SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                    For the Periods Ended September 30, 1998.

                                       or

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

            For the transition period from __________ to __________.


                          Commission File No. 333-42499

                     SUCCESS DEVELOPMENT INTERNATIONAL, INC.
                (Name of registrant as specified in its charter)

                       FLORIDA                            59-3307487
           (State or other jurisdiction of            (I.R.S. Employer
            incorporation or organization)            Identification No.)

            9799 OLD ST. AUGUSTINE ROAD, JACKSONVILLE, FLORIDA 32257
                 (Address number of principal executive offices)

                                 (904) 886-2985
                (Telephone number of principal executive offices)

           Securities Registered Pursuant to Section 12(b) of the Act:

                 None                                     None
        (Title of Each Class)        (Name of Each Exchange on Which Registered)

           Securities Registered Pursuant to Section 12(g) of the ACT:

                    Common Stock (par value $.001 per share)
                                (Title of Class)

        Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period(s) that the
Registrant was required to file such reports), and (2) has been subject to such
filings requirements for the past 90 days. Yes [X] No [ ]

        Indicate by check mark if the disclosure of delinquent filers pursuant
to item 405 of Regulation S-K is not contained herein, and will not be contained
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-QSB or any
amendment to this for 10-QSB. [X]

        The aggregate book value of Common Stock held of the Registrant on
September 30, 1998 was (505,112), based on shares outstanding for the Common
Stock on such date. For the purpose of this computation, all restricted issues
have been included. Such shares may not have, in fact, been issued.

        The number of shares outstanding of the Registrant's Common Stock on
September 30, 1998 was 11,491,678 shares.

                    DOCUMENTS INCORPORATED BY REFERENCE Form
                         SB-2/A Registration Statement.
              Form 10-KSB for Fiscal Year Ended December 31, 1997.

                                        1
<PAGE>
                                TABLE OF CONTENTS

                                     PART I


Item    1.     BUSINESS ....................................................   3


                                     PART II


Item    2.     SUBMISSION MATTERS TO A VOTE OF SHAREHOLDERS.................   3

Item    3.     SELECTED FINANCIAL DATA .....................................   4

Item    4.     MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
               AND RESULTS OF OPERATIONS ...................................   4

                                    PART F/S

Item    5.     CONSOLIDATED FINANCIAL STATEMENTS ...........................   7

Item    6.     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ..................  13

                                    PART III

Item    7.     DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT ..............  22

Item    8.     ENDORSEMENTS ................................................  24

Item    9.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON 
               FORM 8-KSB ..................................................  25

                                        2
<PAGE>
PART  I

ITEM 1. BUSINESS

General

     Success Development International, Inc. was incorporated in Florida in 1995
to serve as a holding company for its five operating subsidiaries, The LeGrand
Group, Inc. ("LGI"), Results Publishing, Inc. ("RPI"), Telstar Consulting, Inc.
("TCI"), SDI Direct Corporation ("SDC") and SDI Internet Services, Inc. ("SIS").

     The LeGrand Group, Inc. was founded in 1989 and incorporated in Florida in
1991 for the purpose of marketing and distributing information about real estate
investment.

     Results Publishing, Inc. was incorporated in Nevada in 1995 for the purpose
of sponsoring workshops and seminars about the LeGrand Group, Inc.'s financial
products and business opportunities.

     Telstar Consulting, Inc. was incorporated in Nevada in 1995 for the purpose
of supplying telemarketing sales for the LeGrand Group, Inc. and other third
party products and services.

     SDI Direct Corporation was incorporated in 1998 as a wholly owned
subsidiary of the Company. SDI Direct was formed to create and market products
and services primarily through television infomercials. SDI Direct developed and
began testing its first infomercial during the third quarter of 1998.

     SDI Internet Services Inc. was incorporated in 1998 as a wholly owned
subsidiary of the Company. SDI Internet services was formed to create an
Internet presence for the Company through the web site at www.success-di.com.
The web site provides information to interested parties about the Company's
products and services. SDI Internet Services also provides web site creation and
hosting for other companies.

     The Company provides information, education, financial and other services
to small businesses and their owners. The services offered by the Company
include a magazine, a variety of seminars, conferences, home study courses,
hands-on training events in the areas of real estate investment and management,
marketing, business structuring and planning, and income tax planning.
Additional specialty services include mortgage lending, equipment leasing,
factoring accounts receivable and business lines of credit. The products and
services provided by the company are designed to enable its customers to create,
increase and maintain financial wealth.

     The Company strives to provide business consumers with information that can
be used independently or, at the purchaser's option, with assistance from
workshop leaders. The Company believes that its ability to teach this
information in an understandable, easy-to-follow format together with its
ongoing support system for customers has enabled it to reach its current
financial position. Maintaining its commitment to quality customer support and
building ongoing relationships with customers is necessary, in the Company's
opinion, to achieve rapid expansion and long-term profitability.

     The Company sells its products and services to a broad spectrum of
individuals and entities from beginning entrepreneurs seeking skills to achieve
financial independence to experienced entrepreneurs looking to enhance their
existing plans and protect existing assets. The products and services are sold
through several mediums, including direct mail, telemarketing, Internet,
periodical advertising, radio, television, direct sales and customer referral.

     The Company's executive offices are located at 9799 Old St. Augustine Road,
Jacksonville, Florida 32257, and its phone number is (904) 886-2985.

                                        3
<PAGE>
PART II

ITEM 2. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED ShareholderS MATTERS
BROKER-DEALER

     We have entered into an Agency Agreement (the "Agreement") with Attkisson,
Carter & Akers, Incorporated, a registered securities broker-dealer (the
Broker-Dealer"). Under the Agreement, we are employing the Broker-Dealer as our
exclusive agent to sell our stock on a "best efforts -- 100,000 Share minimum --
500,000 Shares maximum" basis. All subscription payments will be deposited into
an escrow account at First Union National Bank, Corporate Trust Group, 225 Water
Street, 3rd Floor, Jacksonville, FL 32202, (904) 361-3174. All subscribers'
checks will be made payable to First Union National Bank, as escrow agent. The
Broker-Dealer will transmit such checks directly to the escrow agent by noon of
the next business day after receipt. If the Minimum is not obtained within 3
months after the date of this Prospectus, all proceeds deposited in the escrow
account will be promptly refunded in full, with interest, but without any
deduction for expenses.

     If the Minimum is raised, no interest will be paid to subscribers, and
interest earned during the escrow period will be paid to the Company. All funds
held in the escrow account will be invested in an interest bearing bank account.
Upon raising the Minimum amount, the escrow shall be terminated, subscribers
will become Shareholders and all additional proceeds from the sale of shares
will go directly to the Company.

     During the Escrow Period, all subscription payments for shares must be
delivered by the Broker-Dealer to the Escrow Agent. A written confirmation along
with a copy of the Share Purchase Agreement will be mailed by the Broker-Dealer
to each subscriber or purchaser within fifteen business days of receipt by the
Broker-Dealer. Stock certificates will not be issued to subscribers until such
time as the funds are released from the escrow account to SDI. During the Escrow
Period, subscribers will have no right to a return of their payment.

     The offering will continue until subscriptions for all 500,000 shares
offered are received, or until six months from the effective date of the
Offering or until the Broker-Dealer and the Company mutually agree to terminate
the Offering, whichever event first occurs.

     Subject to sale of the minimum of 100,000 shares prior to the termination
of the Offering, the Company has agreed to pay the Broker-Dealer a sales
commission of ten percent. The Broker-Dealer may offer the shares through other
dealers who are members of the National Association of Securities Dealers, Inc.,
and may grant concessions to or otherwise allow such dealers such proportion of
the ten percent commission as the Broker-Dealer may consider proper.

     The Company has agreed to provide to the Broker-Dealer for no consideration
options (the "Options") to purchase up to 50,000 shares at an exercise price of
$5.50 per share on the basis of one Option for each ten shares sold in the
Offering. The Options are exercisable during the five year period commencing on
the date of this prospectus (the "Option Exercise Term"). During the Option
Exercise Term, the holders of the Options are given, at no cost, the opportunity
to profit from a rise in the market price of the Company's Common Stock. To the
extent that the Options are exercised, dilution to the interest of the Company's
Shareholders will occur. The Options will not be transferred, assigned, pledged
or hypothecated for a period of one year from the effective date of this
offering except to officers or partners of the Broker-Dealer and members of any
selling group and/or their officers or partners. Further, the terms upon which
the Company will be able to obtain additional equity capital may be adversely
affected since the holders of the Options can be expected to exercise them at a
time when the Company would, in all likelihood, be able to obtain any needed
capital on terms more favorable to the Company than those provided in the
Options. Any profit realized by the Broker-Dealer on the exercise of the options
and the ensuing sale of the underlying shares of Common Stock may be deemed
additional compensation to the Broker-Dealer.

     The Company expects to pay up to $15,000 in accountable expenses to the
Broker-Dealer to cover legal expenses and other costs of the Offering.

     The Company has agreed to indemnify the Broker-Dealer against liabilities
incurred by the Broker-Dealer by reason of any untrue statement of a material
fact contained in the

                                        4
<PAGE>
prospectus or by reason of the omission of a material fact necessary in order to
make the statements in the prospectus, in light of the circumstances, not
misleading, where such information relates to or was furnished by the
Broker-Dealer in writing.

ITEM 3. LEGAL PROCEEDINGS

     As of the date of this Prospectus, there is no pending material litigation
involving the Company.

GOVERNMENT REGULATION

     SDI's business is subject to regulation under the Telemarketing and
Consumer Fraud and Abuse Prevention Act and state laws applicable to
telemarketing activities. See "Risk Factors." Management believes that it is in
substantial compliance with all of the foregoing federal and state laws and the
regulations promulgated thereunder. Any claim that we were not in compliance
could result in judgments or consent agreements that required the Company to
modify its marketing program. In the worst cases, enforcement of fraud laws can
result in forcing a business to close and to subject the business and its
management and employees to be subject to criminal prosecution and civil damage
actions.

EMPLOYEES

     As of September 30, 1998, SDI had 31 full time employees and 4 part-time
employees. We also use approximately 15 independent contractors. SDI's employees
are not represented by a labor union and are not subject to any collective
bargaining arrangement. The Company has never experienced a work stoppage and we
believe that it has good relations with its employees and contractors.

ITEM 4. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

    None.

ITEM 5. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

     During the third quarter one item was submitted to a vote of shareholders
which was the election of directors at the annual shareholders meeting on August
5th 1998.

ITEM 6. SELECTED FINANCIAL DATA

                     SUCCESS DEVELOPMENT INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS
           FOR THE PERIODS ENDED SEPTEMBER 30, 1996 AND 1997 AND 1998
<TABLE>
<CAPTION>
                                             September 30,  September 30,  September 30,
                                                1996            1997           1998
                                             Unaudited       Unaudited       Unaudited
                                            ------------    ------------    ------------
<S>                                         <C>             <C>             <C>          
Balance Sheet Data:
   Working capital (net unearned revenue)   $ (1,474,780)   $ (1,887,572)   $   (494,713)
   Total assets .........................      1,821,225       2,179,539       2,038,408
   Total debt ...........................      2,876,909       3,625,871       3,543,520

Operating Statement Data:
   Operating revenue ....................      4,771,136       5,598,688       3,874,699
   Operating expenses ...................      5,755,446       4,961,971       3,974,188
   Other revenue (expenses) net .........        (20,998)         32,076          29,745

Cash Flow Data:
   Operating activities .................       (457,845)         53,801        (162,195)
   Investing activities .................        (67,186)       (141,382)        (25,682)
   Financing activities .................        538,573         131,728         159,899

Shareholders' Equity Data:

                                        5
<PAGE>
   Shareholders' equity (deficit) .......   $ (1,055,684)     (1,446,332)       (505,112)
   Shares Outstanding ...................     10,380,000      10,974,000      11,491,678
</TABLE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     THIS SHOULD BE READ TOGETHER WITH THE FINANCIAL STATEMENTS AND THEIR NOTES.
OPERATING DATA PRESENTED IN THIS DISCUSSION ARE UNAUDITED.

OVERVIEW. We produce, market and distribute information, education and financial
products and services to small business and their owners.

     We have strengthened our management team over the last few years. In May
1995, we elected Daniel S. Pena, Sr. as Director and Chairman of the Board of
Directors. Mr. Pena is an executive experienced in the accelerated growth of an
entrepreneurial company and in the management of public companies. In August
1995, we elected Shawn M. Casey as the new Chief Executive Officer to lead the
Company into its current phase of growth. In July 1996, two executives
experienced in the management of public companies, Hugh Carey and Jarrell
Ormand, agreed to serve on the Board of Directors. In January, 1997, we hired a
new Controller, Ralph E. Vroman Jr., who is now the Chief Financial Officer,
experienced in the financial management and information systems required for
public companies.

     These individuals, along with other key managers recruited by us during
this time frame, bring to the Company significant experience in creating and
marketing personal and financial development products.

     We realized significant improvement in our sales during 1996 and 1997 as
well as significant improvement in our Balance Sheet and financial strength in
1998, primarily as a result of our expanded marketing efforts during 1996 and
early 1997, in which we incurred substantially higher levels of marketing
expenditures. Our net sales increased by 110.14% in 1996 and by 9.82% in 1997,
when compared to 1995 and 1996, respectively. We will continue to seek further
improvement in sales and profit over time as we are able to take advantage of
the increased marketing staff and marketing budget, as more internally developed
products become available for sale, and as economies of scale are achieved as we
continue to grow.

     We account for the recognition of income from "Boot Camps" when the
customer has attended the event or one year has passed. This results in unearned
revenue being reported for the current period. Although we have received payment
which would otherwise be recognized as income, the revenue is treated as
unearned until the purchaser attends the event or one year has passed from the
date of purchase. Our history shows that we will be able to recognize more than
90% percent of this unearned revenue as income within the following twelve-month
period. The amount of revenue unearned is net of all related expenses so, after
the purchasers attend the event or the one year period passes, the recognized
revenue directly increases the income from operations.

RESULTS OF OPERATIONS.

     The following discussion and analysis of the Company's consolidated results
of operations for the years ended September 30, 1997 and 1998 is based upon, and
should be read in conjunction with, the financial information set forth in the
Consolidated Financial Statements, including their notes, included elsewhere in
this report.

OPERATIONS

     Our accounting, purchasing, inventory control, scheduling, order
processing, warehousing and shipping activities are coordinated at our
headquarters. Production and major vendor initial shipments are performed by
independent contractors working under SDI's direction. Our computer system
handles order entry, order processing, picking, billing, accounts receivable,
accounts payable, general ledger, inventory control, catalog management and
analysis and mailing list management. Subject to credit terms and product
availability, orders are typically shipped from our facilities within 24 hours
of

                                        6
<PAGE>
receiving an order. Third party contractors print and assemble the Company's
audio and video tapes, manuals, transcripts, newsletters, software, inserts and
the boxes in which the products are shipped. We have multiple sources for all
components of our products, and have not experienced any material delays in
production or assembly.

PRODUCT RETURNS

     Reserves for returns by customers have been established in the allowance
for bad debt and returns that we believe are adequate based on product
sell-through, inventory levels and historic return rates. We periodically adjust
our reserves for these returns. SDI sells on credit, with varying discounts,
return privileges and unsecured credit terms.


PERIOD ENDED SEPTEMBER 30, 1997 COMPARED TO PERIOD ENDED SEPTEMBER 30, 1998.

     Operating revenue decreased $1,723,989, or 30.79%, to $3,874,699 in 1998
from $5,598,688 in 1997. The decrease resulted primarily from the Company's
focus on restructuring the company's internal systems and developing its new
products and services..

     Cost of product sales and direct operating expenses decreased $1,621,636,
or 52.51%, to $1,466,701 in 1998 from $3,088,337 in 1997. The decrease resulted
primarily from the more effective financial cost controls. Inventory is reported
based on physical counts with allocation for overages, shrinkages and product
returns.

     Royalties and costs to authors and speakers decreased $402,075, or 48.59%
to $425,361 in 1998, from $827,436 in 1997. The decrease resulted from the
acquisition of certain products for which no further royalty payments are due
and the renegotiation of certain other royalty agreements.

     General and administrative expenses increased $1,023,127, or 104.86%, to
$1,998,852 in 1998 from $975,725 in 1997. The increase in expenses was
attributable to the upstart of two additional enterprise operations.

     Depreciation and amortization expenses increased $12,802, or 18.17%, to
$83,275 in 1998 from $70,473 in 1997. The increase resulted primarily from the
acquisition of additional equipment through capital leases.

     Rent and other income increased $5,535, or 6.00%, to $97,785 in 1998 from
$92,250 in 1997. The increase resulted primarily from an increase in earnings
from miscellaneous company owned investments.

     Interest expense decreased $7,866, or 13.07%, to $68,040 in 1998 from
$60,174 in 1997, primarily attributed to the conversion of various notes payable
and accrued interest to stock.

     Liquidity and capital resources have traditionally been financed through
operating cash flow, private placement of convertible debt and issuance of
stock.

     Cash management is a key element of our operating philosophy and future
strategic plans. Even while under capitalized, we have managed cash flow
sufficiently to allow for continued growth and increased operating revenues.

     In our opinion, working capital is sufficient to meet our present working
capital needs. We have historically grown at a fast pace despite being under
capitalized. We will use the available funds in the manner we see fit to
continue our growth. Any funds which are added to working capital will improve
our financial condition.

     We expect to continue to grow at approximately the same pace as
demonstrated from 1996 to 1997. The additional availability of funds is expected
to accelerate the internal growth of the Company. While we intend to make every
attempt to increase marketing using whatever funds are available, a lack of
funds will impede these efforts.

     The company plans to maintain an aggressive growth pattern through the use
of cash flows from operations, financing activities and a direct public
offering.

                                        7
<PAGE>
     The company has systematically contacted each Creditor and restructured its
liabilities and made payment arrangements which have avoided material
litigation, moved billings into current status and reestablished creditor
confidence. Management further took steps towards cost controls by adopting
standardized staffing techniques. This resulted in a work force reduction of
approximately 30% as of year end 1997 from year end 1996.

     Operating activities used $162,374 in cash for 1998 as compared to cash
provided by operating activities of $53,801 in 1997. The cash used by operating
activities resulted from the start up of two additional and new business
activities-SDI Direct Corporation in the second quarter and SDI Internet
Services Inc. in the third quarter.

     During 1997 and 1998 our investing activities consisted primarily of
investment in property and equipment representing net cash used in 1997 of
$141,382 and $25,503 for 1998. 1998 investment activities were represented by
lease swaps on equipment upgrades.

     Financing activities in 1996 we issued $445,000 of convertible notes which
are payable 270 days from the date of their issuance. In 1997 we issued an
additional $140,000 in convertible notes. All notes are convertible into our
Common Stock at a conversion rate of one share of Common Stock for each $1.00 of
principal amount of the notes. The conversion of the notes is subject to the
legal registration of the shares issuable upon conversion or an applicable
exemption from such registration. From January 1, 1996 through September 30,
1997, we have allowed the holders of notes totaling $266,294 to convert those
notes into Common Stock in exchange for cancellation of the debt. $266,294 in
notes payable have been converted to 294,010 shares of common stock through
September 30, 1997. $102,163 in notes payable have been converted to 139,000
shares of common stock through September 30, 1998.

     We have approximately $2,000,000 in net operating loss carryovers from 1996
and prior years available to reduce future taxable income through the year 2010.
Utilization of the net operating loss carryovers is subject to the separate
return limitation year ("SRLY") restrictions for consolidated tax returns, and
realization is dependent upon Results Publishing, Inc. and Telstar, Inc.
generating sufficient separate taxable income to utilize the net operating
losses.

     EFFECT OF INFLATION. The Company's income and profitability is not affected
positively or adversely by inflation.

                                        8
<PAGE>
PART F/S

Item 8. FINANCIAL STATEMENTS

                          FINANCIAL DEPARTMENTS' REPORT

The Board of Directors of
Success Development International, Inc.:

We have prepared the accompanying consolidated balance sheets of Success
Development International, Inc. and subsidiaries as of September 30, 1996, 1997
and 1998, and the related consolidated statements of operations, shareholders'
equity and cash flows for the periods then ended.

We prepared our statements in accordance with the instructions to Form 10-QSB
and therefore omit or condense certain footnotes and other information. The Form
10-QSB requires that we plan and perform with reasonable assurance about whether
the financial statements are free of material misstatement. The accounting
policies followed for interim financial reporting are the same as those
disclosed in Note 2 of the Notes to Consolidated Financial Statements included
in the Company's audited financial statements for the fiscal year ended December
31, 1996 which are included in For 10-KSB, dated for year end December 31, 1997
and Form SB-2 dated for February 18, 1998. We believe that our financial
statements provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Success
Development International, Inc. and subsidiaries as of September 30, 1996, 1997
and 1998 and the results of their operations and their cash flows for the
periods then ended in conformity with generally accepted accounting principles
and the instructions for the Form 10-QSB which may take precedence.

Ralph E. Vroman, Jr., Chief Financial Officer
Jacksonville, Florida
October 29, 1998

                                        9
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

The Board of Directors of
Success Development International, Inc.:

We have audited the accompanying consolidated balance sheets of Success
Development International, Inc. and subsidiaries as of December 31, 1996 and
1995, and the related consolidated statements of operations, shareholders'
deficit and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Success
Development International, Inc. and subsidiaries as of December 31, 1996 and
1995 and the results of their operations and their cash flows for the years then
ended in conformity with generally accepted accounting principles.

James Moore & Co., P.L.
Holly Hill, Florida
September 18, 1997

                                       10
<PAGE>
                     SUCCESS DEVELOPMENT INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS
                 FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
                  AND NINE PERIODS SEPTEMBER 30, 1997 AND 1998
<TABLE>
<CAPTION>
                                                 December 31    December 31   September 30   September 30
                    ASSETS                              1996           1997           1997           1998
CURRENT ASSETS                                       Audited      Unaudited      Unaudited      Unaudited
                                                 -----------    -----------    -----------    -----------
<S>                                              <C>            <C>            <C>            <C>        
     Cash and cash equivalents ...............   $       800    $    31,326    $    57,609    $    97,685
     Restricted Cash .........................        43,045         82,279         30,464        (12,058)
     Current portion of notes receivable-
     trade, net ..............................       247,836        465,824        378,137        423,433
     Inventories .............................        75,218         72,158         21,687         22,612
     Prepaid expenses ........................        28,982         11,145         16,257         31,257
               Total current assets ..........       395,961        662,732        504,153        513,518
                                                 -----------    -----------    -----------    -----------
PROPERTY AND EQUIPMENT, net ..................     1,076,460      1,102,788      1,110,970      1,053,377
                                                 -----------    -----------    -----------    -----------
OTHER ASSETS
     Notes receivable-trade, less current
     portions, net ...........................       165,224        178,819        392,002        250,453
     Receivables from employees and others ...        10,500          9,678         10,500          9,000
     Organizational costs and other ..........        54,819        161,914        161,914        162,649
                                                 -----------    -----------    -----------    -----------
               Total other assets ............       230,543        350,411        564,416        422,102

TOTAL ASSETS .................................   $ 1,702,964    $ 2,115,931    $ 2,179,539    $ 2,038,408
                                                 ===========    ===========    ===========    ===========

LIABILITIES AND ShareholderS' EQUITY
CURRENT LIABILITIES
     Accounts payable and accrued expenses ...   $ 1,149,121    $ 1,051,918    $   823,889    $   493,395
     Accounts payable to management and
     Shareholders ............................       420,736        412,804        362,839        287,518
     Current portion of long-term debt .......     1,073,717        837,473      1,204,997        276,728
     Unearned revenue ........................     1,144,625        770,143        973,265        669,925
               Total current liabilities .....     3,788,202      2,996,321      3,364,990      1,727,567
                                                 -----------    -----------    -----------    -----------
LONG-TERM DEBT, less current portion .........       296,831        194,526        260,881        815,953
                                                 -----------    -----------    -----------    -----------
               Total liabilities .............     4,085,033      3,266,864      3,625,871      2,543,520
                                                 -----------    -----------    -----------    -----------
COMMITMENTS AND CONTINGENCIES
(Notes 6, 9, 11, and 12)
SHAREHOLDERS' EQUITY
     Common stock, $.001 par value; 12,000,000
     and 25,000,000 shares authorized in 1995
     and 1996, respectively, 10,125,000 and
     10,355,000 shares issued and outstanding         10,355         11,241         10,974         11,492
     in 1995 and 1996, respectively
     Additional paid in capital ..............       267,309        800,052        533,309      1,515,366
     Accumulated deficit .....................    (2,659,183)    (1,962,051)    (1,990,390)    (2,031,795)
     Unearned compensation - restricted stock           (550)          (175)          (225)          (175)
                                                 -----------    -----------    -----------    -----------
          Total shareholders' equity (deficit)    (2,382,069)    (1,150,933)    (1,446,332)      (505,112)
                                                 -----------    -----------    -----------    -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ...   $ 1,702,964    $ 2,115,931    $ 2,179,539    $ 2,038,408
                                                 ===========    ===========    ===========    ===========
</TABLE>
   The accompanying notes to consolidated financial statements are an integral
part of these statements.
                                       11
<PAGE>
                     SUCCESS DEVELOPMENT INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
                  AND PERIODS ENDED SEPTEMBER 30, 1997 AND 1998
<TABLE>
<CAPTION>
                                               December 31     December 31    September 30    September 30
                                                      1996            1997            1997            1998
OPERATING REVENUE:                                 Audited       Unaudited       Unaudited       Unaudited
                                              ------------    ------------    ------------    ------------
<S>                                           <C>             <C>             <C>             <C>         
    Product sales and tuition .............   $  5,778,301    $  6,345,837    $  5,598,688    $  3,874,699
                                              ------------    ------------    ------------    ------------
OPERATING EXPENSES:
    Cost of product sales and direct ......      3,116,217       2,993,302       3,088,337       1,466,701
   operating expenses
    Royalties .............................      2,159,148       1,190,071         827,436         425,361
    General and administrative ............      2,750,377       1,443,608         975,725       1,998,852
    Depreciation and amortization .........         86,134          93,964          70,473          83,275
                                              ------------    ------------    ------------    ------------
               Total operating expenses ...      8,111,876       5,720,945       4,961,971       3,974,188
                                              ------------    ------------    ------------    ------------
INCOME FROM OPERATIONS ....................     (2,333,575)        624,892         636,717       (99, 489)
                                              ------------    ------------    ------------    ------------
OTHER INCOME (EXPENSE)
     Rent and other income ................        127,179         152,472          92,250          97,785
     Interest expense .....................       (153,905)        (80,232)        (60,174)        (68,040)
     Loss on disposal of asset ............        (10,160)           --              --              --
                                              ------------    ------------    ------------    ------------
               Total other income (expense)        (36,886)         72,240          32,076          29,745
                                              ------------    ------------    ------------    ------------
NET INCOME (LOSS) .........................   $ (2,370,461)   $    697,132    $    668,793    $    (69,744)
                                              ============    ============    ============    ============

PRIMARY EARNINGS (LOSS) PER COMMON SHARE ..   $      (0.21)   $       0.06    $       0.06    $      (0.01)
NUMBER OF SHARES OUTSTANDING-PRIMARY ......     10,355,000      11,241,010      11,974,000      11,060,854
                                              ============    ============    ============    ============
FULLY DILUTED EARNINGS PER SHARE ..........                   $       0.05    $       0.05    $      (0.01)
WEIGHTED AVERAGE NUMBER OF SHARE
OUTSTANDING-FULLY DILUTED .................                     13,595,150      14,023,413      13,623,180
                                                              ============    ============    ============
</TABLE>
   The accompanying notes to consolidated financial statements are an integral
part of these statements.

                                       12
<PAGE>
                     SUCCESS DEVELOPMENT INTERNATIONAL, INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
                  AND PERIODS ENDED SEPTEMBER 30, 1997 AND 1998
<TABLE>
<CAPTION>
                                                                            Retained                        Total
                                                Common      Additional      Earnings                    Shareholders
                                                 Stock       Paid in    (Accumulated      Unearned         Equity
                                    Shares       Amount      Capital        Deficit)     Compensation     (Deficit)
                                 -----------    --------    ----------   -----------    -------------    -----------
<S>                               <C>           <C>         <C>          <C>            <C>              <C>         
BALANCE, December 31, 1995 ...    10,125,000    $ 10,125          --     $  (288,722)   $      (2,655)   $  (281,252)
                                 -----------    --------    ----------   -----------    -------------    -----------
Issuance of common stock .....        85,000          85          --            --               --               85
Issuance of common stock from
conversion of debt ...........       245,000         245       267,309          --               --          267,554
Restricted common stock -
restrictions expire ..........          --          --            --            --              2,005          2,005

Forfeit of restricted - common
stock ........................      (100,000)       (100)         --            --                100           --

Net income (loss) ............          --          --            --     $(2,370,461)            --      $(2,370,461)
BALANCE, December 31, 1996 ...    10,355,000    $ 10,355    $  267,309   $(2,659,183)   $        (550)   $(2,382,069)
                                 -----------    --------    ----------   -----------    -------------    -----------
Issuance of common stock .....       500,000         500          --            --               --              500
Issuance of common stock from
conversion of debt ...........       561,010         561       532,743          --               --          533,304
Restricted common stock -
restrictions expire ..........          --          --            --            --                200            200

Forfeit of restricted - common
stock ........................      (175,000)       (175)         --            --                175            175

Net income (loss) ............          --          --            --     $   697,132             --      $   697,132

BALANCE, December 31, 1997 ...    11,241,010    $ 11,241    $  800,052   $(1,962,051)   $        (175)   $(1,150,933)
                                 ===========    ========    ==========   ===========    =============    ===========




BALANCE, December 31, 1996 ...    10,355,000    $ 10,355    $  267,309   $(2,659,183)   $        (550)   $(2,382,069)
                                 -----------    --------    ----------   -----------    -------------    -----------
Issuance of common stock .....       500,000         500          --            --               --              500
Issuance of common stock from
conversion of debt ...........       294,000         294       266,000          --               --          266,294
Restricted common stock -
restrictions expire ..........          --          --            --            --                150            150

Forfeit of restricted - common
stock ........................      (175,000)       (175)         --            --                175            175

Net income (loss) ............          --          --            --     $   668,793             --      $   668,793

BALANCE, September 30, 1997 ..    10,974,000    $ 10,974    $  533,309   $(1,990,390)   $        (225)   $(1,446,332)
                                 ===========    ========    ==========   ===========    =============    ===========
BALANCE, December 31, 1997 ...    11,241,010    $ 11,241    $  800,052   $(1,962,052)   $        (175)   $(1,446,332)
                                 -----------    --------    ----------   -----------    -------------    -----------
Issuance of common stock .....       111,527         112       613,290          --               --          613,402
Issuance of common stock from
conversion of debt ...........       139,000         139       102,024          --               --          102,163

Restricted common stock - ....          --          --
restrictions expire ..........          --          --            --            --   

Forfeit of restricted - common          --          --
stock ........................      (175,000)       (175)         --            --   

Net income (loss) ............          --          --            --         (69,744)            --          (69,744)

BALANCE, September 30, 1998 ..    11,491,678    $ 11,492    $1,515,366   $(2,031,795)   $        (175)   $  (505,112)
                                 ===========    ========    ==========   ===========    =============    ===========
</TABLE>
     The accompanying notes to consolidated financial statements are an integral
part of these statements.

                                       13
<PAGE>
                     SUCCESS DEVELOPMENT INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
                  AND PERIODS ENDED SEPTEMBER 30, 1997 AND 1998
<TABLE>
<CAPTION>
                                                           December 31    December 31    September 30    September 30
                                                                  1996           1997            1997            1998
CASH FLOWS FROM OPERATING ACTIVITIES                           Audited      Unaudited       Unaudited       Unaudited
                                                           -----------    -----------    ------------    ------------
<S>                                                        <C>            <C>            <C>             <C>          
     Net income (LOSS) .................................   $(2,370,461)   $   697,132    $    668,793    $    (69,744)
                                                           -----------    -----------    ------------    ------------
Adjustments to reconcile net income (LOSS) to net cash
used in operating activities
     Provision for uncollectible receivables ...........       524,152        816,574         441,168         222,496
     Depreciation and amortization .....................        86,134         93,964          70,473          83,275
     Issuance of common stock for compensation and .....        24,644         91,351           5,429         102,024
interest
     Interest converted to long-term debt ..............        11,259           --              --              --
     Loss on disposal of assets ........................        10,160           --              --              --
Change in assets and liabilities:
     Notes receivable - trade ..........................      (847,912)    (1,048,157)       (798,247)        145,664
     Inventories .......................................       (36,490)         3,060          53,531            (925)
     Prepaid expenses ..................................        (3,793)        17,837          12,725         (15,000)
     Other assets ......................................       (12,270)      (107,095)       (107,095)           (735)
     Accounts payable and accrued liabilities ..........       906,222        (97,203)        (63,717)       (250,590)
     Accounts payable to management and Shareholders ...       376,794         (7,935)        (57,900)        (75,321)
     Unearned revenue ..................................       819,435       (374,482)       (171,360)       (303,340)
                                                           -----------    -----------    ------------    ------------
     Total adjustments .................................     1,858,335       (612,086)       (614,993)        (92,452)
                                                           -----------    -----------    ------------    ------------
        Net cash provided (used) in operating activities      (512,126)        85,046          53,801        (162,196)
                                                           -----------    -----------    ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment ................       (80,150)      (120,278)       (141,382)        (25,682)
     Proceeds from sale of property and equipment ......          --             --              --              --
     Advances to employees and others ..................          --           (1,500)           --            (1,500)
     Collection of receivables from employees and others        15,029          2,322            --             1,321
                                                           -----------    -----------    ------------    ------------
        Net cash used in investing activities ..........       (65,121)      (119,456)       (141,382)        (25,682)
                                                           -----------    -----------    ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from long-term debt ......................       296,000        105,045          93,624         887,520
     Repayment of long-term debt .......................      (162,155)      (140,955)        (51,896)       (727,621)
     Proceeds from convertible notes ...................       445,000        140,000          90,000            --
     Dividends paid ....................................          --             --              --              --
                                                           -----------    -----------    ------------    ------------
         Net cash provided by financing activities .....       578,845        104,090         131,728         159,899
                                                           -----------    -----------    ------------    ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                                 1,598         69,680          44,147         (27,978)
                                                           -----------    -----------    ------------    ------------
CASH AND CASH EQUIVALENTS, beginning of period .........        42,327         43,925          43,925         113,605
                                                           -----------    -----------    ------------    ------------
CASH AND CASH EQUIVALENTS, end of period ...............        43,925        113,605          88,073          85,627
                                                           ===========    ===========    ============    ============
</TABLE>
      The accompanying notes to consolidate financial statements are an integral
part of these statements.

                                       14
<PAGE>
                     SUCCESS DEVELOPMENT INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
                  AND PERIODS ENDED SEPTEMBER 30, 1997 AND 1998
<TABLE>
<CAPTION>
SUPPLEMENT DISCLOSURE OF CASH FLOW INFORMATION     December 31   December 31    September 30    September 30
                                                          1996          1997            1997            1998
CASH FLOWS FROM OPERATING ACTIVITIES                   Audited     Unaudited       Unaudited       Unaudited
                                                   -----------   -----------   -------------   -------------
<S>                                                <C>           <C>           <C>             <C>          
Cash paid during the year for interest             $    94,267   $    80,267   $      42,779   $      39,285
                                                   ===========   ===========   =============   =============
</TABLE>
 NON CASH INVESTING AND FINANCING ACTIVITIES:

During 1995 and 1996, the Company entered into various capital leases for
equipment and software for $91,459 and $41,870, respectively. During 1995, land
and building held for disposition were returned to the previous owner for
cancellation of the $218,483 mortgage. During 1996, long-term debt and accrued
interest was converted to stock and paid in capital in the amount of $267,554.
The accompanying notes to consolidated financial statements are an integral part
of these statements.

      The accompanying notes to consolidate financial statements are an integral
part of these statements.

                                       15
<PAGE>
                     SUCCESS DEVELOPMENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 1996 AND 1997

(1) THE COMPANY AND ITS OPERATIONS:

Success Development International, Inc. ("the Company") was incorporated April
7, 1995 for the purpose of forming a holding company structure for two separate,
but commonly owned, business ventures, The LeGrand Group, Inc. ("LeGrand") and
Results Publishing, Inc. ("Results"). The Company also includes a wholly owned
subsidiary, Telstar Consulting, Inc. ("Telstar").

LeGrand develops and sells a variety of real estate related education materials
and conducts seminars on this topic. Results organizes and promotes general
business conferences designed to provide participants with real estate and other
home based business opportunities. Telstar conducts various telemarketing
services for the Company. These operations are conducted throughout the United
States.

On April 14, 1995, and December 20, 1995, the Shareholders of LeGrand and
Results, respectively, approved plans of merger to become wholly owned
subsidiaries of the Company. Under the terms of the merger agreements, LeGrand
and Results Shareholders received, on a pro rata basis, 5,355,000 shares of the
Company's common stock in exchange for all of the issued and outstanding shares
of LeGrand and Results.

At the time of the merger, the majority Shareholder of the Company was deemed to
exercise effective control over both LeGrand and Results. As a result, the
merger was accounted for as a transfer of assets among entities under common
control in a manner similar to a pooling of interests whereby the historical
bases of assets, liabilities and results of operations of LeGrand and Results
have been combined retroactively in the accompanying consolidated financial
statements. All significant intercompany accounts and transactions have been
eliminated in consolidation.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

      (a) CASH AND --For purposes of the statement of cash flows, the Company
considers all highly liquid assets purchased with an initial maturity of three
months or less to be cash equivalents.

      (b) INVENTORIES--Inventories, consisting of education materials held for
resale, are stated at the lower of cost or market with cost determined on a
first-in, first-out basis.

      (C) PROPERTY AND EQUIPMENT--Property and equipment are recorded at cost
less accumulated depreciation and amortization. Depreciation is computed using
the straight-line method over the estimated useful lives of the individual
assets and leased equipment and software is amortized over the useful life of
the asset or the term of the lease, whichever is shorter. Estimated useful lives
of property and equipment are as follows:

            Buildings ..................................           40 years 
            Furniture, fixtures and equipment ..........           5-7 years
            Vehicles ...................................           5 years
            Software ...................................           3 years


Maintenance and repairs are expended as incurred. Major renewals and betterments
are capitalized. Upon sale or retirement, the cost and related accumulated
depreciation are removed from the accounts and the resulting gain or loss is
included in operations.

     (d) ORGANIZATION COSTS--Organization costs are amortized using the
straight-line method over a five year period.

     (e) REVENUE RECOGNITION--Revenues include products sold which entitle the
purchaser to attend training seminars within one year after delivery of the
product. Training seminar tuition is deferred and recognized only upon
attendance or lapse of the one year time period. Other revenues are recognized
as earned.

     (f) ADVERTISING--The Company expenses the production costs of advertising
the first

                                       16
<PAGE>
     time the advertising takes place, except for direct-response advertising,
which is capitalized and amortized over its expected period of future benefit.
Direct response advertising consists primarily of direct mail with order
response information. The capitalized costs of the advertising are amortized
over the one month period following the mail-out campaign. The costs of other
advertising, promotion and marketing programs are charged to operations in the
year incurred. At December 31, 1996 and 1995, advertising costs capitalized and
reported as assets were $19,023 and $19,583, respectively. For the years ended
December 31, 1996 and 1995, advertising expense was $667,533 and $255,919,
respectively.

     (g) INCOME TAXES--Deferred income tax liabilities and assets are determined
based on the difference between the financial statement and tax basis of assets
and liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.

     (h) USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities (such as the allowance for uncollectible notes receivable-trade and
certain other accounts) and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

     (i) Earnings Per Share - Earnings per share amounts are based on the
weighted average number of shares outstanding. The assumed conversion of the
stock options and convertible debt do not result in material dilution for the
years ended December 31, 1996 and 1995.

     (j) Interim Financial Statements (Unaudited) - The accompanying financial
statements for the interim periods ended September 30, 1997 and 1998 and related
disclosures are unaudited. These unaudited condensed interim financial
statements do not include all of the disclosures provided in the annual
consolidated financial statements and have been prepared in accordance with
Article 10 of Regulation S-X. The Interim financial statements should be read in
conjunction with the accompanying annual audited financial statements and
footnotes thereto. In the opinion of the Company, all adjustments necessary to
fairly present the financial position, results of operations, and cash flows
have been reflected in the financial statements for the periods ended September
30, 1997 and 1998. Results for the interim period September 30, 1998 are not
necessarily indicative of the results to be expected for the year ending
December 31, 1998.

     (k) New Accounting Standards - The following Statements of Financial
Accounting Standards (SFAS) have been issued which have not yet been adopted by
the company:

     SFAS No. 125. - "Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of liabilities," requires and entity to recognize the
financial and servicing assets it controls and the liabilities it has incurred
and to derecognize financial assets when control has been surrendered. The
statement is effective for transfers and extinguishments occurring after
December 31, 1996. Based on current activities, the Company believes the
adoption of SFAS No. 125 will not have a material impact on the Company's
results of operations of financial position.

     SFAS No. 128 - "Earnings Per Share," specifies new computation,
presentation and disclosure requirements. The statement will be effective for
both interim and annual periods ending after December 31, 1997. Management
believes that the adoption of this statement will not have a material impact on
the earnings per share presented.

     SFAS No. 130 - "Reporting Comprehensive Income" requires components of
comprehensive income in a financial statement that is displayed with the same
prominence as other financial statements. The statement will be effective for
financial statements for periods beginning after December 15, 1997. Management
believes that the adoption of this statement will not have a material impact on
the Company's results of operations of financial position.

     SFAS No. 131 - "Disclosures about Segments of an Enterprise and Related
Information" requires reporting of financial and descriptive information about
reportable operating segments. The statement will be effective for financial
statements for periods beginning after

                                       17
<PAGE>
     December 15, 1997. Management believes that the adoption of this statement
will not have a material impact on the Company's results of operations or
financial position.

(l) Stock-Based Compensation - The Company has elected to follow Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB
25) and related interpretations in accounting for its employee stock options.
Under APB 25, because the exercise price of the employee stock options exceed
the market price of the underlying stock on the date of grant, no compensation
expense is recorded. The Company has adopted the disclosure-only provisions of
Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation.

(3) NOTES RECEIVABLE - TRADE:

Notes receivable are principally due from customers for financed sales of
products and attendance at training seminars and are due on various dates
through December 1999. The Company has imputed interest at 10% on non-interest
bearing long-term notes receivable received in 1995. The discount is amortized
and recognized as interest income over the term of the notes. Notes issued for
1996 sales bear interest at 10% to 15%.

(3)  NOTES RECEIVABLE - TRADE:  (Continued)

The following is a summary of notes receivable-trade as of December 31, 1996 and
1997:

                                                        1996             1997
                                                     ---------      -----------
Notes receivable-trade .........................     $ 942,867      $ 1,990,370
Less discount ..................................          --               --
Less allowance for uncollectibles ..............      (529,807)      (1,366,145)
                                                     ---------      -----------
Notes receivable-trade, net ....................       413,050          624,225
Less: current portion of notes receivable ......       247,836          445,406
                                                     ---------      -----------
Notes receivable - long term portion ...........     $ 165,224      $   178,819
                                                     =========      ===========

Additionally, Accounts Receivable is summarized as part of the Notes
Receivable-Trade net current totals for $20,418 in 1997.

Future principal payments scheduled for collection as of December 31, 1996, are
as follows:

           YEAR
          ENDING        AMOUNT
          ------     ----------
           1997..    $  565,720
           1998..       235,717
           1999..       141,430
                     ----------
                     $  942,867
                     ==========

During the year ended December 31, 1996, the Company entered into an agreement
with a financial institution for a one year term with options to renew whereby
the Company can sell on an ongoing basis, notes receivable at discounts ranging
from 5% to 32% of the total unpaid principal balance. The note receivable
discount is calculated in accordance with a predetermined schedule. Under the
terms of the agreement, a reserve fund, equal to 15% of the unpaid principal
balance of all notes receivable purchased plus the percentage of any delinquent
notes receivable outstanding in the portfolio, is established to offset any
uncollectible notes receivable. The reserve fund is classified as restricted
cash in the accompanying balance sheets. During 1996, the Company sold certain
notes receivable with a face value of $311,981 under this agreement for cash in
the amount of $199,337. The

                                       18
<PAGE>
transaction resulted in a loss in the amount of $112,644.

(4) PROPERTY AND EQUIPMENT:

The following is a summary of property and equipment at December 31, 1996 and
1995:

                                                      1996              1997
                                                  -----------       -----------
Land .......................................      $   196,741       $   196,741
Buildings and improvements .................          723,656           723,656
Furniture, fixtures and equipment ..........          231,347           339,765
Vehicles ...................................             --                --
Computer Software ..........................           77,895            89,769
                                                  -----------       -----------
                                                    1,229,639         1,349,931
Less: accumulated depreciation .............         (153,179)         (247,143)
                                                  -----------       -----------
     Property and equipment, net ...........      $ 1,076,460       $ 1,102,788
                                                  ===========       ===========

See Note (6) relative to rental properties included above.

The Company leases certain equipment and software under capital leases. The cost
and related accumulated amortization on these assets at December 31, 1996 and
1997, are $133,329 and $41,452, and $144,750 and $99,073, respectively. Certain
capital leases are personally guaranteed by a Shareholder.

(5) LONG-TERM DEBT:

The following is a summary of long-term debt at December 31, 1996 and 1995.
<TABLE>
<CAPTION>
                                                                              YEAR             YEAR
                                                                             ENDING           ENDING
                                                                              1996             1997
                                                                           ---------        ----------
<S>                                                                         <C>              <C>      
Mortgage note payable in monthly installments of $3,438 of principal 
 plus interest at prime plus 1.5% (9.75% and 10% at December 31, 1996 
 and 1995, respectively) through December 2003, collateralized by 
 property and equipment, guaranteed by a Shareholder...................     $288,750         $ 247,489

Mortgage note payable in monthly installments of $3,458, including 
 interest at prime plus 1.5% (9.75% and 10% at December 31, 1996 and
 1995, respectively,) through July 2004, collateralized by property 
 and equipment, guaranteed by a Shareholder............................      228,850            218,284

Mortgage note payable in monthly installments of $1,553, including 
 interest at 14%, through July 2004, collateralized by property and 
 equipment, guaranteed by a Shareholder................................       86,770             79,853

Note payable, principal and accrued interest at 6% due December 
 1998, uncollateralized.................................................      79,000             79,000

Note payable to Shareholder in monthly installments of $250, 
 including interest at 18% through October 1996, collateralized by
 equipment..............................................................       --                  --

Convertible notes payable, bearing interest at 15%, payable and due
 in varying amounts, and dates, uncollateralized........................     336,261            167,199

Notes payable, bearing interest at 18% payable in varying amounts 
 from August, 1997 through October, 1999, certain notes receivable-
 trade pledged as collateral............................................     251,943            173,213

Obligations under capital leases with interest ranging from 10.74% 
 to 24.58% payable in monthly

                                    19
<PAGE>
 installments ranging from $329 to $908 through May
 2000, collateralized by software and equipment..........................     98,974            66,961
                                                                           ---------        ----------
Total....................................................................  1,370,548         1,031,999
           Less:  current portion                                          1,073,717           837,473
                                                                           ---------        ----------
           Long-term debt, less current portion                            $ 296,831        $  194,526
                                                                           =========        ==========
</TABLE>
Maturities of long-term debt for each of the next five years as of December 31,
1997 are as follows:

YEAR
ENDING                                      AMOUNT
------                                    ----------
1997 .......................              $1,073,717
1998 .......................                 222,267
1999 .......................                  68,481
2000 .......................                   6,083
2001 .......................                    --

As discussed in Note 7, a Shareholder assigned his interests in land trusts to
the Company. The land trusts hold properties and are obligated on the related
mortgages amounting to $604,370 and $672,207 at December 31, 1996 and 1995,
respectively. The transfer of the interest by the Shareholder to the Company
without written consent of the mortgagee violated the mortgage and security
agreement. Also, the property taxes due on the properties have not been paid in
accordance with the mortgage and security agreement. Under the terms of the
agreement, the mortgagee may call the loan for violations of the agreements.
Therefore, the entire amount of the loan balances have been classified as
current in the accompanying balance sheets.

(5)  LONG-TERM DEBT:  (Continued)

CONVERTIBLE NOTES--During 1996 and 1995, the Company issued $445,000 and
$150,000, respectively, of 15.0% convertible notes, which are payable 270 days
from their date of issuance unless extended. They are due in varying amounts
from February 1996 through May 1998. These notes are convertible into the
Company's common stock at a conversion rate of one share of company common stock
for each $1 principal amount of the notes. Conversion of the notes is subject to
the legal registration of the shares or exemption from such registration.

NOTES PAYABLE--Certain notes receivable-trade have been pledged as collateral on
notes payable. The agreement with the financial institution as discussed in Note
3 has a secured interest in some of the same notes receivable-trade which have
been pledged as collateral on notes payable.

CAPITAL LEASE OBLIGATIONS--Minimum future lease payments under capital leases
(included in long-term debt) as of December 31, 1996 for each of the next five
years and in the aggregate are as follows:


        YEAR
      ENDING                                     AMOUNT
     --------                                   --------
        1997 ..................                 $ 46,681
        1998 ..................                   43,717
        1999 ..................                   29,375
        2000 ..................                    5,851
        2001 ..................                      --
  Thereafter ..................                      --
                                                 --------
Total minimum lease payments ..                   125,624

                                       20
<PAGE>
Less: amount representing interest                 26,650
                                                 --------
Present value of net minimum lease payments        98,974
                                                 ========

(6) LEASES:

A portion of the Company's's buildings are leased to tenants under operating
leases through 1998 with several leases having options to renew for two to three
years. The approximate costs and accumulated depreciation of property and
equipment held for lease are $365,078 and $16,403 at December 31, 1996. A
schedule of minimum future lease receipts under operating leases based on the
rentals in effect at December 31, 1997, without regard to the exercise of
renewal options, follows:


              1996                  1997
            AMOUNT                 AMOUNT
       $    71,760             $      --
            57,510                  57,510

                --                  35,994
       -----------             -----------
           129,270                 129,270
       ===========             ===========

(7) RELATED PARTIES:

During 1995, the Company recognized bad debt expense of $19,729 on a receivable
due from an affiliated company, wholly owned by the Company's majority
Shareholder.

Royalties or commissions were paid to four of the Company's Shareholders during
the years ended December 31, 1996 and 1997. These Shareholders and their related
companies have verbal contractual arrangements with the Company whereby they
receive a percentage of the gross sales price of their companies' products sold
at Company events. Royalty expenses recognized by the Company relating to these
Shareholders for the years ended December 31, 1996 and 1997 were approximately
$1,065,000 and $217,198, respectively. The product revenues recognized by the
Company relating to these Shareholders for the years ended December 31, 1996 and
1997 were approximately $4,720,000 and $723,995, respectively. Approximately
$420,000 and $218,045 were due to these Shareholders at December 31, 1996 and
1997, respectively

A Shareholder who is also on the Company's Board of Directors originally
acquired the Company's land and buildings in his personal name as agent for the
Company. He assigned his interests in these properties to land trusts and
assigned his interests in the land trusts to the Company. He is the trustee for
the land trusts. Accordingly, at December 31, 1996, and 1997, these properties
with net book values of $868,514 and $863,130, respectively are included as
property and equipment in the accompanying financial statements. The mortgages
related to these properties are still in the name of the director. The Company
has been paying the mortgages since acquisition and intends to keep paying the
mortgages. Accordingly, at December 31, 1996 and 1997, these mortgages with
outstanding principal balances of $604,370 and $545,626, respectively, are
included as debt in the accompanying financial statements.

(8) FINANCIAL INSTRUMENTS, CONCENTRATION OF CREDIT RISK AND ECONOMIC DEPENDENCY:

The Company's financial instruments include cash, notes receivable-trade, and
long-term debt. Financial instruments that are exposed to concentration of
credit risk consist primarily of cash and notes receivable-trade. Cash, at tithe
amounts insured by the FDIC. The Company places its temporary cash investments
in what management believes to be high quality financial institutions. At
December 31, 1996, the cash bank balances of $44,407, were fully insured by the
FDIC. At December 31, 1997, the cash bank balances of $113,605, were fully
insured by the FDIC. Notes receivable-trade primarily represent uncollateralized
receivables arising from financing arrangements granted to training seminar
participants. Although the Company does not perform formal credit evaluations on
these debtors, no single debtor represents a significant concentration of credit
risk.

All of the Company's financial instruments are recorded at cost which is deemed
to approximate fair value. Fair value of notes receivable was determined by
applying the

                                       21
<PAGE>
current interest rate at which similar notes would be made to borrowers with
similar credit ratings. The determination of the fair value of long-term debt is
based on current rates at which the Company could borrow funds with similar
remaining maturities.

The Company derives a majority of its revenue through the sponsoring, promoting
and selling of products, seminars and services which are developed by two
related parties.

(9) ShareholderS' EQUITY:

LONG-TERM INCENTIVE PLAN--During 1995, the Company adopted a Long-Term Incentive
Plan ("the Plan") which permits the issuance of stock options and restricted
stock to employees of the Company and its subsidiaries. Directors and
independent contractors of the Company and its subsidiaries are eligible to
receive grants of restricted stock. The Plan reserves 7,500,000 shares of common
stock for grants and provides that the term of each award be determined by the
Board of Directors charged with administering the Plan.


As prescribed by the Plan, restricted stock awards are dependent upon the
completion of a specified employment term and, in particular situations, the
achievement of certain performance objectives. If a change in control of the
Company occurs, then all restrictions on grants of restricted stock shall lapse
as of the date such change in control occurs. The restricted shares are issued
in the name of the participant and are either held by the Company or are
deposited with a trust administered by the Board. Until the restrictions lapse,
the participant is not entitled to vote or to receive dividends and the shares
are restricted as to transferability and sale. If the conditions or terms under
which an award is granted are not satisfied, the shares are forfeited. During
1995, the Company awarded 2,680,000 shares of restricted common stock to
employees and directors under the Plan, of which 25,000 shares were forfeited
upon the termination of a certain employee. During 1996, 100,000 shares were
forfeited due to employment terms or performance objectives not met. As of
December 31, 1996 and 1995, 1,670,000 and 2,655,000 shares of restricted stock
were outstanding, respectively. Unearned compensation is recorded at $.001 per
share which represents fair value as determined by an independent appraiser. The
unearned compensation related to these shares is recorded as a separate
component of Shareholders' equity and is amortized over the life of the grant
which is generally two years.

The Company's Stock Option Plan provides for the granting of incentive stock
options and executive stock options to Plan participants at a price not less
than the fair market value on the date the option is granted. Incentive stock
options are to be treated as executive stock options if the fair market value of
common stock with respect to such incentive stock options, exercisable for the
first time by a plan participant during any calendar year, exceeds $100,000.
Options become exercisable, in whole or in part, after completion of such
periods of service as determined by the Board of Directors. Options expire ten
years after the date of grant unless an earlier expiration date is set at the
time of grant. In the absence of the Board specifying the date such options
become exercisable in the participant's stock option agreement, the options
become exercisable in accordance with a predetermined schedule as prescribed in
the Plan. If a change in control of the Company occurs, then all incentive stock
options and executive stock options shall become fully exercisable. Shareholders
whose ownership percentage exceeds 10 percent of the voting common stock are
subject to an incentive stock option price of at least 110 percent of the fair
market value of the stock at the time of the grant and such incentive stock
options are not exercisable after the expiration of five years from the date
such incentive stock option is granted. No incentive stock options or executive
stock options were outstanding as of December 31, 1995.

During 1996, the Company granted 325,000 executive stock options and 400,000
incentive stock options to its employees. The executive stock options vest upon
the completion of a two-year employment period commencing on the effective
option agreement date. The effective option agreement dates ranged from January
30, 1996 to July 15, 1996. All executive stock options may be exercised at a
price of $0.18 per common share and expire ten years after the effective option
agreement date. The incentive stock options vest upon the completion of certain
performance objectives. All incentive stock options may be exercised at a price
of $0.18 per common share and expire ten years after the effective option
agreement date. No options were exercised during the years ended December 31,
1995 and 1996.

                                       22
<PAGE>
Pro Forma information as required by SFAS No. 123 for valuing stock options
under the fair value method is not disclosed as there was no significant value
to the options at the date of grant. Management believes application of SFAS No.
123 to future option grants will not have a significant impact on Pro Forma
Earnings or financial position.

(10) INCOME TAXES:
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109").

The components of the deferred income tax assets and deferred income tax
liabilities recorded on the balance sheet at December 31, 1996 are as follows:

Deferred Tax assets:                                                    AMOUNT
                                                                      ---------
     Net operating losses .........................................   $ 385,000
     Reserve for uncollectible accounts payable ...................     135,000
     Related party accruals .......................................     110,000
                                                                        630,000
                                                                      ---------
Deferred tax liability:
     Excess of tax over book depreciation and other ...............     (25,000)
                                                                      ---------
                                                                        605,000
Valuation allowance ...............................................    (605,000)
                                                                      ---------
                                                                      $    --
                                                                      =========

A valuation allowance was established for the deferred income tax asset because
it is more likely than not that the deferred tax asset will not be realized.

The Company has approximately $2,000,000 in net operating loss carryovers, which
primarily expire in years 2010 and 2011. Utilization of net operating loss
carryovers is subject to separate return limitation year ("SRLY") restrictions
for consolidated tax returns, and realization is dependent upon Results
Publishing, Inc. and Telstar, Inc. generating sufficient separate taxable income
to utilize the net operating losses.

(11) ACCOUNTING CHANGE:

The accompanying consolidated financial statements for the year ended December
31, 1995, have been retroactively restated for the effects of a change in the
method of recognizing revenues on certain product sales. The Company sells
products which entitle the purchaser to attend training seminars within one year
of product delivery. The Company believes it is more appropriate to defer
recognition of the revenue associated with the training seminar until the
customer attends a training seminar or lapse of the time period.

The effect of the change was to increase net loss for the year ended December
31, 1995 by $313,797. The change had no effect on prior years because the
company began selling products which entitled the purchaser to attend training
seminars within one year of product delivery in 1995.

(12) MANAGEMENT PLANS:

As shown in the accompanying financial statements, the Company incurred a net
income of $700 thousand during the year ended December 31, 1997. As of that
date, the Company's current liabilities exceeded its current assets by
approximately $2.3 million, (as described in Note 6), Management of the Company
has developed plans to restructure existing liabilities, reduce or delay
expenditures, reduce personnel and undertake a direct public offering of the
Company's stock (see "Subsequent Events").

(13) SUBSEQUENT EVENTS:

On December 15, 1997 the Company filed and on February 18, 1998 the Securities
Exchange Commission accepted the filing, establishing an "Effective
Registration" for an Initial Public Offering ("IPO"). The IPO was set for a
minimum of 100,000 shares valued at $550,000 and a maximum of 500,000 shares
valued at $2,750,000. On May 18th the minimum

                                       23
<PAGE>
offering funds were released. The offering may continue until the maximum shares
are sold or 1 year from the effective filing date or the company determines to
close the offering.

Regarding Note 6 and Note 11, on May 29, 1998 the Company refinanced the
buildings into the Company's ownership, thus securing the properties and
buildings certainty and moving

                                       24
<PAGE>
significant debt from current liability to long-term liability and strengthening
the Company's financial condition.

On May 25th SDI Direct Corporation began operation in developing and testing
infomercial products.

On July 5 SDI Internet Service Inc. began operations with on-line computer
services and products.

                                       25
<PAGE>
PART III

Item 10.   DIRECTORS AND EXECUTIVE OFFICERS

     The following persons are the current executive officers and directors of
the Company:

NAME                     AGE      POSITION

Daniel S. Pena, Sr.      52       Director & Chairman(1)
Shawn M. Casey           38       Chief Executive Officer, President, Secretary,
                                  Director & Vice-Chairman(1)
Raymond Rach             63       Director & Vice President(2)
Vicki L. Sessions        30       Vice President of Administration
Patricia D. Casey        46       Vice President of Materials Management
Ralph E. Vroman, Jr.     38       Chief Financial Officer
Jarrell D. Ormand        78       Director(3)
Hugh L. Carey            76       Director(3)

-----------------------------
(1)  Member of Executive Committee
(2)  Member of Audit Committee
(3)  Member of Compensation Committee

     Directors of the Company serve staggered three year terms, so that two
directors are elected each year. Following is a brief description of the
background of the officers and directors of SDI based on information provided by
them to SDI.

     Daniel S. Pena, Sr., joined The LeGrand Group, Inc. in early 1995 as a
director and Chairman of the Board. He became a director of SDI in April, 1995,
and Chairman of the Board of SDI in November, 1995. Since 1992, Mr. Pena has
been the controlling shareholder and chairman of Great Western Development
Corporation, a publishing company. Mr. Pena founded Great Western Resources a
publicly held natural resources company, in 1982 and served as its Chief
Executive Officer and Chairman until 1992. From 1979 to 1982, Mr. Pena was
chairman and CEO of JPK Industries, a natural resources company. From 1977 until
1979, Mr. Pena held the position of Vice President at the investment banking
firm of Bear Stearns and Co. in Los Angeles, California, and from 1975 until
1977, that of Director of Financial Planning at Paine Webber Jackson & Curtis in
Los Angeles, California. He was until recently a member of the board of
trustees, California State University, Northridge, where he graduated in 1971
with a B.S. in Business Administration.

     Shawn M. Casey, Esq., joined The LeGrand Group, Inc. as General Counsel and
Conference Director in January, 1995. Since November, 1995, he has served as
President and Chief Executive Officer and Secretary of SDI. He became a director
of SDI in April, 1995. In August, 1997, he was elected Vice-Chairman of the
Board of Directors. From 1989 until 1994, Mr. Casey conducted a solo law
practice in Pittsburgh, PA. focused primarily on real estate and business
matters. At the same time, he was shareholder and President, was a shareholder
and President of Emerald Settlement Services, Inc., a title insurance agency in
Pittsburgh, Pennsylvania. He founded Dream Development Corporation in 1993 to
sponsor and promote seminars, workshops and information products. He graduated
from the University of Scranton in Pennsylvania with a B.A. in Communications in
1981, and received his Juris Doctor degree from Duquesne University in 1985.

     Raymond Rach joined The LeGrand Group, Inc., as President in January, 1993.
Mr. Rach served as President of SDI from April, 1995 until November, 1995, when
he became President of Telstar Consulting, Inc., the Company's telemarketing
subsidiary, and a Vice President of SDI. He has served as a director of SDI
since April, 1995. Prior to joining The LeGrand Group, Inc., Mr. Rach spent five
years, from 1987 to 1992, as Executive Vice President with Budd Mayer
Corporation, one of the nation's largest regional food brokerage firms.

     Jarrell D. Ormand joined SDI in July, 1996 as a Director. From 1963 to
1990, Mr. Ormand was the Chairman and Chief Executive of Ormand Industries,
Inc., a publicly-traded American Stock Exchange company whose interests included
advertising, container manufacturing, apparel, auto leasing, and electronics.
From 1955 to 1958, Mr. Ormand was on the Board of Directors of the American
Petroleum Institute of the Permian Basin (West Texas and New Mexico). Mr. Ormand
is currently a director of Centinela Hospital, a nonprofit hospital based

                                       26
<PAGE>
in California.  Since 1990, Mr. Ormand has been retired.

     Governor Hugh L. Carey joined SDI in August, 1996 as a Director. From
November 1974 to November 1982, Mr. Carey served as governor of the State of New
York. From 1982 to December 31, 1995, Mr. Carey was an Executive of W.R. Grace &
Co., a holding company. From January 1, 1996 to the present, Mr. Carey is Of
Counsel to the law firms of Whitman Breed Abbott & Morgan and Heinrich Gordon
Hargrove Weihe & James, P.A.

     Vicki L. Sessions joined The LeGrand Group, Inc. as Vice President of
Administration in 1991 and currently serves in that position with SDI. Her
responsibilities include Management of Customer Service, Data Entry and Accounts
Receivable. From 1983 to 1991 she served as office manager for MIM Financial,
Inc.. She is the daughter of Ron LeGrand, founder of the LeGrand Group, Inc.,
and served a term as an officer and director of SDI.

     Patricia D. Casey joined SDI in January, 1996 as the purchasing manager.
She was promoted to Vice President of Materials Management in February, 1997 and
is responsible for purchasing, shipping, receiving, inventory, course production
and building maintenance. From 1989 to 1994, Mrs. Casey was a shareholder and
Vice President of Emerald Settlement Services, Inc., a title insurance agency in
Pittsburgh, PA. She is the wife of Shawn M. Casey, an officer and director of
SDI.

     Ralph E. Vroman, Jr. joined SDI in January, 1997 as Controller. In
September, 1997, he was promoted to Chief Financial Officer. Prior to joining
the Company, Mr. Vroman served as Controller for Dixie Sales Company, an
international wholesale distributor for Polaroid Corporation, in Jacksonville,
Florida, from 1994 to 1997. From 1986 to 1994, Mr. Vroman was a financial
consultant with FLC Associates, in Tampa, Florida. He consulted to General
Electric, General Motors, Publix, Schnucks and other large corporations. He is a
Chartered Financial Analyst with multiple degrees in Business Administration,
Finance, Economics, Computers and German from Saint Ambrose University in
Davenport, IA.

KEY EMPLOYEE

     Ron LeGrand, 51, founded The LeGrand Group, Inc., in 1989. He was President
and a Director of The LeGrand Group, Inc., until January, 1995 and President,
Secretary, Treasurer and a Director of Results Publishing, Inc., until November
1995. He resigned as a Director of the Company in March, 1996. An active real
estate entrepreneur, Mr. LeGrand has bought and sold more than 1,100 single
family houses over the last 13 years. Based upon this personal experience, Mr.
LeGrand developed many of the courses and programs offered by SDI today. In
addition, Mr. LeGrand speaks nationally, teaching his real estate investing and
management methodology at SDI's programs.

                                       27
<PAGE>
Item  11.

EXHIBIT
NUMBER       DESCRIPTION
------       -----------
1        Agency Agreement between the Company and Attkisson, Carter & Akers


10.1    Executive Stock Option Agreement

10.2    Incentive Stock Option Agreement

10.3    Restricted Stock Agreement

10.4    Employment Agreement

10.5    Long Term Incentive Plan


12      Notification of Late Filing

23.1    Consent of James Moore & Co.

23.2    Consent of counsel

                                       28
<PAGE>
Item  12.

                                   SIGNATURES

      In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of reporting on Form 10-KSB and authorized this report to be
signed on its behalf by the undersigned, in the City of Jacksonville State of
Florida, on November 12, 1998.

                                  SUCCESS DEVELOPMENT INTERNATIONAL, INC.
                                  (ISSUER)

                                  By
                                    SHAWN M. CASEY, CHIEF EXECUTIVE OFFICER

                                  By
                                    RALPH E. VROMAN, JR, CHIEF FINANCIAL OFFICER