UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549




**FORM
        10-QSB**





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




For
      the quarterly
      period ended **April
      30, 2005**





[ ]
      TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT




For
      the transition
      period from ________to _____________








Commission
      file number 0-13635





**SFG
      FINANCIAL CORPORATION**


(Exact
      name of small business issuer as specified in its charter)





Delaware
            13-3208094(State
                or other jurisdiction of
            (IRS
                Employerincorporation
                or organization)
            Identification
                Number)





**85
      Amherst Street, Garden City, New York 11530**


(Address
      of principal executive offices)





**(516)-327-0843**


(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 [ ]





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes [X] No [ ]





As
      of
      December 11, 2006, the Registrant had 5,513,856 shares of common stock
      outstanding.





Transitional
      Small Business Disclosure Format Yes [ ] N [X]


-1-


**TABLE
      OF CONTENTS**








PART
                1FINANCIAL
                INFORMATIONItem
                1.
            FINANCIAL
                STATEMENTSItem
                2.
            MANAGEMENT'S
                DISCUSSION AND ANALYSIS OR PLAN OF
                OPERATIONItem
                3.
            CONTROLS
                AND PROCEDURESPART
                IIOTHER
                INFORMATIONItem
                1.
            LEGAL
                PROCEEDINGSItem
                2.
            UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF
                PROCEEDSItem
                3.
            DEFAULTS
                ON SENIOR SECURITIESItem
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERSItem
                5.
            OTHER
                INFORMATIONItem
                6.
            EXHIBITSSIGNATURESEX-31
            (Certifications,
                Sarbanes-Oxley Act of
                2002)EX-32
            (Certifications,
                Sarbanes-Oxley Act of
                2002)


-2-





PART
      1- FINANCIAL INFORMATION








Item
      1. Financial Statements







**SFG
      FINANCIAL CORPORATION**





**COMPARATIVE
      FINANCIAL STATEMENTS**





**FOR
      THE THREE MONTHS ENDING APRIL 30, 2006 and 2005**








-3-


**SFG
      FINANCIAL CORPORTATION**





CONTENTS





PageIndependent
              accountant's report
            5Financial
                statements:Balance
                Sheets
            6Statements
                of Income and Expenses
            7Statements
                of Stockholders' Equity
                (Deficiency)
            8Statements
                of Cash Flow
            9Notes
                to the Comparative Financial
                Statements
            10




-4-


**THOMAS
      BAUMAN**


**CERTIFIED
      PUBLIC ACCOUNTANT**


**4
      SCHAEFFER STREET**


**HUNTINGTON
      STATION, NY 11746**


**Telephone
      (631) 427-4789 Fax (631) 424-3649**










To
      the
      Board of Directors and Stockholders


SFG
      Financial Corporation


Garden
      City, New York




ACCOUNTANT’S
      REVIEW REPORT





I
      have
      reviewed the Balance Sheet of SFG Financial Corporation (A Development Stage
      Company) as of April 30, 2006 and 2005 and the related Statements of Operations,
      Stockholders’ Equity, and Cash Flows for the periods then ended in accordance
      with Statements on Standards for Accounting and Review Services issued by the
      American Institute of Certified Public Accountants. All information included
      in
      these financial statements is the representation of the management of SFG
      Financial Corporation.




A
      review
      consists principally of inquiries of Company personnel and analytical procedures applied
      to financial data. It is substantially less in scope than an examination in
      accordance with
      generally accepted auditing standards, the objective of which is the expression
      of an opinion
      regarding the financial statements taken as a whole. Accordingly, I do not
      express such
      an
      opinion.





Based
      on
      my review, I am not aware of any material modifications that should be made
      to the
      accompanying financial statements in order for them to be in conformity with
      generally accepted
      accounting principles.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As discussed in Note 4 to the financial
      statements, the Company has had limited operations and has not commenced planned
      principal operations. The Company’s financial position and operating results
      raise substantial doubt about its ability to continue as a going concern.
      Management’s plan regarding those matters also are described in Note 4. The
      financial statements do not include any adjustments that might result from
      the
      outcome of this uncertainty.











/s/Thomas
      Bauman


Thomas
      Bauman, C.P.A.


December
      15, 2006






-5-







**SFG
                FINANCIALCORPORATION****BALANCE
                SHEETS****AS
                OF APRIL 30****2006**
            
            **2005****ASSETS****Current
                Assets**Cash
                on hand
            
            $
            20
            
            $
            20**Total
                Current Assets**
            
            
            20
            
            
            20**Total
                Assets**
            
            
            20
            
            
            20**LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIENCY)****Liabilities**Accounts
                payable and accrued expenses
            
            
            93,935
            
            
            86,280Due
                to related parties
            
            
            21,094
            
            
            11,683**Total
                Liabilities**
            
            
            115,029
            
            
            97,963**Stockholders'
                Equity (Deficiency)**Common
                stock; $.001 par value 100,000,000 shares
            
            
            4,314
            
            
            4,314authorized;
                4,313,856 shares issued; 4,313,856 sharesoutstanding
                at April 30, 2006 and 2005, respectivelyAdditional
                paid in capital
            
            
            2,425,701
            
            
            2,425,701Retained
                earnings
            
            
            (2,545,024
            )
            
            (2,527,958
            )**Total
                Stockholders' Equity (Deficiency)**
            
            
            (115,009
            )
            
            (97,943
            )**Total
                Liabilities and Stockholders' Equity (Deficiency)**
            
            $
            20
            
            $
            20





-6-


**SFG
                FINANCIALCORPORATION****STATEMENTS
                OF INCOME AND EXPENSES****FOR
                THE THREE MONTHS ENDED APRIL 30****2006**
            
            **2005****Revenue:**Sales
            
            $
            -
            
            $
            -**Operating
                Expenses**Filing
                fees
            
            
            -
            
            
            -Office
                expenses
            
            
            202
            
            
            274Professional
                fees
            
            
            3,500
            
            
            -Stock
                transfer fees
            
            
            -
            
            
            -Travel
            
            
            -
            
            
            -**Total
                Operating Expenses**
            
            
            3,702
            
            
            274**Income
                (Loss) From Operations**
            
            
            (3,702
            )
            
            (274
            )**Provision
                for Taxes**New
                York State corporate taxes
            
            
            155
            
            
            155**Net
                Income (Loss)**
            
            $
            (3,857
            )
            $
            (429
            )**Earnings
                Per Share**
            
            $
            (0.001
            )
            $
            (0.000
            )**Weighted
                Average of Number of Common Shares Outstanding**
            
            
            4,313,856
            
            
            4,313,856




-7-





**SFG
                FINANCIAL CORPORATION****STATEMENTS
                OF STOCKHOLDERS' EQUITY (DEFICIENCY)****CAPITAL****COMMON
                STOCK**
            
            **IN
                EXCESS**
            
            **RETAINED****SHARES**
            
            **AMOUNT**
            
            **OF
                PAR**
            
            **EARNINGS****Balance
                at January 31, 2005**
            
            
            4,313,856
            
            $
            4,314
            
            $
            2,425,701
            
            $
            (2,527,529
            )Net
                Income (Loss) for the three months ended April 30, 2005
            
            
            
            
            
            
            
            
            
            
            
            (429
            )**Balance
                at April 30, 2005**
            
            
            4,313,856
            
            
            4,314
            
            
            2,425,701
            
            
            (2,527,958
            )Net
                Income (Loss) for the nine months ended January 31, 2006
            
            
            
            
            
            
            
            
            
            
            
            (13,209
            )**Balance
                at January 31, 2006**
            
            
            4,313,856
            
            
            4,314
            
            
            2,425,701
            
            
            (2,541,167
            )Net
                Income (Loss) for the three months ended April 30, 2006
            
            
            
            
            
            
            
            
            
            
            
            (3,857
            )**Balance
                at April 30, 2006**
            
            
            4,313,856
            
            $
            4,314
            
            $
            2,425,701
            
            $
            (2,545,024
            )




-8-


**SFG
                  FINANCIAL CORPORATION****STATEMENTS
                  OF CASH FLOWS****FOR
                  THE THREE MONTHS ENDED APRIL 30****2006**
              
              **2005****Cash
                  flow from operating activities:****Net
                  income (loss)**
              
              $
              (3,857
              )
              $
              (429
              )**Adjustments
                  to reconcile net income to net cash provided****by
                  operating activities:****Changes
                  in assets and liabilities:**Increase
                  (decrease) accounts payable
              
              
              3,655
              
              
              -Increase
                  (decrease) due to related parties
              
              
              202
              
              
              429**Net
                  cash provided by operations**
              
              
              -
              
              
              -**Cash
                  flow from investing activities:**Purchase
                  of fixed assets
              
              
              -
              
              
              -**Cash
                  provided from (for) investing activities**
              
              
              -
              
              
              -**Cash
                  flow from financing activities:**Increase
                  (decrease) in Common stock
              
              
              
              
              
              -Increase
                  (decrease) in additional paid in capital
              
              
              -
              
              
              -**Cash
                  flow provided from (for) financing activities**
              
              
              -
              
              
              -**Net
                  increase in cash and cash equivalent**
              
              
              -
              
              
              -**Cash
                  and cash equivalents at beginning of year**
              
              
              20
              
              
              20**Cash
                  and cash equivalents at end of year**
              
              $
              20
              
              $
              20**Cash
                  paid for interest and income taxes as follows:**Interest
              
              $
              -
              
              $
              -Corporate
                  income taxes paid
              
              $
              -
              
              $
              155





-9-





**1.
      Significant accountingpolicies:**





**a.**
            **Organization
                and Business Operations**





SFG
      Financial Corporation (the “Company”) was organized in November 1983 as a
      Delaware corporation. The Company has since ceased normal operation, and is currently a shell
      with no real business activity.
      It has been kept active as a holding company whose purpose is to seek out and
      attract partners for possible merger or acquisition.





**b.**
            **Cash
                and cash equivalents**





The
      Company considers all highly liquid debt instruments purchased with maturity
      of
      three months or less to be cash equivalents.





**c.**
            **Use
                of estimates**





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements and the reported amounts
      of
      revenues and e xpenses
      during the period. Actual results could differ from these
      estimates.





**d.**
            **Earnings
                per share**





Earnings
      per share are based on the weighted-average number of shares of common stock
      outstanding in each year. The Company maintains a capital structure which
      consists of
      capital stock and includes no potential for dilution via conversions, exercise
      of options, or other arrangements that would increase the number of shares
      outstanding.





**e.**
            **Income
                taxes**




Income
      taxes are accounted for by the asset/liability approach in accordance with
      FAS-109 (Accounting for Income Taxes). The provision for income taxes represents
      the total income
      taxes paid or payable
      for the current year. As of April 30, 2006 the Company did not have a deferred
      tax asset or liability.




**2.
      Accounts payable and accrued expenses**




Accounts
      payable and accrued expenses represent expenses that the Company has incurred
      to
      remain as an active shell and seek out possible business partners for a merger.








-10-


**3.**
            **Related
                party transactions**





The
      Company does not maintain a bank account. The payables of the Company are being
      paid by some of the stockholders. The amounts paid by the by these stockholders
      on behalf of the company are represented on the Balance sheet as Due to related
      parties. As of April 30, 2006 and 2005 the total due to related parties was
      $11,683 and $21,094, respectively. Interest on these loans has not been
      accrued.





**4.**
            **Going
                concern**





These
      financial statements are presented on the basis that the Company is a going
      concern. Going concern contemplates the realization of assets and the
      satisfaction of liabilities in the normal course of business over a reasonable
      length of time. As stated in Note 1, the Company has elected to implement a
      business plan that has allowed it to continue operations while identifying
      a
      merger partner. There can be no assurance that a merger will be
      completed.




-11-






Item
        2. Management's Discussion and Analysis or Plan of
        Operation
 
 Plan
        of
        Operation
 
 At
        the
        time of the period covered by this Report, we were focused upon continuing
        our
        Company as a viable entity, looking for merger and similar acquisition
        candidates and we continue to do so.
 
 Our
        current plan, in summary, is focused primarily on corporate governance
        considerations in completing the process of updating filings with both
        applicable state and federal agencies, as needed, namely the SEC and the
        State
        of Delaware, and related efforts. Management believes that its efforts to
        find
        an operating company with which a merger, acquisition or other form of business
        combination can be successfully completed will be significantly enhanced
        if the
        Company maintains a status as a fully compliant public company.
 
 The
        first
        part is compliance with laws and regulations, primarily updating and keeping
        current filings with the SEC, and next establishing the business by making
        a
        merger, acquisition or similar transaction with an operating
        company.
 
 We
        believe at least $25,000 is needed to continue for a period of approximately
        12
        months, not undertaking any material transaction, which would require even
        more
        funding. We anticipate obtaining funding to address cash flow needs through
        private placements, loans and similar matters.
 
 Our
        plan
        is subject to many risks. No assurance of success can be given. We are subject
        to many risks.
 
 Forward
        Looking Statements
 
 The
        foregoing Management’s Discussion and Analysis or Plan of Operation and other
        parts of this Report may contain “forward looking statements” within the meaning
        of Rule 175 under the Securities Act of 1933, as amended, and Rule 3b-6 under
        the Securities Act of 1934, as amended, including statements regarding, among
        other items, the Company business, the Company strategies, projections, and
        anticipated trends in the Company and in any industry in which it operates.
        The
        words “believe,” “expect,” “anticipate,” “intends,” “forecast,” “project,” and
        similar expressions identify forward-looking statements. These forward-looking
        statements are based largely on the Company expectations and are subject
        to a
        number of risks and uncertainties, certain of which are beyond the Company’s
        control. The Company cautions these statements are further qualified by
        important factors that could cause actual results to differ materially from
        those in the forward looking statements. The Company disclaims any intent
        or
        obligation to update “forward looking statements.”
  Item
        3. Controls and Procedures
 
 We
        do not
        believe there were any matters involving controls or procedures to report
        as of
        the period covered by this Report. However, we have performed, under the
        supervision and with the participation of the Company management, including
        the
        CEO acting as CEO and CFO, a review of the effectiveness of the design and
        operation of the Company’s disclosure controls and procedures. Based on that
        evaluation, Management concluded that the Company’s disclosure controls and
        procedures need to be improved primarily finding ways to maintain our
        disclosures in our SEC flings current. The Company recognizes the need to
        improve controls, and while it does not face any material operations, if
        it were
        to commence or undertake material operations or transactions, it would be
        best
        to have instituted controls. Management believes it will do so in the near
        future. There have been no significant changes in the Company internal controls
        or in other factors that could significantly effect internal controls subsequent
        to year end.
   -12-
  PART
        II- OTHERINFORMATION
 
 
 Item
        1. LEGALPROCEEDINGS
  None
 
 Item
        2.UNREGISTERED
        SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  None
 
 General
        Information
 
 All
        of
        the above noted shares, if any, were issued directly by the Company, and
        no
        commissions or fees were paid in connection with any of these transactions.
        The
        Company gave the purchasers the opportunity to ask questions and receive
        answers
        concerning the terms and conditions of the transactions and to obtain any
        additional information which the Company possessed or could acquire without
        unreasonable effort or expense that is necessary to verify the accuracy of
        information furnished; the Company advised the purchaser of the limitations
        on
        resale, and neither the Company nor any person acting on its behalf sold
        the
        securities by any form of general solicitation or general advertising; and/or
        the Company exercised reasonable care to assure that the purchasers of the
        securities are not underwriters within the meaning of section 2(11) of the
        Act
        in compliance with Rule 502(d).
 
 Item
        3. DEFAULTS ON SENIOR SECURITIES
  None
 
 Item
        4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
 None
  Item
        5. OTHER INFORMATION
 
 None
  Item
        6. Exhibits
  EX-31
        (Certifications, Sarbanes-Oxley Act of
        2002)
 EX-32
        (Certifications, Sarbanes-Oxley Act of
        2002)
 
 Reports
        on Form 8-K
 
 None
 -13-
  SIGNATURES
 
 In
        accordance with the requirements of the Exchange Act, the registrant, caused
        this report to be signed on its behalf by the undersigned, thereunto duly
        authorized.
 
 SFG
                FINANCIAL
                CORPORATIONDate:
                January 23, 2007
              By:
              /s/ John
                A.
                DuganJohn
                A. DuganChairman/CEO 
 SFG
                  FINANCIAL
                  CORPORATIONDate:
                  January 23, 2007
                By:
                /s/ John
                  A.
                  DuganJohn
                  A. DuganChairman/CEO
                  (principal
                    executive and financial
                    officer)
 
 -14-