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

                              FORM 10-QSB

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

For the quarterly period ended                
  
                                  or

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

For the transition period from  September 1, 1997  to     December 31, 1997

Commission File Number:         0-27520

                           SDC International, Inc.
           (Exact name of registrant as specified in its charter)

          Delaware                                     75-2583767
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                      Identification No.)

2065 Montgomery Street, Ft. Worth, TX                 76107     
(Address of principal executive offices)(Zip Code)  

                               (561) 882-9300
            (Registrant's telephone number, including area code)


            (Former name, former address and former fiscal year,
                      if changed since last report)

Check whether the 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 [xx]  No [  ]

       APPLICABLE ONLY TO CORPORATE ISSUERS INVOLVED IN BANKRUPTCY
                PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be 
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of 
securities under a plan confirmed by a court.
Yes [  ]  No [  ]

                  APPLICABLE ONLY TO CORPORATE ISSUERS

Common stock, par value $.001 per share: 2,990,118  shares outstanding as of 
December 31, 1997.

<PAGE>   1

                  SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                                   INDEX


FINANCIAL STATEMENTS

     Consolidated Balance Sheets December 31, 1997 (Unaudited)
     and August 31, 1997                                             F-1

      Consolidated Statements of Operations (Unaudited) 
      for the four months ended December 31, 1997 and 1996           F-2

      Consolidated Statement of Stockholders' Equity (Unaudited)
      for the four months ended December 31, 1997                    F-3

      Consolidated Statements of Cash Flows (Unaudited)
      for the four months ended December 31, 1997 and 1996           F-4

      Notes to Consolidated Financial Statements                  F-5 - F-17

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS                               F-18 - F-23

<PAGE>    

                   SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                        CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                    (Unaudited)
                                                                   December 31,      August 31,
                                                                       1997            1997     
                                      ASSETS
<S>                                                               <C>              <C>
Current assets:
     Cash                                                         $    104,997     $     15,199
     Cash - restricted                                                  80,960          330,932
     Accounts receivable                                               150,634          -  
     Prepaid expenses                                                   17,528          -  
     Inventory                                                         437,798          -  
     Other current assets                                                   -            23,778
          Total current assets                                         791,917          369,909

     Machinery and equipment, net                                    3,398,363        3,489,341


Other assets:
     Exclusive agency rights, net                                      231,524          263,485
     Customer list, net                                                103,125          140,625
     Deferred offering costs                                            50,000          -  
     Organizational costs, net                                           6,369            7,643
          Total other assets                                           391,018          411,753

          Total assets                                            $  4,581,298     $  4,271,003

          LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                             $     67,639     $     53,793
     Accounts payable - related party                                   13,477          -  
     Accrued expenses                                                   81,207           36,467
     Note payable - short term                                         100,100          215,000
     Due to officer                                                     15,739           27,036
          Total current liabilities                                    278,162          332,296

Excess of net assets acquired over cost, net                           540,804          -  

Commitments and contingencies (Note 4)            

Stockholders' equity:
     Common stock $.001 par value, authorized
     10,000,000 shares, issued and outstanding
     2,990,118 and 2,639,484 shares, respectively                        2,990            2,639
     Additional paid-in capital                                      6,853,867        6,345,643
     Accumulated deficit                                            (2,925,233)      (2,409,575)
          Sub-total                                                  3,931,624        3,938,707
             Deferred costs                                           (169,292)          -  
          Total stockholders' equity, net                            3,762,332        3,938,707
Total liabilities and stockholders' equity                        $  4,581,298     $  4,271,003

</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>    2

                   SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                          FOR THE FOUR MONTHS ENDED
                                 (UNAUDITED)
<TABLE>
<CAPTION>
                                                                 December 31,      December 31,
                                                                     1997             1996     
<S>                                                              <C>              <C>
Sales                                                            $     59,666     $     27,072

Cost of goods sold                                                     31,324           17,337

Gross profit                                                           28,342            9,735

Expenses:
     Selling, general and administrative                              332,126           81,007
     Depreciation and amortization                                    158,939          156,202
     Stock-based consulting and compensation                           38,650           -  
Total expenses                                                        529,715          237,209

Loss from operations before other income and provision
 for income taxes                                                    (501,373)        (227,474)

Other income (expense):
     Amortization of excess of net assets acquired over costs          18,667           -  
     Interest income                                                    3,707            1,005
     Interest expense                                                 (22,227)          -  
     Foreign currency exchange loss                                   (14,270)          -  
        Total other income (expense)                                  (14,123)           1,005

Loss before provision for income taxes                               (515,496)        (226,469)

Provision for income taxes                                                162           -  

Net loss                                                         $   (515,658)     $  (226,469)

Loss per common equivalent share:
     Basic:
        Net loss                                                 $       (.18)     $      (.10)

Weighted average number of shares outstanding                       2,804,064        2,198,265

</TABLE>

See accompanying notes to consolidated financial statements

<PAGE>    3

                   SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                  FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                                (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   Additional                                         Total
                                            Common Stock            paid-in           Accumulated      Deferred    Stockholders'
                                       Shares          Amount       capital             Deficit         Costs        Equity     
<S>                                   <C>           <C>           <C>              <C>               <C>           <C>
Balances at September 1, 1997         2,639,484     $   2,639     $  6,345,643     $ (2,409,575)     $     -       $ 3,938,707

Issuance of common stock in
 connection with private placement
 memorandum, net of offering costs
 of $36,200                             185,634           186          242,064           -                 -           242,250

Issuance of common stock pursuant
 to the 1997 Non-Qualified Stock
 Option Plan                            150,000           150          253,050           -            (194,400)         58,800

Issuance of common stock in
 connection with loan agreements         15,000            15           13,110           -             (13,125)          -  
                    
Amortization of deferred costs             -              -               -              -              38,233          38,233
                                        
Net loss for the four months ended
 December 31, 1997                         -              -               -            (515,658)          -           (515,658)

Balances at December 31, 1997         2,990,118     $   2,990     $  6,853,867     $ (2,925,233)     $ (169,292)    $ 3,762,332

</TABLE>



See accompanying notes to consolidated financial statements.

<PAGE>    4 

                   SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                          FOR THE FOUR MONTHS ENDED
                                 (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  December 31,       December 31,
                                                                      1997               1996          
<S>                                                            <C>                 <C>
Cash flows from operating activities:
     Net loss                                                  $     (515,658)     $     (226,469)
 Adjustments to reconcile net loss to net
      cash used for operating activities:
     Amortization and depreciation                                    189,394             156,202
     Decrease (increase) in:
          Accounts receivable                                          (2,415)            (23,377)
          Inventory                                                   (55,220)               -  
     Increase (decrease) in:     
          Accounts payable                                              9,742             (3,324)
          Accounts payable - related party                               -                17,337
          Accrued expenses                                             36,082             16,296
               Net cash used for operating activities                (338,075)           (63,335)

Cash flows from investing activities:
     Acquisition of subsidiary, net of cash acquired                   35,777               -  
     Acquisition of customer list                                        -                62,985
     Purchase of machinery and equipment                               (1,864)              -  
     Decrease (increase) in restricted cash                           249,972               -  
     Refund of security deposit                                          -                15,000
               Net cash provided by investing activities              283,885             77,985

Cash flows from financing activities:
     Proceeds from issuance of note payable                              -               20,000
     Repayment of notes payable                                      (109,242)             -  
     Proceeds from sale of common stock                               337,250            15,000
     Costs associated with sale of common stock                       (36,200)             -  
     Deferred offering costs                                          (50,000)             -  
     Repayment of loans from stockholder                              (11,297)          (39,000)
     Proceeds from related party                                       13,477              -  
               Net cash provided by (used for) financing
                  activities                                          143,988            (4,000)

Net increase in cash                                                   89,798            10,650

Cash at beginning of period                                            15,199              (387)
Cash at end of period                                           $     104,997       $    10,263

Supplemental disclosures:
     Interest paid                                              $      16,394       $      -  
     Income taxes paid                                          $         162       $      -  

Supplemental disclosure of non-cash investing activities:
     Issuance of common stock for services                      $     194,400       $      -  
     Issuance of common stock in connection with loan           $     13,125        $      -  

</TABLE>
See accompanying notes to consolidated financial statements.

<PAGE>    5

                   SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                                 (UNAUDITED)

NOTE 1     -     ORGANIZATION

The consolidated financial statements of SDC International, Inc., ("the 
Company") at December 31, 1997 include the accounts of its wholly-owned 
subsidiary Skobol, s.a. after elimination of all significant intercompany 
transactions and accounts.  The Company was incorporated in the State of 
Delaware for the purpose of developing and marketing an exclusive agency 
agreement acquired from Diesel, a.s. (formerly known as Skoda Diesel, a.s.) 
("Skoda") to sell a broad range of Skoda's products which are primarily 
comprised of piston combustion diesel engines whose applications include 
locomotive and stationary engines for the generation and co-generation of 
electric power.  Skoda was formed in Czechoslovakia in the year 1899.

During April 1997, the Company acquired the outstanding common stock of Golden 
Grove Business, Inc., ("GGB"), a Panama Corporation and subsequently dissolved 
GGB.  During November 1997, the Company acquired the outstanding common stock 
of Skobol, s.a., ("Skobol"), a Bolivia Corporation.

The Company's machinery and equipment is located in the Czech Republic.

The accompanying unaudited consolidated financial statements have been 
prepared in accordance with generally accepted accounting principles for 
interim financial information and with instructions to Form 10-QSB for interim 
and transition reporting.  Accordingly, they do not include all of the 
information and footnotes required by generally accepted accounting principles 
for complete financial statements.  In the opinion of management, the 
transition consolidated financial statements include all adjustments necessary 
in order to make the consolidated financial statements not misleading.  For 
further information, refer to the Company's audited financial statements and 
footnotes thereto at August 31, 1997, included in the Company's Form 10-KSB, 
filed with the Securities and Exchange Commission.

NOTE 2     -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a)     Reclassifications

Certain reclassifications have been made to the August 31, 1997 financial 
statements in order to conform to the December 31, 1997 presentation.

b)     Cash and cash equivalents

For purposes of the statements of cash flows, the Company considers all highly
liquid accounts with an original maturity of three months or less as cash 
equivalents.  The Company at December 31, 1997 maintains its domestic cash 
deposits in accounts which are in Federal Deposit Insurance Corporation 
("FDIC") insured accounts.  The Company maintains cash deposits in foreign 
banks, not covered by FDIC in the amount of $138,895.

<PAGE>    6

                    SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                                    (UNAUDITED)

NOTE 2     -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

c)     Machinery and equipment

Machinery and equipment are recorded at cost.  Depreciation is computed using 
the straight line method over the estimated useful lives of the assets as 
follows:

               Machinery and equipment     5-15 years
               Computer software           3 years
               Computers                   5 years

     Maintenance and repairs are charged to expense as incurred.

d)     Exclusive agency rights

Exclusive agency rights relate to agency rights acquired from Skoda and GGB.  
Such rights are being amortized on a straight-line basis over an estimated 
useful life of four to five years. 

e)     Customer list

Customer list include payments and issuance of stock for the acquisition of 
certain assets comprising of supplier and customer lists.  The supplier and 
customer lists are being amortized on a straight-line basis over three years 
which represents the life of the management agreement in connection with the 
acquisition of such assets.

f)     Organizational costs

Organizational costs consist of legal and other fees incurred in the 
establishment of the Company.  Organizational costs are being amortized on a 
straight line basis over their estimated useful lives of five years.

g)      Income taxes

The Company accounts for income taxes in accordance with statement of 
financial accounting standards No. 109 "Accounting for Income Taxes" which 
requires the use of the "liability method" of accounting for income taxes.  
Accordingly, deferred tax liabilities and assets are determined based on the 
difference between the financial statement and tax bases of assets and 
liabilities, using enacted tax rates in effect for the year in which the 
differences are expected to reverse.  Current income taxes are based on the 
respective periods taxable income for Federal and State income tax reporting 
purposes.

h)       Net loss per share

In calculating primary loss per share, the Company uses the weighted average 
number of common stock outstanding during the respective periods.


<PAGE>    7

                 SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                               (UNAUDITED)

NOTE 2     -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)

I)     Use of estimates

The preparation of financial statements in conformity with generally accepted 
accounting principles requires management to make estimates and assumptions 
that affect certain reported amounts and disclosures.  Accordingly, actual 
results could differ from those estimates.

j)     Fair value disclosure as of December 31, 1997

The carrying value of cash, accounts payable, notes payable and accrued 
expenses are a reasonable estimate of their fair value.

k)     Revenue recognition

Sales are recognized when products are shipped.

NOTE 3     -     MACHINERY AND EQUIPMENT

Machinery and equipment at December 31, 1997 consisted of the following:

               Production machinery              $     1,573,226
               Production equipment                    1,436,893
               Tools and fixtures                        941,212
               Computer and software                      32,790     

                                                       4,045,973
               Less:  Accumulated depreciation          (647,611)
                                                 $     3,398,362

During the four months ended December 31, 1997, machinery and equipment with a 
book value of $437,088 was disposed by the Company resulting in a loss on 
disposal of $437,088.  The Company's machinery and equipment is located in the 
Czech Republic.  Total depreciation expense for the four months ended December 
31, 1997 and 1996, amounted to $309,374 and $307,836, respectively.




<PAGE>    8

                   SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                  FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                                (UNAUDITED)

NOTE 4     -     EXCLUSIVE AGENCY RIGHTS, NET

a)On April 21, 1994, one of the founding stockholders executed an exclusive 
agency representation letter agreement as agent of the Company with Skoda 
pursuant to which the Company was appointed as Skoda's exclusive sales agent 
in North, South and Central America with the exception of the country of 
Peru.  In order for the Company to maintain its exclusivity, it must generate 
annual gross sales within the territory of at least $15,000,000 at the close 
of the sixth year after the execution of the agreement.  As consideration for 
the purchase of these exclusive agency rights, the Company issued 51,650 
shares of its common stock to Skoda.

b)In October 1995 the Company purchased the exclusive rights to market and 
sell Skoda Diesel products into the countries of China and South Korea based 
upon the following terms:

     South Korea

     I)    During the year 1997, sales to South Korea must be in the amount of
           at least $2,400,000.
     ii)   During the year 1998, sales to South Korea must be in the amount of
           at least $3,600,000.
     iii)  Each year thereafter, sales to South Korea must be in the amount of
           at least $5,000,000.

The Company paid Skoda a one-time fee of $50,000 for the acquisition of such 
exclusive rights.

     China

     I)    During the year 1997, sales to China must be in the amount of at
           least US $3,000,000.
     ii)   During the year 1998, sales to China must be in the amount of at
           least US $4,500,000.
     iii)  During the year 1999, sales to China must be in the amount of at
           least US $6,000,000.

The Company paid Skoda a one-time fee of $100,000 for the acquisition of such 
exclusive rights.  The agency rights from China and Korea are amortized on a 
monthly basis over (5) years.

On April 18, 1996, the Company entered into a modification agreement whereby 
all such sales levels were postponed for one year.

As a result, for the four months ended December 31, 1997 and 1996, the Company 
recorded amortization expense of $12,912 for each year.

NOTE 5     -     ACQUISITIONS

a)On April 24, 1997, the Company acquired for $120,000 plus 48,000 common 
shares all the issued and outstanding common stock of GGB.  GGB had acquired 
an exclusive agency contract with Tatra a.s. (a Czech Republic truck 
manufacturer) to market and sell Tatra's products.  The Company amortized such 
agency rights over the estimated remaining useful life of four years.  
Accordingly, for the four months ended December 31, 1997, expense amounted to 
$17,656.


<PAGE>    9

                   SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                                (UNAUDITED)

NOTE 5     -     ACQUISITIONS (Cont'd)

b)   On November 18, 1997, the Company acquired 100% of the common stock of 
Skobol Joint Stock Company ("Skobol") from Skobol's parent, Motokov 
International Joint Stock Company for $78,000.  The acquisition was 
retroactively effective to September 1, 1997.  The acquisition was accounted 
as a purchase with the results of Skobol included from the acquisition date.  
Skobol is a distributor of Czech Republic products within the country of 
Bolivia.

The acquisition of Skobol resulted in an excess of net assets acquired over 
costs of $559,471 after application to all non current assets acquired.  This 
amount is being amortized on a straight-line basis over ten years from date of 
acquisition.  Accordingly, for the four months ended December 31, 1997, 
amortization income amounted to $18,667.

NOTE 6     -     ACCRUED EXPENSES

Accrued expenses consisted of the following at December 31, 1997:

          Professional fees            $     34,051
          Stock Commissions payable          36,200
          Other                               5,298
          Total accrued expenses        $     75,549

NOTE 7     -     NOTE PAYABLE

a)   The Company had two bank lines-of-credit which provided short-term 
borrowings up to $220,000.  Interest on advances was payable quarterly at a 
fixed rate of 4.32%.  The lines-of-credit expired on October 19, 1997 and were
secured by a certificate of deposit amounting to $250,000.  During October 
1997, the certificate of deposit was redeemed and such lines of credit were 
repaid.

b)   During October 1997, the Company borrowed $100,000 from an individual
which is payable in 180 days at an interest rate of 14%.  In connection with
such borrowing, the Company issued 15,000 common shares as additional 
consideration.  See Note 5(c).  The issuance of such shares results in an 
effective interest rate of 40%.  As of December 31, 1997, the Company had 
accrued $2,750 of interest and amortized $5,833 of deferred interest in 
relation to this note.

<PAGE>     10

                SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                             (UNAUDITED)

NOTE 8     -     INCOME TAXES

The Company has adopted Statement of Financial Accounting Standards (SFAS) No. 
109, "Accounting for Income Taxes".  Income taxes are provided for the tax 
effects of transactions reported in the financial statements and consist of 
taxes currently due plus deferred taxes related primarily to differences 
between the financial and tax basis of assets and liabilities.  The deferred 
tax assets and liabilities represent the future tax return consequences of 
these temporary differences, which will either be taxable or deductible when 
the assets and liabilities are recovered or settled.

At December 31, 1997, the Company has net operating loss carry forwards for 
tax purposes of approximately $1,581,000 expiring in the years 2009 through 
2011.  These carry forwards result in a deferred tax asset at December 31, 
1997 of approximately $553,000 computed using a combined Federal and State 
corporate tax rate of approximately 35% after accounting for the state income 
tax benefit.  The Company also recorded a deferred tax liability of 
approximately $193,000 resulting from the differences between book and tax 
differences as a result of depreciation and amortization.  Accordingly, the 
net deferred tax asset at December 31, 1997 is $360,000.

At December 31, 1997, a 100% valuation allowance in the amount of $360,000 has 
been recorded against the net deferred tax asset since management could not 
determine that it was "more likely than not" that the benefit of the deferred 
tax asset would be realized.

NOTE 9     -     STOCKHOLDERS' EQUITY

a)    Private Placement Memorandum

On February 24, 1997, the Company commenced and privately offered pursuant to 
rule 505, Regulation D, on a best efforts basis, no more than 500,000 shares 
of common stock in a ninety-day period (before extensions) of its $.001 par 
value common stock at $1.50 per share before deducting discounts, commissions 
and non-accountable expenses. During the four months ended December 31, 1997, 
the Company sold an aggregate of 185,634 shares yielding net proceeds of 
$242,250

b)     1997 Non-qualified stock option plan

On September 5, 1997, the Company established a Non-Qualified Stock Option 
Plan ("the Plan") pursuant to which 750,000 shares of common stock are 
reserved for issuance.  The option price per share is determined by the Board 
of Directors at the time any options are granted.  The Plan is designed to 
serve as an incentive for retaining qualified and competent persons who are 
key employees, consultants, representative, officers and directors of the 
Company.  During the three months ended November 30, 1997, the Company issued 
150,000 shares pursuant to the Plan.  Such shares have been valued at $253,200 
representing 75% of the average market value during the month of issuance as a 
result of the illiquidity of the Company's stock.  In connection with the 
issuance of such shares, the Company recorded $58,800 as stock-based 
compensation and the remaining balance amounting to $194,400 has been recorded 
as deferred consulting costs to be amortized on a monthly basis over 12 
months.  Accordingly, for the four months ended December 31, 1997, 
amortization expense amounted to $32,400.

<PAGE>    11

                  SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                                (UNAUDITED)

NOTE 9     -     STOCKHOLDERS' EQUITY (Cont'd)

c)     Deferred interest

In connection with the obtaining of a loan, the Company issued 15,000 shares 
of common stock as additional consideration.  Such shares have been recorded 
at 50% of the average market value of the stock during the month of issuance 
as a result of the illiquidity of the Company's stock.  Accordingly, the 
Company has recorded deferred interest of $13,125 which is being amortized 
over the term of the loan.  For the four months ended December 31, 1997, 
amortized interest amounted to $5,833.

NOTE 10     -     COMMITMENTS AND CONTINGENCIES

a)      Lease agreement

The Company leased its administrative office pursuant to a signed lease 
agreement commencing July 1, 1995 and expiring on June 30, 1997.  Such leases 
required monthly payments of $3,500.  Effective December 1996, the Company 
terminated this lease whereby a security deposit amounting to $18,000 was used 
as part of the cancellation settlement.  Effective January 1, 1997, the 
Company rents its executive office on a month to month basis from its Chief 
Executive Officer with monthly payments amounting to approximately $3,000.

Included in general and administrative expenses is rent expense which amounted 
to $12,541 and $23,662 for the four months ended December 31, 1997 and 1996, 
respectively.

b)      Concentration of credit risk

Due to its current limited sales, the Company has a high concentration of 
credit risk until such transactions are completed.  The Company is actively 
seeking sales outside of the United States.  If such sales occur, the revenue 
and subsequent collections will be subject to the fluctuations such sales 
generate, both from currency and political changes.  The Company's machinery 
and equipment is located in the Czech Republic.  The Company's primary source 
of inventory is currently Skoda and Tatra and as such, it is subject to their 
risks of business and their continued financial health, as well as the risks 
associated with foreign businesses, both from currency and political changes.

c)     Management agreement

On December 15, 1995 the Company and Worth entered into a management agreement 
with an individual in Eastern Europe for a period of three years.  Pursuant to 
such agreement, the individual shall devote such time, attention and efforts 
to management services as may be reasonably required by the Company and 
Worth.  The Company and Worth will compensate such individual an amount equal 
to twenty-five percent (25%) of the gross profit from sales generated by such 
individual in Eastern Europe.  Such payments are payable monthly after the 
collection of receivables from such sales.  There are no amounts currently 
payable under this agreement.

<PAGE>    12

                  SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                   CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                               (UNAUDITED)

NOTE 10     -     COMMITMENTS AND CONTINGENCIES (Cont'd)

d)     Finder's fee agreement

On May 20, 1996, the Company entered into a finder's fee agreement with Prime 
Charter, Ltd ("Prime") for a period of ten years, renewable for additional 
five year periods.  Pursuant to such agreement, any sales to entities 
introduced to the Company by Prime shall result in a finder's fee to Prime of 
two percent (2%) of the gross sales price or ten percent (10%) of the adjusted 
gross profit resulting from the sales.  Such payments are due 45 days after 
each quarter-annual calendar period.  There are no amounts currently due under 
this agreement.

e)     Dependence on Skoda and Tatra

The Company's operations are dependent on Skoda and Tatra since Skoda is 
responsible for the manufacturing of all of the Company's products and Tatra 
for making available sufficient inventory.  The Company faces risks of the 
inability to obtain products in the event of production problems due to labor 
problems, governmental regulations, working capital deficiencies, political 
unrest and other problems which may result in the inability of Skoda and Tatra 
to fulfill orders of the Company.

f)     Letter of intent

 On October 10, 1997, the Company signed a Letter of Intent with an 
underwriter to proceed on a "Firm Commitment" basis with a secondary offering 
of the Company's Common Stock and redeemable Warrants ("the Warrants").  The 
Company will offer 1,000,000 shares of common stock and 1,000,000 Warrants.  
The 1,000,000 shares and Warrants will be offered to the public at a price of 
$6.00 per share and $.125 per Warrant, respectively.  The total gross 
offering  amounts to $6,125,000.

Each Warrant, which is redeemable in 60 months, entitles the holder thereof to 
purchase one share of Common Stock at 120% of the offering price of Common 
shares.  The warrant may be redeemed by the Company at $.10 each after the 
common shares have traded at 150% of the offering price of the common shares 
for 10 consecutive days.

NOTE 11     -     RELATED PARTY TRANSACTIONS

a)     Acquisition of exclusive agency rights

In October 1995, the Company purchased the exclusive rights to market and sell 
Skoda Diesel products into the countries of China and South Korea.  In 
consideration for these rights the Company paid Skoda $150,000.





<PAGE>     13

                SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                             (UNAUDITED)

NOTE 11     -     RELATED PARTY TRANSACTIONS (Cont'd)

b)     Due to officer

The Company's Chief Executive Officer and shareholder advances funds to or on 
behalf of the Company.  As of December 31, 1997, $15,739 was owed to such 
officer.  Such advances are non interest bearing and due on demand.

c)     Rent Expense

Effective January 1, 1997, the Company rents its executive office on a month 
to month basis from its Chief Executive Officer with monthly payments 
amounting to approximately $3,000.

d)     Management fees

For the four months ended December 31, 1997 and 1996, the Company recorded 
$51,000 and $24,000, respectively, of management fees paid to its Chief 
Executive Officer.

NOTE 12     -     FOREIGN OPERATIONS

The Company operates in two related industries, heavy equipment and 
transportation sales.  The majority of the Company's operations are foreign.  
The information about those foreign operations for the four months ended 
December 31, 1997, is as follows:

<TABLE>
<CAPTION>
                                                  Foreign         Domestic
                                                  Operations      operations    Consolidated
<S>                                               <C>             <C>           <C>
          Sales to unaffiliated customers         $    59,666     $     -       $    59,666
          Sales to affiliated customers                  -              -              -  
                                                  $    59,666     $     -       $    59,666

          Operating profit                        $    28,342     $     -       $    28,342

          Depreciation and amortization           $   158,122     $     817     $   158,939

          Identifiable assets at December
                   31, 1997                       $ 4,460,354     $    -       $  4,460,354

          Corporate assets                                                          120,944

          Total assets at December 31, 1997                                    $  4,581,298
</TABLE>






<PAGE>    14

                    SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                                (UNAUDITED)

NOTE 12     -     FOREIGN OPERATIONS (Cont'd)

The information about those foreign operations for the four months ended 
December 31, 1996, is as follows:

<TABLE>
<CAPTION>
                                                  Foreign         Domestic
                                                  Operations      operations    Consolidated
<S>                                               <C>             <C>           <C>
        Sales to unaffiliated customers           $     -       $     -         $     -  
        Sales to affiliated customers                   -             27,072         27,072
                                                  $     -       $     27,072     
$     27,072

        Operating profit                          $     -       $      9,735    $     9,735

        Depreciation and amortization             $   155,385   $        817    $   156,202

        Identifiable assets at August 31, 1997    $ 3,976,598   $      -        $ 3,976,598

         Corporate assets                                                           294,405

         Total assets at August 31, 1997                                        $ 4,271,003
</TABLE>

     The Company had one major customer during the four months ended December 
31, 1996, which comprised 100% of sales.  There were no major customers during 
the four months ended December 31, 1997.

NOTE 13     -     EARNINGS PER SHARE

     Effective September 1, 1996, the Company implemented Statement of 
Financial Accounting Standards No.  128 "Earnings Per Share ("EPS") ("SFAS 
#128").  The following is the reconciliation of the numerators and 
denominators of the basic and diluted EPS for the four months ended December 
31, 1997 and 1996:

<TABLE>
<CAPTION>
                                                               (Unaudited)
                                                           For the four months 
                                                            ended December 31,
                                                           1997            1996    
<S>                                                    <C>              <C>
               Numeric

               Net (loss) income                       $  (515,658)     $ (226,469)

               Denominator:

               Computation of basic EPS:
                      Weighted average common shares
                      outstanding                        2,804,064       2,198,265

               Basic EPS                                      (.18)           (.10)
</TABLE>


<PAGE>     15

                   SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                  FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                                (UNAUDITED)

NOTE 13     -     EARNINGS PER SHARE (Cont'd)

<TABLE>
<CAPTION>

<S>                                                      <C>             <C>
               Computation of diluted EPS:
                 Weighted average common shares
                 outstanding                             2,804,064       2,198,265

               Potentially dilutive shares:
                 Weighted average shares issuable under
                 warrants                                      (A)              (A)

                  Weighted average shares outstanding & 
                  available                              2,804,064        2,198,265     

          Diluted EPS                                   $     (.18)     $      (.10)
</TABLE>

     (A)   In accordance with the provisions of SFAS #128 no potential dilutive
           shares have been included in the computation of diluted EPS as the
           Company has a loss from continuing operations.

NOTE 14     -     SUBSEQUENT EVENTS

a)     Private placement memorandum

During the six months ended June 30, 1998, the Company sold an aggregate of 
169,001 shares in connection with its private placement memorandum (Note 
9(a)), yielding net proceeds after commissions and non-accountable expenses of 
$220,545.

b)     1997 Non-qualified stock option plan

During the six months ended June 30, 1998, the Company issued an aggregate of 
450,000 shares pursuant to the plan (Note 9(b)).  Such shares have been valued 
at $621,581, representing 76% of the average market value during the month of 
issuance as a result of the illiquidity of the Company's stock.

c)     Stock-based consulting

During the six months ended June 30, 1998, the Company issued 140,000 shares 
of restricted common stock.  Such shares have been valued at $126,700 
representing 50% of the average market value when issued as a result of the 
illiquidity of the Company's stock and the restricted nature of the shares 
issued.

d)     Note payable
During June 1998, the Company repaid a short-term loan of $35,000 by issuance 
of 35,000 common shares.





<PAGE>    16

                 SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                               (UNAUDITED)

NOTE 14     -     SUBSEQUENT EVENTS (Cont'd)

e)     Note payable

During June 1998, the Company borrowed $100,000 from a shareholder which is 
payable in 90 days at an interest rate of 14% per annum.  In connection with 
such borrowing, the Company issued 20,000 common shares as additional 
consideration.  Such shares will be valued at 50% of the average market value 
when issued as a result of the illiquidity of the Company's stock and the 
restricted nature of the shares issued.  The issuance of such shares results 
in an effective interest rate of 82%.

f)     Note payable

During June 1998, the Company borrowed $100,000 from a shareholder which is 
payable in 180 days at an interest rate of 14% per annum.  In connection with 
such borrowing, the Company issued 15,000 common shares as additional 
consideration.  Such shares will be valued at 50% of the average market value 
when issued as a result of the illiquidity of the Company's stock and the 
restricted nature of the shares issued.  The issuance of such shares results 
in an effective interest rate of 40%.

g)     Line of credit

During June 1998, the Company obtained an unsecured $500,000 line of credit 
from a shareholder with an interest rate at fourteen percent (14%) per annum.  
The Company may borrow from the credit line up to $35,714 in any one week.  
Principal and interest are payable on December 8, 1998.  If the Company is not 
able to pay such principal and interest when due, the principal balance of the 
line of credit and any outstanding accrued interest may be converted into 
common stock at the rate of $1.00 per share.

h)     Due to shareholder

During July 1998, the Chairman of the Company advanced $17,000 to the 
Company.  Such advances are non interest bearing and due on demand.

i)     Acquisition

During July 1998, the Company entered into a letter of intent to purchase 
43.5% of the Czech truck manufacturer, Tatra a.s., for approximately $13.6 
million.  In addition, the Company will purchase Tatra's senior secured loan 
from the bank holding such note, with an approximate balance of $89.5 million, 
for approximately $30 million.  Both agreements are anticipated to close 
September 30.

There is no assurance that the transaction will be completed since the Company 
must obtain sufficient capital to complete the acquisition, thus, no pro forma 
financial information has been presented.  The following information is from 
Tatra's audited financial statements.  Tatra had sales of approximately $290 
million for the year ended December 31, 1997.  At December 31, 1997, Tatra had 
total assets of approximately $230 million.


<PAGE>    17

                     SDC INTERNATIONAL, INC.  AND SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                    FOR THE FOUR MONTHS ENDED DECEMBER 31, 1997
                                  (UNAUDITED)

NOTE 14     -     SUBSEQUENT EVENTS (Cont'd)

j)     Note payable

During August 1998, the Company borrowed $350,000 from a shareholder 
which is payable in 180 days at an interest rate of 14% per annum.  In 
connection with such borrowing, the Company issued 37,500 common shares as 
additional consideration.  Such shares will be valued at 50% of the average 
market value when issued as a result of the illiquidity of the Company's stock 
and the restricted nature of the shares issued.  The issuance of such shares 
results in an effective interest rate of 32%.

k)     Note payable

During August 1998, the Company borrowed $125,000 from each of two 
shareholders which is payable in 180 days at an interest rate of 14% per 
annum.  In connection with such borrowing, the Company issued each shareholder 
31, 250 common shares as additional consideration.  Such shares will be valued 
at 50% of the average market value when issued as a result of the illiquidity 
of the Company's stock and the restricted nature of the shares issued.  The 
issuance of such shares results in an effective interest rate of 57%.

l)     Inventory loans

The Company has retired $96,500 of short term inventory loans since 
May 31, 1998.



<PAGE>     18

ITEM 2   -    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
              RESULTS OF OPERATIONS

The Company is the Central and South American distributor for Czech heavy-duty 
truck manufacturer TATRA.  During the four months ending December 31,1997, the 
company provided training at the Tatra factory for its initial service center 
for service and warranty work on Tatra trucks.  TATRA, a.s., is a Czech 
manufacturer of on/off-road heavy trucks.  The factory was founded in 1850 and 
in 1898 the first truck was manufactured.  The factory continued development 
and innovations of its vehicle and today produces a truck with the an air 
cooled diesel engine and a solid central backbone tube with swing half axles, 
both features being unique features of the TATRA truck.  Engines are 
manufactured by TATRA, Deutz, Detroit Diesel or Cummins Diesel.  TATRA has ISO 
9001 certification and TATRA trucks meet all EURO II regulations.

The Company has canceled its plans to sell and finance inventories of 
Slovakian manufacturer Krizik, a.s., because the Company has developed similar
opportunities with companies with whom SDC has existing relationships and 
which are located within the Czech Republic where the Company conducts most if 
its business activities.

During the period ending December 31, 1997, the Company continued the 
registration process of its division, SDC Prague, s.r.o., in the Czech 
Republic.  SDC Prague plans to market and sell electrical generating and 
co-generating equipment using the components of East European manufacturers.

During the period ending December 31, 1997, the Company began rebuilding the 
inventories of its Bolivian subsidiary, SKOBOL, s.a., formerly the subsidiary 
of Czech trading company Motokov International.  Skobal is a thirty-seven year 
old distributor of Czech products within Bolivia, and the Company plans to use 
this subsidiary as its base to expand throughout that region of South America 
with the other Czech products offered by the Company.  The new subsidiary 
provided and excess of $559,471 of net assets acquired over the cost of the 
acquisition.  Skobol operated at a small loss during this period as the 
products are being expanded and Skobol is reintroducing itself to the 
marketplace as a continuing supplier of Czech products.  The subsidiary's 
financial statements are consolidated with those of the Company.

At the close of the period ending December 31, 1997, the Company continued
negotiating for a possible acquisition of Skoda's's Diesel International 
operations.  Management and shareholder control of Diesel International 
(formerly Skoda Diesel) changed in 1996, and the Company believes that if an 
acquisition can be made on terms favorable to the Company, potential negative 
effects of the management and shareholder changes of 1996 will be eliminated 
and the Company could exert total control over this supplier.  SDC management 
continues to work with the management in place a Diesel International and 
relationships with management are satisfactory.  Discussions continue with two 
other East European manufacturers of industrial products which should be 
synergistic with the Company's present products and markets.

The Company concluded its Regulation D Rule 505 offering of its common stock 
which provided a gross total of $740,000 for the Company.  The Five Year 
Growth Plan which was completed in August 1997 has been updated to reflect the 
positive developments of the prior six months and management is exploring 
different sources of additional capital and reviewing different methods of 
obtaining additional capital for the Company in order to execute its five year 
plan.

<PAGE>    19


ITEM 2   -  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

There can be no assurances that any of the matters discussed above will come 
to fruition or will result in positive results for the Company.

The Company has devoted substantial time and effort to negotiating and 
arranging strategic alliances with major Czech manufacturers rather than 
devoting its time to beginning its marketing and sales development.  It is 
felt that the most efficient use of time and resources will be with the proper 
product mix for entering new markets.  Therefore, the Company's revenues to 
date are primarily the result of orders received by the Company rather than 
the results of marketing efforts by the Company.  The Company records revenue 
when products are shipped.  During the four months ending December 31, 1997, 
the Company shipped $59,666 and realized a gross profit from those sales of 
$28,342.  These sales were made by the new subsidiary Skobol, s.a.  Management 
believes sales by Skobol will increase as its reorganization of its operations 
is completed and new inventories are provided.  However, Company sales and 
shipments will continue to be sporadic until a more steady flow of orders 
exist, and until the marketing efforts for larger items, such as electrical 
generating sets and trucks, can come to fruition.

Operating expenses for the four months ending December 31, 1997, were more 
than in the four months ending December 31, 1997, due primarily to the 
expansion of management, development of additional product lines needed in 
order to enhance future growth and revenues of the Company, and the continuing 
negotiations for major strategic alliances which often times include paid 
professional advisors such as attorneys and accountants.  Expense categories 
such as legal, accounting, travel, and costs and expenses for securities 
matters increased due to the fact that the Company is a fully reporting 12 (g) 
company, due to the planned acquisition of new product lines, and due to the 
extensive discussions and negotiations in the Czech Republic regarding future 
strategic alliances and the possible acquisition of Diesel 
International.                                                                  
                         

Total expenses for the four months ending December 31, were $237,209 in 1996 
and $529,715 in 1997.  Non-cash expenses as deprecation and amortization and 
payment for consulting services accounted for $197,589 more than thirty-seven 
percent (37%) of the expenses during the four months ending December 31, 
1997.  During the four months ending December 31, 1997, expenses increased due 
to the increased activity level of corporate and product acquisition plans and 
related activities.  The Company's net loss of $515,658 for the four months 
ending December 31, 1997, includes certain non-cash charges as follows:

               Depreciation and amortization           $     158,937
               Amortization of common stock issued as
                 consideration of services                    38,650

               Total non-cash charges                  $     197,589

Accordingly, the Company's cash loss before the above charges amounted to 
approximately $318,069.



<PAGE>    20

ITEM 2   -  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

During the four months ending December 31, 1997, as compared to the four 
months ending December 31, 1996, operating expenses were approximately 
$292,506 higher.  Management expects operating expenses (non-depreciation and 
non-amortization), to remain at this approximate level for the near future due 
to the level of negotiations and expansion discussions taking place 
presently.  Operating expense categories which exceeded $5,000, for the four 
months period ending December 31, 1997, were; Amortization and depreciation 
$158,939; Office rent $12,540; Management compensation and salary $51,000; 
Travel and lodging $57,609; Consulting $80,328; Legal and accounting $20,784; 
Telephone $10,046; and Consulting costs paid by issuance of stock $38,650; 
Repair and maintenance $16,434; Marketing $7,263; Offices supplies $6,355; 
Truck expense $7,237; and Wages $41,017.  Operating expense categories which 
exceeded $5,000 for the four month period ending December 31, 1996 were; 
Amortization and depreciation $156,202; Office rent $23,662; Management 
compensation and salary $24,000; Travel and lodging $19,305; and Capital 
funding $5,697.

LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1997, the Company's working capital is $513,755.  Net cash 
used for the Company's operating activities for the four months ending 
December 31, 1997 amounted to $338,075 whereas the net cash used for operating 
activities for the period ending December 31, 1996 amounted to $63,335.  Net 
cash provided by (used for) financing activities in the four months ending 
December 31, 1997 was $143,988 compared to $(4,000) for the four months ending 
December 31, 1996.  Net cash provided by (used for) investing activities 
during the four months ending December 31, 1997 was $283,885 compared to 
$77,985 for the period ending December 31, 1996.  Therefore, total cash at the 
end of the period ending December 31, 1997 was $104,997 compared to 10,263 at 
the end of the four months ending December 31, 1996.  At December 31, 1997, 
all corporate debt amounted to $121,497.

Management is evaluating its current and projected cash needs to determine if 
its current financial situation will be sufficient to meet such needs.  If the 
Company continues according to its present plans and without modification, the 
Company will be required to obtain additional financing or equity capital.  
Management is actively exploring possible sources of additional capital and is 
reviewing possible methods to obtain such additional capital, as needed.  
There is no assurance that such financing or capital will be available.

Negative cash flows from the Company's operating activities are anticipated to 
continue until the Company has established its distributors within its sales 
territories, nas received and shipped orders, and has collected payment for 
such orders.  The Company may encounter difficulties in financing the purchase 
of inventory necessary to complete orders.  The Company acknowledges that 
there can be no assurance that it will be able to obtain capital or financing 
until the time of such payment is received or that such capital is unable to 
provide needed revenues to finance its ongoing operating or if the Company 
does not receive additional capital, there could be a severe adverse impact on 
the Company's future operations.




<PAGE>     21

ITEM 2   -  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES (Cont'd)

On September 5, 1997, the Company established a Non-Qualified Stock Option 
Plan ("The Plan") pursuant to which 750,000 shares of common stock are 
reserved for issuance.  The option price per share shall be determined by the 
Board of Directors at the time any options are granted.  The Plan is designed 
to serve as an incentive for retainage qualified and competent persons who are 
key employees, consultants, representatives, officers and directors of the corpo
ration.  As of December 31, 1997, 150,000 shares had been issued under such 
Plan.  See Notes to financial statements, Note 5(b).
     
On October 10, 1997, the Company signed a Letter of Intent with an underwriter 
to proceed on a "Firm Commitment" basis with a secondary offering of the 
Company's common stock and redeemable warrants ("the Warrants").  The Company 
plans to offer 1,000,000 shares and warrants will be offered to the public at 
a price of $6.00 per share and $0.125 per warrant, respectively.  The total 
gross offering amounts to $6,125,000.  The Company, if necessary, will effect 
a reverse stock split in order to complete the secondary offering at a price 
of at least $6.00 per share.  Each warrant, which is redeemable within 60 
months, entitles the holder thereof to purchase one share of common stock at 
120% of the offering price of the common shares. The warrants may be redeemed 
by the Company at $0.10 each after the common shares have traded at 150% of 
the offering price of common shares for ten consecutive days.  Due to the 
current progress of negotiations with potential strategic partners, this 
offering is postponed by management.

The Company' products are sold in US dollars and the Company does not believe 
currency exchange rates or current inflation rates will have a significant 
effect on sales or profitability.  Although the Company maintains a bank 
account in Czech currency within the Czech Republic for paying local expenses, 
the amount on deposit in such account is usually small and, therefore, 
fluctuation in the currency exchange rates should not have a significant 
effect on the Company.

During the six months ended June 30, 1998, the Company sold an aggregate of 
169,001 shares in connection with its private placement memorandum (Note 
9(a)), yielding net proceeds after commissions and non-accountable expenses of 
$220,545.

During the six months ended June 30, 1998, the Company issued an aggregate of 
450,000 shares pursuant to the plan (Note 9(b)).  Such shares have been valued 
at $621,581, representing 76% of the average market value during the month of 
issuance as a result of the illiquidity of the Company's stock.
During the six months ended June 30, 1998, the Company issued 140,000 shares 
of restricted common stock.  Such shares have been valued at $126,700 
representing 50% of the average market value when issued as a result of the 
illiquidity of the Company's stock and the restricted nature of the shares 
issued.

During June 1998, the Company repaid a short-term loan of $35,000 by issuance 
of 35,000 common shares.



<PAGE>    22

ITEM 2   -  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES (Cont'd)

During June 1998, the Company borrowed $100,000 from a shareholder which is 
payable in 90 days at an interest rate of 14% per annum.  In connection with 
such borrowing, the Company issued 20,000 common shares as additional 
consideration.  Such shares will be valued at 50% of the average market value 
when issued as a result of the illiquidity of the Company's stock and the 
restricted nature of the shares issued.  The issuance of such shares results 
in an effective interest rate of 82%.

During June 1998, the Company borrowed $100,000 from a shareholder which is 
payable in 180 days at an interest rate of 14% per annum.  In connection with 
such borrowing, the Company issued 15,000 common shares as additional 
consideration.  Such shares will be valued at 50% of the average market value 
when issued as a result of the illiquidity of the Company's stock and the 
restricted nature of the shares issued.  The issuance of such shares results 
in an effective interest rate of 40%.

During June 1998, the Company obtained an unsecured $500,000 line of credit 
from a shareholder with an interest rate at fourteen percent (14%) per annum.  
The Company may borrow from the credit line up to $35,714 in any one week.  
Principal and interest are payable on December 8, 1998.  If the Company is not 
able to pay such principal and interest when due, the principal balance of the 
line of credit and any outstanding accrued interest may be converted into 
common stock at the rate of $1.00 per share.

During July 1998, the Chairman of the Company advanced $17,000 to the 
Company.  Such advances are non interest bearing and due on demand.

During July 1998, the Company entered into a letter of intent to purchase 
43.5% of the Czech truck manufacturer, Tatra a.s., for approximately $13.6 
million.  In addition, the Company will purchase Tatra's senior secured loan 
from the bank holding such note, with an approximate balance of $89.5 million, 
for approximately $30 million.  Both agreements are anticipated to close 
September 30.

There is no assurance that the transaction will be completed since the Company 
must obtain sufficient capital to complete the acquisition, thus, no pro forma 
financial information has been presented.  The following information is from 
Tatra's audited financial statements.  Tatra had sales of approximately $290 
million for the year ended December 31, 1997.  At December 31, 1997, Tatra had 
total assets of approximately $230 million.

During August 1998, the Company borrowed $350,000 from a shareholder which is 
payable in 180 days at an interest rate of 14% per annum.  In connection with 
such borrowing, the Company issued 37,500 common shares as additional 
consideration.  Such shares will be valued at 50% of the average market value 
when issued as a result of the illiquidity of the Company's stock and the 
restricted nature of the shares issued.  The issuance of such shares results 
in an effective interest rate of 32%.




<PAGE>   23

ITEM 2   -  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES (Cont'd)

During August 1998, the Company borrowed $125,000 from each of two 
shareholders which is payable in 180 days at an interest rate of 14% per 
annum.  In connection with such borrowing, the Company issued each shareholder 
31, 250 common shares as additional consideration.  Such shares will be valued 
at 50% of the average market value when issued as a result of the illiquidity 
of the Company's stock and the restricted nature of the shares issued.  The 
issuance of such shares results in an effective interest rate of 57%.

The Company has retired $96,500 of short term inventory loans since May 31, 
1998.

<PAGE>    24

                                SIGNATURES

In accordance with section 13 or 15(d) of the Exchange Act, the registrant 
caused this report to be signed on its behalf by the undersigned, hereunto 
duly authorized.



                                          SDC INTERNATIONAL, INC.


                                          BY:/s/Ronald A. Adams
                                             Ronald A. Adams, President

August 31, 1998


In accordance with the Exchange Act, this report has been signed below by the 
following persons on behalf of the registrant and in the capacitates and on 
the dates indicated.



/s/Ronald A. Adams                               August 31, 1998
Ronald A. Adams, Director and President
(Principal Executive Officer and Principal
Financial Officer)


/s/Henry S. Green                                August 31, 1998
Henry S. Green, Jr., Director