U.S. SECURITIES AND EXCHANGE
                                   COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                     For the fiscal year ended JULY 31, 2003

                         Commission file number 0-29671

                               SGD HOLDINGS, LTD.
                 (Name of small business issuer in its charter)

               DELAWARE                                 13-3986493
  (State or other jurisdiction of          (I.R.S. Employer Identification No.)
   incorporation or organization)

                    4385 SUNBELT DRIVE, ADDISON, TEXAS 75001
               (Address of principal executive offices) (Zip Code)

          3801 WILLIAM D TATE AVENUE, SUITE 100, GRAPEVINE, TEXAS 76051
           (Former address of principal executive offices) (Zip Code)

                    Issuer's telephone number (972) 248-0266

           Securities registered pursuant to Section 12(g) of the Act:
                         COMMON STOCK, $.0001 PAR VALUE
                                (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ] .

Check if delinquent filers in response to Item 405 of Regulation S-B is not
contained in this form, and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]

State issuer's revenues for its most recent fiscal year - $13,422,192.

As of October 31, 2003, the registrant had outstanding 36,266,077 shares of its
Common Stock, par value $.0001, its only class of voting securities. The
aggregate market value of the shares of Common Stock of the registrant held by
non-affiliates on October 31, 2003, was approximately $177,000 based on its
closing price on the OTC: Bulletin Board on that date. (See Item 5).

                       DOCUMENTS INCORPORATED BY REFERENCE

No  documents  are  incorporated  by  reference  into this Report  except  those
Exhibits so incorporated as set forth in the Exhibit index.  Transitional  Small
Business Disclosure Format (Check one): Yes [ ]; No [ X ].


                                       1
<PAGE>



ITEM 1.  DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT

On April 20, 2000, pursuant to an agreement and plan of reorganization dated
April 11, 2000, SGD Holdings, Ltd. ("SGD" or the "Company") acquired 100% of the
issued and outstanding common stock of Benton Ventures, Inc. ("Benton"), a
Delaware corporation, in exchange for 1,200,000 newly issued common shares of
SGD. On April 25, 2000, the Board of Directors of SGD elected to merge Benton
into SGD pursuant to Section 253 of Delaware's General Corporate Laws. As a
result of the merger, SGD was the surviving company and assumed the reporting
responsibilities under successor issuer status as more fully detailed in Section
12(g)(3) of The Securities Exchange Act of 1934. On January 24, 2001 the Company
changed its name from Goldonline International, Inc. to SGD Holdings, Ltd.

SGD, formerly Transun International Airways, Inc., was incorporated May 22, 1996
in Delaware and until June 1999 was a development stage company with plans to
establish itself as an air transport company providing non-scheduled air service
(charter flights) for tour operators, charter brokers, cruise line casinos,
theme parks and theme attractions.

On June 10, 1999, SGD acquired all of the issued and outstanding common stock of
both Con-Tex Silver Imports, Inc. ("Silver"), incorporated September 12, 1994 in
Texas and Jewelry Solutions & Commerce, Inc. ("Jewelry"), formerly Gold
Online.com, Inc., incorporated February 3, 1999 in Delaware. For accounting
purposes, the acquisitions have been treated as the acquisition of Silver and
Jewelry by SGD with Silver as the acquirer (reverse acquisition). The historical
financial statements prior to June 10, 1999 are those of Silver. On January 17,
2001, Gold Online.com, Inc. changed its name to Jewelry Solutions & Commerce,
Inc. and was inactive at July 31, 2003.

Effective October 1, 2000, the Company acquired, pursuant to an Agreement and
Plan of Merger the operations and business of HMS Jewelry Company, Inc. ("HMS"),
in exchange for $4,500,000 in cash and convertible promissory notes in the
amount of $2,500,000. The transaction resulted in the merger of the business and
operations of HMS Jewelry Co., Ltd., a Texas limited partnership and HMS
Operating Company, a Texas corporation into a newly formed subsidiary of the
Company, HMS Jewelry Company, Inc. HMS is a national jewelry wholesaler,
specializing in 18K, 14K and 10K gold and platinum jewelry, with headquarters in
Dallas, Texas. HMS markets its products to a network of over 30,000 retail
jewelers, through a catalog and telephone ordering system and through its B2B
online catalog http://www.HMSgold.com.

Effective September 1, 2001, SDG acquired the business and operations of
Tandori, Inc., ("Tandori") pursuant to a Transfer and Assumption Agreement in
exchange for $300,000 in cash paid to the franchisor and assumption of existing
liabilities. The acquisition included the LifeStyle Technologies(TM) franchise
for Raleigh, North Carolina, which had commenced operations in January 2001, and


                                       2
<PAGE>

three other locations which had not yet commenced operations; part of Houston,
Texas and Wilmington and Greensboro, North Carolina. In addition, SGD issued
800,000 shares of its common stock, valued at $160,000, based upon the quoted
price on the date of transfer, to certain principles of the new operation.
Tandori operated under the LifeStyle Technologies(TM) name as a full service
home technology integration company providing complete installation and
equipment for structured wiring, home audio, home theater, home security, PC
networking, central vacuum, accent lighting and other current technology
applications.

DISCONTINUED OPERATIONS

(a) On April 23, 2003, Silver filed a Voluntary Petition for Reorganization
under Chapter 11 of Title 11 of the United States Code in the United States
Bankruptcy Court for the Northern District of Texas, Fort Worth Division, Case
No. 03-43783-DML-11. The reorganization filing was necessitated as a result of
James G. Gordon, a Director and former President of SGD, locking Silver
employees out of the office and warehouse premises which he owned and leased to
Silver, which prevented Silver from operating its business.

During the week ended July 25, 2003, management of the Company determined that
the additional costs being charged to the Estate as a result of operating in
bankruptcy would make it virtually impossible to reorganize Silver. Accordingly,
in SGD's next scheduled Board of Director's meeting, on August 7, 2003, the
Board voted to convert the Chapter 11 case to Chapter 7 and all operations of
Silver were immediately discontinued. The Voluntary Petition for Reorganization
under Chapter 11 was converted to Chapter 7 on September 23, 2003. The
operations of Silver have been included in discontinued operations for the
periods presented.

 Silver was involved in both the wholesale and retail jewelry business,
principally silver, with retail locations in Texas. The wholesale operation of
Silver consisted of sales directly from its headquarters in Conroe, Texas, sales
from a Dallas location and sales from jewelry shows at locations throughout the
south central United States.

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

Tandori operated under the LifeStyle Technologies(TM) name as a full service
home technology integration company providing complete installation and
equipment for structured wiring, home audio, home theater, home security, PC
networking, central vacuum, accent lighting and other current technology
applications.





                                       3
<PAGE>



BUSINESS OF ISSUER

SGD is now a holding company engaged in acquiring and developing jewelry related
businesses and other businesses which allow the Company to better diversify.

HMS is a wholesale jewelry distributor with headquarters in Dallas, Texas. HMS
primarily sells gold products to a network of over 30,000 retail jewelers,
through a catalog and telephone ordering system.

Jewelry established an Internet jewelry presence in the late fall of 1999, when
Jewelry began selling through an e-commerce site, located at
http://www.GoldOnline.com, which has now been licensed to a third party. Jewelry
is evaluating its e-commerce site, as well as, other retail options.

                                   FISCAL YEAR

As used throughout this document, fiscal 2003 refers to the fiscal year ended
July 31, 2003 and fiscal 2002 refers to the fiscal year ended July 31, 2002.

                         PRINCIPAL PRODUCTS AND MARKETS

HMS is a national jewelry wholesaler, specializing in 18K, 14K AND 10K gold and
platinum jewelry, with headquarters in Dallas, Texas. HMS markets its products
to a network of over 30,000 retail jewelers through a catalog and telephone
ordering system and through its B2B online catalog at http://www.HMSgold.com.
HMS reduces gross sales by the amount of returns and discounts to determine net
sales each month. Each month a reserve is established for returns based on HMS's
historical experience, the amount of gross sales and the customer base. Total
actual returns amounted to approximately 10.55% and 10.33% of gross sales in
fiscal 2003 and fiscal 2002, respectively.

                                  DISTRIBUTION

HMS generally utilizes the services of United Parcel Service for shipping its
products.

                                   COMPETITION

HMS operates as a wholesale jewelry distributor, and as such, its primary
competitive factors in the industry are price, quality and customer service. HMS
has developed specialized customer service programs that are important
competitive factors in sales to jewelry retailers. The recent trend towards
consolidation at the retail level in the jewelry industry and low labor costs
outside the United States may increase the level of competition facing us. There
can be no assurance that we will be able to compete successfully against current
and future competitors or that competitive pressures we face will not have a
material adverse effect on our business, operating results and financial
condition.




                                       4
<PAGE>



                    SOURCE AND AVAILABILITY OF RAW MATERIALS

HMS acquires its inventory from a large number of sources, the loss of any one
of which would not have a material impact on its operations.

HMS uses gold consignment arrangements with a gold lender to supply
substantially all of its gold needs. See Item 6. "Management's Discussion and
Analysis - Liquidity and Capital Resources."

                           SEASONAL NATURE OF BUSINESS

The Company's business is seasonal in nature. Presented below are the Company's
net sales from continuing operations for each quarter of fiscal 2003 and fiscal
2002:
                                                           Net Sales
                                                      ($ in thousands)

Fiscal 2003 ended July 31, 2003

               First quarter ....................         $ 3,995
               Second quarter ...................           4,649
               Third quarter ....................           2,264
               Fourth quarter ...................           2,514
                                                          -------
                 Total ..........................         $13,422
                                                          =======


Fiscal 2002 ended July 31, 2002

               First quarter ....................         $ 2,887
               Second quarter ...................           4,157
               Third quarter ....................           2,308
               Fourth quarter ...................           2,609
                                                          -------
                 Total ..........................         $11,961
                                                          =======

HMS has experienced a seasonal pattern in its operating results with the second
quarter (ended January 31) typically having the highest sales. This fluctuation
is mitigated to a degree by the early placement of orders by many of their
customers, particularly for the Christmas holiday season. This accounts for the
first quarter (ended October 31) generally having higher sales than the third
and fourth quarter. In addition, HMS markets holiday and seasonal products year
round for such occasions as Mother's Day, Valentine's Day, Father's Day,
religious holidays and school graduations.





                                       5
<PAGE>



                                 MAJOR CUSTOMERS

HMS services a significant number of jewelry store customers located throughout
the United States, the largest of which accounts for less than 3.5% of net
sales. The loss of any customer would not have a material impact on the
operations of HMS.

                                    EMPLOYEES

At July 31, 2003, the Company had 25.5 equivalent employees (23 full-time) as
compared to 28.5 equivalent employees (28 full-time) at July 31, 2002.


ITEM 2.  DESCRIPTION OF PROPERTY

At July 31, 2003, SGD maintained its corporate headquarters at 3801 William D.
Tate Avenue, Suite 100, Grapevine, Texas. The office is currently provided by
the President of the Company without charge.

HMS maintains its wholesale gold inventory and operations in Dallas, Texas. The
office and operations area comprises 8,075 square feet and is leased from a
company owned by the President of HMS for $8,075 per month.


ITEM 3.  LEGAL PROCEEDINGS

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

On January 3, 2003 James G. Gordon and Lisa K. Gordon ("Plaintiffs") filed a
petition in the District Court of Montgomery County, Texas, Cause No.
03-01-00006-CV against SGD Holdings, Ltd., G. David Gordon and David Covey. G.
David Gordon is the brother of James G. Gordon and David Covey is president of
Tandori, Inc., a wholly owned subsidiary of SGD. Plaintiffs, in their claim
asserted against SGD, are seeking to declare the one for six stock split, which
occurred in September 1999, void. If declared void, they claim they would
presently own 75,000,000 shares of SGD common stock instead of 11,250,000 shares
of SGD common stock as currently reported by the Company.

                                       6
<PAGE>

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

On April 23, 2003, SGD's wholly owned subsidiary, Con-Tex Silver Imports, Inc.
filed a Voluntary Petition for Reorganization under Chapter 11 of Title 11 of
the United States Code in the United States Bankruptcy Court for the Northern
District of Texas, Fort Worth Division, Case No. 03-43783-DML-11. The
reorganization filing was necessitated as a result of James G. Gordon, a
Director and former President of SGD, locking Silver employees out of the office
and warehouse premises which he owned and leased to Silver, which prevented
Silver from operating.

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


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.





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<PAGE>



ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

SGD had been a non-reporting publicly traded company with certain of its
securities exempt from registration under the Securities Act of 1933 pursuant to
Rule 504 of Regulation D and Rule 701 of the General Rules and Regulations of
the Securities and Exchange Commission. SGD's common stock is traded on the OTC:
Bulletin Board operated by NASDAQ under the symbol SGDD. SGD had not filed a
registration statement with the Securities and Exchange Commission and had not
been a reporting company under the Securities Exchange Act of 1934 prior to
April 3, 2000.

The NASDAQ Stock Market implemented a change in its rules requiring all
companies trading securities on the OTC: Bulletin Board to become reporting
companies under the Securities Exchange Act of 1934. The Company was required to
become a reporting company by the close of business on April 3, 2000, or no
longer be listed on the OTC: Bulletin Board. SGD effected a merger with Benton
and has become a successor issuer thereto in order to comply with the reporting
company requirements implemented by the Nasdaq Stock Market.

The following chart shows the quarterly high and low bid prices for the
Company's Common Stock for the last two years, as reported on the OTC: Bulletin
Board. The prices represent quotations by dealers without adjustments for retail
mark-ups, mark-downs or commissions and may not represent actual transactions.

                                                 Opening   High   Low  Closing
                                                   Bid      Bid   Bid     Bid

               Quarter ended October 31, 2002   $   .07$   .18$   .04$   .06
               Quarter ended January 31, 2003   $   .06$   .17$   .03$   .05
               Quarter ended April 30, 2003 .   $   .05$   .12$   .05$   .06
               Quarter ended July 31, 2003 ..   $   .06$   .06$   .01$   .01

               Quarter ended October 31, 2001   $   .70$   .87$   .20$   .51
               Quarter ended January 31, 2002   $   .51$   .51$   .12$   .12
               Quarter ended April 30, 2002 .   $   .12$   .27$   .08$   .14
               Quarter ended July 31, 2002 ..   $   .14$   .18$   .05$   .07


HOLDERS

As of October 31, 2003, there were approximately 219 holders of record of the
Company's common stock, an undetermined number of which represent more than one
individual participant in securities positions with the Company.




                                       8
<PAGE>



DIVIDENDS

The Company has not previously paid cash dividends on its common stock, and
intends to utilize current resources to expand; thus, it is not anticipated that
cash dividends will be paid on the Company's common stock in the foreseeable
future.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table summarizes certain information as of July 31, 2003 with
respect to compensation plans (including individual compensation arrangements)
under which Common Stock of the Company is authorized for issuance:
<TABLE>
<CAPTION>

                                        Number of securities to be
                                          issued upon exercise of    Weighted average exercise      Number of securities
                                           outstanding options,        price of outstanding        remaining available for
Plan category                               warrants and rights    options, warrants and rights        future issuance

<S>                                      <C>                    <C>                           <C>
Equity compensation plans approved
  by security holders                               300,000           $       1.00                      9,592,000
Equity compensation plans not
  approved by security holders                            -                    .00                              -
                                               -------------          ------------                    -----------

Total                                                300,000          $       1.00                      9,592,000
                                               =============           ============                     =========
</TABLE>

The material features of the Company's stock option plan, the data for which is
summarized under the Equity compensation plans approved by security holders in
the table above, and its warrant arrangements are summarized in Note 11 to the
consolidated financial statements that appear in Item 7.

Recent Sales of Unregistered Securities

During the year ended July 31, 2003, the Company sold 4,000,000 shares of its
common stock in private transactions for $200,000. The shares were sold pursuant
to an exemption from registration under Section 4(2) promulgated under the
Securities Act of 1933, as amended.



ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

From time to time, the Company may publish forward-looking statements relative
to such matters as anticipated financial performance, business prospects,
technological developments and similar matters. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-looking
statements. All statements other than statements of historical fact included in
this section or elsewhere in this report are, or may be deemed to be,
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Exchange Act of 1934. Important factors that


                                       9
<PAGE>

could cause actual results to differ materially from those discussed in such
forward-looking statements include: 1. General economic conditions and their
impact on the retail sales environment and the home building market; 2.
Fluctuations in the price of gold and other metals used to manufacture our
jewelry; 3. Customer requirements; 4. Competition from outside the United States
where labor costs are substantially lower; and 5. Success of marketing,
advertising and promotional campaigns.

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

LIQUIDITY AND CAPITAL RESOURCES

The Company's working capital from continuing operations increased from
$2,010,518 at July 31, 2002 to $2,198,988 at July 31, 2003. The working capital
increase of $188,470 consists of a decline in current assets of $51,873 and a
decrease in current liabilities of $240,343. The decline in current assets is
primarily composed of a decline in cash of $257,527, a net increase in inventory
of $212,624, a decrease in prepaid expenses and other assets of $184,496 and an
increase in deferred income taxes of $165,400. The decrease in current
liabilities is primarily composed of a decrease in accounts payable of $334,644.

The Company has a number of unresolved legal issues with one of its Directors,
James G. Gordon and will continue to have high legal costs until these issues
can be resolved. The Company anticipates that it will be able to raise
additional funds, as necessary, to fund these lawsuits.

HMS relies on a gold consignment program, short-term borrowings and internally
generated funds to finance its inventories and accounts receivable. HMS fills
most of its gold supply needs through a gold consignment arrangement with a gold
lender. Under the terms of that arrangement, HMS is entitled to lease the lesser
of an aggregate of 13,200 ounces of fine gold or an aggregate consigned gold
value not to exceed $4,950,000, reduced by any outstanding balance on its
$1,500,000 line of credit. The consigned gold is secured by substantially all
property of HMS, including its cash, accounts receivable, inventory and
machinery and equipment, the corporate guaranty of SGD and the individual
guarantees of Harry Schmidt, President of HMS, and G. David Gordon. HMS pays the
gold lender a consignment fee based on the dollar value of ounces of gold
outstanding under their agreement, which value is based on the daily Second
London Gold Fix. HMS believes that its financing rate under the consignment
arrangement is substantially similar to the financing rates charged to gold
consignees similarly situated to HMS. As of July 31, 2003, HMS held 9,925 ounces
of gold on consignment with a market value of $3,520,894 and at July 31, 2002,
HMS held 12,332 ounces of gold on consignment with a market value of $3,756,944.

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

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

                                       10
<PAGE>

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

While we believe our supply of gold is relatively secure, significant increases
or rapid fluctuations in the cost of gold may impact the demand for our
products. During the past two years, the average closing price of gold according
to the Second London Gold Fix ranged from a low of $302 to a high of $390 and
averaged $337 per ounce during fiscal 2003 and ranged from a low of $271 to a
high of $350 and averaged $297 per ounce in fiscal 2002. Fluctuations in the
precious metals markets and credit may result in an interruption of our gold
supply or the credit arrangements necessary to allow us to support our accounts
receivable and continue the use of consigned gold.

The gold lender has also provided a line of credit to HMS in the amount of
$1,500,000 that is due on demand, including interest at the lender's prime rate
plus 3/4%. HMS does not have any advances on this line of credit at July 31,
2003. During fiscal 2003 HMS borrowed and repaid a total of $950,000 on this
line of credit.

During fiscal 2003, the Company had $974,875 ($397,559 from continuing
operations) in cash used in operating activities as compared to $842,388 ($6,142
provided by continuing operations) in fiscal 2002. During fiscal 2003 the major
uses of cash for operating activities was the net loss of $243,333, an increase
in inventory of $212,624 and the decrease in accounts payable of $408,031. The
most significant source of cash from operating activities and non-cash
adjustments was the decrease in other assets of $278,303. During fiscal 2002 the
most significant use of cash included an increase in accounts receivable of
$204,105, an increase in inventory of $752,132 and an increase in other assets
of $209,739. Major increases in cash and non-cash adjustments include an
unrealized loss on marketable securities of $321,518, proceeds from the sale of
marketable securities of $300,001, and increases in accounts payable of
$425,332.

During fiscal 2003 the Company used $151,253 in investing activities, which
included $107,500 for capital expenditures and $43,753 from discontinued
operations. During fiscal 2002 the Company used $49,389 for capital expenditures
and $624,557 from discontinued operations.

During fiscal 2003, the Company had $868,601 ($651,477 for discontinued
operations) in net cash provided by financing activities. The $217,124 in cash
provided by continuing operations includes $200,000 in proceeds from common
stock sales, $30,000 in related party note proceeds and $12,876 in note
payments. During fiscal 2002 the Company had $342,126 ($346,139 from


                                       11
<PAGE>

discontinued operations) in net cash provided by financing activities. The
$4,013 in cash used by financing operations from continuing operations included
$835,000 in loan proceeds and collection of a note receivable of $500,000 less
repayment of related party debt of $1,305,153 and less repayment of other notes
of $33,860.

The Company is currently budgeting $100,000 for capital expenditures for fiscal
2004. The Company will either use cash or its existing credit facilities to
finance the planned capital expenditures.


SALES AND COST OF SALES

Sales and related cost of sales are summarized as follows:

                                              2003                2002

Sales and revenues                   $    13,422,192    $     11,961,639
Cost of sales                             10,083,982           8,720,699
                                      ---------------    ----------------
Gross profit                         $     3,338,210    $      3,240,940
                                     ===============    ================

Fiscal 2003
Fiscal 2003 sales increased $1,460,553 (12%) from the year earlier period,
despite the impact of the economy. The increase is primarily due to the impact
of the new catalog which was introduced at the end of fiscal 2002 and to the
increase in gold prices during fiscal 2003. During the past two years, the
average closing price of gold according to the Second London Gold Fix ranged
from a low of $302 to a high of $390 and averaged $337 per ounce during fiscal
2003 and ranged from a low of $271 to a high of $350 and averaged $297 per ounce
in fiscal 2002.

Fiscal 2002
HMS sales increased 2.6% on a proforma basis. The decline in sales experienced
by HMS after the September 11, 2001 tragedy was offset by increases from its new
catalog, which was introduced during the fourth quarter of fiscal 2002.

During fiscal 2003 HMS gross profit margin was 24.9% as compared to 27.1% in
fiscal 2002. HMS gross profit margin declined in fiscal 2003 primarily due to
the increase in gold price. HMS has a fixed amount of profit for each ounce of
gold sold; accordingly with the gold value increasing their gross profit
percentage is a smaller percentage of sales.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES


Fiscal 2003 - Gold Operations - HMS SG&A
During fiscal 2003, the selling, general and administrative ("SG&A") expenses of
HMS increased $378,716 (16%) to $2,699,429 from $2,320,713. The 16% increase in


                                       12
<PAGE>

SG&A is consistent with the 12% sales increase. The major items which increased
include salaries of $118,791; catalog costs of $105,327; freight of $45,839; and
commissions of $32,667. The majority of the increases are associated with the
increased level of sales and the costs associated with the new catalog, which
was distributed during the fourth quarter of fiscal 2002.

Fiscal 2002 - Gold Operations - HMS SG&A
During fiscal 2002, HMS reduced its SG&A costs by $99,970 (4%) from the year
earlier period, which only included ten months of operations. On a pro forma
basis, HMS reduced its SG&A costs by $387,647 (14.3%).

Goodwill amortization expense in fiscal 2002 was zero as compared to $205,330 in
fiscal 2001 due to implementing the new FASB requirements.

Accounting and legal costs declined $106,987 from the historical amount in
fiscal 2001, which was primarily the result of the acquisition in the prior
year.

A number of other costs and expenses both increased and decreased as follows:
catalog costs - down $43,411; commissions - up $32,607; freight out - up
$45,849; jewelry shows - up $41,757; rent - down $26,253; salaries - up $14,042
(from pro forma amount).

Catalog costs are the result of amortizing the total cost of the catalog over
twelve to twenty-four months, based upon the expected life of the catalog. The
current year amount only includes the initial 2 months of amortization for the
new catalog. Commissions and freight out are both up due to increased sales
while jewelry show costs are higher due to attending more shows during the
current year than in the prior year.

Corporate and other SG&A
SG&A costs increased from $317,665 in fiscal 2002 to $461,041 in fiscal 2003.
The increase of $143,376 consists primarily of increases in professional
services of $177,046, principally legal costs associated with legal actions
required as a result of Director James G. Gordon's actions.


INTEREST EXPENSE

Interest expense amounted to $324,653 ($222,700 related party) in fiscal 2003,
as compared to $188,311 ($160,861 related party) in fiscal 2002. The increase in
related party interest is mainly due to fees paid with common stock to induce
the related parties to extend and guarantee certain Company loans. The increase
in unrelated party interest is due to the $835,000 loan being outstanding for
the full period in fiscal 2003 and only 3 months during fiscal 2002 and due to
common stock issued as a renewal fee.





                                       13
<PAGE>



GOLD CONSIGNMENT FEE

The gold consignment fee charged by the gold lender for HMS during fiscal 2002
was $124,163 and amounted to $187,296 during fiscal 2003. The increase is
attributed to a higher level of consigned inventory due primarily to higher gold
prices.


UNREALIZED LOSS ON MARKETABLE SECURITIES

The Company recognized an unrealized loss in the amount of $3,521 and $321,518
on their investment in trading securities in fiscal 2003 and fiscal 2002,
respectively.


INTEREST AND OTHER INCOME

Interest income declined in fiscal 2003 to $5,197 as compared to $34,380 in
fiscal 2002. The decline is due primarily to lower average invested cash
balances.


INCOME TAXES

From continuing operations, in fiscal 2003 the Company recorded an income tax
benefit of $89,200 and in fiscal 2002 the Company recorded an income tax
provision of $9,500.


NEW ACCOUNTING STANDARDS

In June 2002, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 146, "Accounting for Costs Associated with
Exit or Disposal Activities". SFAS 146 requires that a liability be recognized
on the date on which the company had committed to an exit plan. In fiscal 2003
the Company adopted this statement with no effect on its financial position or
results of operations.

In October 2002, the FASB issued Statement of Financial Accounting Standards No.
147, "Acquisition of Certain Financial Institutions." The adoption of SFAS 147
did not have any impact on the financial position or results of operations of
the Company.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure."
This Statement amends SFAS 123, "Accounting for Stock-Based Compensation" to
provide alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. In
addition, this Statement amends the disclosure requirements of SFAS 123 to
require prominent disclosures in both annual and interim financial statements
about the method of accounting for stock-based employee compensation and the
effect of the method used on reported results. The Company adopted the
provisions of this statement effective January 1, 2003 with no impact on its
financial position or results of operations.

                                       14
<PAGE>

Effective January 1, 2003, we adopted FASB Interpretation No. ("FIN") 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others." FIN 45 elaborates on the
disclosures that must be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees. It also clarifies
that a guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The adoption of this interpretation did not have a material effect on
the Company's financial position or results of operations.

In January 2003, the FASB issued FIN 46, "Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51." FIN 46 requires a variable interest
entity ("VIE") to be consolidated by the primary beneficiary of the entity under
certain circumstances. FIN 46 is effective for all new VIE's created or acquired
after January 31, 2003. For VIE's created or acquired prior to February 1, 2003,
the provisions of FIN 46 must be applied for the first interim or annual period
beginning after June 15, 2003. The Company adopted this interpretation on
January 31, 2003 with no impact on its financial position or results of
operations.

In April 2003, the FASB issued SFAS 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." This Statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under SFAS 133, "Accounting for Derivative Instruments and
Hedging Activities." The Statement is effective for contracts entered into or
modified after June 30, 2003 and is to be applied prospectively. The Company
adopted this Statement on April 30, 2003 with no impact on its financial
position or results of operations.

In May 2003, the FASB issued SFAS 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." This Statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). Many of those instruments
were previously classified as equity. This Statement is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is
effective at the beginning of the first interim period beginning after June 15,
2003. It is to be implemented by reporting the cumulative effect of a change in
an accounting principle for financial instruments created before the issuance
date of the Statement and still existing at the beginning of the interim period
of adoption. Restatement is not permitted. The Company does not expect the
adoption of this Statement to have a material impact on its financial position
or results of operations.

FOURTH QUARTER ADJUSTMENTS

During the fourth quarter the Company selected an offer to sell the assets and
business of Tandori in exchange for an assumption of the majority of the
liabilities of Tandori. In addition, the Company determined the necessity of
converting Silver's Voluntary Petition for Reorganization under Chapter 11 to
Chapter 7.

                                       15
<PAGE>

The Company reduced its receivable from Premier by $70,000 as a result of
Premier filing for a Voluntary Petition for Reorganization under Chapter 11.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements and related disclosures in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates. For example, unexpected changes in market conditions or a downturn in
the economy could adversely affect actual results. Estimates are used in
accounting for, among other things, inventory obsolescence, goodwill valuation,
retail inventory method, legal liability, product warranty, depreciation,
employee benefits, taxes, and contingencies. Estimates and assumptions are
reviewed periodically and the effects of revisions are reflected in the
Consolidated Financial Statements in the period they are determined to be
necessary.

Management believes the following critical accounting policies, among others,
affect its more significant judgments and estimates used in the preparation of
its Consolidated Financial Statements.

MERCHANDISE INVENTORIES - Merchandise inventories are stated at the lower of
cost or market. All gold inventories are valued at cost using the average cost
method.

The Company also writes down its inventory for discontinued, slow-moving and
damaged inventory. This write-down is equal to the difference between the cost
of inventory and its estimated market value based upon assumptions of targeted
inventory turn rates, future demand, management strategy, and market conditions.
If actual market conditions are less favorable than those projected by
management or management strategy changes, additional inventory write-downs may
be required and, in the case of a major change in strategy or downturn in market
conditions, such write-downs could be significant.

HMS does a complete physical count of its inventory each month by using daily
cycle counts.

LONG-LIVED ASSETS AND GOODWILL- Long-lived assets are periodically reviewed for
impairment by comparing the carrying value of the assets with their estimated
fair values. If the evaluation indicates that the carrying amount of the asset
may not be recoverable, the potential impairment is measured based on a
projected discounted cash flow method, using a discount rate that is considered
to be commensurate with the risk inherent in the Company's current business
model. Assumptions are made with respect to cash flows expected to be generated


                                       16
<PAGE>

by the related assets based upon updated projections. Any changes in key
assumptions or market conditions could result in an unanticipated impairment
charge. Any impairment would be recognized in operating results if a permanent
reduction were to occur.

Goodwill, which represents the cost in excess of fair value of net assets
acquired, is subject to an impairment test on an annual basis, or when there is
reason to believe that the value has been diminished or impaired. The fair value
of the Company's identified reporting unit was estimated using the expected
present value of corresponding future cash flows and market values of comparable
businesses where available. The Company completed the valuations of its
reporting unit that includes goodwill in fiscal year 2003 and concluded that no
impairment charge was required.

REVENUE RECOGNITION - The Company recognizes revenue in accordance with the
Securities and Exchange Commissions Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements (SAB 101). Revenue related to merchandise
sales is recognized at the time of the sale, reduced by a provision for returns.
The provision for sales returns is based on historical evidence of the Company's
return rate.

INCOME TAXES - Income taxes are estimated for each jurisdiction in which the
Company operates. This involves assessing the current tax exposure together with
temporary differences resulting from differing treatment of items for tax and
accounting purposes. Any resulting deferred tax assets are evaluated for
recoverability based on estimated future taxable income. To the extent that
recovery is deemed not likely, a valuation allowance is recorded.


ITEM 7.  FINANCIAL STATEMENTS

The Consolidated Financial Statements of SGD Holdings, LTD and Subsidiaries,
together with the reports thereon of Guest & Company, P.C. dated October 24,
2003 for the year ended July 31, 2003 and Stephen P. Higgins, C.P.A. dated
October 18, 2002 for the year ended July 31, 2002 is set forth as follows:

                   Index to Consolidated Financial Statements

                                                         Page
                                                          No.
                                                         ----

Index                                                     17
Auditors Report
  Guest & Company, P.C.                                   18
  Stephen P. Higgins, C.P.A.                              19
Consolidated Balance Sheet                                20
Consolidated Statements of Operations                     21
Consolidated Statement of Stockholders' Equity            22
Consolidated Statements of Cash Flows                    23-24
Notes to Consolidated Financial Statements               25-42



                                       17
<PAGE>



                              Guest & Company, P.C.
                         7170 S. Braden Ave., Suite 100
                           Tulsa, Oklahoma 74136-6333
                      Phone: 918-481-5355 Fax: 918-481-5771




To the Stockholders and Board of Directors
SGD Holdings, Ltd.


We have audited the accompanying consolidated balance sheet of SGD Holdings,
Ltd. and Subsidiaries as of July 31, 2003, and the related consolidated
statements of operations, changes in stockholders' equity, and cash flows for
the year ended July 31, 2003. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of SGD
Holdings, Ltd. and Subsidiaries as of July 31, 2003 and the consolidated results
of their operations and their cash flows for the year ended July 31, 2003 in
conformity with accounting principles generally accepted in the United States of
America.

As more fully described in note 14 to the consolidated financial statements, the
Company is a defendant in two lawsuits filed on January 3, 2003 and on May 2,
2003. It is not possible to predict at this time the outcome or extent of the
Company's liability, if any.


                            /s/ Guest & Company, P.C.



October 24, 2003
Tulsa, Oklahoma



                                       18
<PAGE>



                           Stephen P. Higgins, C.P.A.
                               67 Dumbarton Drive
                           Huntington, New York 11743






To the Stockholders and Board of Directors
SGD Holdings, Ltd.


We have audited the accompanying consolidated balance sheet of SGD Holdings,
Ltd. and Subsidiaries as of July 31, 2002, and the related consolidated
statements of operations, changes in stockholders' equity, and cash flows for
the year ended July 31, 2002. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of SGD
Holdings, Ltd. and Subsidiaries as of July 31, 2002 and the consolidated results
of their operations and their cash flows for the year ended July 31, 2002 in
conformity with accounting principles generally accepted in the United States of
America.


                         /s/ Stephen P. Higgins, C.P.A.



October 18, 2002
Huntington, New York



                                       19
<PAGE>




SGD Holdings, Ltd. and Subsidiaries

Consolidated Balance Sheet
July 31, 2003

Assets
Current assets
  Cash and cash equivalents .....................................   $   898,828
  Accounts receivable, net of allowance of $61,752  .............     1,163,689
  Marketable investment securities ..............................         8,514
  Inventory .....................................................     2,200,819
  Prepaid expenses and other assets .............................       319,695
  Due from related parties ......................................        61,184
  Deferred income taxes .........................................       201,200
                                                                    -----------
          Total current assets ..................................     4,853,929

Property and equipment, net .....................................       229,540
Marketable investment securities ................................        21,300
Deposits ........................................................        21,997
Goodwill, net ...................................................     3,490,612
                                                                    -----------
                                                                    $ 8,617,378
                                                                    ===========

Liabilities and Stockholders' Equity
Current liabilities
  Note payable ..................................................   $   835,000
  Notes payable due related parties .............................     1,330,000
  Accounts payable ..............................................       361,343
  Accrued expenses ..............................................       111,310
  Due to related parties ........................................        17,288
                                                                    -----------
          Total current liabilities .............................     2,654,941
Deferred income taxes payable ...................................        15,400
                                                                    -----------
          Total liabilities .....................................     2,670,341
                                                                    -----------
Commitments and Contingencies
Stockholders' equity
  Common stock, $.0001 par value.  Authorized 200,000,000 shares;
    issued and outstanding 36,266,077 shares ....................         3,627
  Paid-in capital ...............................................     9,810,867
  Deficit .......................................................    (3,598,107)
  Accumulated other comprehensive income (loss) .................      (269,350)
                                                                    -----------
Total stockholders' equity ......................................     5,947,037
                                                                    -----------
                                                                    $ 8,617,378
                                                                    ===========




                                       20
<PAGE>


<TABLE>
<CAPTION>


SGD Holdings, Ltd. and Subsidiaries

Consolidated Statements of Operations
Years ended July 31, 2003 and July 31, 2002

                                                          2003           2002

<S>                                                  <C>             <C>
Sales and revenues ...............................   $ 13,422,192    $ 11,961,639
Cost of sales ....................................     10,083,982       8,720,699
                                                     ------------    ------------
Gross profit .....................................      3,338,210       3,240,940
  Selling, general and administrative expense ....      3,160,470       2,638,378
                                                     ------------    ------------
Earnings from operations .........................        177,740         602,562

Other (income) expense:
  Interest expense ...............................        101,953          27,450
  Interest expense - related parties .............        222,700         160,861
  Gold consignment fee ...........................        187,296         124,163
  Unrealized loss on marketable securities .......          3,521         321,518
  Interest income ................................         (5,197)        (34,380)
  Other income ...................................           --           (24,984)
                                                     ------------    ------------
                                                          510,273         574,628
                                                     ------------    ------------
Earnings (loss) from continuing operations before
  income taxes ...................................       (332,533)         27,934
Income tax expense (benefit) .....................        (89,200)          9,500
                                                     ------------    ------------
Earnings (loss) from continuing operations .......       (243,333)         18,434
Discontinued operations:
  Loss from operations of discontinued operations
    including gain on disposal of $117,551 in 2003     (1,907,262)     (1,371,252)
  Income tax expense (benefit) ...................        207,500        (117,400)
                                                     ------------    ------------
    Loss on discontinued operations ..............     (2,114,762)     (1,253,852)
                                                     ------------    ------------
Net loss .........................................   $ (2,358,095)   $ (1,235,418)
                                                     ============    ============

Basic and diluted earnings (loss) per share:
  Continuing operations                              $      (0.01)   $       0.00
  Discontinued operations ........................          (0.06)          (0.05)
                                                     ------------    ------------

                                                     $      (0.07)   $      (0.05)
                                                     ============    ============

Weighted average shares outstanding ..............     31,379,228      27,361,830
                                                     ============    ============
</TABLE>

See accompanying notes to consolidated financial statements.




                                       21
<PAGE>



<TABLE>
<CAPTION>

SGD Holdings, Ltd. and Subsidiaries

Consolidated Statement of Stockholders' Equity
Years ended July 31, 2003 and July 31, 2002

                                                                                                  Accumulated
                                                                       Paid-in      Earnings       Comprehen-
                                           Shares       Par Value      Capital      (Deficit)     sive Income      Total
                                           ------      ---------      --------     ----------    ------------      -----
<S>           <C> <C>                   <C>          <C>           <C>            <C>            <C>            <C>
Balance, July 31, 2001 .............    26,266,077   $     2,627   $ 9,105,367    $    (4,594)   $      --      $ 9,103,400
Common shares issued:
  Tandori, Inc. acquisition ........       800,000            80       159,920           --             --          160,000
  Consulting fees ..................       625,000            63        74,937           --             --           75,000
  Loan fee .........................       475,000            47        66,453           --             --           66,500
  Comprehensive income:
    Unrealized loss on available-for
      sale securities, net .........          --            --            --             --         (140,500)      (140,500)
    Net loss .......................          --            --            --       (1,235,418)          --       (1,235,418)
                                       -----------   -----------   -----------    -----------    -----------    -----------
      Total comprehensive income ...          --            --            --       (1,235,418)      (140,500)    (1,375,918)
                                       -----------   -----------   -----------    -----------    -----------    -----------
Balance, July 31, 2002 .............    28,166,077         2,817     9,406,677     (1,240,012)      (140,500)     8,028,982
Common shares issued to
  related parties:

    Loan and guaranty fees .........     3,100,000           310       154,690           --             --          155,000
    Settlement .....................     1,000,000           100        49,900           --             --           50,000
Common shares sold for cash ........     4,000,000           400       199,600           --             --          200,000
Comprehensive income:
  Unrealized loss on available-for-
    sale securities, net ...........          --            --            --             --         (128,850)
  Net loss .........................          --            --            --       (2,358,095)          --       (2,358,095)
                                       -----------   -----------   -----------    -----------    -----------    -----------
      Total comprehensive income
                                              --            --            --       (2,358,095)      (128,850)    (2,486,945)
                                       -----------   -----------   -----------    -----------    -----------    -----------
Balance, July 31, 2003 .............    36,266,077   $     3,627   $ 9,810,867    $(3,598,107)   $  (269,350)   $ 5,947,037
                                       ===========   ===========   ===========    ===========    ===========    ===========

See accompanying notes to consolidated financial statements.
</TABLE>





                                       22
<PAGE>



SGD Holdings, Ltd. and Subsidiaries

Consolidated Statements of Cash Flows
Years ended July 31, 2003 and July 31, 2002
<TABLE>
<CAPTION>

                                                                                2003           2002
Cash flows used in operating activities
<S>                                                                          <C>            <C>
Net loss .................................................................   $(2,358,095)   $(1,235,418)
  Loss from discontinued operations ......................................    (2,114,762)    (1,253,852)
                                                                             -----------    -----------
    Earnings (loss) from continuing operations ...........................      (243,333)        18,434
Adjustments to reconcile net earnings (loss) to net cash used in operating
 activities:
  Depreciation and amortization ..........................................        70,670         58,684
  Deferred income taxes ..................................................       (89,200)         9,500
  Asset impairments ......................................................        30,412           --
  Unrealized gain on marketable equity securities ........................         3,521        321,518
  Proceeds from sale of marketable securities ............................          --          300,001
  Deferred revenue realized ..............................................          --          (31,295)
  Common stock issued for services .......................................        50,000         75,000
  Gain on sale of assets .................................................          --          (24,984)
  Accounts receivable ....................................................        45,546       (204,105)
  Inventory ..............................................................      (212,624)      (752,132)
  Other assets ...........................................................       278,303       (209,739)
  Accounts payable .......................................................      (408,031)       425,332
  Accrued expenses .......................................................        77,177         19,928
                                                                             -----------    -----------
Net cash from continuing operations ......................................      (397,559)         6,142
  Net cash used in discontinued operations ...............................      (577,316)      (848,530)
                                                                             -----------    -----------
    Net cash used in operations ..........................................      (974,875)      (842,388)
                                                                             -----------    -----------

Cash flows used in investing activities
  Capital expenditures ...................................................      (107,500)       (49,389)
                                                                             -----------    -----------
Net cash used in continuing operations ...................................      (107,500)       (49,389)
  Net cash used in discontinued operations ...............................       (43,753)      (624,557)
                                                                             -----------    -----------
    Net cash used in investing activities ................................      (151,253)      (673,946)
                                                                             -----------    -----------


See accompanying notes to consolidated financial statements.                           (Continued)

</TABLE>




                                       23
<PAGE>





SGD Holdings, Ltd. and Subsidiaries

Consolidated Statements of Cash Flows, Continued
Years ended July 31, 2003 and July 31, 2002
<TABLE>
<CAPTION>

                                                                  2003           2002
<S>                                                         <C>           <C>
Cash flows provided by financing activities
  Proceeds from sale of common stock .....................   $   200,000    $      --
  Loan proceeds ..........................................       950,000        835,000
  Loan proceeds, related party ...........................        30,000           --
  Repayment of notes payable - related party .............          --       (1,305,153)
  Repayment of long-term debt and notes payable ..........      (962,876)       (33,860)
  Collection of note receivable ..........................          --          500,000
                                                             -----------    -----------
Net cash from continuing operations ......................       217,124         (4,013)
  Net cash from discontinued operations ..................       651,477        346,139
                                                             -----------    -----------
    Net cash provided by financing activities ............       868,601        342,126
                                                             -----------    -----------

Net increase in cash and cash equivalents ................      (257,527)    (1,174,208)
Cash and cash equivalents, beginning of year .............     1,156,355      2,330,563
                                                             -----------    -----------
Cash and cash equivalents, end of year ...................   $   898,828    $ 1,156,355
                                                             ===========    ===========

Supplemental Cash Flow Information

Cash paid for interest and income taxes are as follows:
  Interest and gold consignment fee ......................   $   287,619    $   308,474
  Income taxes ...........................................          --             --

Noncash investing and financing activities are as follows:
Financed insurance premiums ..............................          --           37,800
Common stock issued for loan and guaranty fees ...........       155,000         66,500
Common stock issued for settlement .......................        50,000           --
Common stock issued as part of Tandori, Inc. acquisition .          --          160,000
Marketable securities issued to prepay interest on note ..          --           48,430

See accompanying notes to consolidated financial statements.
</TABLE>




                                       24
<PAGE>



SGD Holdings, Ltd. and Subsidiaries
Notes to Consolidated Financial Statements
Years ended July 31, 2003 and 2002


1.       Summary of significant accounting policies

          Principles of consolidation and presentation
          The consolidated  financial  statements include the accounts of SGD
          Holdings,  Ltd. ("SGD") and its wholly owned subsidiaries Con-Tex
          Silver Imports, Inc. ("Silver"),  HMS Jewelry Company, Inc. ("HMS"),
          Tandori, Inc. ("Tandori") and Jewelry Solutions  &  Commerce,  Inc.
          ("Jewelry") (collectively  referred  to as  the  "Company").  All
          material  intercompany  accounts  and transactions have been
          eliminated.

          Organization
          SGD was  incorporated  on May 22,  1996 in  Delaware  as Transun
          International  Airways,  Inc.  and  until  June 1999 was a development
          stage company with plans to establish itself as an air transport
          company  providing  non-scheduled  air service (charter  flights) for
          tour operators,  charter  brokers,  cruise line casinos,  theme parks
          and theme  attractions.  TransunInternational Airways, Inc. changed
          its name to Goldonline  International,  Inc. on June 10, 1999.
          Goldonline  International,Inc. changed its name to SGD Holdings, Ltd.
          on January 24, 2001.

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

          Silver was incorporated on September 12, 1994 in Texas. HMS was
          incorporated on October 12, 2000 in Texas. Tandori was incorporated on
          November 9, 1998 in Nevada. Jewelry was incorporated on February 3,
          1999 in Delaware.

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

                                       25
<PAGE>

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

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

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

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

           Silver was involved in both the wholesale and retail jewelry
          business, principally silver, with retail locations in Texas. The
          wholesale operation of Silver consisted of sales directly from its
          headquarters in Conroe, Texas, sales from a Dallas location and sales
          from jewelry shows at locations throughout the south central United
          States.

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

          Tandori operated under the LifeStyle Technologies(TM) name as a full
          service home technology integration company providing complete
          installation and equipment for structured wiring, home audio, home
          theater, home security, PC networking, central vacuum, accent lighting
          and other current technology applications.




                                       26
<PAGE>



          Nature of business
          SGD is a holding company principally engaged in acquiring and
          developing jewelry businesses. HMS is primarily involved in the
          wholesale gold jewelry business. Jewelry is evaluating its e-commerce
          site, as well as, other retail options.

          Cash equivalents
          The Company considers all liquid investments with original maturities
          of three months or less to be cash equivalents. At July 31, 2003, cash
          equivalents consist of money fund investments, money market accounts
          and business checking accounts.

          Marketable investment securities
          Marketable investment securities are classified into the following
          categories:
              o Trading securities reported at fair value with unrealized gains
                and losses included in earnings;
              o Available-for-sale securities reported at fair value with
                unrealized gains and losses, net of deferred income taxes,
                reported in other comprehensive income; and
              o Held-to-maturity securities reported at amortized cost.

          Inventories
          Inventories consist primarily of gold jewelry and are carried at the
          lower of average cost or market. The inventory is marked down for
          estimated unmarketable inventory equal to the difference between the
          cost of inventory and the estimated market value based upon
          assumptions about future demand and market conditions. Management
          records these inventory markdowns periodically based on the various
          assumptions, including customer demand and preferences.

          The Company satisfies a majority of its gold supply needs through a
          gold consignment agreement with a financial institution that leases
          gold to the Company ("gold lender"). In accordance with the terms of
          the agreements, the Company has the option of repaying the gold lender
          in an equivalent number of ounces of fine gold or cash based upon the
          then quoted London Bullion Brokers' second fixing price.

          Property and equipment
          Owned machinery and equipment are stated at cost and depreciated using
          the straight-line method over the estimated useful lives of the
          respective assets.




                                       27
<PAGE>



          Goodwill
          Goodwill, which represents the cost in excess of fair value of net
          assets acquired, is subject to an impairment test on an annual basis,
          or when there is reason to believe that the value has been diminished
          or impaired. The fair value of the Company's identified reporting unit
          was estimated using the expected present value of corresponding future
          cash flows and market values of comparable businesses where available.
          The Company completed the valuations of its reporting unit that
          includes goodwill in fiscal year 2003 and concluded that no impairment
          charge was warranted.

          Income taxes
          The Company accounts for income taxes under the provisions of
          Statement of Financial Accounting Standards No. 109, "Accounting for
          Income Taxes" ("SFAS 109"). Under SFAS 109, the liability method is
          used in accounting for income taxes and deferred tax assets and
          liabilities are determined based on differences between the financial
          reporting and tax bases of assets and liabilities. Deferred tax assets
          and liabilities are measured using enacted tax rates expected to apply
          to taxable income in the years in which those temporary differences
          are expected to be recovered or settled. The effect on deferred tax
          assets and liabilities of a change in tax rates is recognized in
          income in the period that includes the enactment date.

          Revenue and cost recognition
          The Company recognizes revenue in accordance with the Securities and
          Exchange Commissions Staff Accounting Bulletin No. 101, Revenue
          Recognition in Financial Statements (SAB 101). Revenue related to
          merchandise sales is recognized at the time of the sale, reduced by a
          provision for returns. The provision for sales returns is based on
          historical evidence of the Company's return rate.

          Advertising Expenses
          Advertising expenses are charged against operations when incurred and
          are a component of selling, general and administrative expense in the
          consolidated statements of operations. Amounts charged against
          operations were $120,407 in fiscal 2003 and $138,792 in fiscal 2002.

          Catalog costs
          Catalog costs are charged to expense as incurred, the only exception
          being major catalog revisions. Costs capitalized are amortized over a
          maximum of two years. At July 31, 2003, there were $117,449 in
          unamortized catalog revision costs capitalized.

          Shipping and handling costs
          Shipping and handling costs billed to customers are recorded as
          revenue. The costs associated with shipping goods to customers are
          recorded as a selling expense. Shipping expenses, which include only
          third party costs of shipping, for the years ended July 31, 2003 and
          July 31, 2002, were $314,900 and $269,061, respectively.




                                       28
<PAGE>


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

         SFAS 123, "Accounting for Stock-Based Compensation" and SFAS 148,
         "Accounting for Stock-Based Compensation - Transition and Disclosure -
         an amendment of SFAS 123" require disclosures as if the Company had
         applied the fair value method to employee awards rather than the
         intrinsic value method. The fair value of stock-based awards to
         employees is calculated through the use of option pricing models, which
         were developed for use in estimating the fair value of traded options,
         which have no vesting restrictions and are fully transferable. These
         models also require subjective assumptions, including future stock
         price volatility and expected time to exercise, which greatly affect
         the calculated values. No awards were granted during fiscal 2003 or
         fiscal 2002. Accordingly, there is no disclosure of the fair value
         method as compared to the intrinsic value method.

         Options and warrants issued to non-employees are accounted for under
         SFAS 123, "Accounting for Stock Based Compensation." For the options
         and warrants issued to non-employees, the fair value of each award is
         calculated using the Black-Scholes Model in accordance with SFAS 123.

         Net earnings (loss) per share
         The Company has adopted SFAS No. 128 which establishes standards for
         computing and presenting earnings per share (EPS) for entities with
         publicly held common stock. The standard requires presentation of two
         categories of EPS - basic EPS and diluted EPS. Basic EPS excludes
         dilution and is computed by dividing income available to common
         stockholders by the weighted-average number of common shares
         outstanding for the year. Diluted EPS reflects the potential dilution
         that could occur if securities or other contracts to issue common stock
         were exercised or converted into common stock or resulted in the
         issuance of common stock that then shared in the earnings of the
         Company. All potential dilutive securities are antidilutive for fiscal
         2003 and 2002. Accordingly, basic and diluted EPS are the same for each
         period.

         Use of estimates
         The process of preparing consolidated financial statements in
         conformity with accounting principles generally accepted in the Unites
         States of America requires the use of estimates and assumptions
         regarding certain types of assets, liabilities, revenues and expenses.
         Such estimates primarily relate to unsettled transactions and events
         as of the date of the consolidated financial statements. Accordingly,
         upon settlement, actual results may differ from estimated amounts.

                                       29
<PAGE>

         Fair value determination
         Financial instruments consist of cash, cash investments, accounts
         receivable, accounts payable, accrued liabilities, notes payable and
         long-term debt. The carrying amount of these financial instruments
         approximates fair value due to their short-term nature or the current
         rates which the Company could borrow funds with similar remaining
         maturities.

         Recent accounting pronouncements
         In June 2002, the Financial Accounting Standards Board ("FASB") issued
         Statement of Financial Accounting Standards No. 146, "Accounting for
         Costs Associated with Exit or Disposal Activities." SFAS 146 requires
         that a liability be recognized on the date on which the company had
         committed to an exit plan. In fiscal 2003 the Company adopted this
         statement with no effect on its financial position or results of
         operations.

         In October 2002, the FASB issued Statement of Financial Accounting
         Standards No. 147, "Acquisition of Certain Financial Institutions." The
         adoption of SFAS 147 did not have any impact on the financial position
         or results of operations of the Company.

         In December 2002, the FASB issued Statement of Financial Accounting
         Standards No. 148, "Accounting for Stock-Based Compensation -
         Transition and Disclosure." This Statement amends SFAS 123, "Accounting
         for Stock-Based Compensation" to provide alternative methods of
         transition for a voluntary change to the fair value based method of
         accounting for stock-based employee compensation. In addition, this
         Statement amends the disclosure requirements of SFAS 123 to require
         prominent disclosures in both annual and interim financial statements
         about the method of accounting for stock-based employee compensation
         and the effect of the method used on reported results. The Company
         adopted the provisions of this statement effective January 1, 2003 with
         no impact on its financial position or results of operations.

         Effective January 1, 2003, the Company adopted FASB Interpretation No.
         ("FIN") 45, "Guarantor's Accounting and Disclosure Requirements for
         Guarantees, Including Indirect Guarantees of Indebtedness of Others."
         FIN 45 elaborates on the disclosures that must be made by a guarantor
         in its interim and annual financial statements about its obligations
         under certain guarantees. It also clarifies that a guarantor is
         required to recognize, at the inception of a guarantee, a liability for
         the fair value of the obligation undertaken in issuing the guarantee.
         The adoption of this interpretation did not have a material effect on
         the Company's financial position or results of operations.

         In January 2003, the FASB issued FIN 46, "Consolidation of Variable
         Interest Entities, an Interpretation of ARB No. 51." FIN 46 requires a
         variable interest entity ("VIE") to be consolidated by the primary
         beneficiary of the entity under certain circumstances. FIN 46 is
         effective for all new VIE's created or acquired after January 31, 2003.
         For VIE's created or acquired prior to February 1, 2003, the provisions
         of FIN 46 must be applied for the first interim or annual period
         beginning after June 15, 2003. The Company adopted this interpretation
         on January 31, 2003 with no impact on its financial position or results
         of operations.

                                       30
<PAGE>

         In April 2003, the FASB issued SFAS 149, "Amendment of Statement 133 on
         Derivative Instruments and Hedging Activities." This Statement amends
         and clarifies financial accounting and reporting for derivative
         instruments, including certain derivative instruments embedded in other
         contracts and for hedging activities under SFAS 133, "Accounting for
         Derivative Instruments and Hedging Activities." The Statement is
         effective for contracts entered into or modified after June 30, 2003
         and is to be applied prospectively. The Company adopted this Statement
         on April 30, 2003 with no impact on its financial position or results
         of operations.

         In May 2003, the FASB issued SFAS 150, "Accounting for Certain
         Financial Instruments with Characteristics of both Liabilities and
         Equity." This Statement establishes standards for how an issuer
         classifies and measures certain financial instruments with
         characteristics of both liabilities and equity. It requires that an
         issuer classify a financial instrument that is within its scope as a
         liability (or an asset in some circumstances). Many of those
         instruments were previously classified as equity. This Statement is
         effective for financial instruments entered into or modified after May
         31, 2003, and otherwise is effective at the beginning of the first
         interim period beginning after June 15, 2003. It is to be implemented
         by reporting the cumulative effect of a change in an accounting
         principle for financial instruments created before the issuance date of
         the Statement and still existing at the beginning of the interim period
         of adoption. Restatement is not permitted. The Company does not expect
         the adoption of this Statement to have a material impact on its
         financial position or results of operations.

         Reclassifications
         Certain reclassifications were made to the prior year's financial
         statements to conform to the current year's presentation.


2.       Discontinued operations

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

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

         Silver was involved in both the wholesale and retail jewelry
         business, principally silver, with retail locations in Texas. The
         wholesale operation of Silver consisted of sales directly from its
         headquarters in Conroe, Texas, sales from a Dallas location and sales

                                       31
<PAGE>

          from jewelry shows at locations throughout the south central United
          States.

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

          Tandori operated under the LifeStyle Technologies(TM) name as a full
          service home technology integration company providing complete
          installation and equipment for structured wiring, home audio, home
          theater, home security, PC networking, central vacuum, accent lighting
          and other current technology applications.

          The following summarizes the assets and liabilities comprising the
          disposal group (unaudited):
<TABLE>
<CAPTION>

                                                           Silver           Tandori            Total

<S>                                                    <C>               <C>              <C>
          Current assets                               $       633,524   $       749,130  $       1,382,654
          Property and equipment, net                          120,315           198,959            319,274
          Goodwill, net                                             -            485,575            485,575
          Other assets                                          11,286            14,007             25,293
                                                       ---------------   ---------------  -----------------
            Total assets                                       765,125         1,447,671          2,212,796
          Liabilities **                                      (649,507)       (1,680,840)        (2,330,347)
                                                       ---------------   ---------------  -----------------
          Loss (gain) on disposal                      $       115,618   $      (233,169) $        (117,551)
                                                       ===============   ===============  =================

          ** Excludes all liabilities owed to SGD and its continuing operations.
</TABLE>

          The following summarizes the results of operations of the disposal
         group (unaudited):
<TABLE>
<CAPTION>

                                                                               2003              2002
          Revenues:
<S>                                                                      <C>              <C>
            Tandori                                                      $     3,645,218  $       2,122,491
            Silver                                                             1,573,728          2,615,281
                                                                         ---------------  -----------------
              Total revenue                                              $     5,218,946  $       4,737,772
                                                                         ===============  =================

          Net loss before income taxes:
            Tandori                                                      $       796,082  $         269,546
            Silver                                                             1,228,731          1,101,706
            Gain on disposal                                                    (117,551)                -
                                                                         ---------------  ----------------
              Net loss before income taxes                               $     1,907,262  $       1,371,252
                                                                         ===============  =================

</TABLE>

                                       32
<PAGE>

3.       Marketable investment securities

         The following summarizes the Company's investment in securities at July
31, 2003:

               Trading securities:
                        Cost ................   $  93,581
                        Unrealized loss .....     (85,067)
                                                ---------
                          Fair value ........   $   8,514
                                                =========

               Available-for-sale securities:
                        Cost ................   $ 429,550
                        Unrealized loss .....    (408,250)
                                                ---------
                          Fair value ........   $  21,300
                                                =========

          The Company included in operations $3,521 and $321,518 in unrealized
          losses during fiscal 2003 and fiscal 2002, respectively. During fiscal
          2002, the Company sold $300,000 of its marketable securities at cost
          for cash and exchanged other marketable securities for $48,430 in
          prepaid interest for one year on their note payable of $835,000, which
          resulted in a gain of $24,984. The Company did not sell any of their
          marketable investment securities during fiscal 2003.

          On July 20, 2001, the Company completed the acquisition of 355,000
          shares of the common stock of Premier Concepts, Inc. ("Premier") in
          exchange for 965,000 shares of its common stock. The Company used the
          July 31, 2001 closing market price as quoted on the Nasdaq Stock
          Market to value the transaction.

          The shares of common stock of Premier are "restricted securities"
          under Rule 144. The Company's investment represents 7.9% and 9.6% of
          the outstanding stock of Premier at July 31, 2003 and 2002,
          respectively. Accordingly, the Company is subject to certain
          restrictions on the number of shares it can sell and its required
          holding period. The Company has classified its investment in Premier
          as available-for-sale securities as a result of the Company's
          intention to hold the securities indefinitely pursuant to SFAS No.
          115, "Accounting for Certain Investments in Debt and Equity
          Securities."

          Unrealized gains and losses based on fluctuations in the market value
          of available-for-sale securities are included in other comprehensive
          income as an adjustment to equity.



                                       33
<PAGE>



          The following unrealized losses have been recorded in stockholders'
          equity as accumulated other comprehensive income (loss).

                                              2003        2002

               Unrealized loss ..........   $195,250   $213,000
               Deferred income taxes ....     66,400     72,500
                                            --------   --------
                 Other comprehensive loss   $128,850   $140,500
                                            ========   ========


          Due to the limited market for Premier common stock, it is likely that
          only limited quantities of the stock will be able to be sold in the
          open market after the required holding period. As a result of these
          restrictions and the probable limited trading volume, the Company
          believes the fair value of the investment might be less than the
          recorded value required by SFAS No. 115 and that there can be no
          assurance the Company will realize the recorded value of its
          investment in Premier. On October 10, 2003 Premier filed a Voluntary
          Petition for Reorganization under Chapter 11 of Title 11 of the United
          States Code in the United States Bankruptcy Court for the Central
          District of California, Los Angeles Division; Case No. LA 03-36445 BR.

4.       Inventories

          Inventories at July 31, 2003 consist of:

               Inventory, principally gold jewelry   $ 5,721,713
               Less consigned gold ...............    (3,520,894)
                                                     -----------
                 Net inventories .................   $ 2,200,819
                                                     ===========

          At July 31, 2003, inventories excluded 9,925 ounces of gold on
consignment.

5.       Property and equipment

          Property and equipment consist of the following at July 31, 2003:

               Office and computer equipment and software   $ 221,745
               Furniture and fixtures ...................     137,071
               Leasehold improvements ...................      27,546
                                                            ---------
                                                              386,362
               Less accumulated depreciation ............    (156,822)
                                                            ---------
                                                            $ 229,540
                                                            =========
6.       Note payable

          The Company has a note payable to a company in the amount of $835,000
          which was due on July 31, 2003. The terms of the note include interest
          at 5.8%, payable monthly and all of the issued and outstanding stock
          of HMS is collateral on the note. Subject to ratification by the Board
          of Directors, the Company will issue 250,000 shares of its common
          stock with anti-dilution rights as a loan extension fee and 1,210,746
          shares of its common stock with anti-dilution rights to pay the
          accrued interest through July 31, 2003 to extend the note to July 31,
          2004. The extended note will continue to have interest payable at 5.8%
          and will be convertible into common stock at $.015 per share or the
          market price, limited to 9.9% of the total outstanding shares of the
          Company at the time. All of the issued and outstanding common stock of
          HMS will continue to be collateral on the note in second position
          behind the collateral position of the president of HMS.In the event of
          default on any of the loans secured by the HMS common stock, the
          lender will have the option to purchase HMS for $5,000,000.

                                       34
<PAGE>
<TABLE>
<CAPTION>

7.       Notes payable due related parties

         Notes payable due related parties consists of the following at July 31,
         2003:

<S>                                                                                  <C>
                  Note payable to the president of HMS, due on August 1, 2003;
                  interest payable monthly at 8%; collateralized by the common
                  stock of HMS; convertible into common stock of the Company at
                  $.05 per share with anti-dilution rights (a)                                $ 1,250,000

                  Note payable to G. David Gordon, a shareholder and the brother
                  of a Director of the Company; due on demand with interest at
                  6% payable monthly; unsecured (b)                                                30,000

                  Note payable to G. David Gordon, a shareholder and the brother
                  of a Director of the Company; due on demand with interest at
                  8%; unsecured; convertible into common stock of the Company at
                  $.01 per share (b)                                                                50,000
                                                                                          ----------------
                    Total notes payable due related parties                               $      1,330,000
                                                                                          ================
</TABLE>

          (a) Subject to ratification by the Board of Directors, the Company
          will issue 300,000 shares of its common stock with anti-dilution
          rights as a loan extension fee. The extended note will bear interest
          at 8% per annum; will be due July 31, 2004; will be convertible into
          common stock of the Company at $.01 per share, limited to 9.9% of the
          total outstanding shares of the Company at the time, with
          anti-dilution rights; and the HMS common stock will continue to be
          collateral on the loan.

          (b) Subject to ratification of the Board of Directors, the Company
          will issue a combined note for $80,000 plus related accrued interest
          to G. David Gordon. The extended note will bear interest at 6% per
          annum; will be due July 31, 2004; will be secured by the common stock
          of HMS in third position behind the other notes above; all principal
          and accrued interest is convertible into common stock of the Company
          at $.01 per share; and all shares have anti-dilution rights.

                                       35
<PAGE>

8.       Gold consignment and line of credit agreement

          HMS has a gold consignment agreement with a gold lender. Under the
          terms of the agreement, HMS is entitled to lease the lesser of an
          aggregate amount of 13,200 ounces, or an aggregate consigned gold
          value not to exceed $4,950,000, less any balance outstanding on its
          $1,500,000 line of credit. Title to such consigned gold remains with
          the gold lender until HMS purchases the gold. However, during the
          period of consignment, the entire risk of loss, damage or destruction
          of the gold is borne by HMS. The purchase price per ounce is based on
          the daily Second London Gold Fix. HMS pays the gold consignor a
          consignment fee based upon the dollar value of gold ounces
          outstanding, as defined in the agreement. At July 31, 2003, HMS had
          9,925 ounces of gold on consignment with a market value of $3,520,894,
          which was valued at the daily Second London Gold Fix, $354.75 per
          ounce at July 31, 2003, and charged 4.25%.

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

          The gold lender has also provided a line of credit to HMS in the
          amount of $1,500,000 that is due on demand, including interest at the
          lender's prime rate plus 3/4%. HMS does not have any advances on this
          line of credit at July 31, 2003. During fiscal 2003, HMS borrowed and
          repaid $950,000 on this line of credit.

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

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

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


                                       36
<PAGE>


9.        Income taxes

          Income tax expense (benefit) from continuing operations for the years
          ended July 31, 2003 and 2002 consists of:

                                2003        2002

               Current        $   --      $   --
               Deferred        (89,200)      9,500
                              --------    --------
                 Total        $(89,200)   $  9,500
                              ========    ========


         Actual income tax expense (benefit) applicable to earnings (loss)
         before income taxes from continuing operations is reconciled with the
         "normally expected" federal income tax expense (benefit) for the years
         ended July 31, 2003 and 2002 as follows:

                                                            2003           2002

         Normally expected income tax expense (benefit)   $(113,100)   $   9,500
         Deferred tax asset valuation allowance .......      20,500         --
         Non-deductible items and other ...............       3,400         --
                                                          ---------    ---------
                                                          $ (89,200)   $   9,500
                                                          =========    =========


         The deferred income tax assets and liabilities at July 31, 2003 are
         comprised of the following:
                                                         Current     Noncurrent

         Allowance for bad debts and returns .......   $   21,000   $     --
         Net operating loss carryforwards ..........    1,353,700         --
         Marketable securities allowance ...........       29,100      138,900
                                                       ----------   ----------
                                                        1,403,800      138,900
         Valuation allowance .......................    1,202,600         --
                                                       ----------   ----------
             Deferred income tax assets ............      201,200      138,900
         Deferred income tax liability - asset basis         --        (11,300)
         Deferred income tax liability - goodwill ..         --       (143,000)
                                                       ----------   ----------
             Net deferred income tax assets ........   $  201,200   $  (15,400)
                                                       ==========   ==========

         The Company has available net operating loss carryforwards in the
         amount of $3,981,000, which expire between 2020 and 2023.


10.      Related party transactions

          HMS leases its facility from HMS Leasing Company, LLC, at the rate of
          $8,075 per month pursuant to a lease agreement that expires on October
          31, 2010. This amounted to $96,900 during fiscal 2003 and fiscal 2002.
          HMS Leasing Company, LLC is owned by the president of HMS. HMS is a
          guarantor of the loan obligation of HMS Leasing Company, LLC on the
          facility, which has a balance of $535,813 at July 31, 2003.

                                       37
<PAGE>

          At July 31, 2003, the Company owed G. David Gordon, a shareholder and
          the brother of a Director, $18,621 in accrued interest. In addition,
          G. David Gordon is owed compensation in the amount of $75,000 at July
          31, 2003, which is payable one-half in SGD common stock and one-half
          in cash and is recorded in accrued expenses. During fiscal 2003, G.
          David Gordon was issued 2,000,000 common shares for issuing his
          personal guarantee on the Company's obligation to the gold lender and
          the Company's $835,000 note obligation. G. David Gordon also received
          1,000,000 shares pursuant to a settlement agreement with the Company.

          At July 31, 2003, the Company had made net advances of $2,254 to the
          president of HMS, including companies owned by him. During fiscal
          2003, the president of HMS was issued 1,100,000 common shares for
          extending the $1,250,000 note obligation due him.

          See Note 7 for details of the $1,330,000 in note obligations to
          related parties.

          The Company has made net sales to Premier of $95,997 and $543,784
          during fiscal 2003 and fiscal 2002, respectively, and has net
          receivables from Premier at July 31, 2003 of $60,263. The Company owns
          7.9% of the stock of Premier at July 31, 2003 and the Chief Executive
          Officer of Premier is a Director of the Company. On October 10, 2003
          Premier filed a Voluntary Petition for Reorganization under Chapter 11
          of Title 11 of the United States Code in the United States Bankruptcy
          Court for the Central District of California, Los Angeles Division;
          Case No. LA 03-36445 BR. The Company reduced its receivable from
          Premier to the amount they estimate is collectible and recorded a
          write-down of $70,000 on July 31, 2003.

          G. David Gordon and the President of Tandori acquired the assets and
          assumed substantially all liabilities of Tandori effective July 31,
          2003. The Company realized a gain of $233,169 on the transaction.


11.      Capital stock

                                  Common stock

          The Company has 200,000,000 shares of common stock (par value $.0001)
          authorized and 36,266,077 shares issued and outstanding at July 31,
          2003.

          During fiscal 2003, the Company issued 3,100,000 shares of its common
          stock for loan and guaranty fees associated with extending existing
          loans and credit agreements and issued 1,000,000 shares of its common
          stock for a settlement. These non-cash transactions were valued at the
          closing price of the Company's common stock on the date of the
          transactions, $155,000 and $50,000, respectively. The Company also
          sold 4,000,000 shares of its common stock in private transactions for
          $200,000. These shares are "restricted securities" and may be sold
          only in compliance with Rule 144 of the Securities Exchange Act.

                                       38
<PAGE>

          During fiscal 2002, the Company issued 800,000 shares of its common
          stock in conjunction with the acquisition of Tandori, issued 625,000
          shares of its common stock for consulting services and issued 475,000
          shares of its common stock for a loan fee. The transactions were
          valued at the closing price of the Company's common stock on the date
          of the transactions, $160,000, $75,000 and $66,500, respectively.

          The Company's financial statements were restated during fiscal 2002 to
          reflect the correction of an error in the number of shares issued in
          the June 10, 1999 acquisition of Con-Tex Silver Imports, Inc. and
          Jewelry Solutions & Commerce, Inc. On August 12, 1999 the Company had
          requested that 75,000,000 and 10,000,000 shares, respectively, be
          issued for these acquisitions. Effective September 10, 1999 the
          Company reverse-split all of its outstanding common stock, one share
          for each six shares outstanding. The above certificates, representing
          the 85,000,000 shares were issued on September 10, 1999 but were not
          reverse-split, as they should have been. Accordingly, the outstanding
          shares are adjusted downward by 70,833,331 shares. This adjustment
          does not change previously reported net income (loss).

                                Stock option plan

          On September 1, 1999, the Board of Directors approved the Goldonline
          International, Inc. Stock Option Plan (the "Plan"), which was approved
          by a majority of the shareholders at a meeting on the same date. The
          Company has reserved 10,000,000 shares of common stock for the grant
          of qualified incentive options or non-qualified options to employees
          and directors of the Company and to non-employee directors,
          consultants and advisors and other persons who may perform significant
          services for or on behalf of the Company. Prices for incentive stock
          options must provide for an exercise price of not less than 100% of
          the fair market value of the common stock on the date the options are
          granted unless the eligible employee owns more than 10% of the
          Company's common stock for which the exercise price must be at least
          110% of such fair market value. Non-statutory options must provide for
          an exercise price of not less than 85% of the fair market value.




                                       39
<PAGE>


          On June 1, 2001, and pursuant to the Plan, the Board of Directors of
          the Company granted options to each member of the Board of Directors
          with an exercise price of $1.00 per share. The options expire on June
          1, 2004. The following is a summary of option activity for the two
          years ended July 31, 2003:
                                            Options Outstanding
                                            -------------------
                                                         Weighted
                                    Options              Average
                                    Available            Exercise
                                   for Grant   Options    Price
                                   ---------   -------    -------

         Balance, July 31, 2001   9,492,000     400,000  $ 1.00
                                  ---------   ---------    -----
         Granted ..............        --          --       --
         Expired ..............     100,000    (100,000)   1.00
         Exercised ............        --          --       --
                                  ---------   ---------    -----
         Balance, July 31, 2002   9,592,000     300,000  $ 1.00
                                  ---------   ---------    -----
         Granted ..............        --          --       --
         Expired ..............        --          --       --
         Exercised ............        --          --       --
                                  ---------   ---------    -----
         Balance, July 31, 2003   9,592,000     300,000  $ 1.00
                                  =========   =========    =====


          The Black-Scholes option valuation model was developed for use in
          estimating the fair value of traded options that have no vesting
          restrictions and are fully transferable. In addition, option valuation
          models require the input of highly subjective assumptions including
          the expected stock price volatility. Because the Company's employee
          stock options have characteristics significantly different from those
          of traded options, and because changes in the subjective input
          assumptions can materially affect the fair value estimate, in
          management's opinion, the existing models do not necessarily provide a
          reliable single measure of the fair value of the Company's options.

12.      Commitments and Contingencies

          Rent expense amounted to $96,900 during fiscal 2003 and fiscal 2002.
          Minimum rental commitments under all non-cancelable leases with an
          initial term in excess of one year are payable as follows: 2004 -
          $96,900; 2005 - $96,900; 2006 - $96,900; 2007 - $96,900; 2008 -
          $96,900 and thereafter - $218,025.

          HMS is a guarantor of the loan obligation of HMS Leasing Company, LLC
          on the facility, which has a balance of $535,813 at July 31, 2003.

          From time to time during their normal course of operations, the
          Company maintained cash balances in a financial institution which
          exceeded the insurance limits of the Federal Depository Insurance
          Corporation.

                                       40
<PAGE>

13.       Segment information

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

14.       Legal matters

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

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

          In March 2003, Con-Tex Silver Imports, Inc. filed a petition in the
          District Court of Galveston County, Texas, Cause No. 03CV0316 against
          Debbie King, the sister-in-law of James G. Gordon. Effective October
          28, 2002, James G. Gordon, the former President of Silver entered into
          a transaction with his sister-in-law whereby he sold the assets of one
          of the retail locations of Silver for cash proceeds of $30,645. The
          Company recorded a loss on the transaction of $51,015. In its claim,
          Silver alleged conspiracy, unjust enrichment and that the sale of the
          retail location is void because of unconscionability. Additionally,


                                       41
<PAGE>

          Silver requested a return of profits received by Defendant. This
          action is currently stayed due to Silver filing a Voluntary Petition
          for Reorganization under Chapter 11 of Title 11 of the United States
          Code on April 23, 2003. The Voluntary Petition for Reorganization
          under Chapter 11 was converted to Chapter 7 on September 23, 2003.

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

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

15.       Fourth quarter adjustments

          During the fourth quarter, the Company selected an offer to sell the
          assets and business of Tandori in exchange for an assumption of the
          majority of the liabilities of Tandori. In addition, the Company
          determined the necessity of converting Silver's Voluntary Petition for
          Reorganization under Chapter 11 to Chapter 7. Both businesses are
          included in discontinuied operations.

          The Company reduced its receivable from Premier, a related party,
          by $70,000 as a result of Premier filing for a Voluntary Petition for
          Reorganization under Chapter 11.

16.      Subsequent event

          Effective August 29, 2003, HMS loaned a company $100,000 and entered
          into a letter of intent which provides in part, that HMS has the
          option for one year to convert the $100,000 loan into 51% ownership of
          the company. In addition, HMS has the option to acquire an additional
          29% of the company for that shareholder's capital contributions to the
          company.



                                       42
<PAGE>



ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

On June 10, 2003, the Company dismissed its former principal accountant, Stephen
P. Higgins, CPA of Huntington, New York, and engaged Guest & Company, P.C.,
Certified Public Accountants, of Tulsa, Oklahoma, as its principal accountants.
The decision to change accountants was approved by the Board of Directors of the
Company.

During the fiscal year ended July 31, 2002 and the subsequent interim periods
through January 31, 2003, there were no disagreements with the former
accountants on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of the former accountant would have caused him
to make reference in connection with his report to the subject matter of the
disagreement, and Stephen P. Higgins, CPA has not advised the Company of any
reportable events as defined in paragraph (A) through (D) of Regulation S-K Item
304(a)(1)(v).

The accountant's report of Stephen P. Higgins, CPA as of and for the year ended
July 31, 2002, did not contain any adverse opinion or disclaimer of opinion.


ITEM 8A  CONTROLS AND PROCDEURES

(a) Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in the reports that
are filed or submitted under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in the reports that are filed under the Exchange Act is
accumulated and communicated to management, including the principal executive
officer, as appropriate to allow timely decisions regarding required disclosure.
Under the supervision of and with the participation of management, including the
principal executive officer, the Company has evaluated the effectiveness of the
design and operation of its disclosure controls and procedures as of July 31,
2003, and, based on its evaluation, our principal executive officer has
concluded that these controls and procedures are effective.

(b)  Changes in Internal Controls

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

                                       43
<PAGE>




ITEM 9.      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
             COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT DIRECTORS,
             EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES

The following table sets forth the names, ages and current positions with the
Company held by the Directors, Executive Officers and Significant Employees;
together with the year such positions were assumed. There is no immediate family
relationship between or among any of the Directors, Executive Officers or
Significant Employees, and the Company is not aware of any arrangement or
understanding between any Director or Executive Officer and any other person
pursuant to which he was elected to his current position.
<TABLE>
<CAPTION>

                                                      POSITION OR OFFICE                     DATE FIRST
NAME                                    AGE           WITH THE COMPANY                       ELECTED/
                                                                                             APPOINTED
<S>                                     <C>          <C>                                   <C>
Dr. Terry Washburn                      50            Acting CEO, Director                   2000
James G. Gordon                         37            Director                               1999
Mitch Horowitz                          42            Director                               2001
Harry M. Schmidt                        58            President, HMS Jewelry                 2000
Richard T. Clark                        56            Director                               2003
</TABLE>

Dr. Terry Washburn became President and Acting CEO of SGD on November 25, 2002;
became a Director during fiscal 2000; and is the Chief Executive Officer and a
Director of Premier Concepts, Inc. Dr. Washburn served eight years as a Board
member of a private pension fund during which he served on the investment
advisory subcommittee that successfully directed the firm's asset base, which
reached 3 billion dollars. Dr. Washburn earned a Bachelor of Business
Administration from the University of Oklahoma, a Master of Divinity from the
Southwestern Baptist Theological Seminary in Ft. Worth, Texas and a Doctor of
Ministry from the Fuller Theological Seminary in Pasadena, California. He has
extensive background in accounting, marketing, strategic planning and leadership
development. Dr. Washburn is also a Director of Team Sports Entertainment, Inc.

James G. Gordon has been a Director of SGD since 1999 and was President of SGD
until November 25, 2002. Prior to starting the Company, Mr. Gordon was founder
and President of Con-Tex Silver Imports, Inc., a wholesale and retail jewelry
operation commencing in 1994. Mr. Gordon received a Bachelor of Science Degree
from the University of Arkansas in 1990 and has been involved in the jewelry
wholesale business since 1990. Mr. Gordon has also been a Certified Gemologist
since 1990.

Mitch Horowitz became a Director of the Company in April 2001. Mr. Horowitz is
the Associate Publisher of the "National Jeweler" magazine, by whom he has been
employed since 1993, and is currently responsible for all sales activities for
the magazine. For the ten years prior to 1993, Mr. Horowitz was employed by
Vance Publishing Corp. Mr. Horowitz has 18 years of sales and marketing
experience in the jewelry industry. Mr. Horowitz earned his Bachelor's Degree at
the University of Buffalo.

                                       44
<PAGE>

Harry M. Schmidt is President of HMS Jewelry Company, Inc. since its acquisition
by SGD in October 2000. From 1983 through October 2000, Mr. Schmidt was the
principal owner and chief operating officer for HMS Jewelry Co., Ltd and HMS
Operating Company, the predecessors to HMS Jewelry Company, Inc. From 1978 to
1983, Mr. Schmidt was Vice President of The Leverett Company, a jewelry
wholesaler.

Richard T. Clark became a Director In May 2003. Mr. Clark is President of Clark
Capital Corp. in Tulsa, Oklahoma. Clark Capital Corp. deals in public company
corporate restructurings, including bankruptcies and tax arbitrage. Mr. Clark
worked as an independent broker at S.C. Costa Co. from 1989-1992 dealing in
corporate finance. Previous to that, he was Vice President at Dean Witter
Reynolds and before that, served as Vice President of Rotan Mosle, Inc. (later
acquired by Paine Webber). Mr. Clark received his BA from the University of
Tulsa in 1970 and an MBA with a major in finance from there in 1979.

AUDIT COMMITTEE
The Board of Directors has determined that Richard T. Clark meets the
requirements of a financial expert and serves as Chairman of the Audit
Committee. Mr. Clark is independent as specified in Item 7(d)(3)(iv) of Schedule
14A under the Exchange Act.

The small business issuer has a separately designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act, which is
made up of Mr. Clark and Mr. Horowitz.


COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Mr. Washburn and Mr. Horowitz timely filed their Form 5's reporting no change
and Mr. Clark timely filed his Form 5, which included his Form 3 transaction.
Mr. Gordon had not filed his Form 5 as of October 31, 2003.





                                       45
<PAGE>



ITEM 10.          EXECUTIVE COMPENSATION

The following table shows the cash compensation of the Company's chief executive
officer and each officer whose total cash compensation exceeded $100,000, for
the three fiscal years ended July 31, 2003. The Company has no long-term
compensation plans.
<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE

NAME AND                   FISCAL                                                     OTHER                  ALL
PRINCIPAL                  YEAR                                                      ANNUAL                OTHER
POSITION                   ENDED               SALARY       BONUS              COMPENSATION         COMPENSATION

<S>                      <C>              <C>           <C>                 <C>                      <C>
Terry Washburn             07/31/03                 -           -                   $24,000                    -
(Acting CEO                07/31/02                 -           -                   $24,000                    -
since 11/25/02)            07/31/01                 -           -                   $14,000                    -

James G. Gordon            07/31/03           $42,500           -                         -                    -
(President until           07/31/02          $102,000           -                         -                    -
11/25/02)                  07/31/01          $102,000           -                         -                    -
</TABLE>

The Company has made available certain non-monetary benefits to its executive
officers with a view to acquiring and retaining qualified personnel and
facilitating job performance. The Company considers such benefits to be ordinary
and incidental business costs and expenses. The value of such benefits did not
exceed, in the case of any named individual, 10% of the cash compensation of the
individual.

Mr. Washburn's other compensation is for consulting services performed for HMS.

On September 1, 1999, the Company established a stock option plan, which
reserved 10,000,000 shares of the Company's common stock for issue to certain
employees, directors and consultants. The Plan provides that options may be
granted for no less than fair market value at the date of the option grant.
During fiscal 2001, options to acquire 100,000 shares at $1.00 per share for one
year were granted to each of the four directors. The outside directors received
$500 each for their service as a director during fiscal 2002 and have received
no compensation for their service as a director during fiscal 2003. There were
no long-term incentive plan awards during the fiscal year.

There were no option/SAR grants during fiscal 2003 and there were no option/SAR
exercises during fiscal 2003.

At July 31, 2003, Directors Terry Washburn, James G. Gordon and Mitch Horowitz
each had an option to acquire 100,000 shares of the Company's common stock at
$1.00 per share. The options expire on June 1, 2004. The unexercised options
have no value at July 31, 2003 as they are not in-the-money.





                                       46
<PAGE>


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table indicates all persons who, as of October 31, 2003, the most
recent practicable date, are known by the Company to own beneficially more than
5% of any class of the Company's voting securities and all Directors of the
Company and all Officers who are not Directors of the Company, as a group. As of
October 31, 2003, there were 36,266,077 shares of the Company's common stock
outstanding.
<TABLE>
<CAPTION>


TITLE                      NAME AND ADDRESS                             AMOUNT AND NATURE
OF                           OF BENEFICIAL                                OF BENEFICIAL                   % OF
CLASS                            OWNER                                        OWNER                      CLASS
<S>               <C>                                               <C>                            <C>

Common              James G. Gordon #                                         11,350,000                    31.2%
                    111 Rhodes
                    Conroe, TX  77301

Common              Lakewood Development                                       4,500,000                   12.4%
                    5525 North Mac Arthur Blvd., #615
                    Irving, TX  75038

Common              Evolve One, Inc.                                           1,866,666                     6.6%
                    6413 Congress Ave, Ste 240
                    Boca Raton, FL 33487

Common              Dr. Terry Washburn #                                         100,000                     *
                    1701 West N.W. Highway
                    Grapevine, TX  76051

Common              Mitch Horowitz #                                             100,000                     *
                    1199 S. Bell Line Rd, Ste 100
                    Coppell, TX  75019

Common              Richard T. Clark                                           1,000,000                     2.8%
                    1165 E 24th Place
                    Tulsa, OK  74114


Common              All directors and executive                               12,550,000                    34.3%
                    officers as a group (four persons)

* Less than 1%.

# Includes option to acquire 100,000 shares of common stock.
</TABLE>


                                       47
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANACTIONS

HMS leases its facility from HMS Leasing Company, LLC, at the rate of $8,075 per
month pursuant to a lease agreement that expires on October 31, 2010. This
amounted to $96,900 during fiscal 2003 and fiscal 2002. HMS Leasing Company, LLC
is owned by the president of HMS. HMS is a guarantor of the loan obligation of
HMS Leasing Company, LLC on the facility, which has a balance of $535,813 at
July 31, 2003.

At July 31, 2003 the Company owed G. David Gordon, a shareholder and the brother
of a Director $18,621 in accrued interest. In addition, Gordon is owed
compensation in the amount of $75,000 at July 31, 2003 which is payable one-half
in SGD common stock and one-half in cash. During fiscal 2003, Gordon was issued
2,000,000 common shares for issuing his personal guarantee on the Company's
obligation to the gold lender and the Company's $835,000 note obligation. Gordon
also received 1,000,000 shares pursuant to a settlement agreement with the
Company.

At July 31, 2003, the Company had made net advances to the president of HMS,
including companies owned by him, of $2,254. During fiscal 2003 the president of
HMS was issued 1,100,000 common shares for extending the $1,250,000 note
obligation due him.

The Company has made net sales to Premier of $95,997 and $543,784 during fiscal
2003 and fiscal 2002, respectively, and has receivables from Premier at July 31,
2003 of $60,263. The Company owns 7.9% of the stock of Premier at July 31, 2003
and the Chief Executive Officer of Premier is a Director of the Company. On
October 10, 2003 Premier filed a Voluntary Petition for Reorganization under
Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy
Court for the Central District of California, Los Angeles Division; Case No. LA
03-36445 BR. The Company reduced its receivable from Premier to the amount they
estimate is collectible and recorded a write-down of $70,000 on July 31, 2003.

The Company has current notes payable to related parties at July 31, 2003 in the
total amount of $1,330,000, as more particularly described in Note 7 to the
consolidated financial statements.

G. David Gordon and the President of Tandori acquired the assets and assumed
substantially all liabilities of Tandori effective July 31, 2003. The Company
realized a gain of $233,169 on the transaction.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBITS - See Exhibit Index at Page 52
(B) REPORTS ON FORM 8-K -
   o On May 8, 2003 the Company  filed Form 8-K to report that its wholly  owned
     subsidiary,  Con-Tex  Silver  Imports,  Inc.  filed,  on April 23,  2003, a
     Voluntary Petition for  Reorganization  under Chapter 11 of Title 11 of the
     United States Code in the United States  Bankruptcy  Court for the Northern
     District  of Texas,  Fort Worth  Division;  Case No.  03-43783-DML-11.  The
     filing was  necessitated  as a result of James G.  Gordon,  a Director  and


                                       48
<PAGE>

     former  President of the Registrant,  locking Con-Tex  employees out of the
     office and  warehouse  premises,  which Gordon owned and leased to Con-Tex,
     thus preventing Con-Tex from operating.
   o On June 16, 2003 the Company  filed Form 8-K to report the dismissal of its
     former principal accountant,  Stephen P. Higgins,  CPA, of Huntington,  New
     York and engaged Guest & Company,  P.C.,  Certified Public Accountants,  of
     Tulsa, Oklahoma as its principal accountants. The change was effective June
     10, 2003.

ITEM 14  PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES - The aggregate fees billed as of October 31, 2003 for professional
services rendered by the Company's current accountant was $31,211 for the audit
of the Company's annual financial statements for the fiscal year ended July 31,
2003 and for the reviews of the financial statements included in the Company's
Forms 10-QSB for that fiscal year. The Company's prior accountant billed $33,500
during fiscal 2003 for the prior year audit and review of the applicable Forms
10-QSB for fiscal 2003.

AUDIT-RELATED FEES - None.

TAX FEES - None.

ALL OTHER FEES - Other than the services described above, no other fees were
billed for services rendered by the principal accountant during fiscal 2003.

AUDIT COMMITTEE POLICIES AND PROCEDURES - Not applicable.

If greater than 50 percent, disclose the percentage of hours expended on the
principal accountant's engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees -
Not applicable.






                                       49
<PAGE>



                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                      SGD HOLDINGS, LTD.



Date:  November 12, 2003                           By:  /s/ Terry Washburn
                                                  -----------------------------
                                                  Terry Washburn
                                                  President, Acting CEO and
                                                  Principal Accounting Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.


Date:  November 12, 2003                           By:  /s/ Terry Washburn
                                                  -----------------------------
                                                   Terry Washburn
                                                   Director

Date:  November 12, 2003                           By:  /s/ Mitch Horowitz
                                                   -----------------------------
                                                   Mitch Horowitz
                                                   Director

Date:  November 12, 2003                           By:  /s/ Richard T. Clark
                                                   -----------------------------
                                                   Richard T. Clark
                                                   Director

Date:  November 12, 2003                           By:  /s/
                                                   -----------------------------
                                                   James G. Gordon
                                                   Director





                                       50
<PAGE>



EXHIBITS  HAVE BEEN OMITTED  FROM THIS COPY.  COPIES OF EXHIBITS MAY BE OBTAINED
FROM SGD  HOLDINGS,  LTD.  (THE  "COMPANY")  UPON  REQUEST  AND  PAYMENT  OF THE
COMPANY'S COSTS IN FURNISHING SUCH COPIES.  COPIES MAY ALSO BE OBTAINED FROM THE
SECURITIES AND EXCHANGE  COMMISSION  FOR A SLIGHT CHARGE.  (The foregoing is not
applicable to the original(s) hereof.)
<TABLE>
<CAPTION>

                                  EXHIBIT INDEX
Securities and
Exchange
Commission                                                                                              Page
Exhibit No.           Type of Exhibit                                                                  Number
<S>               <C>                                                                             <C>
2                     Plan of acquisition, reorganization, arrangement,                                  N/A
                      liquidation, or succession

3(i)                  Articles of incorporation N/A

3(ii)                 By-laws N/A

4                     Instruments defining the rights of holders, incl. Indentures                       N/A

9                     Voting trust agreement                                                             N/A

10                    Material contracts                                                                 N/A

11                    Statement re: computation of per share earnings                                  Item 7

16                    Letter on change in certifying accountant                                          N/A

18                    Letter on change in accounting principles                                          N/A

21                    Subsidiaries of the Registrant                                                   Item 1

22                    Published report regarding matters submitted to vote                               N/A

23                    Consent of experts and counsel                                                     N/A

24                    Power of Attorney                                                                  N/A

31                    Certification pursuant to 18 U.S.C. Section 1350
                      Section 302 of the Sarbanes-Oxley Act of 2002                                      52

32                    Certification pursuant to 18 U.S.C. Section 1350
                      Section 906 of the Sarbanes-Oxley Act of 2002                                      53
</TABLE>




                                       51
<PAGE>



Exhibit 31

     SGD HOLDINGS, LTD. FORM 10-KSB FOR THE FISCAL YEAR ENDED JULY 31, 2003
   CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                 SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Terry Washburn, certify that:

1.   I have reviewed  this annual  report on Form 10-KSB of SGD  Holdings,  Ltd.
     (the registrant);
2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;
3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;
4.   I am responsible for establishing and maintaining  disclosure  controls and
     procedures  (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
     the  registrant  and  have;  a)  designed  such  disclosure   controls  and
     procedures,  or  caused  such  disclosure  controls  and  procedures  to be
     designed under my supervision, to ensure that material information relating
     to the registrant,  including its consolidated subsidiaries,  is made known
     to me by others within those  entities,  particularly  during the period in
     which this report is being prepared;  b) evaluated the effectiveness of the
     registrant's  disclosure  controls  and  procedures  and  presented in this
     report my conclusions  about the  effectiveness of the disclosure  controls
     and procedures, as of the end of the period covered by this report based on
     such  evaluation;  and c)  disclosed  in  this  report  any  change  in the
     registrant's  internal  controls  over  financial  reporting  that occurred
     during the registrant's fourth fiscal quarter that has materially affected,
     or is reasonably  likely to materially  affect,  the registrant's  internal
     control over financial reporting; and;
5.   I have disclosed, based on my most recent evaluation of internal control
     over financial reporting, to the registrant's auditors and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent functions): a) all significant deficiencies and material
     weaknesses in the design or operation of internal control over financial
     reporting which are reasonably likely to adversely affect the registrant's
     ability to record, process, summarize and report financial information; and
     b) any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal control
     over financial reporting.

                                                     /s/ Terry Washburn
                                                     ------------------
                                                     Terry Washburn
                                                     President and Acting CEO
                                                     November 12, 2003



                                       52
<PAGE>


Exhibit 32

     SGD HOLDINGS, LTD. FORM 10-KSB FOR THE FISCAL YEAR ENDED JULY 31, 2003
  CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,
      AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Terry Washburn, certify that

1.   I am the President and Acting chief executive officer of SGD Holdings, Ltd.
2.   Attached  to this  certification  is Form  10-KSB for the fiscal year ended
     July 31,  2003,  a periodic  report (the  "periodic  report")  filed by the
     issuer with the Securities Exchange Commission pursuant to Section 13(a) or
     15(d) of the  Securities  and  Exchange Act of 1934 (the  "Exchange  Act"),
     which contains financial statements.
3.   I hereby certify,  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant
     to Section 906 of the Sarbanes-Oxley Act of 2002, that
     o   The periodic  report  containing the financial statements fully
         complies with the  requirements of Section 13(a) or 15(d) of the
         Exchange Act, and
     o   The information in the periodic report fairly presents, in all
         material respects, the financial condition and results of  operations
         of the issuer for the periods presented.


November 12, 2003                                     /s/ Terry Washburn
                                                      --------------------------
                                                      Terry Washburn
                                                      President and Acting CEO

A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by SGD Holdings, Ltd. and furnished
to the Securities and Exchange Commission or its staff upon request.

This certification will not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, or otherwise subject to the liability of that
section. This certification will not be deemed to be incorporated by reference
into any filing under the Securities Act of 1933 or the Securities Exchange Act
of 1934 even if the document with which it is submitted to the Securities and
Exchange Commission is so incorporated by reference.

                                       53