====================      =====================

Income (loss) per common share                        $                 .01       $                 (.02)
                                                        ====================        =====================

Weighted average common shares outstanding                        1,247,519                      645,800
                                                        ====================        =====================
</TABLE>












             See accompanying notes and accountant's review report.

                                      F-5
<PAGE>
                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A Development Stage Company)

                  Statements of Changes in Stockholders' Equity
        Period from August 10, 1995 (Date of Inception), to June 30, 2000


<TABLE>
<CAPTION>
                                                                                                        Deficit        Unrealized
                                                                   Common stock       Additional      Accumulated       Gain on
                                                      ---------------------------      Paid-in           From          Marketable
                                                        Shares         Amount          Capital         Inception       Securities
                                                      -----------   -------------   --------------   --------------   ------------

<S>                                                      <C>       <C>              <C>              <C>              <C>
Balances, August 10, 1995                                     --   $           --   $           --   $          --    $        --

    Sale of common stock                                 642,800               64               --              --             --

    Net loss for the period                                                                                    (64)
                                                      -----------    -------------    -------------    ------------     ----------

Balances, December 31, 1995                              642,800               64               --             (64)            --

The Company was inactive
  during 1996                                                 --               --               --              --             --
                                                      -----------    -------------    -------------    ------------     ----------

Balances, December 31, 1996                              642,800               64               --             (64)            --

The Company was inactive
  during 1997                                                 --               --               --              --             --
                                                      -----------    -------------    -------------    ------------     ----------

Balances, December 31, 1997                              642,800               64               --             (64)            --

    Sale of common stock                                   3,000                1            2,999              --             --

    Net loss                                                                                                (3,589)
                                                      -----------    -------------    -------------    ------------     ----------

Balances, December 31, 1998                              645,800               65            2,999          (3,653)            --

    Prior period adjustment                                   --               --               --            (833)            --

    Sale of common stock                                 297,500               30           29,720              --             --

    Shareholders loans converted to stock                233,750               23           23,352              --             --

    Common stock issued for marketable
    securities, valued at $.10 per share                  68,750                7            6,868              --             --

    Change in unrealized gain on
    marketable securities                                     --               --               --              --         22,656

    Net loss                                                                                               (67,597)
                                                      -----------    -------------    -------------    ------------     ----------

Balances, December 31, 1999                            1,245,800              125           62,939         (72,083)        22,656

    Shareholders loans converted to stock                156,400               15           15,625              --             --

    Change in unrealized gain on
    marketable securities                                     --               --               --              --        (22,656)

    Net income                                                                                              14,621
                                                      -----------    -------------    -------------    ------------     ----------

Balances, June 30, 2000                                1,402,200   $          140   $       78,564   $     (57,462)   $        --
                                                      ===========    =============    =============    ============     ==========
</TABLE>



             See accompanying notes and accountant's review report.

                                       F-6

<PAGE>
                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A Development Stage Company)

                            Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                          Six Months           Six Months         Aug. 10, 1995
                                                                            Ended                 Ended           (inception) to
                                                                           June 30,             June 30,             June 30,
                                                                             2000                 1999                 2000
                                                                        -------------        -------------         -------------
<S>                                                                     <C>                  <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)                                                   $     14,621         $     (14,101)        $    (56,629)
    Adjustments to reconcile net income (loss) to net
         cash used in operating activities
         Realized gain on sale of available-for-sale securities              (17,089)                   --              (17,089)
         Impairment loss on related party receivable                              --                    --               50,000
         Changes in assets and liabilities
            Increase (decrease) in accrued expenses                               --                  (200)                  --
                                                                          -----------          ------------          -----------

   NET CASH USED IN OPERATING ACTIVITIES                                      (2,468)              (14,301)             (23,718)
                                                                          -----------          ------------          -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Proceeds from sale of available-for-sale securities                       23,965                    --               23,965
    Increase in loan receivable, related party                                    --                    --              (51,633)
    Decrease in loan receivable, related party                                    --                    --                  800
                                                                          -----------          ------------          -----------

   NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                        23,965                    --              (26,868)
                                                                          -----------          ------------          -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from short-term debt                                                600                38,672               99,682
    Repayment of short-term debt                                              (2,831)              (43,128)             (60,668)
    Proceeds from issuance of common stock                                        --                17,250               32,814
                                                                          -----------          ------------          -----------

   NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                        (2,231)               12,794               71,828
                                                                          -----------          ------------          -----------

NET INCREASE (DECREASE) IN CASH                                               19,266                (1,507)              21,242

CASH - BEGINNING OF PERIOD                                                     1,976                 2,396                   --
                                                                          -----------          ------------          -----------

CASH - END OF PERIOD                                                    $     21,242         $         889         $     21,242
                                                                          ===========          ============          ===========


SUPPLEMENTAL DISCLOSURES:
    Cash paid during the period for interest                            $        652         $       1,989         $      3,774
                                                                          ===========          ============          ===========
    Cash paid during the period for income taxes                        $         --         $          --         $         --
                                                                          ===========          ============          ===========
    Change in unrealized gain on marketable securities                  $    (22,656)        $          --         $         --
                                                                          ===========          ============          ===========
    Common stock issued for marketable securities                       $         --         $          --         $      6,875
                                                                          ===========          ============          ===========
    Conversion of shareholders loans to capital stock                   $    (15,640)        $     (23,375)        $    (39,015)
                                                                          ===========          ============          ===========
</TABLE>









             See accompanying notes and accountant's review report.

                                       F-7

<PAGE>
                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A Development Stage Company)

                          Notes to Financial Statements

Note 1 - Summary of Significant Accounting Policies

Nature of Operations

The financial  statements  presented are those of Southern Group  International,
Inc., a development stage company (the "Company").  The Company was incorporated
under the laws of the  state of  Florida  on  August  10,  1995.  The  Company's
activities,  to date,  have been  primarily  directed  towards  the  raising  of
capital.

As shown in the  financial  statements,  as of June 30,  2000,  the  Company has
incurred an accumulated deficit of $57,462. The Company's continued existence is
dependent  on  its  ability  to  generate  sufficient  cash  flow  to  meet  its
obligations  on a timely basis.  Accordingly,  the  financial  statements do not
include any adjustments  that might be necessary should the Company be unable to
continue  in  existence.  The  Company  has been  exploring  sources  to  obtain
additional  equity  or debt  financing.  The  Company  has  also  indicated  its
intention to participate in one or more as yet unidentified  business  ventures,
which  management  will select after  reviewing the business  opportunities  for
their profit or growth potential.

The  Company  will  engage  a  consultant,  who  will be  compensated  based  on
performance,  to  effect a merger  once a  candidate  has been  identified.  The
Company has  elected not to  recognize  compensation  expense for its  executive
officers, as they devote an insignificant amount of time to the Company.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the  reporting  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 period.  Actual results
could differ from those estimates.

Securities Available-For-Sale

Securities  available-for-sale  consist  of  marketable  equity  securities  not
classified as trading securities.  Securities  available-for-sale  are stated at
fair value,  and unrealized  holding gains and losses are reported as a separate
component of stockholders' equity.

Dividends  on  marketable  equity  securities  are  recognized  in  income  when
declared.  Realized  gains and losses are  determined on the basis of the actual
cost of the securities sold.

                                       F-8
<PAGE>

                       SOUTHERN GROUP INTERNATIONAL, INC.

                          (A Development Stage Company)

                          Notes to Financial Statements

Income (Loss) Per Common Share

Income  (loss) per common share is computed by dividing the net income (loss) by
the weighted average shares outstanding during the period.

Note 2 - Securities Available-For-Sale

Securities  available-for-sale at December 31, 1999 consisted of 8,750 shares of
Yournet Inc.,  which is traded on the OTC Bulletin Board.  During the six months
ended June 30, 2000, the Company sold  securities  available-for-sale  for total
proceeds of $23,965 resulting in gross realized gains of $17,089.

Note 3 - Loan Payable

The Company has a bank  line-of-credit  which provides borrowings up to $75,000.
The line-of-credit is guaranteed by a stockholder of the Company,  and principal
and interest on advances are payable monthly at the bank prime rate plus 1%. The
line-of-credit  is due to expire in October  2001.  The Company has fully repaid
the bank  line-of-credit  on February 25, 2000.  Interest expense related to the
bank line-of-credit was $51 during the six months ended June 30, 2000.

Note 4 - Loans Payable - Stockholders

Loans of $37,450 were received from certain  stockholders  during the year ended
December  31,  1999,  proceeds of which were used to repay a portion of the bank
line-of-credit. Stockholders' loans totaling $23,375 were converted to equity as
a result of a  resolution  adopted  by the board of  directors  on May 5,  1999,
whereby  600,000 shares of restricted  common stock were issued for an aggregate
consideration  of $60,000.  The loans  provide for  interest at a rate of 8% and
were due on January 31, 2000. Pursuant to a resolution by the board of directors
on June 29, 2000, the loans and accrued interest totaling $15,640 were converted
to equity. The stockholders  received 156,400 shares of common stock,  valued at
$.10 per share.  Interest  expense related to the  stockholders'  loans was $600
during the six months ended June 30, 2000.

                                       F-9
<PAGE>

                       SOUTHERN GROUP INTERNATIONAL, INC.

                          (A Development Stage Company)

                          Notes to Financial Statements

Note 5 - Common Stock Transactions

Pursuant to a resolution  adopted by the Board of Directors on May 5, 1999,  the
Company issued 600,000 shares of restricted  common stock at a price of $.10 per
share, for an aggregate  consideration of $60,000,  which includes conversion of
stockholders'  loans of $23,375,  cash  contributions  of $29,750 and marketable
securities valued at $6,875. The price of $.10 per share, which exceeds the book
value per share, was determined as the fair value by management, as there was no
public market for the stock on the date of issuance.

Pursuant to a resolution adopted by the Board of Directors on June 29, 2000, the
Company  converted  stockholders'  loans  totaling  $15,640 to 156,400 shares of
common  stock,  valued at $.10 per  share.  The price of $.10 per  share,  which
exceeds  the  book  value  per  share,  was  determined  as the  fair  value  by
management, as there was no public market for the stock on the date of issuance.

                                       F-10

<PAGE>





                       SOUTHERN GROUP INTERNATIONAL, INC.
                         (A DEVELOPMENT STAGE COMPANY)

                              FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
               AND FOR THE PERIOD AUGUST 10, 1995 (INCEPTION) TO
                               DECEMBER 31, 1999



















<PAGE>

                               TABLE OF CONTENTS








                                                                        Page No.
                                                                        --------
AUDITOR'S REPORT....................................................       F-13

FINANCIAL STATEMENTS

     Balance sheets.................................................       F-14

     Statements of Operations.......................................       F-15

     Statements of Changes in Stockholders' Equity..................       F-16

     Statements of Cash Flows.......................................       F-17

     Notes to Financial Statements..................................       F-18





















<PAGE>


                              STEWART H. BENJAMIN
                       CERTIFIED PUBLIC ACCOUNTANT, P.C.
                              27 SHELTER HILL ROAD
                              PLAINVIEW, NY 11803
                                    -------
                           TELEPHONE: (516) 933-9781
                           FACSIMILE: (516) 827-1203


                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors and Stockholders
Southern Group International, Inc.
Hauppauge, New York

I have audited the accompanying  balance sheets of Southern Group International,
Inc. (a  development  stage  company) as of December 31, 1999 and 1998,  and the
related  statements of operations,  stockholders'  equity and cash flows for the
years  then ended and for the  period  from  August  10,  1995  (inception),  to
December 31, 1999.  These  financial  statements are the  responsibility  of the
Company's  management.  My  responsibility  is to  express  an  opinion on these
financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing  standards.
Those standards  require that I plan and perform the audits to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Southern Group International,  Inc.
as of December  31, 1999 and 1998,  and the results of its  operations  and cash
flows for the years then ended and from August 10, 1995 (inception), to December
31, 1999, in conformity with generally accepted accounting principles.

/s/ Stewart H. Benjamin
---------------------------
Stewart H. Benjamin
Certified Public Accountant, P.C.

Plainview, New York
February 4, 2000




                                      F-13


<PAGE>

                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A Development Stage Company)
                                 Balance Sheets

                                     ASSETS
<TABLE>
<CAPTION>

                                                                                              December 31,
                                                                                       1999                  1998
                                                                                   --------------        --------------

<S>                                                                               <C>                   <C>
Current assets

    Cash                                                                          $         1,976       $         2,396
    Securities available-for-sale  (Notes 1 & 2)                                           29,531                    --
    Loan receivable, related party (Note 3)                                                54,900                51,634
                                                                                   --------------        --------------

                                                                                  $        86,407       $        54,030
                                                                                   ==============        ==============



                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities

    Loan payable (Note 4)                                                         $         2,831       $        54,419
    Loans payable, related parties (Note 5)                                                15,039                    --
    Accrued expenses                                                                           --                   200
                                                                                   --------------        --------------

Total liabilities                                                                          17,870                54,619
                                                                                   --------------        --------------

Stockholders' equity (deficit)
    Preferred stock, $.0001 par value, 10,000,000 shares
        authorized and zero shares issued and outstanding                                      --                    --
    Common stock, $.0001 par value, 80,000,000 shares
        authorized and 1,245,800 shares issued and outstanding
        in 1999 and 645,800 in 1998                                                           125                    65
    Additional paid-in capital                                                             62,939                 2,999
    Deficit accumulated during the development stage                                      (17,183)               (3,653)
    Unrealized gain on marketable securities                                               22,656                    --
                                                                                   --------------        --------------

Total stockholders' equity (deficit)                                                       68,537                  (589)
                                                                                   --------------        --------------

                                                                                  $        86,407       $        54,030
                                                                                   ==============        ==============

</TABLE>






The  accompanying  notes  are  an  integral  part  of the financial statements.


                                       F-14


<PAGE>

                       SOUTHERN GROUP INTERNATIONAL, INC.

                          (A Development Stage Company)

                            Statements of Operations


<TABLE>
<CAPTION>
                                                                                                    Aug. 10, 1995
                                                   Year Ended               Year Ended             (inception) to
                                                December 31,             December 31,               December 31,
                                                      1999                     1998                     1999
                                                ------------------       ------------------       -----------------

<S>                                            <C>                      <C>                      <C>
Costs and expenses
    General and administrative:

        Bank charges                           $               675      $               957      $             1,632
        Filing fees                                            250                      350                      600
        Edgar filing service fees                              740                       --                      740
        Legal fees                                          10,000                      500                   10,500
        Accounting fees                                      1,725                      375                    2,100
        Transfer agent fees                                    750                    1,610                    2,360
        Miscellaneous                                           --                       --                       64
                                                ------------------       ------------------       ------------------

Total costs and expenses                                    14,140                    3,792                   17,996
                                                ------------------       ------------------       ------------------

Other income (expenses)
    Interest income                                          4,067                      833                    4,900
    Interest expense                                        (3,457)                    (630)                  (4,087)
                                                ------------------       ------------------       ------------------

Total other income (expenses)                                  610                      203                      813
                                                ------------------       ------------------       ------------------

Net loss                                       $           (13,530)     $            (3,589)     $           (17,183)
                                                ==================       ==================       ==================

Loss per common share                          $             (.013)     $             (.006)
                                                ==================       ==================

Weighted average common shares outstanding               1,041,964                  644,386
                                                ==================       ==================

</TABLE>

















The accompanying notes are an integral part of the financial statements.


                                      F-15


<PAGE>

                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A Development Stage Company)
                  Statements of Changes in Stockholders' Equity

      Period from August 10, 1995 (Date of Inception), to December 31, 1999
<TABLE>
<CAPTION>
                                                                                                    Deficit           Unrealized
                                                       Common stock             Additional        Accumulated          Gain on
                                          ---------------------------------      Paid-in             From            Marketable
                                              Shares            Amount            Capital          Inception          Securities
                                          ---------------   ---------------    --------------    ---------------    ---------------

<S>                                       <C>              <C>                <C>               <C>                <C>
Balances, August 10, 1995                              --  $             --   $            --   $             --   $             --
    Issuance of common stock                      642,800                64                --                 --                 --
    Net loss for the period                                                                                  (64)
                                          ---------------   ---------------    --------------    ---------------    ---------------
Balances, December 31, 1995                       642,800                64                --                (64)                --
The Company was inactive
  during 1996                                          --                --                --                 --                 --
                                          ---------------   ---------------    --------------    ---------------    ---------------
Balances, December 31, 1996                       642,800                64                --                (64)                --
The Company was inactive
  during 1997                                          --                --                --                 --                 --
                                          ---------------   ---------------    --------------    ---------------    ---------------
Balances, December 31, 1997                       642,800                64                --                (64)                --
    Issuance of common stock                        3,000                 1             2,999                 --                 --
    Net loss                                                                                              (3,589)
                                          ---------------   ---------------    --------------    ---------------    ---------------
Balances, December 31, 1998                       645,800                65             2,999             (3,653)                --
    Issuance of common stock                      600,000                60            59,940                 --                 --
    Change in unrealized gain on
    marketable securities                              --                --                --                 --             22,656
    Net loss                                                                                             (13,530)
                                          ---------------   ---------------    --------------    ---------------    ---------------
Balances, December 31, 1999                     1,245,800  $            125   $        62,939   $        (17,183)  $         22,656
                                          ===============   ===============    ==============    ===============    ===============

</TABLE>







The accompanying  notes are an integral part of the financial statements.

                                       F-16

<PAGE>

                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A Development Stage Company)
                            Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                                                                   Aug. 10, 1995
                                                                  Year Ended               Year Ended             (inception) to
                                                                 December 31,             December 31,             December 31,
                                                                     1999                     1998                     1999
                                                               ------------------       ------------------       ------------------
<S>                                                            <C>                      <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                                   $          (13,530)      $           (3,589)      $          (17,183)
    Adjustments to reconcile net loss to net
         cash used in operating activities
         Contribution of marketable securities                             (6,875)                      --                   (6,875)
         Changes in assets and liabilities
            Increase (decrease) in accrued expenses                          (200)                     200                       --
                                                               ------------------       ------------------       ------------------

   NET CASH USED IN OPERATING ACTIVITIES                                  (20,605)                  (3,389)                 (24,058)
                                                               ------------------       ------------------       ------------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Increase in loan receivable, related party                             (3,267)                 (51,634)                 (54,900)
                                                               ------------------       ------------------       ------------------

   NET CASH USED IN INVESTING ACTIVITIES                                   (3,267)                 (51,634)                 (54,900)
                                                               ------------------       ------------------       ------------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from short-term debt                                          15,039                   58,654                   72,539
    Repayment of short-term debt                                          (51,587)                  (4,235)                 (54,669)
    Proceeds from issuance of common stock                                 60,000                    3,000                   63,064
                                                               ------------------       ------------------       ------------------

   NET CASH PROVIDED BY FINANCING ACTIVITIES                               23,452                   57,419                   80,934
                                                               ------------------       ------------------       ------------------

NET INCREASE (DECREASE) IN CASH                                              (420)                   2,396                    1,976

CASH - BEGINNING OF YEAR                                                    2,396                       --                       --
                                                               ------------------       ------------------       ------------------

CASH - END OF YEAR                                            $             1,976      $             2,396      $             1,976
                                                               ==================       ==================       ==================


SUPPLEMENTAL DISCLOSURES:
    Cash paid during the year for interest                    $             2,493      $               630      $             3,123
                                                               ==================       ==================       ==================
    Cash paid during the year for income taxes                $                 -      $                 -      $                 -
                                                               ==================       ==================       ==================
    Change in unrealized gain on marketable securities        $            22,656      $                 -      $            22,656
                                                               ==================       ==================       ==================

</TABLE>








The accompanying notes are an integral part of the financial statements.


                                       F-17


<PAGE>

                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements

Note 1 - Summary of Significant Accounting Policies

Nature of Operations

The financial  statements  presented are those of Southern Group  International,
Inc., a development stage company (the "Company").  The Company was incorporated
under the laws of the  state of  Florida  on  August  10,  1995.  The  Company's
activities,  to date,  have been  primarily  directed  towards  the  raising  of
capital.

As shown in the financial  statements,  as of December 31, 1999, the Company has
incurred an accumulated deficit of $17,183. The Company's continued existence is
dependent  on  its  ability  to  generate  sufficient  cash  flow  to  meet  its
obligations  on a timely basis.  Accordingly,  the  financial  statements do not
include any adjustments  that might be necessary should the Company be unable to
continue  in  existence.  The  Company  has been  exploring  sources  to  obtain
additional  equity  or debt  financing.  The  Company  has  also  indicated  its
intention to participate in one or more as yet unidentified  business  ventures,
which  management  will select after  reviewing the business  opportunities  for
their profit or growth potential.

The  Company  will  engage  a  consultant,  who  will be  compensated  based  on
performance,  to  effect a merger  once a  candidate  has been  identified.  The
Company has  elected not to  recognize  compensation  expense for its  executive
officers, as they devote an insignificant amount of time to the Company.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the  reporting  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 period.  Actual results
could differ from those estimates.

Securities Available-For-Sale

Securities  available-for-sale  consist  of  marketable  equity  securities  not
classified as trading securities.  Securities  available-for-sale  are stated at
fair value,  and unrealized  holding gains and losses are reported as a separate
component of stockholders' equity.

Dividends  on  marketable  equity  securities  are  recognized  in  income  when
declared.  Realized  gains and losses are  determined on the basis of the actual
cost of the securities sold.


                                       F-18


<PAGE>

                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements

Loss Per Common Share

Loss per common  share is  computed  by  dividing  the net loss by the  weighted
average shares outstanding during the period.

Note 2 - Securities Available-For-Sale

The amortized cost and fair value of securities  available-for-sale  at December
31, 1999 are as follows:

         Amortized cost                                  $     6,875
         Gross unrealized gain                                22,656
                                                           ---------
         Fair value                                      $    29,531
                                                          ==========

The Company sold no securities during the year ended December 31, 1999.

Note 3 - Loan Receivable, Related Party

On October 27, 1998 the Company made a short-term  loan of $50,000 with proceeds
from a bank line-of-credit to a Hungarian company that is wholly owned by a U.S.
corporation in which certain stockholders of the Company own an equity interest.
The purpose of the loan was to provide working capital to the Hungarian company.
The loan is  uncollateralized,  provides  for interest at a rate of 8% per annum
and is due on June 30,  2000.  The  Company has  received  no payments  from the
related  party loan as of December 31, 1999,  but  management  believes that the
loan will be fully repaid by June 30,  2000.  The balance of $54,900 at December
31, 1999 includes interest receivable of $4,900.

Note 4 - Loan Payable

The Company has a bank  line-of-credit  which provides borrowings up to $75,000.
The line-of-credit is guaranteed by a stockholder of the Company,  and principal
and interest on advances are payable monthly at the bank prime rate plus 1%. The
line-of-credit  is due to  expire in  October  2001.  There  was an  outstanding
balance on this line-of-credit of $2,832 at December 31, 1999, which the Company
has  repaid  on  February  25,  2000.  Interest  expense  related  to  the  bank
line-of-credit was $2,493 during the year ended December 31, 1999.


                                       F-19


<PAGE>

                       SOUTHERN GROUP INTERNATIONAL, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements

Note 5 - Loans Payable - Stockholders

Loans of $37,450 were received from certain  stockholders  during the year ended
December  31,  1999,  proceeds of which were used to repay a portion of the bank
line-of-credit. Stockholders' loans totaling $23,375 were converted to equity as
a result of a  resolution  adopted  by the board of  directors  on May 5,  1999,
whereby  600,000 shares of restricted  common stock were issued for an aggregate
consideration of $60,000. The loans provide for interest at a rate of 8% and are
due on January 31, 2000.  Management has indicated its intentions to convert the
loans, totaling $15,039 at December 31, 1999, to equity in the second quarter of
2000.  Interest expense related to the stockholders' loans was $2,153 during the
year ended December 31, 1999.

Note 6 - Common Stock Transactions

Pursuant to a resolution  adopted by the Board of Directors on May 5, 1999,  the
Company issued 600,000 shares of restricted  common stock at a price of $.10 per
share, for an aggregate  consideration of $60,000,  which includes conversion of
stockholders'  loans of $23,375,  cash  contributions  of $29,750 and marketable
securities valued at $6,875. The price of $.10 per share, which exceeds the book
value per share, was determined as the fair value by management, as there was no
public market for the stock on the date of issuance.


                                      F-20



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