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

                                   FORM 10-QSB

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

                 FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2003

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

              FOR THE TRANSITION PERIOD FROM _________ TO _________

                         COMMISSION FILE NUMBER: 0-30703

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

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

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

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

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

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ ] No [X]

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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

State the number of shares  outstanding of each of the  registrant's  classes of
common equity, as of the latest practicable date:  535,166,225 shares issued and
outstanding as of August 31, 2004

<PAGE>

                        COLLECTIBLE CONCEPTS GROUP, INC.

                                      INDEX

PART I   FINANCIAL INFORMATION

         ITEM 1   Condensed Consolidated Balance Sheet As Of August 31, 2003
                  (Unaudited)                                                  3

                  Condensed Consolidated Statements Of Operations For The
                  Three Months Ended August 31, 2003 And 2002 (Unaudited)      4

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

                  Condensed Consolidated Statement Of Changes In
                  Shareholders'  Deficiency For The Six Months Ended
                  August 31, 2003 (Unaudited)                                  6

                  Condensed Consolidated Statements Of Cash Flows For The
                  Six Months Ended August 31, 2003 And 2002 (Unaudited)        7

                  Notes To Condensed Consolidated Financial Statements As
                  Of August 31, 2003 (Unaudited)                          8 - 16

         ITEM 2   Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                    17 - 23

         ITEM 3   Controls and Procedures                                     24

PART II  OTHER INFORMATION

         ITEM 1   Legal proceedings                                           25
         ITEM 2   Changes in securities and use of proceeds                   25
         ITEM 3   Defaults upon senior securities                             25
         ITEM 4   Submission of matters to a vote of security holders         25
         ITEM 5   Other information                                           25
         ITEM 6   Exhibits and Reports on 8-K                                 25

         SIGNATURES                                                           27



                                       2
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                              AS OF AUGUST 31, 2003
                                   (UNAUDITED)

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

CURRENT ASSETS
Cash                                                                        $      3,750
Accounts receivable, net of allowance for doubtful accounts of $2,740             36,004
Inventories                                                                       15,207
                                                                            ------------
Total Current Assets                                                              54,961
                                                                            ------------

PROPERTY AND EQUIPMENT, NET                                                       28,829
                                                                            ------------

OTHER ASSETS
Trademarks                                                                         1,300
Security deposits                                                                  3,200
                                                                            ------------
Total Other Assets                                                                 4,500
                                                                            ------------

TOTAL ASSETS                                                                $     88,290
                                                                            ============

                    LIABILITIES AND SHAREHOLDERS' DEFICIENCY

CURRENT LIABILITIES
Accounts payable                                                            $  1,466,472
Accrued expenses                                                               1,792,307
Convertible secured debentures, net                                              744,925
Notes and loans payable, current portion                                         770,429
Loans payable - related parties                                                   77,924
Convertible subordinated debentures                                              114,800
                                                                            ------------
Total Current Liabilities                                                      4,966,857

Notes and loans payable, long-term portion                                         5,676
                                                                            ------------

TOTAL LIABILITIES                                                              4,972,533
                                                                            ------------

COMMITMENTS AND CONTINGENCIES                                                         --

SHAREHOLDERS' DEFICIENCY
Common stock, $.001 par value, 700,000,000 shares authorized, 172,833,158
  shares issued and outstanding                                                  172,830
Common stock to be issued (2,746,772 shares)                                      15,522
Additional paid-in capital                                                    14,562,972
Deferred equity based expense                                                   (118,750)
Accumulated deficit                                                          (19,516,817)
                                                                            ------------
Total Shareholders' Deficiency                                                (4,884,243)
                                                                            ------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY                              $     88,290
                                                                            ============
</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, 2003 & 2002
                                   (UNAUDITED)

                                                     2003             2002
                                                -------------    -------------

SALES                                           $      36,671    $       8,756

COST OF SALES                                          30,959            9,325
                                                -------------    -------------

GROSS PROFIT (LOSS)                                     5,712             (569)

OPERATING EXPENSES
Selling, general and administrative                   278,141          612,537
                                                -------------    -------------

LOSS FROM OPERATIONS                                 (272,429)        (613,106)
                                                -------------    -------------

OTHER INCOME (EXPENSE)
Consulting Income                                       9,000               --
Interest expense                                     (116,942)         (96,854)
                                                -------------    -------------
Total Other Income (Expense)                         (107,942)         (96,854)
                                                -------------    -------------

LOSS BEFORE TAX PROVISION                            (380,371)        (709,960)
INCOME TAX PROVISION                                       --               --
                                                -------------    -------------

NET LOSS                                        $    (380,371)   $    (709,960)
                                                =============    =============


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

WEIGHTED AVERAGE SHARES USED IN NET LOSS
CALCULATIONS - BASIC AND DILUTED                  155,885,661       22,780,157
                                                =============    =============


     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, 2003 & 2002
                                   (UNAUDITED)


                                                     2003             2002
                                                -------------    -------------

SALES                                           $      86,816    $      48,989

COST OF SALES                                          61,926           71,009
                                                -------------    -------------

GROSS PROFIT (LOSS)                                    24,890          (22,020)

OPERATING EXPENSES
Selling, general and administrative                   482,238          836,558
                                                -------------    -------------

LOSS FROM OPERATIONS                                 (457,348)        (858,578)
                                                -------------    -------------

OTHER INCOME (EXPENSE)
Consulting Income                                       9,000               --
Interest expense                                     (213,491)        (117,150)
Forgiveness of Debt                                        --           70,778
                                                -------------    -------------
Total Other Income (Expense)                         (204,491)         (46,372)
                                                -------------    -------------

LOSS BEFORE TAX PROVISION                            (661,839)        (904,950)
INCOME TAX PROVISION                                       --               --
                                                -------------    -------------

NET LOSS                                        $    (661,839)   $    (904,950)
                                                =============    =============


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

WEIGHTED AVERAGE SHARES USED IN NET LOSS
CALCULATIONS - BASIC AND DILUTED                  136,451,967       15,537,551
                                                =============    =============


     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, 2003
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         Common Stock          Additional     Deferred
                                             Common Stock                To be issued           Paid-In     Equity-Based
                                         Shares        Amount        Shares        Amount       Capital        Expense
                                     ------------------------------------------------------------------------------------
<S>                                    <C>          <C>          <C>            <C>          <C>             <C>
Balance, February 28, 2003             99,400,121   $   99,400      1,524,506   $   10,374   $ 14,396,576    $ (187,500)
Common stock issued for cash            9,714,286        9,714             --           --          7,286            --
Common stock issued for services
  rendered                             38,750,000       38,750             --           --         91,450            --
Common stock to be issued per
  anti-dilution provision                      --           --      1,222,266        5,148         (5,148)           --
Conversions of convertible secured
  debentures to common stock           24,968,751       24,966             --           --         (2,192)           --
Beneficial conversion on
  convertible debentures                       --           --             --           --         75,000       (75,000)
Amortization of deferred equity
  based expense                                --           --             --           --             --       143,750
Net loss, August 31, 2003                      --           --             --           --             --            --
                                     ------------   ----------   ------------   ----------   ------------    ----------
BALANCE AUGUST 31, 2003               172,833,158   $  172,830      2,746,772   $   15,522   $ 14,562,972    $ (118,750)
                                     ============   ==========   ============   ==========   ============    ==========
</TABLE>

<TABLE>
<CAPTION>

                                      Accumulated
                                        Defecit          Total
                                     -----------------------------
<S>                                  <C>             <C>
Balance, February 28, 2003           $(18,854,978)   $ (4,536,128)
Common stock issued for cash                   --          17,000
Common stock issued for services
  rendered                                     --         130,200
Common stock to be issued per
  anti-dilution provision                      --              --
Conversions of convertible secured
  debentures to common stock                   --          22,774
Beneficial conversion on
  convertible debentures                       --              --
Amortization of deferred equity
  based expense                                --         143,750
Net loss, August 31, 2003                (661,839)       (661,839)
                                     ------------    ------------
BALANCE AUGUST 31, 2003              $(19,516,817)   $ (4,884,243)
                                     ============    ============
</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, 2003 & 2002
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                  2003            2002
                                                                                ---------      ---------
<S>                                                                             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                        $(661,839)     $(904,950)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation                                                                        9,089         11,861
Common stock issued for services rendered                                         130,200        539,419
Amortization of deferred equity based expense                                     143,750         75,000
Forgiveness of debt                                                                    --         70,000
Changes in operating assets and liabilities:
Accounts receivable                                                               (32,493)        19,764
Inventories                                                                         8,063             --
Accounts payable and accrued expenses                                             269,027         77,696
                                                                                ---------      ---------
Net Cash Used In Operating Activities                                            (134,203)      (111,210)
                                                                                ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:                                                  --             --
                                                                                ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible secured debentures                           75,000         75,000
Proceeds from issuance of convertible subordinated debentures                      43,000             --
Proceeds from the issues of common stock                                           17,000         25,000
Repayment of notes and loans payable                                               (2,025)       (21,514)
Proceeds from notes and loans payable                                              17,500         39,863
Repayment of notes payable - related parties                                      (22,092)        (8,970)
Proceeds from notes payable - related parties                                       2,970          2,282
                                                                                ---------      ---------
Net Cash Provided By Financing Activities                                         131,353        111,661
                                                                                ---------      ---------

NET (DECREASE) INCREASE IN CASH                                                    (2,850)           451

CASH - BEGINNING OF PERIOD                                                          6,600            139
                                                                                ---------      ---------

CASH - END OF PERIOD                                                            $   3,750      $     590
                                                                                =========      =========
</TABLE>


      See accompanying notes to condensed consolidated financial statements

                                       7
<PAGE>

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 six months ended August 31, 2003 are
      not  necessarily  indicative  of the results  that may be expected for the
      year ended  February 28, 2004.  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,
      2003.

      (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) Loss Per Share

      Basic and  diluted  loss per share for all periods  presented  is computed
      based on the weighted  average  number of common shares  outstanding.  The
      assumed  conversions  of  convertible  debentures  into  common  stock and
      exercises of stock options was not included in the  computation of diluted
      loss per share  because the assumed  conversions  and  exercises  would be
      anti-dilutive.


                                       8
<PAGE>

      (E) 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.

      (F) Reclassifications

      Certain items have been reclassified in prior period statements to conform
      to the current period presentation.

      (G) Recent Accounting Pronouncements

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

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

      Most of the provisions of Statement 150 are  consistent  with the existing
      definition of liabilities  in FASB Concepts  Statement No. 6, "Elements of
      Financial  Statements".  The remaining  provisions  of this  Statement are
      consistent with the FASB's proposal to revise that definition to encompass
      certain  obligations that a reporting entity can or must settle by issuing
      its  own  shares.   This  Statement   shall  be  effective  for  financial
      instruments  entered  into or modified  after May 31,  2003 and  otherwise
      shall be effective at the beginning of the first interim period  beginning
      after June 15, 2003, except for mandatory redeemable financial instruments
      of a  non-public  entity,  as to which the  effective  date is for  fiscal
      periods beginning after December 15, 2004.


                                       9
<PAGE>

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

       Interpretation No. 46, as revised,  also requires expanded disclosures by
       the primary beneficiary (as defined) of a variable interest entity and by
       an enterprise  that holds a significant  variable  interest in a variable
       interest entity but is not the primary beneficiary.

       Interpretation  No. 46, as revised,  applies to small business issuers no
       later than the end of the first reporting period that ends after December
       15,  2004.   This   effective  date  includes  those  entities  to  which
       Interpretation  46 had  previously  been applied.  However,  prior to the
       required  application of Interpretation No. 46, a public entity that is a
       small   business   issuer   shall   apply   Interpretation   46  or  this
       Interpretation   to   those   entities   that   are   considered   to  be
       special-purpose  entities  no  later  than  as of the  end  of the  first
       reporting period that ends after December 15, 2003.

       Interpretation   No.   46   may   be   applied   prospectively   with   a
       cumulative-effect  adjustment as of the date on which it is first applied
       or by restating  previously  issued financial  statements for one or more
       years with a  cumulative-effect  adjustment  as of the  beginning  of the
       first year restated.

       In March 2004, the U.S.  Securities and Exchange  Commission's  Office of
       the Chief Accountant and the Division of Corporate Finance released Staff
       Accounting  bulletin ("SAB") No. 105, "Loan Commitments  Accounted for as
       Derivative Instruments".  This bulletin contains specific guidance on the
       inputs  to a  valuation-recognition  model to  measure  loan  commitments
       accounted  for at fair value,  and requires that  fair-value  measurement
       include only differences between the guaranteed interest rate in the loan
       commitment and market  interest rate,  excluding any expected future cash
       flows  related  to  the  customer  relationship  or  loan  servicing.  In
       addition,  SAB105  requires the disclosure of the  accounting  policy for
       loan commitments,  including methods and assumptions used to estimate the
       fair value of loan commitments,  and any associated  hedging  strategies.
       SAB 105 is effective for derivative  instruments  entered into subsequent
       to March 31, 2004 and should also be applied to existing  instruments  as
       appropriate. The Company has not yet completed its evaluation of SAB 105,
       but does not anticipate a material impact on the financial statements.

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

NOTE 2   GOING CONCERN

       The accompanying  condensed  consolidated  financial statements have been
       prepared on a going concern basis which  contemplates  the realization of


                                       10
<PAGE>

       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, 2003,  the Company had a working  capital  deficiency of
       $4,911,896  a  shareholders'  deficiency  of  $4,884,243,  a net  loss of
       $661,839 and net cash used in  operations  of  $134,203.  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 (See Note 10).

NOTE 3   CONVERTIBLE SECURED DEBENTURES

       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 was in
       default of the debenture agreement.  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  results 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


                                       11
<PAGE>

       principal 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 November 26, 2002, the Company issued $250,000 of convertible  secured
       debentures to a group of investors.  These debentures  mature 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  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 $125,000 was amortized to expense during the six
       months  ended August 31, 2003 and $62,500  remains  deferred as of August
       31, 2003.

       On May 13,  2003,  the  Company  issued  $25,000 of  convertible  secured
       debentures to a group of investors.  These  debentures  mature 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. Of
       this amount  $6,250 was  amortized  to expense to expense  during the six
       months  ended August 31, 2003 and $18,750  remains  deferred as of August
       31, 2003.

       On June 25,  2003,  the Company  issued  $25,000 of  convertible  secured
       debentures to a group of investors.  These debentures  mature 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. Of
       this amount  $6,250 was  amortized  to expense to expense  during the six
       months  ended August 31, 2003 and $18,750  remains  deferred as of August
       31, 2003.

       On July 18,  2003,  the Company  issued  $25,000 of  convertible  secured
       debentures to a group of investors.  These debentures  mature 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. Of
       this amount  $6,250 was  amortized  to expense to expense  during the six
       months  ended August 31, 2003 and $18,750  remains  deferred as of August
       31, 2003.

       The following  schedule  reflects  convertible  secured  debentures as of
       August 31, 2003 (in order of due date), all of which are in default:

       10% convertible secured debentures, due April 2001
       (net of conversions) (A)                                       $  344,925
       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
       15% convertible secured debentures, due July 2004 (A)              25,000
                                                                      ----------
       Total                                                          $  744,925
                                                                      ==========
       (A) In default


                                       12
<PAGE>

NOTE 4   NOTES AND LOANS PAYABLE

      As of August  31,  2003,  notes and loans  payable  consisted  of  various
      unsecured notes and loans payable to certain individuals, investors and an
      auto finance  company.  The notes and loans bear interest at various rates
      ranging from 8.0% to 12.0% and had various maturities through August 2001,
      except for the  automobile  loan,  which  matures  February 28, 2006.  The
      balance of the notes and loans  payable,  with the  exception  of the auto
      loan, are in default and remain unpaid as of August 31, 2003.

      The Company  has loans  payable of  $77,924,  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,  2003.  During the six months  ended  August 31,  2003,  the
      Company  recorded  interest  expense of $2,614  relating to loans from its
      president  and other related  parties and $84,842 in accrued  interest was
      payable relating to these loans as of August 31, 2003 which is included in
      accrued expenses in the accompanying  condensed consolidated balance sheet
      (See Note 8).

NOTE 5   CONVERTIBLE SUBORDINATED DEBENTURES

      The Company has outstanding $71,800 of convertible subordinated debentures
      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.

      The  Company  issued an  additional  $43,000 of  convertible  subordinated
      debentures  during the six months ended August 31,  2003.  The  debentures
      bear interest at 12% per annum and have a term of one year.  Subsequent to
      August 31, 2003, the  debentures  were not paid at the due date and are in
      default.  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
      43,000,000 common shares.

      The following schedule reflects convertible  subordinated debentures as of
      August 31, 2003 (in order of due date):

       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)           43,000
                                                                    ----------
       Total                                                        $  114,800
                                                                    ==========

       (A) In default


                                       13
<PAGE>

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.  The  Company has not issued  2,746,772  shares owed to the third
      party as of August 31, 2003.  These shares are shown as common stock to be
      issued with a corresponding  decrease to additional  paid in capital,  for
      all periods presented.

      During the six months ended August 31, 2003, the Company converted $22,774
      of convertible  secured debentures into 24,968,751 shares of common stock.
      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, 2003 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, 2003, the Company  received $17,000
      from the issuance of  9,714,286  shares of common  stock  through  private
      placements to various investors.

      From time to time, the Company has issued common stock in exchange for the
      performance of services or as an alternative to the payment of interest on
      outstanding debt,  internal  accounting and financial  services,  internet
      website  creation,   marketing,   insurance  program  review  and  general
      management  consulting.  The dollar value of these activities  included in
      the selling, general and administrative expenses was $130,200 and $539,419
      for the six months  ended  August 31, 2003 and 2002,  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, 2003 and 2002 was  38,750,000
      and 29,921,571, respectively.

NOTE 7   COMMITMENTS AND CONTINGENCIES

     (A) Licenses

      The  Company  has  entered  into   various   licensing   agreements   (the
      "Agreements")  for the right to manufacture,  sell and distribute  certain
      collectibles   and   novelties   relating  to  current  and  future  movie
      characters,  as well as certain accessories  containing logos and names of
      professional  minor league and college sports teams. The Agreements expire
      at various dates  through 2003 and generally  require the Company to pay a
      royalty of  between  9% and 11% of sales,  with  certain  minimum  royalty
      payments  required.  The  unpaid  minimum  royalty  fees  related to these
      agreements   of  $397,250  are   included  in  accrued   expenses  in  the
      accompanying condensed consolidated balance sheet.



                                       14
<PAGE>

     (B) Contingencies

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

      (C) Concentrations

      Approximately 74% and 90% of the Company's  revenues were derived from its
      three largest  customers during the three months ended August 31, 2003 and
      2002, respectively.

      Approximately 46% and 73% of the Company's  revenues were derived from its
      three  largest  customers  during the six months ended August 31, 2003 and
      2002, respectively

      The Company  obtains a significant  portion of its new borrowings from one
      investor  group.  During the six months ended August 31, 2003, the Company
      borrowed $75,000 from this investor group. As of August,  31 2003, a total
      of $744,925 was owed to this investor group (See Note 3).

      (D) Other Contingencies

      The  Company is  non-compliant  with  respect to payment of  employee  and
      employer payroll-related taxes. The liability is $205,252 as of August 31,
      2003,  which  includes  penalties  and interest and is included in accrued
      expenses.

NOTE 8   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,  2003,  the amount of salary  deferred was
      $380,750,  which is  included  in accrued  expenses.  The Company has also
      issued stock options to the president.

      The  Company  has loans  payable of  $77,924,  which is  included in 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,  2003.  During the six months  ended  August 31,  2003,  the
      Company  recorded  interest  expense of $2,614  relating to loans from its
      president  and other related  parties and $84,842 in accrued  interest was
      payable relating to these loans as of August 31, 2003 which is included in
      accrued expenses in the accompanying condensed consolidated balance sheet.

NOTE 9   SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
         IN THE STATEMENTS OF CASH FLOWS

      During the six months ended August 31, 2003, the Company converted $22,774
      of convertible secured debentures into 24,968,751 shares of common stock.


                                       15
<PAGE>

      Cash  payments for interest  expense  were  immaterial  for the six months
      ended August 31, 2003 and 2002.

NOTE 10  SUBSEQUENT EVENTS

      Subsequent to August 31, 2003, the Company at various dates issued secured
      convertible  debentures  totaling $225,000 to a group of investors.  These
      debentures mature one year from the date of issuance, bear interest at 15%
      per annum and are convertible into shares of the Company's common stock at
      the lesser of $ .01 or 25% of the  average of the  lowest  three  intraday
      trading  prices  during  the twenty  trading  days  immediately  preceding
      conversion.

      In December  2003,  the Company and an employee  entered  into a five-year
      Employment  Agreement  under  which the  employee  is to  receive a weekly
      salary of $500.  Additionally,  20,000,000 stock options are to be granted
      at exercise prices ranging from $.001 to $.004 per share. The options have
      a ten-year term. An additional 3,200,000 shares of our common stock are to
      be  issued on or  before  the  termination  of the  employment  agreement.
      Compensation  afforded  to the  employee  under  the  agreement  will also
      satisfy any and all indebtedness to the employee and related parties.  The
      amount of this debt is estimated to be $219,530.

      Subsequent to August 31, 2003,  the Company issued  129,377,100  shares of
      common stock to thirty-one individuals, in exchange for services rendered.

      Subsequent to August 31, 2003,  the Company issued  233,096,639  shares of
      common stock to convert $38,607 of debt.

      Subsequent  to August 31, 2003,  the Company  issued  7,300,000  shares of
      common stock as part of the shares owed at that date to a third party that
      has a 1.603% anti-dilution ownership in the Company (See Note 6).

      In June 2004,  the Company issued senior  secured  convertible  redeemable
      notes  totaling  $550,000 to a group of investors.  These notes mature two
      years from the date of  issuance,  bear  interest at 15% per annum and are
      convertible  into  shares of the  Company's  common  stock at $ .01 or 50%
      discount  from the lowest bid price over the three trading days during the
      twenty days preceding conversion.



                                       16
<PAGE>

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

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

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

      o     discuss our future expectations;

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

      o     state other "forward-looking" information.

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

GENERAL

         The  following  detailed  analysis  of  operations  should  be  read in
conjunction with the 2003 audited consolidated  financial statements and related
notes  included in the  Company's  Form 10-KSB for the year ended  February  28,
2003.

         During the three months ended May 31, 2003, the Company  focused on the
new genre of films being so heavily  oriented to  characters  of comic books and
fantasies.  The  Company  pursued  licenses  mostly  in that  category  and will
supplement them with new trend properties as they appear.  Management recognizes
however,  that the Company  does not have the  financial  resources to engage in
product development and manufacturing activities.

         In August  2003,  the Company  re-evaluated  its  business  model.  The
Company  believes that  licenses have evolved into less time  sensitive and sale
spiking  properties.  The Company is not renewing or continuing licenses that do
not fit 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 joint  ventures and products that  addressed new markets in keeping with the
Company's new  marketing  direction  aimed at the  collegiate  and  professional
sports marketplaces.

         In March of 2003 the Company  entered  into a Joint  Venture  Agreement
with Pivotal Self-Service  Technologies,  Inc. a Canadian company to produce and
market   flashlight   and  battery   products   utilizing   Pivotal's   offshore
manufacturing  resources and the Company's licensing and marketing capabilities.
In connection with this joint venture,  the Company modified its pending license
agreement for Terminator 3 (T-3) to include flashlights and batteries along with
scrolls, pins and other desktop collectibles. Upon approval of the modifications
by the licensor to the license agreement,  Pivotal paid the Company $9,000 which
was used as the initial payment against the $50,000  guaranteed  royalty for the
T-3 license.  On November 8, 2003, the Joint Venture Agreement was dissolved and
a new Royalty and Services Agreement entered into


                                       17
<PAGE>

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

with Pivotec,  a Division of Pivotal Self Service  Technologies,  Inc. Under the
terms of the new agreement,  the Company sold the Mighty Volt trade name and all
intellectual  property  rights  developed by the Company in the  previous  joint
venture with Pivotal  Self  Service  Technologies,  Inc. in exchange for 500,000
restricted shares of Pivotal Self Service  Technologies,  Inc. common stock. The
Company will assist Pivotec in obtaining  licenses and managing other aspects of
the business of selling licensed  flashlight and battery products.  Any licenses
obtained in this manner will be assigned to Pivotec.  This agreement  provides a
1% royalty to the Company on net sales of any flashlight and/or battery products
containing  images available either from licenses the Company has or assisted in
obtaining  for  Pivotec.  Additionally,  the  Company  may sell  these  licensed
products  and will  receive a sales  commission  based on a formula  of  several
variables  that is expected to produce an average  commission of 15% of the sale
price. The agreement also contains a provision in which Pivotec paid the Company
$16,000 for  services it  performed  in  obtaining  licenses.  This  payment was
credited against the outstanding royalty guarantee in the T-3 license agreement.
The Company  renegotiated  the total advance on the guarantee  amount to $25,000
from the  original  amount of $50,000.  Under the  agreement,  the Company  will
retain ownership of the T-3 license.

         During the three  months  ended  August 31,  2003,  the Company  issued
$50,000 in convertible  secured  debentures  that bear interest at 15% per annum
and a year  maturity 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.
The funds are held in escrow and made  available to the Company "as needed" on a
draw down basis each month.  The investor  also agreed to purchase an additional
$225,000 in  convertible  secured  notes upon the  Company's  completion  of all
reporting requirements with the Securities and Exchange Commission (SEC) and the
filing of a  registration  statement  with the SEC covering the shares of common
stock underlying the convertible debentures.

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.


                                       18
<PAGE>

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

         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.

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

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

         Most of the  provisions  of  Statement  150  are  consistent  with  the
existing  definition of liabilities in FASB Concepts  Statement No. 6, "Elements
of  Financial  Statements".  The  remaining  provisions  of this  Statement  are
consistent  with the FASB's  proposal to revise  that  definition  to  encompass
certain  obligations  that a reporting  entity can or must settle by issuing its
own shares. This Statement shall be effective for financial  instruments entered
into or modified  after May 31, 2003 and  otherwise  shall be  effective  at the
beginning of the first interim period beginning after June 15, 2003,  except for
mandatory redeemable  financial  instruments of a non-public entity, as to which
the effective date is for fiscal periods beginning after December 15, 2004.

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


                                       19
<PAGE>

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

         Interpretation No. 46, as revised,  also requires expanded  disclosures
by the primary  beneficiary (as defined) of a variable interest entity and by an
enterprise  that holds a significant  variable  interest in a variable  interest
entity but is not the primary beneficiary.

         Interpretation No. 46, as revised, applies to small business issuers no
later than the end of the first  reporting  period that ends after  December 15,
2004. This effective date includes those entities to which Interpretation 46 had
previously  been  applied.   However,  prior  to  the  required  application  of
Interpretation  No. 46, a public  entity that is a small  business  issuer shall
apply  Interpretation  46 or this  Interpretation  to  those  entities  that are
considered  to be  special-purpose  entities  no later than as of the end of the
first reporting period that ends after December 15, 2003

         Interpretation   No.   46  may   be   applied   prospectively   with  a
cumulative-effect  adjustment  as of the date on which it is first applied or by
restating  previously  issued financial  statements for one or more years with a
cumulative-effect adjustment as of the beginning of the first year restated.

         In March 2004, the U.S. Securities and Exchange  Commission's Office of
the Chief  Accountant  and the  Division of  Corporate  Finance  released  Staff
Accounting  bulletin  ("SAB")  No.  105,  "Loan  Commitments  Accounted  for  as
Derivative Instruments".  This bulletin contains specific guidance on the inputs
to a  valuation-recognition  model to measure loan commitments  accounted for at
fair value,  and requires that fair-value  measurement  include only differences
between the guaranteed  interest rate in the loan commitment and market interest
rate,  excluding  any  expected  future  cash  flows  related  to  the  customer
relationship or loan servicing.  In addition,  SAB105 requires the disclosure of
the accounting  policy for loan  commitments,  including methods and assumptions
used to estimate the fair value of loan commitments,  and any associated hedging
strategies.  SAB  105 is  effective  for  derivative  instruments  entered  into
subsequent to March 31, 2004 and should also be applied to existing  instruments
as appropriate. The Company has not yet completed its evaluation of SAB 105, but
does not anticipate a material impact on the financial statements.

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

RESULTS OF OPERATIONS

SIX MONTHS ENDED AUGUST 31, 2003 COMPARED TO SIX MONTHS AUGUST 31, 2002.

         Net  revenue  for the six  months  ended  August 31,  2003 was  $86,816
compared to net revenue of $ 48,989 for the six months  ended  August 31,  2002.
The increase in revenue was due  primarily to the sales in X-Men and  Terminator
products that offset the loss of sales in products from Lord Of The Rings.

Cost of sales for the six months ended August 31, 2003  decreased by $9,083 from
the six months ended August 31, 2002.  Cost of sales as a percentage of revenues
decreased  to 71.3% for the six months  ended  August 31,  2003 as  compared  to
144.9% for the same period last year. The decrease is mainly attributable to the
sales of products that were developed in the previous year.

         Selling,  general and administrative  expenses for the six months ended
August 31, 2003  decreased  to $482,238  from  $836,558  for the same period the
previous  year. For the six months ended August 31, 2003 and August 31, 2002 the
services obtained through the issuance of stock include internal  accounting and
financial services, internet website creation,  marketing assistance,  insurance
program  review and  general  management  consulting  services  in the amount of
approximately $130,200 and $539,419 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, 2003,


                                       20
<PAGE>

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

the Company  incurred  charges relating to the costs of producing the samples as
well as the related  package design of  approximately  $13,583 versus charges of
approximately $4,048 for the same period the previous year.

         The Company incurred  interest expense of $213,491 for the three months
ended  August 31, 2003 as compared to $117,150  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 beneficial  conversion  calculation added
$143,750 and $75,000 of interest  expense  respectively for the six months ended
August 31, 2003 and 2002 respectively.

         As a result of the above,  the Company  had a net loss of $661,839  for
the six months  ended  August 31, 2003 as compared to a net loss of $904,950 for
the same period last year.

THREE MONTHS ENDED AUGUST 31, 2003 COMPARED TO THREE MONTHS AUGUST 31, 2002.

         Net  revenue  for the three  months  ended  August 31, 2003 was $36,671
compared to net revenue of $ 8,756 for the three  months  ended August 31, 2002.
The increase in revenue was due  primarily to the sales in X-Men and  Terminator
products that offset the loss of sales in products from Lord Of The Rings.

Cost of sales for the three months  ended  August 31, 2003  increased by $21,634
from the three months ended  August 31, 2002.  Cost of sales as a percentage  of
revenues  decreased  to 84.4% for the three  months  ended  August  31,  2003 as
compared to 106.5% for the same period last year. The increase in cost is due to
increase sales volume the decrease as a percentage is mainly attributable to the
sales of products that were developed in the previous year.

         Selling, general and administrative expenses for the three months ended
August 31, 2003  decreased  to $278,141  from  $612,537  for the same period the
previous  year.  For the three  months ended August 31, 2003 and August 31, 2002
the services obtained through the issuance of stock include internal  accounting
and  financial  services,  internet  website  creation,   marketing  assistance,
insurance  program  review and  general  management  consulting  services in the
amount  of  approximately  $74,100  and  $458,419  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, 2003, the Company incurred
charges  relating to the costs of  producing  the samples as well as the related
package design of approximately  $6,487 versus charges of  approximately  $2,406
for the same period the previous year.

         The Company incurred  interest expense of $116,942 for the three months
ended  August 31, 2003 as  compared to $96,854 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 beneficial  conversion  calculation added
$81,250 and $75,000 of interest expense  respectively for the three months ended
August 31, 2003 and 2002 respectively.

         As a result of the above,  the Company  had a net loss of $380,371  for
the three months ended August 31, 2003 as compared to a net loss of $709,960 for
the same period last year.


                                       21
<PAGE>

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

LIQUIDITY AND CAPITAL RESOURCES

         Since the Company's inception, it has experienced significant operating
and net losses that it has been able to fund by obtaining  private capital.  The
Company,  therefore,  cannot  predict if and when it will  generate  income from
operations and if it will be able to raise sufficient  capital necessary to fund
future  operations.  As of  August  31,  2003,  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  $1,000,000  to fund our
continued  operations  for the next twelve  months,  depending on revenues  from
operations.

         As of August 31, 2003, the Company had a working capital  deficiency of
$4,911,896.  The working capital  deficit  increased from February 28, 2003 as a
direct result of the unprofitable operations for the six months ended August 31,
2003 that resulted in cash used in operating activities of $134,203. The Company
had an ending cash balance of $3,750 at August 31, 2003.

         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, 2003,  the Company  received the following  capital  infusions:
$17,000 from  issuance of common stock and  exercise of stock  options,  $75,000
from the issuance of convertible secured  debentures,  $43,000 from the issuance
of convertible  subordinated debentures $17,500 from notes and loans payable and
$2,970 from other  borrowings.  During the six months ended August 31, 2003, the
Company made payments of $24,117.

         To  obtain  funding  for our  ongoing  operations,  we  entered  into a
Securities  Purchase  Agreement with accredited  investors on May 13, 2003, June
25,  2003  and July  18,  2003  each  for the  sale of (i)  $25,000  in  secured
convertible  notes. The secured  convertible  notes bear interest at 15%, mature
one year from the date of issuance,  and are convertible  into our common stock,
at the investors'  option,  at the lower of (i) $0.01 or (ii) 75% of the average
of the three lowest intraday  trading prices for the common stock on a principal
market for the 20 trading days before but not including the conversion date. The
full principal amount of the secured convertible notes is due upon default under
the terms of  secured  convertible  notes.  In  addition,  we have  granted  the
investors  a  security   interest  in  substantially   all  of  our  assets  and
intellectual property and registration rights.

         The Company issued an additional  $43,000 of  convertible  subordinated
debentures  during the six months  ended August 31, 2003.  The  debentures  bear
interest  at 12% per  annum  and have a term of one year.  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 43,000,000 common shares.

         An event of default has occurred regarding various convertibles secured
debentures and convertible  subordinated  debentures in that the Company did not
have  an  effective  registration  statement  within  150  days  of the  sale of
convertible debentures. As a result of this default, the Company is obligated to
pay the debenture  holders the principal amount of the debentures  together with
interest  and  certain  other  amounts.  The  Company  does not have the capital
resources  to pay  the  amounts  required  under  this  agreement.  The  secured
convertible  debenture holders have informed the Company that they do not intend
to take any  action  at this  time due to the  default.  The  Company  does not,
however, have any legally binding commitment from the debenture holders to waive
the default  provision of the  debentures.  Subsequent  to August 31, 2003,  the
convertible  secured  debenture  holders  converted  $24,281  of this  debt into
34,196,857  shares of the Company's  common stock and issued another $225,000 in
convertible secured debentures to the Company.


                                       22
<PAGE>

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

         As of August 31, 2003,  the Company had $854,029 in  outstanding  notes
and loans payable,  $114,800 in convertible subordinated debentures and $744,925
in  outstanding  convertible  secured  debentures.  As of August 31,  2003,  the
Company had  $1,466,472 in accounts  payable,  $1,792,307  in accrued  expenses,
accrued payroll,  accrued royalties and related taxes. These liabilities are for
federal withholding taxes and are related to calendar years 1999, 2000 and 2001.
In July 2002, the Company reached an agreement with the Internal Revenue Service
on a payment  plan for the back taxes  owed.  The plan called for the Company to
make  twelve  monthly  payments of $5,272,  followed by six monthly  payments of
$13,200, followed by six monthly payments of $25,000. The Company made the first
eleven  payments of $5,272,  but defaulted on payments  thereafter.  In December
2002,  the Company began making  monthly  payments of $2,500,  which the Company
continues to do when the funds are available. The Company has a verbal agreement
with the IRS that the Company will  continue to make monthly  payments of $2,500
with the  understanding  that the Company will  accelerate  and  increase  these
payments when feasible, and the IRS will refrain from pursuing immediate payment
in full. The Company, however, does not have a written agreement with the IRS to
these terms.

         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.



                                       23
<PAGE>

ITEM 3 - CONTROLS AND PROCEDURES

a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.  As of August 31, 2003, the
Company's  management  carried out an evaluation,  under the  supervision of the
Company's  Chief  Executive  Officer  and  Principal  Financial  Officer  of the
effectiveness  of the design and operation of the Company's 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 upon that evaluation, the
Chief  Executive  Officer and Principal  Financial  Officer  concluded  that the
Company's  disclosure controls and procedures were effective,  as of the date of
their  evaluation,  for the purposes of recording,  processing,  summarizing and
timely reporting material  information required to be disclosed in reports filed
by the Company under the Securities Exchange Act of 1934.

b) CHANGES IN INTERNAL CONTROLS. There were no changes in internal controls over
financial reporting, known to the Chief Executive Officer or Principal Financial
Officer  that  occurred  during  the  period  covered  by this  report  that has
materially  affected,  or is likely to materially effect, the Company's internal
control over financial reporting.



                                       24
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION

ITEM 1   LEGAL PROCEEDINGS

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

ITEM 2   CHANGES IN SECURITIES AND USE OF PROCEEDS

         During the three  months  ended  August  31,  2003 the  Company  issued
24,725,000 shares to several  individuals for services rendered. The shares have
an aggregate fair market value of $74,100 based on the market price on the dates
of  issuance.  The Company  issued  13,718,751  shares of stock in exchange  for
$10,336 of convertible debentures.

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

ITEM 3    DEFAULTS UPON SENIOR SECURITIES

           The  Company  is   currently  in  default  on  all  of  its  secured
convertible  debentures  that the  Company has  issued,  in the total  amount of
$744,925.  The Company is currently in default on all 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.  These defaults continue
to exist as of today. 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 substantially by all of the Company's assets.

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.

ITEM 5   OTHER INFORMATION

         Not applicable.



                                       25
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION


ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K

         (a) EXHIBITS.

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

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

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

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

         (b) REPORTS ON FORM 8-K.

                  None.



                                       26
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES


                                   SIGNATURES


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


                                                COLLECTIBLE CONCEPTS GROUP, INC.

Date:   September 28, 2004                        By: /s/ PAUL S. LIPSCHUTZ
                                                     ----------------------
                                                  Paul S. Lipschutz
                                                  Chief Executive Officer

Date:   September 28, 2004                        By: /s/ PAUL S. LIPSCHUTZ
                                                     ----------------------
                                                  Paul S. Lipschutz
                                                  Principal Financial Officer



                                       27