<PAGE>

                     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: APRIL 30, 2004

                         Commission File Number: 0-29671


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


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

                    4385 SUNBELT DRIVE, ADDISON, TEXAS 75001
                    ----------------------------------------
                     (Address of principal executive office)


                                 (972) 248-0266
                                 --------------
                           (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 April 30, 2004 was 45,526,824.

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



<PAGE>
SGD HOLDINGS, LTD. AND SUBSIDIARIES

Form 10-QSB Index

                                                                        Page No.
                                                                        --------

Part I.        Unaudited Financial Information

    Item 1.    Condensed Consolidated Balance Sheet -
               April 30, 2004                                               3

               Condensed Consolidated Statements of Operations -
               Three Months Ended April 30, 2004 and 2003                   4

               Condensed Consolidated Statements of Operations -
               Nine Months Ended April 30, 2004 and 2003                    5

               Condensed Consolidated Statements of Cash Flows -
               Nine Months Ended April 30, 2004 and 2003                    6

               Notes to Condensed Consolidated Financial Statements -      7-15

    Item 2.    Management's Discussion and Analysis of Financial
               Condition and Results of Operations                        16-21

    Item 3.    Controls and Procedures                                      22

Part II.       Other Information                                          23-27




                                       2

<PAGE>
<TABLE>


SGD HOLDINGS, LTD. AND SUBSIDIARIES

Condensed Consolidated Balance Sheet
April 30, 2004
(Unaudited)
<S>                                                                        <C>
ASSETS:
Current assets:
 Cash and cash equivalents                                                 $ 1,306,664
 Trade accounts receivable, net of allowance of $61,752                      1,268,513
 Inventory                                                                   2,332,204
 Due from related parties                                                       42,053
 Deferred income taxes                                                         235,600
 Prepaid expenses and other assets                                             209,593
                                                                          -------------
  Total current assets                                                       5,394,627
Property and equipment, net                                                    261,621
Goodwill, net                                                                3,718,439
Marketable equity securities                                                     7,100
Other assets                                                                    32,392
                                                                          -------------
     Total assets                                                          $ 9,414,179
                                                                          =============

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
 Notes payable                                                             $ 1,105,530
 Notes payable - related parties                                             1,350,488
 Accounts payable                                                              675,806
 Accrued expenses                                                               66,464
 Due to related parties                                                        243,893
                                                                          -------------
  Total current liabilities                                                  3,442,181
Deferred income taxes payable                                                   10,600
                                                                          -------------
     Total liabilities                                                       3,452,781
                                                                          -------------

Minority interest                                                                    -

Commitments and contingencies

Stockholders' equity:
 Common stock, $.0001 par value; 200,000,000 shares authorized;
   45,526,824 shares issued and outstanding                                      4,553
 Additional paid-in capital                                                  9,918,549
 Accumulated deficit                                                        (3,682,954)
 Accumulated other comprehensive loss                                         (278,750)
                                                                          -------------
   Total stockholders' equity                                                5,961,398
                                                                          -------------
     Total liabilities and stockholders' equity                            $ 9,414,179
                                                                          =============

See accompanying notes to condensed consolidated financial statements.

                                       3
</TABLE>

<PAGE>
<TABLE>

SGD HOLDINGS, LTD. AND SUBSIDIARIES
<CAPTION>

Condensed Consolidated Statements of Operations
Three Months Ended April 30, 2004 and 2003
(Unaudited)

                                                         2004           2003
<S>                                                   <C>            <C>

Sales and revenues                                    $ 2,576,881    $ 2,264,293
Cost of sales                                           1,905,723      1,752,289
                                                      ------------   ------------
  Gross profit                                            671,158        512,004
Selling, general and administrative expense               815,507        690,436
                                                      ------------   ------------
  Loss from operations                                   (144,349)      (178,432)

Other income (expense):
  Unrealized gain (loss) on marketable securities          45,857         (1,943)
  Loss on sale of marketable securities                   (47,750)            --
  Interest expense                                        (14,055)       (31,054)
  Interest expense - related parties                      (27,257)       (66,600)
  Gold consignment fee                                    (31,629)       (52,930)
  Interest and other income (expense)                        (558)         5,199
                                                      ------------   ------------
    Total other income (expense)                          (75,392)      (147,328)
                                                      ------------   ------------
Loss from continuing operations before income taxes      (219,741)      (325,760)
Income tax benefit                                        (71,100)       (54,800)
                                                      ------------   ------------
Loss from continuing operations                          (148,641)      (270,960)
                                                      ------------   ------------
Discontinued operations:
 Loss from operation of discontinued operations                --       (671,559)
 Income tax benefit                                            --             --
                                                      ------------   ------------
     Loss on discontinued operations                           --       (671,559)
                                                      ------------   ------------
Net loss before minority interest                        (148,641)      (942,519)
Minority interest                                             200             --
                                                      ------------   ------------
Net loss                                              $  (148,441)   $  (942,519)
                                                      ============   ============
Basic and diluted loss per share:
  Continuing operations                               $     (0.00)   $     (0.01)
  Discontinued operations                                      --          (0.02)
                                                      ------------   ------------
     Net loss per share                               $     (0.00)   $     (0.03)
                                                      ============   ============

Weighted average shares outstanding (thousands)          43,337.9       32,912.1
                                                      ============   ============

See accompanying notes to condensed consolidated financial statements.


                                       4
</TABLE>

<PAGE>

<TABLE>

SGD HOLDINGS, LTD. AND SUBSIDIARIES
<CAPTION>
Condensed Consolidated Statements of Operations
Nine Months Ended April 30, 2004 and 2003
(Unaudited)

                                                                     2004            2003
<S>                                                              <C>             <C>
Sales and revenues                                               $ 10,331,588    $ 10,907,808
Cost of sales                                                       7,741,380       8,211,108
                                                                 -------------   -------------
  Gross profit                                                      2,590,208       2,696,700
Selling, general and administrative expense                         2,468,888       2,165,735
                                                                 -------------   -------------
  Earnings from operations                                            121,320         530,965

Other income (expense):
  Unrealized gain (loss) on marketable securities                      85,067          (7,407)
  Loss on sale of marketable securities                               (69,783)             --
  Interest expense                                                    (39,536)        (82,113)
  Interest expense - related parties                                 (119,457)       (118,600)
  Gold consignment fee                                               (102,431)       (143,825)
  Interest and other income                                             5,373           6,437
                                                                 -------------   -------------
    Total other income (expense)                                     (240,767)       (345,508)
                                                                 -------------   -------------
Earnings (loss) from continuing operations before income taxes       (119,447)        185,457
Income tax expense (benefit)                                          (34,400)        120,500
                                                                 -------------   -------------
Earnings (loss) from continuing operations                            (85,047)         64,957
                                                                 -------------   -------------
Discontinued operations:
 Loss from operation of discontinued operations                            --      (1,228,166)
 Income tax benefit                                                        --        (187,600)
                                                                 -------------   -------------
     Loss on discontinued operations                                       --      (1,040,566)
                                                                 -------------   -------------
Net loss before minority interest                                     (85,047)       (975,609)
Minority interest                                                         200              --
                                                                 -------------   -------------
Net loss                                                         $    (84,847)   $   (975,609)
                                                                 =============   =============

Basic and diluted loss per share:
  Continuing operations                                          $      (0.00)   $       0.00
  Discontinued operations                                                  --           (0.03)
                                                                 -------------   -------------
     Net loss per share                                          $      (0.00)   $      (0.03)
                                                                 =============   =============

Weighted average shares outstanding (thousands)                      38,663.0        29,732.4
                                                                 =============   =============

See accompanying notes to condensed consolidated financial statements.

                                              5
</TABLE>

<PAGE>
<TABLE>

SGD HOLDINGS, LTD. AND SUBSIDIARIES
<CAPTION>

Condensed Consolidated Statements of Cash Flows
Nine Months Ended April 30, 2004 and 2003
(Unaudited)

                                                                                  2004          2003
<S>                                                                           <C>            <C>
Cash flows provided (used) by operating activities:
Net loss                                                                      $   (84,847)   $  (975,609)
  Loss from discontinued operations                                                    --     (1,040,566)
                                                                              ------------   ------------
     Earnings (loss) from continuing operations                                   (84,847)        64,957

Adjustments to reconcile net earnings (loss) to net cash provided
 (used) by operating activities:
  Depreciation and amortization                                                    57,520         51,658
  Deferred income taxes                                                           (34,400)       120,500
  Unrealized (gain) loss on marketable securities                                 (85,067)         7,407
  Proceeds from sale of marketable securities                                      23,797             --
  Loss on sale of marketable securities                                            69,783             --
  Common stock issued for services                                                     --         50,000
  Minority interest                                                                  (200)            --
  Changes in assets and liabilities:
    Accounts receivable                                                           (77,139)      (226,347)
    Inventory                                                                     114,964       (522,424)
    Other assets                                                                  178,815        112,379
    Accounts payable and accrued expenses                                         340,200       (267,077)
                                                                              ------------   ------------
Net cash provided (used) by continuing operations                                 503,426       (608,947)
  Net cash used by discontinued operations                                             --       (382,855)
                                                                              ------------   ------------
     Net cash provided (used) by operations                                       503,426       (991,802)
                                                                              ------------   ------------

Cash flows used by investing activities:
  Capital expenditures                                                            (82,014)       (75,326)
  Cash received in excess of cash paid for Gem Pak                                  6,214             --
                                                                              ------------   ------------
Net cash used by continuing operations                                            (75,800)       (75,326)
  Net cash used by discontinued operations                                             --         (7,205)
                                                                              ------------   ------------
     Net cash used by investing activities                                        (75,800)       (82,531)
                                                                              ------------   ------------

Cash flows provided (used) by financing activities:
  Amounts due related parties                                                     100,736         31,333
  Proceeds from sale of common stock                                               36,000        200,000
  Loans made to Gem Pak before acquisition                                       (148,477)            --
  Funds transferred to discontinued operations                                         --        (14,590)
  Repayment of long-term debt and notes payable                                    (8,049)       (12,876)
                                                                              ------------   ------------
Net cash provided (used) by continuing operations                                 (19,790)       203,867
  Net cash provided by discontinued operations                                         --        390,059
                                                                              ------------   ------------
     Net cash provided (used) by financing activities                             (19,790)       593,926
                                                                              ------------   ------------

Net increase (decrease) in cash and cash equivalents                              407,836       (480,407)
Cash and cash equivalents, beginning of period                                    898,828      1,156,355
                                                                              ------------   ------------
Cash and cash equivalents, end of period                                      $ 1,306,664    $   675,948
                                                                              ============   ============

See accompanying notes to condensed consolidated financial statements.


                                                6
</TABLE>
<PAGE>

SGD HOLDINGS, LTD. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.       ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (A) PRINCIPLES OF CONSOLIDATION AND PRESENTATION

         The condensed consolidated financial statements include the accounts of
         SGD Holdings, Ltd. ("SGD") and its wholly owned subsidiaries: HMS
         Jewelry Company, Inc. ("HMS"); Jewelry Solutions & Commerce, Inc.
         ("Jewelry"); Tandori, Inc. ("Tandori"); Con-Tex Silver Imports, Inc.
         ("Silver"); Gem Pak, Inc. (Gem Pak), the 80% subsidiary of HMS; and
         Rings N' Things, LLC ("Rings"), the 80% owned subsidiary of Jewelry,
         (collectively referred to as the "Company"). Tandori and Silver are
         inactive. All material intercompany accounts and transactions have been
         eliminated.

         (B) ORGANIZATION

         SGD was incorporated on May 22, 1996 in Delaware as Transun
         International Airways, Inc. 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. Transun International Airways, Inc. changed its name to
         Goldonline International, Inc. on June 10, 1999. Goldonline
         International, Inc. changed its name to SGD Holdings, Ltd. on January
         24, 2001.

         On April 20, 2000, pursuant to an agreement and plan of reorganization
         dated April 11, 2000, SGD acquired 100% of the issued and outstanding
         common stock of Benton Ventures, Inc. ("Benton"), a Delaware
         corporation, in exchange for 1,200,000 newly issued common shares of
         SGD. On April 25, 2000, the Board of Directors of SGD elected to merge
         Benton into SGD pursuant to Section 253 of Delaware's General Corporate
         Laws. As a result of the merger, SGD became the surviving company and
         assumed the reporting responsibilities under successor issuer status as
         more fully detailed in Section 12(g)(3) of The Securities Exchange Act
         of 1934. Benton was a dormant company and its assets and liabilities
         were insignificant.

         HMS was incorporated on October 12, 2000 in Texas. Jewelry was
         incorporated on February 3, 1999 in Delaware. Rings was incorporated on
         September 2, 2003 in Nevada. Gem Pak was incorporated on May 24, 2002
         in Texas.


                                       7
<PAGE>

         On June 10, 1999, SGD acquired all of the issued and outstanding common
         stock of Silver and Jewelry. For accounting purposes, the acquisitions
         were treated as the acquisition of Silver and Jewelry by SGD with
         Silver as the acquiror (reverse acquisition). The historical financial
         amounts prior to June 10, 1999 is that of Silver.

         Effective October 1, 2000, SGD completed the acquisition of HMS Jewelry
         Co., Ltd., a Texas limited partnership, and HMS Operating Company, a
         Texas corporation, and transferred the assets acquired and liabilities
         assumed into HMS Jewelry Company, Inc. For accounting purposes, the
         acquisition was treated as a purchase.

         Effective September 1, 2001, SGD completed the acquisition of Tandori
         in a transaction treated as a purchase for accounting purposes.

         Effective April 1, 2004, HMS completed the acquisition of 80% of Gem
         Pak in a transaction treated as a purchase for accounting purposes. SGD
         issued 100,000 shares of its common stock for 80% of Gem Pak's common
         stock.

         (C) DISCONTINUED OPERATIONS

         The operations of Silver and Tandori were discontinued at the end of
         July 2003, see Note 2.

         (D) NATURE OF BUSINESS

         SGD is a holding company principally engaged in acquiring and
         developing jewelry businesses. HMS is primarily involved in the
         wholesale gold jewelry business. Jewelry and Rings are operating three
         small retail locations. Gem Pak sells packaging and display materials,
         primarily to jewelry stores.

         (E) GENERAL

         The condensed consolidated 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 condensed consolidated financial statements
         have not been audited.

         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with accounting principles
         generally accepted in the United States of America 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 condensed consolidated financial statements should be read in
         conjunction with the consolidated financial statements and notes
         thereto included in the Company's Annual Report for the year ended July
         31, 2003, which is included in the Company's Form 10-KSB dated July 31,
         2003 and filed November 13, 2003. 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.


                                       8
<PAGE>

         (F) STOCK OPTIONS AND WARRANTS

         The Company accounts for stock-based awards to employees using the
         intrinsic value method described in Accounting Principles Board Opinion
         (APB) No. 25, "Accounting for Stock Issued to Employees" and its
         related interpretations. Accordingly, no compensation expense has been
         recognized in the accompanying condensed consolidated financial
         statements for stock-based awards to employees when the exercise price
         of the award is equal to or greater than the quoted market price of the
         stock on the date of the grant.

         As of April 30, 2004, the Company had options outstanding to its three
         current directors and one former director, which vested on May 31,
         2001, for 100,000 shares each. These options all expire on May 31,
         2004. No options have been granted since that date. Accordingly, there
         is no pro forma disclosure for the current period.

         SFAS No. 123, "Accounting for Stock-Based Compensation" and SFAS No.
         148, "Accounting for Stock-Based Compensation - Transition and
         Disclosure - an amendment of FASB Statement No. 123" require
         disclosures as if the Company had applied the fair value method to
         employee awards rather than the intrinsic value method. The fair value
         of stock-based awards to employees is calculated through the use of
         option pricing models, which were developed for use in estimating the
         fair value of traded options, which have no vesting restrictions and
         are fully transferable. These models also require subjective
         assumptions, including future stock price volatility and expected time
         to exercise, which greatly affect the calculated values.


2.       DISCONTINUED OPERATIONS

         (a) On April 23, 2003, Silver filed a Voluntary Petition for
         Reorganization under Chapter 11 of Title 11 of the United States Code
         in the United States Bankruptcy Court for the Northern District of
         Texas, Fort Worth Division, Case No. 03-43783-DML-11.

         During the week ended July 25, 2003, management of the Company
         determined to cease operations of Silver. Accordingly, in SGD's next
         scheduled Board of Director's meeting, on August 7, 2003, the Board
         voted to convert the Chapter 11 case to Chapter 7 and all operations of
         Silver were immediately discontinued. The Voluntary Petition for
         Reorganization under Chapter 11 was converted to Chapter 7 on September
         23, 2003. The operations of Silver have been included in discontinued
         operations for the periods presented.


                                       9
<PAGE>

         Silver was involved in both the wholesale and retail jewelry business,
         principally silver, with retail locations in Texas. The wholesale
         operation of Silver consisted of sales directly from its headquarters
         in Conroe, Texas, sales from a Dallas location and sales from jewelry
         shows at locations throughout the south central United States. Silver
         had sales of $275,165 and $1,394,376 during the three-month and
         nine-month periods ended April 30, 2003, respectively.

         (b) On July 17, 2003, the Company received an offer to acquire the
         assets and business of Tandori, effective July 31, 2003, in exchange
         for assumption of liabilities, excluding payroll taxes. In addition,
         the buyer agreed to pay SGD up to 50% of any profits the buyer might
         make from the sale of Tandori's assets, up to $1,000,000, if the buyer
         should sell the assets to a third party within three years of the
         acquisition. The Company subsequently approved the offer and the
         operations have been included in discontinued operations for the
         periods presented. The purchaser was G. David Gordon and the former
         President of Tandori.

         Tandori operated under the LifeStyle Technologies(TM) name as a full
         service home technology integration company providing complete
         installation and equipment for structured wiring, home audio, home
         theater, home security, PC networking, central vacuum, accent lighting
         and other current technology applications. Tandori had sales of
         $802,872 and $2,689,494 during the three-month and nine-month periods
         ended April 30, 2003, respectively.


3.       RELATED PARTY TRANSACTIONS

         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 obligation amounted to $72,675 during the nine-month
         periods ended April 30, 2004 and 2003. HMS Leasing Company, LLC is
         owned by the president of HMS. HMS is a guarantor of the loan
         obligation of HMS Leasing Company, LLC on the facility, which has a
         balance of $509,700 at April 30, 2004.

         At April 30, 2004, the Company owed G. David Gordon, CEO of HMS, a
         shareholder and the brother of a Director, compensation in the amount
         of $150,000 at April 30, 2004, which is payable one-half in SGD common
         stock and one-half in cash. David Gordon was also owed $1,507 in
         accrued interest at April 30, 2004.

         At April 30, 2004, the Company had made net advances of $9,254 to the
         president of HMS, including companies owned by him.

         See Note 7 for details of the $1,350,488 in note obligations to related
         parties.


                                       10
<PAGE>

         The Company has made net sales to Premier Concepts, Inc. ("Premier") of
         $64,221 during the nine-month period ended April 30, 2003 and sales of
         $15,734 during the current nine-month period. The Company has net
         receivables from Premier at April 30, 2004 of $32,799. The Company owns
         7.9% of the stock of Premier at April 30, 2004 and the Chief Executive
         Officer of Premier is the Acting CEO and a Director of the Company. On
         October 10, 2003, Premier filed a Voluntary Petition for Reorganization
         under Chapter 11 of Title 11 of the United States Code in the United
         States Bankruptcy Court for the Central District of California, Los
         Angeles Division; Case No. LA 03-36445 BR.

         Amounts due to related parties include $21,000 in accrued compensation
         due to Terry Washburn, Acting CEO of the Company, and $6,132 in
         reimbursements due to a company owned by Mr. Washburn. On January 28,
         2004, the Company issued Mr. Washburn 1,500,000 common shares in
         exchange for $15,000 due him.

         On January 28, 2004, the Company issued 3,500,000 common shares to BJB
         Services, Inc., whose principal serves as controller for the Company,
         in exchange for $35,000 due for prior services. At April 30, 2004, the
         Company owes BJB $43,975 for services rendered and owes another
         company, which is 50% owned by the principal of BJB, $2,153 for
         services rendered.

         At April 30, 2004, Carolyn Greco, President of Gem Pak, is owed $19,126
         for advances made to Gem Pak.


4.       MARKETABLE EQUITY SECURITIES

         The following summarizes the Company's investments in securities at
         April 30, 2004:

         Trading securities - None.
         Available-for-sale securities (Premier Concepts, Inc., a related
          party):

                  Cost                                         $     429,550
                  Unrealized gain (loss)                            (422,450)
                                                               --------------
                      Fair value                               $       7,100
                                                               ==============

         The Company recognized an unrealized gain from trading securities in
         the amount of $45,857 and $85,067 during the three-month and nine-month
         periods ended April 30, 2004, respectively. The Company recognized an
         unrealized loss from trading securities in the amount of $1,943 and
         $7,407 during the three-month and nine-month periods ended April 30,
         2003, respectively.

         Unrealized losses from available-for-sale securities, which are
         restricted under Rule 144 and which is included as a component of
         equity, as of April 30, 2004, were as follows:

         Unrealized losses                                     $    (422,450)
         Deferred income taxes                                       143,700
                                                               --------------
         Accumulated other comprehensive income (loss)         $    (278,750)
                                                               ==============


                                       11

<PAGE>


5.       INVENTORIES AND GOLD CONSIGNMENT AGREEMENT

         Inventories at April 30, 2004 consist of:


         Inventory, principally gold jewelry                   $     5,390,903
         Less consigned gold                                        (3,058,699)
                                                               ----------------
              Net inventories                                  $     2,332,204
                                                               ================

          HMS has a gold consignment agreement with a gold lender. Under the
          terms of the agreement, HMS is entitled to lease the lesser of an
          aggregate amount of 13,200 ounces, or an aggregate consigned gold
          value not to exceed $4,950,000 less any balance outstanding on its
          $1,500,000 line of credit. Title to such consigned gold remains with
          the gold lender until HMS purchases the gold. However, during the
          period of consignment, the entire risk of loss, damage or destruction
          of the gold is borne by HMS. The purchase price per ounce is based on
          the daily Second London Gold Fix. HMS pays the gold consignor a
          consignment fee based upon the dollar value of gold ounces
          outstanding, as defined in the agreement. At April 30, 2004, HMS had
          7,873.1 ounces of gold on consignment with a market value of
          $3,058,699 ($388.50 per ounce).

          Consigned gold is not included in inventory, and there is no related
          liability recorded. As a result of these consignment arrangements, HMS
          is able to shift a substantial portion of the risk of market
          fluctuations in the price of gold to the gold lender, since HMS does
          not purchase gold from the gold lender until receipt of a purchase
          order from, or shipment of jewelry to, its customers.

          The gold lender has also provided a line of credit to HMS in the
          amount of $1,500,000 that is due on demand, including interest at the
          lender's prime rate plus 3/4%. HMS does not have any advances on this
          line of credit at April 30, 2004.

          Payment for the consigned gold and the line of credit is secured by
          substantially all property of HMS including its cash, accounts
          receivable, inventory and equipment, the personal guaranty of the
          President of HMS, the personal guaranty of G. David Gordon and the
          corporate guaranty of SGD.

          The consignment agreement may be terminated by the gold lender upon 60
          days notice. If the gold lender were to terminate its existing gold
          consignment agreement, HMS does not believe it would experience an
          interruption of its gold supply that would materially adversely affect
          its business. HMS believes that other consignors would be willing to
          enter into similar arrangements should its gold lender terminate its
          relationship with the company.

          The consignment agreement contains certain restrictive covenants
          relating to maximum usage, net worth, working capital, and other
          financial ratios, and the agreement requires HMS to own a specific
          amount of gold at all times.


                                       12
<PAGE>

          HMS is currently negotiating with its gold lender to increase the size
          of the consignment facility and to modify certain terms and conditions
          of the current agreement.

6.       NOTES PAYABLE

          Notes payable consists of the following at April 30, 2004:

            Note payable to a company, extended to
            July 31, 2004; interest payable monthly
            at 5.8% (a)                                              $   835,000

            Note payable to a bank, with monthly payments
            of $4,658.36 including interest at 5.25%; with
            the balance of $250,252.77 due December 10, 2004;
            guaranteed by the President of Gem Pak;
            collateralized by bonds owned by an individual
            who is also a personal guarantor                             270,530
                                                                     -----------
              Total notes payable                                    $ 1,105,530
                                                                     ===========

          (a) Convertible into common stock at the lesser of $.015 per share or
          the market price, limited to 9.9% of the total outstanding shares of
          the Company at the time of conversion. All of the issued and
          outstanding common stock of HMS is collateral on the note, in second
          position behind the collateral position of the note due the president
          of HMS and the note is guaranteed by G. David Gordon. In the event of
          default on any of the loans secured by the HMS common stock, the
          lender has the option to purchase HMS for $5,000,000. On January 28,
          2004, the Company issued 250,000 shares of its common stock as a loan
          extension fee and issued 1,210,746 shares of its common stock for
          $12,107 in accrued interest.


7.       NOTES PAYABLE DUE RELATED PARTIES

         Notes payable due related parties consists of the following at April
         30, 2004:

            Note payable to the president of HMS, due on
            July 31, 2004; interest payable monthly at 8%;
            collateralized by the common stock of HMS;
            guaranteed by G. David Gordon; convertible into
            common stock of the Company at $.01 per share,
            limited to 9.9% of the total outstanding shares of
            the Company at the time; with anti-dilution rights       $ 1,250,000


                                       13
<PAGE>

            Note payable to G. David Gordon, CEO of HMS, a
            shareholder and the brother of a Director of the
            Company; due on July 31, 2004 with interest at 6%
            payable monthly; collateralized by the common stock
            of HMS in third position behind the other notes
            above; all principal and accrued interest convertible
            into common stock of the Company at $.01 per share;
            and all shares have anti-dilution rights                     100,488
                                                                     -----------
              Total notes payable due related parties                $ 1,350,488
                                                                     ===========

         The Company issued the president of HMS 300,000 shares of its common
         stock as a loan extension fee on January 28, 2004.

8.       SEGMENT INFORMATION

         The Company reports segments based upon the management approach, which
         designates the internal reporting that is used by management for making
         operating decisions and assessing performance. With the disposition of
         Silver and Tandori, continuing operations currently includes one
         segment, the wholesale gold operations of HMS.

9.       LEGAL MATTERS

         On December 13, 2002, SGD filed a petition against James G. "Greg"
         Gordon ("Gordon") in the 342nd District Court, Tarrant County, Texas
         alleging breach of fiduciary duty, conversion of corporate funds and
         misappropriation of corporate funds. SGD alleged that Gordon, who was
         President of SGD from June 10, 1999 until November 25, 2002, wrongfully
         and without authority or approval, transferred approximately $2.7
         million from two separate SGD bank accounts into an account or accounts
         held by Silver. Thereafter, Gordon utilized a portion of SGD's funds
         for his and his family's personal use and enjoyment, his personal
         financial gain and for unauthorized transactions on Silver's behalf.
         SGD was seeking to recover its damages, which were in excess of $2.7
         million, costs of court and pre-judgment interest, as allowed by law.
         SGD dismissed its claim against Gordon as it determined the cost would
         exceed any benefit and the funds it saved could be used to pay
         creditors of the Company; however the Company still maintains the right
         to re-file the lawsuit against Gordon.

         On January 3, 2003, James G. Gordon and Lisa K. Gordon ("Plaintiffs")
         filed a petition in the District Court of Montgomery County, Texas,
         Cause No. 03-01-00006-CV against SGD Holdings, Ltd., G. David Gordon
         and David Covey. G. David Gordon is the brother of James G. Gordon and
         David Covey is the former president of Tandori, Inc., a wholly owned
         subsidiary of SGD. Plaintiffs, in their claim asserted against SGD, are
         seeking to declare the one for six stock split, which occurred in
         September 1999, void. If declared void, they claim they would presently
         own 75,000,000 shares of SGD common stock instead of 11,250,000 shares
         of SGD common stock as currently reported by the Company. Presently,
         the case is in discovery and Company counsel has not obtained all
         information necessary to assess the merits of Plaintiffs' claim and is
         therefore unable to determine a possible outcome or the extent of the
         Company's liability, if any.


                                       14
<PAGE>

         In March 2003, Con-Tex Silver Imports, Inc. filed a petition in the
         District Court of Galveston County, Texas, Cause No. 03CV0316 against
         Debbie King, the sister-in-law of James G. Gordon. Effective October
         28, 2002, James G. Gordon, the former President of Silver entered into
         a transaction with his sister-in-law whereby he sold the assets of one
         of the retail locations of Silver for cash proceeds of $30,645. The
         Company recorded a loss on the transaction of $51,015. In its claim,
         Silver alleged conspiracy, unjust enrichment and that the sale of the
         retail location is void because of unconscionability. Additionally,
         Silver requested a return of profits received by Defendant. This action
         is currently stayed due to Silver filing a Voluntary Petition for
         Reorganization under Chapter 11 of Title 11 of the United States Code
         on April 23, 2003. The Voluntary Petition for Reorganization under
         Chapter 11 was converted to Chapter 7 on September 23, 2003.

         On April 23, 2003, SGD's wholly owned subsidiary, Con-Tex Silver
         Imports, Inc. filed a Voluntary Petition for Reorganization under
         Chapter 11 of Title 11 of the United States Code in the United States
         Bankruptcy Court for the Northern District of Texas, Fort Worth
         Division, Case No. 03-43783-DML-11 and on September 23, 2003 the
         Voluntary Petition was converted to Chapter 7.

         On May 2, 2003, Lakewood Development Corporation ("Lakewood"), a
         stockholder, filed a petition in the District Court of Tarrant County,
         Texas, Cause No. 96 198685 03 against SGD Holdings, Ltd. and James G.
         Gordon, former President of SGD. Lakewood, in its claim asserted
         against SGD and Gordon, alleged fraud in stock transactions under
         Section 27.01 of the Texas Business and Commerce Code, violations of
         the anti-fraud provisions of the Texas Securities Act and common law
         fraud. In addition, Lakewood is alleging breach of fiduciary duty
         against Gordon. Lakewood is seeking restitution of the $7,817,500 which
         it invested in common stock based upon representations made by Gordon,
         together with damages, expenses and interest. Presently, the case is in
         discovery and Company counsel has not obtained all information
         necessary to assess the merits of Lakewood's claims and therefore is
         unable to determine a possible outcome or the extent of the Company's
         liability, if any.

         On December 31, 2003, Richard Singer and Robert Bertsch, on behalf of
         the Company, filed suit against James G. Gordon, a director of the
         Company, for his breach of fiduciary duty as a result of his unilateral
         actions to prevent the Company from exercising its option to acquire
         the building which HMS currently leases. The parties have yet to begin
         any substantial discovery and, therefore, the Company and its attorneys
         are not in a position to assess the merits of this action.


10.      COMMITMENTS

         In addition to the HMS lease discussed in Note 3, the Company has two
         non-cancelable operating leases. Future minimum lease payments amount
         to $34,529 for the balance of fiscal 2004, $81,116 for fiscal 2005 and
         $46,116 for fiscal 2006.



                                       15
<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; 5. Legal
     issues; and 6. Success of marketing, advertising and promotional campaigns.

     The continuing operations of the Company consist primarily of the wholesale
     sales of HMS.


LIQUIDITY AND CAPITAL RESOURCES

     The Company's working capital decreased from $2,198,988 at July 31, 2003 to
     $1,952,446 at April 30, 2004. The decrease in working capital of $246,542
     consists of an increase in current assets of $540,698 less an increase in
     current liabilities of $787,240. The major items of the increase in current
     assets consisted of an increase in accounts receivable of $104,824, an
     increase in inventory of $131,385 and an increase in cash of $407,836. The
     major increase in current liabilities was from an increase in accounts
     payable of $314,463 and an increase in notes payable of $270,530.

     The Company has a number of unresolved legal issues with one of its
     Directors, James G. Gordon and will continue to have high legal costs,
     which amounted to approximately $76,000 during the nine months ended April
     30, 2004, until these issues can be resolved. The Company anticipates that
     it will be able to raise additional funds, as necessary, to fund these
     lawsuits.

     The Company sold 2,400,001 shares of its common stock during the quarter
     ended April 30, 2004 for $36,000 in cash.

     The Company acquired property and equipment in the amount of $82,014 during
     the nine-month period ended April 30, 2004 and is currently budgeting an
     additional $20,000 for capital expenditures for the remainder of fiscal
     2004. The Company plans to use cash and existing credit sources for the
     acquisitions.


                                       16
<PAGE>

     HMS relies on a gold consignment program, short-term borrowings and
     internally generated funds to finance its inventories and accounts
     receivable. HMS fills most of its gold supply needs through a gold
     consignment arrangement with a gold lender. Under the terms of that
     arrangement, HMS is entitled to lease the lesser of an aggregate of 13,200
     ounces of fine gold or an aggregate consigned gold value not to exceed
     $4,950,000, reduced by any outstanding balance on its $1,500,000 line of
     credit. The consigned gold is secured by substantially all property of HMS,
     including its cash, accounts receivable, inventory and machinery and
     equipment, the corporate guaranty of SGD and the individual guaranty's of
     Harry Schmidt, President of HMS, and G. David Gordon. HMS pays the gold
     lender a consignment fee based on the dollar value of ounces of gold
     outstanding under their agreement, which value is based on the daily Second
     London Gold Fix. HMS believes that its financing rate under the consignment
     arrangement is substantially similar to the financing rates charged to gold
     consignees similarly situated to HMS. As of April 30, 2004, HMS held
     7,873.1 ounces of gold on consignment with a market value of $3,058,699.

     The consignment agreement contains restrictive covenants relating to
     maximum usage, net worth, working capital and other financial ratios and
     the agreement requires HMS to own a specific amount of gold at all times.

     The consignment agreement may be terminated by the gold lender upon 60 days
     notice. If the gold lender were to terminate its existing gold consignment
     arrangement, HMS does not believe it would experience an interruption of
     its gold supply that would materially adversely affect its business. HMS
     believes that other consignors would be willing to enter into similar
     arrangements should its gold lender terminate its relationship with the
     company.

     Consigned gold is not included in inventory, and there is no related
     liability recorded. As a result of these consignment arrangements, HMS is
     able to shift a substantial portion of the risk of market fluctuations in
     the price of gold to the gold lender, since HMS does not purchase gold from
     the gold lender until receipt of a purchase order from, or shipment of
     jewelry to, its customers.

     While we believe our supply of gold is relatively secure, significant
     increases or rapid fluctuations in the cost of gold may impact the demand
     for our products. Fluctuations in the precious metals markets and credit
     may result in an interruption of our gold supply or the credit arrangements
     necessary to allow us to support our accounts receivable and continue the
     use of consigned gold.

     The gold lender has also provided a line of credit to HMS in the amount of
     $1,500,000 that is due on demand, including interest at the lender's prime
     rate plus 3/4%. HMS does not have any advances on this line of credit at
     April 30, 2004.



                                       17

<PAGE>


RESULTS OF OPERATIONS

                   THREE MONTHS ENDED APRIL 30, 2004 AND 2003

     SALES AND COST OF SALES - The Company's sales and cost of sales may be
     summarized as follows for the three-month periods ended April 30, 2004 and
     2003:

                                                       2004            2003

     Sales and revenues                            $ 2,576,881    $ 2,264,293
     Cost of sales                                   1,905,723      1,752,289
                                                   -----------    -----------
     Gross profit                                  $   671,158    $   512,004
                                                   ===========    ===========

     Total sales increased $312,588 (13.8%) during the three-month period ended
     April 30, 2004, as compared to the same prior year period. The increase
     consists of $178,942 in retail sales by the jewelry stores and Gem Pak and
     an increase of $133,646 in wholesale gold sales. Gem Pak distributed its
     new catalog during April 2004 and HMS distributed its catalog during May
     and June 2004. The Company expects improved sales from new products.

     The Second London Gold Fix was $388.50 per ounce on April 30, 2004 and
     $399.75 per ounce on January 31, 2004, the beginning of the current year
     quarter. The Second London Gold Fix was $336.75 per ounce on April 30, 2003
     and $367.50 per ounce on January 31, 2003. Sales volumes were down during
     the current quarter, countering one-half of the approximate 12% average
     increase in gold price. The decline in volume sold is attributed to lower
     consumer spending due to the general state of the economy. In addition, the
     Company is currently in the second year of its catalog and sales have
     generally been better during the initial year of a catalog.

     Gross profit has increased to 26.0% during the current year period from
     22.6% during the same prior year period. The 3.4% improvement includes 0.5%
     for HMS and 2.9% from the higher gross profit realized from new operations.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSE - The following summarizes the
     Company's selling, general and administrative expenses ("SGA") for the
     three-month periods ended April 30, 2004 and 2003:

                                                      2004             2003

     HMS                                           $   617,835    $   597,998
     Jewelry and Rings                                 122,745          1,122
     Gem Pak                                            33,615             --
     Corporate and other                                41,312         91,316
                                                   -----------    -----------
       Total                                       $   815,507    $   690,436
                                                   ===========    ===========


     HMS's SGA for the quarter ended April 30, 2004 increased 3.3% from the year
     earlier period. Jewelry and Rings SGA commenced operations during the
     current quarter and represents the SGA associated with their retail
     operations. Gem Pak was acquired during the current quarter and the SGA
     represents one month of operations. Corporate SGA decreased $50,004 during
     the quarter ended April 30, 2004 as compared to the year earlier period.
     The prior year corporate SGA includes a $50,000 charge for a settlement
     with G. David Gordon.



                                       18
<PAGE>

     INTEREST EXPENSE AND GOLD CONSIGNMENT FEE - Related party interest expense
     decreased $39,343 to $27,257 during the quarter ended April 30, 2004, as
     compared to the year earlier period. Interest expense decreased $16,999
     during the quarter ended April 30, 2004, as compared to the year earlier
     period. The decrease in related party interest expense is primarily due to
     the prior year amount including amortization of loan and guaranty fees in
     the amount of $40,000. The decrease in other interest expense is primarily
     due to the prior year amount including $13,300 in amortization of loan
     fees.

     The gold consignment fee decreased $21,301 during the three month period
     ended April 30, 2004, as compared to the prior year period. The decrease is
     due to having lower balances on the gold consignment facility as a result
     of a reduction in the number of ounces of gold on consignment. At April 30,
     2004, HMS had 7,873.1 ounces of gold on consignment with a related
     consignment obligation of $3,058,699 ($388.50 per ounce). At April 30,
     2003, HMS had 12,925 ounces of gold on consignment with a related
     consignment obligation of $4,352,494 ($336.75 per ounce). Accordingly, the
     decrease is a result of the 39% decrease in the quantity of gold on
     consignment offset by the 12% average increase in the price of gold, since
     the rate was approximately the same.

     UNREALIZED GAIN (LOSS) ON MARKETABLE SECURITIES - The Company recognized an
     unrealized gain in the amount of $45,857 during the three month period
     ended April 30, 2004, from its investment in marketable equity securities
     that have been classified as trading securities. During the three month
     period ended April 30, 2003, the Company recognized an unrealized loss of
     $1,943.

     LOSS ON SALE OF MARKETABLE SECURITIES - The Company sold its remaining
     trading marketable securities during the current year quarter and realized
     a loss of $47,750.

     INCOME TAXES - The Company recorded an income tax benefit of $71,100 during
     the three month period ended April 30, 2004, and a benefit for income taxes
     in the amount of $54,800 during the three month period ended April 30,
     2003.

     DISCONTINUED OPERATIONS - The Company recognized a loss of $671,559, with
     no income tax benefit, during the three months ended April 30, 2003, from
     its discontinued operations.




                                       19
<PAGE>


                    NINE MONTHS ENDED APRIL 30, 2004 AND 2003

     SALES AND COST OF SALES - The Company's sales and cost of sales may be
     summarized as follows for the nine-month periods ended April 30, 2004 and
     2003:

                                                       2004            2003

     Sales and revenues                            $ 10,331,588    $ 10,907,808
     Cost of sales                                    7,741,380       8,211,108
                                                   ------------    ------------
     Gross profit                                  $  2,590,208    $  2,696,700
                                                   ============    ============


     Total sales, principally gold sales, have decreased $576,220 (5.3%) during
     the nine-month period ended April 30, 2004, as compared to the same prior
     year period.

     The Second London Gold Fix was $388.50 per ounce on April 30, 2004 as
     compared to $354.75 per ounce on July 31, 2003, the beginning of the
     current year period. The Second London Gold Fix was $336.75 per ounce on
     April 30, 2003 as compared to $304.65 per ounce on July 31, 2002. Sales
     volumes were down substantially during the current year period, more than
     countering the approximate 16% average increase in gold price. The decline
     in volume sold is attributed to lower consumer spending due to the general
     state of the economy. In addition, the Company is currently in the second
     year of its catalog and sales have generally been better during the initial
     year of a catalog. The decline in sales began to reverse in the quarter
     ended April 30, 2004, and the Company released its new catalog during May
     and June 2004, which is expected to result in improved sales.

     Total gross profit has increased to 25.1% during the current year period
     from 24.7% during the same prior year period. HMS gross profit declined to
     23.7% during the current year period as compared to 24.7% during the same
     prior year period. HMS has a fixed dollar amount of profit for each ounce
     of gold sold. Accordingly, with the gold value increasing, the gross profit
     percentage is a smaller percentage of sales.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSE - The following summarizes the
     Company's selling, general and administrative expenses ("SGA") for the
     nine-month periods ended April 30, 2004 and 2003:

                                                        2004            2003

     HMS                                           $  1,912,299    $  1,914,691
     Jewelry and Rings                                  286,154           3,401
     Gem Pak                                             33,615              --
     Corporate                                          236,820         247,643
                                                   ------------    ------------
       Total                                       $  2,468,888    $  2,165,735
                                                   ============    ============

     HMS's SGA for the nine-month period ended April 30, 2004 decreased 0.1%
     from the year earlier period. Jewelry and Rings SGA commenced operations
     during the current year period and this cost represents the SGA associated
     with their retail operations. Gem Pak was acquired April 1, 2004 and this
     cost represents the SGA associated with one month of operations. Corporate
     SGA decreased $10,823 (4.4%) during the nine-month period ended April 30,
     2004 as compared to the year earlier period.


                                       20
<PAGE>

     INTEREST EXPENSE AND GOLD CONSIGNMENT FEE - Related party interest expense
     increased $857 to $119,457 during the nine-month period ended April 30,
     2004, as compared to the year earlier period. Interest expense decreased
     $42,577 during the nine-month period ended April 30, 2004, as compared to
     the year earlier period. The decrease in other interest expense is
     primarily due to the prior year amount including $39,900 in amortization of
     loan and guaranty fees.

     The gold consignment fee decreased $41,394 during the nine-month period
     ended April 30, 2004, as compared to the prior year period. The decrease is
     due to having lower balances on the gold consignment facility as a result
     of a reduction in the number of ounces of gold on consignment. At April 30,
     2004, HMS had 7,873.1 ounces of gold on consignment with a related
     consignment obligation of $3,058,699 ($388.50 per ounce). At April 30,
     2003, HMS had 12,925 ounces of gold on consignment with a related
     consignment obligation of $4,352,494 ($336.75 per ounce). Accordingly, the
     decrease is a result of the 39% decrease in the quantity of gold on
     consignment offset by the 12% increase in the price of gold, since the rate
     was approximately the same.

     UNREALIZED GAIN (LOSS) ON MARKETABLE SECURITIES - The Company recognized an
     unrealized gain in the amount of $85,067 during the nine-month period ended
     April 30, 2004, from its investment in marketable equity securities that
     have been classified as trading securities. During the nine-month period
     ended April 30, 2003, the Company recognized an unrealized loss of $7,407.

     LOSS ON SALE OF MARKETABLE SECURITIES - The Company sold its remaining
     trading marketable securities during the current year period and realized a
     loss of $69,783.

     INCOME TAXES - The Company recorded an income tax benefit of $34,400 during
     the nine-month period ended April 30, 2004, and a provision for income
     taxes in the amount of $120,500 during the nine-month period ended April
     30, 2003.

     DISCONTINUED OPERATIONS - The Company recognized a loss of $1,040,566,
     including an income tax benefit of $187,600, during the nine-month period
     ended April 30, 2003, from its discontinued operations.



                                       21
<PAGE>


ITEM 3.  CONTROLS AND PROCEDURES

     (a) Evaluation of Disclosure Controls and Procedures

     Disclosure controls and procedures are controls and other procedures that
     are designed to ensure that information required to be disclosed in the
     reports that are filed or submitted under the Exchange Act is recorded,
     processed, summarized and reported, within the time periods specified in
     the Securities and Exchange Commission's rules and forms. Disclosure
     controls and procedures include, without limitation, controls and
     procedures designed to ensure that information required to be disclosed in
     the reports that are filed under the Exchange Act is accumulated and
     communicated to management, including the principal executive officer, as
     appropriate to allow timely decisions regarding required disclosure. Under
     the supervision of and with the participation of management, including the
     principal executive officer, the Company has evaluated the effectiveness of
     the design and operation of its disclosure controls and procedures as of
     April 30, 2004, and, based on its evaluation, our principal executive
     officer has concluded that these controls and procedures are effective.

     (b)  Changes in Internal Controls

     There have been no significant changes in internal controls or in other
     factors that could significantly affect these controls subsequent to the
     date of the evaluation described above, including any corrective actions
     with regard to significant deficiencies and material weaknesses.





                                       22
<PAGE>


                           PART II - OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS

     On December 13, 2002, SGD filed a petition against James G. "Greg" Gordon
     ("Gordon") in the 342nd District Court, Tarrant County, Texas alleging
     breach of fiduciary duty, conversion of corporate funds and
     misappropriation of corporate funds. SGD alleged that Gordon, who was
     President of SGD from June 10, 1999 until November 25, 2002, wrongfully and
     without authority or approval, transferred approximately $2.7 million from
     two separate SGD bank accounts into an account or accounts held by Silver.
     Thereafter, Gordon utilized a portion of SGD's funds for his and his
     family's personal use and enjoyment, his personal financial gain and for
     unauthorized transactions on Silver's behalf. SGD was seeking to recover
     its damages, which were in excess of $2.7 million, costs of court and
     pre-judgment interest, as allowed by law. SGD dismissed its claim against
     Gordon as it determined the cost would exceed any benefit and the funds it
     saved could be used to pay creditors of the Company; however the Company
     still maintains the right to re-file the lawsuit against Gordon.

     On January 3, 2003, James G. Gordon and Lisa K. Gordon ("Plaintiffs") filed
     a petition in the District Court of Montgomery County, Texas, Cause No.
     03-01-00006-CV against SGD Holdings, Ltd., G. David Gordon and David Covey.
     G. David Gordon is the brother of James G. Gordon and David Covey is the
     former president of Tandori, Inc., a wholly owned subsidiary of SGD.
     Plaintiffs, in their claim asserted against SGD, are seeking to declare the
     one for six stock split, which occurred in September 1999, void. If
     declared void, they claim they would presently own 75,000,000 shares of SGD
     common stock instead of 11,250,000 shares of SGD common stock as currently
     reported by the Company. Presently, the case is in discovery and Company
     counsel has not obtained all information necessary to assess the merits of
     Plaintiffs' claim and is therefore unable to determine a possible outcome
     or the extent of the Company's liability, if any.

     In March 2003, Con-Tex Silver Imports, Inc. filed a petition in the
     District Court of Galveston County, Texas, Cause No. 03CV0316 against
     Debbie King, the sister-in-law of James G. Gordon. Effective October 28,
     2002, James G. Gordon, the former President of Silver entered into a
     transaction with his sister-in-law whereby he sold the assets of one of the
     retail locations of Silver for cash proceeds of $30,645. The Company
     recorded a loss on the transaction of $51,015. In its claim, Silver alleged
     conspiracy, unjust enrichment and that the sale of the retail location is
     void because of unconscionability. Additionally, Silver requested a return
     of profits received by Defendant. This action is currently stayed due to
     Silver filing a Voluntary Petition for Reorganization under Chapter 11 of
     Title 11 of the United States Code on April 23, 2003. The Voluntary
     Petition for Reorganization under Chapter 11 was converted to Chapter 7 on
     September 23, 2003.

     On April 23, 2003, SGD's wholly owned subsidiary, Con-Tex Silver Imports,
     Inc. filed a Voluntary Petition for Reorganization under Chapter 11 of
     Title 11 of the United States Code in the United States Bankruptcy Court
     for the Northern District of Texas, Fort Worth Division, Case No.
     03-43783-DML-11 and on September 23, 2003, the Voluntary Petition was
     converted to Chapter 7.


                                       23
<PAGE>

     On May 2, 2003, Lakewood Development Corporation ("Lakewood"), a
     stockholder, filed a petition in the District Court of Tarrant County,
     Texas, Cause No. 96 198685 03 against SGD Holdings, Ltd. and James G.
     Gordon, former President of SGD. Lakewood, in its claim asserted against
     SGD and Gordon, alleged fraud in stock transactions under Section 27.01 of
     the Texas Business and Commerce Code, violations of the anti-fraud
     provisions of the Texas Securities Act and common law fraud. In addition,
     Lakewood is alleging breach of fiduciary duty against Gordon. Lakewood is
     seeking restitution of the $7,817,500 which it invested in common stock
     based upon representations made by Gordon, together with damages, expenses
     and interest. Presently, the case is in discovery and Company counsel has
     not obtained all information necessary to assess the merits of Lakewood's
     claims and therefore is unable to determine a possible outcome or the
     extent of the Company's liability, if any.

     On December 31, 2003, Richard Singer and Robert Bertsch, on behalf of the
     Company, filed suit against James G. Gordon, a director of the Company, for
     his breach of fiduciary duty as a result of his unilateral actions to
     prevent the Company from exercising its option to acquire the building
     which HMS currently leases. The parties have yet to begin any substantial
     discovery and, therefore, the Company and its attorneys are not in a
     position to assess the merits of this action.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

     During the quarter ended April 30, 2004, the Company issued 2,400,001
     shares of its common stock in exchange for $36,000 in cash and issued
     100,000 shares of its common stock to acquire 80% of Gem Pak. The small
     business issuer claimed exemption from registration based upon Section 4(2)
     of the Securities and Exchange Act of 1933.


ITEM 5.  OTHER INFORMATION

     Although the Company does not currently employ a Chief Financial Officer,
     Terry Washburn, President and Acting CEO, is also the principal accounting
     officer.



                                       24

<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

         Exhibit 31        Certification pursuant to 18 U.S.C. Section 1350
                           Section 302 of the Sarbanes-Oxley Act of 2002

         Exhibit 32        Certification pursuant to 18 U.S.C. Section 1350
                          Section 906 of the Sarbanes-Oxley Act of 2002

     (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: June 21, 2004                    By: /s/ Terry Washburn
                                           -------------------------------------
                                           Terry Washburn, President, Acting CEO
                                           and Principal Accounting Officer




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