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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|(Mark One)                                 |                                                                                         
|------------------------------------------ | ----------------------------------------------------------------------------------------
|ý                                          | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|For the Quarterly Period Ended May 4, 2002
|OR                                        
|o                                          | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period from
 to        
|Commission File Number: 0-22834           

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SUCCESSORIES, INC.(Exact name of registrant as specified in its charter)

|ILLINOIS(State or other jurisdiction of
incorporation or organization)   |  | 36-3760230(I.R.S. Employer
Identification No.)
|------------------------------------------------------------------------ |  | ----------------------------------------------
|2520 Diehl Road
Aurora, Illinois(Address of principal executive offices) |  | 60504(Zip Code)                               
|(630) 820-7200(Registrant's telephone number, including area code)      

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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 ý    No o

Registrant
had 9,348,104 shares of common stock, $.01 par value, outstanding as of June 11, 2002.

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SUCCESSORIES, INC.  INDEX TO FORM 10-Q

|                  |                       |                                                                                       |  | Page Number
|----------------- | --------------------- | ------------------------------------------------------------------------------------- |  | -----------
|PART I.           | FINANCIAL INFORMATION |                                                                                       | 
|                  | Item 1.               | Financial Statements                                                                  |  |            
|                  |                       | Consolidated Balance Sheets                                                           |  | 3          
|                  |                       | Consolidated Statements of Operations and Comprehensive Loss                          |  | 4          
|                  |                       | Consolidated Statement of Stockholders' Equity                                        |  | 5          
|                  |                       | Consolidated Statements of Cash Flows                                                 |  | 6          
|                  |                       | Notes to Consolidated Financial Statements                                            |  | 7          
|                  | Item 2.               | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 13         
|                  | Item 3.               | Quantitative and Qualitative Disclosures About Market Risk                            |  | 17         
|PART II.          | OTHER INFORMATION     |                                                                                       | 
|                  | Item 1.               | Legal Proceedings                                                                     |  | 18         
|                  | Item 6.               | Exhibits and Reports on Form 8-K                                                      |  | 19         
|SIGNATURES        |                       | 20                                                                                   
|INDEX TO EXHIBITS |                       |                                                                                      

2

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PART I.    FINANCIAL INFORMATION

SUCCESSORIES, INC.        Consolidated Balance Sheets

|                                                |                                                                                                                                                                                                              | May 4,
2002 |            | February 2,
2002 |  
|----------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------- | ---------- | ---------------- | -
|
|ASSETS                                          |                                                                                                                                                                                                              |             |            |                  |  
|Current assets:                                 |                                                                                                                                                                                                              |             |            |                  |  
|                                                | Cash and cash equivalents                                                                                                                                                                                    |             | $          | 505,000          |  
|                                                | Accounts and notes receivable, net                                                                                                                                                                           |             |            | 2,129,000        |  
|                                                | Inventories, net                                                                                                                                                                                             |             |            | 5,349,000        |  
|                                                | Prepaid catalog expenses                                                                                                                                                                                     |             |            | 1,507,000        |  
|                                                | Other prepaid expenses                                                                                                                                                                                       |             |            | 812,000          |  
|                                                |                                                                                                                                                                                                              |             |            |                  |  
|Total current assets                            |                                                                                                                                                                                                              |             | 10,302,000 |                  |  
|Restricted cash                                 |                                                                                                                                                                                                              |             | 250,000    |                  |  
|Property and equipment, net                     |                                                                                                                                                                                                              |             | 3,477,000  |                  |  
|Notes receivable                                |                                                                                                                                                                                                              |             |           |                  |  
|Deferred financing costs and debt discount, net |                                                                                                                                                                                                              |             | 149,000    |                  |  
|Intangibles and other assets, net               |                                                                                                                                                                                                              |             | 851,000    |                  |  
|                                                |                                                                                                                                                                                                              |             |            |                  |  
|TOTAL ASSETS                                    |                                                                                                                                                                                                              | $           | 15,029,000 |                  | $
|                                                |                                                                                                                                                                                                              |             |            |                  |  
|LIABILITIES AND STOCKHOLDERS' EQUITY            |                                                                                                                                                                                                              |             |            |                  |  
|Current liabilities:                            |                                                                                                                                                                                                              |             |            |                  |  
|                                                | Revolving credit loan                                                                                                                                                                                        |             | $          | 1,258,000        |  
|                                                | Accounts payable                                                                                                                                                                                             |             |            | 2,074,000        |  
|                                                | Accrued expenses and deferred income taxes                                                                                                                                                                   |             |            | 1,523,000        |  
|                                                |                                                                                                                                                                                                              |             |            |                  |  
|Total current liabilities                       |                                                                                                                                                                                                              |             | 4,855,000  |                  |  
|Minority interest                               |                                                                                                                                                                                                              |             | 10,000     |                  |  
|                                                |                                                                                                                                                                                                              |             |            |                  |  
|Stockholders' equity:                           |                                                                                                                                                                                                              |             |            |                  |  
|                                                | Convertible preferred stock, $.01 par value; 1,000,000 shares authorized; 503,092 of Series A and 101,667 of Series B shares issued and outstanding; liquidation value $.01 per share plus accrued dividends |             |            | 6,000            |  
|                                                | Common stock, $.01 par value; 20,000,000 shares authorized; 9,313,884 shares issued and outstanding, respectively                                                                                            |             |            | 93,000           |  
|                                                | Common stock warrants                                                                                                                                                                                        |             |            | 2,324,000        |  
|                                                | Notes receivable from stockholders                                                                                                                                                                           |             |            | (118,000         | )
|                                                | Additional paid-in capital                                                                                                                                                                                   |             |            | 33,321,000       |  
|                                                | Accumulated deficit                                                                                                                                                                                          |             |            | (25,398,000      | )
|                                                | Accumulated other comprehensive loss                                                                                                                                                                         |             |            | (64,000          | )
|                                                |                                                                                                                                                                                                              |             |            |                  |  
|Total stockholders' equity                      |                                                                                                                                                                                                              |             | 10,164,000 |                  |  
|                                                |                                                                                                                                                                                                              |             |            |                  |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      |                                                                                                                                                                                                              | $           | 15,029,000 |                  | $
|                                                |                                                                                                                                                                                                              |             |            |                  |  

The
accompanying notes are an integral part of these statements.

3

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SUCCESSORIES, INC.        Consolidated Statements of Operations and  Comprehensive Loss        (Unaudited)

|                                                   |                                    | Three Months Ended |           
|-------------------------------------------------- | ---------------------------------- | ------------------ | ----------
|
|Net product sales                                  |                                    | $                  | 10,076,000
|Cost of goods sold                                 |                                    |                    | 4,808,000 
|                                                   |                                    |                    |           
|Gross profit on product sales                      |                                    |                    | 5,268,000 
|Fees, royalties and other income                   |                                    |                    | 188,000   
|                                                   |                                    |                    |           
|Gross margin                                       |                                    |                    | 5,456,000 
|Operating expenses                                 |                                    |                    | 6,456,000 
|                                                   |                                    |                    |           
|Loss from operations                               |                                    |                    | (1,000,000
|                                                   |                                    |                    |           
|Other income (expense):                            |                                    |                    |           
|                                                   | Interest expense                   |                    |           
|                                                   | Minority interests in subsidiaries |                    |           
|                                                   | Interest income                    |                    |           
|                                                   | Other, net                         |                    |           
|                                                   |                                    |                    |           
|Total other expense                                |                                    |                    | (69,000   
|                                                   |                                    |                    |           
|Loss before income tax and extraordinary item      |                                    |                    | (1,069,000
|Income tax expense (benefit)                       |                                    |                    | (106,000  
|                                                   |                                    |                    |           
|Loss before extraordinary item                     |                                    |                    | (963,000  
|Extraordinary loss on early extinguishment of debt |                                    |                    |          
|                                                   |                                    |                    |           
|Net loss                                           |                                    | $                  | (963,000  
|                                                   |                                    |                    |           
|Dividend to preferred shareholders                 |                                    |                    | 55,000    
|                                                   |                                    |                    |           
|Loss available to common stockholders              |                                    | $                  | (1,018,000
|                                                   |                                    |                    |           
|Foreign currency translation adjustment            |                                    |                    |          
|                                                   |                                    |                    |           
|Comprehensive loss                                 |                                    | $                  | (963,000  
|                                                   |                                    |                    |           
|Loss per share (basic and diluted):                |                                    |                    |           
|                                                   | Loss before extraordinary item     |                    | $         
|                                                   |                                    |                    |           
|                                                   | Net loss                           |                    | $         
|                                                   |                                    |                    |           

The
accompanying notes are an integral part of these statements.

4

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SUCCESSORIES, INC.        Consolidated Statement Of Stockholders' Equity        (Unaudited)

|                              |                           | Convertible
Preferred Stock |   |   |       |   |           |   |   |        |   |   |           |   |   |          |   |   |           
|----------------------------- | ------------------------- | --------------------------- | - | - | ----- | - | --------- | - | - | ------ | - | - | --------- | - | - | -------- | - | - | ----------
|
|
|
|Balance at February 2, 2002   |                           | 604,759                     |   | $ | 6,000 |   | 9,313,884 |   | $ | 93,000 |   | $ | 2,324,000 |   | $ | (118,000 | ) | $ | 33,321,000
|Net loss                      |                           |                            |   |   |      |   |          |   |   |       |   |   |          |   |   |         |   |   |          
|Preferred stock transactions: |                           |                             |   |   |       |   |           |   |   |        |   |   |           |   |   |          |   |   |           
|                              | Preferred stock dividends |                             |  |   |       |  |           |  |   |        |  |   |           |  |   |          |  |   |           
|                              |                           |                             |   |   |       |   |           |   |   |        |   |   |           |   |   |          |   |   |           
|Balance at May 4, 2002        |                           | 604,759                     |   | $ | 6,000 |   | 9,313,884 |   | $ | 93,000 |   | $ | 2,324,000 |   | $ | (118,000 | ) | $ | 33,321,000
|                              |                           |                             |   |   |       |   |           |   |   |        |   |   |           |   |   |          |   |   |           

The accompanying notes are an integral part of these statements.

5

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SUCCESSORIES, INC.        Consolidated Statements of Cash Flows        (Unaudited)

|                                                    |                                                                                         | Three Months Ended                                 |         
|--------------------------------------------------- | --------------------------------------------------------------------------------------- | -------------------------------------------------- | --------
|
|Cash flows from operating activities:               |                                                                                         |                                                    |         
|                                                    | Net loss                                                                                |                                                    |         
|                                                    | Adjustments to reconcile net loss to net cash from operating activities:                |                                                    |         
|                                                    |                                                                                         | Depreciation and amortization                      |         
|                                                    |                                                                                         | Amortization of debt discount                      |         
|                                                    |                                                                                         | Minority interests in subsidiaries                 |         
|                                                    |                                                                                         | Extraordinary loss on early extinguishment of debt |         
|                                                    |                                                                                         |                                                    |         
|                                                    |                                                                                         |                                                    | (310,000
|Changes in operating assets and liabilities:        |                                                                                         |                                                    |         
|                                                    | Accounts and notes receivable                                                           |                                                    |         
|                                                    | Inventories                                                                             |                                                    |         
|                                                    | Prepaid catalog expenses                                                                |                                                    |         
|                                                    | Other prepaid expenses                                                                  |                                                    |         
|                                                    | Accounts payable                                                                        |                                                    |         
|                                                    | Accrued expenses                                                                        |                                                    |         
|                                                    | Other assets                                                                            |                                                    |         
|                                                    |                                                                                         |                                                    |         
|Net cash provided by operating activities           |                                                                                         |                                                    | 267,000 
|                                                    |                                                                                         |                                                    |         
|Cash flows from investing activities:               |                                                                                         |                                                    |         
|                                                    | Proceeds from notes receivable issued in connection with sale of property and equipment |                                                    |         
|                                                    | Purchase of property and equipment                                                      |                                                    |         
|                                                    |                                                                                         |                                                    |         
|Net cash provided by (used in) investing activities |                                                                                         |                                                    | 4,000   
|                                                    |                                                                                         |                                                    |         
|Cash flows from financing activities:               |                                                                                         |                                                    |         
|                                                    | Proceeds from sale of common stock                                                      |                                                    |         
|                                                    | Net (repayments) borrowings on revolving credit loan                                    |                                                    |         
|                                                    | Repayments of long-term debt                                                            |                                                    |         
|                                                    | Distributions to joint venture partners                                                 |                                                    |         
|                                                    | Proceeds from notes receivable issued to stockholders                                   |                                                    |         
|                                                    |                                                                                         |                                                    |         
|Net cash used in financing activities               |                                                                                         |                                                    | (368,000
|                                                    |                                                                                         |                                                    |         
|Net decrease in cash                                |                                                                                         |                                                    | (97,000 
|Cash and cash equivalents, beginning of period      |                                                                                         |                                                    | 602,000 
|                                                    |                                                                                         |                                                    |         
|Cash and cash equivalents, end of period            |                                                                                         | $                                                  | 505,000 
|                                                    |                                                                                         |                                                    |         

The
accompanying notes are an integral part of these statements.

6

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SUCCESSORIES, INC.        Notes To Consolidated Financial Statements        (Unaudited)

NOTE 1. DESCRIPTION OF THE BUSINESS

Successories, Inc. and its subsidiaries (collectively the "Company") design, manufacture, and market a diverse range of motivational and
self-improvement products, most of which are the Company's own proprietary designs. The Company considers itself a single line of business with products that are marketed primarily under
theSuccessoriestrade name through direct marketing (catalog, electronic commerce and telemarketing), retail (Company-owned stores), sales to
franchisees and wholesale distribution channels. The Company operates a chain of Successories retail stores located in the United States and Canada. The Company also operates a franchising program
whereby franchisees are granted the right to market the Company's products under theSuccessoriestrademark.

NOTE 2. BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared, without audit, in accordance with generally accepted accounting principles for interim
financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. 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, all adjustments (consisting only of normal recurring matters) considered necessary for a fair
presentation have been included.

The
Company's fiscal year ends on the Saturday closest to January 31. References to the three months ended May 4, 2002, and May 5, 2001, refer to the thirteen weeks
ended on the dates indicated.

The
results of operations for the three months ended May 4, 2002 are not necessarily indicative of the results to be expected for the full year. These financial statements should
be read in conjunction with the Company's financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended February 2,
2002.

NOTE 3. INVENTORIES

Inventories are comprised of the following:

May 4,
2002

February 2,
2002Finished goods

$
4,026,000

$
3,825,000Raw Materials


1,895,000


1,763,0005,921,000


5,588,000Less: reserve for obsolescence


(572,000
)

(583,000
)$
5,349,000

$
5,005,000


NOTE 4. DEBT

On June 20, 1997, the Company entered into a credit facility agreement with The Provident Bank (the "Bank"), amended most recently on June 13, 2002,
the credit facility was comprised of a revolving credit loan, term loan and fixed rate loan. During the first quarter ended May 4, 2002, the revolving credit loan provided for maximum
borrowings of $4 million, and the borrowing base was limited to 85% of eligible receivables plus the lesser of 57% of eligible inventory or $3,000,000, as defined. A commitment fee of 0.25% is
payable on the daily unused amount of the maximum revolving credit. The

7

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facility expires in June 2003, and all borrowings under the facility are secured by substantially all the assets of the Company. The interest rate on the revolving credit loan borrowing is
prime plus 2.0%. Interest is payable monthly. The interest rate on the outstanding revolving credit loan was 6.8% at May 4, 2002. As of May 4, 2002, available borrowings on the revolving
credit loan were $2,287,000.

On
June 13, 2002, the Company obtained an amendment to the credit facility to adjust and modify certain financial covenants which were retroactive to the first quarter ended
May 4, 2002. In addition, the amendment adjusted borrowing base and the revolver limits, prospectively. Subsequent to June 13, 2002, the borrowing base is limited to 80% of eligible
receivables plus 45% of eligible inventory. Effective June 13, 2002, the maximum revolving credit loan is limited to $3,500,000 through October 31, 2002 and $3,000,000 thereafter. In
connection with the above mentioned amendment, the Company agrees to exchange the stock warrants previously issued to the bank in exchange for a success fee equal to 2% of the gross sales price, in
the event that the Company is sold.

In
the prior year first quarter 2001, the Company pre-paid the entire outstanding Bank term loan and fixed rate loan balance in the amount of $3,590,000. The above noted
loans had payment terms through June 2003. The Company recorded an extraordinary loss of $219,000 related to the early debt extinguishment in the prior year quarter ended May 5, 2001.
The extraordinary loss represents the write-off of the unamortized debt discount associated with the term loan and fixed rate loan.

The
credit facility agreement contains, among other provisions, requirements for maintaining certain earnings levels and financial ratios, limits on capital expenditures and additional
indebtedness, and use of proceeds from certain equity offerings.

At
May 4, 2002, the Company was in compliance with the debt covenant requirements of the credit facility agreement.

The
weighted average interest rates on cash interest expense for borrowings outstanding as of May 4, 2002 and May 5, 2001 were 6.8% and 8.6%, respectively.

NOTE 5. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental disclosures to the statements of cash flows are as follows:

Three Months EndedMay 4,
2002

May 5,
2001Cash paid during the period for:Income taxes

$
1,000

$
87,000Interest


32,000


48,000Non-cash investing and financing Activities:Preferred stock dividends

$
55,000

$
55,000


8

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NOTE 6. LOSS PER SHARE

The computations of basic and diluted loss per share are as follows:

Three Months EndedMay 4,
2002

May 5,
2001Numerator for loss before extraordinary item per share:Loss before extraordinary item

$
(963,000
)
$
(1,343,000
)Less: Preferred stock dividends


(55,000
)

(55,000
)Numerator for loss before extraordinary item per share

$
(1,018,000
)
$
(1,398,000
)Numerator for net loss per share:Net loss

$
(963,000
)
$
(1,562,000
)Less: Preferred stock dividends


(55,000
)

(55,000
)Numerator for net loss per share

$
(1,018,000
)
$
(1,617,000
)Denominator for loss per share:Weighted average common stock shares


9,313,884


9,183,826Basic and diluted loss per share:Loss before extraordinary item

$
(0.11
)
$
(0.15
)Net loss

$
(0.11
)
$
(0.18
)


Stock
options, warrants, and convertible preferred stock were not included in the computation of the diluted loss per share, due to their antidilutive effect on the loss per share.

NOTE 7. SEGMENT AND RELATED INFORMATION

The Company has adopted SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information." This Statement establishes standards for the
way public business enterprises report information about operating segments in annual financial statements and in interim financial reports issued to shareholders.

The
Company's reportable segments are the various distribution channels used to market its products. The Company's products have similar purposes and uses in each channel of
distribution, but profitability varies among the channels. The Company considers itself a single line of business with products that are marketed through direct marketing (catalog, electronic commerce
and telemarketing), retail (Company-owned stores), wholesale and sales to franchisees channels. In addition, the Company generates revenue from providing framing services to outside corporate
businesses on a contract fee basis. The Company has four reportable segmentsDirect MarketingSuccessories, Retail Company-owned
stores, Sales to Franchisees and other segments (Direct MarketingGolf, Wholesale and Contract Framing). At the end of the first quarter in fiscal 2002, the Company discontinued contract
framing services for third party products.

9

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The
accounting policies of the reportable segments are the same as those described in Note 2 of Notes to Consolidated Financial Statements in the Company's 10-K. The
Company evaluates the performance of its operating segments based on income (loss) before other income (expense), income taxes and extraordinary item.

Summarized
financial information concerning the Company's reportable segments is shown in the following table. The "Corporate" row includes corporate related items not allocated to
reportable segments.

|                                |              | Net
Sales |            | Segment
Profit (Loss) |   | Total
Assets |            | Capital
Expenditures |            | Depreciation
and Amortization
|------------------------------- | ------------ | --------- | ---------- | --------------------- | - | ------------ | ---------- | -------------------- | ---------- | -----------------------------
|Three Months Ended May 4, 2002: |              |           |            |                       |   |              |            |                      |            |                              
|Direct MarketingSuccessories    |              | $         | 7,328,000  |                       | $ | 838,000      |            | $                    | 3,062,000  |                              
|Retail Company-owned stores     |              |           | 1,949,000  |                       |   | (415,000     | )          |                      | 1,951,000  |                              
|Sales to Franchisees            |              |           | 586,000    |                       |   | 20,000       |            |                      | 583,000    |                              
|Other segments                  |              |           | 213,000    |                       |   | 70,000       |            |                      | 94,000     |                              
|Corporate                       |              |           |           |                       |   | (1,476,000   | )          |                      | 9,425,000  |                              
|                                |              |           |            |                       |   |              |            |                      |            |                              
|CONSOLIDATED                    |              | $         | 10,076,000 |                       |   | (963,000     | )          | $                    | 15,115,000 |                              
|                               
|Three Months Ended May 5, 2001: |              |           |            |                       |   |              |            |                      |            |                              
|Direct MarketingSuccessories    |              | $         | 7,672,000  |                       | $ | 530,000      |            | $                    | 4,134,000  |                              
|Retail Company-owned stores     |              |           | 2,106,000  |                       |   | (280,000     | )          |                      | 3,289,000  |                              
|Sales to Franchisees            |              |           | 927,000    |                       |   | 38,000       |            |                      | 1,168,000  |                              
|Other segments                  |              |           | 381,000    |                       |   | 71,000       |            |                      | 347,000    |                              
|Corporate                       |              |           |           |                       |   | (1,921,000   | )          |                      | 16,481,000 |                              
|                                |              |           |            |                       |   |              |            |                      |            |                              
|                                | CONSOLIDATED |           | $          | 11,086,000            |   | $            | (1,562,000 | )                    | $          | 25,419,000                   

The Company utilizes its facilities and the majority of its assets interchangeably among each distribution channel. Assets that relate
specifically to a reportable segment have been included in the above table. Assets identified to the reportable segments are primarily cash, receivables, inventory, prepaid catalogs, property and
equipment, and intangibles.

The
following table presents the details for "Corporate":

Three Months EndedMay 4,
2002

May 5,
2001Corporate administrative expenses

$
1,073,000

$
1,116,000Unallocated depreciation and amortization expense


440,000


496,000Other expenses


69,000


90,000Income tax expense (benefit)


(106,000
)

Extraordinary loss on early debt extinguishment





219,000$
1,476,000

$
1,921,000


10

---

Corporate
administrative expenses are primarily charges for those functions not specifically attributable to any specific segment; these functions include the product development,
merchandising, information systems, accounting, legal, human resource and executive departments. Included in the expenses associated with these functions are payroll and related costs, professional
fees, information system maintenance costs, office occupancy costs, and property, casualty and directors and officers insurance.

The
Company's operations are principally in North America. No single foreign country or geographic area is significant to the consolidated operations. Long-lived assets are
all located in North America.

The
Company's products include distinctive lines of wall decor, desktop accessories, books and stationery, personalized gifts and awards. In addition, the Company sells other
motivational products supplied by third parties.

For
the three months ended May 4, 2002 and May 5, 2001, net product sales by product categories were as follows:

Three Months EndedMay 4,
2002

May 5,
2001Wall décor

42
%
43
%Desktop accessories

18
%
20
%Books and stationery

19
%
18
%Personalized gifts and awards

21
%
17
%Other



2
%


NOTE 8. NEW ACCOUNTING PRONOUNCEMENT

On February 3, 2002, the Company adopted FASB No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". The provisions
of FAS No. 144 will be applied to the Company's plan to close all of its 100% owned retail stores in the second quarter of 2002.

In
May 2002, the Financial Accounting Standards Board issued FASB No. 145 "Recision of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13
and Technical Corrections:" FAS No. 145 is effective for fiscal years beginning after May 14, 2002 unless adopted earlier.

FAS 145
requires the stringent criteria of Accounting Principles Board No. 30 to be applied to debt extinguishments. Prior debt extinguishments that do not qualify will be
reclassified as ordinary. FAS 145 also amends the requirements for certain lease modifications which result in a change in classification of the lease from a capital lease to an operating
lease. In addition FAS 145 provides guidance regarding the trucking industry's deregulation that occurred in 1980. The adoption of FAS 145 is not expected to have a material impact on
the Company's results of operations or financial condition.

11

---

NOTE 9. MANAGEMENT PLANS

Due to the continuing soft economic climate and the substantial loss before income taxes and extraordinary items of $5,712,000 sustained in fiscal 2001, the
Company retained the professional services of Duff & Phelps, LLC, an investment banking and financial advisory firm. Duff & Phelps is assisting the Company in identifying and assessing
strategic alternatives, which are currently focussed on pursuing the sale of the Company. No assurance can be given that the sale of the Company shall be effected.

The
Company will continue its primary focus on sales growth in the direct marketing channel and support of its current franchisees. In the process of reviewing its strategic options, the
Company decided on May 7, 2002 to take immediate steps to develop a plan to close all of its 100% owned retail stores. As a result, in the second quarter 2002, the Company will identify the
stores to be closed, evaluate the associated asset impairment charges and report the operating results from the respective stores as discontinued operations.

At
the end of the first quarter in fiscal 2002, the Company discontinued contract-framing services for third party products. Any future contract framing services shall be limited
primarily to large and multiple unit production runs. Net sales and operating results for contract framing were not material.

The
Company's management continues to evaluate its operating expenses due to the softness in sales. In the current year second quarter 2002, the Company instituted further workforce
reduction which is expected to provide annualized payroll savings of approximately $1,100,000. The severance costs associated with the above mentioned workforce reduction of approximately $93,000 will
be recorded in the second quarter 2002.

12

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

The following discussion should be read in conjunction with, and is qualified in its entirety by, the Consolidated Financial Statements and Notes thereto included
elsewhere in this Report.

Successories
designs, manufactures and markets a diverse range of motivational and self-improvement products, most of which are the Company's own proprietary designs. The
Company's products include distinctive lines of wall decor, desktop accessories, books and stationery, and personalized gifts and awards. In-house designers create proprietary art work and
designs that can be used in conjunction with a wide variety of products. The Company will also customize products to fulfill customers' special needs.

The
Company's products are marketed primarily under itsSuccessoriestrade name through direct marketing (catalog, electronic commerce and
telemarketing), retail channel (Company-owned stores), sales to franchisees and wholesale distribution. Although the Company utilizes multiple distribution channels for its products, the Company's
products have similar purposes and uses in each channel of distribution. The profitability varies among products and distribution channels. The Company utilizes its facilities interchangeably for each
distribution channel. Furthermore, the marketing channels are directed at a single customer base located primarily in North America. In addition, the Company generated revenue from providing framing
services to outside corporate businesses on a contract fee basis.

For
the three months ended May 4, 2002 and May 5, 2001, net product sales for the various distribution channels, as a percentage of total net product sales, were as
follows:

Three Months EndedMay 4,
2002

May 5,
2001Direct marketingSuccessories

72.7
%
69.2
%Retail Company-owned stores

19.3
%
19.0
%Sales to franchisees

5.8
%
8.4
%Other channels

2.2
%
3.4
%


The
gross profit margins for direct marketing and retail channels vary due to differences in product mix and volume discounts based on order size. The gross profit margin for sales to
the franchisees is lower than the direct marketing and retail channels since these sales are generally made at wholesale prices.

Due
to the continuing soft economic climate and the substantial loss before income taxes and extraordinary items of $5,712,000 sustained in fiscal 2001, the Company retained the
professional services of Duff & Phelps, LLC, an investment banking and financial advisory firm. Duff & Phelps is assisting the Company in identifying and assessing strategic
alternatives, which are currently focussed on pursuing the sale of the Company. No assurance can be given that the sale of the Company shall be effected.

The
Company will continue its primary focus on sales growth in the direct marketing channel and support of its current franchisees. In the process of reviewing its strategic options, the
Company decided on May 7, 2002, to take immediate steps to develop a plan to close all of its 100% owned retail stores. As a result, in the second quarter 2002, the Company will identify the
stores to be closed, evaluate the associated asset impairment charges and report the operating results from the respective stores as discontinued operations. The cost of store closures will be
dependent upon the terms and conditions of lease termination to be negotiated with landlords.

13

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At
the end of the first quarter in fiscal 2002, the Company discontinued contract framing services for third party products. Any future contract framing services shall be limited
primarily to large and multiple unit production runs. Net sales and operating results for contract framing were not material.

RESULTS OF OPERATIONS

The following table sets forth the results of operations for the three months ended May 4, 2002 and May 5, 2001:

|                                 |  | Three Months Ended |        |   |       |   |  
|-------------------------------- |  | ------------------ | ------ | - | ----- | - | -
|
|
|
|Net product sales                |  | $                  | 10,076 |   | 100.0 |   | $
|Cost of goods sold               |  |                    | 4,808  |   | 47.7  |   |  
|                                 |  |                    |        |   |       |   |  
|Gross profit on product sales    |  |                    | 5,268  |   | 52.3  |   |  
|Fees, royalties and other income |  |                    | 188    |   | 1.9   |   |  
|                                 |  |                    |        |   |       |   |  
|Gross margin                     |  |                    | 5,456  |   | 54.2  |   |  
|Operating expenses               |  |                    | 6,456  |   | 64.1  |   |  
|                                 |  |                    |        |   |       |   |  
|Loss from operations             |  |                    | (1,000 | ) | (9.9  | ) |  
|Interest and other expenses      |  |                    | 69     |   | 0.7   |   |  
|                                 |  |                    |        |   |       |   |  
|Loss before income taxes         |  |                    | (1,069 | ) | (10.6 | ) |  
|Income tax expense (benefit)     |  |                    | (106   | ) | (1.1  | ) |  
|                                 |  |                    |        |   |       |   |  
|Loss before extraordinary item   |  |                    | (963   | ) | (9.5  | ) |  
|Extraordinary loss               |  |                    |       |   |      |   |  
|                                 |  |                    |        |   |       |   |  
|Net loss                         |  | $                  | (963   | ) | (9.5  | ) | $
|                                 |  |                    |        |   |       |   |  

Three Months Ended May 4, 2002 (First Quarter 2002), Compared To Three Months Ended May 5 2001 (First Quarter 2001)

Net product sales were $10,076,000 in the current year first quarter ended May 4, 2002, compared to $11,086,000 for the corresponding first quarter ended
May 5, 2001. The $1,010,000 or 9.1% decrease in net sales was comprised of direct marketingSuccessoriesof $344,000 or 4.5%, retail
Company-owned stores of $157,000 or 7.5%, sales to franchisees of $341,000 or 36.8%, and other channels of $168,000 or 44.1%.

The
Company's customers are predominantly mid to large size businesses, which appear to remain cautious with their discretionary spending. The Company started experiencing lower response
rates from prospect catalog circulation in direct marketingSuccessorieschannel in the first quarter 2001. As a result, starting in the second quarter
2001, the Company started to focus its efforts on refining its catalog circulation strategy and aggressively targeting opportunities in niche markets. In the first quarter 2002, the Company reduced
its catalog circulation by 40% which was primarily in prospect catalogs. The decrease in direct marketing net sales in the first quarter 2002 was in part due to the refined catalog circulation
strategy which, however, had a positive impact to the operating profit for the channel as a result of improved return on catalog advertising costs. Internet sales, which are included in the direct
marketingSuccessorieschannel, increased by 20.4% from year to year. Internet sales represented 26.9% of the total direct marketing sales in the first
quarter 2002 and were 21.4% in the prior year first quarter 2001. Internet continues to be a significant marketing and sales opportunity for the Company. The comparable store sales in retail
Company-owned stores decreased by 15.2% in the current year first quarter in comparison to prior year first quarter. The decrease in sales to franchisees

14

---

can be primarily attributed to 16 fewer stores in operation in the current year first quarter in comparison to prior year first quarter. The decrease in net sales in the other channels from year to
year can be primarily attributed to the Company's decision made in first quarter 2002 to discontinue contract framing services for third party products.

Gross
margin decreased in the current year first quarter 2002 to $5,456,000 from $6,112,000 in prior year first quarter 2001. The decrease in gross margin can be primarily attributed to
decline in net sales from year to year. To encourage consumer spending, the Company continues to provide promotional and permanent discounting of various products. The gross profit, as a percentage of
net sales, for the first quarter 2002 in comparison to first quarter 2001 was negatively impacted by additional discounting
provided to customers and higher fixed production costs due to lower sales volume, which were significantly offset by lower material costs.

Operating
expenses decreased in the current year first quarter 2002 to $6,456,000 from $7,365,000 in the prior year first quarter 2001. The decrease in operating expenses from year to
year of $909,000 is primarily in catalog advertising costs due to reduced and refined catalog circulation, variable operating expenses as a result of lower sales volume, and corporate payroll expenses
related to workforce reductions instituted in the prior year third quarter 2001. The Company's management continues to evaluate its operating expenses due to the softness in sales. In the current year
second quarter 2002, the Company instituted further workforce reduction which is expected to provide annualized payroll savings of approximately $1,100,000. The severance costs associated with the
above mentioned workforce reduction of approximately $93,000 will be recorded in the second quarter 2002.

In
the current year first quarter 2002, the Company recorded an income tax benefit of $106,000 related to income tax refund claims approved and received from amended state returns.

In
the prior year first quarter 2001, the Company recorded an extraordinary loss of $219,000 related to early debt extinguishment. As a result of pre-payment of the term loan
and fixed rate loan with the Company's bank, the Company recorded an additional expense to write-off the unamortized debt discount associated with the term loan and fixed rate loan.

In
the current year first quarter 2002, the Company had a net loss of $963,000 in comparison to a net loss of $1,562,000 in the prior year first quarter 2001. The improved operating
results, in the light of lower sales volume, can be attributed to the Company's efforts to streamline operating expenses and utilization of cost effective marketing strategies to improve the operating
results of the Company.

LIQUIDITY AND CAPITAL RESOURCES

The Company's ongoing cash requirements are for working capital, capital expenditures and debt service. The Company expects to rely on cash generated from its
operations, supplemented by borrowings available on the revolving credit loan, to fund its cash requirements.

Operating
activities provided cash of $267,000 for the three months ended May 4, 2002 (first quarter 2002), compared to $167,000 for the three months ended May 5, 2001
(first quarter 2001). The increase in cash flow in the first quarter 2002 in comparison to the first quarter 2001 can be attributed to decrease in loss from operations, and changes in prepaid catalog
expenses and accrued expenses balances offset by changes in inventory and accounts receivable balances.

Investing
activities provided cash of $4,000 in the first quarter 2002, compared to used cash of $69,000 in the first quarter 2001. The principal use of cash in investing activities is
capital expenditures and the source of cash is proceeds from sales of property and equipment. The Company's current credit facility limits capital expenditures to $1 million for the fiscal
year.

Financing
activities used cash of $368,000 in the first quarter 2002 and $1,554,000 in the first quarter 2001. Scheduled debt repayments on the term note and net repayments on the
revolving credit

15

---

loan were the principal uses of cash. Proceeds from net borrowings on the revolving credit loan were the primary source of cash. In the prior year first quarter 2001, the Company prepaid its term
loan and fixed rate loan with the bank as planned in an effort to strengthen the Company's balance sheet and debt to equity position. The above noted loans had payment terms through June 2003.

On
June 13, 2002, the Company obtained an amendment to the credit facility to adjust and modify certain financial covenants which were retroactive to the first quarter ended
May 4, 2002. At May 4, 2002, the Company was in compliance with the debt covenants of the credit facility agreement. See footnote 4 in the notes to the financial statements for further
information.

The
Company believes that internally generated funds and the credit facility will be sufficient to meet its current operating needs, including funds required to close all of the 100%
owned retail stores, fund debt service and make anticipated capital expenditures.

SEASONALITY

The Company's business is subject to seasonal variations in demand. Historically, a significant portion of the Company's sales and net income have been realized
during the period from October through January. The effects of seasonality are greater in the Company's retail operations than the other segments of its business. Most operating expenses are incurred
evenly throughout the year, although some selling and administrative expenses are variable depending on sales, and direct marketing catalog advertising expenses as a percentage of sales are higher in
the first calendar quarter due to more prospecting. The Company's quarterly operating results may also vary depending upon such factors as catalog mailings and the timing of new product introductions
and promotions by the Company. The Company's cash requirements generally reach a seasonal peak in the second half of the fiscal year to finance increased inventory levels needed to meet the third and
fourth quarter sales demand.

INFLATION

The Company does not believe that inflation has had a material impact on its operations.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q report contains forward-looking statements which the Company believes are within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be deemed to include, among other things, statements relating to anticipated
financial performance, the management team, management's long-term performance goals, channels, programs to reduce costs and enhance asset utilization, banking arrangement and terms,
realization of deferred tax assets, as well as statements relating to the Company's operational and growth strategies. Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be accurate, and actual results could differ materially from those addressed in forward-looking
statements contained in this Form 10-Q report. Potential risks and uncertainties include such factors as the financial strength of the economy, and the retail and catalog industries
in general, changes in consumer confidence, the level of consumer spending on motivational-type products, the competitive pricing environment within the markets that the Company
distributes its products, the level of the Company's success in continuing to control costs and the Company's ability to increase certain margins through economies of scale. Additional risks and
uncertainties include the Company's ability to develop and introduce successful new products, generate funds sufficient to meet its current operating and capital needs, identify, pursue or realize any
benefit from any strategic alternatives that may be considered, including the potential sale of the Company, and successfully exit the retail channel (100% Company-owned stores). Investors are also
directed to consider other risks

16

---

and uncertainties discussed in the Company's public announcements, reports to shareholders and documents filed by the Company with the Securities and Exchange Commission, including but not limited to
Reports on Forms 10-K, 8-K and 10-Q. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be
placed on such statements. The Company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date on this report.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to market risk associated with adverse changes in interest rates and foreign currency exchange rates, but does not hold any market risk
sensitive instruments for trading purposes. The Company uses variable rate debt, as described in Note 3 of the Notes to Consolidated Financial Statements. At May 4, 2002, principal
exposed to interest rate risk is limited to $1,258,000 in variable rate debt. The variable rate debt level varies periodically and the maximum borrowings available at May 4, 2002 was
$3,545,000. The impact of a 1% change in interest rates on the variable rate debt is approximately $13,000. The Company's exposure to foreign currency exchange rate risk relates primarily to the
financial position and results of operations in Canada. The Company's exposure to foreign currency exchange rate risk is difficult to estimate due to factors such as balance sheet accounts, and the
existing economic uncertainty and future economic conditions in the international marketplace. The Company does not expect significant impact from foreign currency exchange rate risk. The Company's
Canadian operations annual sales are approximately $2,500,000.

17

---



PART II. OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

On September 25, 2001 the Company filed a complaint against TGMK Group, Inc., TMK Group, Inc. and Terry Keenan. ("Defendants") in the United
States District Court of the Northern District of Illinois in Cook County, Chicago, Illinois (Case No. 01C7405). The Company alleged that: Defendants executed franchise agreements, including
personal guarantees, to operate Successories stores in Illinois; Mr. Keenan executed promissory notes to the order of the Company; Defendants breached the franchise agreements and promissory
notes by non-payment of monies due the Company; and Defendants are infringing on the Company's federally registered trademarks and service marks. The relief sought by the Company includes:
(i) a temporary restraining order, a preliminary injunction and a permanent injunction prohibiting, enjoining and/or restraining Defendants from infringing on the Company's intellectual
property; (ii) an order directing Defendants to eliminate all advertising under the Successories name or the Company's intellectual property; (iii) an order directing Defendants to
render an accounting to the Company of the gross sales by Defendants under the infringing marks; (iv) an award of three times the damages to the Company's goodwill and intellectual property
resulting from Defendants infringing use of the Company's name and marks; (v) an award of punitive damages from Defendants of at least $500,000; (vi) an award from Defendants of
attorneys' fees, expenses and costs; (vii) an award of the full amount due from Defendants under the franchise agreements and the promissory notes of at least $480,350 as of
September 25, 2001; and (viii) such other further and different relief as the Court deems just and appropriate. A preliminary injunction against the Defendants became effective on
October 10, 2001. On or about January 31, 2002, the Defendants filed an answer to the complaint and a counterclaim. In the counterclaim, Defendants claim that the Company:
(i) breached a duty of good faith and fair dealing, and breached the asset purchase agreement between the parties; (ii) had a duty to correct and supplement historical sales information
which it knew to be false or inaccurate; (iii) violated the Consumer Fraud and Deceptive Business Practices Act by fraud and misrepresentation; (iv) engaged in a prohibited practice of
selling an unregistered franchise; and (v) converted fixtures, inventory and product of the Defendants. Defendants seek the following relief: (i) recission of the asset purchase and
franchise agreements; (ii) compensatory damages in excess of $1,000,000; (iii) treble damages; (iv) attorneys' fees and costs; and (v) such other further and different
relief as the Court deems just and appropriate. On February 22, 2002, the Company moved to compel arbitration of Defendants' counterclaims and affirmative defenses. On March 7, 2002,
Defendants responded to the Company's motion and the Company replied to the response on March 18, 2002. The Motion was fully briefed on March 20, 2002. On April 8, 2002, the Court
granted the Company's motion to compel arbitration and included all pending claims before the Court.

On
March 12, 2002, the Company filed a complaint against Sloan Enterprises, L.C., J. Sloan Cownie and Mindy Cownie in the Circuit Court of The Eighteenth Judicial Circuit in
DuPage County, Wheaton, Illinois (Case No. 2002L000261). The Company alleged that: Defendants executed franchise agreements, including personal guarantees, to operate Successories stores in
Iowa and Nebraska; and breached the franchise agreements by non-payment of monies due the Company. The Company sought: (i) $85,956 plus interest; (ii) attorneys' fees,
expenses and costs; and (iii) such other further and different relief as the Court deems just and appropriate. On June 10, 2002, the Company received a default judgment against the
defendants.

Except
as noted above, there are no other material pending legal proceedings against the Company. The Company is, however, at times involved in routine litigation arising in the ordinary
course of its business and, while the results of such proceedings cannot be predicted with certainty, the Company believes that the final outcome of such matters will not have a material adverse
effect on the Company's consolidated financial position or results of operations.

18

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ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K



19

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SIGNATURES

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

|                    |  | SUCCESSORIES, INC.(Registrant)
|------------------- |  | ------------------------------
|                    |  |                               
|Date: June 17, 2002 |  | By:                           
|                    |  |                               
|Date: June 17, 2002 |  | By:                           

20

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INDEX TO EXHIBITS

|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                    
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1         |  | Articles of Incorporation of RegistrantAmended and Restated as of October 28, 1999(14)                                                                                                                                                                                                                                                        
|3.3         |  | By-laws of Registrant(11)                                                                                                                                                                                                                                                                                                                      
|3.4         |  | Amended and Restated Certificate of Designation of Series A and Series B Convertible Preferred Stock(12)                                                                                                                                                                                                                                       
|4.1         |  | Specimen Common Stock Certificate(11)                                                                                                                                                                                                                                                                                                          
|4.2         |  | Specimen Series A Convertible Preferred Stock Certificate(13)                                                                                                                                                                                                                                                                                  
|4.3         |  | Specimen Series B Convertible Preferred Stock Certificate(13)                                                                                                                                                                                                                                                                                  
|10.1        |  | Form of Franchising Agreement(11)                                                                                                                                                                                                                                                                                                              
|10.2        |  | Stock Option Instrument for Arnold M. Anderson dated November 19, 1991(1)                                                                                                                                                                                                                                                                      
|10.3        |  | Successories, Inc. Amended and Restated Stock Option Plan(17)                                                                                                                                                                                                                                                                                  
|10.4        |  | Joint Venture Agreement with Morrison DFW, Inc. and related documents(3)                                                                                                                                                                                                                                                                       
|10.5        |  | Indemnification Agreement dated April 7, 1999 between the Company and Arnold M. Anderson(10)                                                                                                                                                                                                                                                   
|            |  | Indemnification Agreements in the form filed were also entered into by the Messrs. Seamas T. Coyle, Timothy C. Dillon, C. Joseph LaBonte, Steven B. Larrick, Michael H. McKee, Mervyn C. Phillips, Jr.,
Guy E. Snyder, Gary J. Rovansek, R. Scott Morrison, Jr., Jack Miller, Howard I. Bernstein, Larry A. Hodges, and Leslie Nathanson Juris.
|10.6        |  | Form of Subordinated Note, Common Stock Purchase Warrant and Subordination Agreement relating to issuance of $1,500,000 Subordinated Notes and Warrants to purchase 120,000 shares of the Company's Common Stock(4)                                                                                                                            
|10.7        |  | Common Stock Option Agreement granted to Arnold M. Anderson and Incentive Stock Option Agreement granted to Arnold M. Anderson(4)*                                                                                                                                                                                                             
|10.8(a)     |  | Employment Agreement with Arnold M. Anderson dated March 1, 1996(5)*                                                                                                                                                                                                                                                                           
|10.8(b)     |  | Amendment to Employment Agreement with Arnold M. Anderson dated March 1, 1996(14)*                                                                                                                                                                                                                                                             
|10.8(c)     |  | Amendment to Employment Agreement with Arnold M. Anderson dated January 14, 1997(14)*                                                                                                                                                                                                                                                          
|10.8(d)     |  | Addendum to Employment Agreement with Arnold M. Anderson dated February 16, 2000(14)*                                                                                                                                                                                                                                                          
|10.8(e)     |  | Amendment to Employment Agreement with Arnold M. Anderson dated October 1, 2001(20)*                                                                                                                                                                                                                                                           
|10.9        |  | Employment Agreement with Michael H. McKee dated June 1, 1999(11)*                                                                                                                                                                                                                                                                             
|10.10       |  | Form of Subordinated Note Extensions, Stock Options and Subordination Agreement relating to the extension of $100,000 of Subordinated Notes, and options to purchase 10,000 shares of the Company's Common Stock(2)                                                                                                                            
|10.11       |  | Credit Agreement between the Company and The Provident Bank dated as of June 20, 1997(6)                                                                                                                                                                                                                                                       
|10.12       |  | First Amendment to Credit Agreement between the Company and The Provident Bank dated as of July 16, 1997(6)                                                                                                                                                                                                                                    
|            |  |                                                                                                                                                                                                                                                                                                                                                

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|10.13 |  | Lease Agreement between LaSalle National Trust, N.A. as Trustee under Trust No. 120358 and Celex Group, Inc.(7)                   
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------
|10.14 |  | Second Amendment to Credit Agreement between the Company and The Provident Bank dated as of May 14, 1998(7)                       
|10.15 |  | Third Amendment to Credit Agreement between the Company and The Provident Bank dated as of September 1, 1998(8)                   
|10.16 |  | Employment Agreement with Gary Rovansek dated October 29, 1998(8)                                                                 
|10.17 |  | Fourth Amendment to Credit Agreement between the Company and The Provident Bank dated as of April 28, 1999(10)                    
|10.18 |  | Warrants to Purchase Common Stock of the Company granted to Provident Financial Group, Inc. dated as of April 29, 1999(10)        
|10.19 |  | Preferred Stock Purchase Agreement, dated as of May 28, 1999, by and among the Company and the investors(9)                       
|10.20 |  | Registration Rights Agreement, dated as of May 28, 1999, by and among the Company and the investors(9)                            
|10.21 |  | Preferred Stock Purchase Agreement, dated as of October 18, 1999, by and among the Company and the investors(12)                  
|10.22 |  | Amendment No. 1 to the Registration Rights Agreement, dated as of October 18, 1999, by and among the Company and the investors(12)
|10.23 |  | Fifth Amendment to Credit Agreement between the Company and The Provident Bank dated as of April 6, 2000(15)                      
|10.24 |  | Sixth Amendment to Credit Agreement between the Company and The Provident Bank dated as of August 28, 2000(16)                    
|10.25 |  | Joint Venture Agreement with Celebrating Excellence of Minnesota, Inc. and related documents(18)                                  
|10.26 |  | Seventh Amendment to Credit Agreement between the Company and The Provident Bank dated as of September 4, 2001(19)                
|10.27 |  | Retainer Agreement between the Company and Jack Miller dated April 17, 2001(19)                                                   
|10.28 |  | Eighth Amendment to Credit Agreement between the Company and The Provident Bank dated as of December 3, 2001(20)                  
|21.1  |  | Subsidiaries of the Registrant (filed herewith)                                                                                   

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