UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

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

                For the quarterly period ended September 30, 2001

                                       OR

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

             For the transition period from __________ to __________

                        Commission File Number 000-30444


                                  KAHALA CORP.
                     (fka Sports Group International, Inc.)
             (Exact name of registrant as specified in its charter)


            Florida                                              59-3474394
(State of other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                         7730 E. Greenway Rd., Suite 104
                            Scottsdale, Arizona 85260
                    (Address of principal executive offices)


                                 (480) 443-0200
              (Registrant's telephone number, including area code)

Check whether issuer (1) has filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

The number of shares outstanding of the registrant's Common Stock, $.001 per
value per share, as of November 12, 2001 was 18,709,786 shares.
<PAGE>
                                  KAHALA CORP.

                        Quarter Ended September 30, 2001

                                   FORM 10-QSB

                                      INDEX


                                                                     PAGE NUMBER
                                                                     -----------

PART I -  FINANCIAL INFORMATION                                                2

ITEM 1.   FINANCIAL STATEMENTS (INCLUDING NOTES)                             2-9

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION        10-18

PART II - OTHER INFORMATION                                                   18

ITEM 1.   LEGAL PROCEEDINGS                                                   18

ITEM 2.   CHANGES IN SECURITIES                                               18

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES                                     18

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                 18

ITEM 5.   OTHER INFORMATION                                                   18

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                                 19-23

SIGNATURES                                                                    24

                                        1
<PAGE>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

STATEMENT OF INFORMATION FURNISHED

     The accompanying financial statements have been prepared in accordance with
Form 10-QSB instructions and applicable items of Regulation S-B, and in the
opinion of management, contain all adjustments (consisting of only normal and
recurring accruals) necessary to present fairly the Company's financial position
as of September 30, 2001, the Company's results of operations for the three and
nine months ended September 30, 2001 and 2000, and the Company's statement of
cash flows for the nine months ended September 30, 2001 and 2000. These results
have been determined on the basis of generally accepted accounting principles
and practices applied consistently with those used in the preparation of the
Company's 2000 Annual Report on Form 10-KSB.

     Certain information and footnote disclosures normally included in financial
statements presented in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that the accompanying financial
statements be read in conjunction with the financial statements and related
notes thereto incorporated by reference in the Company's 2000 Annual Report on
Form 10-KSB.

                                       2
<PAGE>
KAHALA CORP.
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2001 (UNAUDITED)
--------------------------------------------------------------------------------

ASSETS

CURRENT ASSETS
  Cash                                                             $     25,777
  Trade and other accounts receivable, net of allowance                 968,367
  Inventories                                                           184,011
  Prepaid expenses and other assets                                      80,065
  Deferred income taxes                                                  19,639
  Notes receivable - current portion, net of allowance                1,353,861
                                                                   ------------
     Total current assets                                             2,631,720

PROPERTY AND EQUIPMENT, net                                             639,573
LEASE DEPOSITS                                                          156,942
NOTES RECEIVABLE - less current portion                               2,826,515
GOODWILL, net of accumulated amortization                             4,974,450
DEFERRED INCOME TAXES                                                   496,684
                                                                   ------------
TOTAL ASSETS                                                       $ 11,725,884
                                                                   ============
LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
  Accounts payable                                                 $    177,532
  Accrued liabilities                                                   690,230
  Line of credit                                                        555,140
  Notes payable - current portion                                     1,088,687
  Acquisition notes payable                                             175,443
  Confirmed bankruptcy liabilities - current portion                    591,209
                                                                   ------------
     Total current liabilities                                        3,278,241

NOTES PAYABLE - long-term portion                                       198,018
ACQUISITION NOTES PAYABLE - long-term portion                            86,727
CONFIRMED BANKRUPTCY LIABILITIES - long term portion                    462,987
DEFERRED FRANCHISE FEE INCOME                                           780,000
                                                                   ------------
     Total liabilities                                                4,805,973
                                                                   ------------
STOCKHOLDERS' EQUITY:
  Series A preferred stock, $10.00 par value, 575,000 shares
    designated, 575,000 issued                                        5,750,000
  Series B preferred stock, $10.00 par value, 650,000 shares
    designated, 650,000 issued                                        6,500,000
  Series C preferred stock, $10.00 par value, 160,000 shares
    designated, 160,000 issued                                        1,600,000
  Common stock, $.001 par value, 100,000,000 shares authorized,
    18,709,786 issued and outstanding                                    18,710
  Paid in capital                                                     6,298,146
  Accumulated deficit                                               (13,246,945)
                                                                   ------------
     Total stockholders' equity                                       6,919,911
                                                                   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $ 11,725,884
                                                                   ============

                                       3
<PAGE>
KAHALA CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30,  (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                          NINE                           THREE
                                              ----------------------------    ----------------------------
                                                 2001            2000             2001           2000
                                              ------------    ------------    ------------    ------------
<S>                                           <C>             <C>             <C>             <C>
REVENUES:
  Net product and store sales                 $  1,871,465    $  5,165,501    $    588,034    $    904,420
  Franchise fees                                   589,750         843,543         192,500         246,400
  Royalties                                      1,976,611       1,442,988         540,593         576,007
  Rental income                                    123,397         180,300          36,600          56,700
                                              ------------    ------------    ------------    ------------
     Total revenues                              4,561,223       7,632,332       1,357,727       1,783,527
                                              ------------    ------------    ------------    ------------

EXPENSES:
  Cost of product sales                            722,140       1,799,661         186,665         264,375
  Personnel expenses                             1,756,865       2,493,310         509,675         664,309
  Rent                                             669,428       1,128,152         182,870         261,485
  Depreciation and amortization                    291,179         371,662         106,358          87,979
  General and administrative expenses              964,189       1,570,851         433,456         306,445
                                              ------------    ------------    ------------    ------------
      Total expenses                             4,403,801       7,363,636       1,419,024       1,584,593
                                              ------------    ------------    ------------    ------------

OPERATING (LOSS) INCOME                            157,422         268,696         (61,297)        198,934
                                              ------------    ------------    ------------    ------------

OTHER (INCOME) AND EXPENSES
  Loss on sale of assets                             7,225        (194,644)        (72,449)        130,356
  Interest expense                                 113,535         207,242          43,510          59,267
  Interest income                                  (88,750)        (89,532)        (38,297)        (33,199)
                                              ------------    ------------    ------------    ------------

  Total other expense (income)                      32,010         (76,934)        (67,236)        156,424
                                              ------------    ------------    ------------    ------------

INCOME BEFORE INCOME TAXES                         125,412         345,630           5,940          42,510

INCOME TAX (BENEFIT) PROVISION                          --              --              --              --
                                              ------------    ------------    ------------    ------------

NET INCOME                                    $    125,412    $    345,630    $      5,940    $     42,510
                                              ============    ============    ============    ============

NET (LOSS) INCOME PER SHARE:
  Basic                                       $      (0.06)   $      (0.06)   $      (0.02)   $      (0.02)
                                              ============    ============    ============    ============

  Diluted                                     $      (0.06)   $      (0.06)   $      (0.02)   $      (0.02)
                                              ============    ============    ============    ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic                                         15,476,514       9,160,499      17,466,799       9,875,419
                                              ============    ============    ============    ============

  Diluted                                       15,476,514       9,160,499      17,466,799       9,875,419
                                              ============    ============    ============    ============
</TABLE>

                                       4
<PAGE>
KAHALA CORP.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                    2001           2000
                                                                 -----------    -----------
<S>                                                              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net  Income (loss)                                             $   125,412    $   345,630
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
  Depreciation and amortization                                      250,890        371,662
  Deferred income taxes                                                   --             --
  Loss (Gain) on sale of assets                                        7,225       (194,644)
  Changes in assets and liabilities:
    Trade and other accounts receivable                              280,839       (198,749)
    Inventories                                                      (20,844)      (105,154)
    Prepaids and other current assets                                (25,201)        (5,224)
    Accounts payable                                                 (22,271)      (194,478)
    Accrued liabilities                                             (389,009)      (466,371)
    Deferred franchise fee income                                   (385,000)        95,528
                                                                 -----------    -----------
          Net cash provided by (used in) operating activities       (177,959)      (351,800)
                                                                 -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                               (176,525)      (441,056)
  Financing of notes receivable                                     (500,000)            --
  Collections on notes receivable                                    280,459        149,372
  Proceeds from sale of property and equipment                       216,508      1,447,144
                                                                 -----------    -----------
          Net cash provided by (used in)  investing activities      (179,558)     1,155,460
                                                                 -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from borrowings on line of credit                         458,140             --
  Proceeds from borrowings on notes payable                          500,000         70,000
  Principal repayments on notes payable                             (495,901)    (1,315,069)
  Payments on confirmed bankruptcy liabilities                      (178,830)      (160,542)
                                                                 -----------    -----------
          Net cash provided by (used in) financing activities        283,409     (1,405,611)
                                                                 -----------    -----------

INCREASE (DECREASE) IN CASH                                          (74,108)      (601,951)

CASH, BEGINNING OF PERIOD                                             99,885        644,264
                                                                 -----------    -----------

CASH, END OF PERIOD                                              $    25,777    $    42,313
                                                                 ===========    ===========
</TABLE>

                                       5
<PAGE>
KAHALA CORP.

CONSOLIDATED STATEMENT OF CASH FLOWS, (CONTINUED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (UNAUDITED)
--------------------------------------------------------------------------------

                                                           2001          2000
                                                        ----------    ----------
SUPPLEMENTAL CASH FLOW INFORMATION:

  Interest paid                                         $  111,567    $  207,242
                                                        ==========    ==========

  Income taxes paid                                     $       --    $       --
                                                        ==========    ==========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

  Common stock issued as preferred stock dividends      $1,026,750    $  869,178
                                                        ==========    ==========

  Sale of property & equipment under notes receivable   $  493,176    $1,284,883
                                                        ==========    ==========

                                       6
<PAGE>
KAHALA CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2001
--------------------------------------------------------------------------------

1.   BASIS OF PRESENTATION

     The accompanying unaudited financial statements represent the financial
     position of Kahala Corp. (the "Company") as of September 30, 2001,
     including our results of operations for the three and nine months ended
     September 30, 2001 and 2000 and cash flows for the nine months ended
     September 30, 2001 and 2000. These statements have been prepared in
     accordance with generally accepted accounting principles for interim
     financial information and the instructions for Form 10-QSB. Accordingly,
     they do not include all the information and footnotes required by generally
     accepted accounting principles ("GAAP") for complete financial statements.
     In the opinion of management, all adjustments to these unaudited financial
     statements necessary for a fair presentation of the results for the interim
     periods presented have been made. The results for the three and nine months
     ended September 30, 2001 and 2000 may not necessarily be indicative of the
     results for the entire fiscal year. These financial statements should be
     read in conjunction with our Form 10-KSB for the year ended December 31,
     2000, including specifically the audited financial statements and notes to
     such financial statements contained therein.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Our accounting policies, and the methods of applying those policies, which
     affect the determination of our financial position, results of operations
     and/or cash flows are summarized below:

     CASH: includes all short-term highly liquid investments that are readily
     convertible to known amounts of cash and have original maturities of three
     months or less. At times, cash deposits may exceed government insured
     limits.

     PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
     the accounts of the Company and its wholly owned subsidiaries: Surf City
     Acquisition Corp. II, Surf City Squeeze, Inc., Surf City Squeeze Franchise
     Corp., Kona Coast Provisions, Inc. ("Kona"), Malibu Smoothie Franchise
     Corp., Selman Systems, Inc. and its two operating subsidiaries, Frullati
     Enterprises, Inc. and Frullati Franchise Systems, Inc., Fru-Cor, Inc.,
     Rollerz Franchise Systems, LLC, Tahi Mana, LLC, and R1 Franchise Systems,
     L.L.C. All significant inter company accounts and transactions are
     eliminated.

     INVENTORIES: consist primarily of food products, drink mixes, supplements
     and supplies. Inventories are recorded at the lower of cost or market on a
     first-in, first-out basis.

     REVENUE RECOGNITION: Initial franchise fees are deferred until
     substantially all services and conditions relating to the sale of the
     franchise have been performed or satisfied. The Company will occasionally
     finance the initial franchise fee by taking a note receivable from the
     franchisee. The notes receivable are typically payable by the franchisees
     over three to five years.

                                       7
<PAGE>
     Fees from Area Development Agreements or similar development arrangements
     ("ADA") are recognized as revenue on a pro rata basis based on the number
     of stores opened to-date to the total stores to be developed as stipulated
     in the ADA. If the total number of stores stipulated in the ADA are not
     opened at the expiration of the ADA, the balance of such fees is
     recognized.

     Kona sells mixes, supplements and related supplies to franchisees. Revenue
     on such sales is recognized when the product is shipped. Sales from the
     corporate-owned stores are recognized at the point of sale.

     The Company is entitled to marketing program income (the "Program Income")
     from suppliers on the basis of product volume shipped by those suppliers to
     franchised, licensed and corporate-owned stores. Program Income is
     recognized when suppliers have shipped, and stores have received, products
     for which Program Income apply.

     The Company also receives sublease rental income. The Company is the
     primary lessee on certain franchised and licensed stores. Rental income is
     recognized ratably over the term of the subleases.

     INCOME TAXES: The Company provides for income taxes based on the provisions
     of Statement of Financial Accounting Standards No. 109, ACCOUNTING FOR
     INCOME TAXES, which, among other things, requires that recognition of
     deferred income taxes be measured by the provisions of enacted tax laws in
     effect at the date of the financial statements.

     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 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.

     GOODWILL: is recorded for the difference between the purchase price of the
     acquired business and the fair value of the identifiable net assets.
     Goodwill is amortized on a straight-line basis over 20 years. The 20-year
     period is based on the initial and renewable franchise periods in most
     franchise agreements. In accordance with Statement of Financial Accounting
     Standards No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS, the Company will
     cease amortizing goodwill in the year beginning January 1, 2002.
     Amortization expense for the three and nine month periods ending September
     30, 2001 was $55,393 and $166,181, respectively.

                                       8
<PAGE>
3.   INCOME TAXES

     The Company recognizes deferred income taxes for the differences between
     financial accounting and tax bases of assets and liabilities. Income taxes
     for the three and nine month periods ended September 30, 2001 an 2000
     consisted of the following:

<TABLE>
<CAPTION>
                                              Nine Months             Three Months
                                        ----------------------    ----------------------
                                          2001         2000         2001         2000
                                        ---------    ---------    ---------    ---------
<S>                                     <C>          <C>          <C>          <C>
     Current tax (benefit) provision    $  50,308    $ 121,200    $   4,377    $   8,502
     Deferred tax (benefit) provision     (50,308)    (121,200)      (4,377)      (8,502)
                                        ---------    ---------    ---------    ---------
     Total income tax provision         $     -0-    $     -0-    $     -0-    $     -0-
                                        =========    =========    =========    =========
</TABLE>

4.   NET LOSS PER SHARE

     Net loss per share is calculated using the weighted average number of
     shares of common stock outstanding during the year. Preferred stock
     dividends are subtracted from the net income to determine the amount
     available to common shareholders. Preferred stock convertible to 15,766,667
     and 14,166,667 common shares as of September 30, 2001 and September 30,
     2000, respectively; an outstanding warrant to purchase one million common
     shares; and employee stock options to purchase 1,975,000 and 1,430,000
     common shares as of September 30, 2001 and September 30, 2000,
     respectively, were all not considered in the calculation for diluted
     earnings per share for the nine months ended September 30, 2001 and
     September 30, 2000 because the effect of their inclusion would be
     anti-dilutive.

<TABLE>
<CAPTION>
                                       Nine Months Ending Sept. 30, 2001        Nine Months Ending Sept. 30, 2000
                                     --------------------------------------    -----------------------------------
                                       Income                        Per        Income                      Per
                                       (Loss)         Shares        share       (Loss)        Shares       share
                                     -----------    ----------    ---------    ---------     ---------    --------
<S>                                  <C>            <C>           <C>          <C>           <C>          <C>
     Net Income (Loss)               $   125,412                               $ 345,630
     Preferred stock dividends        (1,026,750)                               (869,178)

     BASIC EARNINGS PER SHARE

     Loss available to common
     stockholders                    $  (901,338)   15,476,514    $   (0.06)   $(523,548)    9,160,499    $  (0.06)

     Effect of dilutive securities           N/A                                     N/A

     DILUTED EARNINGS PER SHARE                                   $   (0.06)                              $  (0.06)
</TABLE>

                                       9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

     Certain of the information discussed in this quarterly report, and in
particular in this section entitled "Management's Discussion and Analysis or
Plan of Operation," contain forward-looking statements that involve risks and
uncertainties that might adversely affect the Company's operating results in the
future in a material way. The words "believes," "may," "likely," "expects,"
"anticipates," and similar expressions identify forward-looking statements,
which speak only as of the date the statement was made. Such forward-looking
statements are within the meaning of that term in Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Such statements may include, but are not limited to, projections of
revenues, including sales of franchises and corporate-owned locations, income or
loss, plans for future operations, and financing needs or plans. Statements in
the Company's Annual Report on Form 10-KSB, including the Notes to the Company's
Consolidated Financial Statements and "Management Discussion and Analysis or
Plan of Operation", describe factors, among others, that could contribute to
such differences. Such factors include, without limitation, the effect of
national and regional economic and market conditions in the U.S. where the
Company franchises and operates store locations, costs of labor and employee
benefits, costs of marketing, the success or failure of marketing efforts, costs
of food and non-food items used in the operation of the Company's stores,
intensity of competition for locations and franchisees as well as customers,
perception of food safety, spending patterns and demographic trends, legal
claims and litigation, the availability of financing for the Company and its
franchisees at reasonable interest rates, and legislation and governmental
regulations affecting the Company's business. Many of these factors are beyond
the Company's control.

GENERAL

     The Company was incorporated in the state of Florida in September 1997, as
Secretarial Services of Orlando, Inc. and in March 1999 changed its name to
Sports Group International, Inc. In January, 2001, the Company changed its name
to Kahala Corp. Prior to March 1999, the Company had no significant operations.
The term "Company" refers to Kahala Corp. and its subsidiaries. The Company's
common stock trades over-the-counter on the Electronic Bulletin Board under the
symbol "KAHA". From March, 1999 until January 31, 2001, the Company's common
stock traded on the over-the-counter Electronic Bulletin Board under the symbol
"SPGK."

     The Company has developed its business through the following acquisitions:
(i) the Surf City Squeeze concept was acquired by the Company on March 15, 1999
through a reverse merger with Surf City Acquisition Corp. II ("SCAC"), with the
transaction being accounted for as a recapitalization of SCAC, with SCAC as the
acquirer; (ii) the Frullati Cafe and Bakery concept was acquired by the Company
on May 21, 1999 through its acquisition of 100% of Selman Systems, Inc.
("Selman") (the Company also acquired eight individual Frullati Cafe & Bakery

                                       10
<PAGE>
units through its purchase of 100% of Fru-Cor, Inc. ("Fru-Cor") on July 7,
1999); and (iii) the Rollerz concept was acquired during the second quarter of
2000 from a corporation owned and controlled by the Company's President and CEO
(the "Rollerz Transaction"). In addition to the above-mentioned acquisitions,
the Company developed the Tahi Mana concept internally during 2000, and, in
July, 2001, the Company provided debtor in possession financing to Ranch * 1,
Inc. and its wholly owned subsidiaries as part of a longer term strategy to
acquire the company, as discussed in more detail below.

COMPANY OVERVIEW

     The Company currently operates and franchises, under the Frullati Cafe and
Bakery, Surf City Squeeze, Rollerz, and Tahi Mana brand names (collectively, the
"Concepts"), juice bars and health food cafes that serve blended fruit drinks,
sandwiches, salads, soups, baked goods, healthy snacks, and nutritional
supplements in shopping malls, airports, medical centers, office buildings and
health clubs throughout the United States, Canada, and select Middle Eastern
countries. As of September 30, 2001, the Company, through its subsidiaries, has
approximately 211 total locations of the Concepts, of which 205 are either
franchised or licensed by third parties and 6 are directly owned and operated by
the Company or its subsidiaries. Of the 211 total locations of the Concepts, 113
operate as Surf City Squeeze outlets, 92 operate as Frullati Cafe & Bakery
outlets, 4 operate as Rollerz outlets, and 2 operate as Tahi Mana outlets. The
Company's corporate stores operate under the Frullati Cafe and Bakery, Surf City
Squeeze, Rollerz, and Tahi Mana brand names. The Company also sells proprietary
smoothie mixes and other nutrients and supplements to its franchisees and
licensees through its wholly owned subsidiaries.

     The stores operating under the Frullati Cafe and Bakery brand name are
located primarily in shopping malls, airports and hospitals in the midwest,
southwest, and southeastern United States. The average Frullati Cafe and Bakery
store derives approximately 60% of its total revenue from blended fruit drinks
and other beverage sales and approximately 40% from the sale of sandwiches,
baked goods, soups, salads and other healthy food items. The stores operating
under the Surf City Squeeze brand name are located in shopping malls and health
clubs primarily in California, Arizona and Canada. The average Surf City store
derives the majority of its revenue from the sale of blended fruit drinks and
other beverages, and nutrients and supplements that are added to the drinks. The
stores operating under the Rollerz brand name are located in office buildings
and shopping malls in Arizona, Texas, and California. The average Rollerz store
derives approximately 75% of its total revenues from gourmet rolled sandwiches,
soups, salads, baked goods, and other healthy snacks and approximately 25% from
the sale of blended fruit drinks and other beverage items. The stores operating
under the Tahi Mana brand name are located in health clubs in Arizona. The
average Tahi Mana store derives the majority of its revenue from the sale of
blended fruit drinks and other beverages, nutrients and supplements that are
added to the drinks or can be taken home, and healthy snacks.

     The Company derives its revenues primarily from area representative and
development fees, initial franchise and license fees, ongoing royalty payments,
sales from its company-owned stores, and sales of nutritional and health food

                                       11
<PAGE>
products to its franchisees and licensees. The Company's long-term strategy is
to operate primarily as a franchisor, and through strategic acquisitions and
internal growth, to become one of the larger franchisors of juice bars, healthy
food cafes, and other retail food concepts in the United States and select
international markets that include Canada, Europe, the Middle East, Australia,
and certain Pacific Rim countries. The Company also plans to operate a limited
number of company-owned stores in certain key markets where the stores can be
geographically concentrated. The Company has not yet identified other areas
where it may wish to operate company-owned stores.

RANCH * 1 FINANCING

Ranch * 1, Inc., through its wholly owned subsidiaries, owns and operates and
franchises Ranch * 1 quick service restaurants that specialize in the sale of
grilled chicken sandwiches and other grilled chicken products, Ranch * 1 famous
fries, and other food and beverage items. Currently, there are 53 Ranch * 1
restaurants operating in 12 states, the District of Columbia, and Taiwan, of
which 49 are franchised to third parties and the remaining four are corporately
owned. On July 3, 2001, Ranch * 1, Inc. and each of its wholly owned
subsidiaries (collectively, "Ranch 1") filed for Chapter 11 bankruptcy
protection in the U.S. Bankruptcy Court for the Southern District of New York.

During July, 2001, the Company, through a newly formed wholly owned subsidiary,
R 1 Franchise Systems, L.L.C. ("R 1 Franchise"), entered into a
Debtor-In-Possession Loan and Security Agreement with Ranch 1 to provide up to
$2,000,000 in debtor in possession financing to Ranch 1 during the pendancy of
its bankruptcy reorganization (the "Loan Agreement"). In connection with the
Loan Agreement, on July 6, 2001, the Company and R 1 Franchise entered into a
Memorandum of Agreement with a significant shareholder of the Company that
provides up to $2,500,000 to R 1 Franchise for purposes of the Loan Agreement
(the "Financing Agreement").

On July 31, 2001, the U.S. Bankruptcy Court for the Southern District of New
York entered a final order (the "Final Order") approving the Loan Agreement
between Ranch 1 and R 1 Franchise. As of October 31, 2001 and November 12, 2001,
R 1 Franchise has advanced Ranch 1 $500,000 and $650,000, respectively, under
the Loan Agreement. Additionally, to effectuate the advances to Ranch 1 under
the Loan Agreement, as of October 31, 2001, R 1 Franchise has been advanced
$500,000 from a significant shareholder under the above-referenced Financing
Agreement.

The Final Order also approved a joint franchise marketing agreement between
Ranch 1 and R 1 Franchise that provides for R 1 Franchise to be paid a
commission equal to 50% of the initial franchise fees and area development fees
generated from sales by R 1 Franchise of new Ranch * 1 franchises and area
development rights during the period when Ranch 1 is operating under Chapter 11
bankruptcy protection.

With the U.S. Bankruptcy Court for the Southern District of New York's final
approval of the Loan Agreement, the Company, through R 1 Franchise, has been
working closely with the current Ranch 1 management team during the course of
the Chapter 11 Bankruptcy, including working together on Ranch 1's Chapter
Eleven Plan of Reorganization.

                                       12
<PAGE>
RESULTS OF OPERATIONS

     Total operating revenues for the nine months ended September 30, 2001,
decreased by $3,071,109 to $4,561,223 from $7,632,332 during the same nine month
period in 2000. For the three months ended September 30, 2001, total operating
revenues decreased by $425,800 to $1,357,727 from $1,783,527 during the same
period of 2000. This decrease in operating revenues is the result of the Company
selling six company-owned locations of the Concepts during the nine months ended
September 30, 2001 to third party franchisees (the "Store Sales"). Additionally,
during the nine months ended September 30, 2001, the Company closed a total of
six underperforming company-owned outlets of the Concepts in an effort to
increase the Company's overall profitability, none of which were closed during
the three month period ending September 30, 2001 (collectively, the "Store
Closures"). The decline in store revenues resulting from the Store Sales and the
Store Closures is partially offset by a corresponding increase in royalty income
from the company-owned stores sold to third party franchisees and brand new
franchises sold. Royalties for the nine months ended September 30, 2001 include
a non-recurring $300,000 purchase closing in March, 2001 of the Company's future
royalties from the franchisees of its Concepts in the state of Illinois by
Rilwala Foods, Inc., an area representative of the Company whose principals
include Haresh Shah, a current director of the Company.

     Cost of product sales decreased to $722,140 for the nine months ended
September 30, 2001, compared to $1,799,661 for the same nine month period in
2000. For the three months ended September 30, 2001, cost of product sales
decreased to $186,665, compared to $264,375 for the same period of 2000. This
decrease is primarily the result of the Store Sales and the Store Closures.
whereby the Company reduced the number of its corporate-owned locations of the
Concepts by a total of twelve units during the period January 1, 2001 to
September 30, 2001 as discussed in the preceding paragraph. However, the gross
margin of store and product revenues decreased to approximately 61% for the nine
months ended September 30, 2001, compared to approximately 65% for the nine
months ended September 30, 2000. For the three months ended September 30, 2001,
the gross margin of store and product revenues decreased to approximately 68%,
compared to 71% for the same three months of 2000. These decreases are
attributable to the Company's revenues for the nine and three months ending
September 30, 2001 including a greater proportion of sales from lower margin raw
materials and related supplies sold by its Kona subsidiary to the franchisees
and licensees of the Company's Concepts as the number of its corporate-owned
units decreases, and that the Company's remaining corporate-owned stores are
generally poorer performing units of the Concepts.

                                       13
<PAGE>
     Personnel costs decreased by $736,445 to $1,756,865 for the nine months
ended September 30, 2001, compared to $2,493,310 for the same nine month period
in 2000. For the three months ended September 30, 2001, personnel costs
decreased by $154,634 to $509,675, compared to $664,309 for the same three month
period of 2000. These decreases in personnel costs are primarily attributable to
the reduction in staff associated with the Store Sales and Store Closures
detailed above, partially offset by an increase in the Company's corporate
administrative staff to support the additional franchisees who purchased the
former corporate-owned locations of the Concepts as part of the Store Sales.

     Rent expense decreased by $458,724 to $669,428 for the nine months ended
September 30, 2001, compared to $1,128,152 for the same nine month period of
2000. For the three months ended September 30, 2001, rent expense decreased
$78,615 to $182,870, compared to $261,485 for the same three month period of
2000. This decrease in rent expense during both the three and nine month periods
ending September 30, 2001 is primarily the result of the Company selling a total
of six of its corporate-owned locations of the Concepts during the nine month
period ending September 30, 2001, and closing an additional six underperforming
company-owned outlets of the Concepts during the nine month period ended
September 30, 2001, with all of these six outlets closed as of June 30, 2001.

     General and administrative expenses decreased by $606,662 to $964,189 for
the nine months ended September 30, 2001, compared to $1,570,851 for the same
period of 2000. This decrease in general and administrative expenses during the
nine months ended September 30, 2001 is primarily attributable to a decrease in
legal fees during the first nine months of 2001, compared to the same period of
2000 when the Company was involved in a significant lawsuit with Sports Group
International, Inc., a Delaware corporation, over a failed merger that was
resolved during the second quarter of 2000 in favor of the Company. For the
three months ended September 30, 2001, general and administrative expenses
increased $127,011 to $433,456, compared to $306,445 for the same three month
period of 2000. This increase in general and administrative expenses during the
three months ended September 30, 2001 is primarily due to an increase in travel
and related expenses incurred by Company personnel relating to the following
items: (i) the R 1 Franchise debtor in possession loan to Ranch * 1, which is
based in New York City; and (ii) additional on-site visits of the Company's
franchisees throughout the United States to provide extra training and
operational support in an effort to help increase individual unit sales volume.

     Total other income decreased by $108,944 to a loss of $32,010 for the nine
months ended September 30, 2001, compared to other income of $76,934 for the
same nine month period of 2000. Total other income increased by $223,660 to
$67,236 for the three months ended September 30, 2001, compared to other loss of
$156,424 during the same period of 2000. This decrease in other income for the
nine months ended September 30, 2001 is due to a combination of the following
two items: (i) a $7,225 loss recognized on the sale of six of the Company's
corporate-owned locations of the Concepts and the closing of six underperforming
corporate-owned locations during the first nine months of 2001, compared to a

                                       14
<PAGE>
gain of $194,644 from the sale of eighteen of the Company's corporate-owed
locations of the Concepts during the same nine month period of 2000; and (ii) a
decrease in interest expense of $93,707 during the nine months ended September
30, 2001 compared to the same nine month period of 2000, resulting from an
overall decrease in the Company's outstanding debt during the past twelve months
and a decline in short and long term borrowing rates. The increase in other
income for the three months ended September 30, 2001 is due to a combination of
the following events: (i) a $72,449 gain recognized on the sale of one of the
Company's corporate- owned locations of the Concepts during the three months
ending September 30, 2001, compared to a loss of $130,356 from the sale of eight
of the Company's corporate-owed locations of the Concepts during the same three
month period of 2000; and (ii) a decrease in interest expense of $15,757 during
the three months ended September 30, 2001 compared to the same three month
period of 2000, resulting from an overall decrease in the Company's outstanding
debt during the past twelve months and an overall decline in short and long term
borrowing rates.

     The Company's future operating profitability has become more dependent upon
franchise and royalty revenue. Gross revenues will continue to decrease as the
transition is made from corporate-owned locations to franchised locations.
However, the Company will continue to attempt to grow its existing Concepts
through the franchising of new locations and assisting franchisees in increasing
volumes at their existing locations.

     Many of the Company's franchised units of the Concepts are located in
regional shopping malls and airports across the country. As the entire country
has experienced a general downturn in its economy, customer traffic at regional
shopping malls and airports has declined significantly. This decline in customer
traffic will likely result in lower per unit sales volume at the Company's
franchised units over the coming months, translating into reduced royalties
collected by the Company. However, the declining sales volume due to the
economic downturn should be partially offset by a seasonal increase in sales
volume in the Company's franchised outlets historically experienced during the
upcoming holiday season.

LIQUIDITY AND CAPITAL RESOURCES

     As of September 30, 2001, the Company's liquidity continued to improve
compared to June 30, 2001, March 31, 2001 and December 31, 2000, and
substantially improved compared to the third quarter of 2000. The Company's
current ratio is 0.80 as of September 30, 2001, compared to 0.77 as of June 30,
2001, 0.67 as of March 31, 2001, 0.58 as of December 31, 2000, and 0.41 as of
September 30, 2001.

     The Company anticipates that it will have sufficient liquidity to sustain
its operations over the next 12 months. In late December 1999, the Company
obtained a $1,000,000 credit facility from a national banking institution
comprised of an $800,000 term note (the "Term Note") and a $200,000 revolving
line of credit. During the first quarter of 2001, the Company entered into an
agreement with the same national banking institution to increase the amount of
its revolving line of credit from $200,000 to $500,000. As of September 30,

                                       15
<PAGE>
2001, the balance outstanding under the Term Note is approximately $333,000 and
approximately $458,000 is outstanding under the $500,000 revolving line of
credit.

     The Company does not anticipate the need for significant capital
expenditures in the near future. However, if certain prospective store locations
would be better as company-owned stores rather than franchised locations, the
Company may require significant capital to build-out and open those prospective
stores. The Company did not incur any significant capital expenditures during
the three month period ended September 30, 2001. However, during the nine months
ended September 30, 2001, the Company did incur approximately $176,000 in
capital expenditures.

     The Company continues to finance the sale of its corporate-owned locations
by taking notes receivable from the buyers. Most of the notes are payable over
three to five years. Notes receivable balances totaled $4,180,376 at September
30, 2001. This practice of taking notes receivable has caused the Company to
carefully manage its cash flows in order to maintain relationships with vendors
and meet payments on its debt obligations. The Company has sold the majority of
its corporate-owned locations and does not anticipate an increase in notes
receivable at levels commensurate with that of the past twelve to eighteen
months.

     Net cash used in operating activities was approximately $177,959 for the
first nine months of 2001, compared to net cash used in operating activities of
$351,800 for the corresponding nine month period of 2000. The primary sources of
cash from operating activities during the first nine months of 2001 causing this
change are as follows: (i) the Company recognized a loss of $7,225 on the sale
of six of its corporate-owned locations of the Concepts and the closing of six
underperforming corporate-owned locations of the Concepts during the first nine
months of 2001 compared to a net gain of $194,644 from the sale of eighteen of
the Company's corporate-owned locations of the Concepts during the same nine
month period of 2000; and (ii) a reduction in the Company's trade and other
accounts receivable of $280,839 during the nine months ending September 30, 2001
compared to an increase in trade and other receivables of $198,749 during the
same period of 2000 as the Company was more aggressive in collecting its
royalties and other related receivables from franchisees and licensees during
the first nine months of 2001.

     The sources of cash from operating activities detailed above were fully
offset by the following: (i) a decrease in accounts payable and accrued
liabilities of approximately $411,280 during the nine months ended September 30,
2001 compared to a decrease of $660,849 during the same period of 2000 as the
Company continues to reduce its overall level of outstanding obligations; (ii)
an increase in the Company's inventory levels of only $20,844 during the nine
months ended September 30, 2001 compared to an increase of $105,154 during the
same period of 2000 due to the above-referenced Store Sales and Store Closures,
offset by an increase in inventory levels at the Company's Kona subsidiary to
allow adequate service to the larger base of the Company's franchised locations;
and (iii) an increase in deferred franchise fee income of $385,000 during the
nine months ended September 30, 2001 compared to a decrease of $95,528 during
the same period of 2000 as the Company sold four ADA's and multiple single unit

                                       16
<PAGE>
franchises during the first nine months of 2001. Additionally, the Company also
experienced a decrease in overall net income and depreciation and amortization
during the first nine months of 2001 as compared to the first nine months of
2000.

     Net cash used in investing activities was approximately $179,558 for the
first nine months of 2001, compared to net cash provided by investing activities
of $1,155,460 during the comparable nine month period of 2000. The primary
reason for this decrease is proceeds from the sale of property and equipment was
only $216,508 during the first nine months of 2001, compared to proceeds of
$1,447,144 during the same period of 2000. This decrease in proceeds from the
sale of property and equipment during the first nine months of 2001 is the
result of the Company receiving a greater percentage of the purchase price of
the corporate-owned locations of the Concepts sold to third party franchisees
during the first nine months of 2001 in promissory notes and other deferred
arrangements rather than cash. Additionally, during the nine months ended
September 30, 2001, the Company loaned Ranch 1 $500,000 under a note receivable
pursuant to the Loan Agreement. See RANCH * 1 FINANCING, above. The decrease in
the proceeds from the sale of property and equipment and the $500,000 loan to
Ranch 1 during the first nine months of 2001 was partially offset by the
Company's purchases of $176,525 of property and equipment to construct new
outlets of its Concepts during the first nine months of 2001, compared to
$441,056 of such purchases during the comparable period of 2000 when the Rollerz
Transaction was completed and the first three Tahi Mana locations were opened.

     Net cash provided by financing activities for the first nine months of 2001
was approximately $283,409, compared to net cash used in financing activities of
$1,405,611 during the same nine month period of 2000. The primary reason for
this increase was the Company received $458,140 in net proceeds from borrowing
on its newly expanded $500,000 revolving line of credit discussed above, and
$500,000 in net proceeds from borrowings under the Financing Agreement with a
significant shareholder to effectuate the Ranch 1 Loan Agreement during the
first nine months of 2001 (See RANCH * 1 FINANCING, above), compared to net
proceeds from borrowing on notes payable of only $70,000 during the same period
of 2000. The above-referenced sources of cash from financing activities during
the first nine months of 2001 were partially offset by a decrease of $819,168 in
principal payments on notes payable during the first nine months of 2001 as
compared to the same period of 2000, as the Company made principal payments on a
$1,200,000 promissory note held by the prior owners of Fru-Cor, Inc. (the
"Fru-Cor Note") of approximately $900,000 during the first nine months of 2000.
The Fru-Cor Note was paid in full by the end of 2000.

     The Company believes that it can effectively implement its growth plans for
the current fiscal year's operations with the $1,000,000 credit facility,
including the newly increased $500,000 revolving line of credit, discussed
above. Nevertheless, the Company is seeking additional debt or equity financing
from various sources, including investment banks, venture capitalists, and
private investors, to fund future expansion and for potential future
acquisitions.

                                       17
<PAGE>
     The Company has never paid cash dividends on its common stock and does not
anticipate a change in this policy in the foreseeable future.

FACTORS THAT MAY AFFECT FUTURE RESULTS

     Factors that may affect the Company's future results are described in
detail at pages 31-32 of the Company's Annual Report on Form 10-KSB for the year
ended December 31, 2000. These factors include, without limitation, the effect
of national and regional economic and market conditions in the U.S. where the
Company franchises and operates store locations (including declining customer
traffic in airports and regional shopping malls due to the weakening United
States economy and the terrorist attacks of September 11, 2001), costs of labor
and employee benefits, costs of marketing, the success or failure of marketing
efforts, costs of food and non-food items used in the operation of the Company's
stores, intensity of competition for locations and franchisees as well as
customers, perception of food safety, spending patterns and demographic trends,
legal claims and litigation, the availability of financing for the Company and
its franchisees at reasonable interest rates, and legislation and governmental
regulations affecting the Company's business. Many of these factors are beyond
the Company's control. Due to the factors note above and in the Company's Form
10-KSB for the year ended December 31, 2000, the Company's future earnings and
stock price may be subject to significant volatility. Any shortfall in revenues
or earnings from levels expected by the investing public or securities analysts
could have an immediate and significant adverse effect on the trading price of
the Company's common stock.

                          PART II - OTHER INFORMATION

ITEM I. LEGAL PROCEEDINGS

     NONE - The Company is currently only party to routine litigation that is
incidental to its principal business of franchising and operating retail juice
bars and healthy food cafes.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     NONE

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     NONE

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

     NONE

ITEM 5. OTHER INFORMATION

     NONE

                                       18
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

     EXHIBIT NUMBER                           DESCRIPTION
     --------------                           -----------

          2.1                 Order Confirming First Modified Joint Plan of
                              Reorganization Proposed by the Debtor and the
                              Official Committee of Unsecured Creditors,
                              incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

          2.2                 First Modified Joint Plan of Reorganization
                              Proposed by the Debtor and the Official Committee
                              of Unsecured Creditors dated May 13, 1997, as
                              amended July 22, 1997, incorporated by reference
                              to the Company's Registration Statement on Form
                              10-SB filed with the Securities and Exchange
                              Commission on December 20, 1999, File No. 0-30444.

          2.3                 Amended Disclosure Statement accompanying First
                              Modified Joint Plan of Reorganization Proposed by
                              the Debtor and the Official Committee of Unsecured
                              Creditors dated May 13, 1997, as amended July 22,
                              1997, incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

          2.4                 Share Purchase Agreement between Sports Group
                              International, Inc. and Surf City Acquisition
                              Corporation II dated March 15, 1999, incorporated
                              by reference to the Company's Registration
                              Statement on Form 10-SB filed with the Securities
                              and Exchange Commission on December 20, 1999, File
                              No. 0-30444.

          2.5                 Membership Interest Purchase Agreement between
                              Sports Group International, Inc. and Apache Peak
                              Capital, L.L.C., dated March 12, 1999,
                              incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

                                       19
<PAGE>
     EXHIBIT NUMBER                           DESCRIPTION
     --------------                           -----------

          2.6                 Share Purchase Agreement between Sports Group
                              International, Inc., Ziad S. Dalal and Selman
                              Systems, Inc. dated May 21, 1999, incorporated by
                              reference to the Company's Registration Statement
                              on Form 10-SB filed with the Securities and
                              Exchange Commission on December 20, 1999, File No.
                              0-30444.

          2.7                 Stock Purchase Agreement between Selman Systems,
                              Inc., Kenneth L. Musgrave, Ltd., Tony Condor and
                              Larry Pearce dated May 21, 1999, incorporated by
                              reference to the Company's Registration Statement
                              on Form 10-SB filed with the Securities and
                              Exchange Commission on December 20, 1999, File No.
                              0-30444.

          3.1                 Amended and Restated Articles of Incorporation of
                              Sports Group International, Inc., incorporated by
                              reference to the Company's Registration Statement
                              on Form 10-SB filed with the Securities and
                              Exchange Commission on December 20, 1999, File No.
                              0-30444.

          3.2                 Bylaws of Sports Group International, Inc.,
                              incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

          4.1                 Promissory Note with United Texas Bank,
                              incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

          4.2                 Bank One Promissory Note, incorporated by
                              reference to the Company's Registration Statement
                              on Form 10-SB filed with the Securities and
                              Exchange Commission on December 20, 1999, File No.
                              0-30444.

                                       20
<PAGE>
     EXHIBIT NUMBER                           DESCRIPTION
     --------------                           -----------

          4.3                 Promissory Note between SCAC and the Petersen
                              Trust, incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

          4.4                 Consent and Waiver of Terms of Series A Preferred
                              Stock, incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

          10.1                Sports Group International, Inc.'s 1999 Stock
                              Option Plan, incorporated by reference to the
                              Company's Registration Statement on Form 10-SB
                              filed with the Securities and Exchange Commission
                              on December 20, 1999, File No. 0-30444.

          10.2                Employment Agreement between Mr. Kevin A.
                              Blackwell and Sports Group International, Inc.
                              dated October 1, 1999, incorporated by reference
                              to the Company's Registration Statement on Form
                              10-SB filed with the Securities and Exchange
                              Commission on December 20, 1999, File No. 0-30444.

          10.3                Employment Agreement between Mr. David A. Guarino
                              and Sports Group International, Inc. dated October
                              1, 1999, incorporated by reference to the
                              Company's Registration Statement on Form 10-SB
                              filed with the Securities and Exchange Commission
                              on December 20, 1999, File No. 0-30444.

          10.4                Series B Preferred Stock and Warrant Purchase
                              Agreement between Sports Group International,
                              Inc., Robert E. Petersen and Margaret Petersen
                              dated May 20, 1999, incorporated by reference to
                              the Company's Registration Statement on Form 10-SB
                              filed with the Securities and Exchange Commission
                              on December 20, 1999, File No. 0-30444.

                                       21
<PAGE>
     EXHIBIT NUMBER                           DESCRIPTION
     --------------                           -----------

          10.5                Warrant to purchase 1,000,000 shares of the
                              Company's Common Stock, incorporated by reference
                              to the Company's Registration Statement on Form
                              10-SB filed with the Securities and Exchange
                              Commission on December 20, 1999, File No. 0-30444.

          10.6                Master Franchise Agreement between Surf City
                              Squeeze Franchise Corp. and 1238176 Ontario, Inc.
                              dated July 7, 1998, incorporated by reference to
                              the Company's Registration Statement on Form 10-SB
                              filed with the Securities and Exchange Commission
                              on December 20, 1999, File No. 0-30444.

          10.7                Indemnification Agreement for Kathryn Blackwell,
                              incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

          10.8                Indemnification Agreement for Kevin Blackwell,
                              incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

          10.9                Indemnification Agreement for David Guarino,
                              incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

          10.10               Indemnification Agreement for Robert Corliss,
                              incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

          10.11               Indemnification Agreement for Don Plato,
                              incorporated by reference to the Company's
                              Registration Statement on Form 10-SB filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

                                       22
<PAGE>
     EXHIBIT NUMBER                           DESCRIPTION
     --------------                           -----------

          10.12               Compromise Settlement and Non-Modification
                              Agreement between Sports Group International,
                              Inc., Selman Systems, Inc., and Ziad S. Dalal,
                              dated February 1, 2000, incorporated by reference
                              to the Company's Amendment No. 1 to its Form
                              10-SB/A Registration Statement filed with the
                              Securities and Exchange Commission on February 16,
                              2000.

          10.13               Series C Preferred Stock Agreement between Sports
                              Group International, Inc. and Rilwala Group, Inc.
                              dated December 28, 2000, incorporated by reference
                              to Exhibit 10.13 of the Company's 2000 Annual
                              Report on Form 10-KSB filed with the Securities
                              and Exchange Commission on April 2, 2001, File No.
                              000-30444.

          10.14               Exclusive Master Development Agreement and
                              Investment Agreement between Sports Group
                              International, Inc. and Rilwala Group, Inc. dated
                              November 1, 2000, incorporated by reference to
                              Exhibit 10.14 of the Company's 2000 Annual Report
                              on Form 10-KSB filed with the Securities and
                              Exchange Commission on April 2, 2001, File No.
                              000-30444.

          10.15               Debtor-In-Possession Loan and Security Agreement
                              by and between R 1 Franchise Systems, L.L.C. and
                              Ranch * 1, Inc (and its affiliated entities) dated
                              July 5, 2001.

          10.16               Final Order Entered by the United States
                              Bankruptcy Court for the Southern District of New
                              York Authorizing Ranch 1, Inc. (and its affiliated
                              entities) to Obtain Post-Petition Secured
                              Financing Pursuant to Sections 364(C)(1),
                              364(C)(2) and 364(C)(3) of the Bankruptcy Code,
                              and Approving Joint Franchise Marketing Agreement.

          10.17(1)            Memorandum of Agreement dated July 6, 2001.

          11*                 Computation of Per Share Earnings - Located in the
                              September 30, 2001 Statement of Operations and
                              footnote four to such financial statement filed
                              herewith on page four and nine, respectively.

          21                  Subsidiary Information. (See Chart), incorporated
                              by reference to the Company's Registration
                              Statement on Form 10-SB filed with the Securities
                              and Exchange Commission on December 20, 1999, File
                              No. 0-30444.

     ----------
     * Filed herewith.

     (1)  The Company has sought confidential treatment for portions of the
          referenced exhibits.

(b)  Reports on Form 8-K

     NONE

                                       23
<PAGE>
                                   SIGNATURES

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

KAHALA CORP.
(Registrant)


By: /s/ Kevin Blackwell                                  Date: November 12, 2001
    ---------------------------------
    Kevin Blackwell
    President, CEO, and Director


By: /s/ David Guarino                                   Date: November 12,  2001
    ---------------------------------
    David Guarino
    Vice President, Chief Financial Officer, and Director
    (Principal Financial and Accounting Officer)

                                       24