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 March 31, 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 or 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 par
value per share, as of May 12, 2000 was 8,951,735 shares.
<PAGE>
                        SPORTS GROUP INTERNATIONAL, INC.

                          Quarter Ended March 31, 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       7-10


PART II - OTHER INFORMATION                                               11

ITEM 1.   LEGAL PROCEEDINGS                                               11-15

ITEM 2.   CHANGES IN SECURITIES                                           15

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES                                 15

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS             15

ITEM 5.   OTHER INFORMATION                                               15

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                                16-20

SIGNATURES                                                                21
<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 March 31, 2000 and the results of  operations  and statement of cash flows
for the three  months  ended March 31, 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
                           MARCH 31, 2000 (UNAUDITED)


ASSETS

CURRENT ASSETS
   Cash                                                            $    163,249
   Trade and other accounts receivable, net of allowance                476,998
   Inventories                                                          114,613
   Prepaid expenses and other assets                                     92,716
   Deferred income taxes                                                201,990
   Notes receivable - current portion, net of allowance                 197,798
                                                                   ------------
      Total current assets                                            1,247,364

PROPERTY AND EQUIPMENT, net                                           2,814,284

LEASE DEPOSITS                                                          155,811

NOTES RECEIVABLE - less current portion                               1,185,101

GOODWILL, net of accumulated amortization                             5,463,387

DEFERRED INCOME TAXES                                                   289,970

                                                                   ------------
TOTAL ASSETS                                                       $ 11,155,917
                                                                   ============

LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
   Accounts payable                                                $    945,245
   Accrued liabilities                                                1,047,561
   Notes payable - current portion                                      798,669
   Acquisition notes payable                                          1,292,552
   Confirmed bankruptcy liabilities - current portion                   512,008
                                                                   ------------
      Total current liabilities                                       4,596,035

NOTES PAYABLE - long-term portion                                       540,522
ACQUISITION NOTES PAYABLE - long-term portion                           192,814
CONFIRMED BANKRUPTCY LIABILITIES - long term portion                    846,986
DEPOSITS HELD UNDER CONTRACT                                            140,000
DEFERRED FRANCHISE FEE INCOME                                           238,400
                                                                   ------------
      Total liabilities                                               6,554,757
                                                                   ------------
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, 8,951,735 issued and outstanding                          8,227
  Paid in capital                                                     4,338,604
  Accumulated deficit                                               (11,995,671)
                                                                   ------------
     Total stockholders' equity                                       4,601,160
                                                                   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $ 11,155,917
                                                                   ============

                                       3
<PAGE>
                        SPORTS GROUP INTERNATIONAL, INC.

                 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
                    THREE MONTHS ENDED MARCH 31, (UNAUDITED)


                                                    2000               1999
                                                 -----------       -----------
REVENUES:
  Net product and store sales                    $ 2,156,491       $   125,759
  Franchise fees                                      67,500            38,245
  Royalties                                          429,733           159,222
  Rental income                                       61,800           104,400
                                                 -----------       -----------
      Total revenues                               2,715,524           427,626
                                                 -----------       -----------
EXPENSES:
  Cost of product sales                              760,794            84,548
  Personnel expenses                                 799,455            96,997
  Rent                                               434,710           134,260
  Depreciation and amortization                       82,655             2,591
  General and administrative expenses                864,872            95,634
                                                 -----------       -----------
      Total expenses                               2,942,486           414,030
                                                 -----------       -----------

OPERATING (LOSS) INCOME                             (226,962)           13,596
                                                 -----------       -----------
OTHER (INCOME) AND EXPENSES
  Interest expense                                    66,887            32,468
  Interest income                                     (1,447)           (3,933)
                                                 -----------       -----------

      Total other expense                             65,440            28,535
                                                 -----------       -----------

INCOME BEFORE INCOME TAXES                          (292,402)          (14,939)

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

NET (LOSS) INCOME                                $  (181,413)      $    (9,460)
                                                 ===========       ===========
NET (LOSS) PER SHARE:
  Basic                                          $     (0.06)      $         *
                                                 ===========       ===========
  Diluted                                        $     (0.06)      $         *
                                                 ===========       ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic                                            8,476,905         2,764,444
                                                 ===========       ===========
  Diluted                                          8,476,905         2,764,444
                                                 ===========       ===========

* less than $(0.01) per share

                                       4
<PAGE>
                        SPORTS GROUP INTERNATIONAL, INC.

                  CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE
                    THREE MONTHS ENDED MARCH 31, (UNAUDITED)


<TABLE>
<CAPTION>
                                                                      2000            1999
                                                                   ---------       ---------
<S>                                                                <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net  (loss)                                                      $(181,413)      $  (9,460)
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
    Depreciation and amortization                                     82,666           2,591
    Deferred income taxes                                           (110,989)         (5,478)
    Changes in assets and liabilities:
      Trade and other accounts receivable                           (168,620)         12,618
      Inventories                                                      4,295           7,454
      Refundable lease deposits                                       (2,500)         (7,734)
      Prepaids and other current assets                              (50,335)            157
      Other assets                                                       (12)         12,133
      Accounts payable                                                (7,210)        147,374
      Accrued liabilities                                             (6,513)        (28,812)
      Deferred franchise fee income                                   23,928          (3,244)
                                                                   ---------       ---------
          Net cash provided by (used in) operating activities       (416,703)        127,599
                                                                   ---------       ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                (68,120)        (42,042)
  Collections on notes receivable                                     72,415          41,564
  Proceeds from sale of property and equipment                       350,000              --
                                                                   ---------       ---------
          Net cash (used in) investing activities                    354,295            (478)
                                                                   ---------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from borrowings on notes payable                               --         332,500
  Repayments on line of credit                                      (199,555)             --
  Principal repayments on notes payable                             (150,602)       (105,679)
  Payments on confirmed bankruptcy liabilities                       (68,450)       (152,089)
                                                                   ---------       ---------
          Net cash provided by (used in) financing activities       (418,607)         74,732
                                                                   ---------       ---------

INCREASE (DECREASE) IN CASH                                         (481,015)        201,853

CASH, BEGINNING OF PERIOD                                            644,264          19,467
                                                                   ---------       ---------
CASH, END OF PERIOD                                                $ 163,249       $ 221,320
                                                                   =========       =========
</TABLE>

                                       5
<PAGE>
                        SPORTS GROUP INTERNATIONAL, INC.

               CONSOLIDATED STATEMENT OF CASH FLOWS, (CONTINUED)
                FOR THE THREE MONTHS ENDED MARCH 31, (UNAUDITED)


                                                           2000           1999
                                                         --------      --------
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid                                          $ 66,887      $ 32,468
                                                         ========      ========

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

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
  Common stock issued as preferred stock dividends       $289,726
                                                         ========

  Sale of property & equipment under notes receivable    $610,000      $ 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 and the Surf City Squeeze brand names,  juice
bars and health food cafes that serve blended fruit drinks and healthy foods and
snacks in shopping malls,  airports,  hospitals and health clubs  throughout the
United  States and  Canada.  As of March 31,  2000,  the  Company,  through  its
subsidiaries,  has  approximately  209 total locations,  of which 190 are either
franchised or licensed by third  parties and 19 are directly  owned and operated
by the Company or its subsidiaries. The Company's corporate stores operate under
the  Frullati  Cafe and Bakery brand name.  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 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  metropolitan area. 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.  Thus,
the results of operations  and statement of cash flow for the three months ended
March 31, 1999 are those of SCAC only.

     Total  operating  revenues  for the three  months  ended  March  31,  2000,
increased by $2,287,898 to  $2,715,524  from $427,626  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 ending
March 31, 1999 being those of SCAC only.

     Cost of product sales increased to approximately  28% of operating  revenue
for the three months ended March 31, 2000,  compared to 20% of operating revenue
during the same  three-month  period of 1999.  This  increase was  primarily the
result of the  increase of net  product  and store sales  during the first three
months of 2000 resulting from the  acquisition of the corporate  owned stores of
Selman and Fru-Cor.

     Personnel  costs  increased  by $702,458 to $ 799,455 for the three  months
ended March 31,  2000,  compared  to $ 96,997 for the same period of 1999.  This
increase  in  personnel  costs  was  primarily  attributable  to the  additional
personnel costs  associated  with the corporate  stores owned by a subsidiary of
Selman and Fru-Cor.

     Rent  expense  increased by $300,450 to $434,710 for the three months ended
March 31, 2000, compared to $ 134,260 for the same period of 1999. This increase
was  primarily  the  result  of  additional  rent  expense  associated  with the
corporate stores owned by a subsidiary of Selman and Fru-Cor.

                                       8
<PAGE>
     Depreciation and amortization  expense increased $80,064 to $82,655 for the
three months  ended March 31,  2000,  compared to $ 2,591 for the same period of
1999.  This increase in  depreciation  and  amortization  expenses was primarily
attributable to the  depreciation of the corporate  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 32% of total
operating  revenues for the three months ended March 31, 2000 compared to 22% of
operating  revenues  during the three months ended March 31, 1999. This increase
was primarily  attributable to an increase in professional fees during the three
months ended March 31, 2000 due to the Company's legal proceedings  discussed in
more detail below.

     Total other  expenses  increased by 36,905 to $ 65,440 for the three months
ended March 31,  2000,  compared  to $ 28,535 for the same period of 1999.  This
increase is primarily  due to an increase in interest  expense to 66,887  during
the three  months  ended March 31,  2000 from  32,468  during the same period of
1999. This increase in interest  expense is due to the additional  borrowings of
$322,500 from the holder of the Company's  Series B Preferred  Stock in February
1999 and the $1,200,000 indebtedness the Company incurred to purchase Fru-Cor.

     The Company's  consolidated  operating  loss increased to $ 226,962 for the
three  months ended March 31, 2000,  from  operating  income of $ 13,596 for the
three months ended March 31, 1999. The operating loss for the three-month  ended
March 31, 2000 was a result of an increase  in  professional  fees for the three
months ended March 31, 2000 due to the Company's legal  proceedings as discussed
in more detail below.

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 the full amount of the $1,000,000  credit  facility to satisfy
current obligations.  The Company is currently evaluating offers to sell certain
company-owned  stores  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.

                                       9
<PAGE>
     Net cash used by operating  activities was  approximately  $416,703 for the
first  three  months  of  2000,  compared  to net  cash  provided  by  operating
activities of $127,599 for the corresponding  period of 1999. The primary reason
for this increase was an increase in accounts  receivable and prepaid assets due
to the  consolidation of the Company's  corporate  offices.  The Company expects
that this increase will reverse by the end of 2000.

     Net cash provided by investing  activities was  approximately  $354,295 for
the first three months of 2000 compared to net cash used in financing activities
of $ 478 during the  comparable  period of 1999.  The primarily  reason for this
increase was the sale of corporate stores in the first three months of 2000.

     Net cash used in  financing  activities  for the first three months of 2000
was approximately $418,607 compared to net cash provided by financing activities
of  $74,732  during the same  period of 1999.  The  significant  reason for this
increase was a net reduction in borrowings in the first quarter of 2000 compared
to a net increase in borrowings in the first quarter 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  has  recently   completed  the
renegotiation  of  the  $1,200,000  Fru-Cor  acquisition  note  to  provide  for
repayment of the note over the remainder of 2000. The Company also has sold four
additional   corporate   stores  since  March  31,  2000  to  provide  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 our 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.

                                       10
<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 quarter ended March 31, 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  has  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 seeks monetary
damages in an unspecified amount.

                                       11
<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  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.
Since the court has now  ruled  that the  Company  and SGI did not merge and are
independent  entities,   the  Company  believes  that  the  following  ancillary
litigation will be resolved in its favor because it has no legal  responsibility
for the debts and other obligations of SGI.

     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. In JEFF KUDLA V. SPORTS GROUP INTERNATIONAL,  INC., the plaintiff asserts
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.  In MAKO  CAPITAL,
INC. V. SPORTS GROUP  INTERNATIONAL,  INC.,  the  plaintiff  alleges a breach of
contract  arising  out of loans made by Mako  Capital to SGI in the  approximate
amount of $250,000.

     In addition,  the Company has been notified that Spalding Sports Worldwide,
Inc.  ("Spalding")  has  threatened to assert a claim against the Company in the
amount of $275,000  in  connection  with  royalties  allegedly  owed to Spalding
pursuant to a license agreement between Spalding and SGI.

     The  Company  has  advised  Spalding  that it is not a party to the license
agreement  and that it has not assumed any of SGI's  liabilities  in  connection
with the Merger  Agreement  discussed  above. As of this date,  Spalding has not
filed suit against the  Company.  Given the court's  recent  decision in the SGI
litigation  discussed above, the Company believes it is highly unlikely Spalding
will commence any legal action against the Company over  royalties  arising from
SGI's license with Spalding.

                                       12
<PAGE>
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.  ("Surf City") that were discharged in
bankruptcy.  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.

     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
is currently  filing a motion with the court to recover its attorneys'  fees and
costs incurred in the defense of this matter.

                                       13
<PAGE>
ROYAL MARKETING INTERNATIONAL, INC.:

     Royal Marketing International, Inc., a Frullati Cafe and Bakery franchisee,
has sued Frullati  Franchise  Systems,  Inc. and Frullati,  Inc.  (collectively,
"Frullati")  for a breach of  contract,  breach of the implied  covenant of good
faith and fair dealing,  tortuous  interference with contract,  violation of the
Texas Unfair Trade & Deceptive  Practices Act, fraud in the  inducement,  common
law fraud,  misrepresentation,  negligent  misrepresentation and rescission,  in
District  Court for  Dallas  County,  Texas.  The  franchisee  seeks  damages of
approximately  $400,000.  The franchisee  alleges that it purchased the right to
open two  franchises in the Miami,  Florida area,  and was  responsible  for the
construction/build-out  of the stores.  The franchisee  alleges that the cost of
construction ran over what was estimated by Frullati and that the stores did not
perform to the franchisee's expectations or the "estimate" the plaintiff alleges
it received from Frullati.  Subsequent to the filing of the complaint,  Frullati
was able to negotiate reductions in the cost of construction, bringing the final
cost  within the  initially  projected  amount.  The Company  believes  that the
franchisee owes Frullati  approximately $ 135,000 for the cost of  construction,
past due rent and  royalties,  and has  filed a  cross-complaint  against  Royal
Marketing in the district court action for that amount. In early January,  2000,
Royal Marketing,  Inc.,  Frulatti  Franchise  Systems,  Inc. and Frulatti,  Inc.
settled this lawsuit for a nominal  payment and the case has been dismissed with
prejudice.

ZIAD S. DALAL:

     Mr. Ziad Dalal  ("Dalal") was the sole  shareholder  of Selman prior to the
Company's  purchase  of Selman in May 1999.  Under the  Company's  agreement  to
purchase the stock of Selman,  the Company  assumed:  (i) a loan  evidenced by a
note between  Selman and United Texas Bank in the original  principal  amount of
$576,000  ("United Texas Note");  (ii) a loan between Selman and Bank One in the
original principal amount of $100,000 ("Bank One Note"), (iii) a promissory note
between  Selman and Fru-Cor in the amount of  $1,200,000,  and (iv) a promissory
note between Selman and Dalal in the amount of $300,000 ("Dalal Note").

     On the day  following  the  closing of the  Company's  purchase of Selman's
stock,  Dalal's attorney  requested that the Company execute a Closing Agreement
which  provided  that the  Company  and Selman  were to have Dalal  removed as a
guarantor on the United Texas Note and the Bank One Note.  The Company  executed
the Closing  Agreement.  The Closing Agreement  provided that if the Company and
Selman did not obtain a release of Dalal's personal  guarantee on these two bank
notes within  forty-five days of the closing,  that failure would be an event of
default  under the  Dalal  Note,  causing  the  entire  $300,000  balance  to be
immediately due and payable.

                                       14
<PAGE>
     The Company and Selman failed to obtain Dalal's personal  guarantee release
on the Bank One Loan and United  Texas Note within  forty-five  (45) days of the
closing,  and Dalal  subsequently  sued Selman and the Company in District Court
for Dallas  County for full  payment of the Dalal  Note,  and for  interest  and
related costs.  The Company,  by obtaining a $1,000,000  credit facility in late
December  1999,  paid the United  Texas  Note and Bank One Note in full and,  on
February 1, 2000,  settled the Dalal suit. Under the settlement  agreement,  the
Dalal Note was  restructured  to  provide  for 36  monthly  payments,  beginning
February  1,  2000,  each in the amount of  $9,540.  The Dalal suit will  remain
pending in Dallas County  District  Court  subject to the Company  performing as
agreed under the restructured Dalal Note.

     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

                                       15
<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.

                                       16
<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.

                                       17
<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.

                                       18
<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.

                                       19
<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 March
                        31, 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

                                       20
<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: May 18, 2000
    -----------------------------------------------------
    Kevin Blackwell
    President, CEO, and Director


By:  /s/ David Guarino                                        Date: May 18, 2000
    -----------------------------------------------------
    David Guarino
    Vice President, Chief Financial Officer, and Director
    (Principal Financial and Accounting Officer)



                                       21