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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 28, 2005

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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:  August 22, 20051,055,555

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 28,2005 | May 31,2004
|------------------------------------------------ | ---------------- | -----------
|ASSETS                                           |                  |            
|Current Assets                                   |                 
|Cash                                             |                  | $   5,087  
|Cash in Escrow                                   |                  | 4,357      
|Prepaid Expense                                  |                  | --         
|                                                 |                  |            
|Total Assets                                     |                  | $   9,444  
|                                                 |                  |            
|                                                 |                  |            
|LIABILITIES AND STOCKHOLDERS' EQUITY             |                 
|Liabilities:                                     |                 
|Accounts Payable & Accrued Liabilities           |                  | $   1,500  
|Shareholder Loans                                |                  | 2,350      
|                                                 |                  |            
|Total Liabilities                                |                  | 3,850      
|                                                 |                  |            
|Stockholders Equity                             |                 
|Common stock (par value $.00001),                |                 
|Authorized 950,000,000 shares,                   |                 
|Issued 1,055,555 shares at February 28, 2005     |                 
|and May 31, 2004                                 |                  | 10         
|Paid-In Capital                                  |                  | 36,134     
|Deficit accumulated during the development stage |                 
|Since March 1, 2004 in connection with           |                 
|Quasi reorganization                             |                  | (30,550    
|                                                 |                  |            
|Total Stockholders Equity                       |                  | 5,594      
|                                                 |                  |            
|Total Liabilities and Stockholders Equity       |                  | $   9,444  
|                                                 |                  |            
|                                                 |                  |            

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 | CumulativeSinceMarch 1, 2004Inception of |                  |  
|---------------- | -------------------------- | ------------------------- | ---------------------------------------- | ---------------- | -
|
|Revenues         |                            | $             --          |                                          | $             -- |  
|                 |                            |                           |                                          |                  |  
|Expenses         |                            | 2,449                     |                                          | 2,129            |  
|                 |                            |                           |                                          |                  |  
|Net Loss         |                            | $     (2,449              | )                                        | $     (2,129     | )
|                 |                            |                           |                                          |                  |  
|                 |                            |                           |                                          |                  |  
|Basic & Diluted  |                           
|Loss per Share   |                            | $             --          |                                          | $             -- |  
|                 |                            |                           |                                          |                  |  
|                 |                            |                           |                                          |                  |  
|Weighted Average |                           
|Shares           |                            | 1,055,555                 |                                          | 1,055,555        |  
|                 |                            |                           |                                          |                  |  
|                 |                            |                           |                                          |                  |  

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 EndedFebruary 28, | CumulativeSinceMarch 1, 2004InceptionofDevelopment |  
|----------------------------------------- | ------------------------------------- | -------------------------------------------------- | -
|
|CASH FLOWS FROM OPERATING                 |                                       |                                                    |  
|ACTIVITIES:                               |                                      
|Net Loss                                  |                                       | $(18,119                                           | )
|(Increase) Decrease in Prepaid Expenses   |                                       | 3,500                                              |  
|Increase (Decrease) in Accounts Payable   |                                       | (128                                               | )
|                                          |                                       |                                                    |  
|Net Cash Used in operating activities     |                                       | (14,747                                            | )
|                                          |                                       |                                                    |  
|CASH FLOWS FROM INVESTING                 |                                      
|ACTIVITIES:                               |                                      
|Net cash provided by investing activities |                                       | --                                                 |  
|                                          |                                       |                                                    |  
|CASH FLOWS FROM FINANCING                 |                                      
|ACTIVITIES:                               |                                      
|Contributed capital                       |                                       | 5,000                                              |  
|Proceeds from shareholder loans           |                                       | 1,800                                              |  
|Cash contributed by shareholders          |                                       | --                                                 |  
|                                          |                                       |                                                    |  
|Net cash provided by financing activities |                                       | 6,800                                              |  
|                                          |                                       |                                                    |  
|Net (Decrease) Increase in                |                                      
|Cash and Cash Equivalents                 |                                       | (7,947                                             | )
|Cash and Cash Equivalents                 |                                      
|at Beginning of Period                    |                                       | 17,391                                             |  
|                                          |                                       |                                                    |  
|Cash and Cash Equivalents                 |                                      
|at End of Period                          |                                       | $   9,444                                          |  
|                                          |                                       |                                                    |  
|                                          |                                       |                                                    |  
|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 28, 2005 AND 2004(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 28, 2005 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. From August 31, 2001 to
March 1, 2004, the Company was in the development stage. On August 3, 2004, the
stockholders of the Company approved a plan of quasi reorganization which called
for a restatement of accounts to eliminate the accumulated deficit and related
capital accounts on the Companys balance sheet. The quasi reorganization
was effective March 1, 2004. Since March 1, 2004, 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 28, 2005. 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.

5

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MERCARI
COMMUNICATIONS GROUP, LTD.(A Development Stage Company)NOTES TO FINANCIAL STATEMENTSFOR THE NINE MONTHS ENDED FEBRUARY 28, 2005 AND 2004(Unaudited)

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

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.

Loss per
Share

Basic
loss per share has been computed by dividing the loss for the year applicable to
the common stockholders by the weighted average number of common shares
outstanding during the years. There are no outstanding common stock equivalents
for February 28, 2005 and 2004 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.

NOTE 2
 INCOME TAXES

As
of May 31, 2004, the Company had a net operating loss carryforward for income
tax reporting purposes of approximately $12,000 that may be offset against
future taxable income through 2024. 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.

6

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MERCARI
COMMUNICATIONS GROUP, LTD.(A Development Stage Company)NOTES TO FINANCIAL STATEMENTSFOR THE NINE MONTHS ENDED FEBRUARY 28, 2005 AND 2004(Unaudited)

NOTE 3
 DEVELOPMENT STAGE COMPANY (continued)

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 28, 2005 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
 COMMON STOCK TRANSACTIONS

On
December 17, 2001, the Board of Directors approved the cancellation of 225,833
shares of common stock. As of May 31, 2002, these shares had not been cancelled.
During the year ended May 31, 2003, these shares were cancelled.

On
December 17, 2001, the Board of Directors authorized the sale of 843,305
restricted common shares at par value by the three current Directors. The
Directors paid $7,590 in cash consideration for those shares. As of May 31,
2002, these shares had not been issued. During the year ended May 31, 2003,
these shares were issued.

On
August 3, 2004, the Company authorized a 1 for 900 reverse stock split of the
Companys common stock. The reverse stock split reduced the number of
outstanding common shares from 950,000,000 to 1,055,555. All references to the
Companys common stock in the financial statements have been restated to
reflect the reverse stock split.

NOTE 6
 CONTINGENT LIABILITIES

At
May 31, 2003, the Company had $120,471 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. During the year ended May 31,
2004, the Company reclassified the $110,435 of expired liabilities to paid-in
capital.

7

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MERCARI
COMMUNICATIONS GROUP, LTD.(A Development Stage Company)NOTES TO FINANCIAL STATEMENTSFOR THE NINE MONTHS ENDED FEBRUARY 28, 2005 AND 2004(Unaudited)

NOTE 7
 RELATED PARTY TRANSACTIONS

During
the year ended May 31, 2004, an officer loaned the Company $550 to pay general
and administrative expenses. Amounts due to the officer are non-interest
bearing, unsecured and payable at anytime the shareholder desires.

During
the three months ended February 28, 2005, an officer loaned the Company $1,800
to pay general and administrative expenses. Amounts due to the officer are
non-interest bearing, unsecured and payable at anytime the shareholder desires.

NOTE 8
 QUASI REORGANIZATION

On
August 3, 2004, the Company approved and authorized a plan of quasi
reorganization and restatement of accounts to eliminate the accumulated deficit
and related capital accounts on the Companys balance sheet. The
quasi-reorganization became effective March 1, 2004. The quasi reorganization
resulted in the elimination of $919,100 of retained deficit at the effective
date of the reorganization, the elimination of $34,123 of deficit accumulated
since the August 31, 2001 inception of development stage, and a decrease in
additional paid-in capital of $953,223.

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, 2004.

Results of
Operations

The
Company had no operations from 1990 through 2004. 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. The Company is now current in its state and federal filing
obligations, and is current in its reporting obligations under the Securities
Exchange Act of 1934, as amended. The Company is now actively seeking one or
more acquisition candidates.

During
each of the years since the Company was reactivated, the Company has had no
revenue and has had losses approximately equal to the expenditures made to
reactivate and meet filing and reporting obligations. We do not expect any
revenue unless and until a business acquisition transaction is completed. Our
expenses have been paid from capital contributions and advances from the three
directors.

8

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Liquidity
and Capital Resources

The
Company requires working capital principally to fund its current operations.
There are no commitments from banks or other lending sources for lines of credit
or similar short-term borrowing, but the Company has been able to obtain
additional capital required from its directors. 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 or
private offering of its common stock in connection with a business acquisition,
for which the Company has no commitments. The Company intends to actively pursue
other financing or funding opportunities.

Item 3.
Controls and Procedures

The
Companys Chief Executive Officer and Chief Financial Officer are
responsible for establishing and maintaining disclosure controls and procedures
for the Company.

(a)
Evaluation of Disclosure Controls and Procedures

| | As
of the end of the period covered by this report, the Company carried out an
evaluation, under the supervision and with the participation of the
Companys management, including the Companys President, of the
effectiveness of the design and operation of the Companys disclosure
controls and procedures pursuant to Rule 13a-15 under the Securities Exchange
Act of 1934, as amended (the Exchange Act). Based upon the
evaluation, the Companys President concluded that, as of the end of the
period, the Companys disclosure controls and procedures were effective in
timely alerting him to material information relating to the Company required to
be included in the reports that the Company files and submits pursuant to the
Exchange Act.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(b)
Changes in Internal Controls

Based
on his evaluation as of February 28, 2005, there were no significant changes in
the Companys internal controls over financial reporting or in any other
areas that could significantly affect the Companys internal controls
subsequent to the date of his most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

9

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PART
II  OTHER INFORMATION

Item 1.
Legal Proceedings

There
is no pending litigation, which the 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.

Item 6.
Exhibits and Reports on Form 8-K

The
Company did not file a report on Form 8-K during the nine months ended February
28, 2005.

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:  August 23, 2005 | By   /s/ Robert W. Marsik
       Robert W. Marsik, President
       (Principal Executive and Financial Officer)
|---------------------- | ---------------------------------------------------------------------------------------------------------------

11

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