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, 2005

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

              FOR THE TRANSITION PERIOD FROM _________ TO _________

                         COMMISSION FILE NUMBER: 0-30703

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

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

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

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


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

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

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

State the number of shares  outstanding of each of the  registrant's  classes of
common equity, as of the latest practicable date:  699,695,037 shares issued and
outstanding as of August 19, 2005.


<PAGE>

                        COLLECTIBLE CONCEPTS GROUP, INC.

                                      INDEX

PART I   FINANCIAL INFORMATION

         ITEM 1  Condensed Consolidated Balance Sheet As Of May 31, 2005
                 (Unaudited)                                                   3

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

                 Condensed Consolidated Statement Of Changes In
                 Shareholders'  Deficiency For The Three Months
                 Ended May 31, 2005 (Unaudited)                                5

                 Condensed Consolidated  Statements Of Cash Flows For
                 The Three Months Ended May 31, 2005 and 2004 (Unaudited)      6

                 Notes To Condensed Consolidated Financial Statements
                 As Of May 31, 2005 (Unaudited)                           7 - 18

         ITEM 2  Management's Discussion and Analysis of Financial
                 Condition  and Results of Operations                    19 - 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                                                           26


                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                       ASSETS
<S>                                                                   <C>
CURRENT ASSETS
Cash                                                                  $      19,304
Accounts receivable, net of allowance for doubtful accounts of
 $40,587                                                                    105,900
Prepaid royalties                                                           114,001
Deposit on inventory                                                         36,680
                                                                      -------------
Total Current Assets                                                        275,885
                                                                      -------------
PROPERTY AND EQUIPMENT, NET                                                   3,557
                                                                      -------------
OTHER ASSETS
Trademarks                                                                    1,300
Security deposits                                                             3,200
                                                                      -------------
Total Other Assets                                                            4,500
                                                                      -------------
TOTAL ASSETS                                                          $     283,942
                                                                      =============

                    LIABILITIES AND SHAREHOLDERS' DEFICIENCY

CURRENT LIABILITIES
Accounts payable                                                      $   1,422,690
Accrued expenses                                                          1,564,784
Accrued expenses - related parties                                          773,711
Convertible secured debentures                                            1,601,320
Notes and loans payable                                                     500,879
Loans payable - related parties                                              21,268
Convertible subordinated debentures                                         127,300
                                                                      -------------
Total Current Liabilities                                                 6,011,952
                                                                      -------------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' DEFICIENCY
Common stock, $.001 par value, 700,000,000 shares authorized,
  699,695,037 shares issued and outstanding                                 699,694
Common stock to be issued (140,362,036 shares)                               84,802
Additional paid-in capital                                               16,249,207
Common stock subscribed (33,300,000 shares)                                  15,000
Subscription receivable                                                     (15,000)
Deferred equity based expense                                              (431,250)
Accumulated deficit                                                     (22,330,463)
Total Shareholders' Deficiency                                           (5,728,010)
                                                                      -------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY                        $     283,942
                                                                      =============
</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 MAY 31, 2005 AND 2004
                                            (UNAUDITED)


<TABLE>
<CAPTION>
                                                                         2005             2004
                                                                    -------------    -------------
<S>                                                                 <C>              <C>
NET SALES                                                           $      15,032    $      63,775

COST OF SALES                                                              21,934           35,415
                                                                    -------------    -------------
GROSS (LOSS) PROFIT                                                        (6,902)          28,360

OPERATING EXPENSES
Selling, general and administrative                                       293,126          230,120
                                                                    -------------    -------------
LOSS FROM OPERATIONS                                                     (300,028)        (201,760)
                                                                    -------------    -------------
OTHER INCOME (EXPENSE)
Consulting services                                                            --            3,159
Interest expense, net                                                    (171,666)        (131,167)
Forgiveness of debt                                                            --           14,111
                                                                    -------------    -------------
Total Other Expense                                                      (171,666)        (113,897)
                                                                    -------------    -------------
LOSS BEFORE TAX PROVISION                                                (471,694)        (315,657)
INCOME TAX PROVISION                                                           --               --
                                                                    -------------    -------------
NET LOSS                                                            $    (471,694)   $    (315,657)
                                                                    =============    =============
BASIC AND DILUTED LOSS PER SHARE                                    $          --    $          --
                                                                    =============    =============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED     699,695,037      442,286,744
                                                                    =============    =============


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


                                                 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, 2005
                                                           (UNAUDITED)



                                                                                            Common Stock
                                                            Common Stock                    To be issued          Additional
                                                    ---------------------------     --------------------------      Paid-In
                                                       Shares          Amount         Shares         Amount         Capital
                                                    -----------    ------------     -----------   ------------   ------------
<S>                                                 <C>            <C>                <C>         <C>            <C>
Balance February 28, 2005                           699,695,037    $    699,694       7,162,036   $     24,802   $ 15,873,654
Acquisition of treasury stock from CEO              (15,000,000)        (15,000)             --             --        (15,000)
Common stock issued for financing services           15,000,000          15,000              --             --         15,000
Beneficial conversion on convertible debentures              --              --              --             --        325,043
Common stock subscribed to (166,500,000 shares)              --              --              --             --             --
Cash received for stock subscription                         --              --     133,200,000         60,000             --
Amortization of deferred equity based expense                --              --              --             --             --
Issuance of options for services
  rendered and financing costs                               --              --              --             --         50,510
Net loss, quarter ended May 31, 2005                         --              --              --             --             --
                                                    -----------    ------------     -----------   ------------   ------------
Balance May 31, 2005                                699,695,037    $    699,694     140,362,036   $     84,802   $ 16,249,207
                                                    ===========    ============     ===========   ============   ============
<CAPTION>
                                                        Common                        Deferred
                                                        Stock       Subscription    Equity-Based    Accumulated
                                                      Subscribed      Receivable       Expense        Deficit          Total
                                                    ------------    ------------    ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>             <C>             <C>
Balance February 28, 2005                           $         --    $         --    $   (531,250)   $(21,858,769)   $ (5,791,869)
Acquisition of treasury stock from CEO                        --              --              --              --         (30,000)
Common stock issued for financing services                    --              --              --              --          30,000
Beneficial conversion on convertible debentures               --              --              --              --         325,043
Common stock subscribed to (166,500,000 shares)           75,000         (75,000)             --              --              --
Cash received for stock subscription                     (60,000)         60,000              --              --          60,000
Amortization of deferred equity based expense                 --              --         100,000              --         100,000
Issuance of options for services
  rendered and financing costs                                --              --              --              --          50,510
Net loss, quarter ended May 31, 2005                          --              --              --        (471,694)       (471,694)
                                                    ------------    ------------    ------------    ------------    ------------
Balance May 31, 2005                                $     15,000    $    (15,000)   $   (431,250)   $(22,330,463)   $ (5,728,010)
                                                    ============    ============    ============    ============    ============


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

                                                                5
<PAGE>

<TABLE>
<CAPTION>
                          COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           FOR THE THREE MONTHS ENDED MAY 31, 2005 & 2004
                                             (UNAUDITED)

                                                                                 2005        2004
                                                                              ---------    ---------
<S>                                                                           <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                      $(471,694)   $(315,657)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation                                                                      2,488        3,912
Warrants issued                                                                      --        9,345
Common stock & options issued for services rendered                              32,221        4,583
Amortization of deferred equity based expense                                   100,000       75,000
Forgiveness of debt                                                                  --      (14,111)
Non-cash interest expense                                                        20,625           --
Changes in operating assets and liabilities:
Accounts receivable                                                             110,893       (4,699)
Loan receivable                                                                   1,245           --
Prepaid royalties                                                              (114,001)          --
Inventory deposits                                                              (36,680)          --
Accounts payable and accrued expenses                                           (46,214)     (36,941)
                                                                              ---------    ---------
Net Cash Used in Operating Activities                                          (401,117)    (278,568)
                                                                              ---------    ---------
CASH FLOWS FROM INVESTING ACTIVITIES:                                                --           --
                                                                              ---------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock subscribed                                            60,000           --
Proceeds from issuance of convertible secured debentures                        373,332      485,000
Repayment of notes and loans payable                                            (15,922)     (40,995)
Proceeds from notes and loans payable                                            15,000       21,500
Repayment of notes payable - related parties                                    (13,029)     (18,700)
Proceeds from notes payable - related parties                                        --        5,500
                                                                              ---------    ---------
Net Cash Provided by Financing Activities                                       419,381      452,305
                                                                              ---------    ---------
NET INCREASE IN CASH                                                             18,264      173,737

CASH - BEGINNING OF PERIOD                                                        1,040           93
                                                                              ---------    ---------
CASH - END OF PERIOD                                                          $  19,304    $ 173,830
                                                                              =========    =========


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

                                                  6
<PAGE>

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

NOTE 1   NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      (A)   BASIS OF PRESENTATION

      These condensed  consolidated  statements have been prepared in accordance
      with  accounting  principles  generally  accepted in the United  States of
      America for interim  financial  information  and the  instructions to Form
      10-QSB and do not include all the  information  and footnotes  required by
      accounting  principles  generally accepted in the United States of America
      for  complete  financial  statements.  In the opinion of  management,  all
      adjustments (consisting of normal recurring accruals) considered necessary
      for a fair  presentation  of the results for the interim periods have been
      included.  Operating  results for the three  months ended May 31, 2005 are
      not  necessarily  indicative  of the results  that may be expected for the
      year ended  February 28, 2006.  The  accompanying  condensed  consolidated
      financial  statements  and the  information  included  under  the  heading
      "Management's  Discussion and Analysis" should be read in conjunction with
      the Company's audited consolidated  financial statements and related notes
      included  in the  Company's  Form 10-KSB for the year ended  February  28,
      2005.

      (B)   PRINCIPLES OF CONSOLIDATION

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

      (C)   USE OF ESTIMATES

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

      (D)   PREPAID ROYALTIES

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

      (E)   LOSS PER SHARE

      The Company follows  Statement of Financial  Accounting  Standards No. 128
      ("SFAS No. 128")  "Earnings  Per Share".  Basic and fully diluted loss per
      share  amounts are computed  based on net loss and divided by the weighted


                                       7
<PAGE>

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

      average  number of common shares  outstanding.  The assumed  conversion of
      convertible debt into 3,897,253,333 common shares and 2,663,242,333 common
      shares  as of May 31,  2005 and 2004  respectively,  and the  exercise  of
      outstanding  options and warrants to purchase 80,572,308 common shares and
      12,953,886  common shares as of May 31, 2005 and 2004  respectively,  were
      not  included in the  computation  of diluted  loss per share  because the
      assumed  conversion  and exercise would be  anti-dilutive  for all periods
      presented.  As of May 31,  2005 the Company  does not have  enough  common
      shares  available to convert all the  eligible  debt to shares if the debt
      holders  elected to convert all of their  notes.  The Company is currently
      working on the  necessary  actions to  increase  the number of  authorized
      common shares.

      (F)   STOCK-BASED COMPENSATION

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

      (G)   RECENT ACCOUNTING PRONOUNCEMENTS

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

NOTE 2   GOING CONCERN

      The accompanying  condensed  consolidated  financial  statements have been
      prepared on a going concern basis,  which  contemplates the realization of
      assets and the  settlement of  liabilities  and  commitments in the normal
      course  of  business.  Since  inception,  the  Company  has not  generated
      sufficient  revenues  to meet  its  operating  expenses  and has  incurred
      significant  operating  losses  and net  losses.  As of and for the  three


                                       8
<PAGE>

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

      months ended May 31, 2005, the Company had a working capital deficiency of
      $5,736,067,  a  shareholders'  deficiency  of  $5,728,010,  a net  loss of
      $471,694  and net cash used in  operations  of  $401,117.  The Company has
      minimal cash  available for  operations  and is in default with respect to
      repayment  provisions of certain secured and subordinated  debentures.  In
      addition,  the Company was not able to complete an effective  registration
      statement  within  150 days as  required  in  connection  with the sale of
      convertible  secured  debentures to a group of investors and, as a result,
      the Company is in default of the debenture agreement.  These matters raise
      substantial  doubt  about the  Company's  ability to  continue  as a going
      concern.  The condensed  consolidated  financial statements do not include
      any  adjustments  relating to the  recoverability  and  classification  of
      recorded  assets,  or the amounts and  classification  of liabilities that
      might be necessary in the event the Company cannot continue in existence.

      In order to generate additional revenues and the working capital needed to
      continue and expand operations,  the Company's management has committed to
      a plan for reducing expenses,  increasing retail distribution channels for
      its products and raising  additional  capital.  There can be no assurances
      that the Company will be able to obtain the  necessary  funding to finance
      their  operations  or grow  revenue  in  sufficient  amounts to fund their
      operating expenses.

NOTE 3   CONVERTIBLE SECURED DEBENTURES

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

      On September 30, 2004, the Company issued $250,000 of convertible  secured
      debentures to a group of investors.  These debentures  mature on September
      30,  2006 and bear  interest  at 15% per  annum and are  convertible  into
      shares of the  Company's  common  stock at the lower of $.01 or 25% of the
      average of the lowest  three  intraday  trading  prices  during the twenty
      trading  days  immediately  preceding   conversion.   This  results  in  a
      beneficial  conversion  feature  in the amount of  $250,000,  (since it is
      limited to the amount  received) which is being amortized over the term of
      the loan. Of this amount $31,250 was amortized to expense during the three
      months  ended May 31,  2005 and  $156,250  remains  deferred as of May 31,
      2005.  Additionally,  the Company  issued  warrants to purchase  1,500,000
      shares of common  stock  having a fair value of $710,  which was  expensed
      during the year ended  February 28,  2005.  As of the date of this report,
      these  debentures  are still  unpaid and in default  because  the  Company
      failed to meet certain debt covenants.


                                       9
<PAGE>

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

      On May 28,  2004,  the  Company  issued  $550,000 of  convertible  secured
      debentures to a group of  investors.  These  debentures  mature on May 28,
      2006 and bear interest at 15% per annum and are convertible into shares of
      the  Company's  common stock at the lower of $.01 or 25% of the average of
      the lowest three  intraday  trading  prices during the twenty trading days
      immediately preceding conversion.  This results in a beneficial conversion
      feature  in the  amount of  $550,000,  (since it is  limited to the amount
      received)  which is being  amortized  over the term of the  loan.  Of this
      amount  $68,750 was amortized to expense during the three months ended May
      31, 2005 and $275,000  remains  deferred as of May 31, 2005.  In addition,
      there  was a  $165,000  discount  taken on the  debenture,  which is being
      amortized  over its two year life. Of this amount $20,625 was amortized to
      interest  expense  during the three  months ended May 31, 2005 and $82,500
      remains deferred as of May 31, 2005. As of the date of this report,  these
      debentures  are still unpaid and in default  because the Company failed to
      meet certain debt covenants.

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

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

      On January 13, 2004, the Company  issued  $50,000 of  convertible  secured
      debentures to a group of investors.  These  debentures  matured on January
      13,  2005 and bear  interest  at 15% per  annum and are  convertible  into
      shares of the  Company's  common  stock at the lower of $.01 or 25% of the
      average of the lowest  three  intraday  trading  prices  during the twenty
      trading  days  immediately  preceding   conversion.   This  results  in  a
      beneficial  conversion  feature  in the  amount of  $50,000,  (since it is
      limited to the amount  received) which is being amortized over the term of
      the loan.  This entire  amount was amortized to expense as of February 28,
      2005. As of the date of this report, these debentures are still unpaid and
      in default.

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


                                       10
<PAGE>

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

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

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

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

      On November 26, 2002, the Company issued  $250,000 of convertible  secured
      debentures to a group of investors.  These debentures  matured on November
      26,  2003 and bear  interest  at 15% per  annum and are  convertible  into
      shares of the  Company's  common  stock at the lower of $.01 or 25% of the
      average of the lowest  three  intraday  trading  prices  during the twenty
      trading  days  immediately  preceding  conversion.   This  resulted  in  a
      beneficial  conversion  feature in the amount of $250,000,  which has been
      fully  recognized as an expense at February 28, 2003.  The  debentures are
      convertible  into shares of the Company's  common stock at any time at the
      holder's  option equal to the quotient of (a) the aggregate  amount of the
      principle and accrued  interest and unpaid  interest to be so converted by
      (b) the conversion  price As of the date of this report,  these debentures
      are still unpaid and in default.

      On May  28,  2002,  the  Company  issued  a  $75,000  convertible  secured
      debenture  to a group of investors  with a conversion  price of 50% of the
      average of the lowest three intraday trading prices during the twenty days
      immediately preceding conversion. This resulted in a beneficial conversion
      feature  of  $75,000,  which has been  fully  recognized  as an expense at
      February 28, 2003. The debentures bear interest of 12% simple interest per
      annum and matured on July 28, 2003. The debentures  are  convertible  into
      shares of the  Company's  common stock at any time at the holder's  option
      equal to the quotient of (a) the  aggregate  amount of the  principle  and
      accrued  interest  and  unpaid  interest  to be so  converted  by (b)  the
      conversion  price.  As of the date of this report,  these  debentures  are
      still unpaid and in default.


                                       11
<PAGE>

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

      In May 2000, the Company issued $400,000 of secured convertible debentures
      to a group of  investors.  These  debentures  matured in April  2001,  are
      secured by substantially  all of the Company's assets and bear interest at
      10% per annum,  payable  quarterly;  the debentures are  convertible  into
      common stock at any time at the holder's  option at the lesser of $2.80 or
      50% of market  value  (the  debt  discount  of  $65,000  assigned  to this
      beneficial  conversion  feature was recorded as additional paid-in capital
      and the debt  discount was  amortized  as interest  expense in the quarter
      ended May 31, 2000 because the debentures  are  convertible at any time at
      the holder's option); the debentures also have warrants to purchase 57,143
      shares of common  stock at 110% of the market  value on the closing date -
      the warrants have a five-year life and are exercisable  immediately (using
      an option  pricing  model,  the warrants were valued at $280,000 using the
      following assumptions: no expected payment of dividends, expected lives of
      warrants  of three  years,  a risk free rate of 6.5% and a  volatility  of
      75%). The $280,000 was recorded as additional paid-in capital and the debt
      discount was  amortized  to interest  expense over the term of the related
      debentures.  As of February  28,  2002,  the debt  discount had been fully
      amortized. The debenture holders also have certain rights in the event the
      Company  files a  registration  statement.  The  Company  was not  able to
      complete  an  effective  registration  statement  within  150  days of the
      debenture  sale.  As a result,  the Company is in default of the debenture
      agreement. As of the date of this report, $258,820 of these debentures are
      still unpaid and in default.

      In addition, the Company granted the investors in all of the above secured
      convertible debenture  transactions,  a security interest in substantially
      all of its assets,  including the assets of its wholly owned subsidiaries,
      and intellectual property.

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

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

       10% convertible secured debentures, due April 2001
       (net of conversions) (A)                                     $   258,820

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

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

                                       12
<PAGE>

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


       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 (A)        550,000

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

       15% convertible secured debentures, due May 2008, net (A)        400,000
                                                                    -----------
       Total                                                          2,083,820
       less unamortized discount                                        482,500
       less current portion                                           1,601,320
                                                                    -----------
       Long term portion                                            $        --
                                                                    ===========

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

NOTE 4   NOTES AND LOANS PAYABLE

      As of May 31, 2005, notes and loans payable consisted of various unsecured
      notes and loans  payable to  certain  individuals,  investors  and an auto
      finance  company.  The notes and loans  bear  interest  at  various  rates
      ranging from 8.0% to 12.0% and had various maturities through August 2001,
      except for the  automobile  loan,  which  matures  February 28, 2006.  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, 2005.


                                       13
<PAGE>

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

      The Company has remaining balances due on loans payable of $21,268,  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, 2005.  During the three months ended
      May 31, 2005, the Company  recorded  interest  expense of $528 relating to
      loans from its president  and other related  parties and $77,164 in unpaid
      accrued  interest  was payable  relating to these loans as of May 31, 2005
      which is  included  in  accrued  expenses  in the  accompanying  condensed
      consolidated balance sheet (See Note 9).

NOTE 5   CONVERTIBLE SUBORDINATED DEBENTURES

      As of May 31, 2005,  the Company has  outstanding  $71,800 of  convertible
      subordinated debentures that were issued in prior years that bear interest
      at 12% per annum and matured at various  times  through  August 2001.  The
      debentures  are  in  default  and  remain  unpaid.  Each  $1,000  unit  is
      convertible at any time at the holder's option, into between 143 and 1,429
      shares of Company common stock for an aggregate of 38,214 common shares.

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

      The Company  currently  does not have a  sufficient  number of  authorized
      shares of common stock  available  if all debt holders  decided to convert
      their convertible subordinated debentures into the Company's common stock.
      The Company is working on rectifying the situation (See Note 8(E)).

      The following schedule reflects convertible  subordinated debentures as of
      May 31, 2005 (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)             55,500
                                                                    -----------
      Total                                                         $   127,300
                                                                    ===========

      (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.  During the year ended  February  28,  2005,  the Company  issued
      7,300,000  shares  of common  stock  owed as part of this  agreement.  The
      Company has not issued  3,962,036  shares owed as of May 31, 2005,  to the


                                       14
<PAGE>

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

      third  party.  These  shares are shown as common stock to be issued with a
      corresponding  decrease to additional  paid in capital as of May 31, 2005.
      On February 28, 2005, ownership of the 1.603% anti-dilution  agreement was
      sold to another company (See Note 8(A)).

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

      During the three months  ended May 31, 2005 an  individual  subscribed  to
      purchase  166,500,000  shares of common stock for  $75,000.  As of May 31,
      2005 the  Company has  received  $60,000 of these funds and has not issued
      any of the stock. Accordingly 133,200,000 shares are shown as to be issued
      and 33,300,000 are shown as common stock subscribed as of May 31, 2005.

      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 $30,000 and $0 for
      the  three  months  ended  May 31,  2005  and  2004,  respectively.  These
      transactions have been recorded at the fair value of the services rendered
      or the fair value of the common  stock  issued,  whatever was more readily
      evident.  The  number  of  shares  of common  stock  issued  for  services
      performed in the three  months ended May 31, 2005 and 2004 was  15,000,000
      and 0, respectively.

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

      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.  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.

NOTE 7 STOCK OPTIONS

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


                                       15
<PAGE>

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

      In May 2005, the Company issued 12,000,000  options to an advisor having a
      three-year term. The exercise price is $0.003. The options are immediately
      exercisable.  The fair value of the  options of $7,200 is being  amortized
      over the life of the contract.  The expense  associated with these options
      was $138 for the three months  ended May 31, 2005.  The advisor is also to
      receive 5% of sales on certain licensing agreements (See Note 8(A)).

NOTE 8   COMMITMENTS AND CONTINGENCIES

      (A)   LICENSES

      The  Company  has  entered  into   various   licensing   agreements   (the
      "agreements")  for the right to manufacture,  sell and distribute  certain
      collectibles   and   novelties   relating  to  current  and  future  movie
      characters,  as well as certain accessories  containing logos and names of
      professional minor league and college sports teams. The agreements for the
      collectibles initially expired at various dates through 2004 and generally
      require the Company to pay a royalty of between 9% and 12% of sales,  with
      certain minimum  royalty  payments  required.  The Company has renewed all
      royalty  agreements  as they  pertain  to  professional  minor  league and
      college  sports  teams.  The  Company has decided not to renew the royalty
      agreements  relating to current and future  movie  characters.  The unpaid
      minimum  royalty fees of $311,590  ($215,750 which are owed on non renewed
      agreements)  related to these  agreements are included in accrued expenses
      in the accompanying  consolidated  balance sheet. Royalty expense amounted
      to approximately $21,721 and $0 for the years ended May 31, 2005 and 2004,
      respectively.

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

      In May 2005,  the  Company  has agreed to give an advisor a 5% royalty for
      five  years  for  helping  the  Company  secure  the  following  licensing
      agreements,  National  Hockey  League  ("NHL"),  Arena  Football  and  the
      National Basketball  Association  ("NBA"). In addition,  in the event that
      the Company secures licensing agreements with minor league baseball or any
      of its  teams,  the  advisor  shall also  receive a 5% royalty  from those
      licensing agreements.

      (B)   OTHER CONTINGENCIES

      In fiscal 2002, a licensing company commenced a lawsuit for various causes
      of action for breach of  contract,  trademark  infringement  and seeking a
      permanent  injunction  precluding  the  Company  from  using  any  of  the
      plaintiffs' intellectual property. The Company consented to the entry of a
      permanent injunction and the parties entered into a settlement  agreement,


                                       16
<PAGE>

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

      which resulted in the dismissal of the action in December  2003.  However,
      despite the dismissal of the action,  the plaintiff  reserves the right to
      pursue  monetary  claims  against  the  Company  for its breach of various
      license agreements.

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

      (C)   CONCENTRATIONS

      Approximately 97% and 67% of the Company's  revenues were derived from its
      three largest  customers  during the quarters ended May 31, 2005 and 2004,
      respectively.

      The Company  obtains a significant  portion of its new borrowings from one
      investment group. During the three months ended May 31, 2005 and 2004, the
      Company borrowed $400,000 and $650,000,  respectively,  from this investor
      group. As of May 31, 2005, a total of $2,083,820 was owed to this investor
      group (See Note 3).

      (D)   AGREEMENTS TO MARKET SPORTS COLLECTIBLES

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

      In March 2005,  the Company  signed a  licensing  agreement  with the NBA,
      which expires on September 30, 2006. The agreement  includes a 12% royalty
      paid on sales, with a minimum royalty for the period of $25,000,  which is
      included in prepaid royalties as of May 31, 2005, and is being amortized.
      .
      On May 12, 2005, the Company  signed a licensing  agreement with the Arena
      Football League,  which expires on June 30, 2007. The agreement includes a
      12% royalty paid on sales with no minimum royalty guarantees.  The Company
      paid $10,000 for the rights to the  license,  which is included in prepaid
      royalties as of May 31, 2005, and is being amortized.

      (E)   DEBT CONVERSIONS

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


                                       17
<PAGE>

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

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,  2005,  the  amount  of salary  deferred  was
      $589,421,  which is included in accrued  expenses-related  parties.  Also,
      $184,290 of accrued compensation was due to the Company's President's wife
      as of May 31, 2005.

      The Company has remaining balances due on loans payable of $21,268,  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, 2005.  During the three months ended
      May 31, 2005, the Company  recorded  interest  expense of $528 relating to
      loans from its president  and other related  parties and $77,164 in unpaid
      accrued  interest  was payable  relating to these loans as of May 31, 2005
      which is  included  in  accrued  expenses  in the  accompanying  condensed
      consolidated balance sheet.

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

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

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

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

NOTE 11  SUBSEQUENT EVENTS

      In July 2005,  we entered into a  Securities  Purchase  Agreement  with an
      investment group for the sale of (i) $850,000 in secured convertible notes
      and (ii) warrants to purchase  1,700,000  shares of our common stock.  The
      investors  purchased all of the secured  convertible notes and warrants on
      July 7, 2005.  This money is being used to purchase  inventory and provide
      working  capital.  The  secured  convertible  notes bear  interest at 10%,
      mature three years from the date of issuance, and are convertible into the
      Company's common stock, at the investors' option, at the lower of:

            o     $0.0016;

            o     or 25% of the  average of the three  lowest  intraday  trading
                  prices for the common stock on the  Over-The-Counter  Bulletin
                  Board for the 20 trading  days  before but not  including  the
                  conversion date.


                                       18
<PAGE>

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

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

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

      o     discuss our future expectations;

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

      o     state other "forward-looking" information.

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

GENERAL

      The  following   detailed   analysis  of  operations  should  be  read  in
conjunction with the audited consolidated financial statements and related notes
included in the Company's Form 10-KSB for the year ended February 28, 2005.

      The Company  continues  to pursue its  re-evaluated  business  model.  The
Company  believes that  licenses have evolved into less time  sensitive and sale
spiking  properties.  The Company is not renewing or continuing licenses that do
not fit our new business model. The Company's new business model will be focused
on more evergreen properties and those with a longer window of opportunity.  The
Company  recognized  the need to have  products that  addressed  the  mainstream
consumer market where market size and repeat sales  opportunities could give the
Company a means to stabilize and grow its revenues.  To avoid the time,  expense
and risks associated with in-house new product  development,  the Company sought
out entities with  mainstream  consumer  products whose  marketability  could be
enhanced by the addition of the Company's  licenses.  These activities  produced
new  opportunities  and products that  addressed new markets in keeping with the
Company's new  marketing  direction  aimed at the  collegiate  and  professional
sports marketplaces.

      In March 2005,  the Company  signed a  licensing  agreement  with the NBA,
which expires on September 30, 2006.  The agreement  includes a 12% royalty paid
on sales,  with a minimum  royalty  of  $25,000,  which is  included  in prepaid
royalties as of May 31, 2005, and is being amortized.

      On May 12, 2005, the Company  signed a licensing  agreement with the Arena
Football  League,  which expires on June 30, 2007. The agreement  includes a 12%
royalty  paid on sales with no minimum  royalty  guarantees.  The  Company  paid
$10,000, which is included in prepaid royalties as of May 31, 2005, and is being
amortized.


                                       19
<PAGE>

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

      On May 18, 2005, the Company entered into a Securities  Purchase Agreement
with AJW Offshore,  Ltd., AJW Qualified Partners, LLC, AJW Partners, LLC and New
Millennium  Capital  Partners  II, LLC for the sale of (i)  $400,000  in secured
convertible notes and (ii) warrants to purchase  47,368,422 shares of its common
stock. This money is being used to re-new the Company's product license with the
National  Football League and to produce enough quantity of NFL related products
(Fanbana's, Megaphone Caps and Scrolls) to meet expected demand for the upcoming
season.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MAY 31, 2005 COMPARED TO THREE MONTHS MAY 31, 2004.

      Net revenue for the three months  ended May 31, 2005 was $15,032  compared
to net revenue of $63,775 for the three months ended May 31, 2004.  The decrease
in  revenue  was due  primarily  to the  discontinued  sales in X-Men and Marvel
Characters products.

      Cost of sales for the three months ended May 31, 2005 decreased by $13,481
from the three  months  ended May 31,  2004.  Cost of sales as a  percentage  of
revenues increased to 145.9% for the three months ended May 31, 2004 as compared
to 55.5% for the same  period  last  year.  The  decrease  in cost is due to the
decrease in sales volume.  The increase as a percentage is  attributable  to the
type of products that were sold and their impact on the decrease in sales volume
that lead to a higher shipping cost per unit and resulted in a gross loss before
operating and other expenses.

      Selling,  general and  administrative  expenses for the three months ended
May 31,  2005  increased  to  $293,126  from  $230,120  for the same  period the
previous  year.  For the three  months  ended May 31,  2005 and May 31, 2004 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 $30,000 and $0 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, 2005, the Company  incurred  charges  relating to the
costs  of  producing  the  samples  as well as the  related  package  design  of
approximately  $610 versus charges of approximately  $12,543 for the same period
the previous year.

      The Company  incurred  interest  expense of $171,666  for the three months
ended May 31, 2005 as compared to $131,167 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 $100,000 and
$75,000 of interest  expense for the three  months  ended May 31, 2005 and 2004,
respectively.

      As a result of the above,  the Company had a net loss of $471,694  for the
three  months  ended May 31, 2005 as compared to a net loss of $315,657  for the
same period last year.

LIQUIDITY AND CAPITAL RESOURCES

      Since the Company's inception,  it has experienced  significant  operating
and net losses that it has been able to fund by obtaining  private capital.  The
Company,  therefore,  cannot  predict if and when it will  generate  income from
operations and if it will be able to raise sufficient  capital necessary to fund
future operations.  As of May 31, 2005, the Company has not generated sufficient
revenues to meet operating  expenses.  As a result,  there is substantial  doubt
about the Company's


                                       20
<PAGE>

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

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,  2005,  the  Company  had a working  capital  deficiency  of
$5,736,067.  The working capital  deficit  increased from February 28, 2005 as a
direct result of the unprofitable  operations for the three months ended May 31,
2005 that resulted in cash used in operating activities of $401,117. The Company
had an ending cash balance of $19,304 at May 31, 2005.

      The Company has financed its losses  through  private  sales of equity and
debt securities and the issuance of stock for services.  During the three months
ended  May 31,  2005 the  Company  received  the  following  capital  infusions:
$373,332 (net of discount) from the issuance of convertible  secured debentures,
$15,000 from notes and loans payable and $60,000 from common stock subscription.
During the three months ended May 31, 2005, the Company made payments of $28,951
toward notes and loans payable.

      To obtain funding for its ongoing  operations,  the Company entered into a
Securities Purchase Agreement with accredited investors on May 18, 2005, for the
sale of $400,000 in secured  convertible  notes. The secured  convertible  notes
bear  interest at 10%,  matures  three years from the date of issuance,  and are
convertible  into the Company's common stock, at the investors'  option,  at the
lower of (i)  $0.0016 or (ii) 25% 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, the Company has granted the investors a security
interest  in  substantially  all of its assets  and  intellectual  property  and
registration rights.

      An event of default has occurred regarding all of the convertible  secured
debentures  outstanding  as of May 31, 2005.  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.  In addition, the Company granted
the investors a security interest in substantially all of its assets,  including
the assets of its wholly owned subsidiaries, and intellectual property.

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


                                       21
<PAGE>

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

      As of May 31,  2005,  the Company had  $500,879 in  outstanding  notes and
loans payable,  $127,300 in convertible  subordinated  debentures and $1,601,320
(net of discount) in outstanding  convertible secured debentures.  As of May 31,
2005,  the Company had  $1,422,690  in accounts  payable,  $2,338,495 in accrued
expenses,  accrued  payroll,  accrued  royalties and related taxes.  In November
2002, the Company successfully  negotiated a long-term payment plan with the IRS
to retire its  outstanding  payroll tax  obligations.  The plan was  executed in
December 2002 and calls for escalating monthly payments to be made over a period
of 18 months.  After an initial  down payment of $25,800 in December  2002,  the
Company  had agreed to a payment  schedule  of $5,750 for the first six  months,
$13,000  for the next six  months  and  $25,000  for the final six  months.  The
Company  made the agreed  payments  in a timely  fashion  through  the first six
months  and  is  currently  behind  schedule  on the  balance.  The  Company  is
negotiating  with the IRS to recast the plan in  accordance  with its ability to
make timely payments.

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

CRITIAL ACCOUNTING POLICIES

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

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

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

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


                                       22
<PAGE>

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

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

RECENT ACCOUNTING PRONOUNCEMENTS

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


                                       23
<PAGE>

ITEM 3 - CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

      As of May 31, 2005,  our management  carried out an evaluation,  under the
supervision of our Chief Executive  Officer and Chief  Financial  Officer of the
effectiveness  of the design and operation of our system of disclosure  controls
and  procedures  pursuant to the Securities and Exchange Act, Rule 13a-15(e) and
15d-15(e) under the Exchange Act). Based on that evaluation, our chief executive
officer and chief financial officer  concluded that our disclosure  controls and
procedures are not effective to provide reasonable assurance that information we
are  required to disclose in reports  that we file or submit  under the Exchange
Act is recorded,  processed,  summarized  and  reported  within the time periods
specified in Securities and Exchange  Commission  rules and forms, and that such
information is not accumulated and communicated to our management, including our
chief executive officer and chief financial  officer,  as appropriate,  to allow
timely decisions regarding required disclosure.  As detailed in our Controls and
Procedures  disclosure  in our  Annual  Report on Form  10-KSB,  filed  with the
Securities  and  Exchange  Commission  on  August  2,  2005,  we  determined  in
connection with our audit for the year ended February 28, 2005 that our controls
and  procedures  were not  effective.  We further  disclosed the reasons why our
controls and procedures were determined to not be effective.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.

      There were no changes in internal  controls over financial  reporting that
occurred during the period covered by this report that have materially affected,
or are  reasonably  likely to  materially  effect,  our  internal  control  over
financial  reporting.  As described in our Annual  Report on Form 10-KSB,  filed
with the Securities and Exchange Commission on August 2, 2005, subsequent to the
period of this report, we began to implement changes to our internal controls.


                                       24
<PAGE>

                                     PART II

ITEM 1   LEGAL PROCEEDING

      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, 2005, the Company issued  15,000,000
shares for financial services rendered.

      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  convertible  secured
debentures that the Company has issued,  in the total amount of $2,083,820.  The
Company is also currently in default on interest  payments owed on these secured
convertible debentures.  As a result of these defaults, the Company is obligated
to pay interest and certain other amounts. The Company does not have the capital
resources to pay the amounts  required.  The debenture holders have informed the
Company  that  they do not  intend  to take any  action  at this time due to the
default. The Company does not, however, have any legally binding commitment from
the debenture  holders.  The debentures are secured  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.

ITEM 6   EXHIBITS

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

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

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

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


                                       25
<PAGE>

                                   SIGNATURES

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


                                            COLLECTIBLE CONCEPTS GROUP, INC.

Date:   August 23, 2005                     By: /s/ PAUL S. LIPSCHUTZ
                                              ---------------------------------
                                              Paul S. Lipschutz
                                              Chief Executive Officer
                                             (Principal Executive Officer),
                                              Principal Financial Officer and
                                              Principal Accounting Officer


                                       26