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


                                 AMENDMENT NO. 1
                                       TO
                                   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, 2005

        [ ] 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]

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

State the number of shares  outstanding of each of the  registrant's  classes of
common equity, as of the latest practicable date:  699,695,037 shares issued and
outstanding as of October 14, 2005.

<PAGE>

                        COLLECTIBLE CONCEPTS GROUP, INC.

                                      INDEX
<TABLE>
<CAPTION>

PART I   FINANCIAL STATEMENTS
<S>      <C>                                                                                     <C>
         ITEM 1    Condensed Consolidated Balance Sheet As Of August 31, 2005 (Unaudited)           3

                   Condensed Consolidated  Statements Of Operations For The Three Months Ended
                   August 31, 2005 and 2004 (Unaudited)                                             4

                   Condensed  Consolidated  Statements Of Operations  For The Six Months Ended
                   August 31, 2005 and 2004 (Unaudited)                                             5

                   Condensed  Consolidated  Statement Of Changes In  Shareholders'  Deficiency
                   For The Six Months Ended August 31, 2005 (Unaudited)                             6

                   Condensed  Consolidated  Statements  Of Cash Flows For The Six Months Ended
                   August 31, 2005 and 2004 (Unaudited)                                             7

                   Notes To Condensed  Consolidated Financial Statements As Of August 31, 2005
                   (Unaudited)                                                                    8 - 22

         ITEM 2    Management's Discussion and Analysis of Financial Condition and Results of
                   Operations                                                                    23 - 27

         ITEM 3    Controls and Procedures                                                          28

PART II  OTHER INFORMATION

         ITEM 1    Legal proceedings                                                                29
         ITEM 2    Unregistered sales of equity securities and use of proceeds                      29
         ITEM 3    Defaults upon senior securities                                                  29
         ITEM 4    Submission of matters to a vote of security holders                              29
         ITEM 5    Other information                                                                29
         ITEM 6    Exhibits                                                                         30

         SIGNATURES                                                                                 31
</TABLE>








                                        2
<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                        ASSETS
<S>                                                                                   <C>
CURRENT ASSETS
Cash                                                                                   $        485,890
Accounts receivable, net of allowance for doubtful accounts of $40,678                          307,038
Prepaid expenses                                                                                106,119
Inventory                                                                                        49,593
                                                                                       ----------------
Total Current Assets                                                                            948,640
                                                                                       ----------------

PROPERTY AND EQUIPMENT, NET                                                                       2,822
                                                                                       ----------------
OTHER ASSETS
Trademarks                                                                                        1,300
Security deposits                                                                                 3,200
                                                                                       ----------------
Total Other Assets                                                                                4,500
                                                                                       ----------------

TOTAL ASSETS                                                                           $        955,962
                                                                                       ================
                     LIABILITIES AND SHAREHOLDERS' DEFICIENCY

CURRENT LIABILITIES
Accounts payable                                                                       $      1,537,728
Accrued expenses                                                                              1,634,619
Accrued expenses - related parties                                                              788,664
Convertible secured debentures, net of discount                                               1,730,556
Notes and loans payable                                                                         499,421
Loans payable - related parties                                                                   8,115
Convertible subordinated debentures                                                             127,300
                                                                                       ----------------
Total Current Liabilities                                                                     6,326,403
                                                                                       ----------------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' DEFICIENCY

Common stock, $.001 par value, 700,000,000 shares authorized, 699,695,037
shares issued and outstanding                                                                   699,694
Common stock to be issued (183,362,036 shares)                                                   84,802
Additional paid-in capital                                                                   17,101,291
Common stock subscribed (33,300,000 shares)                                                      15,000
Subscription receivable                                                                         (15,000)
Deferred equity based expense                                                                  (331,250)

Accumulated deficit                                                                         (22,924,978)
                                                                                       ----------------
Total Shareholders' Deficiency                                                               (5,370,441)
                                                                                       ----------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY                                         $        955,962
                                                                                       ================
</TABLE>


      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, 2005 & 2004
                                   (UNAUDITED)

                                                   2005            2004
                                               -----------     -----------
SALES                                          $   357,980     $   256,162

COST OF SALES                                      316,525         296,880
                                               -----------     -----------
GROSS PROFIT (LOSS)                                 41,455         (40,718)

OPERATING EXPENSES
Selling, general and administrative                351,283         264,657
                                               -----------     -----------
LOSS FROM OPERATIONS                              (309,828)       (305,375)
                                               -----------     -----------
OTHER INCOME (EXPENSE)
Consulting income                                       -              288
Forgivness of debt                                   7,000         115,000
Interest expense                                  (291,687)       (188,419)
                                               -----------     -----------
Total other income (expense)                      (284,687)        (73,131)
                                               -----------     -----------

LOSS BEFORE TAX PROVISION                         (594,515)       (378,506)
INCOME TAX PROVISION                                    -               -
                                               -----------     -----------

NET LOSS                                       $  (594,515)    $  (378,506)
                                               ===========     ===========

BASIC AND DILUTED LOSS PER SHARE               $        -      $        -
                                               ===========     ===========

WEIGHTED AVERAGE SHARES USED IN LOSS PER
SHARE CALCULATIONS - BASIC AND DILUTED         699,695,037     493,962,037
                                               ===========     ===========



      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, 2005
                                   (UNAUDITED)

                                            2005               2004
                                       --------------    --------------
SALES                                  $     373,012     $      319,936

COST OF SALES                                338,459            332,295
                                       --------------    --------------
GROSS PROFIT (LOSS)                           34,553            (12,359)

OPERATING EXPENSES
Selling, general and administrative          644,409            494,776
                                       --------------    --------------
LOSS FROM OPERATIONS                        (609,856)          (507,135)

OTHER INCOME (EXPENSE)
Consulting income                                  -              3,447
Interest expense                            (463,353)          (319,586)
Forgiveness of debt                            7,000            129,111
                                       --------------    --------------
Total other income (expense)                (456,353)          (187,028)
                                       --------------    --------------

LOSS BEFORE TAX PROVISION                 (1,066,209)          (694,163)
INCOME TAX PROVISION                               -                  -
                                       --------------    --------------

NET LOSS                               $  (1,066,209)    $     (694,163)
                                       ==============    ==============

BASIC AND DILUTED LOSS PER SHARE       $           -     $            -
                                       ==============    ==============

WEIGHTED AVERAGE SHARES USED IN LOSS
PER SHARE CALCULATIONS - BASIC AND
DILUTED                                  699,695,037        468,124,391
                                       ==============    ==============






      See accompanying notes to condensed consolidated financial statements

                                        5

<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIENCY
                    FOR THE SIX MONTHS ENDED AUGUST 31, 2005
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                   Common Stock
Additional
                                                                       Common Stock                To be issued
Paid-In
                                                                   Shares        Amount          Shares      Amount
Capital
                                                                 -----------    --------        ---------    -------
-----------
<S>                                                              <C>            <C>             <C>          <C>       <C>
Balance February 28, 2005                                        699,695,037    $699,694        7,162,036    $24,802
$15,873,654

Acquisition of treasury stock from CEO                           (15,000,000)    (15,000)            -
-          (15,000)

Common stock issued for financing services                        15,000,000      15,000             -
-           15,000

Beneficial conversion on convertible debentures                         -           -                -          -
1,172,003

Common stock subscribed to  (209,500,000 shares)                        -           -                -
-             -

Cash received for stock subscription                                    -           -         176,200,000
60,000          -

Amortization of deferred equity based expense                           -           -                -
-             -

Issuance of options for services rendered and financing costs           -           -                -
-           55,634

Net loss, quarter ended August 31, 2005                                 -           -                -
-             -
                                                                 -----------    --------      -----------    -------
-----------
Balance August 31, 2005                                          699,695,037    $699,694      183,362,036    $84,802
$17,101,291
                                                                 ===========    ========      ===========    =======
===========
</TABLE>


<TABLE>
<CAPTION>
                                                                 Common                   Deferred
                                                                 Stock     Subscription  Equity-Based  Accumulated
                                                               Subscribed  Receivable      Expense      Deficit
Total
                                                               ----------  ------------  ------------  ------------
------------
<S>                                                             <C>          <C>          <C>          <C>            <C>
Balance February 28, 2005                                       $    -     $    -         ($531,250)   ($21,858,769)
($5,791,869)

Acquisition of treasury stock from CEO                               -          -              -               -
(30,000)

Common stock issued for financing services                           -          -              -
-           30,000

Beneficial conversion on convertible debentures                      -          -                              -
1,172,003

Common stock subscribed to  (209,500,000 shares)                   75,000    (75,000)          -
-             -

Cash received for stock subscription                              (60,000)    60,000           -
-           60,000

Amortization of deferred equity based expense                        -          -           200,000            -
200,000

Issuance of options for services rendered and financing costs        -          -
-           55,634

Net loss, quarter ended August 31, 2005                              -          -              -         (1,066,209)
(1,066,209)
                                                               ----------  ------------  ------------  ------------
------------
Balance August 31, 2005                                         $  15,000   ($15,000)      ($331,250)  ($22,924,978)
($5,370,441)
                                                               ==========  ============  ============  ============
============
</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, 2005 & 2004
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                            2005               2004
                                                                       -------------      -------------
CASH FLOW S FROM OPERATING ACTIVITIES:
<S>                                                                    <C>                <C>
Net loss                                                               $  (1,066,209)     $    (694,164)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation                                                                   3,223              7,825
Warrants issued                                                                   -               9,345
Common stock & options issued for services rendered                           85,634             88,875
Amortization of deferred equity based expense                                200,000            200,000
Forgiveness of debt                                                                -           (129,114)
Non-cash interest expense                                                     98,532             20,625
Changes in operating assets and liabilities:
Accounts receivable                                                          (90,245)            (6,758)
Loan Receivable                                                                1,245            (10,000)
Prepaid expenses                                                            (106,119)                 -
Inventory                                                                    (49,593)                 -
Accounts payable and accrued expenses                                        153,612             88,374
                                                                       -------------      -------------
Net Cash Used in Operating Activities                                       (769,920)          (424,992)
                                                                       -------------      -------------
CASH FLOW S FROM INVESTING ACTIVITIES:                                             -                  -
                                                                       -------------      -------------
CASH FLOW S FROM FINANCING ACTIVITIES:

Proceeds from common stock subscribed                                         60,000                  -
Proceeds from issuance of convertible secured debentures                   1,223,332            485,000
Repayment of notes and loans payable                                         (17,380)           (74,084)
Proceeds from notes and loans payable                                         15,000             71,500
Repayment of notes payable - related parties                                 (26,182)           (60,700)
Proceeds from notes payable - related parties                                      -              6,420
                                                                       -------------      -------------
Net Cash Provided by Financing Activities                                  1,254,770            428,136
                                                                       -------------      -------------

NET INCREASE IN CASH                                                         484,850              3,144

CASH - BEGINNING OF PERIOD                                                     1,040                 93
                                                                       -------------      -------------
CASH - END OF PERIOD                                                   $     485,890      $       3,237
                                                                       =============      =============
</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, 2005
                                   (UNAUDITED)

NOTE 1      NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            (A) Basis of Presentation

            These  condensed  consolidated  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  three  months  ended  August  31,  2005  are  not
            necessarily  indicative  of the results that may be expected for the
            year  ended   February  28,   2006.   The   accompanying   condensed
            consolidated financial statements and the information included under
            the heading "Management's Discussion and Analysis" 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, 2005.

            (B) Principles of Consolidation

            The condensed consolidated financial statements include the accounts
            of  Collectible  Concepts  Group,  Inc.  and  its two  wholly  owned
            subsidiaries,  Team  Sports  Specialties  Corporation  and Music Art
            Corporation   (collectively,   the   "Company").   All   significant
            intercompany  accounts  and  transactions  have been  eliminated  in
            consolidation.

            (C) Use of Estimates

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

            (D) Prepaid Royalties

            The Company has changed their policy on expensing  minimum royalties
            paid on new royalty  agreements.  The minimum amount paid on royalty
            agreements for collectibles related to movies had been expensed upon
            the execution of the agreement. For sports collectibles however, the
            Company now amortizes the minimum  amount of royalties paid over the
            lives of the  agreements  or the date the  minimum  royalty has been
            exceeded, whichever is shorter.

                                        8
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)

            (E) Loss Per Share

            The Company follows Statement of Financial  Accounting Standards No.
            128 ("SFAS No. 128")  "Earnings Per Share".  Basic and fully diluted
            loss per share amounts are computed based on net loss and divided by
            the  weighted  average  number of  common  shares  outstanding.  The
            assumed  conversion of convertible  debt into  5,597,253,333  common
            shares and  2,902,133,574  common  shares as of August 31,  2005 and
            2004  respectively,  and the  exercise  of  outstanding  options and
            warrants to purchase  82,272,308 common shares and 14,203,886 common
            shares  as of  August  31,  2005  and  2004  respectively,  were not
            included in the  computation of diluted loss per because the assumed
            conversion  and  exercise  would be  anti-dilutive  for all  periods
            presented.  As of August 31, 2005 the  Company  does not have enough
            common  shares  available to convert all the eligible debt to shares
            if the debt  holders  elected to convert  all of their  notes and to
            issue the required number of shares of common stock to be issued per
            the  statement  of  shareholders'  deficiency.  The  Company and its
            attorney are currently  working on the necessary actions to increase
            the number of authorized common shares.

            (F) Stock-Based Compensation

            SFAS No. 123, "Accounting for Stock-Based  Compensation" encourages,
            but does not  require,  companies  to record  compensation  cost for
            stock-based  employee  compensation plans at fair value. The Company
            has chosen to account for employee  stock-based  compensation  using
            the intrinsic value method prescribed in Accounting Principles Board
            ("APB") Opinion No. 25,  "Accounting for Stock Issued to Employees",
            and  related  interpretations.  Accordingly,  compensation  cost for
            stock  options is  measured  as the  excess,  if any,  of the quoted
            market  price of the  Company's  stock at the date of the grant over
            the amount an employee  must pay to acquire  the stock.  The Company
            values  shares  issued in  consideration  of services at fair value.
            Options or warrants  issued to  non-employees  and  consultants  are
            recorded  using the fair value  method,  based on the  Black-Scholes
            option-pricing  model.  There  were no options  issued to  employees
            during the periods presented.  Therefore, the required disclosure of
            pro forma  amounts  under SFAS No. 123, as modified by SFAS No. 148,
            "Accounting   for   Stock-Based   Compensation   -  Transition   and
            Disclosure", has not been presented.

            (G) Recent Accounting Pronouncements

            In May 2005, the FASB issued SFAS No. 154,  "Accounting  Changes and
            Error Corrections" ("SFAS 154") which replaces Accounting Principles
            Board  Opinions  No.  20  "Accounting   Changes"  and  SFAS  No.  3,
            "Reporting Accounting Changes in Interim

                                        9
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            Financial  Statements-An  Amendment of APB Opinion No. 28." SFAS 154
            provides  guidance on the accounting for and reporting of accounting
            changes  and  error   corrections.   It  establishes   retrospective
            application,  or the latest practicable date, as the required method
            for reporting a change in accounting  principle and the reporting of
            a  correction  of an error.  SFAS 154 is  effective  for  accounting
            changes and a correction  of errors made in fiscal  years  beginning
            after December 15, 2005 and is required to be adopted by the Company
            in the first  quarter  of fiscal  2007.  The  Company  is  currently
            evaluating the effect that the adoption of SFAS 154 will have on its
            consolidated results of operations and financial condition.

NOTE 2      GOING CONCERN

            The accompanying  condensed  consolidated  financial statements have
            been  prepared  on a going  concern  basis  which  contemplates  the
            realization  of  assets  and  the  settlement  of  liabilities   and
            commitments in the normal course of business.  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 and for the six months  ended  August 31,  2005,  the
            Company  had  a  working   capital   deficiency  of  $5,377,763,   a
            shareholders' deficiency of $5,370,441, a net loss of $1,066,209 and
            net cash used in  operations  of  $769,920.  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. These matters raise substantial doubt about the
            Company's  ability to continue  as a going  concern.  The  condensed
            consolidated  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.

            In order to generate  additional  revenues  and the working  capital
            needed to continue and expand operations,  the Company's  management
            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.

NOTE 3      CONVERTIBLE SECURED DEBENTURES

            On July 7, 2005,  the Company at various  dates  issued  convertible
            secured  debentures  totaling $850,000 to an investment group. These
            debentures mature on July 7, 2008 and bear interest at 10% per annum
            and are convertible into shares of the Company's common

                                       10
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            stock at the  lesser of $ .0016 or 25% of the  average of the lowest
            three  intraday  trading  prices  during  the  twenty  trading  days
            immediately  preceding  conversion.  This  results  in a  beneficial
            conversion feature in the amount of $846,960 (since it is limited to
            the amount  received  net of warrants  having a fair market value of
            $3,040),  which is  treated as a discount  on the  debenture  and is
            being  amortized  over the term of the loan. Of this amount  $70,580
            was amortized to expense during the six months ended August 31, 2005
            and $776,380 remains  deferred as of August 31, 2005.  Additionally,
            the Company issued warrants to purchase  1,700,000  shares of common
            stock  having  a fair  value  of  $3,040,  of this  amount  $253 was
            amortized to expense during the six months ended August 31, 2005 and
            $2,787  remains  deferred as of August 31,  2005.  As of the date of
            this  report,  these  debentures  are still  unpaid  and in  default
            because the Company failed to meet certain debt covenants.

            On May 18, 2005,  the Company at various  dates  issued  convertible
            secured  debentures  totaling $400,000 to an investment group. These
            debentures mature on May 18, 2008 and bear interest at 10% per annum
            and are convertible into shares of the Company's common stock at the
            lesser of $ .0016 or 25% of the average of the lowest three intraday
            trading prices during the twenty trading days immediately  preceding
            conversion.  This results in a beneficial  conversion feature in the
            amount of $325,043  (since it is limited to the amount  received net
            of prepaid  interest  of $26,668 and  warrants  having a fair market
            value of $48,289),  which is treated as a discount on the  debenture
            and is being  amortized  over the term of the loan.  Of this  amount
            $27,087 was amortized to expense  during the six months ended August
            31, 2005 and $297,956  remains  deferred as of August 31,  2005.  In
            addition, the debenture holders withheld $26,668 as prepaid interest
            (through  February 28, 2006),  which is treated as a discount on the
            debenture and is being  amortized over the term of the loan. Of this
            amount  $6,667 was  amortized  to  interest  expense  during the six
            months  ended  August 31,  2005 and $20,001  remains  deferred as of
            August 31,  2005.  Additionally,  the  Company  issued  warrants  to
            purchase  47,368,422  shares of common  stock having a fair value of
            $48,289,  of this amount $4,024 was amortized to expense  during the
            six months ended August 31, 2005 and $44,265 remains  deferred as of
            August 31, 2005. As of the date of this report, these debentures are
            still  unpaid  and in default  because  the  Company  failed to meet
            certain debt covenants.

            On September  30, 2004 the Company  issued  $250,000 of  convertible
            secured debentures to a group of investors.  These debentures mature
            on  September  30,  2006 and bear  interest at 15% per annum and are
            convertible  into shares of the Company's  common stock at the lower
            of $.01 or 25% of the average of the lowest three  intraday  trading
            prices  during  the  twenty  trading  days   immediately   preceding
            conversion.  This results in a beneficial  conversion feature in the
            amount of  $250,000,  (since it is limited  to the amount  received)
            which is being  amortized  over the term of the loan. Of this amount
            $62,500 was amortized to expense  during the six months ended August
            31,  2005 and  $125,000  remains  deferred  as of August  31,  2005.
            Additionally,  the Company  issued  warrants  to purchase  1,500,000
            shares  of  common  stock  having a fair  value of $710,  which  was
            expensed  during the year ended February 28, 2005. As of the date of
            this  report,  these  debentures  are still  unpaid  and in  default
            because the Company failed to meet certain debt covenants.

                                       11
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            On May 28, 2004 the Company issued  $550,000 of convertible  secured
            debentures to a group of investors.  These debentures  mature on May
            28, 2006 and bear interest at 15% per annum and are convertible into
            shares of the Company's  common stock at the lower of $.01 or 25% of
            the average of the lowest three  intraday  trading prices during the
            twenty trading days immediately preceding  conversion.  This results
            in a beneficial conversion feature in the amount of $550,000, (since
            it is limited to the amount  received) which is being amortized over
            the term of the loan.  Of this  amount  $137,500  was  amortized  to
            expense  during the six months  ended  August 31, 2005 and  $206,250
            remains  deferred as of August 31, 2005.  In  addition,  there was a
            $165,000  discount taken on the debenture,  which is being amortized
            over its two year life.  Of this  amount  $41,250 was  amortized  to
            interest  expense  during the six months  ended  August 31, 2005 and
            $61,875  remains  deferred as of August 31, 2005.  As of the date of
            this  report,  these  debentures  are still  unpaid  and in  default
            because the Company failed to meet certain debt covenants.

            On March 17, 2004 the Company issued $100,000 of convertible secured
            debentures  to a group of  investors.  These  debentures  matured on
            March  17,  2005  and  bear  interest  at  15%  per  annum  and  are
            convertible  into shares of the Company's  common stock at the lower
            of $.01 or 25% of the average of the lowest three  intraday  trading
            prices  during  the  twenty  trading  days   immediately   preceding
            conversion.  This results in a beneficial  conversion feature in the
            amount of  $100,000,  (since it is limited  to the amount  received)
            which is being  amortized  over the term of the  loan.  This  entire
            amount was  amortized to expense as of February 28, 2005.  As of the
            date of this  report,  these  debentures  are  still  unpaid  and in
            default.

            On  February  20,  2004 the Company  issued  $25,000 of  convertible
            secured debentures to a group of investors. These debentures matured
            on  February  20,  2005 and bear  interest  at 15% per annum and are
            convertible  into shares of the Company's  common stock at the lower
            of $.01 or 25% of the average of the lowest three  intraday  trading
            prices  during  the  twenty  trading  days   immediately   preceding
            conversion.  This results in a beneficial  conversion feature in the
            amount of  $25,000,  (since it is limited  to the  amount  received)
            which is being  amortized  over the term of the  loan.  This  entire
            amount was  amortized to expense as of February 28, 2005.  As of the
            date of this  report,  these  debentures  are  still  unpaid  and in
            default.

            On January  13,  2004 the  Company  issued  $50,000  of  convertible
            secured debentures to a group of investors. These debentures matured
            on  January  13,  2005 and bear  interest  at 15% per  annum and are
            convertible  into shares of the Company's  common stock at the lower
            of $.01 or 25% of the average of the lowest three  intraday  trading
            prices  during  the  twenty  trading  days   immediately   preceding
            conversion. This results in a beneficial conversion

                                       12
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            feature in the amount of $50,000, (since it is limited to the amount
            received)  which is being  amortized over the term of the loan. This
            entire  amount was  amortized to expense as of February 28, 2005. As
            of the date of this report, these debentures are still unpaid and in
            default.

            On November  17, 2003,  the Company  issued  $50,000 of  convertible
            secured debentures to a group of investors. These debentures matured
            on  November  17,  2004 and bear  interest  at 15% per annum and are
            convertible  into shares of the Company's  common stock at the lower
            of $.01 or 25% of the average of the lowest three  intraday  trading
            prices  during  the  twenty  trading  days   immediately   preceding
            conversion.  This results in a beneficial  conversion feature in the
            amount of  $50,000,  (since it is limited  to the  amount  received)
            which is being  amortized  over  the  term of the loan  This  entire
            amount was  amortized to expense as of February 28, 2005.  As of the
            date of this  report,  these  debentures  are  still  unpaid  and in
            default.

            On July 18, 2003, the Company issued $25,000 of convertible  secured
            debentures to a group of investors. These debentures matured on July
            18, 2004 and bear interest at 15% per annum and are convertible into
            shares of the Company's  common stock at the lower of $.01 or 25% of
            the average of the lowest three  intraday  trading prices during the
            twenty trading days immediately preceding  conversion.  This results
            in a beneficial conversion feature in the amount of $25,000,  (since
            it is limited to the amount  received) which is being amortized over
            the term of the loan. This entire amount was amortized to expense as
            of  February  28,  2005.  As of  the  date  of  this  report,  these
            debentures are still unpaid and in default.

            On June 25, 2003, the Company issued $25,000 of convertible  secured
            debentures to a group of investors. These debentures matured on June
            25, 2004 and bear interest at 15% per annum and are convertible into
            shares of the Company's  common stock at the lower of $.01 or 25% of
            the average of the lowest three  intraday  trading prices during the
            twenty trading days immediately preceding  conversion.  This results
            in a beneficial conversion feature in the amount of $25,000,  (since
            it is limited to the amount  received) which is being amortized over
            the term of the loan. This entire amount was amortized to expense as
            of  February  28,  2005.  As of  the  date  of  this  report,  these
            debentures are still unpaid and in default.

            On May 13, 2003, the Company  issued $25,000 of convertible  secured
            debentures to a group of investors.  These debentures matured on May
            13, 2004 and bear interest at 15% per annum and are convertible into
            shares of the Company's  common stock at the lower of $.01 or 25% of
            the average of the lowest three  intraday  trading prices during the
            twenty trading days immediately preceding  conversion.  This results
            in a beneficial conversion feature in the amount of $25,000,  (since
            it is limited to the amount  received) which is being amortized over
            the term of the loan This entire  amount was amortized to expense as
            of  February  28,  2005.  As of  the  date  of  this  report,  these
            debentures are still unpaid and in default.

                                       13
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            On November 26, 2002,  the Company  issued  $250,000 of  convertible
            secured debentures to a group of investors. These debentures matured
            on  November  26,  2003 and bear  interest  at 15% per annum and are
            convertible  into shares of the Company's  common stock at the lower
            of $.01 or 25% of the average of the lowest three  intraday  trading
            prices  during  the  twenty  trading  days   immediately   preceding
            conversion.  This resulted in a beneficial conversion feature in the
            amount of $250,000, which has been fully recognized as an expense at
            February 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) 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 and in default.

            On May 28, 2002,  the Company issued a $75,000  convertible  secured
            debenture 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 resulted in a
            beneficial  conversion  feature  of  $75,000,  which has been  fully
            recognized as an expense at February 28, 2003. 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) 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 and 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 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 the
            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.  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,
            $258,820 of these debentures are still unpaid and in default.

                                       14
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            The principal amount of $2,933,820 of the secured  convertible notes
            is due upon a default under the terms of secured  convertible notes.
            In addition,  the Company granted the investors a security  interest
            in  substantially  all of its  assets,  including  the assets of its
            wholly owned subsidiaries, and intellectual property. The Company is
            required to file a  registration  statement  with the Securities and
            Exchange Commission within 30 days of receipt of a written demand by
            the  investors,  which will include the common stock  underlying the
            secured  convertible  notes and the  warrants.  If the  registration
            statement is not filed within 30 days of receipt of a written demand
            by the  investors or if the  registration  statement is not declared
            effective  within 90 days from the date of  filing,  the  Company is
            required to pay liquidated  damages to the  investors.  In the event
            that the  Company  breaches  any  representation  or warranty in the
            Securities  Purchase  Agreement,  the  Company  is  required  to pay
            liquidated  damages  in  shares  or  cash,  at the  election  of the
            investors,  in an amount  equal to 3% of the  outstanding  principal
            amount of the secured  convertible  notes per month plus accrued and
            unpaid interest.

            The  Company   currently  does  not  have  a  sufficient  number  of
            authorized  shares of common  stock  available  if all debt  holders
            decided to convert their  convertible  secured  debentures  into the
            Company's  common stock.  The Company is working on  rectifying  the
            situation.  The  provisions of the debt  instruments  call for a 24%
            penalty on the amount of debt a  noteholder  attempts to convert and
            there  are not  enough  authorized  shares  available.  The  secured
            convertible  debenture  holders have  informed us that they have not
            and do not intend to  convert  any of their debt until the number of
            authorized  shares  is  increased.  Therefore,  no  accrual  for the
            penalty has been made at August 31, 2005. We do not,  however,  have
            any legally binding  commitment from the debenture  holders to waive
            the default  provision of the  debentures.  The  following  schedule
            reflects  convertible  secured  debentures as of August 31, 2005 (in
            order of due date):

<TABLE>
<CAPTION>
<S>                                                                           <C>
                 10% convertible secured debentures, due April 2001
                 (net of conversions) (A)                                          $     258,820

                 12% convertible secured debentures, due July 2003 (A)                    75,000

                 15% convertible secured debentures, due November 2003 (A)               250,000

                 15% convertible secured debentures, due May 2004 (A)                     25,000

                 15% convertible secured debentures, due June 2004 (A)                    25,000

</TABLE>

                                       15
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


<TABLE>
<CAPTION>
<S>                                                                           <C>

                 15% convertible secured debentures, due July 2004 (A)                    25,000

                 15% convertible secured debentures, due November 2004 (A)                50,000

                 15% convertible secured debentures, due January 2005 (A)                 50,000

                 15% convertible secured debentures, due February 2005 (A)                25,000

                 15% convertible secured debentures, due March 2005  (A)                 100,000

                 15% convertible secured debentures, due May 2006, net (A)               550,000

                 15% convertible secured debentures, due September 2006 (A)              250,000

                 15% convertible secured debentures, due May 2008, net (A)               400,000

                 15% convertible secured debentures, due July 2008, net (A)              850,000
                                                                                  --------------

                 Total                                                                 2,933,820
                 less unamortized discount                                             1,203,264
                                                                                  --------------
                 Total -net                                                            1,730,556
                 less current portion                                                  1,730,556
                                                                                  --------------

                 Long term portion                                                $            -
                                                                                  ==============
</TABLE>

            (A) In default as of the date of this report

NOTE 4      NOTES AND LOANS PAYABLE

            As of August 31, 2005, 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.

                                       16
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            The balance of the notes and loans  payable,  with the  exception of
            the auto  loan,  are in default  and remain  unpaid as of August 31,
            2005.

            The Company has  remaining  balances due on loans payable of $8,115,
            which  are  included  as loans  payable  -  related  parties  in the
            accompanying  condensed  consolidated  balance  sheet,  due  to  the
            Company's  president  as of August 31,  2005.  During the six months
            ended August 31, 2005, the Company recorded interest expense of $731
            relating to loans from its president  and other related  parties and
            $77,367 in unpaid  accrued  interest  was payable  relating to these
            loans as of August 31, 2005 which is included in accrued expenses in
            the accompanying condensed consolidated balance sheet (See Note 9).

NOTE 5      CONVERTIBLE SUBORDINATED DEBENTURES

            As of August  31,  2005,  the  Company  has  outstanding  $71,800 of
            convertible  subordinated debentures that were issued in prior years
            that bear  interest  at 12% per annum and  matured at various  times
            through  August  2001.  The  debentures  are in  default  and remain
            unpaid.  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 38,214 common shares.

            As of August  31,  2005,  the  Company  has  outstanding  $55,500 of
            convertible  subordinated debentures that were issued in prior years
            that bear interest at 12% per annum and have a term of one year. The
            debentures  are in default  and remain  unpaid.  Each $1,000 unit is
            convertible  at any  time at the  holder's  option,  into  1,000,000
            shares of Company common stock for an aggregate of 55,500,000 common
            shares.

            The  Company   currently  does  not  have  a  sufficient  number  of
            authorized  shares of common  stock  available  if all debt  holders
            decided to convert their  convertible  subordinated  debentures into
            the Company's common stock. The Company is working on rectifying the
            situation (See Note 1(E)).

            The following schedule reflects convertible  subordinated debentures
            as of August 31, 2005 (in order of due date):

<TABLE>
<CAPTION>
<S>                                                                                  <C>
               12% convertible subordinated debentures,  unsecured,
               due at various times through August 2001 (A)                          $      71,800

               12% convertible subordinated debentures,  unsecured,
               due at various times during quarter ended May 31, 2004 (A)                   55,500
                                                                                     -------------

               Total                                                                 $     127,300
                                                                                     =============
</TABLE>
                                       17
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            (A) In default

NOTE 6      COMMON STOCK

            In October 2001, the Company  entered into an agreement with a third
            party  whereby the third  party has an  anti-dilution  ownership  of
            1.603% of the Company.  During the year ended February 28, 2005, the
            Company issued 7,300,000 shares of common stock owed as part of this
            agreement.  The Company has not issued  3,962,036  shares owed as of
            August  31,  2005,  to the third  party.  These  shares are shown as
            common  stock  to  be  issued  with  a  corresponding   decrease  to
            additional  paid in capital as of August 31,  2005.  On February 28,
            2005,  ownership of the 1.603%  anti-dilution  agreement was sold to
            another company (See Note 8(A)).

            In December 2003, the Company  agreed to issue  3,200,000  shares of
            the  Company's  common  stock to settle  $145,763 of notes and loans
            payable  (including  accrued interest of $4,733).  These shares have
            not been  issued  and are shown as  common  stock to be issued as of
            August 31, 2005.

            During the six months ended August 31, 2004,  the Company  converted
            $38,429 of convertible  secured debentures into 74,463,161 shares of
            common  stock having a fair value of $244,244.  The  conversions  of
            debt to stock were based upon negotiated  conversion prices with the
            debtors (See Note 3). Based on sales of common stock for cash during
            the six months ended August 31, 2004 for prices below market  value,
            no  gain  or  loss  has  been   recognized  on  the   aforementioned
            conversions of convertible secured debentures.

            During the six months ended August 31, 2005 an individual subscribed
            to purchase  166,500,000  shares of common stock for $75,000.  Since
            the Company has failed to issue the  original  subscribed  shares an
            additional  43,000,000  shares are owed.  As of August 31,  2005 the
            Company has  received  $60,000 of these funds and has not issued any
            of the  stock.  Accordingly  176,200,000  shares  are shown as to be
            issued and  33,300,000  are shown as common stock  subscribed  as of
            August 31, 2005.

            During the six months ended August 31,  2005,  the Company  acquired
            15,000,000  shares of its  common  stock  from the  Company's  Chief
            Executive  Officer  and his wife in exchange  for a note  payable of
            $30,000.   The  15,000,000  shares  were  immediately  reissued  for
            services  rendered as discussed in the above  paragraph.  See note 9
            for additional related party transactions.

            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

                                       18
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            the  selling,  general and  administrative  expenses was $30,000 and
            $79,708  for  the  six  months  ended  August  31,  2005  and  2004,
            respectively.  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 the six months ended
            August   31,   2005  and  2004  was   15,000,000   and   31,103,100,
            respectively.

NOTE 7      STOCK OPTIONS

            In  December  2003,  the  Company  issued  20,000,000  options  to a
            consultant  having a ten-year term. The exercise price is $0.001 for
            the first 5,000,000 options,  $0.002 for the next 5,000,000 options,
            $0.003  for the  next  5,000,000  options  and  $0.004  for the last
            5,000,000  options.  The  only  restriction  is that  no  more  than
            5,000,000  options  can be  exercised  in any one  year.  The  total
            expense  associated  with  issuing  the  options of $40,000 is being
            recognized  over  the  earliest  periods  that  the  options  may be
            exercised.  The expense associated with these options was $2,083 and
            $4,583  for  the  three   months   ended  May  31,  2005  and  2004,
            respectively.

            In May 2005,  the Company  issued  12,000,000  options to an advisor
            having a three-year term. The exercise price is $0.003.  The options
            are immediately exercisable. The fair value of the options of $7,200
            is  being  amortized  over  the life of the  contract.  The  expense
            associated  with these  options  was $552 for the six  months  ended
            August  31,  2005.  The  advisor  is also to  receive 5% of sales on
            certain licensing agreements (See Note 8(A)).

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 for the collectibles  initially  expired at various dates
            through 2004 and  generally  require the Company to pay a royalty of
            between 9% and 12% of sales,  with certain minimum royalty  payments
            required.  The Company has  renewed all royalty  agreements  as they
            pertain to professional  minor league and college sports teams.  The
            Company has decided not to renew the royalty agreements  relating to
            current and future movie characters. The unpaid minimum royalty fees
            of  $296,538  ($215,750  which are owed on non  renewed  agreements)
            related to these  agreements are included in accrued expenses in the
            accompanying consolidated balance sheet. Royalty expense amounted to
            approximately  $61,845  and $0 for the six months  ended  August 31,
            2005 and 2004, respectively.

                                       19
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            On February 28, 2005, the Company sold a partial  interest (2.5%) in
            its future revenues  generated  under each of its National  Football
            League ("NFL") license (2005), its National  Basketball  Association
            ("NBA")  license in 2005-2006 and its upcoming  license in 2006 with
            Major League Baseball ("MLB").  The agreement included a clause that
            would extend the partial sale of revenues to an  additional  year of
            sales under the NFL license,  should the Company be  unsuccessful in
            obtaining  the MLB license.  The 2.5%  revenues  stake was sold to a
            third-party  company  for a  total  of  $80,000.  Additionally,  the
            purchaser assumed the rights to a 1.603% anti-dilution  ownership in
            the Company  from its previous  owner,  as well as all of the issued
            shares of common stock previously owned by that party.

            In May 2005,  the Company has agreed to give an advisor a 5% royalty
            for  five  years  for  helping  the  Company  secure  the  following
            licensing agreements,  National Hockey League ("NHL"),  Minor League
            Baseball,  Arena  Football and the National  Basketball  Association
            ("NBA").

            (B) Other Contingencies

            In fiscal 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 December 2003. 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.

            The Company is non-compliant with respect to payment of employee and
            employer  payroll-related  taxes. The estimated liability,  which is
            included  in accrued  expenses,  was  approximately  $196,944  as of
            August 31, 2005, which includes penalties and interest.

            (C) Concentrations

            Approximately  82% and 67% of the  Company's  revenues  were derived
            from its three largest  customers  during the quarters  ended August
            31, 2005 and 2004, respectively.

            The Company obtains a significant portion of its new borrowings from
            one  investment  group.  During the six months ended August 31, 2005
            and  2004,   the   Company   borrowed   $1,250,000   and   $650,000,
            respectively,  from this  investor  group.  As of August 31, 2005, a
            total of $2,993,820 was owed to this investor group (See Note 3).

                                       20

<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            (D) Agreements to Market Sports Collectibles

            In September 2004, the Company signed a licensing agreement with the
            National  Football  League,  which  expired on March 31,  2005.  The
            agreement  was renewed for the period April 2005 through March 2006.
            The  agreement  includes a 12% royalty  paid on sales with a minimum
            annual royalty of $100,000,  which is included in prepaid  royalties
            as of August 31, 2005,  and is being  amortized over the term of the
            agreement or until the minimum is met which ever is sooner.

            In March 2005,  the Company  signed a licensing  agreement  with the
            NBA, which expires on September 30, 2006.  The agreement  includes a
            12% royalty paid on sales,  with a minimum royalty for the period of
            $25,000,  which is  included in prepaid  royalties  as of August 31,
            2005, and is being amortized over the term of the agreement or until
            the minimum is met which ever is sooner.

            On May 12, 2005, the Company  signed a licensing  agreement with the
            Arena Football League, which expires on June 30, 2007. The agreement
            includes  a 12%  royalty  paid  on  sales  with no  minimum  royalty
            guarantees.  The Company paid $10,000 for the rights to the license,
            which is included in prepaid royalties as of August 31, 2005, and is
            being  amortized over the term of the agreement or until the minimum
            is met which ever is sooner.

            (E) Debt Conversions

            The  Company   currently  does  not  have  a  sufficient  number  of
            authorized   shares  of  common  stock   available  if  all  of  the
            convertible secured and convertible  subordinated  debenture holders
            decided to convert their debt into the Company's  common stock.  The
            Company  is  currently  working on  rectifying  the  situation.  The
            provisions  of the  convertible  secured  debentures  call for a 24%
            penalty on the amount of debt a note holder attempts to convert when
            there are not enough  authorized shares available to do so (See Note
            3 with  regard to the  convertible  secured  dentures).  However the
            convertible  subordinated  debenture  agreements  do not  contain  a
            provision  to address the  inability  of the debt holders to convert
            and the possible financial effects of this are unknown (See Note 5).

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,  2005,  the amount of salary
            deferred was $601,921, which is included in accrued expenses-related
            parties.  Also,  $186,743  of  accrued  compensation  was due to the
            Company's President's wife as of August 31, 2005.

                                       21
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                              AS OF AUGUST 31, 2005
                                   (UNAUDITED)


            The Company has  remaining  balances due on loans payable of $8,115,
            which  are  included  as loans  payable  -  related  parties  in the
            accompanying  condensed  consolidated  balance  sheet,  due  to  the
            Company's president and other related parties as of August 31, 2005.
            During the six months ended August 31,  2005,  the Company  recorded
            interest  expense of $731  relating to loans from its  president and
            other  related  parties and $77,367 in unpaid  accrued  interest was
            payable  relating  to these  loans as of August  31,  2005  which is
            included  in  accrued   expenses  in  the   accompanying   condensed
            consolidated balance sheet.

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

            During the six months ended August 31,  2005,  the Company  received
            15,000,000 treasury shares from the Company's President and his wife
            valued at $30,000 in exchange  for a related  party note  payable of
            $30,000. These shares were subsequently issued as part of shares for
            financing services.

            During the six months ended August 31, 2004,  the Company  converted
            $38,429 of convertible  secured debentures into 74,463,161 shares of
            common stock.

            Cash  payments for  interest  expense  were  immaterial  for the six
            months ended August 31, 2005 and 2004.

NOTE 11     SUBSEQUENT EVENTS

            On  September  9,  2005,  the  Company  signed an  amended  National
            Basketball   Association  "NBA"  licensing  agreement  allowing  the
            Company to offer more  products.  This increase in products  changes
            the minimum royalty agreement to $35,000, from $25,000.

            On September 12, 2005, the Company signed a licensing agreement with
            the National Hockey League "NHL". This agreement is for two one-year
            periods starting July 1, 2005, with minimum royalties of $25,000 for
            each year of the agreement.


                                       22

<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
collectibles 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 audited consolidated financial statements and related notes
included in the Company's Form 10-KSB for the year ended February 28, 2005.

      The Company  continues  to pursue its  re-evaluated  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 our new business model. The Company's new business model will be focused
on more evergreen properties and those with a longer window of opportunity.  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.  These activities  produced
new  opportunities  and products that  addressed new markets in keeping with the
Company's new  marketing  direction  aimed at the  collegiate  and  professional
sports marketplaces.

      The Company's license portfolio includes all of the teams in the NFL, NBA,
NHL and Arena  Football.  It also includes major  colleges as: Notre Dame,  LSU,
Ohio State, USC and UCLA and many other nationally renowned schools.

      In March 2005,  the Company  signed a  licensing  agreement  with the NBA,
which expires on September 30, 2006.  The agreement  includes a 12% royalty paid
on sales,  with a minimum royalty of $25,000.  On September 9, 2005, the Company
signed an amended  National  Basketball  Association  "NBA" licensing  agreement
allowing the Company to offer more products.  This increase in products  changes
the minimum royalty agreement to $35,000, from $25,000.

      On May 12, 2005, the Company  signed a licensing  agreement with the Arena
Football  League,  which expires on June 30, 2007. The agreement  includes a 12%
royalty  paid on sales with no minimum  royalty  guarantees.  The  Company  paid
$10,000 for the license.

                                       23
<PAGE>

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

      On September 12, 2005, the Company signed an licensing  agreement with the
National  Hockey  League  "NHL".  This  agreement  is for two one  year  periods
starting  July 1, 2005 with  minimum  royalties  of $25,000 for each year of the
agreement.

      On July 7, 2005, we entered into a Securities  Purchase Agreement with AJW
Offshore,  Ltd.,  AJW  Qualified  Partners,  LLC,  AJW  Partners,  LLC  and  New
Millennium  Capital  Partners  II, LLC for the sale of (i)  $850,000  in secured
convertible  notes and (ii) warrants to purchase  1,700,000 shares of our common
stock.  This money is being used for payroll and to produce  enough  quantity of
NFL related  products  (Fanbana's,  Megaphone Caps and Scrolls) to meet expected
demand for the upcoming season.

RESULTS OF OPERATIONS

SIX MONTHS ENDED AUGUST 31, 2005 COMPARED TO SIX MONTHS AUGUST 31, 2004.

      Net revenue for the six months ended August 31, 2005 was $373,012 compared
to net  revenue of  $319,936  for the six months  ended  August  31,  2004.  The
increase in revenue was due  primarily to the  increase in sales of  promotional
products in  connections  with the new licenses the Company has been  obtaining.
For the six months ended August 31, 2005,  our sales  consisted of $348,550 from
promotional  items,  $15,626 from our NFL license,  $1,428 from our NBA license,
$4,102 from collegiate sales and $3,306 from miscellaneous sales.

      Cost of sales for the six months ended August 31, 2005 increased by $6,164
from the six months  ended August 31,  2004.  Cost of sales as a  percentage  of
revenues  decreased  to 90.74%  for the six  months  ended  August  31,  2005 as
compared to 103.86% for the same period last year.  The  decrease in the cost of
sales as a percentage of revenue is mainly attributable to the increased sales.

      Selling,  general and  administrative  expenses  for the six months  ended
August 31, 2005  increased  to $644,409  from  $494,776  for the same period the
previous  year.  The increase in these  expenses  resulted  mainly from expenses
incurred to obtain new  licenses  ($60,000)  and  expenses  related to financing
transactions ($100,000). For the six months ended August 31, 2005 and August 31,
2004, the services  obtained  through the issuance of stock and options  include
internal accounting and financial services, internet website creation, marketing
assistance,  insurance program review and general management consulting services
in the amount of approximately $85,634 and $88,875  respectively.  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, 2005, the Company  incurred
charges  relating to the costs of  producing  the samples as well as the related
package design of approximately  $8,546 versus charges of approximately  $23,554
for the same period the previous year.

      The Company incurred interest expense of $463,353 for the six months ended
August 31, 2005 as compared to $319,586  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.  The increase is a result of a $400,000  financing done in
May 2005 and a $850,000  financing  completed  in August  2005.  The  beneficial
conversion  calculation  added $298,532 and $200,000 of interest expense for the
six months ended August 31, 2005 and 2004, respectively.

      As a result of the above, the Company had a net loss of $1,066,209 for the
six months  ended  August 31, 2005 as compared to a net loss of $694,164 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, 2005 COMPARED TO THREE MONTHS AUGUST 31, 2004.

      Net  revenue  for the three  months  ended  August 31,  2005 was  $357,980
compared to net revenue of $256,162  for the three months ended August 31, 2004.
The increase in revenue was due primarily to the increase of  promotional  sales
generate in  connections  with the new licenses the Company has been  obtaining.
For the three months ended August 31, 2005, our sales consisted of $336,150 from
promotional  items,  $15,626 from our NFL license,  $1,428 from our NBA license,
$4,102 from collegiate sales and $674 from miscellaneous sales.

      Cost of sales for the three  months  ended  August 31, 2005  increased  by
$19,645  from  the  three  months  ended  August  31,  2004.  Cost of sales as a
percentage of revenues  decreased to 88.4% for the three months ended August 31,
2004 as compared to 115.9% for the same  period last year.  The  decrease in the
cost of sales as a percentage of revenue is mainly  attributable to the increase
in sales.

      Selling,  general and  administrative  expenses for the three months ended
August 31, 2005  increased  to $351,283  from  $264,657  for the same period the
previous  year.  The increase in these  expenses  resulted  mainly from expenses
incurred to obtain new  licenses  ($40,000)  and  expenses  related to financing
transactions  ($60,000).  For the three  months ended August 31, 2005 and August
31, 2004 the services obtained through the issuance of stock and options include
internal accounting and financial services, internet website creation, marketing
assistance,  insurance program review and general management consulting services
in the amount of approximately $55,634 and $79,708  respectively.  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, 2005, the Company incurred
charges  relating to the costs of  producing  the samples as well as the related
package design of approximately  $7,936 versus charges of approximately  $11,011
for the same period the previous year.

      The Company  incurred  interest  expense of $291,687  for the three months
ended  August 31, 2004 as compared to $188,419  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. The increase is a result of a $850,000 financing
completed in August 2005. The beneficial  conversion  calculation added $177,907
and $125,000 of interest expense  respectively for the three months ended August
31, 2005 and 2004 respectively.

As a result of the above,  the Company had a net loss of $594,515  for the three
months  ended August 31, 2005 as compared to a net loss of $378,506 for the same
period last year.

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,  2005,  the  Company  has not  generated
sufficient  revenues  to  meet  operating  expenses.   As  a  result,  there  is
substantial doubt about the Company's ability to continue as a going concern. We
anticipate  that we will  require  up to  approximately  $2,000,000  to fund our
continued  operations  for the next twelve  months,  depending on revenues  from
operations.


                                       25
<PAGE>

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

      As of August 31, 2005,  the Company had a working  capital  deficiency  of
$5,377,763.  The working capital  deficit  increased from February 28, 2005 as a
direct result of the unprofitable operations for the six months ended August 31,
2005 that resulted in cash used in operating activities of $769,920. The Company
had an ending cash balance of $485,890 at August 31, 2005.

      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, 2005 the Company  received  the  following  capital  infusions:
$1,223,332   (net  of  discount)  from  the  issuance  of  convertible   secured
debentures,  $15,000 from notes and loans  payable and $60,000 from common stock
subscription.  During the six months  ended  August 31,  2005,  the Company made
payments of $43,562 toward notes and loans payable.


      To obtain  funding for its  ongoing  operations,  the  Company has entered
into Securities Purchase Agreements  with  several accredited  investors, on the
following dates for the sale of secured convertible notes and warrants:

<TABLE>
<CAPTION>
     Transaction Date            Secured      Interest                          Conversion Price                       Warrants Sold
                               Convertible      Rate
                               Notes Sold
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
<S>                          <C>              <C>       <C>                                                              <C>
May 2000                     $400,000         10%       $0.04 or 25% of market value                                     4,000,000
                             ($258,820
                             remaining)
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
May 28, 2002                 $75,000          12%       $.01 or 25% of the  average  of the  lowest  three  intraday       150,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
November 26, 2002            $250,000         15%       $.01 or 25% of the  average  of the  lowest  three  intraday       500,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
May 15, 2003                 $25,000          15%       $.01 or 25% of the  average  of the  lowest  three  intraday        50,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
June 20, 2003                $25,000          15%       $.01 or 25% of the  average  of the  lowest  three  intraday        50,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
July 23, 2003                $25,000          15%       $.01 or 25% of the  average  of the  lowest  three  intraday        50,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
November 14, 2003            $50,000          15%       $.01 or 25% of the  average  of the  lowest  three  intraday       100,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
January 13, 2004             $50,000          15%       $.01 or 25% of the  average  of the  lowest  three  intraday       100,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
February 13, 2004            $25,000          15%       $.01 or 25% of the  average  of the  lowest  three  intraday        50,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
March 16, 2004               $100,000         15%       $.01 or 25% of the  average  of the  lowest  three  intraday       200,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
May 28, 2004                 $550,000         15%       $.01 or 25% of the  average  of the  lowest  three  intraday     1,650,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
September 30, 2004           $250,000         15%       $.01 or 25% of the  average  of the  lowest  three  intraday     1,250,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
May 18, 2005                 $400,000         15%       $.0016 or 25% of the  average of the lowest  three  intraday    47,368,422
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
---------------------------- ---------------- --------- ------------------------------------------------------------- --------------
July 7, 2005                 $850,000         15%       $.0016 or 25% of the  average of the lowest  three  intraday     1,700,000
                                                        trading  prices during the twenty  trading days  immediately
                                                        preceding conversion
</TABLE>

      The secured convertible notes bear interest as described above,  typically
mature two years from the date of issuance or two years from when the company is
in compliance  with the terms of the  securities  purchase  agreements,  and are
convertible  into our common stock,  at the investors'  option,  on the terms as
described  above.  As of  September  30,  2005,  the average of the three lowest
intraday  trading  prices for our common stock  during the  preceding 20 trading
days as  reported  on the  Over  the  Counter  Bulletin  Board  was  $.001  and,
therefore,  the conversion price for the secured  convertible notes was $.00025.
Based on this  conversion  price,  the $2,933,820 in secured  convertible  notes
remaining,  excluding interest,  were convertible into 11,735,280,000  shares of
our common stock. If the Company's stock price should decrease, the Company will
be required to issue substantially more shares, which will cause dilution to the
Company's existing stockholders. There is no upper limit on the number of shares
that may be  issued,  which  will  have  the  effect  of  further  diluting  the
proportionate  equity  interest  and voting  power of  holders of the  Company's
common stock.

      An event of default has occurred regarding all of the convertible  secured
debentures  outstanding  as of August 31, 2005. As a result of this default,  we
are  obligated  to  pay  the  debenture  holders  the  principal  amount  of the
debentures  together with interest and certain other amounts. We do not have the
capital resources to pay the amounts required under this agreement.  The secured
convertible  debenture  holders have informed us that they do not intend to take
any action at this time due to the default. We do not, however, have any legally
binding  commitment from the debenture holders to waive the default provision of
the  debentures.  In addition,  we granted the investors a security  interest in
substantially  all of our  assets,  including  the  assets of our  wholly  owned
subsidiaries,  and intellectual  property.  These events of default,  taken as a
whole,  are  reasonably  likely to have a material  impact on our short-term and
long-term  liquidity.  The investors have been willing in the past to provide us
with  capital  as needed to  sustain  our  day-to-day  operations  and to forego
enforcing default provisions,  however, no assurance can be given that they will
provide  such  capital in the future or  continue  to forego  enforcing  default
provisions,  which they are under no  obligation  to do so. In the event that we
need  additional  capital in the future for our day-to-day  operations,  and the
investors  do not provide  such  funds,  we will have to seek  capital  from new
investors. As a result of these events of default and that all of our assets are
secured by the current investors, it is highly unlikely that we would be able to
obtain  additional  capital  from  other  investors.  If we are unable to obtain
additional  capital,  we would  likely  be  required  to  curtail  or cease  our
operations.  As all of our assets are secured by our existing lendors,  of which
we  are  currently  in  default,  we do not  anticipate  filing  for  bankruptcy
protection, as all of our assets would be transferred to our lendors pursuant to
our existing security agreements.


      The Company  currently  does not have a  sufficient  number of  authorized
shares of common stock  available if all debt holders  decided to convert  their
convertible  secured  debentures into the Company's common stock. The Company is
working on rectifying the situation. The provisions of the debt instruments call
for a 24% penalty on the amount of debt owed if a noteholder attempts to convert
and there are not enough authorized shares  available.  The secured  convertible
debenture  holders  have  informed  us that they  have not and do not  intend to
convert  any of their debt at this time.  Therefore,  no accrual for the penalty
has been made at August 31, 2005. We do not,  however,  have any legally binding
commitment  from the  debenture  holders to waive the default  provision  of the
debenture.

                                       26
<PAGE>

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

      As of August 31, 2005, the Company had $499,421 in  outstanding  notes and
loans payable,  $127,300 in convertible  subordinated  debentures and $1,730,556
(net of discount) in outstanding  convertible secured  debentures.  As of August
31, 2005, the Company had $1,537,728 in accounts payable,  $2,423,283 in accrued
expenses,  accrued  payroll,  accrued  royalties and related taxes.  In November
2002,  we  negotiated  a  long-term  payment  plan  with the IRS to  retire  our
outstanding payroll tax obligations.  The plan was executed in December 2002 and
calls for  escalating  monthly  payments  to be made over a period of 18 months.
After an initial  down payment of $25,800 in December  2002,  we had agreed to a
payment  schedule of $5,750 for the first six  months,  $13,000 for the next six
months and $25,000 for the final six  months.  We made the agreed  payments in a
timely  fashion  through the first six months and fell behind on the rest of the
payments.  We  re-negotiated  with the IRS, and starting on January 1, 2005,  we
began to pay all our current taxes on a timely basis,  along with $3,000 a month
towards accrued taxes until all owed taxes have been paid off.

      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.

CRITIAL 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  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.

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<PAGE>

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

      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.  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.

RECENT ACCOUNTING PRONOUNCEMENTS

      In May 2005, the FASB issued SFAS No. 154,  "Accounting  Changes and Error
Corrections"  ("SFAS 154") which replaces  Accounting  Principles Board Opinions
No. 20 "Accounting  Changes" and SFAS No. 3,  "Reporting  Accounting  Changes in
Interim  Financial  Statements-An  Amendment  of APB  Opinion  No. 28." SFAS 154
provides  guidance on the accounting or and reporting of accounting  changes and
error  corrections.  It  establishes  retrospective  application,  or the latest
practicable  date,  as the required  method for reporting a change in accounting
principle and the  reporting of a correction of an error.  SFAS 154 is effective
for accounting changes and a correction of errors made in fiscal years beginning
after  December  15,  2005 and is  required  to be adopted by the Company in the
first  quarter of fiscal 2007.  The Company is currently  evaluating  the effect
that  the  adoption  of SFAS  154  will  have  on its  consolidated  results  of
operations and financial condition.

















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<PAGE>

ITEM 3 - CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

      As of August 31, 2005, our management carried out an evaluation, under the
supervision of our Chief Executive  Officer and Chief  Financial  Officer of the
effectiveness  of the design and operation of our system of disclosure  controls
and  procedures  pursuant to the Securities and Exchange Act, Rule 13a-15(e) and
15d-15(e) under the Exchange Act). Based on that evaluation, our chief executive
officer and chief financial officer  concluded that our disclosure  controls and
procedures are effective to provide reasonable assurance that information we are
required to disclose in reports that we file or submit under the Exchange Act is
recorded,  processed,  summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms, and that such information
is accumulated and communicated to our management, including our chief executive
officer and chief financial officer,  as appropriate,  to allow timely decisions
regarding required disclosure.

Changes in Internal Control over Financial Reporting.

      Except as described below, there were no changes in internal controls over
financial  reporting that occurred during the period covered by this report that
have materially  affected,  or are reasonably likely to materially  effect,  our
internal control over financial reporting.  As described in our Annual Report on
Form 10-KSB for the year ended  February 28, 20005 and our  Quarterly  Report on
Form 10-QSB for the quarter ended May 31, 2005,  filed with the  Securities  and
Exchange  Commission  on August 2, 2005 and August 23,  2005,  respectively,  we
implemented  several changes to our internal controls as a result of significant
deficiencies and material  weaknesses  previously  discovered.  In June 2005, we
hired a full-time bookkeeper.  Our bookkeeper has been charged with establishing
proper records and accounts, including establishing separate records for each of
our clients and vendors. In addition, we have promoted an employee to handle all
of our invoicing and billing on a full-time basis. We have made  arrangements to
have our accountant, who works for us on a part-time basis, to be in our offices
one day each week to oversee  these  changes  and to review and  account for all
transactions  that  occurred  during the prior  week.  As well,  we have  opened
several  banking  accounts,  with each new account  established for a particular
purpose, such as payroll/commission and purchasing. Lastly, we have instituted a
policy whereby management is prohibited from entering into verbal contracts.

      Based upon the  evaluation  conducted by our chief  executive  officer and
chief financial  officer in connection with this report, we believe we have made
made   significant   progress  in  correcting  our  material   deficiencies  and
weaknesses,  however,  we have not had a full  quarter  with our  changes to our
internal  controls  to assess  whether  we need to make  further  changes to our
internal controls.  We anticipate that our material  deficiencies and weaknesses
will be fully corrected before the end of the quarter ended November 30, 2005.








                                       29
<PAGE>

                                     PART II

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   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

         None.

ITEM 3   DEFAULTS UPON SENIOR SECURITIES

      The  Company is  currently  in default on all of its  convertible  secured
debentures that the Company has issued,  in the total amount of $2,933,820.  The
Company is also currently in default on interest  payments owed on these secured
convertible debentures.  As a result of these defaults, 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 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.  The debentures are secured by substantially  all of the
Company's assets.

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

ITEM 5   OTHER INFORMATION

         Not applicable.

ITEM 6   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)




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<PAGE>

                                   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:   December 16, 2005              By: /s/ PAUL S. LIPSCHUTZ
                                          ----------------------
                                       Paul S. Lipschutz
                                       Chief Executive Officer

Date:   December 16, 2005              By: /s/ PAUL S. LIPSCHUTZ
                                          ----------------------
                                       Paul S. Lipschutz
                                       Principal Financial Officer and Principal
                                       Accounting Officer





                                       31