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

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

~~May~~January 3128, ~~2001~~2002 Date of Report (Date of earliest event reported)

SGI INTERNATIONAL
(Exact name of registrant as specified in its charter)

Utah
(State of other jurisdiction of incorporation)

2-93124
(Commission File Number)

33-0119035
(IRS Employer Identification No.)

1200 Prospect Street, Suite 325
La Jolla, CA 92037
(Address of principal executive offices and Zip Code)

(858) 551-1090
(Registrants telephone number including area code)

ITEM 52. ~~OTHER~~ACQUISTION ~~EVENTS~~OR DISPOSITION OF ASSETS.

On January 28, 2002, SGI International ("SGI") ~~and~~entered into ~~subsidiaries~~an Acquisition Agreement with the senior management of ~~AEI~~its ~~Resources~~subsidiary, ~~(collectively~~Assembly & Manufacturing Systems, Inc. ("~~AEI~~AMS"), ~~specifically,~~thereby ~~Bluegrass~~selling ~~Coal~~that subsidiary ~~Development~~to ~~Company and~~its ~~Americoal~~management. ~~Development~~AMS ~~Company~~has ~~have~~been ~~amended~~experiencing ~~effective~~difficulty ~~May~~obtaining sales ~~31,~~orders since September of 2001, ( due to the ~~"Tenth~~current ~~Amendment")~~economic ~~certain~~recession as ~~terms~~well ~~and~~as ~~conditions~~SGI's ofweakened ~~the~~financial ~~Amended~~condition. ~~and~~Selling AMS to its management ~~Restated~~gives ~~Acquisition~~AMS ~~Agreement~~and ~~(the~~its ~~"Acquisition~~management ~~Agreement)~~an ~~between~~opportunity ~~the~~to make sales otherwise improbable ~~parties,~~in ~~dated~~light ~~December~~of 9,SGI's ~~1999.~~present ~~The~~financial ~~Tenth~~condition, ~~Amendment~~and ~~essentially~~allows ~~provided~~ SGI ~~with~~an aopportunity to ~~extension~~realize ofvalue from the ~~May~~sale. ~~31,~~The ~~2001,~~aggregate ~~date~~sale toprice ~~June~~was 30$347, ~~2001~~525, consisting inof ~~which~~cash and notes payable. The sale price was within the set toof ~~satisfy~~values ~~various~~determined ~~terms~~by ~~and~~an ~~conditions~~independent ~~more~~third ~~fully~~party ~~described~~appraisal inof ~~the~~AMS's ~~Acquisition~~present ~~Agreement~~fair market value. The ~~extension~~notes ~~was~~payable ~~granted~~bear ~~under~~interest ~~substantially~~at ~~similar~~prime ~~terms~~plus 1%, are secured by the common stock of AMS, and ~~conditions~~are aspayable ~~those~~over ~~agreed~~a to5 inyear period. Further, the ~~previous~~notes ~~extension.~~payable ~~All~~are ~~other terms~~subject ~~and~~to ~~conditions~~specified ofreductions ~~the~~based ~~Acquisition~~on certain ~~Agreement~~specific ~~remain~~events detailed in ~~full~~the ~~force and~~Acquisition ~~effect~~Agreement.

~~ITEM~~(a) 7.Financial ~~FINANCIAL~~statements ~~STATEMENTS~~of ~~AND~~businesses ~~EXHIBITS~~acquired. Not applicable.

(ab) ~~Financial~~ ~~statements~~Pro offorma ~~businesses~~financial ~~acquired~~information. Not applicable.

(bc) ~~Pro~~ ~~forma financial information~~Exhibits. ~~Not applicable.~~

Exhibit No. Description 99.1 Acquisition Agreement (c1) ~~Exhibits~~ 99.2 Pledge Agreement (1) ~~None~~ 99.3 Form of Secured Promissory Note (1) ________________________

~~Pursuant to the requirements of the Securities Exchange~~ ~~Act~~(1) Filed ~~of 1934, the Registrant has duly caused this report to be signed on~~Herewith ~~its behalf by the undersigned, hereunto dully authorized.~~

~~SGI INTERNATIONAL~~ SIGNATURE

~~Michael~~Pursuant L.to ~~Rose~~the requirements of the Securities Exchange ~~Michael~~Act L.of ~~Rose~~1934, the Registrant has duly caused this report to be signed on ~~President~~its ~~and~~behalf ~~Chief~~by ~~Executive~~the ~~Officer~~undersigned, hereunto dully authorized.

SGI INTERNATIONAL

Michael L. Rose
Michael L. Rose
President and Chief Executive Officer

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