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 MAY 31, 2004

|_|   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:  699,995,037 shares issued and
outstanding as of April 1, 2005


<PAGE>

                        COLLECTIBLE CONCEPTS GROUP, INC.

                                      INDEX

PART I   FINANCIAL INFORMATION

         ITEM 1  Condensed Consolidated Balance Sheet As Of May 31, 2004
                 (Unaudited)                                                   3

                 Condensed Consolidated  Statements Of Operations For
                 The Three Months Ended May 31, 2004 and 2003 (Unaudited)      4

                 Condensed  Consolidated  Statement Of Changes In
                 Shareholders'  Deficiency For The Three Months Ended
                 May 31, 2004 (Unaudited)                                      5

                 Condensed Consolidated  Statements Of Cash Flows For The
                 Three Months Ended May 31, 2004 and 2003 (Unaudited)          6

                 Notes To Condensed Consolidated Financial Statements
                 As Of May 31, 2004 (Unaudited)                           7 - 19

         ITEM 2  Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                     20 - 25

         ITEM 3  Controls and Procedures                                      26

PART II  OTHER INFORMATION

         ITEM 1  Legal proceedings                                            27
         ITEM 2  Changes in securities and use of proceeds                    27
         ITEM 3  Defaults upon senior securities                              27
         ITEM 4  Submission of matters to a vote of security holders          27
         ITEM 5  Other information                                            27
         ITEM 6  Exhibits and Reports on 8-K                                  28

         SIGNATURES                                                           29


                                       2
<PAGE>


                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                               AS OF MAY 31, 2004
                                   (UNAUDITED)

                                     ASSETS
CURRENT ASSETS
Cash                                                               $    173,830
Accounts receivable, net of allowance for doubtful accounts of $0         7,500
                                                                   ------------
Total Current Assets                                                    181,330
                                                                   ------------
PROPERTY AND EQUIPMENT, NET                                              16,921
                                                                   ------------
OTHER ASSETS
Trademarks                                                                1,300
Security deposits                                                         3,200
                                                                   ------------
Total Other Assets                                                        4,500
                                                                   ------------
TOTAL ASSETS                                                       $    202,751
                                                                   ============

                    LIABILITIES AND SHAREHOLDERS' DEFICIENCY

CURRENT LIABILITIES
Accounts payable                                                   $  1,373,174
Accrued expenses                                                      1,933,220
Convertible secured debentures, net                                     857,309
Notes and loans payable, current portion                                636,720
Loans payable - related parties                                          56,243
Convertible subordinated debentures                                     137,300
                                                                   ------------
Total Current Liabilities                                             4,993,966

Debentures and note payable, long-term portion, net                     470,827
                                                                   ------------
TOTAL LIABILITIES                                                     5,464,793

COMMITMENTS AND CONTINGENCIES                                                --

SHAREHOLDERS' DEFICIENCY
Common stock, $.001 par value, 700,000,000 shares authorized,
460,421,110 shares issued and outstanding                               460,420
Common stock to be issued (10,684,036 shares)                            31,846
Additional paid-in capital                                           15,432,900
Deferred equity based expense                                          (693,750)
Accumulated deficit                                                 (20,493,458)
                                                                   ------------
Total Shareholders' Deficiency                                       (5,262,042)
                                                                   ------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY                     $    202,751
                                                                   ============

      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 MAY 31, 2004 AND 2003
                                   (UNAUDITED)

                                                        2004             2003
                                                 -------------    -------------
SALES                                            $      63,775    $      50,145
COST OF SALES                                           35,415           30,966
                                                 -------------    -------------
GROSS PROFIT                                            28,360           19,179

OPERATING EXPENSES
Selling, general and administrative                    230,120          204,140
                                                 -------------    -------------
LOSS FROM OPERATIONS                                  (201,760)        (184,961)
                                                 -------------    -------------
OTHER INCOME (EXPENSE)
Consulting services                                      3,159               --
Interest expense, net                                 (131,167)         (96,506)
Forgiveness of debt                                     14,111               --
                                                 -------------    -------------
Total Other Income (Expense)                          (113,897)         (96,506)
                                                 -------------    -------------
LOSS BEFORE TAX PROVISION                             (315,657)        (281,467)

INCOME TAX PROVISION                                        --               --
                                                 -------------    -------------
NET LOSS                                         $    (315,657)   $    (281,467)
                                                 =============    =============
BASIC AND DILUTED LOSS PER SHARE                 $          --    $          --
                                                 =============    =============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING -
BASIC AND DILUTED                                  442,286,744      116,626,868
                                                 =============    =============

      See accompanying notes to condensed consolidated financial statements


                                       4
<PAGE>

<TABLE>
<CAPTION>
                                     COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                          CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIENCY
                                          FOR THE THREE MONTHS ENDED MAY 31, 2004
                                                        (UNAUDITED)

                                                                                          Common Stock
                                                           Common Stock                   To be issued          Additional
                                                   ---------------------------   ---------------------------     Paid-In
                                                      Shares         Amount         Shares         Amount        Capital
                                                   ------------------------------------------------------------------------
<S>                                                <C>           <C>              <C>           <C>            <C>
Balance, February 29, 2004                          422,299,964   $    422,299     10,062,999   $     30,293   $ 14,788,739

Common stock issued for cash                                 --             --             --             --             --

Common stock issued for services rendered                    --             --             --             --             --

Issuance of options & warrants                               --             --             --             --         13,929

Common stock to be issued per anti-dilution
provision                                                    --             --        621,037          1,553         (1,553)

Conversions of convertible secured debentures to
common stock                                         38,121,146         38,121             --             --        (18,215)

Beneficial conversion on convertible debentures              --             --             --             --        650,000

Amortization of deferred equity based expense                --             --             --             --             --

Net loss, May 31, 2004                                       --             --             --             --             --
                                                   ------------   ------------   ------------   ------------   ------------
BALANCE MAY 31, 2004                                460,421,110   $    460,420     10,684,036   $     31,846   $ 15,432,900
                                                   ============   ============   ============   ============   ============

<CAPTION>
                                                        Deferred
                                                       Equity-Based    Accumulated
                                                          Expense        Deficit          Total
                                                   --------------------------------------------
<S>                                               <C>              <C>            <C>
Balance, February 29, 2004                         $   (118,750)   $(20,177,801)   $ (5,055,220)

Common stock issued for cash                                 --              --              --

Common stock issued for services rendered                    --              --              --

Issuance of options & warrants                               --              --          13,929

Common stock to be issued per anti-dilution
provision                                                    --              --              --

Conversions of convertible secured debentures to
common stock                                                 --              --          19,906

Beneficial conversion on convertible debentures        (650,000)             --              --

Amortization of deferred equity based expense            75,000              --          75,000

Net loss, May 31, 2004                                       --        (315,657)       (315,657)
                                                   ------------    ------------    ------------
BALANCE MAY 31, 2004                               $   (693,750)   $(20,493,458)   $ (5,262,042)
                                                   ============    ============    ============

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


                                               5
<PAGE>

                   COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE THREE MONTHS ENDED MAY 31, 2004 & 2003
                                      (UNAUDITED)

<TABLE>
<CAPTION>
                                                                  2004         2003
                                                                ---------    ---------
<S>                                                             <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                        $(315,657)   $(281,467)
Adjustments  to  reconcile  net loss to net cash (used in)
 operating activities:
  Depreciation                                                      3,912        5,091
  Warrants issued                                                   9,345           --
  Common stock & options issued for services rendered               4,583       56,100
  Amortization of deferred equity based expense                    75,000       62,500
  Forgiveness of debt                                             (14,111)          --
Changes in operating assets and liabilities:
Accounts receivable                                                (4,699)     (33,133)
Inventories                                                            --        5,693
Accounts payable and accrued expenses                             (36,941)     107,703
                                                                ---------    ---------
Net Cash (Used in) Operating Activities                          (278,568)     (77,513)
                                                                ---------    ---------
CASH FLOWS FROM INVESTING ACTIVITIES:                                  --           --
                                                                ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible secured debentures          485,000       25,000
Proceeds from issuance of convertible subordinated debentures          --       43,000
Proceeds from the issues of common stock                               --       17,000
Repayment of notes and loans payable                              (40,995)        (578)
Proceeds from notes and loans payable                              21,500           --
Repayment of notes payable - related parties                      (18,700)     (14,976)
Proceeds from notes payable - related parties                       5,500        2,970
                                                                ---------    ---------
Net Cash Provided by Financing Activities                         452,305       72,416
                                                                ---------    ---------
NET INCREASE (DECREASE) IN CASH                                   173,737       (5,097)

CASH - BEGINNING OF PERIOD                                             93        6,600
                                                                ---------    ---------
CASH - END OF PERIOD                                            $ 173,830    $   1,503
                                                                =========    =========
</TABLE>

         See accompanying notes to condensed consolidated financial statements


                                          6
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (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 May 31, 2004 are
      not  necessarily  indicative  of the results  that may be expected for the
      year ended  February 28, 2005.  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  29,
      2004.

      (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.  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.


                                       7
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


      (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 January 2003,  (as revised in December  2003) The Financial  Accounting
      Standards Board ("FASB") issued  Interpretation No. 46(R),  "Consolidation
      of Variable Interest  Entities",  an interpretation of Accounting Research
      Bulletin   ("ARB")   No.   51,   "Consolidated    Financial   Statements".
      Interpretation No. 46(R) 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.


                                       8
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


      Interpretation 46(R) 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 46(R) 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(R) 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(R)   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.

      The  implementation of the provisions of  Interpretation  No. 46(R) is not
      expected  to  have a  significant  effect  on the  Company's  consolidated
      financial statement presentation or disclosure.

      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.


                                       9
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


      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 December 2004, the FASB issued SFAS No. 123 (R), "Share-Based Payment".
      SFAS  No.  123 (R)  revises  SFAS No.  123,  "Accounting  for  Stock-Based
      Compensation"  and  supersedes APB Opinion No. 25,  "Accounting  for Stock
      Issued to Employees". SFAS No. 123 (R) focuses primarily on the accounting
      for  transactions  in  which  an  entity  obtains  employee   services  in
      share-based payment  transactions.  SFAS No. 123 (R) requires companies to
      recognize in the  statement of  operations  the cost of employee  services
      received  in  exchange  for  awards  of  equity  instruments  based on the
      grant-date fair value of those awards (with limited exceptions).  SFAS No.
      123 (R) is effective as of the first  interim or annual  reporting  period
      that begins after June 15, 2005 for non-small  business  issuers and after
      December 15, 2005 for small  business  issuers.  Accordingly,  the Company
      will adopt SFAS No. 123 (R) in its  quarter  ending  March 31,  2006.  The
      Company is currently evaluating the provisions of SFAS No. 123 (R) and has
      not yet determined the impact,  if any, that SFAS No. 123 (R) will have on
      its financial statement presentation or disclosures.

      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
      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  three
      months ended May 31, 2004, the Company had a working capital deficiency of
      $4,812,636,  a  shareholders'  deficiency  of  $5,262,042,  a net  loss of
      $315,657  and net cash used in  operations  of  $278,568.  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.


                                       10
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


      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 11).

NOTE 3   CONVERTIBLE SECURED DEBENTURES

      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. The entire
      beneficial  conversion expense of $550,000 has been deferred as of May 31,
      2004. In addition,  there was a $165,000  discount taken on the debenture,
      which is being amortized over its two-year life.

      On March 17,  2004 the Company  issued  $100,000  of  convertible  secured
      debentures to a group of investors.  These debentures  mature 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.  Of this
      amount  $25,000 was amortized to expense during the three months ended May
      31,2004 and $75,000 remains deferred as of May 31, 2004. 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  mature 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. Of this amount $6,250 was amortized to expense  during the three
      months ended May 31,2004 and $18,750 remains  deferred as of May 31, 2004.
      As of the date of this report,  these  debentures  are still unpaid and in
      default.


                                       11
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


      On January 13,  2004 the Company  issued  $50,000 of  convertible  secured
      debentures to a group of investors. These debentures mature 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
      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.  Of this
      amount  $12,500 was amortized to expense during the three months ended May
      31,2004 and $25,000 remains deferred as of May 31, 2004. 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  mature 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. Of this amount $12,500 was amortized to expense during the three
      months ended May 31,2004 and $25,000 remains  deferred as of May 31, 2004.
      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  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  during the three months ended May
      31,2004 and $0 remains deferred as of May 31, 2004. 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  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  during the three months ended May
      31,2004 and $0 remains deferred as of May 31, 2004. As of the date of this
      report, these debentures are still unpaid and in default.


                                       12
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


      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  during the three months ended May
      31,2004 and $0 remains deferred as of May 31, 2004. 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  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 expenses 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


                                       13
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


      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,  these  debentures  are  still
      unpaid and in default.

      The following schedule reflects  convertible  secured debentures as of May
      31, 2004 (in order of due date):

      10% convertible secured debentures, due April 2001
      (net of conversions) (A)                                       $   314,809

      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

      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 of  $165,000 discount                                          385,000
                                                                     -----------
      Total                                                          $ 1,324,809
                                                                     ===========
      ----------
      (A)   In default as of the date of this report


                                       14
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


NOTE 4   NOTES AND LOANS PAYABLE

      As of May 31, 2004, 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 May 31, 2004.

      The Company  has loans  payable of  $56,243,  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 May 31, 2004.  During the three months ended May 31, 2004,  the Company
      recorded  interest  expense of $1,009 relating to loans from its president
      and other  related  parties  and $88,257 in accrued  interest  was payable
      relating  to these  loans as of May 31,  2004 which is included in accrued
      expenses in the  accompanying  condensed  consolidated  balance sheet (See
      Note 9).

NOTE 5   CONVERTIBLE SUBORDINATED DEBENTURES

      As of May 31,  2004 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 May 31,  2004 the  Company has  outstanding  $65,500 of  convertible
      subordinated debentures that were issued in prior years that bear interest
      at 12% per annum and have a term of one year.  Subsequent  to February 29,
      2004, the debentures  were not paid at their due dates 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  65,500,000
      common shares.


                                       15
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


      The following schedule reflects convertible  subordinated debentures as of
      May 31, 2004 (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)          65,500
                                                                     -----------
      Total                                                          $   137,300
                                                                     ===========
      ----------
      (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.  The Company has not issued the  7,484,036  shares owed as of May
      31, 2004, to the third party. These shares are shown as common stock to be
      issued with a corresponding  decrease to additional  paid in capital,  for
      all periods presented.

      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 are shown as common
      stock to be issued.

      During the three months ended May 31, 2004, the Company  converted $19,906
      of convertible  secured  debentures into 38,121,146 shares of common stock
      having a fair value of  $142,160.  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 three months ended May
      31,  2004  for  prices  below  market  value,  no gain or  loss  has  been
      recognized  on  the  aforementioned  conversions  of  convertible  secured
      debentures.


                                       16
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


      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 $0 and $56,100 for
      the  three  months  ended  May 31,  2004  and  2003,  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  three  months  ended  May 31,  2004  and 2003 was 0 and
      14,025,000, 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 $4,583 for the
      three months ended May 31, 2004.

NOTE 8   COMMITMENTS AND CONTINGENCIES

      (A) LICENSES

      The  Company  has  entered  into   various   licensing   agreements   (the
      "Agreements")  for the right to manufacture,  sell and distribute  certain
      collectibles   and   novelties   relating  to  current  and  future  movie
      characters,  as well as certain accessories  containing logos and names of
      professional  minor league and college sports teams. The Agreements expire
      at various dates  through 2003 and generally  require the Company to pay a
      royalty of  between  9% and 11% of sales,  with  certain  minimum  royalty
      payments  required.  The  unpaid  minimum  royalty  fees  related to these
      agreements   of  $216,750  are   included  in  accrued   expenses  in  the
      accompanying condensed consolidated balance sheet.

      (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.


                                       17
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


      (C) CONCENTRATIONS

      Approximately 67% and 59% of the Company's  revenues were derived from its
      three largest  customers  during the quarters ended May 31, 2004 and 2003,
      respectively.

      The Company  obtains a significant  portion of its new borrowings from one
      investor  group.  During the three months ended May 31, 2004,  the Company
      borrowed $650,000 from this investor group. As of May 31, 2004, a total of
      $1,489,809 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 $213,242 as of May 31,
      2004,  which  includes  penalties  and interest and is included in accrued
      expenses.

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 May 31,  2004,  the  amount  of salary  deferred  was
      $489,500, which is included in accrued expenses.

      The Company  has loans  payable of  $56,243,  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 May 31, 2004.  During the three months ended May 31, 2004,  the Company
      recorded  interest  expense of $1,009 relating to loans from its president
      and other  related  parties  and $88,257 in accrued  interest  was payable
      relating  to these  loans as of May 31,  2004 which is included in accrued
      expenses in the accompanying condensed consolidated balance sheet.


                                       18
<PAGE>
                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               AS OF MAY 31, 2004
                                   (UNAUDITED)


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

      During the three months ended May 31, 2004, the Company  converted $19,906
      of convertible secured debentures into 38,121,146 shares of common stock.

      During the three months ended May 31, 2003, the Company  converted $12,438
      of notes and loans payable and related  accrued  interest into  11,250,000
      shares of common stock.

      Cash payments for interest  expense were  immaterial  for the three months
      ended May 31, 2004 and 2003.

NOTE 11  SUBSEQUENT EVENTS

      Subsequent  to  May  31,  2004,   the  Company   entered  into   marketing
      relationships with various suppliers of products.

      Subsequent to May 31, 2004, the Company issued 64,103,100 shares of common
      stock to seventeen investors, in exchange for services rendered.

      Subsequent  to May 31,  2004,  the Company  issued  168,132,790  shares of
      common  stock to convert  $130,546 of debt and  interest  (which  included
      90,452,256 shares of common stock issued to convert $50,346 of convertible
      secured debentures).

      Subsequent to May 31, 2004, the Company issued  7,300,000 shares of common
      stock  as part of the  shares  owed to a third  party  that  has a  1.603%
      anti-dilution ownership in the Company (See Note 6).

      In  September   2004,  the  Company  issued  senior  secured   convertible
      redeemable  notes totaling  $250,000 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.


                                       19
<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 2004 audited consolidated  financial statements and related
notes  included in the  Company's  Form 10-KSB for the year ended  February  29,
2004.

      In May 2004,  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 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.

      During the three  months  ended May 31,  2004,  the  Company  successfully
signed licensing agreements with over fifteen different colleges,  which include
The Ohio  State  University,  University  of Miami and  University  of  Southern
California.  The Company also sent licensing  proposals to the National Football
League (signed October 2004),  the National  Basketball  League (signed February
2005),  and  Major  League  Baseball.  The  Company  is  also in  pursuing  more
collegiate licenses.


                                       20
<PAGE>

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


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.

      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

                                       21
<PAGE>


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


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.

      Interpretation No. 46(R), 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(R), 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 46(R) 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 December 2004, the FASB issued SFAS No. 123 (R), "Share-Based Payment".
SFAS No. 123 (R) revises SFAS No. 123, "Accounting for Stock-Based Compensation"
and supersedes APB Opinion No. 25,  "Accounting  for Stock Issued to Employees".
SFAS No. 123 (R) focuses  primarily on the accounting for  transactions in which
an entity obtains employee services in share-based  payment  transactions.  SFAS
No. 123 (R) requires  companies to recognize in the statement of operations  the
cost of employee services received in exchange for awards of equity  instruments
based on the grant-date fair value of those awards (with limited


                                       22
<PAGE>

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

exceptions).  SFAS No. 123 (R) is  effective  as of the first  interim or annual
reporting period that begins after June 15, 2005 for non-small  business issuers
and after December 15, 2005 for small business issuers. Accordingly, the Company
will adopt SFAS No. 123 (R) in its quarter ending March 31, 2006. The Company is
currently  evaluating  the  provisions  of  SFAS  No.  123  (R)  and has not yet
determined the impact,  if any, that SFAS No. 123 (R) will have on its financial
statement presentation or disclosures.

      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

THREE MONTHS ENDED MAY 31, 2004 COMPARED TO THREE MONTHS ENDED MAY 31, 2003.

      Net revenue for the three months  ended May 31, 2004 was $63,775  compared
to net revenue of $ 50,145 for the three months ended May 31, 2003. The increase
in  revenue  was due  primarily  to the  sales in X-Men  and  Marvel  Characters
products.

      Cost of sales for the three months ended May 31, 2004  increased by $4,449
from the three  months  ended May 31,  2003.  Cost of sales as a  percentage  of
revenues  decreased to 55.5% for the three months ended May 31, 2004 as compared
to 61.7% for the same  period  last  year.  The  increase  in cost is due to the
increase in sales volume.  The decrease as a percentage is  attributable  to the
type of  products  that  were sold and their  impact  on the  increase  in sales
volume.

      Selling,  general and  administrative  expenses for the three months ended
May 31,  2004  increased  to  $230,120  from  $204,140  for the same  period the
previous  year.  For the three  months  ended May 31,  2004 and May 31, 2003 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 $0 and $56,100 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 May 31, 2004, the Company  incurred  charges  relating to the
costs  of  producing  the  samples  as well as the  related  package  design  of
approximately $12,543 versus charges of approximately $7,096 for the same period
the previous year.

      The Company  incurred  interest  expense of $131,167  for the three months
ended May 31, 2004 as compared to $96,506 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 $75,000 and
$25,000 of interest expense respectively for the three months ended May 31, 2004
and 2003, respectively.

      As a result of the above,  the Company had a net loss of $315,657  for the
three  months  ended May 31, 2004 as compared to a net loss of $281,467  for the
same period last year.


                                       23
<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 May 31, 2004, 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 May 31,  2004,  the  Company  had a working  capital  deficiency  of
$4,812,636.  The working capital  deficit  increased from February 29, 2004 as a
direct result of the unprofitable  operations for the three months ended May 31,
2004 that resulted in cash used in operating activities of $278,568. The Company
had an ending cash balance of $173,830 at May 31, 2004.

      The Company has financed its losses  through  private  sales of equity and
debt securities and the issuance of stock for services.  During the three months
ended  May 31,  2004 the  Company  received  the  following  capital  infusions:
$485,000 from the issuance of convertible secured debentures, $21,500 from notes
and loans  payable and $5,500  from other  borrowings.  During the three  months
ended May 31, 2004, the Company made payments of $59,695.

      To obtain funding for our ongoing operations, we entered into a Securities
Purchase Agreement with accredited  investors on March 17, 2004, for the sale of
(i) $100,000 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.

      To obtain funding for our ongoing operations, we entered into a Securities
Purchase  Agreement with  accredited  investors on May 28, 2004, for the sale of
(i) $550,000 in secured  convertible  notes. The secured  convertible notes bear
interest  at  15%,  matures  two  years  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

      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 May 31,  2004,  the
convertible  secured  debenture  holders  converted  $50,346  of this  debt into
90,542,256  shares of the Company's  common stock and issued another $250,000 in
convertible secured debentures to the Company.


                                       24
<PAGE>

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

      As of May 31,  2004,  the Company had  $696,290 in  outstanding  notes and
loans payable,  $137,300 in convertible  subordinated debentures and $1,324,809,
net of discount,  in outstanding  convertible secured debentures.  As of May 31,
2004,  the Company had  $1,373,174  in accounts  payable,  $1,933,220 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.


                                       25
<PAGE>

ITEM 3 - CONTROLS AND PROCEDURES

A) EVALUATION OF DISCLOSURE  CONTROLS AND  PROCEDURES.  As of May 31, 2004,  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.


                                       26
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION

ITEM 1   LEGAL PROCEEDINGS

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

ITEM 2   CHANGES IN SECURITIES AND USE OF PROCEEDS

      During the three months ended May 31, 2004 the Company issued 0 shares for
services rendered. The Company issued 38,121,146 shares of stock in exchange for
$19,906 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 $ 939,809  of its  convertible
secured  debentures  that  the  Company  has  issued,  in the  total  amount  of
$1,489,809.  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
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.


                                       27
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION


ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K

      (a)   EXHIBITS.

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

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

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

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

      (b)   REPORTS ON FORM 8-K.

            None.


                                       28
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES

                                   SIGNATURES


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


                                            COLLECTIBLE CONCEPTS GROUP, INC.

Date:   April 14, 2005                      By: /s/ PAUL S. LIPSCHUTZ
                                              ---------------------------
                                              Paul S. Lipschutz
                                              Chief Executive Officer

Date:   April 14, 2005                      By: /s/ PAUL S. LIPSCHUTZ
                                              ---------------------------
                                              Paul S. Lipschutz
                                              Principal Financial Officer


                                       29