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**FORM      10-QSB**

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**July      31, 2006**

**SFG      FINANCIAL CORPORATION**

| Delaware                                       | 13-3208094                            |
|------------------------------------------------|---------------------------------------|
| (State                or other jurisdiction of | (IRS                Employer          |
| incorporation                or organization)  | Identification                Number) |

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

**(516)-327-0843**

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**TABLE      OF CONTENTS**

| PART                1 FINANCIAL                INFORMATION                       |
|----------------------------------------------------------------------------------|
|                                                                             |   |
|                                                                             |   |
|                                                                             |   |
| Item                1.                                                           | FINANCIAL                STATEMENTS |
|                                                                             |   |
| Item                2.                                                           | MANAGEMENT'S                DISCUSSION AND ANALYSIS OR PLAN OF                OPERATION |
|                                                                             |   |
| Item                3.                                                           | CONTROLS                AND PROCEDURES |
|                                                                             |   |
|                                                                             |   |
|                                                                             |   |
| PART                II OTHER                INFORMATION                          |
|                                                                             |   |
|                                                                             |   |
|                                                                             |   |
| Item                1.                                                           | LEGAL                PROCEEDINGS |
|                                                                             |   |
| Item                2.                                                           | UNREGISTERED                SALES OF EQUITY SECURITIES AND USE OF                PROCEEDS |
|                                                                             |   |
| Item                3.                                                           | DEFAULTS                ON SENIOR SECURITIES |
|                                                                             |   |
| Item                4.                                                           | SUBMISSION                OF MATTERS TO A VOTE OF SECURITY HOLDERS |
|                                                                             |   |
| Item                5.                                                           | OTHER                INFORMATION |
|                                                                             |   |
| Item                6.                                                           | EXHIBITS |
|                                                                             |   |
|                                                                             |   |
| SIGNATURES                                                                       |   |
|                                                                             |   |
|                                                                             |   |
| EX-31                (Certifications, Sarbanes-Oxley Act of                2002) |
| EX-32                (Certifications, Sarbanes-Oxley Act of                2002) |

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CIAL

**SFG      FINANCIAL CORPORATION**

**COMPARATIVE      FINANCIAL STATEMENTS**

**FOR      THE SIX MONTHS ENDING JULY 31, 2006 and 2005**

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**SFG      FINANCIAL CORPORTATION**

|                                                                          | Page   |
|-------------------------------------------------------------------------------|--------|
|                                                                          |   |
| Independent                accountant’s report                          | 5      |
|                                                                          |   |
| Financial                statements:                                          |   |
|                                                                          |   |
| Balance                Sheets                                                 | 6      |
|                                                                          |   |
| Statements                of Income and Expenses                              | 7      |
|                                                                          |   |
| Statements                of Stockholders' Equity                (Deficiency) | 8      |
|                                                                          |   |
| Statements                of Cash flows                                       | 9      |
|                                                                          |   |
| Notes                to the Comparative Financial                Statements   | 10     |
|                                                                          |   |
|                                                                          |   |
|                                                                          |   |
|                                                                          |   |
|                                                                          |   |
|                                                                          |   |
|                                                                          |   |

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**THOMASBAUMAN**

**CERTIFIED        PUBLIC ACCOUNTANT**

**4        SCHAEFFER STREET**

**HUNTINGTON        STATION, NY 11746**

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

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**SFG      FINANCIAL CORPORATION**

**BALANCE      SHEETS**

**AS      OF JULY 31 **

|                                                                       |   |   |       |   |   |       |   |
|----------------------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
|                                                                       |   |   | **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                       |   |   | 97,435     |   |   | 86,280     |   |
| Due                to related parties                                      |   |   | 21,672     |   |   | 12,018     |   |
| **Total                Liabilities**                                       |   |   | 119,107    |   |   | 98,298     |   |
|                                                                       |   |   |       |   |   |       |   |
| **Stockholders'                Equity (Deficiency)**                       |   |   |       |   |   |       |   |
| Common                stock; $.001 par value 100,000,000 shares            |   |   | 4,314      |   |   | 4,314      |   |
| authorized;                4,313,856 shares issued; 4,313,856 shares       |   |   |       |   |   |       |   |
| outstanding                at July 31, 2006 and 2005, respectively         |   |   |       |   |   |       |   |
| Additional                paid in capital                                  |   |   | 2,425,701  |   |   | 2,425,701  |   |
| Retained                earnings                                           |   |   | (2,549,102 | )      |   | (2,528,293 | )      |
| **Total                Stockholders' Equity (Deficiency)**                 |   |   | (119,087   | )      |   | (98,278    | )      |
|                                                                       |   |   |       |   |   |       |   |
|                                                                       |   |   |       |   |   |       |   |
| **Total                Liabilities and Stockholders' Equity (Deficiency)** |   | $      | 20         |   | $      | 20         |   |
|                                                                       |   |   |       |   |   |       |   |

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**SFG        FINANCIAL CORPORATION**

**STATEMENTS        OF INCOME AND EXPENSES**

**FOR THE SIX      MONTHS ENDED JULY 31**
|                                                                         |   |   |      |   |   |      |   |
|------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
|                                                                         |   |   |      |   |   |      |   |
|                                                                         |   |   | **2006**  |   |   | **2005**  |   |
| **Revenue:**                                                                 |   |   |      |   |   |      |   |
| Sales                                                                        |   | $      | -         |   | $      | -         |   |
|                                                                         |   |   |      |   |   |      |   |
| **Operating                  Expenses**                                      |   |   |      |   |   |      |   |
| Filing                  fees                                                 |   |   | -         |   |   | -         |   |
| Office                  expenses                                             |   |   | 780       |   |   | 594       |   |
| Professional                  fees                                           |   |   | 7,000     |   |   | -         |   |
| Stock                  transfer fees                                         |   |   | -         |   |   | -         |   |
| Travel                                                                       |   |   | -         |   |   | 15        |   |
| **Total                  Operating Expenses**                                |   |   | 7,780     |   |   | 609       |   |
|                                                                         |   |   |      |   |   |      |   |
| **Income                  (Loss) From Operations**                           |   |   | (7,780    | )      |   | (609      | )      |
|                                                                         |   |   |      |   |   |      |   |
| **Provision                  for Taxes**                                     |   |   |      |   |   |      |   |
| New                  York State corporate taxes                              |   |   | 155       |   |   | 155       |   |
|                                                                         |   |   |      |   |   |      |   |
| **Net                  Income (Loss)**                                       |   | $      | (7,935    | )      | $      | (764      | )      |
|                                                                         |   |   |      |   |   |      |   |
| **Earnings                  Per Share**                                      |   | $      | (0.002    | )      | $      | (0.000    | )      |
|                                                                         |   |   |      |   |   |      |   |
| **Weighted                  Average of Number of Common Shares Outstanding** |   |   | 4,313,856 |   |   | 4,313,856 |   |
|                                                                         |   |   |      |   |   |      |   |

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**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 six months ended July 31, 2005    |   |   |                                    |   |   | -                              |   |   | -                           |   |   | (764         | )      |
|                                                                         |   |   |                                    |   |   |                           |   |   |                        |   |   |         |   |
| **Balance                  at July 31, 2005**                                |   |   | 4,313,856                               |   |   | 4,314                          |   |   | 2,425,701                   |   |   | (2,528,293   | )      |
|                                                                         |   |   |                                    |   |   |                           |   |   |                        |   |   |         |   |
| Net                  Income (Loss) for the six months ended January 31, 2006 |   |   | -                                       |   |   | -                              |   |   | -                           |   |   | (12,874      | )      |
|                                                                         |   |   |                                    |   |   |                           |   |   |                        |   |   |         |   |
| **Balance                  at January 31, 2006**                             |   |   | 4,313,856                               |   |   | 4,314                          |   |   | 2,425,701                   |   |   | (2,541,167   | )      |
|                                                                         |   |   |                                    |   |   |                           |   |   |                        |   |   |         |   |
| Net                  Income (Loss) for the six months ended July 31, 2006    |   |   |                                    |   |   |                           |   |   |                        |   |   | (7,935       | )      |
|                                                                         |   |   |                                    |   |   |                           |   |   |                        |   |   |         |   |
| **Balance                  at July 31, 2006**                                |   |   | 4,313,856                               |   | $      | 4,314                          |   | $      | 2,425,701                   |   | $      | (2,549,102   | )      |
|                                                                         |   |   |                                    |   |   |                           |   |   |                        |   |   |         |   |
|                                                                         |   |   |                                    |   |   |                           |   |   |                        |   |   |         |   |

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**SFG        FINANCIAL CORPORATION**

**STATEMENTS        OF CASH FLOWS**
**FOR      THE      SIX MONTHS ENDED JULY 31**
|                                                                          |   |   |               |   |   |               |   |
|-------------------------------------------------------------------------------|--------|--------|--------------------|--------|--------|--------------------|--------|
|                                                                          |   |   | **2006**           |   |   | **2005**           |   |
| **Cash                  flow from operating activities:**                     |   |   |               |   |   |               |   |
| **Net                  income (loss)**                                        |   | $      | (7,935             | )      | $      | (764               | )      |
| **Adjustments                  to reconcile net income to net cash provided** |   |   |               |   |   |               |   |
| **by                  operating activities:**                                 |   |   |               |   |   |               |   |
| **Changes                  in assets and liabilities:**                       |   |   |               |   |   |               |   |
| Increase                  (decrease) accounts payable                         |   |   | 7,155              |   |   | -                  |   |
| Increase                  (decrease) due to related parties                   |   |   | 780                |   |   | 764                |   |
| Increase                  (decrease) deferred taxes                           |   |   | -                  |   |   | -                  |   |
| Prior                  period adjustment                                      |   |   | -                  |   |   | -                  |   |
| **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                |   |
|                                                                          |   |   |               |   |   |               |   |

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**SFG        FINANCIAL CORPORATION**

**NOTES        TO COMPARATIVE FINANCIAL STATEMENTS**

**1.        Significant accounting policies:**

| **a.  ** | **Organization                and Business Operations** |
|--------------------|---------------------------------------------------------|
| **b.  ** | **Cash                and cash equivalents** |
|--------------------|----------------------------------------------|
| **c.  ** | **Use                of estimates** |
|--------------------|-------------------------------------|
| **d.  ** | **Earnings                per share** |
|--------------------|---------------------------------------|
| **e.  ** | **Income                taxes** |
|--------------------|---------------------------------|

**2.        Accounts payable and accrued expenses**

| **3.  ** | **Related                party transactions** |
|--------------------|-----------------------------------------------|
| **4.  ** | **Going                concern** |
|--------------------|----------------------------------|

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Item            2. Management's Discussion and Analysis or Plan of Operation

Forward            Looking Statements

Controls and 

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INFORMATION

5. OTHER 

EX-31            (Certifications, Sarbanes-Oxley Act of            2002)

EX-32            (Certifications, Sarbanes-Oxley Act of            2002)

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|                                      |                                                       |                                      |
|-------------------------------------------|------------------------------------------------------------|-------------------------------------------|
|                                      | SFG                      FINANCIAL CORPORATION(Registrant) |
|                                 |                                                  |                                 |
| Date:                    January 23, 2007 | By:                                              | /s/ John                    A. Dugan |
|                                      | John                    A. Dugan                           |
|                                      | Chairman/CEO                                               |

|                                        |                                                                           |                                                             |
|---------------------------------------------|--------------------------------------------------------------------------------|------------------------------------------------------------------|
|                                        | SFG                        FINANCIAL CORPORATION(Registrant)                   |
|                                   |                                                                      |                                                        |
| Date:                      January 23, 2007 | By:                                                                  | /s/ John                      A.                      Dugan |
|                                        | John                      A. Dugan                                             |
|                                        | Chairman/CEO(principal executive and financial                        officer) |

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