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**FORM        10-QSB**

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**October        31, 2006**

**0-13635**

**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 I                  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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Item        1. Financial Statements

**SFG      FINANCIAL CORPORATION**

**COMPARATIVE      FINANCIAL STATEMENTS**

**FOR      THE NINE MONTHS ENDING OCTOBER 31, 2006 and 2005**

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**SFG      FINANCIAL CORPORTATION**

|                                                                          | Page   |
|-------------------------------------------------------------------------------|--------|
|                                                                          |   |
| Independent                accountant’s report                          | 1      |
|                                                                          |   |
| Financial                statements:                                          |   |
|                                                                          |   |
| Balance                Sheets                                                 | 2      |
|                                                                          |   |
| Statements                of Income and Expenses                              | 3      |
|                                                                          |   |
| Statements                of Stockholders' Equity                (Deficiency) | 4      |
|                                                                          |   |
| Statements                of Cash Flows                                       | 5      |
|                                                                          |   |
| Notes                to the Comparative Financial                Statements   | 6      |
|                                                                          |   |
|                                                                          |   |
|                                                                          |   |
|                                                                          |   |
|                                                                          |   |
|                                                                          |   |
|                                                                          |   |

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**THOMAS      BAUMAN**

**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**

**BALANCESHEETS**

**AS      OF OCTOBER 31, **

|                                                                          |   |   |       |   |   |       |   |
|-------------------------------------------------------------------------------|--------|--------|------------|--------|--------|------------|--------|
|                                                                          |   |   | **2006**   |   |   | **2005**   |   |
| **ASSETS**                                                                    |   |   |       |   |   |       |   |
| **Current                Assets**                                             |   |   |       |   |   |       |   |
| Cash                on hand                                                   |   | $      | 9,606      |   | $      | 20         |   |
|                                                                          |   |   |       |   |   |       |   |
|                                                                          |   |   |       |   |   |       |   |
| **Total                Assets**                                               |   |   | 9,606      |   |   | 20         |   |
|                                                                          |   |   |       |   |   |       |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY (DEFICIENCY)**          |   |   |       |   |   |       |   |
| **Liabilities**                                                               |   |   |       |   |   |       |   |
| Accounts                payable and accrued expenses                          |   |   | 68,076     |   |   | 86,280     |   |
| Deposit                payable                                                |   |   | 71,971     |   |   | -          |   |
| Due                to related parties                                         |   |   | 22,244     |   |   | 12,202     |   |
| **Total                Liabilities**                                          |   |   | 162,291    |   |   | 98,482     |   |
|                                                                          |   |   |       |   |   |       |   |
| **Stockholders'                Equity (Deficiency)**                          |   |   |       |   |   |       |   |
| Common                stock; $.001 par value 100,000,000 shares authorized;   |   |   | 5,514      |   |   | 4,314      |   |
| 5,513,856                and 4,313,856 shares issued; 5,513,856 and 4,313,856 |   |   |       |   |   |       |   |
| shares                outstanding at October 31, 2006 and 2005, respectively  |   |   |       |   |   |       |   |
| Additional                paid in capital                                     |   |   | 2,502,351  |   |   | 2,425,701  |   |
| Retained                earnings                                              |   |   | (2,660,550 | )      |   | (2,528,477 | )      |
| **Total                Stockholders' Equity (Deficiency)**                    |   |   | (152,685   | )      |   | (98,462    | )      |
|                                                                          |   |   |       |   |   |       |   |
|                                                                          |   |   |       |   |   |       |   |
| **Total                Liabilities and Stockholders' Equity (Deficiency)**    |   | $      | 9,606      |   | $      | 20         |   |
|                                                                          |   |   |       |   |   |       |   |

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**SFG        FINANCIAL CORPORATION**

**STATEMENTS        OF INCOME AND EXPENSES**

**FOR        THE NINE MONTHS ENDED OCTOBER 31**

|                                                                         |   |   |      |   |   |      |   |
|------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|-----------|--------|
|                                                                         |   |   | **2006**  |   |   | **2005**  |   |
| **Revenue:**                                                                 |   |   |      |   |   |      |   |
| Forgiveness                  of debt                                         |   | $      | 8,050     |   | $      | -         |   |
|                                                                         |   |   |      |   |   |      |   |
| **Operating                  Expenses**                                      |   |   |      |   |   |      |   |
| Filing                  and stock transfer fees                              |   |   | 2,035     |   |   | -         |   |
| Interest                  expense                                            |   |   | 4         |   |   |      |   |
| Office                  expenses                                             |   |   | 1,434     |   |   | 778       |   |
| Penalties                  & interest                                    |   |   | 108       |   |   | -         |   |
| Professional                  fees                                           |   |   | 123,701   |   |   | -         |   |
| Travel                                                                       |   |   | -         |   |   | 15        |   |
| **Total                  Operating Expenses**                                |   |   | 127,282   |   |   | 793       |   |
|                                                                         |   |   |      |   |   |      |   |
| **Income                  (Loss) From Operations**                           |   |   | (119,232  | )      |   | (793      | )      |
|                                                                         |   |   |      |   |   |      |   |
| **Provision                  for Taxes**                                     |   |   |      |   |   |      |   |
| New                  York State corporate taxes                              |   |   | 151       |   |   | 155       |   |
|                                                                         |   |   |      |   |   |      |   |
| **Net                  Income (Loss)**                                       |   | $      | (119,383  | )      | $      | (948      | )      |
|                                                                         |   |   |      |   |   |      |   |
| **Earnings                  Per Share**                                      |   | $      | (0.026    | )      | $      | (0.000    | )      |
|                                                                         |   |   |      |   |   |      |   |
| **Weighted                  Average of Number of Common Shares Outstanding** |   |   | 4,580,523 |   |   | 4,313,856 |   |
|                                                                         |   |   |      |   |   |      |   |

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**SFG        FINANCIAL CORPORATION**

**STATEMENTSOF        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 nine months  |       |       |                                                      |       |       |                                |       |       |                             |       |       |              |       |
| ended                  October 31, 2005                 |       |       |                                                      |       |       |                           |       |       |                        |       |       | (948         | )          |
|                                                    |       |       |                                                      |       |       |                           |       |       |                        |       |       |         |       |
| **Balance                  at October 31, 2005**        |       |       | 4,313,856                                                 |       |       | 4,314                          |       |       | 2,425,701                   |       |       | (2,528,477   | )          |
|                                                    |       |       |                                                      |       |       |                           |       |       |                        |       |       |         |       |
| Net                  Income (Loss) for the three months |       |       |                                                           |       |       |                                |       |       |                             |       |       |              |       |
| November                  1, 2005 to January 31, 2006   |       |       |                                                      |       |       |                           |       |       |                        |       |       | (12,690      | )          |
|                                                    |       |       |                                                      |       |       |                           |       |       |                        |       |       |         |       |
| **Balance                  at January 31, 2006**        |       |       | 4,313,856                                                 |       |       | 4,314                          |       |       | 2,425,701                   |       |       | (2,541,167   | )          |
|                                                    |       |       |                                                      |       |       |                           |       |       |                        |       |       |         |       |
| Shares                  issued for services             |       |       | 1,150,000                                                 |       |       | 1,150                          |       |       | 73,600                      |       |       |         |       |
| Shares                  issued to extinguish debt       |       |       | 50,000                                                    |       |       | 50                             |       |       | 3,050                       |       |       |         |       |
| Net                  Income (Loss) for the nine months  |       |       |                                                      |       |       |                           |       |       |                        |       |       |              |       |
| ended                  October 31, 2006                 |       |       |                                                      |       |       |                           |       |       |                        |       |       | (119,383     | )          |
|                                                    |       |       |                                                      |       |       |                           |       |       |                        |       |       |         |       |
| **Balance                  at October 31, 2006**        |       |       | 5,513,856                                                 |       | $          | 5,514                          |       | $          | 2,502,351                   |       | $          | (2,660,550   | )          |
|                                                    |       |       |                                                      |       |       |                           |       |       |                        |       |       |         |       |

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**SFG        FINANCIAL CORPORATION**

**STATEMENTS        OF CASH FLOWS**

**FOR        THE NINE MONTHS ENDED OCTOBER 31**

|                                                                          |   |   |     |   |   |     |   |
|-------------------------------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|
|                                                                          |   |   | **2006** |   |   | **2005** |   |
| **Cash                  flow from operating activities:**                     |   |   |     |   |   |     |   |
| **Net                  income (loss)**                                        |   | $      | (119,383 | )      | $      | (948     | )      |
| **Adjustments                  to reconcile net income to net cash provided** |   |   |     |   |   |     |   |
| **by                  operating activities:**                                 |   |   |     |   |   |     |   |
| **Changes                  in assets and liabilities:**                       |   |   |     |   |   |     |   |
| Increase                  (decrease) accounts payable                         |   |   | (22,204  | )      |   | -        |   |
| Increase                  (decrease) due to related parties                   |   |   | 1,352    |   |   | 948      |   |
| Increase                  (decrease) deposit payable                          |   |   | 71,971   |   |   | -        |   |
| **Net                  cash provided by operations**                          |   |   | (68,264  | )      |   | -        |   |
|                                                                          |   |   |     |   |   |     |   |
| **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                          |   |   | 1,200    |   |   | -        |   |
| Increase                  (decrease) in additional paid in capital            |   |   | 76,650   |   |   | -        |   |
| **Cash                  flow provided from (for) financing activities**       |   |   | 77,850   |   |   | -        |   |
|                                                                          |   |   |     |   |   |     |   |
| **Net                  increase in cash and cash equivalent**                 |   |   | 9,586    |   |   | -        |   |
|                                                                          |   |   |     |   |   |     |   |
| **Cash                  and cash equivalents at beginning of year**           |   |   | 20       |   |   | 20       |   |
|                                                                          |   |   |          |   |   |          |   |
| **Cash                  and cash equivalents at end of year**                 |   | $      | 9,606    |   | $      | 20       |   |
|                                                                          |   |   |     |   |   |     |   |
| **Cash                  paid for interest and income taxes as follows:**      |   |   |     |   |   |     |   |
| Interest                                                                      |   | $      | -        |   | $      | -        |   |
| Corporate                  income taxes paid                                  |   | $      | 155      |   | $      | 155      |   |
|                                                                          |   |   |     |   |   |     |   |

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**SFG        FINANCIAL CORPORATION**

**NOTESTO        THE 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.        Deposit payable**

**       **
***SFG        Financial Corporation***

**4.        Related party transactions**

**5.        **Going concern****

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

Item        3. Controls and Procedures

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Item        1. LEGAL PROCEEDINGS

Item        2.UNREGISTERED        SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Item        3. DEFAULTS 

Item        4. SUBMISSION 

Item        5. 

Item        6. Exhibits

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

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

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SIGNATURES

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

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

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