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 June 30, 2000

                                       OR

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

    For the transition period from __________ to __________

                        Commission File Number 000-30444


                        SPORTS GROUP INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

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

                         7730 E. GREENWAY RD., SUITE 203
                            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 August 11, 2000 was 9,488,267 shares.
<PAGE>
                        SPORTS GROUP INTERNATIONAL, INC.

                           Quarter Ended June 30, 2000

                                   FORM 10-QSB

                                      INDEX


                                                                     Page Number
                                                                     -----------
PART I - FINANCIAL INFORMATION                                              2

ITEM 1.  FINANCIAL STATEMENTS                                             3-6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
         OR PLAN OF OPERATION                                            7-11

PART II - OTHER INFORMATION                                                12

ITEM 1.  LEGAL PROCEEDINGS                                              12-14

ITEM 2.  CHANGES IN SECURITIES                                             14

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                   14

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF
         SECURITY HOLDERS                                                  14

ITEM 5.  OTHER INFORMATION                                                 14

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                               15-19

SIGNATURES                                                                 20

                                        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 June 30, 2000 and the  Company's  results of  operations  and statement of
cash flows for the three  months ended June 30, 2000 and 1999 and the six months
ended June 30, 2000 and 1999. These results have been determined on the basis of
generally accepted accounting principles and practices applied consistently with
those  used in the  preparation  of the  Company's  1999  Annual  Report on Form
10-KSB.

Certain  information  and footnote  disclosures  normally  included in financial
statements presented in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that the accompanying  financial
statements  be read in  conjunction  with the financial  statements  and related
notes thereto  incorporated  by reference in the Company's 1999 Annual Report on
Form 10-KSB.

                                        2
<PAGE>
SPORTS GROUP INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEET
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------

ASSETS

CURRENT ASSETS
  Cash                                                             $    112,954
  Trade and other accounts receivable, net of allowance                 466,751
  Inventories                                                           265,557
  Prepaid expenses and other assets                                      36,387
  Deferred income taxes                                                  91,001
  Notes receivable - current portion, net of allowance                  531,560
                                                                   ------------
     Total current assets                                             1,504,210

PROPERTY AND EQUIPMENT, net                                           1,869,678

LEASE DEPOSITS                                                          159,112

NOTES RECEIVABLE - less current portion                               2,050,167

GOODWILL, net of accumulated amortization                             5,225,070

DEFERRED INCOME TAXES                                                   289,971
                                                                   ------------
TOTAL ASSETS                                                       $ 11,098,208
                                                                   ============
LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
  Accounts payable                                                 $    864,434
  Accrued liabilities                                                   920,158
  Notes payable - current portion                                     1,197,854
  Acquisition notes payable                                             672,158
  Confirmed bankruptcy liabilities - current portion                    357,525
                                                                   ------------
     Total current liabilities                                        4,012,129

NOTES PAYABLE - long-term portion                                       610,508

ACQUISITION NOTES PAYABLE - long-term portion                           192,814

CONFIRMED BANKRUPTCY LIABILITIES - long term portion                    957,092

DEPOSITS HELD UNDER CONTRACT                                            160,000

DEFERRED FRANCHISE FEE INCOME                                            80,000
                                                                   ------------
     Total liabilities                                                6,012,543
                                                                   ------------
STOCKHOLDERS' EQUITY:
  Series A preferred stock, $10.00 par value,
    575,000 shares designated, 575,000 issued                         5,750,000
  Series B preferred stock, $10.00 par value,
    650,000 shares designated, 650,000 issued                         6,500,000
  Common stock, $.001 par value, 100,000,000 shares
    authorized, 9,488,267 issued and outstanding                          9,448
  Paid in capital                                                     4,627,069
  Accumulated deficit                                               (11,800,852)
                                                                   ------------
     Total stockholders' equity                                       5,085,665
                                                                   ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $ 11,098,208
                                                                   ============

                                        3

<PAGE>
SPORTS GROUP INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
SIX AND THREE MONTHS ENDED JUNE 30, (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                       Six Months                     Three Months
                                              ----------------------------    ----------------------------
                                                  2000            1999            2000            1999
                                              ------------    ------------    ------------    ------------
<S>                                           <C>             <C>             <C>             <C>
REVENUES:
  Net product and store sales                 $  4,261,081    $  1,801,952    $  2,104,590    $  1,676,193
  Franchise fees                                   597,143         122,632         529,643          84,387
  Royalties                                        866,981         341,072         437,248         181,850
  Rental income                                    123,600         257,106          61,800         152,706
                                              ------------    ------------    ------------    ------------
     Total revenues                              5,848,805       2,522,762       3,133,281       2,095,136
                                              ------------    ------------    ------------    ------------
EXPENSES:
  Cost of product sales                          1,535,286         781,565         774,492         697,017
  Personnel expenses                             1,829,001         583,610       1,029,546         486,613
  Rent                                             866,667         520,688         431,957         386,428
  Depreciation and amortization                    283,683          71,671         201,028          69,080
  General and administrative expenses            1,264,406         449,909         399,534         354,275
                                              ------------    ------------    ------------    ------------
      Total expenses                             5,779,043       2,407,443       2,836,557       1,993,413
                                              ------------    ------------    ------------    ------------

OPERATING (LOSS) INCOME                             69,762         115,319         296,724         101,723
                                              ------------    ------------    ------------    ------------
OTHER (INCOME) AND EXPENSES
  Gain on sales of assets                         (325,000)             --        (325,000)             --
  Interest expense                                 147,975          77,143          81,088          44,675
  Interest income                                  (56,333)         (8,122)        (54,886)         (4,189)
                                              ------------    ------------    ------------    ------------

  Total other expense (income)                    (233,358)         69,021        (298,798)         40,486
                                              ------------    ------------    ------------    ------------

INCOME BEFORE INCOME TAXES                         303,120          46,298         595,522          61,237

INCOME TAX (BENEFIT) PROVISION                          --              --         110,989           5,479
                                              ------------    ------------    ------------    ------------

NET (LOSS) INCOME                             $    303,120    $     46,298    $    484,533    $     55,758
                                              ============    ============    ============    ============
NET INCOME (LOSS) PER SHARE:
  Basic                                       $       0.03    $       0.01    $       0.05    $       0.01
                                              ============    ============    ============    ============
  Diluted                                     $       0.01    $       0.01    $       0.01    $       0.01
                                              ============    ============    ============    ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic                                          8,801,389       4,617,403       9,128,614       6,450,000
                                              ============    ============    ============    ============
  Diluted                                       22,968,056       6,322,744      23,547,677       9,770,622
                                              ============    ============    ============    ============
</TABLE>

                                        4
<PAGE>
SPORTS GROUP INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE
SIX MONTHS ENDED JUNE  30, (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                    2000           1999
                                                                 -----------    -----------
<S>                                                              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net  (loss)                                                    $   303,120    $    46,298
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
  Depreciation and amortization                                      283,683         71,671
  Gain on Sale of Assets                                            (325,000)            --
  Changes in assets and liabilities:
    Trade and other accounts receivable                             (158,373)      (110,892)
    Inventories                                                     (146,649)       (13,024)
    Prepaids and other current assets                                  5,994         83,447
    Accounts payable                                                 (88,021)       179,653
    Accrued liabilities                                             (133,916)      (105,498)
    Deferred franchise fee income                                   (216,220)       (28,288)
                                                                 -----------    -----------
          Net cash provided by (used in) operating activities       (475,382)       123,367
                                                                 -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                               (470,309)        (8,825)
  Collections on notes receivable                                     93,586         81,351
  Proceeds from sale of property and equipment                     1,275,000             --
                                                                 -----------    -----------
          Net cash provided by (used in)  investing activities       898,277         72,526
                                                                 -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from borrowings on notes payable                           70,000        332,500
  Principal repayments on notes payable                             (911,378)      (147,487)
  Payments on confirmed bankruptcy liabilities                      (112,827)      (293,307)
                                                                 -----------    -----------
          Net cash provided by (used in) financing activities       (954,205)      (108,294)
                                                                 -----------    -----------

INCREASE (DECREASE) IN CASH                                         (531,310)        87,599

CASH, BEGINNING OF PERIOD                                            644,264         19,467
                                                                 -----------    -----------

CASH, END OF PERIOD                                              $   112,954    $   107,066
                                                                 ===========    ===========
</TABLE>

                                        5
<PAGE>
SPORTS GROUP INTERNATIONAL, INC.

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

                                                            2000         1999
                                                         ----------   ----------
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid                                          $   94,874   $   53,748
                                                         ==========   ==========

  Income taxes paid                                      $       --   $       --
                                                         ==========   ==========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:

  Common stock issued as preferred stock dividends       $  579,452
                                                         ==========   ==========

  Sale of property & equipment under notes receivable    $1,830,000   $   65,000
                                                         ==========   ==========

                                        6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

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

OVERVIEW

     Sports Group  International,  Inc. (the "Company") operates and franchises,
under the Frullati Cafe and Bakery,  Surf City Squeeze,  Rollerz,  and Tahi Mana
brand names,  juice bars and health food cafes that serve  blended fruit drinks,
sandwiches,   salads,  soups,  baked  goods,  healthy  snacks,  and  nutritional
supplements in shopping malls, airports,  medical centers,  office buildings and
health clubs  throughout the United States and Canada.  As of June 30, 2000, the
Company,  through its subsidiaries,  has  approximately 203 total locations,  of
which 188 are either franchised or licensed by third parties and 15 are directly
owned and operated by the Company or its subsidiaries.  The Company's  corporate
stores operate under the Frullati Cafe and Bakery,  Rollerz, and Tahi Mana brand
names. The Company also sells proprietary smoothie mixes and other nutrients and
supplements  to  its  franchisees   and  licensees   through  its  wholly  owned
subsidiaries.

                                        7
<PAGE>
     The Company derives its revenues primarily from franchise and license fees,
sales from its  company-owned  stores,  and sales of nutritional and health food
products to its franchisees and licensees.  The Company's  long-term strategy is
to operate  primarily as a franchisor,  and through  strategic  acquisitions and
internal growth, to become one of the larger  franchisors of juice bars, healthy
food  cafes,  and other  retail food  concepts  in the United  States and select
international  markets that include  Canada,  the Middle  East,  Australia,  and
certain  Pacific  Rim  countries.  The  Company  also plans to operate a limited
number of  company-owned  stores in certain key markets  where the stores can be
geographically concentrated. Currently, the majority of the company-owned stores
are located in the Dallas-Ft. Worth and Phoenix, Arizona metropolitan areas. The
Company  has not  yet  identified  other  areas  where  it may  wish to  operate
company-owned stores.

RESULTS OF OPERATIONS

     There were no significant  operations in Sports Group  International,  Inc.
prior to its merger  with Surf City  Squeeze  Acquisition  Corp.  II ("SCAC") on
March 15, 1999. The Sports Group  International,  Inc. and SCAC  transaction was
accounted for as a  recapitalization  of SCAC,  with SCAC as the  acquirer.  The
results of  operations  and  statement of cash flow for the three months and six
months  ended June 30,  1999 are those of SCAC for the entire  period and Selman
Systems, Inc. from May 21, 1999 until June 30, 1999.

     Total operating revenues for the six months ended June 30, 2000,  increased
by $3,326,043 to $5,848,805 from $2,522,762  during the same period in 1999. For
the three months ending June 30, 2000,  total  operating  revenues  increased by
$1,038,145 to $3,133,281  from  $2,095,136  during the same period in 1999.  The
increase in operating revenues resulted from the Company's acquisition of Selman
Systems,  Inc. ("Selman") on May 21, 1999 and Fru-Cor,  Inc. ("Fru-Cor") on July
7, 1999,  compared to the operating revenues for the three months and six months
ending June 30, 1999 being primarily those of SCAC, with only approximately five
weeks of revenues from Selman in the three month period ending June 30, 1999.

     Cost of product sales decreased to approximately 26 % of operating  revenue
for the six months  ended June 30, 2000,  compared to 31 % of operating  revenue
during the same six month  period of 1999.  For the three  months ended June 30,
2000, cost of product sales decreased to approximately 25 % of operating revenue
for the three months ended June 30, 2000,  compared to 33 % of operating revenue
during the same three month period of 1999.  These  decreases were primarily the
result of the Company  negotiating  improved  pricing for its products  with its
suppliers  due to a  combination  of the  following:  (i) the  Company  hiring a
full-time purchasing director in July, 1999; and (ii) the Company's total number
of outlets nearly doubling due to the acquisition of Selman and Fru-Cor.

     Personnel  costs  increased by $1,245,391 to $1,829,001  for the six months
ended June 30, 2000,  compared to $583,610 for the same period of 1999.  For the
three  months  ended June 30,  2000,  personnel  costs  increased by $542,933 to
$1,029,546,  compared to $486,613 for the same period of 1999.  This increase in

                                        8
<PAGE>
personnel  costs was primarily  attributable  to the additional  personnel costs
associated  with the  company-owned  stores owned by a subsidiary  of Selman and
Fru-Cor.

     Rent  expense  increased  by $345,979 to $866,667  for the six months ended
June 30, 2000,  compared to $520,688 for the same period of 1999.  For the three
months  ended June 30,  2000,  rent  expense  increased  by $45,529 to $431,957,
compared to $386,428  during the same three month period of 1999.  This increase
was  primarily  the  result  of  additional  rent  expense  associated  with the
company-owned stores owned by a subsidiary of Selman and Fru-Cor.

     Depreciation and amortization  expense  increased  $212,012 to $283,683 for
the six months ended June 30,  2000,  compared to $71,671 for the same period of
1999. For the three months ended June 30, 2000,  depreciation  and  amortization
increased by $131,948 to $201,028, compared to $69,080 during the same period of
1999.  This increase in  depreciation  and  amortization  expenses was primarily
attributable  to  the  depreciation  of  the  company-owned  stores  owned  by a
subsidiary of Selman and Fru-Cor and the  amortization of goodwill  attributable
to the purchase of Selman and Fru-Cor.

     General and  administrative  expenses  increased to  approximately  22 % of
total operating revenues for the six months ended June 30, 2000, compared to 18%
of operating  revenues  during the six months ended June 30, 1999. For the three
month period ending June 30, 2000, general and administrative expenses decreased
to 13 % of  operating  revenue  compared to 17 % during the same period of 1999.
The  increase   during  the  six  months  ended  June  30,  2000  was  primarily
attributable to an increase in  professional  fees during the first three months
of 2000 due to the Company's  legal  proceedings  discussed in more detail below
and  in  the   Company's   1999  Form  10-KSB.   The  decrease  in  general  and
administrative  expenses as a percentage of total operating  revenues during the
three  months  ended  June  30,  2000  was  primarily  due  to  a  reduction  in
professional  fees  due to the  settlement  and/or  completion  of all  material
litigation  involving  the Company  during the three month period ended June 30,
2000.

     Total other  income  increased  by $302,379 to $233,358  for the six months
ended June 30, 2000,  compared to a loss of $69,021 for the same period of 1999.
For the three  months  ended June 30,  2000,  total other  income  increased  by
$339,284 to  $298,798,  compared to a loss of $40,486  during the same period of
1999.  These  increases  are  due to a  one-time  gain on the  sale  of  certain
company-owned stores of $325,000 realized during the three months ended June 30,
2000. This one-time gain was partially offset by an increase in interest expense
due to the  additional  borrowings  of $322,500 from the holder of the Company's
Series B Preferred  Stock in February  1999,  the  $1,200,000  indebtedness  the
Company incurred to purchase Fru-Cor on July 7, 1999, and the $1,000,000  credit
facility obtained in December, 1999 and discussed in more detail below.

     The  Company's  consolidated  operating  income  increased  by  $256,822 to
$303,120  for the six  months  ended June 30,  2000,  from  operating  income of
$46,298 for the six months ended June 30, 1999.  For the three months ended June

                                        9
<PAGE>
30, 2000, the Company's  consolidated  operating income increased by $428,775 to
$484,533,  compared to operating  income of $55,758  during the same three month
period of 1999. This increase in the Company's consolidated operating income for
the six and three  months  ended  June 30,  2000 was  primarily  the result of a
$325,000  one-time  gain  realized  from the sale of  certain  of the  Company's
corporate   stores  and  improved   sales  at  the  Company's   franchised   and
company-owned stores during the three month period ended June 30, 2000.

LIQUIDITY AND CAPITAL RESOURCES

     The Company  anticipates that it will have sufficient  liquidity to sustain
its  operations  over the next 12 months.  In late  December  1999,  the Company
obtained a $1,000,000 credit facility from a national banking  institution.  The
Company has drawn a significant  portion of the  $1,000,000  credit  facility to
satisfy current obligations. The Company continues evaluating offers to sell its
remaining  company-owned  stores in the Dallas,  Texas area to raise  additional
cash for operating and financing purposes.

     The  Company  does  not  anticipate  the  need  for   significant   capital
expenditures in the near future. However, if certain prospective store locations
would be better as company-owned  stores rather than franchised  locations,  the
Company  may  require  significant  capital to build and open those  prospective
stores.

     Net cash used by operating  activities was  approximately  $475,382 for the
first six months of 2000, compared to net cash provided by operating  activities
of $123,367 for the  corresponding  period of 1999.  The primary reason for this
change was an increase in  inventories  and accounts  payable due to the Company
opening its first two Tahi Mana stores,  the construction of its first corporate
Frullati  Cafe & Bakery  store in  California,  and the  purchase of the Rollerz
concept,  including the first company-owned  Rollerz store, during the first six
months of 2000;  a decrease in deferred  franchise  fee income  during the first
half  of  2000  as the  Company  completed  its  obligations  to  certain  newly
franchised  locations;  and a $325,000 one-time gain realized on the sale of six
company-owned  Frullati  Cafe & Bakery stores during the three months ended June
30, 2000. In certain  instances when the Company sells  corporate  locations,  a
portion of the  purchase  price is  deferred  and  contingent  on the  purchaser
obtaining a renewal or  extension  of the  commercial  real estate lease for the
Frullati Cafe & Bakery location purchased.  The uses of cash detailed above were
partially  offset by an increase in net income and depreciation and amortization
during the first six months of 2000 compared to the first six months of 1999.

     Net cash provided by investing  activities was  approximately  $898,277 for
the  first  six  months  of 2000  compared  to net cash  provided  by  financing
activities of $72,526 during the  comparable  period of 1999. The primary reason
for this increase was the receipt of $1,275,000  from the sale of  company-owned
Frullati  Cafe & Bakery stores in the first six months of 2000.  These  proceeds
were partially offset by an increase of  approximately  $460,000 in purchases of
property and  equipment  arising from the purchase  and/or  development  of four

                                       10
<PAGE>
additional  company-owned  stores during the first six months of 2000, including
the first two Tahi Mana locations, the first Rollerz location, and the Company's
first Frullati Cafe & Bakery location in the state of California.

     Net cash used in financing  activities for the first six months of 2000 was
approximately  $954,205  compared to net cash used in  financing  activities  of
$108,294  during  the same  period of 1999.  The  significant  reasons  for this
increase were an increase in the repayment of the  Company's  outstanding  debt,
including confirmed bankruptcy  liabilities of approximately $583,000 during the
first six months of 2000 compared to the same period of 1999 and a net reduction
in borrowings in the first half of 2000 compared to a net increase in borrowings
in the first half of 1999.

     The Company believes that it can effectively implement its growth plans for
the  current  fiscal  year's  operations  with the  $1,000,000  credit  facility
discussed above.  Additionally,  the Company renegotiated the $1,200,000 Fru-Cor
acquisition  note in May, 2000 to provide for the repayment of the note over the
remainder of 2000.  As of July 31, 2000,  the  principal  balance of the Fru-Cor
acquisition  note has been reduced to $500,000.  The Company also has sold three
additional company-owned Frullati Cafe & Bakery stores in the Dallas, Texas area
since June 30,  2000 to provide  additional  cash for  debt-service  and general
corporate  purposes.  Nevertheless,  the Company is seeking  additional  debt or
equity  financing from various sources,  including  investment banks and private
investors, to fund future expansion and for potential future acquisitions.

     The Company has never paid cash  dividends on 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 21-22 of the Company's Annual Report on Form 10-KSB for the year
ended  December  31,  1999.  SEE PART I,  ITEM 2,  MANAGEMENT'S  DISCUSSION  AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - RISK FACTORS.

                                       11
<PAGE>
                          PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     The  following  litigation  has all been  disclosed in the  Company's  Form
10-KSB for the year ended  December 31, 1999.  Each of these items of litigation
is again disclosed in this Form 10-QSB due to material developments occurring in
each case during the three months ended June 30, 2000.

SGI AND RELATED LITIGATION:

     On March 15, 1999, the Company entered into a Merger  Agreement and Plan of
Reorganization  ("Merger  Agreement") with Sports Group  International,  Inc., a
Delaware  Corporation  ("SGI").  According to the terms of the Merger Agreement,
the merger was to close on or before May 30, 1999,  if certain  conditions  were
met. The merger,  if completed,  would have required the Company to exchange its
shares for shares of SGI held by approximately 300 SGI shareholders.  The Merger
Agreement  did  not  require  the  shares  of the  surviving  corporation  to be
registered with the Securities and Exchange Commission or under applicable state
law prior to the  consummation of the merger.  The merger was subject to certain
conditions,  including the truth of all  representations  and  warranties in the
Merger Agreement,  and no substantial  adverse change in the financial condition
or  operations  of SGI. On June 25, 1999,  the  Company's  legal  counsel sent a
letter to the Board of Directors of SGI notifying SGI that the Merger  Agreement
was terminated  because SGI had failed to comply with certain  conditions of the
Merger Agreement in a timely fashion.  Following receipt of the letter,  the SGI
Board of  Directors  notified  the Company  that SGI  contended  that the Merger
Agreement between the Company and SGI had been "completed."

     On July 29, 1999,  the Company  filed a Complaint  for  Declaratory  Relief
against SGI in the Superior Court of the State of  California,  in the County of
San  Diego,  case  no.  GIC  733034.  The  Company  requested  entry of an order
declaring  that:  (1) the  Merger  Agreement  expired  under  its own  terms and
conditions  on May 30,  1999,  due to SGI's  failure  to satisfy  the  condition
precedent to the consummation of the merger; (2) the Company properly terminated
the  Merger  Agreement;  (3) SGI has no  interest  in or right to  shares of the
Company;  and  (4)  the  Company  has no  liability  to SGI,  its  creditors  or
shareholders. On September 14, 1999, SGI and certain individual SGI shareholders
filed a  cross-complaint  against  the  Company,  alleging  breach of the Merger
Agreement  and  seeking  declaratory  and  injunctive  relief.  SGI also  sought
monetary damages in an unspecified amount.

                                       12
<PAGE>
     The court denied SGI's request for  temporary  injunctive  relief.  In late
March, 2000, the matter was tried before a judge in San Diego Superior Court. On
April 14, 2000, the court ruled in the Company's favor on its declaratory relief
action  against  SGI.  The court found that the Company and SGI did not merge in
1999,  and that the Company was justified in rejecting the proposed  merger with
SGI. The court's decision  establishes that the Company and SGI are separate and
independent entities. The court also ruled in the Company's favor on SGI's cross
complaint  for breach of contract,  determining  that the Company did not breach
the plan of merger when it rejected the proposed merger with SGI. The Company is
currently  attempting to recover its attorneys'  fees and costs incurred in this
matter from SGI and its principals.

     The  SGI  litigation   described  above  has  also  resulted  in  ancillary
litigation.  For the most part, the claims against the Company  associated  with
this litigation assert that the Company is obligated for certain  liabilities of
SGI which the Company would have assumed if the SGI merger had been consummated.

     In  FISCH,   SPIEGLER,   GINSBURG,   LADNER  &  ATTERIAN  V.  SPORTS  GROUP
INTERNATIONAL,  INC.,  the  plaintiff  has  asserted a claim for  $42,000,  plus
pre-judgment  interest,  attorneys'  fees and costs,  alleging  that the Company
assumed  all of SGI's  liabilities  pursuant to the merger  agreement  described
above (the "Fisch Action").  The Fisch Action was voluntarily  dismissed without
prejudice  by the  plaintiff  in late May,  2000.  In JEFF KUDLA V. SPORTS GROUP
INTERNATIONAL,  INC.,  the  plaintiff  asserted  that the  Company is liable for
$25,000,  plus  interest,  attorneys'  fees and costs relating to alleged bridge
loans  made to SGI in March  1999 (the  "Kudla  Action").  The Kudla  Action was
voluntarily  dismissed  without  prejudice in early June, 2000. In MAKO CAPITAL,
INC. V. SPORTS GROUP  INTERNATIONAL,  INC.,  the  plaintiff  alleged a breach of
contract  arising  out of loans made by Mako  Capital to SGI in the  approximate
amount of $250,000 (the "Mako Action"). In late-July, 2000, the Company's motion
for summary  judgment in the Mako Action was granted by a Judge in the San Diego
County Superior Court.

     FRANNET:

     On December  31,  1998,  FranNet  Southern  California,  Inc., a California
corporation,  and Allan S. Craven,  an  individual,  doing business as Franchise
Resource/Franchise  Network  (hereinafter,  "FranNet") filed a complaint against
Surf City Squeeze  Franchise Corp.  ("SCSFC")  alleging that SCSFC is liable for
certain debts of Surf City Squeeze, Inc. that were discharged in bankruptcy (the
"FranNet  Lawsuit").  The lawsuit arises out of a contract  between  FranNet and
Surf City for the  acquisition of  franchisees.  Surf City believes that FranNet
billed  and was  paid  for its  work.  In  1997,  FranNet  filed  a  demand  for
arbitration  for sums it claims it was due from Surf City's sale of  franchises.
Shortly after the arbitration hearing, Surf City filed its Chapter 11 Bankruptcy
Petition.  FranNet  obtained an order lifting the Bankruptcy  Court's stay order
and the  arbitrator  ruled in favor of  FranNet  and  awarded  FranNet  Southern
California $67,159.15 and Franchise Resource $28,056.25 in commissions.

                                       13
<PAGE>
     In addition,  the arbitrator ordered Surf City to pay FranNet's  attorneys'
fees of  $17,000.00,  administrative  fees  of  $1,950.00  and the  arbitrator's
compensation  of  $1,350.00.  As a result of Surf City's  bankruptcy,  FranNet's
award was  treated as an  unsecured  claim and  included  in Surf City's Plan of
Reorganization.  FranNet's  attempt to amend the  Demand to  include  SCSFC as a
party was denied by the arbitrator.

     FranNet sought to enforce the arbitration award against SCSFC in the Orange
County Superior Court,  under a statute which permits a party who has a contract
with another  party to sue a related  party who "received all of the benefits of
the underlying  contract."  FranNet's  Motion for Summary Judgment was denied on
November 30, 1999.

     The FranNet matter was tried in mid-February, 2000. After FranNet presented
its case, the court granted judgment in favor of SCSFC on several grounds. SCSFC
subsequently filed a motion to recover its attorneys' fees and costs incurred in
the defense of this  matter,  and was awarded  $30,000  from  FranNet  (the "Fee
Award").

     In May,  2000,  FranNet  filed its  notice of  intention  to move for a new
trial. In June,  2000, the parties entered into a settlement  agreement  whereby
the FranNet lawsuit was dismissed with prejudice,  the parties mutually released
one another  from any further  causes of action  arising  under the facts of the
FranNet lawsuit,  and SCSFC accepted a lump sum payment and other  consideration
in full satisfaction of the Fee Award.

     Other than the  foregoing and the items  discussed in the Company's  annual
report on Form 10-KSB for the year ended  December 31, 1999,  there are no other
pending  material legal  proceedings to which the Company is a party or to which
the Company's property is subject.  In addition,  from time to time, the Company
is involved in litigation and proceedings  arising out of the ordinary course of
its business,  primarily involving  landlords and franchisees.  The Company does
not believe that any of the  litigation  arising out of its  ordinary  course of
business will have a material adverse effect on the Company.

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

                                       14
<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.

                                       15
<PAGE>
          2.5                 Membership  Interest  Purchase  Agreement  between
                              Sports Group  International,  Inc. and Apache Peak
                              Capital, L.LC., dated March 12, 1999, incorporated
                              by   reference  to  the   Company's   Registration
                              Statement on Form 10-SB filed with the  Securities
                              and Exchange Commission on December 20, 1999, File
                              No. 0-30444.

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

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

          3.1                 Amended and Restated  Articles of Incorporation of
                              Sports Group International,  Inc., incorporated by
                              reference to the 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.

                                       16
<PAGE>
          4.2                 Bank  One   Promissory   Note,   incorporated   by
                              reference to the Company's  Registration Statement
                              on  Form  10-SB  filed  with  the  Securities  and
                              Exchange Commission on December 20, 1999, File No.
                              0-30444.

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

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

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

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

          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.

                                       17
<PAGE>
          10.4                Series B  Preferred  Stock  and  Warrant  Purchase
                              Agreement  between  Sports  Group   International,
                              Inc.,  Robert E.  Petersen and  Margaret  Petersen
                              dated May 20, 1999,  incorporated  by reference to
                              the Company's Registration Statement on Form 10-SB
                              filed with the Securities and Exchange  Commission
                              on December 20, 1999, File No. 0-30444.

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

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

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

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

          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.

                                       18
<PAGE>
          10.10               Indemnification   Agreement  for  Robert  Corliss,
                              incorporated   by  reference   to  the   Company's
                              Registration  Statement  on Form 10-SB  filed with
                              the Securities and Exchange Commission on December
                              20, 1999, File No. 0-30444.

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

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

          11*                 Computation of Per Share Earnings - Located in the
                              June  30,  2000  Statement  of  Operations   filed
                              herewith on page 4.

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

          27*                 Financial Data Schedule.

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

(b)  Reports on Form 8-K

          NONE

                                       19
<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.


SPORTS GROUP INTERNATIONAL, INC.
      (Registrant)


By: /s/ Kevin Blackwell                                    Date: August 11, 2000
    ---------------------------------
    Kevin Blackwell
    President, CEO, and Director


By: /s/ David Guarino                                      Date: August 11, 2000
    ---------------------------------
    David Guarino
    Vice President, Chief Financial Officer, and Director
    (Principal Financial and Accounting Officer)

                                       20