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 quarterly period ended June 30, 2004

                                       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: 0 - 50752

                                MONACO GROUP INC.
                                -----------------
             (Exact name of registrant as specified in its charter)


           Delaware                                             98-0404764
           --------                                             ----------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification Number)

          20A Voyager Court South, Etobicoke, Ontario, Canada, M9W 5M7
          ------------------------------------------------------------
                    (Address of principal executive offices)

                                 (416) 213-0028
                                 --------------
                           (Issuer's telephone number)

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  preceding 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|

At August 19, 2004, the registrant had 4,476,500  shares of Common Stock, no par
value, issued and outstanding.

Transitional Small Business Disclosure Format (check one):   Yes |_|   No |X|




<PAGE>






                         PART I - FINANCIAL INFORMATION
                         ------------------------------


Item 1. FINANCIAL STATEMENTS
----------------------------













                                MONACO GROUP INC.
                                -----------------

                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 2004

                             (Stated in US Dollars)

                                   (Unaudited)
                                    ---------





























                                        2
<PAGE>






<TABLE>
<CAPTION>
                                MONACO GROUP INC.
                                -----------------
                       INTERIM CONSOLIDATED BALANCE SHEET
                       June 30, 2004 and December 31, 2003
                             (Stated in US Dollars)
                                   (Unaudited)
                                    ---------


                                                        June 30,          December 31,
                                     ASSETS               2004                2003
                                     ------         ----------------    ----------------

<S>                                                 <C>                 <C>
Current
   Cash                                             $         1,297     $         6,977
   Accounts receivable                                       83,923                   -
                                                    ----------------    ----------------
                                                    $        85,220     $         6,977
                                                    ================    ================


                                   LIABILITIES
                                   -----------

Current
   Accounts payable and accrued liabilities         $        88,486     $         4,110
   Loans from related party - Note 3                         20,000               1,595
   Advances from related party - Note 3                      22,598                   -
                                                    ----------------    ----------------
                                                            131,084               5,705
                                                    ----------------    ----------------


                        STOCKHOLDERS' EQUITY (DEFICIENCY)
                        ---------------------------------

Common stock, $0.001 par value - Note 4
   10,000,000 shares authorized
   4,446,500 shares issued and outstanding                    4,447               4,447
Additional paid-in capital                                   81,203              80,203
Accumulated deficit                                        (131,514)            (83,378)
                                                    ----------------    ----------------
                                                            (45,864)              1,272
                                                    ----------------    ----------------
                                                    $        85,220     $         6,977
                                                    ================    ================


<FN>
Nature and Continuance of Operations - Note 1
Commitments - Notes 3, 4 and 5
Subsequent Events - Notes 4 and 5
</FN>
</TABLE>











                             SEE ACCOMPANYING NOTES

                                        3
<PAGE>






<TABLE>
<CAPTION>
                                MONACO GROUP INC.
                                -----------------
                  INTERIM CONSOLIDATED STATEMENT OF OPERATIONS
             for the three and six month periods ended June 30, 2004
                             (Stated in US Dollars)
                                   (Unaudited)
                                    ---------


                                                    Three Months         Six Months
                                                       Ended               Ended
                                                      June 30,            June 30,
                                                        2004                2004
                                                  ----------------    ----------------

<S>                                               <C>                 <C>
Sales                                             $       159,361     $       194,429

Cost of sales                                             157,750             191,538
                                                  ----------------    ----------------
Gross profit                                                1,611               2,891
                                                  ----------------    ----------------
General and Administrative Expenses
   Accounting and audit fees                                3,850               5,850
   Bank charges and interest - Note 3                         634               1,263
   Filing and regulatory fees                               2,460               3,845
   Legal fees                                              24,990              39,227
   Office and miscellaneous                                   217                 217
   Transfer agent fees                                          -                 625
                                                  ----------------    ----------------
                                                           32,151              51,027
                                                  ----------------    ----------------
Net loss for the period                           $       (30,540)    $       (48,136)
                                                  ================    ================
Basic loss per share                              $         (0.01)    $         (0.01)
                                                  ================    ================
Weighted average number of shares outstanding           4,446,500           4,446,500
                                                  ================    ================
</TABLE>


















                             SEE ACCOMPANYING NOTES

                                        4
<PAGE>






                                MONACO GROUP INC.
                                -----------------
                  INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
                     for the six months ended June 30, 2004
                             (Stated in US Dollars)
                                   (Unaudited)
                                    ---------


                                                                     2004
                                                              ----------------

Cash flows from Operating Activities
   Net loss for the period                                    $       (48,136)
   Non-cash interest expense                                            1,000
   Changes in non-cash working capital item:
     Accounts receivable                                              (83,923)
     Accounts payable and accrued liabilities                          84,376
                                                              ----------------

                                                                      (46,683)
                                                              ----------------

Cash flow from Financing Activities
   Loans from related party                                            41,003
                                                              ----------------

Increase in cash during the period                                     (5,680)

Cash, beginning of period                                               6,977
                                                              ----------------

Cash, end of period                                           $         1,297
                                                              ================


Supplemental disclosure of cash flow information
   Cash paid for:
     Interest                                                 $             -
                                                              ================

     Income taxes                                             $             -
                                                              ================


Non-cash Transaction - Note 3


















                             SEE ACCOMPANYING NOTES

                                        5
<PAGE>






<TABLE>
<CAPTION>
                                MONACO GROUP INC.
                                -----------------
       INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
      for the period July 21, 2003 (Date of Incorporation) to June 30, 2004
                             (Stated in US Dollars)
                                   (Unaudited)
                                    ---------


                                            Common Stock            Additional
                                            ------------             Paid-in      Accumulated
                                        Number       Par Value       Capital        Deficit         Total
                                     ------------   ------------   ------------   ------------   ------------

<S>                                    <C>          <C>            <C>            <C>            <C>
Capital stock issued - Note 5
  For services        - at $0.01       4,000,000    $     4,000    $    36,000    $         -    $    40,000
  For services        - at $0.10         175,000            175         17,325              -         17,500
  For cash            - at $0.10         271,500            272         26,878              -         27,150
Net loss for the period ended
 December 31, 2003                             -              -              -        (83,378)       (83,378)
                                     ------------   ------------   ------------   ------------   ------------

Balance, December 31, 2003             4,446,500          4,447         80,203        (83,378)         1,272
Capital contribution - Note 3                  -              -          1,000              -          1,000
Net loss for the period                        -              -              -        (48,136)       (48,136)
                                     ------------   ------------   ------------   ------------   ------------

Balance, June 30, 2004                 4,446,500    $     4,447    $    81,703    $  (130,514)   $   (45,864)
                                     ============   ============   ============   ============   ============
</TABLE>































                             SEE ACCOMPANYING NOTES

                                        6
<PAGE>






                                MONACO GROUP INC.
                                -----------------
             NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                       June 30, 2004 and December 31, 2003
                             (Stated in US Dollars)
                                   (Unaudited)
                                    ---------


Note 1    Nature and Continuance of Operations
          ------------------------------------

          The Company was  incorporated in the State of Delaware,  United States
          of America on July 21, 2003 and the fiscal year end is December 31. As
          a result,  there is no comparative  period and no comparative  amounts
          are shown in the Statements of Operations and Cash Flows.

          The  Company's  business  is  brokerage,   sales,   merchandising  and
          distribution  of grocery and consumer  products  across Canada and the
          United  States of America to  independent  and chain  grocery  stores,
          discount   stores,   drug   stores,   convenience   stores  and  other
          distributors.

          These interim consolidated  financial statements have been prepared on
          a going  concern  basis.  The  Company  has  accumulated  a deficit of
          $130,514 since  inception.  Its ability to continue as a going concern
          is  dependent  upon the ability of the Company to generate  profitable
          operations in the future  and/or to obtain the necessary  financing to
          meet its  obligations  and repay its  liabilities  arising from normal
          business operations when they come due.

          The Company has a working  capital  deficiency  of $45,864 at June 30,
          2004 and must support  current  commitments and operations and planned
          expansion  for the next twelve  months.  The outcome of these  matters
          cannot be predicted  with any certainty at this time.  The Company has
          historically  satisfied its capital need  primarily by issuing  equity
          securities or borrowing from shareholders.


Note 2    Basis of Presentation
          ---------------------

          The  accompanying  unaudited  interim  financial  statements have been
          prepared  by  the  Company  in  conformity  with  generally   accepted
          accounting  principles  of  the  United  States  of  America.  Certain
          information and footnote  disclosures  normally  included in financial
          statements  prepared in accordance with generally accepted  accounting
          principles,  however,  have been condensed or omitted  pursuant to the
          rules and  regulations of the Securities and Exchange  Commission.  In
          the  opinion of  management,  all  adjustments  (consisting  of normal
          recurring  adjustments)  considered  necessary for a fair presentation
          have been  included.  The results of operations for the interim period
          ended June 30, 2004 are not  necessarily  indicative of the results to
          be expected for the entire fiscal year ending December 31, 2004. These
          interim  financial  statements  should be read in conjunction with the
          audited  financial  statements  for the period ended December 31, 2003
          included  in the  Company's  Form SB-2 as filed and  amended  with the
          Securities and Exchange  Commission on March 18, 2004,  April 6, 2004,
          April 23, 2004 and May 5, 2004.






                                        7
<PAGE>






Monaco Group Inc.
Notes to the Interim Consolidated Financial Statements
June 30, 2004
(Stated in US Dollars) - Page 2
(Unaudited)
 ---------


Note 3    Loans from Related Party
          ------------------------

          Loans from related party are due to a  shareholder  of the Company and
          are unsecured, bear interest at 10% per annum and are due within seven
          days of notice.  The Company  has been  provided a line of credit from
          this related party up to $20,000 on these terms.  The  shareholder has
          agreed to waive the interest charge up to June 30, 2004.

          The  shareholder  has also  advanced an  additional  $22,598  which is
          unsecured, non-interest bearing and due on demand.


Note 4    Common Stock
          ------------

          Capital stock issued,  par value and additional  paid-in  capital have
          been retroactively  adjusted for a forward stock split approved by the
          Company on September  29, 2003,  allocating  nine more shares for each
          one share held.

          Pursuant to an Option  Agreement  dated July 23, 2003, the Company has
          an option to repurchase up to 90% of the common stock owned by certain
          directors  of the  Company  up to July,  2004 and 75% of the  stock to
          July,  2005 in the event they  terminate  their tenure as directors of
          the Company.  The stock may be  repurchased by the Company for 110% of
          the average amount paid for the stock to July,  2004 and 120% to July,
          2005. The total stock applicable to this Option Agreement are based on
          the number of shares  owned by those  directors  of the Company on the
          date of their  termination.  At December  31, 2003 and June 30,  2004,
          directors  of the  Company  subject to the Option  Agreement  owned an
          aggregate of 2,240,000 common shares.

          Subsequent  to  June  30,  2004,  the  Company  has  proposed  to  the
          shareholders  to approve the  increase in  authorized  common stock to
          15,000,000 shares, and the authorization of 4,000,000  preferred stock
          at $0.001 par value.


Note 5    Subsequent Events - Note 4
          -----------------

          a)   On July 1,  2004,  the  Company  entered  into  an  agreement  to
               purchase  all of the issued and  outstanding  shares of  Bayshore
               Foods Inc.  ("Bayshore") in  consideration  for a note payable in
               the  amount  of  CDN$350,000  and  400,000  common  shares of the
               Company.

          b)   On  July  16,  2004,  MG  Holding  Inc.  ("MGH"),  the  Company's
               wholly-owned subsidiary, amended its articles of incorporation to
               create a new class of stock in the capital of MGH of  "Non-Voting
               Exchangeable  Shares". The rights,  privileges,  restrictions and
               conditions  attaching  to  the  Non-Voting   Exchangeable  Shares
               include:

               i)   Each Non-Voting  Exchangeable Share may be exchanged for two
                    shares of the Company's common stock.



                                        8
<PAGE>






Monaco Group Inc.
Notes to the Interim Consolidated Financial Statements
June 30, 2004
(Stated in US Dollars) - Page 2
(Unaudited)
 ---------


Note 5    Subsequent Events - Note 4 - (cont'd)
          -----------------

          b)   -(cont'd)

               ii)  On not less than 30 days prior  notice,  MGH may redeem some
                    or all  of  the  then  outstanding  Non-Voting  Exchangeable
                    Shares  ("Redemption")  on any date selected by its board of
                    directors at $1.25 per Non-Voting Exchangeable Share.

               iii) Holders of Non-Voting  Exchangeable  Shares shall have until
                    the 10th day immediately  preceding the Redemption to elect,
                    by written notice to the Company, to exchange the Non-Voting
                    Exchangeable Shares for Company common stock.

          c)   On July 27, 2004,  MGH completed the  acquisition of the business
               and all the assets  (the  "Sugar  Business  Assets") of the sugar
               division of Sweet Valley Foods Inc.  ("SVF").  The  consideration
               paid for the Sugar  Business  Assets by MGH was  CDN$80,000  cash
               payment,   CDN$282,725  for  inventory  and  750,000   Non-Voting
               Exchangeable  Shares. A company  affiliated with SVF will loan to
               MGH the purchase amount of the inventory on a short-term basis. A
               shareholder  of the Company  will  financed the  CDN$80,000  cash
               payment.

               The Company has formed a new subsidiary  called Sweet Valley Food
               Corporation,   an  Ontario  corporation,  to  operate  the  Sugar
               Business Assets acquired by MG Holdings Inc.

          d)   Subsequent to June 30, 2004,  the Company  agreed to issue 30,000
               restricted  common shares and has granted  90,000 stock  purchase
               options, exercisable at $1 per share, for a period of five years,
               to three directors of the Company.














                                        9
<PAGE>






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

General
-------

The following discussion and analysis should be read in conjunction with, and is
qualified  in its  entirety  by, our  financial  statements  (and notes  related
thereto) appearing elsewhere in this report.

We are a developmental stage company  incorporated in Delaware on July 21, 2003.
We have three wholly owned  subsidiaries,  Monaco  (Canada)  Inc.,  incorporated
under the laws of the  Province of Ontario on July 25, 2003,  MG Holdings  Inc.,
incorporated under the laws of the Province of Ontario on November 10, 2003, and
Sweet Valley Food  Corporation,  incorporated  under the laws of the Province of
Ontario on May 14, 2004.

In October 2003, we entered the grocery distribution  business in Canada through
our  subsidiary,  Monaco  (Canada).  Since that time,  we  purchased  brand name
grocery  products  manufactured by such companies as Coca Cola, Pepsi Co., Kraft
Foods, and Colgate-Palmolive  from suppliers on an order-by-order basis and sold
these  products  to a limited  number  of  wholesale  customers  in  Canada.  We
distributed products to these customers on an order-by-order basis. We currently
rely on a few major customers for all of our grocery distribution business.

Subsequent to June 30, 2004, we completed our  acquisition  of certain assets of
Sweet Valley  Foods Inc. and we plan to  manufacture,  process,  and  distribute
sugar using the assets we acquired  from Sweet  Valley  Foods Inc.  beginning in
July 2004. We hope to close the  acquisition of Bayshore  Foods,  Inc. in August
and enter the snack food business at that time.

Results of Operations
---------------------

Second Quarter 2004 and Six Months Ended June 30, 2004
------------------------------------------------------

Revenues.  Product  revenues  for the  three  months  ended  June 30,  2004 were
---------
$159,361. Product revenues for the six months ended June 30, 2004 were $194,429.
As we were not incorporated  until July 21, 2003, we cannot present  comparative
information  for the three or six months ended June 30,  2003.  This revenue was
entirely  derived from our grocery  distribution  business in Canada through our
subsidiary,  Monaco  (Canada).  We expect revenue from our grocery  distribution
business to increase  each  quarter in fiscal  2004,  as we gain  suppliers  and
customers.

Cost of Sales.  Cost of sales was  $157,750  for the three months ended June 30,
--------------
2004 (99%,  as a  percentage  of sales).  Cost of sales was $191,538 for the six
months  ended June 30,  2004 (99%,  as a  percentage  of sales).  If our revenue
increases as we anticipate,  we anticipate that cost of sales as a percentage of
sales will decrease.

General and Administrative Expenses. General and administrative expenses totaled
------------------------------------
$32,151 for the three  months ended June 30,  2004.  General and  administrative
expenses  totaled $51,027 for the six months ended June 30, 2004. This total was
primarily due to legal fees of $24,990  (three months) and $39,227 (six months),
mainly related to the filing of a registration statement on Form SB-2.







                                       10
<PAGE>






Liquidity and Capital Resources
-------------------------------

As of June 30, 2004, we had a working capital deficit of $45,864. As of June 30,
2004, our cash and cash equivalents  increased to $1,297 from $6,977 at December
31, 2003. Cash used in operating  activities  amounted to $46,683,  attributable
mainly to the net loss over the six-month period ended June 30, 2004.  Financing
activities  provided  $41,003  from  borrowing  from a  related  party  over the
six-month period ended June 30, 2004.

For the quarter  ended June 30,  2004,  the Company  posted a quarterly  loss of
$30,540. The Company expects to continue to operate at a loss while the business
grows, at least through fiscal 2004.

We have funded our financial needs from inception primarily through net proceeds
received  through  private sales of our  securities,  as well as borrowings from
related parties.

Related Party Transactions
--------------------------

On July 24, 2003, we entered into a Loan Facility  Agreement  with Burgio Family
Holdings Inc., our largest  stockholder.  This Loan Facility Agreement allows us
to borrow up to $20,000 at 10%  interest per annum on all amounts  advanced.  We
currently  have  borrowings of $20,000  under the loan.  The money is accessible
upon seven days notice to Burgio  Family  Holdings  Inc.  and is  unsecured  and
payable on demand upon 30 days written  notice from Burgio Family  Holdings Inc.
Burgio Family Holdings Inc. has agreed to waive the interest charge through June
30, 2004.

We have also borrowed an additional  $22,598 from Burgio Family  Holdings  Inc.,
which is unsecured,  non-interest bearing and due on demand. There is no written
agreement related to this loan.

Exposure to Market Risk
-----------------------

Our  exposure to market  risk for  changes in  interest  rates is low due to our
limited assets. Our borrowings bear interest at a fixed rate.

Plan of Operations
------------------

General.  Over the next  twelve  months,  we plan to  enter  the food  brokerage
--------
business and further develop our distribution  business.  Additionally,  we will
manufacture,  process,  and  distribute  sugar using the assets we acquired from
Sweet  Valley  Foods Inc.  in July  2004.  We hope to close the  acquisition  of
Bayshore  Foods,  Inc. in August 2004 and enter the snack food  business at that
time.

As of June 30, 2004, we had cash of $1,297 and we had borrowed $20,000 under our
loan  agreement  with  Burgio  Family  Holdings,  our largest  stockholder,  and
received additional advances of $22,598. This loan agreement allows us to borrow
up to $20,000 at 10% interest.  Amounts outstanding under the loan agreement are
payable on demand upon 30 days written  notice from Burgio Family  Holdings Inc.
At June 30, 2004, our available funds totaled $1,297, from cash on hand.

At our current  limited level of  operations,  our available  funds could likely
satisfy our cash  requirements for less than three months. We anticipate that we
will  collect  accounts   receivable  that  will  allow  us  to  meet  our  cash
requirements  for a longer period.  If we cannot finance our operating  activity



                                       11
<PAGE>






with available cash, then we will seek alternative sources of funding, including
loans from our  directors,  officers,  or  stockholders,  commercial  or private
lenders, or credit from suppliers. Without regard to the existing loan agreement
                                   ---------------------------------------------
with Burgio Family Holdings, our largest shareholder, there can be no assurances
--------------------------------------------------------------------------------
that loans will be available from our  directors,  officers or  stockholders  on
--------------------------------------------------------------------------------
favorable  terms, if at all.  Without regard to the existing loan agreement with
--------------------------------------------------------------------------------
Burgio Family Holdings,  our largest  shareholder,  there are no agreements with
--------------------------------------------------------------------------------
any of our directors, officers or stockholders to provide loans.
----------------------------------------------------------------

Brokerage.  In the next three months,  we, through our wholly-owned  subsidiary,
----------
Monaco (Canada) Inc., plan to start  contacting  manufacturers  and suppliers of
food and consumer  goods in Canada and offer them our  brokerage  and  marketing
services  throughout  the  grocery  and  foodservice  industry  in an  effort to
establish a national  presence for those clients.  Our  management  will contact
these  manufacturers and suppliers through referrals or by cold calling. We will
also  offer  sales  and  merchandising   services  to  these  manufacturers  and
suppliers.  We  anticipate  that we will  generate  revenue  from our  brokerage
business by earning  commissions  and fees from the sale of the  products of our
clients to independent and chain grocery stores,  discount stores,  drug stores,
convenience  stores  and  other  grocery  and  foodservice  distributors.  These
activities  will require at least $10,000 for the  development  of brochures for
our brokerage  business and approximately  $20,000 for travel,  office supplies,
and other selling expenses.  In connection with these  activities,  we intend to
use existing cash or borrowings  under our loan agreement.  If we cannot finance
this activity with  available  cash,  then we will seek  alternative  sources of
funding,  including  loans  from  our  directors,   officers,  or  stockholders,
commercial or private lenders, or credit from suppliers.

Distribution.  Over the next  twelve  months,  we plan to  further  develop  our
-------------
distribution  business in Canada,  through Monaco (Canada). On July 24, 2003, we
hired a consultant,  Tony Carbonara,  to compile  information  pertaining to the
grocery industry and prospective  suppliers.  During the next twelve months, our
management  will contact  these  prospective  suppliers of grocery  products and
attempt to establish them as vendors. Our management will also attempt to expand
our customer  base by  continuously  offering  prospective  retail and wholesale
customers  the  grocery  products  sourced  from our  existing  and  prospective
suppliers at competitive prices. We anticipate that we will continue to generate
revenue  from the  distribution  of grocery  products to  independent  and chain
grocery  stores,  discount  stores,  drug stores,  convenience  stores and other
grocery and foodservice distributors. To expand the distribution business during
the next twelve months,  we expect to incur sales and marketing costs of $15,000
and general and administrative costs of $20,000 during this period. We intend to
finance these costs by using existing cash,  borrowings under our loan agreement
and profits generated from our distribution  business. If we cannot finance this
activity with available cash and the profits  generated from the distribution of
grocery products,  we will seek alternative sources of funding,  including loans
from our directors, officers, or stockholders, commercial or private lenders, or
credit from suppliers.

In connection with our increased distribution business:

     o    To purchase products from vendors to be held as inventory, we may need
          to raise  additional  funds.  It is unlikely that vendors will give us
          sufficient credit to fund significant  inventory.  Therefore,  we will
          need to use our available cash to finance inventory that is not funded
          by vendor credit.  If we do not have enough  available cash to finance
          inventory,  then we will need to seek alternative  sources of funding,
          including  loans from our directors,  officers,  or  stockholders,  or
          commercial or private lenders.
     o    To warehouse any products  held in inventory,  we will require the use
          of a  third-party  warehouse  to store such  products.  A  corporation



                                       12
<PAGE>






          controlled by our CFO, Suzanne Lilly,  currently provides  warehousing
          services to us.  This  corporation  has agreed to provide  warehousing
          services,  as needed, until December 31, 2004 at no cost.  Thereafter,
          if we require the use of warehousing  services from this  corporation,
          it would  provide  such  services,  on a per use  basis,  inline  with
          standard  market  rates.   This  corporation   currently  charges  its
          customers at a rate of $3.75 per pallet for inbound,  $3.75 per pallet
          for outbound and $4.50 per pallet per month for storage.  If we do not
          have enough available cash to fund warehousing  costs, we will need to
          raise  additional  funds  to  pay  for  such  warehousing  by  seeking
          alternative  sources of funding,  including  loans from our directors,
          officers, or stockholders, or commercial or private lenders.

Acquisitions.  On July 27,  2004,  we acquired  the assets of Sweet Valley Foods
-------------
Inc. related to the manufacturing,  processing,  and selling of sugar. The value
of the inventory purchased from Sweet Valley Foods Inc., as at July 1, 2004, was
$282,724.78  (Canadian  Dollars).  Couprie,  Fenton Inc., a corporation owned by
certain  shareholders  of Sweet  Valley,  has agreed to finance  this  inventory
purchase on a short-term basis. The cash paid by our subsidiary, MG Holdings, at
closing was  $80,000.00  (Canadian  Dollars).  Burgio Family  Holdings Inc., our
largest  shareholder,  agreed to loan us funds to  complete  this  purchase.  We
formed a new subsidiary,  Sweet Valley Food Corporation, an Ontario corporation,
to operate and utilize the sugar assets acquired.  We believe that this business
will have sufficient operations to be self-sufficient. If operations prove to be
insufficient,  we will seek alternative sources of funding, including loans from
our directors,  officers,  or stockholders,  commercial or private  lenders,  or
credit from suppliers.

In August 2004, we hope to complete the  acquisition  of Bayshore  Foods Inc., a
snack food company.  On July 1, 2004, we entered into a Share Purchase Agreement
with  Amton  Inc.,  a New York  corporation,  to  acquire  all of the issued and
outstanding  shares of Bayshore  Foods Inc. We plan to deliver a note payable in
the amount of $350,000  Canadian  dollars and 400,000 shares of our common stock
at the closing. We believe that this business will have sufficient operations to
be  self-sufficient.  If  operations  prove  to be  insufficient,  we will  seek
alternative sources of funding, including loans from our directors, officers, or
stockholders, commercial or private lenders, or credit from suppliers.

During  the next  twelve  months,  we intend  to  acquire  additional  local and
regional food  brokerage  companies in the United  States and Canada.  Potential
target companies must have strong account service  relationships,  complementary
product lines and compatible financial strengths. Acquired companies will likely
be held by our  subsidiary,  MG Holdings  Inc. We hope to find another  suitable
company or suitable companies within the next twelve months, however we have not
yet identified any  additional  companies that meet our criteria,  and we do not
have a specific timetable for acquisitions. Additional acquisitions will require
significant  financial resources.  Available cash will not be sufficient to fund
additional  acquisitions.  We would likely finance additional  acquisitions with
loans from  commercial  or private  lenders.  We are not certain that we will be
able to obtain such financing to fund any additional acquisitions.  As of August
19, 2004, we have not identified any  prospective  acquisitions,  other than the
Sweet Valley and Bayshore acquisitions discussed above.

Adequate funds may not be available when needed or on terms acceptable to us. In
the event that we are not able to obtain  additional  funding on a timely basis,
our business may fail or we may be required to limit any proposed operations.






                                       13
<PAGE>






Employees.  In  connection  with our  acquisition  of the assets of Sweet Valley
----------
Foods Inc. related to the  manufacturing,  processing,  and selling of sugar, we
retained  approximately  10  employees.  We anticipate  retaining  either 1 or 2
employees in connection with the Bayshore acquisition.

Over the next  three to six  months,  we plan to  recruit  a staff of up to four
persons  for  Monaco  (Canada)  to focus on  procurement,  sales and  marketing,
administration  and to assist  with the launch of our  business  and  thereafter
commence  selling our products and services.  We plan to hire a purchasing agent
and salespersons on a commission-only  basis, if possible. By doing so, we could
avoid  using  our  limited  cash to pay  salaries  for  these  individuals.  For
salespersons, we intend to pay a commission range of 0.5% to 3.0% of gross sales
depending on the type of product  sold. We believe that this level of commission
will allow us to recruit a qualified salesperson, yet retain a reasonable profit
margin.  For a purchasing  agent, we intend to pay a commission range of 0.5% to
1.0% of  gross  sales  depending  on the  type of  product  sold and the cost of
product  purchased.  We believe that this level of  commission  will allow us to
recruit a qualified  salesperson,  yet retain a  reasonable  profit  margin.  An
administrative employee hired by us would likely be hired on an hourly basis for
approximately $10 to $15 per hour or approximately  $20,000 to $30,000 per year.
We do not believe  that our current  cash will be  sufficient  to recruit a full
procurement,  sales and marketing, and administrative staff. We could recruit up
to one staff member, likely an administrative employee, using available cash and
borrowing  under our loan  agreement.  If we cannot  finance this  activity with
available  cash,  then we will seek  alternative  sources of funding,  including
loans from our directors,  officers,  or  stockholders  or commercial or private
lenders.

                           FORWARD LOOKING STATEMENTS
                           --------------------------

Certain matters discussed or referenced in this report, including expectation of
increased  revenues and  continuing  losses,  our  financing  requirements,  our
capital  expenditures  and our  prospects  for the  development  of our  grocery
distribution  business,  are forward-looking  statements.  Other forward-looking
statements may be identified by the use of  forward-looking  terminology such as
"may",  "will",  "expect",  "believe",   "estimate",   "anticipate",   "intend",
"continue",  or similar terms,  variations of such terms or the negative of such
terms. All forward-looking  statements speak only as of the date of this report,
and we expressly  disclaim any obligation or undertaking to release publicly any
updates or revisions to any forward-looking  statements contained in this report
to reflect any change in our expectations  with regard to such statements or any
change in events,  conditions or  circumstances  on which any such  statement is
based. Although such statements are based upon our current expectations,  and we
believe  such   expectations  are  reasonable,   such   expectations,   and  the
forward-looking  statements  based on them,  are subject to a number of factors,
risks and uncertainties that could cause our actual results to differ materially
from  those  described  in  the  forward-looking  statements,   including  those
described  below and in our  other  filings  with the  Securities  and  Exchange
Commission.


ITEM 3 -- CONTROLS AND PROCEDURES
---------------------------------

(a)  Evaluation of Disclosure Controls and Procedures. Management, including the
Chief  Executive  Officer  and  Chief  Financial  Officer,   have  conducted  an
evaluation of the effectiveness of disclosure  controls and procedures  pursuant
to Exchange Act Rule 13a-14(c) and 15d-14(c).  This  evaluation was conducted as
of June 30, 2004.  Based on that  evaluation,  the Chief  Executive  Officer and
Chief Financial  Officer  concluded that the disclosure  controls and procedures
are effective in ensuring that all material  information required to be filed in
this  quarterly  report has been made known to them in a timely  fashion.  There
have been no significant  changes in internal  controls or in other factors that




                                       14
<PAGE>






could  significantly  affect internal controls  subsequent to the date the Chief
Executive Officer and Chief Financial Officer completed their evaluation.

(b)  Changes in Internal Control Over Financial  Reporting.  Our Chief Executive
Officer  and  Chief  Financial   Officer  have  indicated  that  there  were  no
significant  changes  in our  internal  controls  or other  factors  that  could
significantly  affect such controls  subsequent to the date of their evaluation,
and there were no such control  actions with regard to significant  deficiencies
and material weaknesses.


ITEM 5 -- OTHER INFORMATION
---------------------------

There were no material  changes to the procedures by which security  holders may
recommend nominees to the registrant's board of directors.










































                                       15
<PAGE>






                          PART II -- OTHER INFORMATION
                          ----------------------------


ITEM 2. CHANGES IN SECURITIES
-----------------------------

On August 16, 2004 we filed an amendment to our Certificate of  Incorporation to
increase  the  authorized  common  stock,  par  value  $0.001  per  share,  from
10,000,000  shares to  15,000,000  shares and to authorize  4,000,000  shares of
preferred stock, par value $0.001 per share.

The increase in authorized common stock and authorization of preferred stock may
result in dilution to the existing  shareholders  if the  authorized  shares are
issued,  including  a decrease in the  Company's  net income per share in future
periods and a decrease in price per share.

As our Board of  Directors  will be  authorized  to issue  any or all  shares of
preferred stock and shall be able to determine the voting powers,  designations,
preferences,  rights  qualifications,   limitations,  or  restrictions  thereof,
without the  approval of the holders of our common  stock,  any or all shares of
preferred  stock issued by us will  probably be senior to shares of common stock
and will probably  entitle the holder  thereof to rights not held by the holders
of our common stock.

The issuance of authorized but unissued preferred stock could be used to deter a
potential takeover of us that may otherwise be beneficial to our shareholders by
diluting  the  shares of the our  common  stock  held by a  potential  suitor or
issuing  shares to a shareholder  of ours that will vote in accordance  with the
desires of the our Board of Directors, at that time.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
----------------------------------------

(a)  Exhibits

3.2.1.    Certificate of Amendment to Certificate of Incorporation
31.1.     Rule 13a-14(a) Certification of Chief Executive Officer
31.2.     Rule 13a-14(a) Certification of Chief Financial Officer
32.1.     Certification  of  Chief  Executive  Officer  Pursuant  to  18  U.S.C.
          Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.
32.2.     Certification  of  Chief  Financial  Officer  Pursuant  to  18  U.S.C.
          section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.

(b)  Reports on Form 8-K

On May 28, 2004,  we filed a report on Form 8-K (Items 5 and 7) to disclose that
on May 25, 2004, we entered into an Asset  Purchase  Agreement with Sweet Valley
Foods Inc., an Ontario corporation, and MG Holdings Inc., an Ontario corporation
and our wholly-owned  subsidiary,  to acquire the assets of Sweet Valley related
to the manufacturing, processing, and selling of sugar.

On June 22, 2004, we filed a report on Form 8-K (Items 5 and 7) to disclose that
on June 21,  2004,  we amended the Asset  Purchase  Agreement  with Sweet Valley
Foods Inc., an Ontario corporation, and MG Holdings Inc., an Ontario corporation
and our wholly-owned subsidiary.









                                       16
<PAGE>






                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                        Monaco Group Inc.
                                        -----------------
                                        (Registrant)


                                        /s/ Peter Nelipa
                                        --------------------------------
                                        Peter Nelipa
                                        Chief Executive Officer
                                        (Duly Authorized Officer)

                                        Date: August 19, 2004


                                        /s/ Suzanne Lilly
                                        --------------------------------
                                        Suzanne Lilly
                                        Chief Financial Officer
                                        (Principal Financial Officer)

                                        Date: August 19, 2004


































                                       17
<PAGE>






                                  Exhibit Index
                                  -------------

3.2.1.    Certificate of Amendment to Certificate of Incorporation
31.1.     Rule 13a-14(a) Certification of Chief Executive Officer
31.2.     Rule 13a-14(a) Certification of Chief Financial Officer
32.1.     Certification  of  Chief  Executive  Officer  Pursuant  to  18  U.S.C.
          Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.
32.2.     Certification  of  Chief  Financial  Officer  Pursuant  to  18  U.S.C.
          section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
          Act of 2002.
















































                                       18