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, 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 August 10, 2001 was 16,818,609 shares.
<PAGE>
                                  KAHALA CORP.

                           Quarter Ended June 30, 2001

                                   FORM 10-QSB

                                      INDEX


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

PART I - FINANCIAL INFORMATION                                              2

     ITEM 1.   FINANCIAL STATEMENTS (INCLUDING NOTES)                     3-9

     ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
               OF OPERATION                                             10-16

PART II - OTHER INFORMATION                                                17

     ITEM 1.   LEGAL PROCEEDINGS                                           17

     ITEM 2.   CHANGES IN SECURITIES                                       17

     ITEM 3.   DEFAULTS UPON SENIOR SECURITIES                             17

     ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS         17

     ITEM 5.   OTHER INFORMATION                                           17

     ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                         18-22

SIGNATURES                                                                 23

                                        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, 2001 and the  Company's  results of  operations  and statement of
cash flows for the three  months ended June 30, 2001 and 2000 and the six months
ended June 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 JUNE 30, 2001 (UNAUDITED)


                                     ASSETS
CURRENT ASSETS
  Cash                                                             $     49,463
  Trade and other accounts receivable, net of allowance               1,217,604
  Inventories                                                           146,875
  Prepaid expenses and other assets                                      90,905
  Deferred income taxes                                                  19,639
  Notes receivable - current portion, net of allowance                  524,974
                                                                   ------------
     Total current assets                                             2,049,460

PROPERTY AND EQUIPMENT, net                                             677,269

LEASE DEPOSITS                                                          157,942

NOTES RECEIVABLE - less current portion                               2,683,608

GOODWILL, net of accumulated amortization                             5,001,128

DEFERRED INCOME TAXES                                                   496,315
                                                                   ------------
TOTAL ASSETS                                                       $ 11,065,722
                                                                   ============
                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                 $    141,380
  Accrued liabilities                                                   693,806
  Line of credit                                                        552,401
  Notes payable - current portion                                       531,352
  Acquisition notes payable                                             171,721
  Confirmed bankruptcy liabilities - current portion                    574,393
                                                                   ------------
     Total current liabilities                                        2,665,053

NOTES PAYABLE - long-term portion                                       116,309

ACQUISITION NOTES PAYABLE - long-term portion                           132,009

CONFIRMED BANKRUPTCY LIABILITIES - long term portion                    548,379

DEFERRED FRANCHISE FEE INCOME                                           690,000
                                                                   ------------
     Total liabilities                                                4,151,750
                                                                   ------------

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,
   16,818,609 issued and outstanding                                     16,819
  Paid in capital                                                     5,953,787
  Accumulated deficit                                               (12,906,634)
                                                                   ------------
     Total stockholders' equity                                       6,913,972
                                                                   ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $ 11,065,722
                                                                   ============

                                        3
<PAGE>
                                  KAHALA CORP.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
      FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2001 AND 2000 (UNAUDITED)

<TABLE>
<CAPTION>
                                                SIX MONTHS ENDED JUNE 30,      THREE MONTHS ENDED JUNE 30,
                                              ----------------------------    ----------------------------
                                                  2001            2000            2001            2000
                                              ------------    ------------    ------------    ------------
<S>                                           <C>             <C>             <C>             <C>
REVENUES:
  Net product and store sales                 $  1,283,431    $  4,261,081    $    597,242    $  2,104,590
  Franchise fees                                   397,250         597,143         169,500         529,643
  Royalties                                      1,436,018         866,981         641,327         437,248
  Rental income                                     86,797         123,600          38,399          61,800
                                              ------------    ------------    ------------    ------------
     Total revenues                              3,203,496       5,848,805       1,446,468       3,133,281
                                              ------------    ------------    ------------    ------------
EXPENSES:
  Cost of product sales                            535,475       1,535,286         260,392         774,492
  Personnel expenses                             1,247,190       1,829,001         653,113       1,029,546
  Rent                                             486,558         866,667         196,897         431,957
  Depreciation and amortization                    184,821         283,683          84,188         201,028
  General and administrative expenses              530,733       1,264,406         192,946         399,534
                                              ------------    ------------    ------------    ------------
      Total expenses                             2,984,777       5,779,043       1,387,536       2,836,557
                                              ------------    ------------    ------------    ------------

OPERATING (LOSS) INCOME                            218,719          69,762          58,932         296,724
                                              ------------    ------------    ------------    ------------
OTHER (INCOME) AND EXPENSES
  Loss on sale of assets                            79,674        (325,000)         41,813        (325,000)
  Interest expense                                  70,025         147,975          32,348          81,088
  Interest income                                  (50,453)        (56,333)        (24,787)        (54,886)
                                              ------------    ------------    ------------    ------------

  Total other expense                               99,246        (233,358)         49,374        (298,798)
                                              ------------    ------------    ------------    ------------

INCOME BEFORE INCOME TAXES                         119,473         303,120           9,558         595,522

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

NET INCOME                                    $    119,473    $    303,120    $      9,558    $    484,533
                                              ============    ============    ============    ============
NET (LOSS) INCOME PER SHARE:
  Basic                                       $      (0.04)   $       0.03    $      (0.02)   $       0.05
                                              ============    ============    ============    ============
  Diluted                                     $      (0.04)   $       0.01    $      (0.02)   $       0.01
                                              ============    ============    ============    ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic                                         14,468,458       8,801,389      15,367,973       9,128,614
                                              ============    ============    ============    ============
  Diluted                                       14,468,458      22,968,056      15,637,973      23,547,677
                                              ============    ============    ============    ============
</TABLE>

                                        4
<PAGE>
                                  KAHALA CORP.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
           FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         2001             2000
                                                                     -----------       -----------
<S>                                                                  <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net  Income (loss)                                                 $   119,473       $   303,120
  Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
    Depreciation and amortization                                        184,821           283,683
    Deferred income taxes                                                     --                --
    Loss (Gain) on sale of assets                                         79,674          (325,000)
  Changes in assets and liabilities:
    Trade and other accounts receivable                                   34,152          (158,373)
    Inventories                                                           16,292          (146,649)
    Refundable lease deposits                                             (1,000)               --
    Prepaids and other current assets                                    (36,041)            5,994
    Accounts payable                                                     (58,054)          (88,021)
    Accrued liabilities                                                 (385,433)         (133,916)
    Deferred franchise fee income                                       (224,000)         (216,220)
                                                                     -----------       -----------
          Net cash provided by (used in) operating activities           (270,116)         (475,382)
                                                                     -----------       -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                   (174,830)         (470,309)
  Collections on notes receivable                                        220,253            93,586
  Proceeds from sale of property and equipment                           166,509         1,275,000
                                                                     -----------       -----------
          Net cash (used in)  investing activities                       211,932           898,277
                                                                     -----------       -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from borrowings on line of credit                             455,401                --
  Proceeds from borrowings on notes payable                                   --            70,000
  Principal repayments on notes payable                                 (337,385)         (911,378)
  Payments on confirmed bankruptcy liabilities                          (110,254)         (112,827)
                                                                     -----------       -----------
          Net cash provided by (used in) financing activities              7,762          (954,205)
                                                                     -----------       -----------

INCREASE (DECREASE) IN CASH                                              (50,422)         (531,310)

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

CASH, END OF PERIOD                                                  $    49,463       $   112,954
                                                                     ===========       ===========
</TABLE>

                                        5
<PAGE>
                                  KAHALA CORP.
               CONSOLIDATED STATEMENT OF CASH FLOWS, (CONTINUED)
                 FOR THE SIX MONTHS ENDED JUNE 30, (UNAUDITED)


<TABLE>
<CAPTION>
                                                                       2001           2000
                                                                    ----------     ----------
<S>                                                                 <C>            <C>
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid                                                     $   40,429     $   94,874
                                                                    ==========     ==========
  Income taxes paid                                                 $       --     $       --
                                                                    ==========     ==========

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING FINANCING ACTIVITIES:

  Common stock issued as preferred stock dividends                  $  680,500     $  579,452
                                                                    ==========     ==========
  Sale of property & equipment under notes receivable               $  468,176     $1,830,000
                                                                    ==========     ==========
</TABLE>

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


1.   BASIS OF PRESENTATION

     The accompanying  unaudited  financial  statements  represent the financial
     position of Kahala Corp. (the "Company") as of June 30, 2001, including our
     results of operations  for the three and six months ended June 30, 2001 and
     2000 and cash flows for the six months ended June 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  period
     presented  have been made.  The results for the three and six months  ended
     June 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 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
     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 and Tahi Mana, LLC. 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 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 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.

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 periods ended June 30, 2001 an 2000 consisted of the following:

<TABLE>
<CAPTION>
                                   SIX MONTHS ENDING JUNE 30,     THREE MONTHS ENDING JUNE 30,
                                   --------------------------     ----------------------------
                                     2001             2000           2001              2000
                                   --------         ---------      --------         ---------
<S>                                <C>              <C>            <C>              <C>
Current tax (benefit) provision    $ 45,391         $ 121,200      $  3,989         $  63,156
Deferred tax (benefit) provision    (45,391)         (121,200)       (3,989)           47,833
                                   --------         ---------      --------         ---------
Total income tax provision         $    -0-         $     -0-      $    -0-         $ 110,989
                                   ========         =========      ========         =========
</TABLE>
                                        8
<PAGE>
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 and warrants to purchase one million  common
     shares were not  considered  in the  calculation  for diluted  earnings per
     share for the six months  ended June 30,  2001  because the effect of their
     inclusion would be anti-dilutive.

<TABLE>
<CAPTION>
                                           SIX MONTHS ENDING JUNE 30, 2001        THREE MONTHS ENDING MARCH 31, 2000
                                        -------------------------------------    ------------------------------------
                                                                        PER       INCOME
                                        INCOME (LOSS)      SHARES      SHARE      (LOSS)        SHARES      PER SHARE
                                        -------------    ----------    ------    ---------    ----------    ---------
<S>                                      <C>             <C>           <C>       <C>          <C>           <C>
Net Income (Loss)                         $ 119,473                              $   9,559
Preferred stock dividends                  (680,500)                              (346,250)

BASIC EARNINGS PER SHARE
Loss available to common stockholders     $(561,027)     14,001,541    $(0.04)   $(336,691)   15,367,973      $(0.02)

Effect of dilutive securities                 N/A                                    N/A

DILUTED EARNINGS PER SHARE                                             $(0.04)                                $(0.02)
</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
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.

                                       10
<PAGE>
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 June 30, 2001,  the  Company,  through its  subsidiaries,  has
approximately  209 total  locations  of the  Concepts,  of which 203 are  either
franchised or licensed by third parties and 6 are directly owned and operated by
the Company or its subsidiaries. Of the 209 total locations of the Concepts, 113
operate as Surf City  Squeeze  outlets,  90 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,  and Rollerz 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
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.

                                       11
<PAGE>
RESULTS OF OPERATIONS

     Total  operating  revenues for the six months ended June 30, 2001 decreased
by $2,645,309 to $3,203,496 from $5,848,805  during the same six month period in
2000.  For the three  months  ended  June 30,  2001,  total  operating  revenues
decreased by $1,686,813 to $1,446,468 from $3,133,281  during the same period of
2000.  This decrease in operating  revenues is the result of the Company selling
nine  company-owned  Frullati Cafe & Bakery locations during the last six months
of 2000 to third party  franchisees  and selling five  additional  company-owned
outlets of the  Concepts  during the six months  ending  June 30,  2001 to third
party franchisees (collectively,  the "Store Sales").  Additionally,  during the
six  months   ended  June  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,  five of which were closed during the three
month period  ending June 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 royalties and franchise fee
income from the  company-owned  stores sold to third party franchisees and brand
new franchises sold.  Royalties for the six months ended June 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 $535,475 for the six months ended June
30, 2001,  compared to $1,535,286 for the same six month period in 2001. For the
three months ended June 30, 2001,  cost of product sales  decreased to $260,392,
compared to $774,492 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 twenty
units  during  the  period  July 1, 2000 to June 30,  2001 as  discussed  in the
preceding  paragraph.  However,  the gross margin of store and product  revenues
decreased to approximately 58% for the six months ended June 30, 2001,  compared
to approximately 64% for the six months ended June 30, 2000.  Additionally,  the
gross margin of store and product revenues  decreased to  approximately  56% for
the three months ended June 30, 2001, compared to approximately 63% for the same
three month period of 2000.  These  decreases are  attributable to the Company's
revenues for the three and six months  ending June 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.

     Personnel  costs  decreased  by $581,811 to  $1,247,190  for the six months
ended June 30,  2001,  compared to  $1,829,001  for the same six month period in
2000.  For the three months ended June 30, 2001,  personnel  costs  decreased by
$376,433 to $653,113,  compared to $1,029,546 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.

                                       12
<PAGE>
     Rent  expense  decreased  by $380,109 to $486,558  for the six months ended
June 30, 2001,  compared to $866,667 for the same six month period of 2000.  For
the three  months  ended June 30,  2001,  rent  expense  decreased  $235,060  to
$196,897,  compared to $431,957  for the same three month  period of 2000.  This
decrease in rent expense during both the three and six month periods ending June
30, 2001 is primarily  the result of the Company  selling a total of fourteen of
its  corporate-owned  locations of the  Concepts  during the period from July 1,
2000  through  June 30,  2001,  and closing an  additional  six  underperforming
company-owned outlets of the Concepts during the six month period ended June 30,
2001, with five of these six outlets closed during the three month period ending
June 30, 2001.

     General and  administrative  expenses decreased by $733,673 to $530,733 for
the six months ended June 30, 2001,  compared to $1,264,406  for the same period
of 2000.  For the three months ended June 30, 2001,  general and  administrative
expenses decreased $206,588 to $192,946, compared to $399,534 for the same three
month period of 2000. These decreases in general and administrative expenses are
primarily  attributable  to a decrease in legal fees during the first six 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.

     Total  other  expense  increased  by $332,604 to $99,246 for the six months
ended June 30, 2001, compared to other income of $233,358 for the same six month
period of 2000.  Total other  expense  increased  by $348,172 to $49,374 for the
three months ended June 30,  2001,  compared to other income of $298,798  during
the same  period of 2000.  This  increase in other  expenses  for the six months
ended June 30, 2001 is due to a combination  of the  following two items:  (i) a
$79,674 loss  recognized  on the sale of five of the  Company's  corporate-owned
locations of the Concepts and the closing of six underperforming corporate-owned
locations  during the first six months of 2001,  compared  to a gain of $325,000
from the sale of six of the Company's  corporate-owed  locations of the Concepts
during  the same six  month  period of 2000;  and (ii) a  decrease  in  interest
expense of $77,950  during the six months  ended June 30,  2001  compared to the
same six  month  period  of 2000,  resulting  from an  overall  decrease  in the
Company's  outstanding debt during the past twelve months. The increase in other
expenses for the three months ended June 30, 2001 is due to a combination of the
following  events:  (i) a  $41,813  loss  recognized  on the  sale of one of the
Company's  corporate-owned  locations  of the  Concepts  and the closing of five
underperforming  corporate-owned  locations  during the three months ending June
30, 2001,  compared to a gain of $325,000  from the sale of six 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 $48,740 in the three  months
ended June 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.

                                       13
<PAGE>
     The Company's future operating profitability has become more dependent upon
franchise and royalty revenue. Gross revenues will 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.

LIQUIDITY AND CAPITAL RESOURCES

     As of June 30, 2001, the Company's liquidity improved modestly versus March
31, 2001 and December  31,  2000,  and  substantially  improved  compared to the
second quarter of 2000. The Company's current ratio is 0.77 as of June 30, 2001,
0.67 as of March 31, 2001, 0.58 as of December 31, 2000, and 0.37 as of June 30,
2000.

     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 June 30, 2001, the
balance   outstanding  under  the  Term  Note  is  approximately   $430,000  and
approximately  $455,000 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 incur  $174,830  and  $36,299 in capital  expenditures
during the six and three month periods ended June 30, 2001, respectively.

     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  $3,208,582 at June 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  $270,116 for the
first six months of 2001,  compared to net cash used in operating  activities of
$475,382 for the  corresponding six month period of 2000. The primary sources of
cash from operating  activities during the first six months of 2001 causing this
change are as follows:  (i) the Company recognized a loss of $79,674 on the sale
of five of its corporate-owned  locations of the Concepts and the closing of six

                                       14
<PAGE>
underperforming  corporate-owned  locations of the Concepts during the first six
months  of 2001  compared  to a gain of  $325,000  from  the  sale of six of the
Company's  corporate-owned  locations of the Concepts  during the same six month
period of 2000;  (ii) a reduction in the Company's  inventory  levels of $16,292
during the six months  ending June 30, 2001 compared to an increase in inventory
of  $146,649  during  the same six  months  of 2000 due to the  above-referenced
reduction in the number of corporate-owned  locations of the Company's Concepts;
and (iii) a reduction in the Company's  trade and other  accounts  receivable of
$34,152  during the six months  ending June 30, 2001  compared to an increase in
trade and other  receivables  of $146,649  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 six months of 2001.

     The sources of cash from operating  activities detailed above are partially
offset by a decrease in accrued liabilities of approximately $385,433 during the
six months ended June 30, 2001  compared to a decrease of only  $133,916  during
the same period of 2000 as the Company  continues to reduce its overall level of
outstanding obligations.  Additionally,  the Company also experienced a decrease
in overall net income and  depreciation  and  amortization  during the first six
months of 2001 as compared to the first six months of 2000.

     Net cash provided by investing  activities was  approximately  $211,932 for
the first  six  months  of 2001,  compared  to net cash  provided  by  investing
activities  of $898,277  during the  comparable  six month  period of 2000.  The
primary  reason for this  decrease  is proceeds  from the sale of  property  and
equipment  is only  $166,509  during the first six months of 2001,  compared  to
proceeds of $1,275,000 during the same period of 2000. This decrease in proceeds
from the sale of property and  equipment  during the first six 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  six  months of 2001 in  promissory  notes and other  deferred
arrangements  rather than cash.  The decrease in the  proceeds  from the sale of
property and equipment  during the first six months of 2001 was partially offset
by the  Company's  purchases of $174,830 of property and  equipment to construct
new  outlets of its  Concepts  during the first six months of 2001,  compared to
$470,309 of such purchases during the comparable period of 2000 when the Rollerz
Transaction was completed and the first Tahi Mana location was opened.

     Net cash provided by financing  activities for the first six months of 2001
was approximately  $7,762,  compared to net cash used in financing activities of
$954,205  during the same six month period of 2000.  The primary reason for this
increase was the Company received $455,401 in net proceeds from borrowing on its
newly  expanded  $500,000  revolving line of credit  discussed  above during the
first six months of 2001,  compared  to net  proceeds  from  borrowing  on notes
payable of only  $70,000  during the same period of 2000.  The  above-referenced
source of cash from financing  activities  during 2001 was partially offset by a
decrease of $573,993 in principal payments on notes payable during the first six
months of 2001 as  compared  to the same  period of 2000,  as the  Company  made

                                       15
<PAGE>
principal  payments on a $1,200,000  promissory note held by the prior owners of
Fru-Cor,  Inc. (the "Fru-Cor  Note") of $600,000  during the first six 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.

     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,  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.

                                       16
<PAGE>
                          PART II - OTHER INFORMATION

ITEM 1. 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

     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 51 Ranch *
1 restaurants  operating in 12 states, the District of Columbia,  and Taiwan, of
which 47 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  secured  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 August 13,  2001,  R 1 Franchise  has
advanced Ranch 1 $500,000 under the Loan Agreement.

     In addition to customary  terms and  conditions,  among other  things,  the
Final Order  provided for R 1 Franchise to be paid a commission  equal to 50% of
the initial franchise fees and area development fees generated from sales of new
Ranch * 1 franchises  and area  development  rights  introduced by R 1 Franchise
during  the  period  when  Ranch 1 is  operating  under  Chapter  11  bankruptcy
protection.

     A copy of the Loan Agreement,  the Final Order, and the Financing Agreement
are  attached  to  this  Form  10-QSB  as  Exhibits  10.15,   10.16,  and  10.17
respectively.

     As  contemplated  by the Loan  Agreement,  the Company intends to negotiate
with the  current  Ranch 1  management  team  regarding  the  terms of a plan of
reorganization.  Under the Loan  Agreement,  the Company has agreed that it will
not file a plan unless that plan  provides for R1 Franchise  (if R1 Franchise so
elects) to acquire  the assets of Ranch 1. There can be no  assurance,  however,
that any such plan of reorganization will ever be successfully negotiated and/or
ultimately approved.

                                       17
<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.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.

                                       18
<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.

                                       19
<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.

             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.

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

             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.

             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.

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

          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 *(1)     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 *(1)     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)(2)  Memorandum of Agreement dated July 6, 2001.

          11 *           Computation of Per Share Earnings - Located in the June
                         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)  All schedules,  exhibits, riders, and addendums to this Agreement have been
     intentionally  omitted with this filing and are available to the Commission
     upon request.

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

(b)  Reports on Form 8-K

NONE

                                       22
<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: August 13, 2001
    ---------------------------------------
    Kevin Blackwell
    President, CEO, and Director


By: /s/ David Guarino                                      Date: August 13, 2001
    ---------------------------------------
    David Guarino
    Vice President, Chief Financial Officer
    and Director (Principal Financial and
    Accounting Officer)

                                       23