UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                 FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2002

        [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

              FOR THE TRANSITION PERIOD FROM _________ TO _________

                         COMMISSION FILE NUMBER: 0-30703

                        COLLECTIBLE CONCEPTS GROUP, INC.
             (Exact name of registrant as specified on its charter)

              DELAWARE                                     95-4026880
  (State or other jurisdiction of                        (IRS Employer
   incorporation or organization)                     Identification No.)

                              1600 LOWER STATE ROAD
                              DOYLESTOWN, PA 18901
                    (Address of principle executive offices)

                                 (215) 491-1075
              (Registrant's telephone number, including area code)

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

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934 during the 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 [ ] No [X]

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares  outstanding of each of the  registrant's  classes of
common equity, as of the latest practicable date:  478,972,190 shares issued and
outstanding as of June 30, 2004

<PAGE>

                        COLLECTIBLE CONCEPTS GROUP, INC.

                                      INDEX

<TABLE>
<CAPTION>
<S>      <C>      <C>                                                                                          <C>
PART I   FINANCIAL INFORMATION

         ITEM 1   Condensed Consolidated Balance Sheet As Of August 31, 2002 (Unaudited)                         3

                  Condensed  Consolidated  Statements Of Operations  For The Three Months Ended August 31,
                  2002 And 2001 (Unaudited)                                                                      4

                  Condensed  Consolidated  Statements  Of  Operations  For The Six Months Ended August 31,
                  2002 And 2001 (Unaudited)                                                                      5

                  Condensed  Consolidated  Statement Of Changes In Shareholders'  Deficiency For The Three
                  Months Ended August 31, 2002 (Unaudited)                                                       6

                  Condensed  Consolidated  Statements  Of Cash Flows For The Three Months Ended August 31,       7

                  Notes To Condensed Consolidated Financial Statements As Of November 30, 2002 (Unaudited)     8 - 17

         ITEM 2   Management's Discussion and Analysis of Financial Condition and Results of Operations       18 - 27

PART II  OTHER INFORMATION

         ITEM 1   Legal proceedings                                                                              28
         ITEM 2   Changes in securities and use of proceeds                                                      28
         ITEM 3   Defaults upon senior securities                                                                28
         ITEM 4   Submission of matters to a vote of security holders                                            28
         ITEM 5   Other information                                                                              28
         ITEM 6   Exhibits and Reports on 8-K                                                                    29

         SIGNATURES                                                                                              30
</TABLE>

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                              AS OF AUGUST 31, 2002
                                   (UNAUDITED)


                                     ASSETS
CURRENT ASSETS
Cash                                                             $        590
Accounts receivable, net                                               22,056
Inventories                                                            10,565
                                                                 ------------
Total Current Assets                                                   33,211

Property and equipment, net                                            49,780
Other assets                                                            4,500
                                                                 ------------

TOTAL ASSETS                                                     $     87,491
                                                                 ============

                    LIABILITIES AND SHAREHOLDERS' DEFICIENCY

CURRENT LIABILITIES
Convertible secured debentures, net                              $    462,500
Notes and loans payable, current portion                              793,947
Loans payable - related parties                                        80,559
Convertible subordinated debentures                                    96,800
Accounts payable                                                    1,294,156
Accrued expenses                                                    1,216,942
Accrued royalties                                                     356,250
                                                                 ------------
Total Current Liabilities                                           4,301,154

Notes and loans payable, long-term portion                             15,000
                                                                 ------------

TOTAL LIABILITIES                                                   4,316,154
                                                                 ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' DEFICIENCY
Common stock, $.001 par value, 700,000,000 shares authorized,
  52,742,756 shares issued and outstanding                             52,743
Common stock, to be issued (776,589 shares)                             5,139
Additional paid-in capital                                         13,772,248
Accumulated deficit                                               (18,058,793)
                                                                 ------------
Total Shareholders' Deficiency                                     (4,228,663)
                                                                 ------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY                   $     87,491
                                                                 ============


     See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR
                 THE THREE MONTHS ENDED AUGUST 31, 2002 AND 2001
                                   (UNAUDITED)


                                                       2002             2001
                                                  ------------     ------------

SALES                                             $      8,756     $      5,351

COST OF SALES                                            9,325            5,514
                                                  ------------     ------------

GROSS (LOSS) PROFIT                                       (569)            (163)

OPERATING EXPENSES
Selling, general and administrative                    612,537          430,199
                                                  ------------     ------------

LOSS FROM OPERATIONS                                  (613,106)        (430,362)
                                                  ------------     ------------

OTHER EXPENSE
Interest expense                                       (96,854)         (69,680)
                                                  ------------     ------------
Total Other Expense                                    (96,854)         (69,680)
                                                  ------------     ------------

LOSS BEFORE TAX PROVISION                             (709,960)        (500,042)
INCOME TAX PROVISION                                        --               --
                                                  ------------     ------------

LOSS FROM CONTINUING OPERATIONS                       (709,960)        (500,042)
LOSS FROM DISCONTINUED OPERATIONS                           --          (47,198)
                                                  ------------     ------------

NET LOSS                                          $   (709,960)    $   (547,240)
                                                  ============     ============

BASIC AND DILUTED LOSS PER SHARE
  Loss per share from continuing operations       $      (0.03)    $      (0.12)
  Loss per share from discontinued operations               --     $      (0.01)
                                                  ------------     ------------

BASIC AND DILUTED LOSS PER SHARE                  $      (0.03)    $      (0.13)
                                                  ============     ============

WEIGHTED AVERAGE SHARES USED IN NET LOSS
CALCULATIONS - BASIC AND DILUTED                    22,780,157        4,176,566
                                                  ============     ============


     See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR
                  THE SIX MONTHS ENDED AUGUST 31, 2002 AND 2001
                                   (UNAUDITED)


                                                     2002             2001
                                                 ------------     ------------

SALES                                            $     48,989     $     11,817

COST OF SALES                                          71,009            8,799
                                                 ------------     ------------

GROSS (LOSS) PROFIT                                   (22,020)           3,018

OPERATING EXPENSES
Selling, general and administrative                   836,558          904,247
                                                 ------------     ------------

LOSS FROM OPERATIONS                                 (858,578)        (901,229)
                                                 ------------     ------------

OTHER (EXPENSE) INCOME
Interest expense                                     (117,150)        (195,713)
Forgiveness of Debt                                    70,778               --
                                                 ------------     ------------
Total Other (Expense)                                 (46,372)        (195,713)
                                                 ------------     ------------

LOSS BEFORE TAX PROVISION                            (904,950)      (1,096,942)
INCOME TAX PROVISION                                       --               --
                                                 ------------     ------------

LOSS FROM CONTINUING OPERATIONS                      (904,950)      (1,096,942)
LOSS FROM DISCONTINUED OPERATIONS                          --         (515,866)
                                                 ------------     ------------

NET LOSS                                         $   (904,950)    $ (1,612,808)
                                                 ============     ============

BASIC AND DILUTED LOSS PER SHARE
  Loss per share from continuing operations      $      (0.06)    $      (0.27)
  Loss per share from discontinued operations              --            (0.13)

BASIC AND DILUTED LOSS PER SHARE                 $      (0.06)    $      (0.40)
                                                 ============     ============

WEIGHTED AVERAGE SHARES USED IN NET LOSS
CALCULATIONS - BASIC AND DILUTED                   15,537,551        4,033,216
                                                 ============     ============


     See accompanying notes to condensed consolidated financial statements.

                                       5

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
          CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIENCY
                    FOR THE SIX MONTHS ENDED AUGUST 31, 2002
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                               Common Stock        Additional
                                                       Common Stock            To be issued          Paid-In      Accumulated
                                                   Shares       Amount      Shares      Amount       Capital        Deficit
                                                 ----------   ---------   ---------   ---------   ------------    ------------
<S>                                               <C>         <C>            <C>      <C>         <C>             <C>
Balance, February 28, 2002                        7,392,614   $   7,392      49,624   $      50   $ 13,183,269    $(17,153,843)
Common stock issued for cash                     15,428,571      15,429          --          --          9,571              --
Common stock issued for services rendered        29,921,571      29,922          --          --        509,497              --
Common stock to be issued per anti-dilution
 provision                                               --          --     726,965       5,089         (5,089)             --
Beneficial conversion on convertible debentures          --          --          --          --         75,000              --
Net loss, 2002                                           --          --          --          --             --        (904,950)
                                                 ----------   ---------   ---------   ---------   ------------    ------------
BALANCE AUGUST 31, 2002                          52,742,756   $  52,743     776,589   $   5,139   $ 13,772,248    $(18,058,793)
                                                 ==========   =========   =========   =========   ============    ============
</TABLE>

<TABLE>
<CAPTION>


                                                    Total
                                                 ------------
<S>                                              <C>
Balance, February 28, 2002                       $ (3,963,132)
Common stock issued for cash                           25,000
Common stock issued for services rendered             539,419
Common stock to be issued per anti-dilution
 provision                                                 --
Beneficial conversion on convertible debentures        75,000
Net loss, 2002                                       (904,950)
                                                 ------------
BALANCE AUGUST 31, 2002                          $ (4,228,663)
                                                 ============
</TABLE>

     See accompanying notes to condensed consolidated financial statements.

                                       6

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED AUGUST 31, 2002 AND 2001
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                  2002           2001
                                                                              -----------    -----------
<S>                                                                           <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                      $  (904,950)   $(1,612,808)
Loss from discontinued operations                                                      --        515,866
                                                                              -----------    -----------
Loss from continuing operations                                                  (904,950)    (1,096,942)

Adjustments to reconcile net loss to net cash used in operating activities:
  Depreciation                                                                     11,861         10,849
  Amortization of debt discount and interest                                           --         47,201
  Amortization of deferred debt expense                                                --          8,670
  Amortization of deferred compensation                                                --          8,400
  Provision for doubtful accounts                                                      --            906
  Common stock issued for services rendered                                       539,419        192,792
  Forgivness of Debt                                                               70,000
  Interest expense related to beneficial conversion of debt                        75,000             --
Changes in operating assets and liabilities,
  net of discontinued operations:
Accounts receivable                                                                19,764          1,455
Inventories                                                                            --           (708)
Prepaid royalties                                                                     --       (165,067)
Prepaid expenses and other                                                             --         (9,675)
Accounts payable and accrued expenses                                              77,696        473,438
Accrued royalties                                                                      --         37,842
                                                                              -----------    -----------
Net Cash Used In Continuing Operations                                           (111,210)      (490,839)
Net Cash Used In Discontinued Operations                                               --        (50,376)
                                                                              -----------    -----------
Net Cash Used In Operating Activities                                            (111,210)      (541,215)
                                                                              -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                                     --        (23,214)
                                                                              -----------    -----------
Net Cash Used In Investing Activities                                                  --        (23,214)
                                                                              -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings, net of financing fees                                                  75,000        352,325
Proceeds from issuance of common stock and exercise of stock options, net          25,000        249,040
Repayment of notes and loans payable                                              (21,514)       (36,083)
Proceeds from notes and loans payable                                              39,863             --
Repayment of loans payable - related parties                                       (8,970)            --
Proceeds from loans payable - related parties                                       2,282             --
                                                                              -----------    -----------
Net Cash Provided by Financing Activities                                         111,661        565,282
                                                                              -----------    -----------

NET INCREASE IN CASH                                                                  451            853

CASH - BEGINNING OF PERIOD                                                            139            222
                                                                              -----------    -----------

CASH - END OF PERIOD                                                          $       590    $     1,075
                                                                              ===========    ===========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


                                       7

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2002
                                   (UNAUDITED)


NOTE 1   NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (A) DESCRIPTION OF BUSINESS

         Collectible  Concepts Group,  Inc. and its subsidiaries (the "Company")
         distribute   high-end  and  novelty   products   related  to  both  the
         entertainment  and sports  industries.  The Company  sells its products
         through  retailers,  distributors,  department stores, the Internet and
         catalogers.

         (B) BASIS OF PRESENTATION

         These  statements  have been  prepared in  accordance  with  accounting
         principles  generally  accepted  in the United  States of  America  for
         interim  financial  information and the instructions to Form 10-QSB and
         do not include all the information and footnotes required by accounting
         principles  generally  accepted  in the United  States of  America  for
         complete  financial  statements.  In the  opinion  of  management,  all
         adjustments   (consisting  of  normal  recurring  accruals)  considered
         necessary  for a fair  presentation  of the  results  for  the  interim
         periods have been included.  Operating results for the six months ended
         August 31, 2002 are not necessarily  indicative of the results that may
         be expected  for the year ended  February 28,  2003.  The  accompanying
         condensed   consolidated   financial   statements  should  be  read  in
         conjunction   with  the  Company's   audited   consolidated   financial
         statements  and related notes included in the Company's Form 10-KSB for
         the year ended February 28, 2002.

         (C) PRINCIPLES OF CONSOLIDATION

         The accompanying consolidated financial statements include the accounts
         of the Company and the  Company's two wholly owned  subsidiaries,  Team
         Sports   Specialties   Corporation  and  Music  Art  Corporation.   All
         significant   intercompany   accounts   and   transactions   have  been
         eliminated.

         The  Company   discontinued   operations   of  its  two  wholly   owned
         subsidiaries,   Team  Sports  Specialties  Corporation  and  Music  Art
         Corporation during the fiscal year ended February 28, 2002.

         (D) USE OF ESTIMATES

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


                                       8
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2002
                                   (UNAUDITED)


         (E) EARNINGS (LOSS) PER SHARE

         The Company follows Statement of Financial Accounting Standards No. 128
         ("SFAS No. 128") "Earnings Per Share". Basic and fully diluted earnings
         (loss) per share  amounts are computed  based on net income  (loss) and
         divided by the weighted average number of shares actually  outstanding.
         The assumed  conversion of common stock equivalents was not included in
         the  computation  of  diluted  earnings  (loss) per share  because  the
         assumed  conversion  and  exercise  would be  anti-dilative  due to net
         losses incurred in all periods.

         (F) STOCK-BASED COMPENSATION

         The Company has adopted the disclosure-only  provisions of SFAS No. 123
         but applies APB Opinion 25 ("Accounting for Stock Issued to Employees")
         in accounting  for stock options issued to employees.  Accordingly,  no
         compensation  has been  recognized  for the six months ended August 31,
         2002.  Compensation  cost that would have been recognized in accordance
         with the basis of fair value  pursuant  to SFAS No. 123, if the Company
         had so elected,  would have been $0 for the the six months ended August
         31, 2002,  and would not have  affected  pro-forma  net loss per share.
         There has been no stock option activity since February 28, 2002.

         (G) RECENT ACCOUNTING PRONOUNCEMENTS

         In July 2001, the Financial  Accounting Standards Board ("FASB") issued
         Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill
         and Other  Intangible  Assets,"  which was  required  to be adopted for
         fiscal year 2002.  SFAS No. 142  established  accounting  and reporting
         standards for goodwill and  intangible  assets  resulting from business
         combinations.  SFAS  No.  142  included  provisions  discontinuing  the
         periodic amortization of, and requiring the assessment of the potential
         impairments  of,  goodwill  (and  intangible   assets  deemed  to  have
         indefinite lives). As SFAS No. 142 replaced the measurement  guidelines
         for  goodwill  impairment,   goodwill  not  considered  impaired  under
         previous  accounting  literature may be considered  impaired under SFAS
         No. 142.  SFAS No. 142 also requires the Company to complete a two-step
         goodwill  impairment  test.  The first step  compares the fair value of
         each reporting unit to its carrying amount,  including goodwill. If the
         fair value of a reporting unit exceeds its carrying amount, goodwill is
         not considered to be impaired and the second step will not be required.
         SFAS No. 142  requires  completion  of this first step within the first
         six months of initial adoption and annually thereafter. If the carrying
         amount of a reporting  unit exceeds its fair value,  the second step is
         performed  to measure the amount of  impairment  loss.  The second step
         compares the implied fair value of goodwill to the carrying  value of a
         reporting  unit's  goodwill.  The  implied  fair value of  goodwill  is
         determined in a manner similar to accounting for a business combination
         with the allocation of the assessed fair value  determined in the first
         step to the assets and liabilities of the reporting unit. The excess of



                                       9
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF AUGUST 31, 2002
                                   (UNAUDITED)


         the fair value of the reporting  unit over the amounts  assigned to the
         assets and  liabilities  is the implied  fair value of  goodwill.  This
         allocation  process  is  only  performed  for  purposes  of  evaluating
         goodwill impairment and does not result in an entry to adjust the value
         of any assets or liabilities.  An impairment loss is recognized for any
         excess in the carrying value of goodwill over the implied fair value of
         goodwill.  Upon the initial  adoption,  any impairment  loss identified
         will  be  presented  as  a  change  in  accounting  principle,  net  of
         applicable income tax benefit, and recorded as of the beginning of that
         year.   Subsequent  to  the  initial  adoption,   any  impairment  loss
         recognized would be recorded as a charge to income from operations.

         In June 2001,  the FASB  issued  SFAS No.  143,  "Accounting  for Asset
         Retirement  Obligations."  SFAS No. 143  establishes  standards for the
         initial   measurement   and  subsequent   accounting  for   obligations
         associated  with the sale,  abandonment,  or other type of  disposal of
         long-lived tangible assets arising from the acquisition,  construction,
         or development and/or normal operation of such assets.  SFAS No. 143 is
         effective for fiscal years  beginning after June 15, 2002, with earlier
         application encouraged.

         In August  2001,  the FASB  issued SFAS No.  144,  "Accounting  for the
         Impairment or Disposal of Long-Lived  Assets." This statement addresses
         financial  accounting  and reporting for the  impairment or disposal of
         long-lived  assets and  supercedes  SFAS No. 121,  "Accounting  for the
         Impairment  of  Long-Lived  Assets  and  for  Long-Lived  Assets  to be
         Disposed  Of".  The  provisions  of the  statement  are  effective  for
         financial  statements  issued for fiscal years beginning after December
         15, 2001.  The Company has applied SFAS No. 144 for the  accounting for
         the impairment or disposal of long-lived  assets  beginning  January 1,
         2002.

         In April  2002,  the FASB  issued  SFAS No.  145,  "Rescission  of FASB
         Statements  No. 4, 44, and 64,  Amendment of FASB Statement No. 13, and
         Technical  Corrections."  SFAS No. 145 rescinds the  provisions of SFAS
         No. 4, which  requires  companies to classify  certain gains and losses
         from  debt  extinguishments  as  extraordinary  items,  eliminates  the
         provisions of SFAS No. 44 regarding transition to the Motor Carrier Act
         of 1980 and  amends  the  provisions  of SFAS No.  13 to  require  that
         certain lease modifications be treated as sale leaseback  transactions.
         The  provisions  of SFAS No.  145  related  to  classification  of debt
         extinguishments  are effective for fiscal years beginning after May 15,
         2002, with earlier application encouraged.

         In  July  2002,  the  FASB  issued  SFAS  No.  146,   "Accounting   for
         Restructuring  Costs." SFAS No. 146 applies to costs associated with an
         exit  activity   (including   restructuring)  or  with  a  disposal  of
         long-lived assets. Those activities can include eliminating or reducing
         product lines, terminating employees and contracts and relocating plant
         facilities or personnel.  Under SFAS No. 146, the Company will record a
         liability for a cost associated with an exit or disposal  activity when


                                       10
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF AUGUST 31, 2002
                                   (UNAUDITED)


         that liability is incurred and can be measured at fair value.  SFAS No.
         146 will require the Company to disclose information about its exit and
         disposal  activities,  the related costs, and changes in those costs in
         the notes to the interim and annual  financial  statements that include
         the period in which an exit activity is initiated and in any subsequent
         period  until the  activity  is  completed.  SFAS No. 146 is  effective
         prospectively for exit or disposal activities  initiated after December
         31,  2002,  with  earlier  adoption  encouraged.  Under SFAS No. 146, a
         company cannot restate it's previously issued financial  statements and
         the new statement  grandfathers  the accounting for liabilities  that a
         company had previously  recorded under Emerging Issues Task Force Issue
         94-3.

         In  December  2002,  the FASB  issued  SFAS No.  148,  "Accounting  for
         Stock-Based  Compensation-Transition  and  Disclosure - an amendment of
         FASB Statement No. 123." SFAS No. 148 amends SFAS No. 123,  "Accounting
         for Stock Based  Compensation"  and  provides  alternative  methods for
         accounting  for a change by  registrants  to the fair  value  method of
         accounting for  stock-based  compensation.  Additionally,  SFAS No. 148
         amends  the  disclosure   requirements  of  SFAS  No.  123  to  require
         disclosure in the significant accounting policy footnote of both annual
         and interim financial  statements of the method of accounting for stock
         based-compensation  and the  related  pro-forma  disclosures  when  the
         intrinsic value method continues to be used. The statement is effective
         for fiscal years beginning after December 15, 2002, and disclosures are
         effective for the first fiscal  quarter  beginning  after  December 15,
         2002.

         In January 2003, The FASB issued  Interpretation No. 46, "Consolidation
         of  Variable  Interest  Entities",   an  interpretation  of  Accounting
         Research Bulletin ("ARB") No. 51, "Consolidated  Financial Statements".
         Interpretation No. 46 addresses  consolidation by business  enterprises
         of variable interest entities,  which have one or both of the following
         characteristics: (i) the equity investment at risk is not sufficient to
         permit  the  entity  to  finance  its  activities   without  additional
         subordinated  support  from other  parties,  which is provided  through
         other  interest that will absorb some or all of the expected  losses of
         the entity; (ii) the equity investors lack one or more of the following
         essential  characteristics  of a controlling  financial  interest:  the
         direct  or  indirect  ability  to make  decisions  about  the  entities
         activities  through voting rights or similar rights;  or the obligation
         to absorb the expected losses of the entity if they occur,  which makes
         it  possible  for the entity to finance  its  activities;  the right to
         receive  the  expected  residual  returns of the entity if they  occur,
         which  is the  compensation  for the  risk of  absorbing  the  expected
         losses.

         Interpretation No. 46 also requires expanded disclosures by the primary
         beneficiary  (as  defined)  of a  variable  interest  entity  and by an
         enterprise  that holds a  significant  variable  interest in a variable
         interest entity but is not the primary beneficiary.  Interpretation No.
         46 applies  immediately  to variable  interest  entities  created after
         January  31,  2003,  and to  variable  interest  entities  in  which an
         enterprise obtains an interest after that date. It applies in the first


                                       11
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF AUGUST 31, 2002
                                   (UNAUDITED)


         fiscal  year or  interim  period  beginning  after  June 15,  2003,  to
         variable  interest  entities  in which an  enterprise  holds a variable
         interest that it acquired before February 1, 2003.  Interpretation  No.
         46 may be applied prospectively with a cumulative-effect  adjustment as
         of the date on which it is first  applied  or by  restating  previously
         issued   financial   statements   for   one  or  more   years   with  a
         cumulative-effect  adjustment  as of the  beginning  of the first  year
         restated.

         In June 2003,  the FASB  issued an  Exposure  Draft for  proposed  SFAS
         entitled "Qualifying Special Purpose Entities ("QSPE") and Isolation of
         transferred  Assets",  an  amendment  of SFAS No.  140  ("The  Exposure
         Draft"). The Exposure Draft is a proposal that is subject to change and
         as such,  is not yet  authoritative.  If the proposal is enacted in its
         current  form,  it will amend and clarify SFAS 140. The Exposure  Draft
         would  prohibit  an  entity  from  being  a QSPE if it  enters  into an
         agreement   that  obliged  a  transferor  of  financial   assets,   its
         affiliates, or its agents to deliver additional cash or other assets to
         fulfill the special-purposes entity's obligation to beneficial interest
         holders.

         In May 2003, the Financial  Accounting  Standards Board ("FASB") issued
         Statement  of  Financial   Accounting   Standards   ("SFAS")  No.  150,
         "Accounting For Certain Financial  Instruments with  Characteristics of
         both  Liabilities and Equity".  SFAS No. 150 changes the accounting for
         certain financial  instruments with characteristics of both liabilities
         and equity that, under previous  pronouncements,  issuers could account
         for as equity.  The new accounting  guidance  contained in SFAS No. 150
         requires that those  instruments  be classified as  liabilities  in the
         balance sheet.

         SFAS No.  150  affects  the  issuer's  accounting  for  three  types of
         freestanding financial instruments.  One type is a mandatory redeemable
         share,  which the issuing  company is obligated to buy back in exchange
         for cash or other  assets.  A second  type  includes  put  options  and
         forward purchase contracts,  which involves  instruments that do or may
         require the issuer to buy back some of its shares in exchange  for cash
         or other assets.  The third type of  instruments  that are  liabilities
         under this  Statement is  obligations  that can be settled with shares,
         the monetary value of which is fixed, tied solely or predominantly to a
         variable such as a market index, or varies  inversely with the value of
         the issuers' shares.  SFAS No. 150 does not apply to features  embedded
         in a financial instrument that is not a derivative in its entirety.

         Most of the  provisions  of  Statement  150  are  consistent  with  the
         existing  definition of liabilities  in FASB Concepts  Statement No. 6,
         "Elements of Financial  Statements".  The remaining  provisions of this
         Statement  are  consistent  with the  FASB's  proposal  to revise  that
         definition to encompass certain obligations that a reporting entity can
         or must  settle by issuing  its own  shares.  This  Statement  shall be
         effective for financial  instruments entered into or modified after May
         31, 2003 and otherwise shall be effective at the beginning of the first
         interim  period  beginning  after June 15, 2003,  except for  mandatory


                                       12
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF AUGUST 31, 2002
                                   (UNAUDITED)


         redeemable  financial  instruments of a non-public  entity, as to which
         the effective date is for fiscal periods  beginning  after December 15,
         2003.

         Management   does  not  expect  the   adoption  of  these   statements'
         pronouncements to have a material impact on the Company's  consolidated
         financial position or results of operations.

NOTE 2   GOING CONCERN

         The  Company's  financial  statements  have been prepared in conformity
         with generally accepted  accounting  principles,  which contemplate the
         continuation of the Company as a going concern.  Since  inception,  the
         Company has not  generated  sufficient  revenues to meet its  operating
         expenses and has incurred significant  operating losses and net losses.
         As of August 31, 2002, the Company had a working capital  deficiency of
         $4,228,663 and a shareholders' deficiency of $4,267,943 and for the six
         months  ended  August  31,  2002,  the  Company  had  a net  loss  from
         operations of $904,950 and net cash used in operations of $111,210. The
         Company has minimal cash  available  for  operations  and is in default
         with  respect  to   repayment   provisions   of  certain   secured  and
         subordinated  debentures.  In  addition,  the  Company  was not able to
         complete  an  effective  registration  statement  within  150  days  as
         required in connection with the sale of convertible  secured debentures
         to a group of investors and, as a result,  the Company is in default of
         the  debenture  agreement.  To  generate  additional  revenues  and the
         working capital needed to continue and expand  operations,  the Company
         has  committed  to a plan  for  reducing  expenses,  increasing  retail
         distribution  channels for its products and raising additional capital.
         There can be no assurances  that the Company will be able to obtain the
         necessary  funding  to  finance  their  operations  or grow  revenue in
         sufficient amounts to fund their operating expenses.

         These matters raise  substantial  doubt about the Company's  ability to
         continue as a going  concern.  The financial  statements do not include
         any adjustments  relating to the  recoverability  and classification of
         recorded assets, or the amounts and  classification of liabilities that
         might  be  necessary  in the  event  the  Company  cannot  continue  in
         existence.

NOTE 3   DISCONTINUED OPERATIONS

         The Company  discontinued  the  operations of Music Art and Team Sports
         during the year ended  February 28,  2002.  The Company did not incur a
         gain or loss on the  disposal of these  subsidiaries  since the Company
         unilaterally ceased operations of these subsidiaries and the assets and
         liabilities  reverted  back to the original  owners as per the terms of
         the  original  acquisition  agreements.  The assets were  comprised  of
         accounts  receivable,   inventory,   fixed  assets  and  goodwill.  The
         liabilities were comprised of accounts payable and accrued expenses.  A
         loss of $0 and $47,198 was incurred from the discontinued operations of
         these  subsidiaries  for three  months  ended August 31, 2002 and 2001,
         respectively.  A  loss  of  $0  and  $515,866  was  incurred  from  the
         discontinued  operations of these subsidiaries for the six months ended
         August 31, 2002 and 2001, respectively.

NOTE 4   CONVERTIBLE SECURED DEBENTURES

         On May 28,  2002,  the  Company  issued a $75,000  convertible  secured
         debentures  to a group of investors  with a conversion  price of 50% of
         the average of the lowest  three  intraday  trading  prices  during the
         twenty  days  immediately  preceding  conversion.  This  results  in  a
         beneficial  conversion  feature  of  $75,000,   which  has  been  fully
         recognized  as an expense  at August  31,  2002.  The  debentures  bear
         interest of 12% simple interest per annum and matured on July 28, 2003.
         The  debentures  are  convertible  into shares of the Company's  common
         stock at any time at the  holder's  option equal to the quotient of (a)


                                       13
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF AUGUST 31, 2002
                                   (UNAUDITED)


         the aggregate  amount of the principle and accrued  interest and unpaid
         interest to be so converted by (b) the conversion price. As of the date
         of this report,  these  debentures are still unpaid in total and are in
         default.

         In May  2000,  the  Company  issued  $400,000  of  secured  convertible
         debentures to a group of investors.  These debentures  matured in April
         2001, are secured by substantially all of the Company's assets and bear
         interest  at 10% per  annum,  payable  quarterly;  the  debentures  are
         convertible into common stock at any time at the holder's option at the
         lesser  of $2.80  (adjusted  for 1 for 70  split)  per  share or 50% of
         market value (the debt discount of $65,000  assigned to this beneficial
         conversion  feature was recorded as additional  paid-in capital and the
         debt  discount was  amortized as interest  expense in the quarter ended
         May 31, 2000  because the  debentures  are  convertible  at any time at
         holder's option);  the debentures also have warrants to purchase 57,143
         shares of common  stock at 110% of the market value on the closing date
         - the warrants have a five-year  life and are  exercisable  immediately
         (using an option  pricing  model,  the warrants were valued at $280,000
         using the  following  assumptions:  no expected  payment of  dividends,
         expected lives of warrants of three years, a risk free rate of 6.5% and
         a volatility of 75%).  The $280,000 was recorded as additional  paid-in
         capital and the debt  discount was  amortized to interest  expense over
         the term of the related  debentures.  As of February 28, 2002, the debt
         discount had been fully amortized with the Company recognizing interest
         of $46,667  during the year ended  February  28,  2002.  The  debenture
         holders  also have  certain  rights in the  event the  Company  files a
         registration  statement.  The  Company  was  not  able to  complete  an
         effective registration statement within 150 days of the debenture sale.
         As a result, the Company is in default of the debenture  agreement.  As
         of the date of this report,  these debentures are still unpaid in total
         and in default.

NOTE 5   NOTES AND LOANS PAYABLE

         As of August 31,  2002,  notes and loans  payable  consisted of various
         unsecured notes and loans payable to certain individuals, investors and
         an auto finance  company.  The notes and loans bear interest at various
         rates  ranging  from 8.0% to 12.0% and had various  maturities  through
         August 2001, except for the automobile loan, which matures February 28,
         2006.  The  balance of the notes and loans  payable  are in default and
         remain unpaid in total as of the date of this report.

         The  Company  has a loan  payable of  approximately  $80,559,  which is
         included  in  loans  payable  -  related  parties  in the  accompanying
         consolidated  balance sheet, due to the Company's president and related
         parties as of August 31,  2002.  During the six months ended August 31,
         2002, the Company recorded  interest  expense of  approximately  $2,941
         relating  to  loans  from  its  president   and  related   parties  and
         approximately $79,474 in accrued interest was payable relating to these
         loans as of August 31, 2002 which is  recorded  in accrued  interest in
         the accompanying consolidated balance sheet. (See Note 9).


                                       14
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF AUGUST 31, 2002
                                   (UNAUDITED)


NOTE 6   CONVERTIBLE SUBORDINATED DEBENTURES

         The  Company  has  outstanding  $96,800  of  convertible   subordinated
         debentures as of August 31, 2002. The debentures bear interest at rates
         ranging from 10% to 12% per annum and matured at various  times through
         August 2001.  The  debentures are in default and remain unpaid in total
         as of the date of this report.  Each $1,000 unit is  convertible at any
         time at the  holder's  option,  into  between  143 and 1,429  shares of
         Company common stock for an aggregate of 55,714 common shares.

NOTE 7   COMMON STOCK

         In July 2002, the Company authorized a 1 for 70 reverse stock split. As
         a result of the  reverse  stock  split,  all capital  stock  shares and
         amounts  and per share data have been  retroactively  restated  for all
         periods presented.

         In October  2001,  the Company  entered into an agreement  with a third
         party  whereby  the third  party has an  anti-dilution  of 1.603%.  The
         Company  has not issued the  respective  shares of 776,589 as of August
         31, 2002 to the third party.  These shares are recorded as common stock
         to be  issued  with a  corresponding  decrease  to  additional  paid in
         capital.

         During the six months  ended  August 31,  2002,  the  Company  received
         $25,000 from the issuance of 15,428,571 shares of common stock.

         From time to time,  the Company has issued common stock in exchange for
         the  performance  of  services or as an  alternative  to the payment of
         interest  on  outstanding  debt,   internal  accounting  and  financial
         services,  internet  website  creation,  marketing,  insurance  program
         review and general  management  consulting.  The dollar  value of these
         activities included in the selling, general and administrative expenses
         was  $539,419  for  the  six  months  ended  August  31,  2002.   These
         transactions  have  been  recorded  at the fair  value of the  services
         rendered or the fair value of the common  stock  issued,  whatever  was
         more readily  evident.  The number of shares of common stock issued for
         services performed in was 29,921,571.

NOTE 8   COMMITMENTS AND CONTINGENCIES

         (A) LICENSES

         The  Company  has  entered  into  various  licensing   agreements  (the
         "agreements") for the right to manufacture, sell and distribute certain
         collectibles  and  novelties  relating  to  current  and  future  movie
         characters,  as well as certain accessories  containing logos and names
         of professional  minor league and college sports teams.  The agreements
         expire at various dates through 2003 and generally  require the Company
         to pay a royalty of between 9% and 11% of sales,  with certain  minimum
         royalty payments  required.  The unpaid minimum royalty fees related to


                                       15
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF AUGUST 31, 2002
                                   (UNAUDITED)


         these  agreements are included in accrue  royalties in the accompanying
         balance sheet.

         (B) CONTINGENCIES

         In the  normal  course of  business  the  Company is subject to various
         regulations, proceedings, lawsuits, claims and other matters, including
         actions  under  laws and  regulations  related to the  environment  and
         health and  safety,  among  others.  The Company  believes  the amounts
         provided in its  consolidated  financial  statements,  as prescribed by
         generally accepted accounting principles,  are adequate in light of the
         probable and estimable liabilities. However, there can be no assurances
         that the actual amounts required to discharge alleged  liabilities from
         various lawsuits,  claims,  legal proceedings and other matters, and to
         comply  with  applicable  laws and  regulations,  will not  exceed  the
         amounts reflected in the Company's consolidated financial statements or
         will not have a material adverse effect on its consolidated  results of
         operations,  financial  condition  and cash flows.  Any amounts of cost
         that may be incurred in excess of those  amounts  provided as of August
         31, 2002 cannot currently be determined.

         In 2002, a licensing  company commenced a lawsuit for various causes of
         action for breach of  contract,  trademark  infringement  and seeking a
         permanent  injunction  precluding  the  Company  from  using any of the
         plaintiffs'  intellectual  property. The Company consented to the entry
         of a permanent  injunction  and the parties  entered  into a settlement
         agreement,  which  resulted  in  the  dismissal  of the  action  in the
         subsequent  period.  However,  despite the dismissal of the action, the
         plaintiff  reserves  the right to pursue  monetary  claims  against the
         Company for its breach of various license agreements.

         (C) OTHER CONTINGENCIES

         The Company is  non-compliant  with  respect to payment of employee and
         employer payroll-related taxes. The liability is approximately $253,000
         as of August 31, 2002,  which  includes  penalties  and interest and is
         included in accrued expenses on the consolidated balance sheet.

NOTE 9   RELATED PARTY TRANSACTIONS

         The Company has an employment  agreement  with its  president,  who has
         elected  to defer a portion  of his salary in support of the cash needs
         of the Company.  As of August 31, 2002,  the amount of salary  deferred
         was approximately $238,250.

         The  Company  has a loan  payable of  approximately  $80,559,  which is
         included  in  loans  payable  -  related  parties  in the  accompanying
         consolidated  balance sheet, due to the Company's president and related
         parties as of August 31,  2002.  During the six months ended August 31,


                                       16
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF AUGUST 31, 2002
                                   (UNAUDITED)


         2002, the Company recorded  interest  expense of  approximately  $2,941
         relating  to  loans  from  its  president   and  related   parties  and
         approximately $79,474 in accrued interest was payable relating to these
         loans as of August 31, 2002 which is  recorded  in accrued  interest in
         the accompanying consolidated balance sheet.

NOTE 10  NON-CASH  INVESTING AND  FINANCING ACTIVITIES IN THE STATEMENTS OF CASH
         FLOWS

         During the six months ended August 31, 2001,  the Company  entered into
         the following non-cash transactions:

         The Company  converted  $66,000 of notes and loans  payable and related
         accrued interest into 89,486 shares of common stock.

         The Company  converted  approximately  $16,033 of accrued interest into
         16,904 shares of common stock.

         Cash payments for interest  expense were  immaterial for the six months
         ended August 31, 2002 and 2001.



                                       17
<PAGE>

The  following  discussion  should  be read in  conjunction  with the  unaudited
condensed  consolidated financial statements and notes thereto set forth in Item
1of  this  Quarterly  Report.  In  addition  to  historical  information,   this
discussion and analysis contains forward-looking  statements that involve risks,
uncertainties  and  assumptions,  which  could  cause  actual  results to differ
materially from Management's expectations.  Factors that could cause differences
include,  but are not  limited  to,  expected  market  demand for the  Company's
services,  fluctuations  in pricing for products  distributed by the Company and
services  offered  by  competitors,   as  well  as  general  conditions  of  the
telecommunications marketplace.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

           Some of the information in this Form 10-QSB contains  forward-looking
statements that involve  substantial risks and  uncertainties.  You can identify
these  statements  by  forward-looking  words such as "may,"  "will,"  "expect,"
"anticipate," "believe," "estimate" and "continue," or similar words. You should
read statements that contain these words carefully because they:

           o      discuss our future expectations;

           o      contain  projections of our future results of operations or of
                  our financial condition; and

           o      state other "forward-looking" information.

           We believe it is important to communicate our expectations.  However,
there may be events in the future that we are not able to accurately  predict or
over  which we have no  control.  Our actual  results  and the timing of certain
events could differ materially from those  anticipated in these  forward-looking
statements  as a result of  certain  factors,  including  those set forth in our
filings with the Securities and Exchange Commission.

GENERAL

           The  following  detailed  analysis  of  operations  should be read in
conjunction with the 2002  Consolidated  Financial  Statements and related notes
included in the Company's Form 10-KSB for the year ended February 28, 2002.

           In August 2003,  the Company  re-evaluated  its business  model.  The
Company  believes that  licenses have evolved into less time  sensitive and sale
spiking  properties.  The Company is not renewing or continuing licenses that do
not fit out new business model. The Company's new business model will be focused
on more  evergreen  properties  and those with a bigger  window of  opportunity.
Notable among these is collegiate  market  licenses.  The Company  believes that
with the new genre of films  being so heavily  oriented to  characters  of comic
books  and  fantasies  that the  Company  will  pursue  licenses  mostly in that
category  and to  supplement  them with new  trend  properties  as they  appear.
Furthermore, the Company recognized the need to have products that addressed the
mainstream  consumer  market where  market size and repeat  sales  opportunities
could give the Company a means to stabilize and grow its revenues.  To avoid the
time,  expense and risks associated with in-house new product  development,  the
Company   sought  out  entities  with   mainstream   consumer   products   whose
marketability could be enhanced by the addition of the Company's licenses.

         During  the  fiscal  year  ended   February  28,   2002,   the  Company
discontinued  operations  of its two  wholly  owned  subsidiaries,  Team  Sports
Specialties Corporation and Music Art Corporation.



                                       18
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

           During the three months ending August 31, 2002,  the Company's  shift
in business  focus to  entertainment  and movie  related  licenses,  the Company
decided not to further pursue the Chicken Soup business opportunity presented in
the license  agreement  executed on May 1, 2000 with  Chicken  Soup for the Soul
Enterprises  ("CSSE"),  with a term ending on  December  31,  2002.  The Company
planned to offer and sell a line of products  derived  from  Chicken Soup brand,
including  silver-like  paperweights,  paper clip holders,  and costume and fine
jewelry along with other items under the terms of the agreement.  The Company is
required to pay a royalty of ten percent (10%) on sales of the products licensed
from CSSE,  with a minimum  royalty of $50,000.  The Company paid $15,000 at the
time of signing the license with $10,000 due upon the first shipment of product.
Efforts to  terminate  the  license  agreement  were  unsuccessful  and CSSE has
initiated litigation to recover the minimum royalty fee. The litigation is still
pending.

           During the three  months  ending  August 31,  2002,  the  Company and
Marvel  Entertainment  mutually agreed to extend the term of the Company's X-Men
and Marvel Character licenses for an additional six months. Marvel Entertainment
also  agreed to extend the June 30,  2002  minimum  payment  date for the Marvel
Character  license to December 31, 2002. All the activity  regarding the license
agreement  with Marvel  Entertainment  is reflected in the Company's  August 31,
2002, financial statements.

           During the three  months  ending  August 31,  2002,  the  Company and
Marvel  Entertainment  mutually  agreed to terminate The Marvel Fan Club license
and retire the fan club website. The Company will have no residual liability due
Marvel Entertainment regarding this license.

           During the three months ending August 31, 2002,  the Company  started
American Collectible Network distributors. Participating distributors will place
unique  entertainment,  sports and music  collectibles in various retail venues.
The  distributor  determines if they wish to sell or consign the  merchandise to
the retailer.  American  Collectible Network Distributors will receive enough of
the  Company's  exciting  products  for  12  point  of  purchase   displays,   a
comprehensive training manual,  seasoned support personnel, a dedicated website,
drop shipping,  on-line  ordering,  and on-site  training.  The distributors own
their own business,  controlling  their time,  cost and desired level of effort.
Subsequent to August 31, 2002, after  approximately  seven months of effort, the
American  Collectibles  Network  distributor program was abandoned and resources
were re-directed toward comic book stores nationally. Working from a database of
more than five thousand listings,  a telephone sales campaign was waged with the
objective of opening new comic book store  accounts.  Initial  results  produced
over one  hundred  new  accounts  with first  orders in the $150 to $350  range.
Pursuant to the  successful  sales of these products by the new comic book store
accounts, re-orders may follow. The program remains in effect.

CRITICAL ACCOUNTING POLICIES

           Our financial  statements  are prepared  based on the  application of
accounting principles generally accepted in the United States of America.  These
accounting  principles require us to exercise  significant judgment about future
events that affect the amounts  reported  throughout  our financial  statements.
Actual  events could unfold quite  differently  than our previous  judgments had
predicted.  Therefore the estimates  and  assumptions  inherent in the financial
statements  included in this report  could be  materially  different  once those
actual events are known. We believe the following  policies may involve a higher
degree of judgment and complexity in their  application  and represent  critical
accounting policies used in the preparation of our financial


                                       19
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

statements.  If different  assumptions  or estimates  were used,  our  financial
statements could be materially different from those included in this report.

           Revenue  Recognition:  We recognize revenues in accordance with Staff
Accounting Bulletin 104, Revenue Recognition in Financial  Statements (SAB 104).
We develop and sell collectibles in the entertainment, sports and music markets.
Revenue from such product sales is  recognized  when  persuasive  evidence of an
arrangement exists,  delivery has occurred, the fee is fixed or determinable and
collectibility  is probable.  At this time the earnings  process is complete and
the risks and rewards of ownership have  transferred  to the customer,  which is
generally  when the goods are shipped  and all  significant  obligations  of the
Company have been satisfied.

           Accounts Receivable:  We must make judgments about the collectibility
of our accounts  receivable  to be able to present them at their net  realizable
value on the balance  sheet.  To do this, we carefully  analyze the aging of our
customer accounts, try to understand why accounts have not been paid, and review
historical  bad debt  problems.  From this  analysis,  we  record  an  estimated
allowance for receivables that we believe will ultimately become uncollectible.

           Realizability  of  Inventory  Values:  We make  judgments  about  the
ultimate  realizability of our inventory in order to record our inventory at its
lower of cost or market.  These judgments  involve  reviewing current demand for
our products in comparison to present  inventory levels and reviewing  inventory
costs compared to current market values.

           Goodwill and other  Long-lived  Assets.  We assess the  impairment of
long-lived  assets  whenever  events or changes in  circumstances  indicate that
their carrying value may not be recoverable from the estimated future cash flows
expected  to result  from their use and  eventual  disposition.  Our  long-lived
assets subject to this evaluation include property and equipment and amortizable
intangible  assets.  We assess the impairment of goodwill annually in our fourth
fiscal quarter and whenever events or changes in circumstances  indicate that it
is more likely than not that an impairment  loss has been  incurred.  Intangible
assets  other than  goodwill  are reviewed  for  impairment  whenever  events or
changes  in  circumstances  indicate  that the  carrying  value may not be fully
recoverable.  We are required to make  judgments and  assumptions in identifying
those events or changes in circumstances that may trigger impairment.

           Our  impairment  review is based on  comparing  the fair value to the
carrying  value of the  assets  with  goodwill.  The fair  value of the asset is
measured at the business  unit level using a discounted  cash flow approach that
incorporates our estimates of future revenue and costs for those assets.


                                       20
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS

           In July 2001,  the  Financial  Accounting  Standards  Board  ("FASB")
issued Statement of Financial  Accounting  Standards ("SFAS") No. 142, "Goodwill
and Other  Intangible  Assets," which was required to be adopted for fiscal year
2002. SFAS No. 142 established  accounting and reporting  standards for goodwill
and  intangible  assets  resulting  from  business  combinations.  SFAS No.  142
included  provisions  discontinuing the periodic  amortization of, and requiring
the assessment of the potential  impairments of, goodwill (and intangible assets
deemed to have  indefinite  lives).  As SFAS No. 142  replaced  the  measurement
guidelines  for goodwill  impairment,  goodwill not  considered  impaired  under
previous  accounting  literature may be considered  impaired under SFAS No. 142.
SFAS  No.  142 also  requires  the  Company  to  complete  a  two-step  goodwill
impairment  test.  The first step compares the fair value of each reporting unit
to its carrying  amount,  including  goodwill.  If the fair value of a reporting
unit exceeds its carrying amount,  goodwill is not considered to be impaired and
the second step will not be required.  SFAS No. 142 requires  completion of this
first  step  within  the  first six  months of  initial  adoption  and  annually
thereafter.  If the carrying  amount of a reporting unit exceeds its fair value,
the second step is  performed  to measure  the amount of  impairment  loss.  The
second step compares the implied fair value of goodwill to the carrying value of
a reporting unit's goodwill. The implied fair value of goodwill is determined in
a manner similar to accounting for a business combination with the allocation of
the  assessed  fair  value  determined  in the  first  step  to the  assets  and
liabilities of the reporting unit. The excess of the fair value of the reporting
unit over the amounts assigned to the assets and liabilities is the implied fair
value of goodwill.  This  allocation  process is only  performed for purposes of
evaluating  goodwill  impairment  and does not  result in an entry to adjust the
value of any assets or  liabilities.  An impairment  loss is recognized  for any
excess  in the  carrying  value of  goodwill  over  the  implied  fair  value of
goodwill.  Upon the initial  adoption,  any impairment  loss  identified will be
presented as a change in  accounting  principle,  net of  applicable  income tax
benefit,  and  recorded  as of the  beginning  of that year.  Subsequent  to the
initial  adoption,  any impairment loss recognized would be recorded as a charge
to income from operations.

           In June 2001,  the FASB issued SFAS No.  143,  "Accounting  for Asset
Retirement  Obligations."  SFAS No. 143  establishes  standards  for the initial
measurement and subsequent accounting for obligations  associated with the sale,
abandonment,  or other type of disposal of long-lived  tangible  assets  arising
from the acquisition,  construction,  or development  and/or normal operation of
such assets. SFAS No. 143 is effective for fiscal years beginning after June 15,
2002, with earlier application encouraged.

           In August  2001,  the FASB issued SFAS No. 144,  "Accounting  for the
Impairment or Disposal of Long-Lived Assets." This statement addresses financial
accounting and reporting for the impairment or disposal of long-lived assets and
supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for  Long-Lived  Assets to be Disposed Of". The  provisions of the statement are
effective  for  financial  statements  issued for fiscal years  beginning  after
December 15, 2001.  The Company has applied SFAS No. 144 for the  accounting for
the impairment or disposal of long-lived assets beginning January 1, 2002.


                                       21
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

           In April 2002,  the FASB issued  SFAS No.  145,  "Rescission  of FASB
Statements No. 4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical
Corrections." SFAS No. 145 rescinds the provisions of SFAS No. 4, which requires
companies  to classify  certain  gains and losses from debt  extinguishments  as
extraordinary  items,  eliminates  the  provisions  of  SFAS  No.  44  regarding
transition  to the Motor  Carrier Act of 1980 and amends the  provisions of SFAS
No. 13 to require that certain lease  modifications be treated as sale leaseback
transactions.  The provisions of SFAS No. 145 related to  classification of debt
extinguishments  are  effective for fiscal years  beginning  after May 15, 2002,
with earlier application encouraged.

           In  July  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for
Restructuring  Costs."  SFAS No. 146  applies to costs  associated  with an exit
activity  (including  restructuring)  or with a disposal of  long-lived  assets.
Those activities can include eliminating or reducing product lines,  terminating
employees and contracts and relocating plant facilities or personnel. Under SFAS
No. 146, the Company will record a liability for a cost  associated with an exit
or disposal activity when that liability is incurred and can be measured at fair
value.  SFAS No. 146 will require the Company to disclose  information about its
exit and disposal  activities,  the related costs, and changes in those costs in
the notes to the interim and annual financial statements that include the period
in which an exit  activity is initiated and in any  subsequent  period until the
activity  is  completed.  SFAS No. 146 is  effective  prospectively  for exit or
disposal  activities  initiated after December 31, 2002,  with earlier  adoption
encouraged.  Under SFAS No. 146, a company cannot restate it's previously issued
financial  statements  and the new statement  grandfathers  the  accounting  for
liabilities  that a company had previously  recorded under Emerging  Issues Task
Force Issue 94-3.

           In December  2002,  the FASB issued  SFAS No.  148,  "Accounting  for
Stock-Based  Compensation-Transition  and  Disclosure  - an  amendment  of  FASB
Statement  No.  123." SFAS No. 148 amends  SFAS No. 123,  "Accounting  for Stock
Based Compensation" and provides alternative methods for accounting for a change
by  registrants  to  the  fair  value  method  of  accounting  for   stock-based
compensation.  Additionally,  SFAS No. 148 amends the disclosure requirements of
SFAS No. 123 to require disclosure in the significant accounting policy footnote
of both annual and interim financial  statements of the method of accounting for
stock   based-compensation  and  the  related  pro-forma  disclosures  when  the
intrinsic  value method  continues to be used.  The  statement is effective  for
fiscal years  beginning  after December 15, 2002, and  disclosures are effective
for the first fiscal quarter beginning after December 15, 2002.

           In   January   2003,   The  FASB   issued   Interpretation   No.  46,
"Consolidation of Variable Interest  Entities",  an interpretation of Accounting
Research  Bulletin  ("ARB")  No.  51,   "Consolidated   Financial   Statements".
Interpretation  No.  46  addresses  consolidation  by  business  enterprises  of
variable   interest   entities,   which  have  one  or  both  of  the  following
characteristics:  (i) the equity  investment at risk is not sufficient to permit
the entity to finance its activities  without  additional  subordinated  support
from other  parties,  which is provided  through other interest that will absorb
some or all of the expected losses of the entity; (ii) the equity investors lack
one  or  more  of  the  following  essential  characteristics  of a  controlling
financial  interest:  the direct or indirect ability to make decisions about the
entities  activities  through voting rights or similar rights; or the obligation
to absorb  the  expected  losses of the  entity if they  occur,  which  makes it
possible  for the entity to finance  its  activities;  the right to receive  the
expected residual returns of the entity if they occur, which is the compensation
for the risk of absorbing the expected losses.


                                       22
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

           Interpretation  No.  46 also  requires  expanded  disclosures  by the
primary  beneficiary  (as  defined)  of a  variable  interest  entity  and by an
enterprise  that holds a significant  variable  interest in a variable  interest
entity  but is not  the  primary  beneficiary.  Interpretation  No.  46  applies
immediately to variable interest entities created after January 31, 2003, and to
variable interest entities in which an enterprise obtains an interest after that
date. It applies in the first fiscal year or interim period beginning after June
15, 2003, to variable  interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003.  Interpretation No. 46 may be
applied  prospectively  with a  cumulative-effect  adjustment  as of the date on
which it is first applied or by restating previously issued financial statements
for one or more years with a cumulative-effect adjustment as of the beginning of
the first year restated.

           In June 2003,  the FASB issued an Exposure  Draft for  proposed  SFAS
entitled   "Qualifying  Special  Purpose  Entities  ("QSPE")  and  Isolation  of
transferred  Assets",  an amendment of SFAS No. 140 ("The Exposure Draft").  The
Exposure  Draft is a proposal  that is subject to change and as such, is not yet
authoritative. If the proposal is enacted in its current form, it will amend and
clarify SFAS 140. The Exposure  Draft would prohibit an entity from being a QSPE
if it enters into an agreement  that obliged a transferor  of financial  assets,
its  affiliates,  or its agents to deliver  additional  cash or other  assets to
fulfill the special-purposes entity's obligation to beneficial interest holders.

           In May 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial  Accounting  Standards ("SFAS") No. 150,  "Accounting For
Certain  Financial  Instruments  with  Characteristics  of both  Liabilities and
Equity".  SFAS No. 150 changes the accounting for certain financial  instruments
with  characteristics  of both  liabilities  and  equity  that,  under  previous
pronouncements, issuers could account for as equity. The new accounting guidance
contained in SFAS No. 150  requires  that those  instruments  be  classified  as
liabilities in the balance sheet.

           SFAS No. 150  affects  the  issuer's  accounting  for three  types of
freestanding  financial  instruments.  One type is a mandatory redeemable share,
which the issuing company is obligated to buy back in exchange for cash or other
assets. A second type includes put options and forward purchase contracts, which
involves  instruments  that do or may require the issuer to buy back some of its
shares in exchange for cash or other assets.  The third type of instruments that
are  liabilities  under this Statement is  obligations  that can be settled with
shares,  the monetary value of which is fixed, tied solely or predominantly to a
variable  such as a market  index,  or  varies  inversely  with the value of the
issuers' shares. SFAS No. 150 does not apply to features embedded in a financial
instrument that is not a derivative in its entirety.

           Most of the  provisions  of  Statement  150 are  consistent  with the
existing  definition of liabilities in FASB Concepts  Statement No. 6, "Elements
of  Financial  Statements".  The  remaining  provisions  of this  Statement  are
consistent  with the FASB's  proposal to revise  that  definition  to  encompass
certain  obligations  that a reporting  entity can or must settle by issuing its
own shares. This Statement shall be effective for financial  instruments entered
into or modified  after May 31, 2003 and  otherwise  shall be  effective  at the
beginning of the first interim period beginning after June 15, 2003,  except for
mandatory redeemable  financial  instruments of a non-public entity, as to which
the effective date is for fiscal periods beginning after December 15, 2003.

           We do not  expect  the  adoption  of these  pronouncements  to have a
material impact on our consolidated financial position or results of operations.


                                       23
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS

SIX MONTHS ENDED AUGUST 31, 2002 COMPARED TO SIX MONTHS ENDED AUGUST 31, 2001.

           Net revenue for the six months ended  August 31, 2002 was $48,989 and
compared to net revenue of $11,817 for the six months ended August 31, 2001. The
increase  in revenue is due to the sale of items tied to the release of the Lord
of the Rings and X-Men movies.

           The Company  discontinued the operations of Music Art and Team Sports
during the year ended  February  28,  2002.  The Company did not incur a gain or
loss on the disposal of these subsidiaries since the Company unilaterally ceased
operations of these subsidiaries and the assets and liabilities reverted back to
the original owners as per the terms of the original acquisition agreements. The
assets  were  comprised  of accounts  receivable,  inventory,  fixed  assets and
goodwill.  The  liabilities  were  comprised  of  accounts  payable  and accrued
expenses.  A  loss  of $0  and  $515,866  was  incurred  from  the  discontinued
operations  of these  subsidiaries  for the six months ended August 31, 2002 and
2001, respectively.

           Cost of sales for the six months ended  August 31, 2002  increased by
$62,210 from the six months ended August 31, 2001. Cost of sales as a percentage
of  revenues  increased  to 144.9% for the six months  ended  August 31, 2002 as
compared  to 74.5% for the same  period  last  year.  This  increase  was mainly
attributable to the cost of producing and shipping samples for new products,  as
well  as  the  Company  was  actively  developing  both  new  products  and  new
distribution  channels,  as our business  model changed after  September 11. The
Company also produced hundreds of samples,  which our sales force used to attain
future  orders from buyers who,  because of the  difficult  retail  environment,
required  actual samples rather than the previous method of buying from mock-ups
or sell sheets.

           Selling, general and administrative expenses for the six months ended
August 31,  2002  decrease  to $836,558  from  $904,247  for the same period the
previous  year. For the six months ended August 31, 2002 and August 31, 2001 the
services obtained through the issuance of stock include internal  accounting and
financial services, internet website creation,  marketing assistance,  insurance
program  review and  general  management  consulting  services  in the amount of
approximately  $539,419 and $192,792  respectively.  Staffing  decreased to five
full time  employees and one-part time  consultants  for marketing and licensing
for the six months ended August 31, 2002 as compared to seven  full-time and one
part time  employees  for the same period of the previous  year.  As  previously
mentioned,  the Company  incurs  charges to bring the  product to market.  These
charges relate to the costs of producing  samples as well as the related package
design costs that must be approved by the licensor prior to full production runs
of the product.  For the six months ended August 31, 2002, the Company  incurred
charges  relating to the costs of  producing  the samples as well as the related
package design of approximately  $21,879 versus charges of approximately $12,200
for the same period the previous  year.  As previously  mentioned,  all goodwill
related  to Music Art and Team  Sports  has been  reclassified  to  discontinued
operations.

           The Company incurred  interest expense of $117,150 for the six months
ended  August 31, 2002 as compared to $195,713  for the same period the previous
year due to  decreased  borrowings  and the  beneficial  conversion  calculation
related to the application of the EITF ("Emerging  Issues Task Force")  Bulletin
for  accounting  of  convertible  securities  and notes and loans  payable  with
beneficial  conversion  features.  The beneficial  conversion  calculation added
$75,000 and $0 of interest expense  respectively for the six months ended August
31, 2002 and 2001 respectively.

           As a result of the above,  the Company had a net loss of $904,950 for
the six months ended August 31, 2002 as compared to a net loss of $1,612,808 for
the same period last year.


                                       24
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

THREE  MONTHS  ENDED  AUGUST 31, 2002  COMPARED TO THREE MONTHS ENDED AUGUST 31,
2001.

           Net revenue  for the three  months  ended  August 31, 2002 was $8,756
compared to net revenue of $5,351 for the three  months  ended  August 31, 2001.
The increase in revenue  resulted  primarily  from the sale of items tied to the
release of the Lord of the Rings and X-Men movies.

           The Company  discontinued the operations of Music Art and Team Sports
during the year ended  February  28,  2002.  The Company did not incur a gain or
loss on the disposal of these subsidiaries since the Company unilaterally ceased
operations of these subsidiaries and the assets and liabilities reverted back to
the original owners as per the terms of the original acquisition agreements. The
assets  were  comprised  of accounts  receivable,  inventory,  fixed  assets and
goodwill.  The  liabilities  were  comprised  of  accounts  payable  and accrued
expenses. A loss of $0 and $47,198 was incurred from the discontinued operations
of these  subsidiaries  for  three  months  ended  August  31,  2002  and  2001,
respectively.

           Cost of sales for the three months ended August 31, 2002 increased by
$3,811  from  the  three  months  ended  August  31,  2001.  Cost of  sales as a
percentage of revenues increased to 106.5% for the three months ended August 31,
2002 as compared to 103.0% for the same period last year.  The  increase in cost
of sales as a percent of revenues  for the three  months  ended  August 31, 2002
over the same period the previous  year is primarily due to lack of sales volume
and increase shipping cost, as well as the Company was actively  developing both
new products and new distribution  channels, as our business model changed after
September  11. The Company also  produced  hundreds of samples,  which our sales
force used to attain  future  orders from buyers who,  because of the  difficult
retail  environment,  required actual samples rather than the previous method of
buying from mock-ups or sell sheets.

           Selling,  general and  administrative  expenses  for the three months
ended August 31, 2002  increased to $612,537  from  $430,199 for the same period
the  previous  year.  For the three  months ended August 31, 2002 and August 31,
2001 the  services  obtained  through  the  issuance of stock  include  internal
accounting  and  financial  services,   internet  website  creation,   marketing
assistance,  insurance program review and general management consulting services
in the amount of  approximately  $458,419  and $55,600,  respectively.  Staffing
decreased  to five  full  time  employees  and  one-part  time  consultants  for
marketing  and  licensing for the three months ended August 31, 2002 as compared
to seven  full-time and one part time employees for the same period the previous
year. As previously  mentioned,  the Company incurs charges to bring the product
to market. These charges relate to the costs of producing samples as well as the
related package design costs that must be approved by the licensor prior to full
production runs of the product.  For the three months ended August 31, 2002, the
Company  incurred charges relating to the costs of producing the samples as well
as the  related  package  design  of  approximately  $9,450  versus  charges  of
approximately  $7,000  for the same  period the  previous  year.  As  previously
mentioned,  all  goodwill  related  to  Music  Art  and  Team  Sports  has  been
reclassified to discontinued operations.

           The Company incurred interest expense of $96,854 for the three months
ended  August 31, 2002 as  compared to $69,680 for the same period the  previous
year due to  increased  borrowings  and the  beneficial  conversion  calculation
related to the application of the EITF ("Emerging  Issues Task Force")  Bulletin
for  accounting  of  convertible  securities  and notes and loans  payable  with
beneficial  conversion  features.

           As a result of the above,  the Company had a net loss of $709,960 for
the three months ended August 31, 2002 as compared to a net loss of $547,240 for
the same period last year.


                                       25
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES

           Since  the  Company's  inception,   it  has  experienced  significant
operating  and net  losses  that it has been able to fund by  obtaining  private
capital.  The Company,  therefore,  cannot  predict if and when it will generate
income  from  operations  and if it will be able  to  raise  sufficient  capital
necessary to fund future  operations.  As of August 31, 2002, the Company had an
accumulated deficit of $18,058,793. This deficit arose from operating losses and
not any particular  transaction or  transactions.  The Company has not generated
sufficient  revenues  to meet its  operating  expenses.  As a  result,  there is
substantial doubt about the Company's ability to continue as a going concern.

           As of August 31, 2002, the Company had a working  capital  deficiency
of  $4,267,943.  The working  capital  deficit as of August 31, 2002 is a direct
result of the  unprofitable  operations for the six months ended August 31, 2002
that resulted in cash used in operating activities of $111,210.  The Company had
an ending cash balance of $590 at August 31, 2002.

           The Company has financed its losses  through  private sales of equity
and debt  securities  and the  issuance  of stock for  services.  During the six
months  ended  August 31,  2002,  the Company  received  the  following  capital
infusions:  approximately  $25,000 from issuance of common stock and exercise of
stock options and approximately $117,145 from other borrowings. During the three
months  ended  August 31,  2002,  the Company  made  payments  of  approximately
$30,484.

            An event of default  has  occurred  regarding  various  convertibles
secured  debenture  in that the Company did not have an  effective  registration
statement  within 150 days of the  debenture  sale. As a result of this default,
the Company is obligated to pay the debenture  holders the  principal  amount of
the  debentures  together with interest and certain other  amounts.  The Company
does not have the  capital  resources  to pay the  amounts  required  under this
agreement.  The secured convertible  debenture holders have informed the Company
that they do not intend to take any action at this time due to the default.  The
Company  does  not,  however,  have  any  legally  binding  commitment  from the
debenture holders to waive the default provision of the debenture. Subsequent to
August 31, 2002, the convertible  secured debenture holders converted $62,835 of
this debt  into  71,776,810  shares of the  Company's  common  stock and  issued
another $475,000 in convertible secured debenture to the Company.

           As of August 31, 2002, the Company had $889,506 in outstanding  notes
and loans payable,  $96,800 in convertible  subordinated debentures and $462,500
in  outstanding  convertible  secured  debentures.  As of August 31,  2002,  the
Company had  $1,294,156 in accounts  payable,  $1,216,942  in accrued  expenses,
accrued payroll and related taxes (These liabilities are for federal withholding
taxes and are related to  calendar  years  1999,  2000 and 2001.  The Company is
currently making payments on its current federal payroll tax obligations and has
agree to a payment plan for these prior  obligations  with the Internal  Revenue
Service), and $356,250 in accrued royalties.

           The Company has been able to operate  based on  deferring  vendor and
employee  payments,   deferring  interest  and  debt  repayments  and  obtaining
additional borrowings and proceeds from equity.  However,  there is no guarantee
that the Company will continue to be successful  with respect to these  actions.
Furthermore,  there can be no assurances that the Company will be able to obtain
the necessary  funding to finance their operations or grow revenue in sufficient
amounts to fund their operating expenses.


                                       26
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION

ITEM 1     LEGAL PROCEEDINGS

           From time to time,  we may become  involved in various  lawsuits  and
legal  proceedings  which arise in the  ordinary  course of  business.  However,
litigation is subject to inherent uncertainties,  and an adverse result in these
or other matters may arise from time to time that may harm our business.  we are
currently not aware of any such legal proceedings or claims that we believe will
have,  individually  or in the  aggregate,  a  material  adverse  affect  on our
business, financial condition or operating results.

ITEM 2     CHANGES IN SECURITIES AND USE OF PROCEEDS

           During  the  quarter  the  company  issued  15,428,571  shares  to  9
individuals  who  purchased  the stock for an aggregate  of $25,000 in cash.  An
officer of the company purchased  5,000,000 of these shares.  The Company issued
27,607,285  shares to 22 individuals for services  rendered.  The shares have an
aggregate  market value of  $458,419.  A total of 9,000,000 of these shares were
issued to an officer of the Company.

           The Company relied upon the exemption provided in Section 4(2) of the
Securities Act of 1933 in connection  with  above-referenced  transactions.  The
Company relied on Section 4(2) with respect to these  transactions  as no public
solicitation  was  employed,  the  shares  bore  restrictive  legends,  and  the
acquirers of the shares had access to the  information  which would be contained
in the  Registration  Statement and had sufficient  sophistication  so as not to
require the protection  afforded by the  Registration  under the Securities Act.
Each of the purchasers of the Company's  securities was given the opportunity to
ask question of and received answers from Company  management.  No commission or
other  remuneration  was paid or given in connection  with the offer and sale of
the securities.

ITEM 3      DEFAULTS UPON SENIOR SECURITIES

           The  Company is in default on the  following  convertible  debentures
that the  Company  has  issued,  $400,000  May 3,  2000,  $75,000  June 3, 2002,
$145,000  November 26, 2002,  $25,000  December 15, 2002,  $25,000  December 31,
2002,  $30,000  January 17, 2003 and $ 25,000  February 20, 2003. As a result of
this  default,  the Company is  obligated  to pay  interest  and  certain  other
amounts.  The  Company  does not have the capital  resources  to pay the amounts
required.  The  Company's  financial  advisor has  informed the Company that the
debenture  holders  do not  intend  to take any  action  at this time due to the
default. The Company does not, however, have any legally binding commitment from
the debenture  holders.  The debentures are secured  substantially by all of the
Company's assets.

ITEM 4     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

ITEM 5     OTHER INFORMATION

           On August 1, 2002,  Jeffrey  Andrews,  the Company's  Chief Financial
Officer, and a director, resigned as an employee, officer and director to pursue
other interest.


                                       27
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION


ITEM 6     EXHIBITS AND REPORTS ON FORM 8-K

           (a) EXHIBITS.

                      31.1 - Certification  of Chief Executive  Officer pursuant
                      to Rule 13a-14 and Rule 15d-14(a),  promulgated  under the
                      Securities and Exchange Act of 1934, as amended

                      31.2 - Certification  of Chief Financial  Officer pursuant
                      to Rule 13a-14 and Rule 15d 14(a),  promulgated  under the
                      Securities and Exchange Act of 1934, as amended

                      32.1 - Certification  pursuant to 18 U.S.C.  Section 1350,
                      as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
                      Act of 2002 (Chief Executive Officer)

                      32.2 - Certification  pursuant to 18 U.S.C.  Section 1350,
                      as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
                      Act of 2002 (Chief Financial Officer)

           (b) REPORTS ON FORM 8-K.

                     None.




                                       28
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES

                                   SIGNATURES


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                         COLLECTIBLE CONCEPTS GROUP, INC.

Date:  July 26, 2004                       By: /s/ PAUL S. LIPSCHUTZ
                                              ----------------------
                                           Paul S. Lipschutz
                                           Chief Executive Officer

Date:  July 26, 2004                       By: /s/ PAUL S. LIPSCHUTZ
                                              ----------------------
                                           Paul S. Lipschutz
                                           Principal Financial Officer




                                       29