<PAGE>
                       Securities and Exchange Commission
                             Washington, D.C., 20549


                                   FORM 10-QSB


(Mark one)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities  Exchange
    Act of 1934


                 For the fiscal quarter ended September 30, 1997


Commission file Number 0-28416
                                                        or


[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934



                            SBI Communications, Inc.
            (Name of small business issuer specified in its charter)


                                    Delaware
                         (State or other jurisdiction of
                         incorporation or organization)



                                   58-1700840
                                (I.R.S. Employer
                             Identification Number)
     Post Office Box 597 - 458 Highway 278 By Pass - Piedmont, Alabama 36272
               (Address of Principal executive offices) (Zip code)
                                 (205) 447-8797
                            Issuer's telephone number


Securities registered pursuant to 12(b) of the Act:                         None
Securities to be registered pursuant to Section 12(g)
                            of the Act:         Common Stock and Preferred Stock


         Common Stock $0.001 Par Value - Preferred Stock $5.00 Par Value
                                (Title of Class)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period 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 [ ]


As of November 11, 1997 the  Registrant  had 5,345,430  shares of its $0.001 par
value Common Stock Outstanding.


<PAGE>


                                Table Of Contents
                                -----------------


                            SBI COMMUNICATIONS, INC.
                                   FORM 10-QSB
                                      INDEX
                                                             Page
  PART I.             FINANCIAL INFORMATION
  -------             ---------------------


  Item 1.             Consolidated Financial Statements         3
                      Consolidated Balance Sheets as of
                        December 31, 1996 and
                        and September 30, 1997


                      Consolidated Statements of Operations     4
                        for the nine months ended
                        September 30, 1996 and 1997


                      Consolidated Statement of Changes         4
                        in Shareholders' Equity for the nine
                        months ended September 30, 1997


                      Consolidated Statements of Cash Flows     5
                        for the nine months ended September 30,
                        1996 and 1997


                      Notes to Consolidated Financial State-    6
                        meats


  Item 2.             Management's Discussion and Analysis      7
                        of Financial Condition and Results
                        of Operations Condition



  Part II.            OTHER INFORMATION
  --------            -----------------


  Item 1.             Legal Proceedings                        11


  Item 2.             Changes in Securities                    11


  Item 3.             Defaults Upon Senior Securities          11


  Item 4.             Submission of Matters to a Vote          11
                        of Security  Holders


  Item 5.             Other Information                        11


  Item 6.             Exhibits and Reports on Form 8-K         11


                      Signatures                               12


                                     Page 2
<PAGE>


PART I. FINANCIAL INFORMATION
Financial Statements


                     SBI COMMUNICATIONS, INC. AND SUBSIDIARY
                     ---------------------------------------
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------
<TABLE>
<CAPTION>


                                                                                          Sept. 30,        Dec. 31,
                                                                                             1997            1996
                                     ASSETS
                                     ------
Current assets:
<S>                                                                                      <C>             <C>       
    Cash                                                                                 $    6,772      $   42,327
    Accounts receivable, net of allowance for doubtful
         accounts of $-0-                                                                    73,656         120,306
    Notes receivable from affiliates                                                          3,600           3,600
    Inventories                                                                              88,101          24,391
    Prepaid expenses                                                                          8,880            -
                                                                                      -------------      ----------
                                                                                            181,009         190,624
Property and equipment, net of accumulated
    depreciation                                                                          6,851,013       7,026,112


Other assets:
    Accounts receivable - long-term, net of allowance for
        doubtful accounts of $-0- at December 31, 1996                                        -             100,000
    Deferred loan costs                                                                      29,128          56,200
    Deposits                                                                                 68,088          68,088
                                                                                       ------------   -------------
                                                                                         $7,129,238      $7,441,024
</TABLE>
<TABLE>
<CAPTION>
                                           LIABILITIES AND STOCKHOLDERS' EQUITY
                                           ------------------------------------


Current liabilities:
<S>                                                                                     <C>             <C>        
    Note payable to trust managed by a shareholder                                      $   150,000     $   200,000
    Mortgage note payable-current portion                                                   241,265           5,873
    Equipment loan - current portion (Note 3)                                                14,063             -
    Accrued wages due to principal shareholder (Note 2)                                     270,000         180,000
    Advances due to principal shareholder                                                    51,705          14,901
    Payable to banks                                                                         63,788             -
    Account payable and accrued expenses                                                    151,676          83,873
                                                                                      -------------     -----------
                                                                                                            942,497   484,647
Mortgage note payable, long-term portion                                                        -           240,229
Equipment loan, long-term portion (Note 3)                                                   78,600             -
                                                                                     -------------- -------------
Total liabilities                                                                         1,021,097         724,876
                                                                                       ------------      ----------
</TABLE>


                                     Page 3


<PAGE>
<TABLE>
<CAPTION>


Stockholders' equity:
<S>                                                                                       <C>             <C>      
    Preferred stock, par value $5.00;  10,000,000 shares  authorized;  1,673,000
        and 1,693,000 shares issued and outstanding at
         September 30, 1997 and December 31, 1996, respectively                           8,365,000       8,465,000
    Common stock, par value $.001; 40,000,000 shares authorized;
        5,345,439 shares issued and outstanding at September 30, 1997
        and December 31, 1996                                                                 5,345           5,345
    Paid in capital                                                                       3,567,343       3,467,343
    Accumulated deficit                                                               (   5,829,547)    ( 5,221,540)
                                                                                       ------------      ----------
                                                                                          6,108,141       6,716,148
                                                                                       ------------      ----------
                                                                                        $ 7,129,238     $ 7,441,024
                                                                                        ===========     ===========
</TABLE>



                     SBI COMMUNICATIONS, INC. AND SUBSIDIARY
                     ---------------------------------------
                               STATEMENTS OF LOSS
                               ------------------
<TABLE>
<CAPTION>


                                                       Three Months Ended September 30,      Nine Months Ended September 30,
                                                            1997              1996               1997              1996
                                                            ----              ----               ----              ----
Revenues:
<S>                                                    <C>                <C>               <C>               <C>      
    Bingo hall rent                                    $    75,000        $   77,000        $ 271,171         $ 277,000
    Kitchen, gift shop, and other  revenues                 14,404            12,754           90,296            12,754
    Other income                                             2,000               343            2,360               617
                                                     -------------     -------------    -------------     -------------
                                                            91,404            90,097          363,827           290,371
                                                      ------------       -----------       ----------        ----------
Expenses:
    Cost of sales - kitchen and gift shop                   33,522            11,105          132,939            11,105
    Administrative salaries and related expenses            37,136            38,152          117,000           115,012
    Facility costs                                          30,036             8,650           59,451            27,640
    Other general and administrative                        76,001           241,037          358,152           402,611
    Production costs                                           -               1,813            2,483            10,011
    Depreciation and amortization                           85,859           137,107          229,733           411,081
    Interest and finance expenses                           25,972            27,717           72,076            54,628
                                                       -----------      ------------    -------------      ------------
                                                           288,526           465,581          971,834         1,032,088
                                                        ----------        ----------      -----------        ----------


Net loss                                                ($ 197,122)       ($ 375,484)      ($ 608,007)       ($ 741,717)
                                                         =========         =========        =========         =========



Net loss per share (Note 4)                          ($       0.04)     ($      0.07)   ($       0.11)    ($       0.14)
                                                      ============       ===========     ============      ============
</TABLE>


                                     Page 4


<PAGE>
<TABLE>
<CAPTION>


                     SBI COMMUNICATIONS, INC. AND SUBSIDIARY
                     ---------------------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                     FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                     ---------------------------------------


                                                                                             1997            1996
                                                                                             ----            ----
Cash flows from operating activities:
<S>                                                                                      <C>             <C>        
    Net (loss)                                                                           ($ 608,007)     ($ 741,717)
    Adjustments to reconcile net loss to cash
        provided (used) by operating activities:
           Depreciation and amortization                                                    229,733         411,081
           Amortization of deferred loan costs                                               27,072          16,576
           Charge offs of long-term receivables                                               8,178           -
           Change in accounts receivable, trade                                              46,650          28,626
           Change in inventories                                                              6,112          60,688
           Change in prepaid expenses                                                (        8,880)          -
           Change in accounts payable and accrued expenses                                  221,591          77,230
                                                                                        -----------      ----------
               Cash (used) by operating activities                                    (      75,551)     (  147,516)
                                                                                       ------------       ---------


Cash flows from investing activities:
    Purchase of property and equipment                                                 (     32,634)     (   38,064)
                                                                                        -----------       ---------
               Cash (used) by investing activities                                     (     32,634)      (  38,064)
                                                                                        -----------        --------


Cash flows from financing activities:
    Proceeds from notes payable                                                              92,663         250,000
    Deferred loan costs paid                                                                  -         (    61,000)
    Loans from shareholders/affiliates                                                       36,804          20,321
    Repayments of affiliated loans                                                            -          (   19,724)
    Mortgage loan and other note repayments                                           (      54,837)    (     2,553)
                                                                                       ------------      ----------
               Cash flows provided by financing activities                                   74,630         187,044
                                                                                       ------------        --------


Net increase (decrease) in cash                                                        (     35,555)          1,464
Cash at beginning of period                                                                  42,327          11,589
                                                                                         ----------      ----------
Cash at end of period                                                                    $    6,772        $ 13,053
                                                                                         ==========        ========


Supplemental information:
    Income taxes paid                                                                 $      -        $      -
                                                                                      =============   ========
    Interest paid                                                                         $  32,102        $ 38,831
                                                                                          =========        ========
</TABLE>


Significant non-cash transactions:


    In 1997, $69,822 of inventory and $22,000 of furniture were acquired through
    offsets against long-term  accounts  receivable.  During 1996, loan costs of
    $20,000 were paid through issuance of preferred stock.


 


                     SBI COMMUNICATIONS, INC. AND SUBSIDIARY
                     ---------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                    SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
                    ----------------------------------------


Note 1 - Selected disclosures
-----------------------------


    The accompanying unaudited consolidated financial statements,  which are for
interim  periods,  do not  included  all  disclosures  provided  in  the  annual
consolidated  financial  statements.   These  unaudited  consolidated  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and the footnotes  thereto  contained in the Form 10-KB for the year
ended December 31, 1996 of SBI  Communications,  Inc. (the "Company"),  as filed
with the Securities and Exchange Commission. The December 31, 1996 balance sheet
was derived from the audited  consolidated  financial  statements,  but does not
include all disclosures required by generally accepted accounting principles.


    In the  opinion of the  Company,  the  accompanying  unaudited  consolidated
financial  statements  contain all adjustments  (which are of a normal recurring
nature)  necessary  for a fair  presentation  of the financial  statements.  The
results of operations for the three and nine months ended September 30, 1997 are
not necessarily indicative of the results to be expected for the full year.


    The  preparation  of  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reporting  amount 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.


    The Company manages for a charity a bingo hall in Piedmont,  Alabama.  Rents
charged to charity are  unsecured,  and generally are paid only as revenues from
the bingo games produce sufficient profit to allow the charity to make payments.
Effective  February 1, 1996, the current lease requires  minimum rent of $25,000
per month,  with additional  contingent rent of $50,000 per month depending upon
the success of the bingo games.  Management records contingent rent revenue only
as it is collected.


    Certain  amounts  in  the  1996  interim  financial   statements  have  been
reclassified  to  conform  with the  classifications  used in the  1997  interim
financial statements.


Note 2 - Related party transactions
-----------------------------------


    The Company accrued salaries payable to the Company's principal  shareholder
totaling $90,000 for each of the nine month periods ended September 30, 1997 and
1996, respectively.


                                     Page 5
<PAGE>


This  shareholder  has also advanced  funds to the Company as needed for working
capital purposes. All amounts owed to the shareholder are payable on demand.


Note 3 - Equipment note payable
-------------------------------


    In  September,  1997,  the Company  obtained  financing on certain  existing
furniture and fixtures totaling approximately $100,000 payable over the a period
of  approximately  three years with interest  imputed at a rate of approximately
ten percent (10%).


Note 4 - Net loss per share
---------------------------


    The Company's net loss per share was  calculated  using  5,345,439  weighted
average shares outstanding for each of the quarters ended and nine month periods
ended September 30, 1997 and 1996, respectively.  Although convertible preferred
stock is a common stock  equivalent,  with a conversion rate of approximately 10
shares of common stock (based upon an approximate  market price for common stock
of $0.50) for each share of preferred stock,  preferred stock conversion has not
been included in the calculation of earnings per share in that to do so would be
antidilutive.


Note 5 - Preferred stock activity
---------------------------------


    In 1996, 5,000 shares of preferred stock with a par value of $25,000 were to
be issued to cover  $20,000 in  closing  costs  relating  to the  mortgage  note
receivable.  The Company  inadvertently  issued  25,000 shares rather than 5,000
shares,  and both parties agreed that the related  certificate would be returned
and reissued.  In that the  certificate had not been returned as of December 31,
1996, the full 25,000 shares were treated as  outstanding  at that time,  with a
related  reduction  in paid in  capital.  In the  first  quarter  of  1997,  the
certificate was returned, and a new certificate for 5,000 shares was issued. The
stockholders'  equity section of the balance sheet as of September 30, 1997, has
been  adjusted to reflect the reduced  number of preferred  shares  outstanding,
with a corresponding adjustment to paid in capital.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
---------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------


SBI Communications,  Inc. (the "Company"), was originally organized in the State
of Utah on  September  23, 1983,  under the  corporate  name of Alpine  Survival
Products, Inc. Its name was subsequently changed to Justin Land and Development,
Inc. during October,  1984, and then to Supermin,  Inc. on November 20, 1985. On
September 29, 1986,  Satellite Bingo, Inc. was the surviving corporate entity in
a statutory merger with Supermin,  Inc., a Utah corporation.  In connection with
the above merger,  the former  shareholders of Satellite  Bingo,  Inc.  acquired
control of the merged entity and changed the corporate name to Satellite  Bingo,
Inc. Through shareholder  approval dated March 10, 1988, the name was changed to
its current  name of SBI  Communications,  Inc. On January 1, 1993,  the Company
executed  a plan of merger  that  effectively  changed  the  Company's  state of
domicile from Utah to Delaware. Although the


                                     Page 6
<PAGE>


Company  is  currently  a  Delaware  corporation,   on  January  31,  1997,  the
stockholders  and Board of  Directors  approved a plan to change  the  Company's
corporate domicile to the State of Nevada.


Management anticipates executing the plan during 1997.


In the past several  years,  while the company was in its  development  stage, a
great deal of time and resources were spent getting the company prepared to grow
exponentially.  In the past  year  the  Company  has  achieved  registering  its
securities pursuant to Section 12(g) of the act; and has aspirations of becoming
NASDAQ listed.  The Company  currently  meets all  requirements to become NASDAQ
listed  except for the fact that the it's stock is currently  trading  below the
required  price.  With this in mind, the company has entered into agreement with
Montgomery  Zukerman  Davis,  Inc.  (MZD)  a  public  relations  firm  based  in
Indianapolis,  Indiana to expose the  company and its shares  nationally  to the
financial community. The Company has developed , with the assistance of MCI, the
Globalot  Bingo  website.  The  company  currently  has two  website  addresses,
http://www.sbicommunications.com  and  http://www.globalot.com,   and  they  are
currently  under  development  to allow bingo  players  from around the world to
participate in bingo games 24 hours a day, with a chance to win $1,000,000.  The
company  expects the  websites to be fully  operational  by the end of 1997,  at
which point the company has laid out an intensive  marketing plan to promote the
website as well as the other aspects of the Company.  The Company also announced
on July 16 that  it has  joined  with  Carlsbad,  CA  based  United  Transactive
Systems,  Inc., in a newly formed enterprise,  National Gaming Network,  J.V. to
develop  interactive,  multimedia  sporting and gaming networks and services for
the  broadcast,  cable,  and  on-line  markets  in  all  regions  where  legally
permissible.  The venture is  currently  working to link a satellite  bingo game
across Native American Indian reservations  across the country.  The company has
also entered into negotiations with U.S. Win, Inc., the HBPA, and military bases
to bring simulcast  parimutuel  racing to military bases in the U.S. and abroad.
Management is very excited about the high  potential of all these  opportunities
to produce  significant  revenues  immediately.  The  Company  plans to keep the
public informed of each step of this expansion process, as well as the continued
improvement of the current  operations.  This promotion as well as significantly
increased  revenues should result in the planned growth of the Company,  however
there can be no assurances of the foregoing.


Currently, the Company's only operations are the leasing of a bingo hall located
in Piedmont,  Alabama and a website which contain a shopping store.  Under local
ordinances, the hall must be leased to a charity in order to conduct and operate
bingo games, which is currently the local Jaycees. The Company believes that the
$4.5 to $5 billion U. S. bingo  industry  is  fragmented  and  inefficient,  yet
potentially profitable.  The Company's strategy,  therefore, is to consolidate a
portion of the industry to build a national  chain of bingo centers in lucrative
markets. The Company believes that its industry  experience,  economies of scale
and financial  resources  will provide a competitive  advantage  over  competing
bingo  operations,  which should enable the Company to  effectively  execute its
long-term  growth plan. The Company  currently has only one bingo center located
in Piedmont,  Alabama.  The Company  intends to continue its  expansion  through
acquisitions and  developments in other selected  markets  throughout the United
States.


RESULTS OF OPERATION
--------------------
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS
------------------------------------------------------------
ENDED SEPTEMBER 30, 1996.
-------------------------


                                     Page 7


<PAGE>


The Company generated revenues of $91,404 during its third quarter of 1997 ended
September 30, 1997, as compared to $90,097 in the comparable period of the prior
fiscal year,  which  represents an increase of  approximately  1% increase.  The
revenue stream also  benefitted from the money generated by the kitchen and gift
shop that was not open  during the second  quarter  of last  year.  The  Company
expects quarterly revenues to continue to increase upon the successful operation
of the Company's Web site and broadcasting of it's interactive programming.


Direct operating costs of the Company's bingo center totaled $288,526 during the
third quarter of 1997 versus  $465,581 in the  comparable  1996  quarter,  which
represents a 62% decrease.  The Company's  general and  administrative  expenses
also  decreased.  Further  analysis of the direct  operating  costs  showed that
approximately  36% of the current  period's costs were comprised of depreciation
and amortization,  which are relatively fixed expenses. The balance is primarily
comprised of legal, wages and management fee costs.


General & Administrative (G&A) expenses totaled $76,001 during the third quarter
of 1997 as  compared  to  $241,037  in the  year  ago  period,  an  decrease  of
approximately  70%. This expense  decrease of $165,036 was due to no startup and
professional  fees.  The company's  travel  expense has also  decreased by about
$5,000 - $7,000.


The  Company  did not  record any tax  expense  during  the  current  quarter or
comparable  year-ago  period  due to losses  incurred.  The  Company's  tax loss
carryforward  balance at the end of fiscal 1996 was in excess of $5 million and,
as such,  the Company does not expect to incur any federal  income tax liability
until this carryforward is depleted by operational profits.


Net loss for the third fiscal  quarter of 1997 was  $197.122,  which  equated to
loss  per  share of  ($.04)  Net loss  for the  comparable  quarter  of 1996 was
$375,484  which  equated to loss per share of  ($0.07).  The  decreased  loss of
approximately  .03 per  share  was due to  closing  the  restaurant.  Management
determined that the local economy couldn't support a restaurant and discontinued
the weekday breakfasts and lunches.  The Company still maintains the kitchen and
gift shop during bingo games and continues to make a  significant  profit during
those  hours.  The company  also had  significant  increases  in its general and
administrative costs which outweighed the increases in revenues.


All of the Company's  revenue comes from operation of the bingo hall or interest
income on cash therefrom.  The following table summarizes  revenue categories in
the Company's statement of income (rounded to the nearest whole dollar).


                                                       Amount of Total Revenue
Nine Months Ended September 30,                         1997             1996
                                                      ------             ----
      Revenues:
          Bingo hall rent/administrative fees          271,171         277,000
          Kitchen and gift shop revenues                90,296          12,754
          Other Income                                   2,360             617
                                                     ---------           -----
               Total Revenue                          $363,827        $290,371
                                                      ========        ========


In 1995, the Company  charged a flat $75,000 per month in rent,  plus management
fees as deemed  appropriate.  In  February,  1996,  the lease  with the  current
charity  was  amended to reflect a minimum  payment of $25,000  per month,  with
adjustments up to $75,000 per month if the


                                     Page 8
<PAGE>


charity  generates  sufficient  annual cash flow to afford to pay the  increased
rent.  Although the charity  generated  cash flow that would allow greater rent,
management  allowed  such excess to be applied  toward  unpaid rents and did not
increase the rent charge for 1996.


Management  collected scheduled rent payments of $225,000 and contingent rent of
46,171 for a total of $271,171 from the Jaycees for nine months ended  September
30, 1997.  Management  is assisting the Jaycees in promoting one more super game
in fiscal 1997  (November).  Management  anticipates that this second large game
could  produce  $300,000 - $400,000  in rental  income.  If this proves true the
Company will generate  between  $700,000 and $900,000 in annual rental income on
this  facility.  Management  believes  that due to  competition  and  geographic
factors,  two large  games per year will likely be the limit for large games for
this facility.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------


At September 30, 1997, the Company had cash and cash  equivalents  of $6,772,  a
decrease of $35,555 from the end of fiscal 1996.  The decrease was mainly due to
the Company  investment in over $60,000 in its  restaurant  and doesn't  foresee
substantial further investments  required there. The Company does expect to make
further  investments in its Piedmont,  Alabama  facility in order to meet strong
customer demands.


The Company  expects its cash position to begin to increase  assuming  continued
collection  of its  amounts  due  from  its  present  charity.  There  can be no
assurance of the foregoing.  The Company intends to finance future  acquisitions
primarily through the use of stock and, to a lesser extent, cash and notes.


Accounts  receivables  totaled $73,656 at September 30, 1997. This was down from
$120,306 at year end 1996. The Company collects most of its receivables from its
participating  charities  within  one to four weeks  from the time  earned.  The
contingent rent will be collected,  when earned,  during two major months within
the year.  The Company also settled its $100,000 long term  accounts  receivable
account by accepting tables, chairs and bingo paper in lieu of cash.


Current  liabilities  totaled $942,497 at the end of the quarter,  but less than
10% of  this  total  represented  trade  payables.  Approximately  25% of  total
liabilities  are  comprised of a long-term  note payable on which the Company is
currently making payments.  The Company has no other long-term debt. The Company
had total assets of over $7.1 million and total liabilities of $1,021,097 at the
end of the third quarter,  with shareholder equity of $6.1 million.  The Company
believes that its current  capital  resources,  together with expected  positive
operational cash flows, will support operational requirements for the next year.


                                     Page 9
<PAGE>


PART II--OTHER INFORMATION
--------------------------


ITEM 1. LEGAL PROCEEDINGS
-------------------------


The Company is not involved in any legal proceedings.


ITEM 2. CHANGES IN SECURITIES
-----------------------------


In July,  1996, 5,000 shares of preferred stock with a par value of $25,000 were
to be issued to cover  $20,000 in closing  costs  relating to the mortgage  note
receivable.  The Company  inadvertently  issued  25,000 shares rather than 5,000
shares,  and both parties agreed that the related  certificate would be returned
and reissued. In the first quarter of 1997, the certificate was returned,  and a
new certificate for 5,000 shares was issued in second quarter of 1997.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES
---------------------------------------


Not applicable.



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


Not applicable.



ITEM 5. OTHER INFORMATION
-------------------------


CHANGE IN  MANAGEMENT.  In April  1997,  Mr.  Michael  McGlothlin  resigned as a
officer and director.


EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------



ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K
-------           --------------------------------
         (A)      EXHIBITS:
                  EXHIBITS DESCRIPTION
                    11         Statement re:  computation of per share
                                              earnings
                    27         Financial data schedule
         (B)      REPORTS ON FORM 8-K:
                    None



                                     Page 10
<PAGE>


                                   SIGNATURES
                                   ----------


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



                                    SBI Communications, Inc.


Date: November 11, 1997           By: /s/Ronald Foster
                                  -------------------------------------
                                  Ronald Foster Chairman of the
                                  Board and Chief Executive Officer
                                  (principal executive officer)




Date: November 11, 1997            By: /s/ Thomas Barrett
                                   -------------------------------------
                                   Thomas Barrett, Controller
                                   (Principal Financial and Accounting
                                   Officer)



                                     Page 11