U.S. 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 Quarter Ended: January 31, 2001

                         Commission File Number: 0-29671


                               SGD HOLDINGS, LTD.
        (Exact name of small business issuer as specified in its charter)

                         GOLDONLINE INTERNATIONAL, INC.
                     (Former name of small business issuer)

      Delaware                                                   13-3986493
(State of Incorporation)                                    (IRS Employer ID No)


                       111 Rhodes Street, Conroe, TX 77301
                     (Address of principal executive office)

                                  409-756-6888
                           (Issuer's telephone number)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ].

The number of shares outstanding of registrant's common stock, par value $.0001
per share, as of January 31, 2001 was 96,084,408.

Transitional Small Business Disclosure Format (Check one):  Yes [ ]  No [X].


<PAGE>
SGD HOLDINGS, LTD. AND SUBSIDIARIES

                                      INDEX

                                                                          Page
                                                                           No.

Part I.      Financial Information

    Item 1.  Condensed Consolidated Balance Sheet -                         3
             January 31, 2001

             Condensed Consolidated Statements of Operations -              4
             Three and Six Months Ended January 31, 2001 and 2000

             Condensed Consolidated Statement of Stockholders' Equity -     5
             Six Months Ended January 31, 2001

             Condensed Consolidated Statements of Cash Flows -             6-7
             Six Months Ended January 31, 2001 and 2000

             Notes to Condensed Consolidated Financial Statements -        8-12
             Six Months Ended January 31, 2001 and 2000

     Item 2. Managements Discussion and Analysis of Financial Condition   13-14
             and Results of Operations

Part II.     Other Information                                              15


                                       2
<PAGE>
SGD HOLDINGS, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET
JANUARY 31, 2001
(UNAUDITED)

ASSETS
CURRENT ASSETS
 Cash and cash equivalents                                           $ 2,659,445
 Trade accounts receivable                                             1,903,008
 Marketable equity securities                                            979,400
 Note receivable                                                         350,000
 Inventory                                                             6,541,172
 Prepaid expenses and other assets                                       177,643
                                                                     -----------
                                                                      12,610,668
Property and equipment, net                                              403,362
Goodwill, net of amortization of $94,450                               3,748,893
Other assets                                                              28,438
                                                                     -----------
                                                                     $16,791,361
                                                                     ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
 Current installments of long-term debt and notes payable              5,120,295
 Accounts payable                                                        717,578
 Accrued expenses                                                         18,117
 Income taxes payable                                                     78,200
 Deferred income taxes payable                                           217,100
 Due to shareholder                                                        3,635
                                                                     -----------
                                                                       6,154,925
Deferred income taxes                                                      5,800
Long-term debt less current installments                               1,328,281

Stockholders' equity
 Common stock, $.0001 par value, 200,000,000 shares authorized,            9,608
 96,084,408 shares issued and outstanding
 Additional paid-in capital                                            8,581,336
 Retained earnings                                                       711,411
                                                                     -----------
                                                                       9,302,355
                                                                     -----------
                                                                     $16,791,361
                                                                     ===========
See accompanying notes to consolidated financial statements

                                       3
<PAGE>
<TABLE>

SGD HOLDINGS, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JANUARY 31, 2001 AND 2000
(UNAUDITED)
<CAPTION>

                                                       THREE MONTHS ENDED             SIX MONTHS ENDED
                                                          January 31,                    January 31,
                                                      2001          2000            2001           2000

<S>                                               <C>            <C>            <C>            <C>
Sales and revenues                                $ 5,130,882    $   501,483    $ 7,202,914    $   910,961
Cost of sales                                       3,451,801        391,330      4,789,506        554,370
                                                  ------------   ------------   ------------   ------------
  Gross profit                                      1,679,081        110,153      2,413,408        356,591
Selling, general and administrative expense         1,267,274        123,368      1,883,081        381,468
                                                  ------------   ------------   ------------   ------------
  Earnings (loss) from operations                     411,807        (13,215)       530,327        (24,877)

Other income (expense):
 Unrealized gain on marketable securities             110,395              -        650,395              -
 Interest expense                                    (101,768)        (7,123)      (141,606)       (11,754)
 Interest and other income                             34,844              -        143,989              -
                                                  ------------   ------------   ------------   ------------
                                                       43,471         (7,123)       652,778        (11,754)
                                                  ------------   ------------   ------------   ------------
Net earnings (loss) before income taxes               455,278        (20,338)     1,183,105        (36,631)
Income tax expense (benefit)                          154,900         (6,915)       349,200        (12,455)
                                                  ------------   ------------   ------------   ------------
Net earnings (loss)                               $   300,378    $   (13,423)   $   833,905    $   (24,176)
                                                  ============   ============   ============   ============

Net earnings (loss) per share                     $     0.003    $    (0.000)   $     0.009    $    (0.000)
                                                  ============   ============   ============   ============

Weighted average shares outstanding (thousands)      96,084.4       87,225.4       95,618.1       87,117.2
                                                  ============   ============   ============   ============

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


                                       4
<PAGE>
<TABLE>

SGD HOLDINGS, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JANUARY 31, 2001
(UNAUDITED)
<CAPTION>

                                               Common Stock               Paid-in          Retained
                                          Shares         Par Value        Capital          Earnings          Total
                                          ------         ---------        -------          --------          -----

<S>                                       <C>               <C>          <C>               <C>           <C>
Balance, August 1, 2000                   94,984,408        $ 9,498      $ 7,013,946       $(122,494)    $ 6,900,950
Sale of common stock for cash              1,100,000            110        1,567,390                       1,567,500
Net earnings                                                                                 833,905         833,905
                                       ------------------------------------------------------------------------------
Balance, January 31, 2001                 96,084,408        $ 9,608      $ 8,581,336       $ 711,411     $ 9,302,355
                                       ==============================================================================

See accompanying notes to consolidated financial statements.

                                       5
</TABLE>


<PAGE>
<TABLE>
SGD HOLDINGS, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JANUARY 31, 2001 AND 2000
(UNAUDITED)
<CAPTION>
                                                                 2001           2000

<S>                                                          <C>            <C>
Cash flows from operating activities
Net earnings (loss)                                          $   833,905    $   (24,176)
Adjustments to reconcile net earnings to net cash provided
    by operating activities:
 Depreciation and amortization                                   122,426         21,623
 Deferred income taxes                                           349,200        (12,455)
 Purchase of marketable equity securities                       (329,005)             -
 Unrealized gain on marketable equity securities                (650,395)             -
 Gain on sale of assets                                           (7,054)             -
 Changes in assets and liabilities:
  Accounts receivable                                           (318,542)       (52,520)
  Inventory                                                   (1,157,339)      (136,956)
  Other assets                                                  (135,536)             -
  Accounts payable and accrued expenses                         (690,808)       108,690
                                                             ------------   ------------
Net cash provided by operating activities                     (1,983,148)       (95,794)
                                                             ------------   ------------

CASH FLOWS PROVIDED BY INVESTING ACTIVITIES
 Capital expenditures                                            (32,604)       (14,225)
 Acquisition of HMS, net of cash acquired                     (2,817,872)             -
 Acquisition of assets at wholesale location                    (105,000)             -
                                                             ------------   ------------
Net cash provided by investing activities                     (2,955,476)       (14,225)
                                                             ------------   ------------

See accompanying notes to consolidated financial statements
</TABLE>
                                       6

<PAGE>
<TABLE>

SGD HOLDINGS, LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS, CONTINUED
SIX MONTHS ENDED JANUARY 31, 2001 AND 2000
(UNAUDITED)
(CONTINUED)
<CAPTION>

                                                                         2001            2000

<S>                                                                   <C>            <C>
Cash flows provided by financing activities
 Proceeds from sales of common stock                                    1,567,500        286,700
 Loans made                                                              (350,000)             -
 Loan proceeds                                                            480,235         50,000
 Repayment of notes payable and long-term debt                            (70,045)       (57,518)
 Increase (decrease) in amount due stockholder                              1,178         (4,352)
                                                                      ------------   ------------
Net cash provided by financing activities                               1,628,868        274,830
                                                                      ------------   ------------

NET INCREASE IN CASH AND CASH EQUIVALENTS                              (3,309,756)       164,811
CASH AND CASH EQUIVALENTS, beginning of period                          5,969,201         34,426
                                                                      ------------   ------------
CASH AND CASH EQUIVALENTS, end of period                              $ 2,659,445    $   199,237
                                                                      ============   ============


Supplemental Disclosures of Cash Flow Information

Interest paid                                                         $   141,606    $    11,754
                                                                      ============   ============

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

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES

Convertible promissory notes issued in acquisition of HMS             $ 2,500,000    $         -
Acquisition of transportation equipment with long-term debt           $    62,376    $    19,462
</TABLE>


See accompanying notes to consolidated financial statements.

                                       7
<PAGE>

SGD HOLDINGS, LTD. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JANUARY 31, 2001 AND 2000


1.       ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


         (a)      ORGANIZATION
                  Effective January 24, 2001, Goldonline International, Inc.
                  ("Registrant") changed its name to SGD Holdings, LTD. ("SGD"
                  or the "Company") pursuant to Section 253 of the General
                  Corporation Law of Delaware. The consolidated financial
                  statements include the accounts of SGD (formerly Transun
                  International Airways, Inc.) and its wholly owned subsidiaries
                  HMS Jewelry Company, Inc. ("HMS"), CON-TEX Silver Imports,
                  Inc. ("SILVER") and Jewelry Solutions & Commerce, Inc.
                  ("Jewelry") (formerly known as Gold Online.com, Inc.)
                  (collectively referred to as the "Company"). All material
                  intercompany accounts and transactions have been eliminated.

                  SGD was incorporated May 22, 1996 in Delaware and until June
                  1999 was a development stage company with plans to establish
                  itself as an air transport company providing non-scheduled air
                  service (charter flights) for tour operators, charter brokers,
                  cruise line casinos, theme parks and theme attractions.

                  SILVER was incorporated September 12, 1994 in Texas. Jewelry
                  was incorporated on February 3, 1999 in Delaware. HMS was
                  incorporated on October 12, 2000 in Texas.

                  On June 10, 1999, SGD acquired all of the issued and
                  outstanding common stock of SILVER and Jewelry. For accounting
                  purposes, the acquisitions have been treated as the
                  acquisition of SILVER and Jewelry by SGD with SILVER as the
                  acquiror (reverse acquisition). The historical financial
                  statements prior to June 10, 1999 are those of SILVER.

                  Effective October 1, 2000, the Company acquired HMS in a
                  transaction treated as a purchase for accounting purposes. The
                  results of operations of HMS will be included in the
                  consolidated financial statements commencing October 1, 2000.

         (b)      NATURE OF BUSINESS
                  SGD is now a holding company principally engaged in acquiring
                  and developing jewelry related businesses. SILVER is a company
                  involved in both the wholesale and retail fulfillment jewelry
                  business, principally silver, with retail locations in the
                  Houston area. The wholesale operation of SILVER consists of
                  both sales directly from its headquarters in Conroe, Texas a
                  satellite location in Dallas, Texas and from jewelry shows at
                  locations throughout the south central United States. Jewelry
                  established an Internet jewelry presence in the fall of 1999,
                  when Jewelry began selling gold, silver and diamond jewelry
                  through e-commerce sites, located at http://www.GoldOnline.com
                  and http://yahoo.com/goldonline. Jewelry now operates as an
                  e-commerce solutions provider to the Company's clients by
                  offering web hosting services and has begun offering back
                  office jewelry fulfillment services to the Company's
                  customers.

                  HMS is a national jewelry wholesaler, specializing in 18K, 14K
                  and 10K gold and platinum jewelry, with headquarters in
                  Dallas, Texas. HMS markets its products to a network of over
                  30,000 retail jewelers; through a catalog and telephone
                  ordering system and through its B2B online catalog
                  http://www.HMSgold.com.

                                       8
<PAGE>

         (c)      GENERAL
                  The financial statements included in this report have been
                  prepared by the Company pursuant to the rules and regulations
                  of the Securities and Exchange Commission for interim
                  reporting and include all adjustments (consisting only of
                  normal recurring adjustments) that are, in the opinion of
                  management, necessary for a fair presentation. These financial
                  statements have not been audited.

                  Certain information and footnote disclosures normally included
                  in financial statements prepared in accordance with generally
                  accepted accounting principles have been condensed or omitted
                  pursuant to such rules and regulations for interim reporting.
                  The Company believes that the disclosures contained herein are
                  adequate to make the information presented not misleading.
                  However, these financial statements should be read in
                  conjunction with the financial statements and notes thereto
                  included in the Company's Annual Report for the period ended
                  July 31, 2000, which is included in the Company's Form 10-KSB,
                  which was filed November 8, 2000 and the Company's 8-K dated
                  October 26, 2000 that reported the acquisition of HMS and
                  included the audited financial statements of HMS. The
                  financial data for the interim periods presented may not
                  necessarily reflect the results to be anticipated for the
                  complete year. Certain reclassifications of the amounts
                  presented for the comparative period have been made to conform
                  to the current presentation.


2.       ACQUISITION OF HMS JEWELRY COMPANY, INC.

         Effective October 1, 2000, the Company acquired, pursuant to an
         Agreement and Plan of Merger the operations and business of HMS, in
         exchange for $4,500,000 in cash and convertible promissory notes in the
         amount of $2,500,000. The purchase also included $47,500 in legal and
         professional costs. The transaction resulted in the merger of the
         business and operations of HMS Jewelry Co., Ltd., a Texas limited
         partnership and HMS Operating Company, a Texas corporation into a newly
         formed subsidiary of the Company, HMS Jewelry Company, Inc. HMS is a
         national jewelry wholesaler, specializing in 18K, 14K and 10K gold and
         platinum jewelry, with headquarters in Dallas, Texas. HMS markets its
         products to a network of over 30,000 retail jewelers, through a catalog
         and telephone ordering system and through its B2B online catalog
         http://www.HMSgold.com.

         The acquisition was accounted for by the purchase method of accounting
         and, accordingly, the statements of consolidated income include the
         results of HMS beginning October 1, 2000. The assets acquired and the
         liabilities assumed were recorded at estimated fair values as
         determined by the Company's management based on information currently
         available and on current assumptions as to future operations. The
         purchase price allocation is a preliminary estimate and the actual
         amounts could differ from this estimate. A summary of the assets
         acquired and liabilities assumed in the acquisition follows:

         Estimated fair values:
         Assets acquired                                          $   7,758,635
         Liabilities assumed                                         (4,428,077)
         Goodwill (amortized by the straight-line method
           over fifteen years)                                        3,716,942
                                                                  -------------
         Purchase price                                               7,047,500
         Less cash acquired                                          (1,729,628)
         Less convertible promissory notes                           (2,500,000)
                                                                  -------------
         Net cash paid                                            $   2,817,872
                                                                  =============


                                       9

<PAGE>

         Unaudited pro forma results of operations for the six months ended
         January 31, 2001 and 2000, as if the Company and HMS had been combined
         as of the beginning of the periods, follow. The pro forma results
         include estimates and assumptions which management believes are
         reasonable. However, pro forma results are not necessarily indicative
         of the results that would have occurred if the business combination had
         been in effect on the dates indicated, or which may result in the
         future.

                                                              Pro forma
                                                    Six months ended January 31,

         (Thousands except for per share data)         2001            2000

         Net sales                                  $  9,106        $ 10,397
         Net income                                 $    880        $    660
         Net income per common share
           Assuming dilution                        $   .009        $   .008
           Basic                                    $   .009        $   .008

3.       RELATED PARTY TRANSACTIONS

         SILVER leases its corporate headquarters from the principal shareholder
         of the Company at the rate of $2,200 per month. This amounted to
         $13,200 during each of the six-month periods ended January 31, 2001 and
         2000.

         The Company had received loans from its principal shareholder. The
         balance owed to the shareholder was $3,635 at January 31, 2001.

         HMS leases its facility from HMS Leasing Company, LLC, at the rate of
         $8,075 per month pursuant to a lease agreement that expires on October
         31, 2010. This amounted to $32,300 during the six-month period ended
         January 31, 2001, which includes the four months during which HMS was
         owned by the Company. HMS Leasing Company, LLC is owned by the
         president of HMS.

4.       MARKETABLE EQUITY SECURITIES

         FAS No. 115 "Accounting for Certain Investments in Debt and Equity
         Securities," requires that all applicable investments be classified as
         trading securities, available-for-sale securities or held-to-maturity
         securities. The Company has classified its investment in marketable
         equity securities as trading securities, which are reported at fair
         value. Fair value is defined to be the last closing price for the
         listed securities. The unrealized gains and losses, which the Company
         recognizes from its trading securities, are included in earnings. As of
         January 31, 2001, all of the Company's investment in marketable equity
         securities was in stock of one company. Due to the size of the
         investment and its limited trading volume, there can be no assurance
         that the Company will realize the value that is required to be used by
         FAS No. 115.

         The following summarizes the Company's investments at January 31, 2001:

         Trading securities:
                  Cost                                        $   329,005
                  Unrealized gain                                 650,395
                                                              -----------
                      Recorded value                          $   979,400
                                                              ===========

         The Company recognized an unrealized gain from trading securities
         during the six months ended January 31, 2001 in the amount of $650,395.

                                       10
<PAGE>

5.       PROPERTY AND EQUIPMENT

         Property and equipment consist of the following at January 31, 2001:


                  Computers and equipment                          $   294,566
                  Transportation equipment                             168,038
                  Furniture and fixtures                               140,841
                  Computer software                                     62,975
                  Web page                                              37,225
                  Leasehold improvements                                 1,840
                                                                   ------------
                                                                       705,485
                  Accumulated depreciation and amortization           (302,123)
                                                                   ------------
                                                                   $   403,362
                                                                   ============

6.       LONG-TERM DEBT AND NOTES PAYABLE
<TABLE>
<CAPTION>

         Long-term debt and notes payable at April 30, 2000 consist of the
         following:
<S>                                                                                   <C>
                  Note payable to bank with interest at 10% payable on demand or
                  July 1, 2001 if no demand is made; accrued interest payable
                  monthly; collateralized by all assets of SILVER and guaranteed
                  by the principal shareholder of the Company                         $   128,736

                  Line of credit and gold consignment facility with accrued
                  interest payable monthly; collateralized by all assets of HMS         3,457,973

                  Note payable to the mother of the president of HMS; payable
                  $105,000 on February 15, 2001 and $55,153 on February 15, 2002          160,153

                  Notes payable to the president of HMS Jewelry Company, Inc.,
                  due $1,250,000 on October 15,2001 and $1,250,000 on October
                  15, 2002, with interest payable monthly at 8%, collateralized
                  by the stock of HMS Jewelry Company, Inc.                             2,500,000

                  Note payable to the brother of the principal share-holder of
                  the Company due on demand with interest at 8%, unsecured,
                  convertible into common stock of the Company at $.01 per share           50,000

                  Note payable to company for financed insurance payable in
                  monthly installments of $3,030 through October 2001                      26,138

                  Notes payable to companies in monthly installments aggregating
                  $2,892, including interest at 9.8% to 11.6% ; collateralized
                  by transportation equipment                                             125,576
                                                                                      ------------
                                                                                        6,448,576

                                       11
<PAGE>

                  Current installments of long-term debt and notes payable              5,120,295
                                                                                      ------------

                  Long-term debt less current installments                            $ 1,328,281
                                                                                      ============
</TABLE>


6.       INCOME TAXES

         Federal income tax expense (benefit) for the six months ended January
         31, 2001 and 2000 consists of:
<TABLE>
<CAPTION>

                                                                  2001            2000
                  <S>                                         <C>            <C>
                  Federal income taxes                        $    78,200    $         -
                  Deferred income tax expense (benefit)           271,000        (12,455)
                                                              ------------   ------------
                                                              $   349,200    $   (12,455)
                                                              ============   ============
</TABLE>


         For the six months ended January 31, 2001 and 2000, actual income tax
         expense (benefit) applicable to earnings (loss) before income taxes is
         reconciled with the "normally expected" federal income tax expense
         (benefit) as follows:
<TABLE>
<CAPTION>

                                                                           2001            2000
                  <S>                                                  <C>            <C>
                  "Normally expected" income tax expense (benefit)     $   402,300    $   (12,455)
                  Change in valuation allowance                            (54,000)             -
                  Other                                                        900              -
                                                                       ------------   ------------
                                                                       $   349,200    $   (12,455)
                                                                       ============   ============
</TABLE>


         The deferred income tax assets and liabilities at January 31, 2001 are
         comprised of the following:
<TABLE>
<CAPTION>

                                                                   CURRENT     NONCURRENT
         <S>                                                   <C>            <C>
         Allowance for bad debts                               $     4,000    $        -
         Asset basis                                                    -          (5,800)
         Unrealized gain on trading securities                    (183,600)            -
                                                               ------------   ------------

              Net deferred income tax assets (liabilities)     $  (140,400)   $    (5,800)
                                                               ============   ============
</TABLE>



                                       12
<PAGE>


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

         From time to time, the Company may publish forward-looking statements
         relative to such matters as anticipated financial performance, business
         prospects, technological developments and similar matters. The Private
         Securities Litigation Reform Act of 1995 provides a safe harbor for
         forward-looking statements. All statements other than statements of
         historical fact included in this section or elsewhere in this report
         are, or may be deemed to be, forward-looking statements within the
         meaning of Section 27A of the Securities Act of 1933 and Section 21E of
         the Exchange Act of 1934. Important factors that could cause actual
         results to differ materially from those discussed in such
         forward-looking statements include: 1. General economic factors
         including, but not limited to, changes in interest rates, trends in
         disposable income; 2. Information and technological advances; 3. Cost
         of products sold; 4. Competition; and 5. Success of marketing,
         advertising and promotional campaigns.

         The Company has historically sold jewelry, principally silver, in its
         own retail outlets and wholesale to other jewelry stores. Jewelry
         established an Internet jewelry presence in the fall of 1999, when
         Jewelry began selling gold, silver and diamond jewelry through
         e-commerce sites, located at http://www.GoldOnline.com and
         http://yahoo.com/goldonline. Jewelry now operates as an e-commerce
         solutions provider to the Company's clients by offering web hosting
         services and has begun offering back office jewelry fulfillment
         services to the Company's customers.

         Effective October 1, 2000, the Company acquired, pursuant to an
         Agreement and Plan of Merger the operations and business of HMS, in
         exchange for $4,547,500 in cash (including $47,500 in legal and
         professional costs) and convertible promissory notes in the amount of
         $2,500,000. The transaction resulted in the merger of the business and
         operations of HMS Jewelry Co., Ltd., a Texas limited partnership and
         HMS Operating Company, a Texas corporation into a newly formed
         subsidiary of the Company, HMS Jewelry Company, Inc. HMS is a national
         jewelry wholesaler, specializing in 18K, 14K and 10K gold and platinum
         jewelry, with headquarters in Dallas, Texas. HMS markets its products
         to a network of over 30,000 retail jewelers, through a catalog and
         telephone ordering system and through its B2B online catalog
         http://www.HMSgold.com.

A.       LIQUIDITY AND CAPITAL RESOURCES

         The Company's working capital decreased from $6,657,979 at July 31,
         2000 to $6,455,743 at January 31, 2001. The decline in working capital
         is primarily the result of the purchase of HMS during the quarter ended
         October 31, 2000. HMS provided $3,557,445 in working capital at January
         31, 2001, whereas the Company used $5,797,500 ($4,547,500 in cash and
         $1,250,000 in current notes payable) in working capital to complete the
         acquisition. The Company also received net proceeds from the sale of
         common stock in the amount of $1,567,500 and recognized an unrealized
         gain from marketable equity securities in the amount of $650,395.

B.       RESULTS OF OPERATIONS

         SALES AND COST OF SALES - During the six months ended January 31, 2001
         sales increased $6,291,953 from $910,961 to $7,202,914 from the same
         year earlier period. The sales increase includes $5,712,122 from HMS
         during the four-month period ended January 31, 2001 and $579,831 from
         the operations of SILVER. SILVER had retail sales increases of $243,975
         (90%) and increases of $335,856 (62%) from wholesale sales. Wholesale
         sales increases are primarily the result of increased marketing efforts
         and an expanded inventory of products available. Retail sales increases
         are primarily due to opening two new locations, with new locations
         accounting for $186,294 of the increase and same store sales accounting
         for $57,681 of the increase.

                                       13
<PAGE>

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSE - During the six months
         ended January 31, 2001, selling, general and administrative expense
         increased $1,501,613 (394%) from the same year earlier period. The
         increase includes the selling, general and administrative expense of
         HMS for the four-month period ended January 31, 2001 in the amount of
         $952,398, which was not included in the year earlier period, and an
         increase of $549,215 from other operations, principally SILVER. The
         major components of the increase in SILVER's costs include payroll and
         commissions of $209,377, advertising of $40,176, rent of $62,244 and
         delivery costs of $26,619. HMS pro forma selling, general and
         administrative expenses increased $25,181 (2%) (from $1,290,646 to
         $1,315,827) during the six-month period ended January 31, 2001 as
         compared to the same prior year period.

         INTEREST EXPENSE - Interest expense increased $129,852 from $11,754 to
         $141,606 during the six-month period ended January 31, 2001, as
         compared to the same year earlier period. The increase includes
         $122,872 from HMS and $6,980 from SILVER, which relates to new debt
         incurred for transportation equipment after the first quarter of last
         year. On a pro forma basis, HMS interest expense declined to $179,761
         from $196,772 during the six-month period ended January 31, 2001 as
         compared to the same prior year period.

         INTEREST AND OTHER INCOME - Interest and other income of the Company
         increased during the six-month period ended January 31, 2001 from the
         same year earlier period to $143,989. The increase is attributed to the
         higher cash balances during the six-month period ended January 31,
         2001, which were primarily due to the sale of common stock through
         exercise of stock options and warrants.

         UNREALIZED GAIN ON MARKETABLE SECURITIES - The Company recognized an
         unrealized gain in the amount of $650,395 during the six months ended
         January 31, 2001, from its investment in marketable equity securities
         that have been classified as trading securities. The Company did not
         have an investment in marketable equity securities during the year
         ended July 31, 2000.

         INCOME TAXES - The Company recorded income tax expense in the amount of
         $349,200 during the six-month period ended January 31, 2001, and
         recorded a benefit of $12,455 during the year earlier period. The
         current year expense was $54,000 less than the expected tax would have
         been as a result of the Company reversing the valuation allowance,
         which it had previously recorded.




                                       14
<PAGE>


                           PART II - OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


         (a)      Exhibits - Not applicable.
         (b)      Reports on Form 8-K - None.


                                    SIGNATURE

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.

                                          SGD HOLDINGS, LTD.



Date: March 15, 2001                      By: /s/ James G. Gordon
                                              ----------------------------------
                                              James G. Gordon, President and
                                              Principal Accounting Officer