UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 10-QSB



(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED September 30, 2005

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD From _______ to .



Commission File Number 333-40954



CCI GROUP, INC.

(Exact name of registrant as specified in its charter)



Utah

87-0648148

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)



405 Park Avenue, 10th Floor,

New York, New York     10022

(Address of principal executive officers)

(212) 421-1400

(Registrants telephone number, including area code)



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



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



Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court. Yes  No    Not Applicable



The number of shares issued and outstanding of our common stock, no par value, as of November 21, 2005 was 9,732,907.



INDEX



CCI Group, Inc.

For The Quarter Ending September 30, 2005



Part I.  Financial Information



Item

1.

Financial Statements

Condensed Consolidated Balance Sheets (Unaudited)  September 30, 2005 and

December 31, 2004

4



Condensed Consolidated Statements of Operations (Unaudited ) for the

Three and Nine Months ended June 30, 2005 and 2004, and for the Period from

January 11, 2001 (Date of Inception) through September 30, 2005

6



Condensed Consolidated Statements of Cash Flows (Unaudited) for the

Three and Nine Months Ended September 30, 2005 and 2004, and for the Period from

January 11, 2001 (Date of Inception) through September 30, 2005

7



Notes to Condensed Consolidated Financial Statements (Unaudited)

9





Item

2.

Managements Discussion and Analysis of Financial Condition

and Results of Operations

13



Item

3.

Controls and Procedures.

16



Part II.  Other Information



Item

1.

Legal Proceedings

16



Item

2.

Changes in Securities and Use of Proceeds

16



Item

4.

Submission of Matters to a Vote of Security Holders

17



Item

5.

Other Matters

17



Item

6.

Exhibits and Reports on Form 8-K

17



Signatures

18

Part I  Financial Information

Item I.  Financial Statements:



The condensed financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

CCI GROUP, INC. AND SUBSIDIARIES

(A Development Stage Company)

Condensed Consolidated Balance Sheets

(Unaudited)



|ASSETS                               
|-------------------------------------
|                                     
|                                     
|CURRENT ASSETS                       
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|OTHER ASSETS                         
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|LIABILITIES AND STOCKHOLDERS' DEFICIT
|                                     
|CURRENT LIABILITIES                  
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|NONCURRENT LIABILITIES               
|                                     
|                                     
|                                     
|                                     
|                                     
|STOCKHOLDERS' EQUITY                 
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     
|                                     



See notes to condensed consolidated financial statements





CCI GROUP, INC. AND SUBSIDIARIES

(A Development Stage Company)

Condensed Consolidated Statements of Operations

(Unaudited)

|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|---------------------------- | ----------------------------------- | ----------------------------- | ------------- |  | ------------- |  | ------------------- |  | ------------ |  | ------------------
|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|                             |                                     |                               |               |  |               |  |                     |  |              |  | For the period    
|                             |                                     |                               | For the Three |  | For the Nine  |  | January 11, 2001   
|                             |                                     |                               | Months Ended  |  | Months Ended  |  | (Date of Inception)
|                             |                                     |                               | September 30, |  | September 30, |  | through            
|                             |                                     |                               | 2005          |  | 2004          |  | 2005                |  | 2004         |  | September 30, 2005
|REVENUE                      |                                     |                               | $264,737      |  | $68,521       |  | $1,268,700          |  | $75,015      |  | $1,562,366        
|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|OPERATING COSTS AND EXPENSES |                                     |                               |               |  |               |  |                     |  |              |  |                   
|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|                             | Cost of sales                       |                               | 41,192        |  |               |  | 175,690             |  |              |  | 264,501           
|                             | Direct and operating expenses       |                               | 347,713       |  |               |  | 1,054,375           |  |              |  | 2,705,140         
|                             | General and administrative expenses |                               | 829,615       |  | 812,157       |  | 2,261,468           |  | 2,718,509    |  | 8,566,756         
|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|                             |                                     | Total Operating Costs         | 1,218,520     |  | 812,157       |  | 3,491,533           |  | 2,718,509    |  | 11,536,397        
|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|LOSS FROM OPERATIONS         |                                     |                               | (953,783)     |  | (743,636)     |  | (2,222,833)         |  | (2,643,494)  |  | (9,974,031)       
|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|OTHER INCOME (EXPENSES)      |                                     |                               |               |  |               |  |                     |  |              |  |                   
|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|                             | Interest expense                    |                               | (846,274)     |  | (622,887)     |  | (2,846,958)         |  | (1,090,695)  |  | (4,961,612)       
|                             | Interest income                     |                               | 7,041         |  | 1,691         |  | 83,184              |  | 1,707        |  | 118,829           
|                             | Foreign currency exchange gain      |                               | (419)         |  | 29,301        |  | 4,844               |  | 40,147       |  | 7,059             
|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|                             |                                     | Total Other Income (Expenses) | (839,652)     |  | (591,895)     |  | (2,758,930)         |  | (1,048,841)  |  | (4,835,724)       
|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|NET LOSS                     |                                     |                               | $(1,793,435)  |  | $(1,335,531)  |  | $(4,981,763)        |  | $(3,692,335) |  | $(14,809,755)     
|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|                             | Basic and Diluted Loss per Share    |                               | $(0.18)       |  | $(0.14)       |  | $(0.51)             |  | $(0.39)      |  |                   
|                             |                                     |                               |               |  |               |  |                     |  |              |  |                   
|                             | Weighted Average Number of          |                               |               |  |               |  |                     |  |              |  |                   
|                             | Common Shares Outstanding           |                               | 9,721,907     |  | 9,661,907     |  | 9,699,709           |  | 9,540,009    |  |                   



See notes to condensed consolidated financial statements







CCI GROUP, INC. AND SUBSIDIARIES

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

|                                                                         |                                                      |                                           |               |  |                     |  | For the period    
|------------------------------------------------------------------------ | ---------------------------------------------------- | ----------------------------------------- | ------------- |  | ------------------- |  | ------------------
|                                                                         |                                                      |                                           | For the Nine  |  | January 11, 2001   
|                                                                         |                                                      |                                           | Months Ended  |  | (Date of Inception)
|                                                                         |                                                      |                                           | September 30, |  | through            
|                                                                         |                                                      |                                           | 2005          |  | 2004                |  | September 30, 2005
|CASH FLOWS FROM OPERATING ACTIVITIES                                     |                                                      |                                           |               |  |                     |  |                   
|Net Loss                                                                 |                                                      |                                           | $(4,981,763)  |  | $(3,692,335)        |  | $(14,809,755)     
|Adjustments to reconcile net loss to net cash from operating activities: |                                                      |                                           |               |  |                     |  |                   
|                                                                         | Depreciation                                         |                                           | 283,093       |  | 166,642             |  | 549,830           
|                                                                         | Issuance of common stock and warrants for services   |                                           | 24,850        |  | 300,000             |  | 2,768,176         
|                                                                         | Amortization of deferred offering costs, discount    |                                           |               |  |                     |  |                   
|                                                                         |                                                      | on notes payable and land lease rights    | 1,838,913     |  | 664,711             |  | 3,207,736         
|                                                                         | Gain on foreign currency exchange                    |                                           | 4,844         |  | (40,147)            |  | 2,629             
|Changes in operating assets and liabilities                              |                                                      |                                           |               |  |                     |  |                   
|                                                                         | Receivables                                          |                                           | (56,464)      |  | (13,630)            |  | (86,060)          
|                                                                         | Employee advance                                     |                                           | -             |  | -                   |  | -                 
|                                                                         | Prepaid expenses and other current assets            |                                           | 14,787        |  | -                   |  | (1,307)           
|                                                                         | Deposits                                             |                                           | (150,000)     |  | (100,000)           |  | (265,900)         
|                                                                         | Accounts payable                                     |                                           | 118,346       |  | 240,123             |  | 529,137           
|                                                                         | Reservation deposits                                 |                                           | (4,886)       |  | 43,916              |  | 279,174           
|                                                                         | Accrued expenses                                     |                                           | 713,344       |  | 128,030             |  | 870,566           
|                                                                         |                                                      | Net Cash Used by Operating Activities     | (2,194,936)   |  | (2,302,690)         |  | (6,955,774)       
|                                                                         |                                                      |                                           |               |  |                     |  |                   
|CASH FLOWS FROM INVESTING ACTIVITIES                                     |                                                      |                                           |               |  |                     |  |                   
|                                                                         | Cash paid for property and equipment                 |                                           | (95,808)      |  | (772,203)           |  | (1,773,205)       
|                                                                         | Issuance of note receivable                          |                                           | -             |  | -                   |  | (400,000)         
|                                                                         | Payments received on note receivable                 |                                           | -             |  | -                   |  | 400,000           
|                                                                         |                                                      | Net Cash Used by Investing Activities     | (95,808)      |  | (772,203)           |  | (1,773,205)       
|                                                                         |                                                      |                                           |               |  |                     |  |                   
|CASH FLOWS FROM FINANCING ACTIVITIES                                     |                                                      |                                           |               |  |                     |  |                   
|                                                                         | Proceeds from issuance of notes payable and warrants |                                           | 2,168,802     |  | 3,564,500           |  | 8,376,502         
|                                                                         | Proceeds from issuance of preferred stock            |                                           | 445,000       |  |                     |  | 445,000           
|                                                                         | Cash paid for offering and financing costs           |                                           | (193,854)     |  | (268,591)           |  | (858,393)         
|                                                                         | Principle payments on capital lease                  |                                           | (141,403)     |  | (246,897)           |  | (451,305)         
|                                                                         | Issuance of common stock for exercise of warrants    |                                           | -             |  | -                   |  | 690               
|                                                                         | Proceeds from issuance of common stock               |                                           | -             |  | -                   |  | 1,348,626         
|                                                                         | Contribution of capital with no issuance of shares   |                                           | -             |  | -                   |  | 2,200             
|                                                                         | Cash received in purchase of Kinship                 |                                           | -             |  | -                   |  | 32,308            
|                                                                         |                                                      | Net Cash Provided by Financing Activities | 2,278,545     |  | 3,049,012           |  | 8,895,628         
|                                                                         |                                                      |                                           |               |  |                     |  |                   
|                                                                         | NET INCREASE IN CASH                                 |                                           | (12,199)      |  | (25,881)            |  | 166,649           
|                                                                         |                                                      |                                           |               |  |                     |  |                   
|                                                                         | CASH AT BEGINNING OF PERIOD                          |                                           | 178,848       |  | 303,968             |  | -                 
|                                                                         |                                                      |                                           |               |  |                     |  |                   
|                                                                         | CASH AT END OF PERIOD                                |                                           | $166,649      |  | $278,087            |  | $166,649