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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31,
2010

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to _______

Commission File No.000-53490

SGB INTERNATIONAL HOLDINGS
INC.(Exact name of registrant as specified in its
charter)

|British Columbia                  | N/A                
|--------------------------------- | -------------------
|(State or other jurisdiction      | (I.R.S. Employer   
|of incorporation or organization) | Identification No.)

909  6081 No. 3 Road, Richmond, BC Canada V6Y
2B2(Address of principal executive offices) (zip code)

(604) 484-3127(Registrants telephone number,
including area code)

N/A(Former name, former address and former
fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).

Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of large accelerated filer, accelerated
filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.

|Large accelerated filer [ ] |                                               | Accelerated filer [ ]        
|--------------------------- | --------------------------------------------- | -----------------------------
|Non-accelerated filer [ ]   | (Do not check if a smaller reporting company) | Smaller reporting company [x]

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

1

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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. 
Yes [ ] No [ N/A ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date:
23,720,446 shares of common stock as of February 18, 2011

2

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TABLE OF CONTENTS

|PART
      I - FINANCIAL INFORMATION                                                                       | 4 
|---------------------------------------------------------------------------------------------------------- | --
|ITEM
      1. FINANCIAL STATEMENTS                                                                         | 4 
|ITEM
      2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF OPERATIONS. | 6 
|ITEM
      3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.                                  | 9 
|ITEM
      4T. CONTROLS AND PROCEDURES                                                                     | 9 
|PART
      II - OTHER INFORMATION                                                                          | 10
|ITEM
      1. LEGAL PROCEEDINGS                                                                            | 10
|ITEM
      1A. RISK FACTORS                                                                                | 10
|ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.                                 | 13
|ITEM
      3. DEFAULTS UPON SENIOR SECURITIES.                                                             | 13
|ITEM
      4. (REMOVED AND RESERVED)                                                                       | 13
|ITEM
      5. OTHER INFORMATION.                                                                           | 13
|ITEM
      6. EXHIBITS                                                                                     | 14
|SIGNATURES                                                                                                 | 15

3

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

These financial statements have been prepared by SGB
International Holdings Inc. without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted in accordance
with such SEC rules and regulations. In the opinion of management, the
accompanying statements contain all adjustments necessary to present fairly the
financial position of our company as of December 31, 2010, and the results of
operations, stockholders equity, and cash flows for the three and nine month
period ended December 31, 2010 and for the period from inception (November 6,
1997) to December 31, 2010. The results for these interim periods are not
necessarily indicative of the results for the entire year. The accompanying
financial statements should be read in conjunction with the financial statements
and the notes thereto filed as a part of our companys annual report on Form
10-K filed on July 14, 2010.

4

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SGB INTERNATIONAL HOLDINGS INC. 
  (A Development Stage Company)

December 31, 2010

|                                  | Index
|--------------------------------- | -----
|                                  |      
|Balance Sheets                    | F-1  
|Statements of Operations          | F-2  
|Statements of Cash Flows          | F-3  
|Notes to the Financial Statements | F-4  

5

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|SGB INTERNATIONAL HOLDINGS INC.
|-------------------------------
|(A Development Stage Company)  
|Balance Sheets                 
|(Expressed in US dollars)      

|                                                                                                                   |  |                   |   | As of        |  
|------------------------------------------------------------------------------------------------------------------ |  | ----------------- | - | ------------ | -
|                                                                                                                   |  |                   |   | December 31, |  
|                                                                                                                   |  |                   |   | 2010         |  
|                                                                                                                   |  |                   |   | (unaudited)  |  
|ASSETS                                                                                                             |  |                   |   |              |  
|Current Assets                                                                                                     |  |                   |   |              |  
|Cash                                                                                                               |  |                   | $ | 6,561        |  
|Prepaid Expens                                                                                                     |  |                   |   | 5,027        |  
|GST receivable                                                                                                     |  |                   |   | 4,658        |  
|Total Current Assets                                                                                               |  |                   |   | 16,246       |  
|                                                                                                                   |  |                   |   |              |  
|Total Assets                                                                                                       |  |                   | $ | 16,246       |  
|                                                                                                                   |  |                   |   |              |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                                                     |  |                   |   |              |  
|Current Liabilities                                                                                                |  |                   |   |              |  
|Accrued liabilities                                                                                                |  | (Note 3 )         |   | 1,487        |  
|Due to related parties                                                                                             |  | (Note 4 )         |   | 277,102      |  
|Notes payable                                                                                                      |  |                   |   | -            |  
|Total Liabilities                                                                                                  |  |                   |   | 278,589      |  
|Commitments and Contingencies                                                                                      |  |                   |   |              |  
|Stockholders Equity (Deficit)                                                                                     |  |                   |   |              |  
|Common Stock, Unlimited shares authorized, without par value
      
      22,820,445 shares issued and outstanding |  |                   |   | 198,857      |  
|Donated Capital                                                                                                    |  | (Note 4-f & 4-g ) |   | 71,435       |  
|Accumulated Other Comprehensive Loss                                                                               |  |                   |   | (2,847       | )
|Deficit Accumulated During the Development Stage                                                                   |  |                   |   | (529,788     | )
|Total Stockholders
      Equity (Deficit)                                                                         |  |                   |   | (262,343     | )
|Total Liabilities and Stockholders Equity (Deficit)                                                               |  |                   | $ | 16,246       |  

See Notes to Financial Statements

F-1

---

|SGB INTERNATIONAL HOLDINGS INC.
|-------------------------------
|(A Development Stage Company)  
|Statements of Operations       
|(Expressed in US dollars)      
|(unaudited)                    

|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  | Accumulated from    |  
|-------------------------------------------- |  | ------------ | - |  | ------------ | - |  | ------------ | - |  | ------------ | - |  | ------------------- | -
|                                             |  | For the      |   |  | For the      |   |  | For the      |   |  | For the      |   |  | Nov 6,1997          |  
|                                             |  | Three Months |   |  | Three Months |   |  | Nine Months  |   |  | Nine Months  |   |  | (Date of Inception) |  
|                                             |  | Ended        |   |  | Ended        |   |  | Ended        |   |  | Ended        |   |  | to                  |  
|                                             |  | December 31, |   |  | December 31, |   |  | December 31, |   |  | December 31, |   |  | December 31,        |  
|                                             |  | 2010         |   |  | 2009         |   |  | 2010         |   |  | 2009         |   |  | 2010                |  
|Revenue                                      |  | -            |   |  | -            |   |  | -            |   |  | -            |   |  | -                   |  
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Expenses                                     |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Amortization                                 |  | -            |   |  | -            |   |  | -            |   |  | 131          |   |  | 1,994               |  
|Automobile                                   |  | -            |   |  | -            |   |  | -            |   |  | 238          |   |  | 907                 |  
|General and administrative                   |  | 3,841        |   |  | 834          |   |  | 8,664        |   |  | 7,058        |   |  | 51,919              |  
|Interest                                     |  | 24           |   |  | -            |   |  | 24           |   |  | 74           |   |  | 2,273               |  
|Director fee                                 |  | 3,254        |   |  | -            |   |  | 9,920        |   |  | 20,158       |   |  | 32,148              |  
|Management fees                              |  | 23,688       |   |  | 22,704       |   |  | 70,116       |   |  | 66,305       |   |  | 196,808             |  
|Professional fees                            |  | 13,882       |   |  | 6,325        |   |  | 26,496       |   |  | 15,675       |   |  | 169,535             |  
|Rent                                         |  | 2,242        |   |  | 2,149        |   |  | 6,636        |   |  | 6,275        |   |  | 30,688              |  
|Travel                                       |  | -            |   |  | -            |   |  | -            |   |  | 1,958        |   |  | 4,501               |  
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Total Expenses                               |  | 46,930       |   |  | 32,011       |   |  | 121,855      |   |  | 117,872      |   |  | 490,772             |  
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Net Loss from Continuing Operations          |  | (46,930      | ) |  | (32,011      | ) |  | (121,855     | ) |  | (117,872     | ) |  | (490,772            | )
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Other Income                                 |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Gain on Disposal of Temporary Investments    |  | -            |   |  | -            |   |  | -            |   |  | -            |   |  | 946                 |  
|Forgiveness of debt                          |  |              |   |  | -            |   |  | -            |   |  | -            |   |  | 7,095               |  
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Net Loss before Discontinued Operations      |  | (46,930      | ) |  | (32,011      | ) |  | (121,855     | ) |  | (117,872     | ) |  | (482,731            | )
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Discontinued Operations                      |  | -            |   |  | -            |   |  | -            |   |  | -            |   |  | (47,057             | )
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Net Loss                                     |  | (46,930      | ) |  | (32,011      | ) |  | (121,855     | ) |  | (117,872     | ) |  | (529,788            | )
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Other Comprehensive Income (Loss)            |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Foreign currency translation adjustment      |  | (8,045       | ) |  | (670         | ) |  | (6,755       | ) |  | (52,448      | ) |  | (2,847              | )
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Comprehensive Loss                           |  | (54,975      | ) |  | (32,682      | ) |  | (128,610     | ) |  | (170,320     | ) |  | (532,635            | )
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Net Loss Per Share
       Basic and Diluted |  | (0.00        | ) |  | (0.00        | ) |  | (0.01        | ) |  | (0.01        | ) |  | N/A                 |  
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|                                             |  |              |   |  |              |   |  |              |   |  |              |   |  |                     |  
|Weighted Average Shares Outstanding          |  | 22,820,445   |   |  | 22,820,445   |   |  | 22,820,445   |   |  | 28,220,000   |   |  | N/A                 |  

See Notes to Financial Statements

F-2

---

|SGB INTERNATIONAL HOLDINGS INC.
|-------------------------------
|(A Development Stage Company)  
|Statements of Cash Flows       
|(Expressed in US dollars)      
|(unaudited)                    

|                                                                                 |   |                |   |   |                |   |   | Accumulated         |  
|-------------------------------------------------------------------------------- | - | -------------- | - | - | -------------- | - | - | ------------------- | -
|                                                                                 |   | For the        |   |   | For the        |   |   | From                |  
|                                                                                 |   | Nine Months    |   |   | Nine Months    |   |   | Nov 6, 1997         |  
|                                                                                 |   | Ended          |   |   | Ended          |   |   | (Date of Inception) |  
|                                                                                 |   | December, 2010 |   |   | December, 2009 |   |   | December 31, 2010   |  
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Cash flows from operating activities                                             |   |                |   |   |                |   |   |                     |  
|Net loss                                                                         | $ | (121,855       | ) | $ | (117,872       | ) | $ | (529,788            | )
|Adjustment to reconcile
      net loss to net cash used in operating activities: |   |                |   |   |                |   |   |                     |  
|Amortization                                                                     |   | -              |   |   | 138            |   |   | 1,994               |  
|Donated services                                                                 |   | -              |   |   | -              |   |   | 66,439              |  
|Forgiven debt                                                                    |   | -              |   |   | -              |   |   | (7,096              | )
|Gain on sale of temporary investment                                             |   | -              |   |   | -              |   |   | (946                | )
|                                                                                 |   |                |   |   |                |   |   | -                   |  
|Changes in operating assets and liabilities:                                     |   |                |   |   |                |   |   | -                   |  
|Prepaid expenses                                                                 |   | -              |   |   | -              |   |   | (1,329              | )
|Accounts receivable                                                              |   | (9,413         | ) |   | 1,384          |   |   | (9,181              | )
|Accounts payable and accrued liabilities                                         |   | (4,592         | ) |   | 1,798          |   |   | 1,225               |  
|Due to related party                                                             |   | -              |   |   | -              |   |   | 32,631              |  
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Net Cash (Used for) by Operating Activities                                      |   | (135,860       | ) |   | (114,552       | ) |   | (446,051            | )
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Cash flows from investing activities                                             |   |                |   |   |                |   |   |                     |  
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Purchase of temporary investment                                                 |   | -              |   |   | -              |   |   | (1,785              | )
|Proceeds from sale of temporary investment                                       |   | -              |   |   | -              |   |   | 2,795               |  
|Purchase of property and equipment                                               |   | -              |   |   | -              |   |   | (1,957              | )
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Net Cash (Used for) Provided by Investing Activities                             |   | -              |   |   | -              |   |   | (947                | )
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Cash flows from financing activities                                             |   |                |   |   |                |   |   |                     |  
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Proceeds from notes payable                                                      |   | -              |   |   | -              |   |   | 12,867              |  
|Advances from related parties                                                    |   | 101,900        |   |   | 117,762        |   |   | 319,351             |  
|Proceeds from common stock subscribed                                            |   | -              |   |   | -              |   |   | 122,507             |  
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Net Cash (Used for) Provided by Financing Activities                             |   | 101,900        |   |   | 117,762        |   |   | 454,725             |  
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Effect of exchange rate changes on cash                                          |   | (2,973         | ) |   | 8,047          |   |   | (1,166              | )
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Increase (Decrease) In Cash                                                      |   | (36,933        | ) |   | 11,257         |   |   | 6,561               |  
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Cash  Beginning of Period                                                       |   | 43,494         |   |   | 56,730         |   |   | -                   |  
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Cash  End of Period                                                             | $ | 6,561          |   | $ | 67,987         |   | $ | 6,561               |  
|                                                                                 |   |                |   |   |                |   |   |                     |  
|Supplemental Disclosures                                                         |   |                |   |   |                |   |   |                     |  
|Interest paid                                                                    | $ | 24             |   | $ | 74             |   | $ | 2,273               |  
|Income taxes paid                                                                | $ | -              |   | $ | -              |   | $ | -                   |  

See Notes to Financial Statements

F-3

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|SGB INTERNATIONAL HOLDINGS INC.                  
|-------------------------------------------------
|(A Development Stage Company)                    
|Notes to the Financial Statements                
|(Expressed in US dollars unless otherwise stated)
|December 31, 2010                                

|1. | Development Stage Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Orca International Language Schools Inc. (the
        Company) was incorporated in British Columbia, Canada on November
        6, 1997. It changed its name to SGB International Holdings Company on
        March 3, 2009. The Company is a Development Stage Company, as defined
        by Statement of Financial Accounting Standard (SFAS) No. 7
        Accounting and Reporting by Development Stage Enterprises.
        During the third quarter of 2008, the Company changed its principal business
        from the language education business to energy investment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | These financial statements have been prepared
        on a going concern basis, which implies the Company will continue to realize
        its assets and discharge its liabilities in the normal course of business.
        The Company has not generated revenues since inception and has never paid
        any dividends and is unlikely to pay dividends or generate earnings in
        the immediate or foreseeable future. The continuation of the Company as
        a going concern is dependent upon the continued financial support from
        its shareholders, the ability of the Company to obtain necessary equity
        financing to continue operations, and the attainment of profitable operations.
        As at December 31, 2010, the Company has working capital deficit of $262,343
        and accumulated losses of $532,635 since inception. These factors raise
        substantial doubt regarding the Companys ability to continue as
        a going concern. These financial statements do not include any adjustments
        to the recoverability and classification of recorded asset amounts and
        classification of liabilities that might be necessary should the Company
        be unable to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-4

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| | e) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | The Company considers all highly liquid instruments
        with maturity of three months or less at the time of issuance to be cash
        equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | f) | Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | Property and equipment consists of computer hardware,
        is recorded at cost, and is depreciated on a straight line basis over
        an estimated useful life of three years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | g) | Website Development Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | The Company recognizes the costs associated with developing
        a website in accordance with the American Institute of Certified Public
        Accountants (AICPA) Statement of Position (SOP)
        No. 98-1, Accounting for the Costs of Computer Software Developed
        or Obtained for Internal Use. The Company also follows the guidance
        pursuant to the Emerging Issues Task Force (EITF) No. 00-2, Accounting
        for Website Development Costs for website development costs
        incurred. The Company capitalizes website development costs that meet
        the capitalization criteria contained in SOP No. 98-1 unless recoverability
        of costs is not assured. To date the Company has charged all website development
        costs to operations.                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | h) | Long-Lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | In accordance with SFAS No. 144, Accounting
        for the Impairment or Disposal of Long-Lived Assets, the Company
        tests long-lived assets or asset groups for recoverability when events
        or changes in circumstances indicate that their carrying amount may not
        be recoverable. Circumstances which could trigger a review include, but
        are not limited to: significant decreases in the market price of the asset;
        significant adverse changes in the business climate or legal factors;
        accumulation of costs significantly in excess of the amount originally
        expected for the acquisition or construction of the asset; current period
        cash flow or operating losses combined with a history of losses or a forecast
        of continuing losses associated with the use of the asset; and current
        expectation that the asset will more likely than not be sold or disposed
        significantly before the end of its estimated useful life.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | Recoverability is assessed based on the carrying amount
        of the asset and its fair value which is generally determined based on
        the sum of the undiscounted cash flows expected to result from the use
        and the eventual disposal of the asset, as well as specific appraisal
        in certain instances. An impairment loss is recognized when the carrying
        amount is not recoverable and exceeds fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | i) | Financial Instruments and Fair Value Measures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | SFAS No. 157 Fair Value Measurementsrequires an entity to maximize the use of observable inputs and minimize
        the use of unobservable inputs when measuring fair value. SFAS No. 157
        establishes a fair value hierarchy based on the level of independent,
        objective evidence surrounding the inputs used to measure fair value.
        A financial instruments categorization within the fair value hierarchy
        is based upon the lowest level of input that is significant to the fair
        value measurement. SFAS No. 157 prioritizes the inputs into three levels
        that may be used to measure fair value:                                                                                                                                                                                                                                                                                                                                                                       

Level 1 applies to assets or
  liabilities for which there are quoted prices in active markets for identical
  assets or liabilities.

Level 2 applies to assets or
  liabilities for which there are inputs other than quoted prices that are observable
  for the asset or liability such as quoted prices for similar assets or liabilities
  in active markets; quoted prices for identical assets or liabilities in markets
  with insufficient volume or infrequent transactions (less active markets); or
  model-derived valuations in which significant inputs are observable or can be
  derived principally from, or corroborated by, observable market data.

Level 3applies to assets or
  liabilities for which there are unobservable inputs to the valuation methodology
  that are significant to the measurement of the fair value of the assets or liabilities.

Our financial instruments consist principally
  of cash, accounts receivable, accrued liabilities, accounts payable, and amounts
  due to a related party. Pursuant to SFAS No. 157, the fair value of our cash
  equivalents is determined based on Level 1 inputs, which consist
  of quoted prices in active markets for identical assets. We believe that the
  recorded values of all of our other financial instruments approximate their
  current fair values because of their nature and respective maturity dates or
  durations.

The Companys operations are in
  Canada and the United States, which results in exposure to market risks from
  changes in foreign currency rates. The financial risk is the risk to the Companys
  operations that arise from fluctuations in foreign exchange rates and the degree
  of volatility of these rates. Currently, the Company does not use derivative
  instruments to reduce its exposure to foreign currency risk.

F-5

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| | j) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Potential benefits of income tax losses are not recognized
        in the accounts until realization is more likely than not. The Company
        has adopted SFAS No. 109 Accounting for Income Taxes
        as of its inception. Pursuant to SFAS No. 109 the Company is required
        to compute tax asset benefits for net operating losses carried forward.
        Potential benefit of net operating losses have not been recognized in
        these financial statements because the Company cannot be assured it is
        more likely than not it will utilize the net operating losses carried
        forward in future years.                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | k) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Companys functional currency is the Canadian
        dollar. The financial statements are translated to United States dollars
        in accordance with SFAS No. 52 Foreign Currency Translationusing period-end rates of exchange for assets and liabilities, and
        average rates of exchange for the year for revenues and expenses. Translation
        gains (losses) are recorded in accumulated other comprehensive income
        (loss) as a component of stockholders equity (deficit). Gains and
        losses arising on translation or settlement of foreign currency denominated
        transactions or balances are included in the determination of income.
        Foreign currency transactions are primarily undertaken in United States
        dollars. The Company has not, to the date of these financial statements,
        entered into derivative instruments to offset the impact of foreign currency
        fluctuations.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | l) | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company records stock-based compensation in accordance
        with SFAS No. 123R Share Based Payments, using the
        fair value method. The Company has not issued any stock options and has
        had no unvested share based payments since inception.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | m) | Recent Accounting Pronouncements  Impact of New
        Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company does not expect the adoption of recently
        issued accounting pronouncements to have a significant impact on the Company's
        results of operations, financial position, or cash flow.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|3. | Accrued Liabilities                                                                                                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                   
|   | Accrued liabilities as at December 31, 2010,
        consist of $ 1,487 bill payable.                                                                                             
|   |                                                                                                                                                                                   
|4. | Related Party Transactions                                                                                                                                                        
|   |                                                                                                                                                                                   
|   | a)                                                                                                                                                                                
|   |                                                                                                                                                                                   
|   | b)                                                                                                                                                                                
|   |                                                                                                                                                                                   
|   | c)                                                                                                                                                                                
|   |                                                                                                                                                                                   
|   | d)                                                                                                                                                                                
|   |                                                                                                                                                                                   
|   | e)                                                                                                                                                                                
|   |                                                                                                                                                                                   
|   | f)                                                                                                                                                                                
|   |                                                                                                                                                                                   
|   | g)                                                                                                                                                                                
|   |                                                                                                                                                                                   
|5. | Common Stock                                                                                                                                                                      
|   |                                                                                                                                                                                   
|   | Company is authorized to issue no-par unlimited
        shares and has 22,820,445 shares issued and outstanding as of December
        31 , 2010 and March 31, 2010, respectively.

F-6

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| | a) | On March 4, 2009, the Company approved a 4.5 for one
        forward stock split of the issued and outstanding common stock. As a result,
        the issued and outstanding capital has increased from 5,071,210 shares
        of common stock with no par value to 22,820,445 shares of common stock
        with no par value.                                                                                                                      
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | b) | On March 3, 2009, the Company created a new class of
        preferred stock. As a result, the authorized capital consists of an unlimited
        amount of common stock without par value and an unlimited amount of preferred
        stock without par value. The Company has not issued any preferred stock.                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | c) | On November 12, 2008, the Company entered into a subscription
        agreement with the significant shareholder, SGB C &C Investment Ltd.
        for the sale of 6,750,000 split-adjusted common shares for gross proceeds
        of $121,245 (CDN$150,000). Subsequent to the sale, SGB C &C Investment
        Ltd. owns 18,607,500 split-adjusted common shares which represent 81.54%
        of the issued and outstanding shares of the Company
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | d) | On November 12, 2008, the former President of the Company
        voluntarily returned 6,750,000 split-adjusted common shares to the Company
        for cancellation                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | e) | On July 24, 2008, pursuant to a share acquisition agreement,
        the former President of the Company transferred 11,857,500 split adjusted
        common to the significant shareholder, SGB C &C Investment Ltd. in
        consideration for $308,750. The transferred shares represent 51.96% of
        the issued and outstanding common share capital resulting in a change
        of control of the Company.                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | f) | On April 8, 2008, three shareholders returned for cancellation
        an aggregate of 5,400,000 split adjusted shares of common stock to treasury
        for no consideration.                                                                                                                                                                                                                                                                        

|6. | Commitments and Contingencies                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                     
|   | On January 1, 2010 the Company entered into a service
        agreement with Xin Lenny LI, the director of the Company. Pursuant to
        this agreement, the Company agreed to accrue CDN $ 1000 monthly as director
        fee.
|   |                                                                                                                                                                                                                                     
|   | On January 15, 2009 the Company entered into a service
        agreement with SGB C&C Investment Ltd. a related party. Pursuant to
        this agreement, the Company agreed to pay CDN $ 24,000 quarterly.                        

F-7

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

Forward-Looking Statements

This report contains forward-looking statements which relate to
future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as may, should,
expects, plans, intends anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in
section 1A entitled Risk Factors on page 10, that may cause our or our
industrys actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

While these forward-looking statements, and any assumptions
upon which they are based, are made in good faith and reflect our current
judgment regarding the direction of our business, actual results will almost
always vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested herein. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this report, unless otherwise specified, all dollar amounts
are expressed in United States dollars and all references to "common shares"
refer to the common shares in our capital stock.

As used in this report, the terms we, us, our company,
and SGB mean SGB International Holdings Inc. and the term Orca means Orca
International Language Schools Inc., unless otherwise indicated.

Corporate Overview

We were incorporated in the province of British Columbia,
Canada under the name Slocan Valley Minerals Ltd. on November 6, 1997 with an
authorized share capital of 10,000,000 common shares without par value.
Following our incorporation we were not actively engaged in any business
activities. On June 1, 2004 we increased our authorized share capital from
10,000,000 common shares without par value to an unlimited number of common
shares without par value. On June 11, 2004 we changed our name to Orca
International Language Schools Inc.

Effective March 3, 2009, we changed our name from Orca
International Language Schools Inc. to SGB International Holdings Inc. and we created a new class of
preferred stock. As a result, our authorized capital consists of an unlimited
amount of common stock without par value and an unlimited amount of preferred
stock without par value. We have not issued any preferred stock.

Our Business

Our goal originally was to provide management services to
schools in the international education industry based on the principles of:
improving their administrative, operational, marketing, sales and human
resources functions; building links with other schools worldwide to foster
student exchange; and repositioning the schools to concentrate their curriculum
on preparing students for one of the three major English proficiency tests. We
have been searching for a school as the initial client but we have not been
successful in finding any such school. Since we have incurred losses since
November 6, 1997, our board of directors has decided to explore the possibility
of adopting a different business plan to protect our shareholders value.

We are defined as a "shell company" under the Rule 405 of the
Securities Act and Rule 12b-2 of the Exchange Act because we have nominal
operations and nominal assets.

6

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Results of Operations

The following summary of our results of operations should be
read in conjunction with our unaudited consolidated financial statements for the
three month period ended December 31, 2010 which are included herein.

Revenues

We have not earned any revenues since our inception. We are
still in the development stage and do not anticipate earning any revenues until
such time as we can establish an alliance with targeted companies to market or
distribute the results of our research projects.

The following summary of our results of operations should be
read in conjunction with our audited financial statements included in our Form
10-K filed on July 14, 2010.

Expenses

Our expenses for the three and nine months ended December 31,
2010 and 2009 were as follows:

|                           |   | For the      |  |   | For the      |  |   | For the      |  |   | For the      | 
|-------------------------- | - | ------------ |  | - | ------------ |  | - | ------------ |  | - | ------------ | 
|                           |   | Three Months |  |   | Three Months |  |   | Nine months  |  |   | Nine months  | 
|                           |   | Ended        |  |   | Ended        |  |   | Ended        |  |   | Ended        | 
|                           |   | December 31, |  |   | December 31, |  |   | December 31, |  |   | December 31, | 
|                           |   | 2010         |  |   | 2009         |  |   | 2010         |  |   | 2009         | 
|Amortization               | $ | -            |  | $ | -            |  | $ | -            |  | $ | 131          | 
|Automobile                 |   | -            |  |   | -            |  |   | -            |  |   | 238          | 
|General and administrative |   | 3,841        |  |   | 834          |  |   | 8,664        |  |   | 7,058        | 
|Interest                   |   | 24           |  |   | -            |  |   | 24           |  |   | 74           | 
|Director fee               |   | 3,254        |  |   | -            |  |   | 9,920        |  |   | 20,158       | 
|Management fees            |   | 23,688       |  |   | 22,704       |  |   | 70,116       |  |   | 66,305       | 
|Professional fees          |   | 13,882       |  |   | 6,325        |  |   | 26,496       |  |   | 15,675       | 
|Rent                       |   | 2,242        |  |   | 2,149        |  |   | 6,636        |  |   | 6,275        | 
|Travel                     |   | -            |  |   | -            |  |   | -            |  |   | 1,958        | 
|                           |   |              |  |   |              |  |   |              |  |   |              | 
|Total Expenses             | $ | 46,930       |  | $ | 32,011       |  | $ | 121,855      |  | $ | 117,872      | 

In the three months ended December 31, 2010 our expenses
increased by 46.6% because of increase in our professional fees.

In the nine months ended December 31, 2010 our expenses
remained at a similar level relative to the nine month period ended December 31,
2009.

Cash Requirements

We anticipate our operating expenses will increase as we
undertake our plan of operations. The increase will be attributable to the
retention of consultant experts, travelling expenses, and development expenses
as we explore opportunities to adopt a business plan other than the current
business of providing management services to schools in the international
education industry. We anticipate our ongoing operating expenses will also
increase as a result of our ongoing reporting requirements under the Exchange
Act.

We estimate our general administrative expenses and working
capital requirements for the next 12-month period to be as follows:

7

---

|Automobile                   | $ | 1,000   | 
|---------------------------- | - | ------- | 
|Office Expenses              |   | 8,000   | 
|Telephone and Communications |   | 2,000   | 
|Travel                       |   | 5,000   | 
|Accounting                   |   | 20,000  | 
|Legal                        |   | 20,000  | 
|Management Fees              |   | 90,000  | 
|Directors Fees               |   | 24,000  | 
|Total                        | $ | 170,000 | 

There can be no assurance that additional financing will be
available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis, if and when it is needed, we will be forced to
scale down or perhaps even cease the operation of our business.

Liquidity and Capital Resources

Working Capital

|                          |   | December 31, |   |   | March 31, |  
|------------------------- | - | ------------ | - | - | --------- | -
|                          |   | 2010         |   |   | 2010      |  
|                          |   | (unaudited)  |   |   | (audited) |  
|Total Current Assets      | $ | 16,246       |   | $ | 43,760    |  
|Total Liabilities         |   | 278,589      |   |   | 177,493   |  
|Working Capital (Deficit) | $ | (262,343     | ) | $ | (133,733  | )

As of December 31, 2010 our working capital deficit increased
by 96% because we have not generated any revenues and we continued to incur and
accrue management service fees. We have incurred recurring losses from
inception. Our ability to meet our financial obligations and commitments is
primarily dependent upon continued financial support of our shareholders,
directors and the continued issuance of equity to new and existing
shareholders.

Management believes that our companys cash will not be
sufficient to meet our working capital requirements for the next three-month
period. Should this prove to be the case, our company plans to raise the capital
required to satisfy our immediate short-term needs and additional capital
required to meet our estimated funding requirements for the next three months
primarily through the private placement of our equity securities. There is no
assurance that our company will be able to obtain further funds required for our
continued working capital requirements.

Cash Flows

We anticipate that we will incur approximately $1,000,000 for
operating expenses, including, legal, accounting and audit expenses associated
with our reporting requirements as a public company under the Exchange Act
during the next twelve months.

|                                                           |   | For the           |   |   | For the           |  
|---------------------------------------------------------- | - | ----------------- | - | - | ----------------- | -
|                                                           |   | Nine months       |   |   | Nine months       |  
|                                                           |   | Ended             |   |   | Ended             |  
|                                                           |   | December 31, 2010 |   |   | December 31, 2009 |  
|                                                           |   |                   |   |   |                   |  
|Net Cash (Used for) by Operating Activities                | $ | (135,860          | ) | $ | (114,552          | )
|Net Cash (Used for) Provided by Investing Activities       |   | --                |   |   | --                |  
|Net Cash (Used for) Provided by Financing
      Activities |   | 101,900           |   |   | 117,762           |  
|                                                           |   |                   |   |   |                   |  
|Increase (Decrease) In Cash                                | $ | (36,933           | ) | $ | 11,257            |  

8

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Going Concern

Our financial statements have been prepared on a going concern
basis, which implies we will continue to realize our assets and discharge our
liabilities in the normal course of business. We have not generated revenues
since inception and have never paid any dividends and are unlikely to pay
dividends or generate earnings in the immediate or foreseeable future. The
continuation of our company as a going concern is dependent upon the continued
financial support from our shareholders, our ability to obtain equity financing
to continue operations, and the attainment of profitable operations. As at
December 31, 2010, we have working capital deficit of $262,343 and accumulated
losses of $529,788 since inception. These factors raise substantial doubt
regarding our ability to continue as a going concern.

Off-Balance Sheet Arrangements

We have not entered into any transactions with unconsolidated
entities whereby we have financial guarantees or other contingent arrangements
that expose us to material continuing risks, contingent liabilities or any other
obligations that provide financing, liquidity, market risk or credit risk
support to us

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.

Not Applicable.

ITEM 4T. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As required by Rule 13a-15 of the Securities Exchange Act of
1934, our principal executive officer and principal financial officer evaluated
our company's disclosure controls and procedures (as defined in Rules 13a-15(e)
of the Securities Exchange Act of 1934) as of the end of the period covered by
this report. Based on this evaluation, our principal executive officer and
principal financial officer concluded that as of the end of the period covered
by this report, these disclosure controls and procedures were not effective to
ensure that the information required to be disclosed by our company in reports
it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the Securities Exchange Commission and to ensure that such
information is accumulated and communicated to our company's management,
including our principal executive officer and principal financial officer, to
allow timely decisions regarding required disclosure. The conclusion that our
disclosure controls and procedures were not effective was due to the presence of
the following material weaknesses in internal control over financial reporting
which are indicative of many small companies with small staff: (i) inadequate
segregation of duties and effective risk assessment; and (ii) insufficient
written policies and procedures for accounting and financial reporting with
respect to the requirements and application of both United States generally
accepted accounting principles and Securities and Exchange Commission
guidelines. Management anticipates that such disclosure controls and procedures
will not be effective until the material weaknesses are remediated.

We plan to take steps to enhance and improve the design of our
internal controls over financial reporting. During the period covered by this
quarterly report on Form 10-Q, we have not been able to remediate the material
weaknesses identified above. Our management continues to review processes and
will make necessary changes to strengthen our system of internal controls over
financial reporting.

Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues,
if any, within our company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple error or mistake.

9

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Changes in Internal Control over Financial
Reporting

There were no changes in our internal control over financial
reporting during the quarter ended December 31, 2010 that have materially
affected or are reasonably likely to materially affect, our internal control
over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS.

An investment in our common stock involves a number of very
significant risks. You should carefully consider the following risks and
uncertainties in addition to other information in this quarterly report in
evaluating our company and its business before purchasing shares of our
companys common stock. Our business, operating results and financial condition
could be seriously harmed due to any of the following risks. You could lose all
or part of your investment due to any of these risks.

Risks Associated with our Company

We have a limited operating history and if we are not
successful in operating our business, then investors may lose all of their
investment in our company.

We have a limited operating history. Our business is subject to
the risks and expenses encountered by start up companies, such as uncertainties
regarding our level of future revenues and our inability to budget expenses and
manage growth accordingly and our inability to access sources of financing when
required and at rates favorable to us. Our limited operating history and the
highly competitive nature of the business in which we plan to operate will make
it difficult or impossible to predict future results of our operations. If we
are not successful in operating our business, then investors may lose all of
their investment in our company.

We have a history of losses and have a deficit, which raises
substantial doubt about our ability to continue as a going concern.

We have not generated any revenues since our date of inception
and we will continue to incur operating expenses without revenues until we
acquire school(s) as clients, commence our business and finally, achieve a
profitable level of operations. Our net loss since inception to December 31,
2010 is $529,788. We had cash in the amount of $6,561 as of December 31, 2010.
We currently do not have any operations and we have no income. We estimate our
average monthly operating expenses to be approximately $15,000 each month. We
cannot provide assurances that we will be able to successfully develop our
business. These circumstances raise substantial doubt about our ability to
continue as a going concern as described in an explanatory paragraph to our
independent auditors report on our audited financial statements, dated June 22,
2010, filed with our annual report on Form 10-K on July 14, 2010. If we are
unable to continue as a going concern, investors will likely lose all of their
investments in our company.

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Our future is dependent upon our ability to obtain financing
and if we do not obtain such financing, we may have to cease our exploration
activities and investors could lose their entire investment.

There is no assurance that we will operate profitably or will
generate positive cash flow in the future. We will require additional financing
in order to proceed beyond the first few months of our plan of operations. We
will require additional financing to sustain our business operations if we are
not successful in earning revenues. We currently do not have any arrangements
for further financing and we may not be able to obtain financing when required.
Our future is dependent upon our ability to obtain financing. If we do not
obtain such financing, our business could fail and investors could lose their
entire investment.

Because we may never earn revenues from our operations, our
business may fail.

We anticipate that we will incur increased operating expenses
without realizing any revenues. We therefore expect to incur significant losses
into the foreseeable future. We recognize that if we are unable to generate
significant revenues from our business, we will not be able to earn profits or
continue operations. There is no history upon which to base any assumption as to
the likelihood that we will prove successful, and we can provide no assurance
that we will generate any revenues or ever achieve profitability. If we are
unsuccessful in addressing these risks, our business will fail and investors may
lose all of their investment in our company.

Because our directors, executive officers, and principal
shareholders control a large percentage of our common stock, such insiders have
the ability to influence matters affecting our shareholders.

Our directors and executive officers, in the aggregate,
beneficially own over 63.56% of the issued and outstanding shares of our common
stock with a principal shareholder beneficially owns 63.56% of the issued and
outstanding shares of our common stock. As a result, they have the ability to
influence matters affecting our shareholders, including the election of our
directors, the acquisition or disposition of our assets, and the future issuance
of our shares. Because our directors, executive officers and principal
shareholders control such shares, investors may find it difficult to replace our
management if they disagree with the way our business is being operated. Because
the influence by these insiders could result in management making decisions that
are in the best interest of those insiders and not in the best interest of the
investors, you may lose some or all of the value of your investment in our
common stock.

Our directors and executive officers are engaged in other
business activities and accordingly may not devote sufficient time to our
business affairs, which may affect our ability to conduct operations and
generate revenues.

Our directors and executive officers are involved in other
business activities. Xin Li, our President, Chief Executive Officer, Chief
Financial Officer and Director spends approximately 20 hours, or 50%, of his
business time on the management of our company and our other director, Stuart
Wooldridge, spends approximately 10 hours, or 20%, of his business time on the
management of our company. As a result of their other business endeavors, they
may not be able to devote sufficient time to our business affairs, which may
negatively affect our ability to conduct our ongoing operations and our ability
to generate revenues. In addition, the management of our company may be
periodically interrupted or delayed as a result of their other business
interests.

All of our assets and all of our directors and executive
officers are outside the United States, with the result that it may be difficult
for investors to enforce within the United States any judgments obtained against
us or any of our directors or officers.

All of our assets are located outside the United States and we
do not currently maintain a permanent place of business within the United
States. In addition, all of our directors and executive officers are nationals
and/or residents of countries other than the United States, and all or a
substantial portion of such persons assets are located outside the United
States. As a result, it may be difficult for investors to enforce within the
United States any judgments obtained against us or our officers or directors,
including judgments predicated upon the civil liability provisions of the
securities laws of the United States or any state thereof. Consequently, you may
be effectively prevented from pursuing remedies under U.S. federal securities
laws against them.

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Risks Associated with Our Common Stock

Our common stock is illiquid and the price of our common
stock may be negatively impacted by factors which are unrelated to our
operations.

Although our common stock is currently listed for quotation on
the OTC Bulletin Board, none of our shares have yet been purchased or sold on
that market. Even when a market is established and trading begins, trading
through the OTC Bulletin Board is frequently thin and highly volatile. There is
no assurance that a sufficient market will develop in our stock, in which case
it could be difficult for shareholders to sell their stock. The market price of
our common stock could fluctuate substantially due to a variety of factors,
including market perception of our ability to achieve our planned growth,
quarterly operating results of our competitors, trading volume in our common
stock, changes in general conditions in the economy and the financial markets or
other developments affecting our competitors or us. In addition, the stock
market is subject to extreme price and volume fluctuations. This volatility has
had a significant effect on the market price of securities issued by many
companies for reasons unrelated to their operating performance and could have
the same effect on our common stock.

We do not intend to pay dividends on any investment in the
shares of stock of our company.

We have never paid any cash dividends and currently do not
intend to ever pay any cash dividends. To the extent that we require additional
funding currently not provided for in our financing plan, our funding sources
may prohibit the payment of a dividend. Because we do not intend to declare
dividends, any gain on an investment in our company will need to come through an
increase in the stocks price. This may never happen and investors may lose all
of their investment in our company.

Our common stock is a penny stock. Trading of our stock may
be restricted by the SECs penny stock regulations, which may limit a
shareholders ability to buy and sell our stock.

Our stock is a penny stock. the Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit the
marketability of our common stock.

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FINRA sales practice requirements may also limit a
stockholders ability to buy and sell our stock.

In addition to the penny stock rules described above, the
Financial Industry Regulatory Authority (FINRA) has adopted rules that require
that in recommending an investment to a customer, a broker or dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, brokers or dealers must make reasonable efforts to
obtain information about the customers financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for brokers or dealers to recommend that their customers buy our
common stock, which may prevent you from reselling your shares and may cause the
price of the shares to decline.

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

On January 17, 2011, we granted our directors and one
consultant stock options to purchase an aggregate of 2,282,044 shares of our
common stock at an exercise price of Cdn $0.10 per share for a term expiring
January 17, 2012. The options are fully vested upon grant.

We granted these stock options to three non-U.S. persons (as
that term is defined in Regulation S of the Securities Act of 1933, as
amended) relying on Section 4(2) of the Securities Act of 1933, as
amendedand/or Rule 506 promulgated pursuant to the Securities Act of
1933, as amended.

On February 2, 2011 Can-US Intl Capital Group Inc. exercised
their option to purchase 900,000 shares of common stock. On February 18, 2011, we issued 900,000 shares of common stock to Can-US Intl Capital Group Inc.

We issued the shares to one non-U.S. persons (as that term is
defined in Regulation S of the Securities Act of 1933, as amended)
relying on Section 4(2) of the Securities Act of 1933, as amendedand/or
Rule 506 promulgated pursuant to the Securities Act of 1933, as
amended.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. (REMOVED AND RESERVED).

ITEM 5. OTHER INFORMATION.

On November 30, 2010, we held our annual and special meeting of
shareholders. At the meeting, our shareholders elected Xin Li and Stuart
Wooldridge as directors of our company. Jun Huang has decided not to run for
re-election as a director of our company at the meeting. To our knowledge, Mr.
Huangs decision was not as a result of any disagreement with our company on any
matter relating to our operations, policies or practices.

At the meeting, our shareholders appointed Stan J.H. Lee, CPA
as our auditor and authorized our directors to fix our auditors
remuneration.

At the meeting, our shareholders approved the 2010 equity
compensation plan pursuant to which our board of directors may grant stock
options or stock awards to acquire up to a maximum of 10% of the total issued
and outstanding common shares of our company at the time of grant.

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ITEM 6. EXHIBITS

Exhibits required by Item 601 of Regulation S-K:

|Exhibit Number | Description                                                                                                                                                                                                                   
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1            | Articles of Incorporation (attached as an exhibit to our
      registration statement on Form SB-2 filed on August
      7, 2007)                                                                                             
|3.01           | Notice of Alteration
          filed with the Ministry of Finance, BC Registry Services effective March
          3, 2009 (attached as an exhibit to our current report on Form 8-K filed
          on March 5, 2009)         
|3.02           | Amended and Restated Articles
          of Incorporation of SGB International Holdings Inc. (attached as an
          exhibit to our current report on Form 8-K filed on March 5, 2009)                                       
|10.1           | Share transfer
          agreement dated July 2, 2008 among Stuart Wooldridge, SGB C&C Investment
          Ltd. and our company (attached as an exhibit to our current report on
          Form 8-K filed on August 6, 2008).
|10.2           | Form of Private Placement Subscription
          Agreement between SGB C&C Investment Ltd. and our company (attached
          as an exhibit to our current report on Form 8-K filed on November 18,
          2008)          
|10.3           | Form of stock
          option agreement (attached as an exhibit to our current report on Form
          8-K filed on January 21, 2011)                                                                                       
|16.1           | Letter from Manning Elliott
          LLP dated July 31, 2009 (attached as an exhibit to our current report
          on Form 8-K filed on August 8, 2009)                                                                    
|31.1*          | Certification pursuant
          to Rule 13a-14(a) under the Securities Exchange Act of 1934                                                                                                                                  
|32.1*          | Certification
          pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
          of the Sarbanes- Oxley Act of 2002                                                                                   

* Filed herewith.

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SIGNATURES

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.

SGB INTERNATIONAL HOLDINGS INC.

|By:                                                                                             | 
|----------------------------------------------------------------------------------------------- | 
|                                                                                                | 
|/s/ Xin Li                                                                                      | 
|Xin Li                                                                                          | 
|President, CEO, CFO and Director                                                                | 
|Principal Executive Officer, Principal Financial Officer
      and Principal Accounting Officer | 
|Date: February 18, 2011                                                                         | 

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