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# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

# Washington, D.C. 20549

# FORM 10-QSB

(Mark one)

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

For the quarterly
period ended February 29, 2004

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|[  ] | TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE
EXCHANGE ACT
|---- | ---------------------------------------------------------------

For the transition period from _______________ to ______________.

Commission File Number
0-17284

MERCARI
COMMUNICATIONS GROUP, LTD.
(Exact name of small business issuer as specified in its charter)

|Colorado(State or other jurisdiction of incorporation or organization) |  | 84-1085935(IRS Employer
Identification No.)
|---------------------------------------------------------------------- |  | -------------------------------------------

1005 East Cobblestone
Drive, Highlands Ranch, Colorado, 80126
(Address of principal executive offices)

(303)
791-3888
(Issuers telephone number)

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

APPLICABLE
ONLY TO CORPORATE ISSUERS

State
the number of shares outstanding of each of the issuers classes of common equity,
as of the latest practical date:  February 29, 2004 - 950,000,000

Transitional Small
Business Disclosure Format.     Yes 
[  ]     No [X]

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PART
I  FINANCIAL INFORMATION

Item 1.
Financial Statements

MERCARI
COMMUNICATIONS GROUP, LTD.(A Development Stage Company)BALANCE SHEETS(Unaudited)

|                                               | February 29,2004 | May 31,2003 
|---------------------------------------------- | ---------------- | ------------
|ASSETS - Cash                                  |                  | $        110
|                                               |                  |             
|                                               |                  |             
|LIABILITIES AND STOCKHOLDERS EQUITY           |                 
|Liabilities:                                   |                 
|Accounts Payable & Accrued Liabilities         |                  | $ 129,401   
|                                               |                  |             
|Total Liabilities                              |                  | 129,401     
|                                               |                  |             
|Stockholders Equity                           |                 
|Common stock (par value $.00001),              |                 
|Authorized 950,000,000 shares,                 |                 
|Issued 950,000,000 shares at February 29, 2004 |                 
|and May 31, 2003                               |                  | 9,500       
|Paid-In Capital                                |                  | 814,432     
|Retained Deficit                               |                  | (919,100    
|Deficit Accumulated During Development Stage   |                  | (34,123     
|                                               |                  |             
|Total Stockholders Equity                     |                  | (129,291    
|                                               |                  |             
|Total Liabilities and Stockholders Equity     |                  | $        110
|                                               |                  |             
|                                               |                  |             

See
accompanying notes

2

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MERCARI COMMUNICATIONS
GROUP, LTD.(A Development Stage Company)STATEMENTS OF OPERATIONS(Unaudited)

|                | For the Three Months Ended | For the Nine Months Ended | CumulativeSinceAugust 31, 2001Inception of |        |  
|--------------- | -------------------------- | ------------------------- | ------------------------------------------ | ------ | -
|
|Revenues        |                            | $      --                 |                                            | $   -- |  
|                |                            |                           |                                            |        |  
|Expenses        |                            | 2,129                     |                                            | 276    |  
|                |                            |                           |                                            |        |  
|Net Loss        |                            | $(2,129                   | )                                          | $(276  | )
|                |                            |                           |                                            |        |  
|                |                            |                           |                                            |        |  
|Basic & Diluted |                           
|Loss per Share  |                            | $      --                 |                                            | $   -- |  
|                |                            |                           |                                            |        |  
|                |                            |                           |                                            |        |  

See
accompanying notes

3

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MERCARI
COMMUNICATIONS GROUP, LTD.(A Development Stage Company)STATEMENTS OF CASH FLOWS(Unaudited)

|                                          | For the Nine Months Ended | Cumulative     Since    August 31, 2001     Inception     of |  
|----------------------------------------- | ------------------------- | ------------------------------------------------------------ | -
|
|CASH FLOWS FROM OPERATING                 |                           |                                                              |  
|ACTIVITIES:                               |                          
|Net Loss                                  |                           | $(8,970                                                      | )
|Increase (Decrease) in Accounts Payable   |                           | 8,930                                                        |  
|                                          |                           |                                                              |  
|Net Cash Used in operating activities     |                           | (40                                                          | )
|                                          |                           |                                                              |  
|CASH FLOWS FROM INVESTING                 |                          
|ACTIVITIES:                               |                          
|Net cash provided by investing activities |                           | --                                                           |  
|                                          |                           |                                                              |  
|CASH FLOWS FROM FINANCING                 |                          
|ACTIVITIES:                               |                          
|Proceeds From Shareholder Advances        |                           | --                                                           |  
|Proceeds From Capital Stock Issued        |                           | --                                                           |  
|                                          |                           |                                                              |  
|Net cash provided by financing activities |                           | --                                                           |  
|                                          |                           |                                                              |  
|Net (Decrease) Increase in                |                          
|Cash and Cash Equivalents                 |                           | (40                                                          | )
|Cash and Cash Equivalents                 |                          
|at Beginning of Period                    |                           | 150                                                          |  
|                                          |                           |                                                              |  
|Cash and Cash Equivalents                 |                          
|at End of Period                          |                           | $    110                                                     |  
|                                          |                           |                                                              |  
|                                          |                           |                                                              |  
|SUPPLEMENTAL DISCLOSURE                   |                          
|OF CASH FLOW INFORMATION:                 |                          
|Cash paid during the year for:            |                          
|Interest                                  |                           | $      --                                                    |  
|Franchise and income taxes                |                           | $      --                                                    |  
|SUPPLEMENTAL DISCLOSURE OF NON-           |                          
|CASH INVESTING AND FINANCING              |                          
|ACTIVITIES:                               |                          
|None                                      |                          
|                                          |                           |                                                              |  

See
accompanying notes

4

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MERCARI
COMMUNICATIONS GROUP, LTD.(A Development Stage Company)NOTES TO FINANCIAL STATEMENTSFOR THE NINE MONTHS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003(Unaudited)

NOTE 1
 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This
summary of accounting policies for Mercari Communications Group, Ltd. (a
development stage company) is presented to assist in understanding the
Companys financial statements. The accounting policies conform to
generally accepted accounting principles and have been consistently applied in
the preparation of the financial statements.

Interim
Reporting

The
unaudited financial statements as of February 29, 2004 and for the three and
nine months then ended reflect, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to fairly state the
financial position and results of operations for the three and nine months.
Operating results for interim periods are not necessarily indicative of the
results which can be expected for full years.

Organization
and Basis of Presentation

The
Company was incorporated under the laws of the State of Colorado on December 30,
1987. The Company ceased all operating activities during the period from June 1,
1990 to August 31, 2001 and was considered dormant. Since August 31, 2001, the
Company is in the development stage, and has not commenced planned principal
operations.

Nature of
Business

The
Company has no products or services as of February 29, 2004. The Company was
organized as a vehicle to seek merger or acquisition candidates. The Company
intends to acquire interests in various business opportunities, which in the
opinion of management will provide a profit to the Company.

Cash and
Cash Equivalents

For
purposes of the statement of cash flows, the Company considers all highly liquid
debt instruments purchased with a maturity of three months or less to be cash
equivalents to the extent the funds are not being held for investment purposes.

Pervasiveness
of Estimates

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

5

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MERCARI
COMMUNICATIONS GROUP, LTD.(A Development Stage Company)NOTES TO FINANCIAL STATEMENTSFOR THE NINE MONTHS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003(Unaudited)

NOTE 1
 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loss Per
Share:

The
reconciliations of the numerators and denominators of the basic loss per share
computations are as follows:

|                            | Loss | Shares  | Per-ShareAmount
|--------------------------- | ---- | ------- | ---------------
|
|
|Basic Loss per Share        |      |         |                
|Loss to common shareholders |      | $(2,129 | )              
|                            |      |         |                
|                            |      |         |                

|                            | For the Three Months Ended February 28, 2003 |       |  
|--------------------------- | -------------------------------------------- | ----- | -
|Basic Loss per Share        |                                              |       |  
|Loss to common shareholders |                                              | $(276 | )
|                            |                                              |       |  
|                            |                                              |       |  

|                            | For the Nine Months Ended February 29, 2004 |         |  
|--------------------------- | ------------------------------------------- | ------- | -
|Basic Loss per Share        |                                             |         |  
|Loss to common shareholders |                                             | $(8,970 | )
|                            |                                             |         |  
|                            |                                             |         |  

|                            | For the Nine Months Ended February 28, 2003 |         |  
|--------------------------- | ------------------------------------------- | ------- | -
|Basic Loss per Share        |                                             |         |  
|Loss to common shareholders |                                             | $(6,469 | )
|                            |                                             |         |  
|                            |                                             |         |  

There
are no outstanding common stock equivalents for February 29, 2004 and February 28, 2003 and
are thus not considered.

Concentration
of Credit Risk

The
Company has no significant off-balance-sheet concentrations of credit risk such
as foreign exchange contracts, options contracts or other foreign hedging
arrangements.

6

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MERCARI
COMMUNICATIONS GROUP, LTD.(A Development Stage Company)NOTES TO FINANCIAL STATEMENTSFOR THE NINE MONTHS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003(Unaudited)

NOTE 2
 INCOME TAXES

As
of February 29, 2004, the Company had a net operating loss carryforward for
income tax reporting purposes of approximately $953,000 that may be offset
against future taxable income through 2022. Current tax laws limit the amount of
loss available to be offset against future taxable income when a substantial
change in ownership occurs. Therefore, the amount available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of the
loss carryforwards are offset by a valuation allowance of the same amount.

NOTE 3
 DEVELOPMENT STAGE COMPANY

The
Company has not begun principal operations and as is common with a development
stage company, the Company has had recurring losses during its development
stage. The Companys financial statements are prepared using generally
accepted accounting principles applicable to a going concern which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. In the
interim, shareholders of the Company have committed to meeting its minimal
operating expenses.

NOTE 4
 COMMITMENTS

As
of February 29, 2004, all activities of the Company have been conducted by
corporate officers from either their homes or business offices. Currently, there
are no outstanding debts owed by the company for the use of these facilities and
there are no commitments for future use of the facilities.

NOTE 5
 CONTINGENT LIABILITIES

At
February 29, 2004, the Company had $129,401 in current liabilities. The Company
believes that $110,435 of these liabilities were unpaid obligations of the
Company when operations ceased in August of 1990. The Company believes none of
such claims would be collectible by creditors, as the statute of limitations
applicable to collection of such commercial debt has expired under the Colorado
Revised Statute 13-80-101, which limits the collection of commercial debt to six
years from the date the last payment was made.

7

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Item 2.
Managements Discussion and Analysis or Plan of Operation.

General
 This discussion should be read in conjunction with Managements
Discussion and Analysis of Financial Condition and Results of Operations in the
Companys annual report on Form 10-KSB for the year ended May 31, 2003.

Results
of Operations  The Company had no operations from 1990 through 2001.
The Company is a development stage business, which intends to acquire a United
States or foreign based business which is privately owned and wishes to become a
publicly owned business. First management must clean up the balance sheet and
restructure the capital structure so that an acquisition could be made.
Additionally, management must bring the Company current in all of its filing
obligations with several state and federal agencies. At the time of
this report, not all of these steps have been completed and no acquisition
considerations or discussions have occurred with any party.

For
the quarter ended February 29, 2004 compared to the same period in 2003, results
are not necessarily indicative of the results that may be expected for the year
ended May 31, 2004.

The
Company has no business operations. The Company had $2,129 and $8,970 in
expenses for the three and nine months ended February 29, 2004, respectively,
and $276 and $6,469 in expenses for the three and nine months ended February 28,
2003, respectively. The Company had no revenues for the three and nine month
periods ended February 29, 2004 and February 28, 2003. Losses on operations may occur until
sufficient revenues can be achieved.

Liquidity
and Capital Resources

The
Company requires working capital principally to fund its current operations.
There are no formal commitments from banks or other lending sources for lines of
credit or similar short-term borrowing, but the Company has been able to borrow
any additional working capital that has been required. From time to time in the
past, required short-term borrowing have been obtained from a principal
shareholder or other related entities.

In
order to complete any acquisition, the Company may be required to supplement its
available cash and other liquid assets with proceeds from borrowings, the sale
of additional securities, including the private placement of restricted stock
and/or a public offering, or other sources. There can be no assurance that any
such required additional funding will be available or favorable to the Company.

The
Companys business plan requires substantial funding from a public offering
of its common stock. Along with other short-term financing, the net proceeds
from the sale of common stock should provide sufficient working capital to meet
anticipated capital needs for the next 12 months. After that, additional funds
will be generated through internal operations or from equity or debt financing,
for which the Company has no commitments.

Since
there is no assurance that the sale of common stock will be successful, the
Company intends to actively pursue other financing or funding opportunities.

8

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Item 3.
Controls and Procedures

The
Companys Chief Executive Officer and Chief Financial Officer have
concluded, based on an evaluation conducted within 90 days prior to the filing
date of this Quarterly Report on Form 10-QSB, that the Companys disclosure
controls and procedures have functioned effectively so as to provide those
officers the information necessary to evaluate whether:

| | (i)
this Quarterly Report on Form 10-QSB contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this Quarterly Report on Form 10-QSB, and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)
the financial statements, and other financial information included in this
Quarterly Report on Form 10-QSB, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of,
and for, the periods presented in this Quarterly Report on Form 10-QSB.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

There
have been no significant changes in the Companys internal controls or in
other factors since the date of the Chief Executive Officers and Chief
Financial Officers evaluation that could significantly affect these
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

PART
II  OTHER INFORMATION

Item 1.
Legal Proceedings

There
is no pending litigation, which th Company is presently a party to and
management is not aware of any litigation which may arise in the future.

Item 2.
Changes in Securities

None.

Item 3. Defaults
Upon Senior Securities

None.

Item 4.
Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other
Information

None.

9

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Item 6.
Exhibits and Reports on Form 8-K

|(a) | Exhibits. The following exhibits are filed with this Form 10-QSB:
|--- | -----------------------------------------------------------------

|31.1 | Statement of the Chief Executive Officer and Chief Financial Officer
Pursuant to Section 302
|---- | --------------------------------------------------------------------------------------------

|32.1 | Statement of the Chief Executive Officer and Chief Financial Officer
Pursuant to Section 906
|---- | --------------------------------------------------------------------------------------------

|(b) | Reports on Form 8-K. The Company did not file a
report on Form 8-K during the three months ended February 29, 2004.
|--- | -------------------------------------------------------------------------------------------------------------------

10

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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.

| | MERCARI COMMUNICATIONS GROUP, LTD.
(Registrant)
| | -----------------------------------------------

|DATE:  June 18, 2004 | By   /s/ Robert W. Marsik
       Robert W. Marsik, President
       (Principal Executive and Financial Officer)
|-------------------- | ---------------------------------------------------------------------------------------------------------------

11

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