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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, 2002

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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
(I.R.S. employer identification number)

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

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

Indicate by check mark
whether the issuer (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 shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [  ]     No [X]

Indicate the number of
shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date: As of February 28, 2002, there were
approximately 950,000,000 common shares outstanding.

Transitional Small
Business Disclosure Format.

Yes 
[  ]     No [X]

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# 1.
PART 1 - FINANCIAL INFORMATION

## Item 1.
Financial statements

## MERCARI
COMMUNICATI0NS GROUP, LTD.
(A Development State Company)
BALANCE SHEET

`February 28, February 28,
                                                      2002         2001
                                                   -----------  -----------
                                                   (unaudited)

ASSETS .........................................   $   5,532    $    -0-

            TOTAL ASSETS .......................   $   5,532    $    -0-

LIABILITIES (Note 1) ...........................   $ 113,435    $ 110,435


            TOTAL LIABILITIES ..................   $ 113,435    $ 110,435



STOCKHOLDERS EQUITY

          Common stock, $0.00001 par value:
          Authorized - 950,000,000 shares;
          Issued and outstanding - 950,000,000
           and 394,274,720 on February 28, 2002
           and 2001, respectively ..............   $   9,475    $   3,943
          Paid-In Capital ......................   $ 806,867    $ 804,722
          Accumulated deficit ..................   ($919,100)   ($919,100)
          Deficit Accumulated During the
          Development Stage ....................   ($  5,145)   $    -0-

              TOTAL STOCKHOLDERS' EQUITY .......   ($107,903)   ($110,435)

              TOTAL LIABILITIES AND
              STOCKHOLDERS' EQUITY .............   $   5,532    $    -0-`

The accompanying notes are
an integral part of these financial statements.

---

## MERCARI
COMMUNICATI0NS GROUP, LTD.
(A Development State Company)
STATEMENT OF OPERATIONS
(Unaudited)

`Cumulative
                                                                        Since
                                                                       August 31,
                                   For the              For the           2001
                             Three Months Ended    Nine Months Ended   Inception
                                 February 28,         February 28,         of
                              -----------------   ------------------   Development
                                2002      2001       2002      2001       Stage
                                ----      ----       ----      ----    -----------

Revenues .................    $  --       $ --     $  --       $ --     $  --
                              -------     -----    -------     -----    -------
Expenses .................      5,145       --       5,145       --       5,145
                              -------     -----    -------     -----    -------
  Net Loss ...............    $(5,145)    $ --     $(5,145)    $ --     $(5,145)
                              =======     =====    =======     =====    =======

Basic & Diluted
  Loss Per Share .........    $  --       $ --     $  --       $ --
                              =======     =====    =======     ======`

The accompanying notes are
an integral part of these financial statements.

---

## MERCARI
COMMUNICATI0NS GROUP, LTD.
(A Development State Company)
STATEMENT OF CASH FLOWS
(Unaudited)

`Cumulative
                                                                        Since
                                                                       August 31,
                                                        For the           2001
                                                   Nine Months Ended   Inception
                                                      February 28,         of
                                                  ------------------   Development
                                                     2002      2001       Stage
                                                     ----      ----    -----------
CASH FLOW FROM OPERATING
ACTIVITIES:
Net Loss .......................................   $(5,145)   $  --     $(5,145)
Increase (Decrease) in Accounts Payable ........     3,000       --       3,000
                                                   -------    -------   -------
  Net cash used in operating activities ........    (2,145)      --      (2,145)
                                                   -------    -------   -------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds From Shareholder Advances .............     2,145       --       2,145
Proceeds From Capital Stock Issued .............     5,532       --       5,532
                                                   -------    -------   -------
  Net cash provided by financing activities ....     7,677       --       7,677
                                                   -------    -------   -------
Net (Decrease) Increase in
  Cash and Cash Equivalents ....................     5,532       --       5,532
Cash and Cash Equivalents
  at Beginning of Period .......................      --         --        --
                                                   -------    -------   -------
Cash and Cash Equivalents
  at End of Period .............................   $ 5,532    $  --     $ 5,532
                                                   =======    =======   =======

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`

The accompanying notes are
an integral part of these financial statements.

---

## MERCARI
COMMUNICATI0NS GROUP, LTD.
(A Development State Company)
Notes to Financial Statements
For the Nine Months Ended February 28, 2002 and 2001
(Unaudited)

NOTE 1 - ORGANIZATION
AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of accounting
policies for Mercari Communications Group, Ltd. (a development stage company)
(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. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation of the financial condition of registrant have been included, and
the disclosures are adequate to make the information presented not
misleading.

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.

The Company completed an
Initial Public Offering (IPO) of its securities in September 1988 having sold
77,637,000 units at $0.01 per unit, generating $776,370 in gross proceeds. (Each
unit consisted of one common share and one Series A Warrant to purchase one
common share). Following the offering and after paying debt incurred and
offering expenses, net proceeds to the Company were $539,213. On April 20, 1989
the Company called all 87,137,000 outstanding Series A Warrants for redemption
on June 16, 1989. There were 2,835,440 Series A Warrants exercised @ $0.01 for
$28,326 gross proceeds and 302,280 Series A Warrants exercised @ $0.0125 for
$3,775 gross proceeds, or total gross proceeds of $32,101. All remaining Series
A Warrants expired following the warrant call. During 1989 the
Company issued 25,000,000 Common shares in exchange for the cancellation of
$103,105 of debt owed by the Company to an unrelated third party, bringing total
shares issued and outstanding to 394,274,720 as of May 31, 2001.

The Company ceased all
operations in mid-year 1990 and was considered to be dormant.

In December 2000 the one
remaining Board member created a new business plan with two unaffiliated
businessmen for the Company. New Officers and two new Directors were appointed
for the purpose of implementing the new plan. The new business plan primarily
provided for the clean up of the Company so as to provide for the
filing of all delinquent reports with the Colorado Secretary of State, the
United States Securities and Exchange Commission and the Internal Revenue
Service and restructuring the balance sheet and the capital structure. Once the
Company is current with all agencies, an application with the National
Association of Security Dealers for inclusion of Company securities on the OTC
Bulletin Board Market, although we make no assurances in that regard. The
Company plans to seek to acquire an operating privately owned business, through
a reverse merger, that has assets, revenues and earnings and wishes to become a
publicly owned corporation. The Company currently has no prospective
acquisition candidates and has not discussed this plan with any potential
acquisition candidate.

On December 17, 2001 the
Board of Directors engaged the audit firm of Robison, Hill and Company, approved
the audit report prepared by the Auditors for the Company for the fiscal year
ended May 31, 2001, and approved the appointment of Computershare Investor
Services as transfer agent for the Company

According to
the Form 10-Q report filed with the Securities and Exchange Commission by the
Company for the quarter ended February 28, 1989, the Company had approximately
$110,000 of liabilities at that time. The Company believes that the claims of
those unpaid creditors have become uncollectible because of the statute of
limitations applicable to the collection of commercial debt under Colorado
Revised Statue 13-80-101, which limits the collection of commercial debt to six
years from the date of last payment.

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## MERCARI
COMMUNICATI0NS GROUP, LTD.
(A Development State Company)
Notes to Financial Statements
For the Nine Months Ended February 28, 2002 and 2001
(Unaudited)

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

Nature of Business

The Company has no products
or services as of February 28, 2002. 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 wake 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:

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

`Per Share
                                            Income       Shares         Amount
                                            ------       ------       ---------
                                         (Numerator)  (Denominator)

                                          For the Three Months Ended February 28, 2002
Basic Loss per Share
Income to common shareholders             $ (5,145)    849,969,450      $ --
                                          ========     ===========      ======

                                          For the Nine Months Ended February 28, 2002
Basic Loss per Share
Income to common shareholders             $ (5,145)    544,420,546      $ --
                                          ========     ===========      ======

                                          For the Three Months Ended February 28, 2001
Basic Loss per Share
Income to common shareholders             $   --       394,274,720      $ --
                                          ========     ===========      ======

                                          For the Nine Months Ended February 28, 2001
Basic Loss per Share
Income to common shareholders             $   --       394,274,720      $ --
                                          ========     ===========      ======`

---

## MERCARI
COMMUNICATI0NS GROUP, LTD.
(A Development State Company)
Notes to Financial Statements
For the Nine Months Ended February 28, 2002 and 2001
(Unaudited)

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

There are no outstanding
common stock equivalents for February 28, 2002 and 2001 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 February 28, 2002,
the Company had a net operating loss carryforward for income tax reporting
purposes of approximately $924,000 that may be offset against future taxable
income through 2021. 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 28, 2002
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 tbese facilities and there are no
connriittnents for future use of the facilities.

NOTE 5 - COMMON STOCK

On December 17, 2001 the
Board of Directors voted to cancel 203,250,000 common shares previously issued
to twenty-one people who entered into an agreement to cancel these shares with
the underwriter in the event that the Company did not achieve certain revenue
projections following the IPO in 1988. The Company did not achieve those revenue
projections and the current Board of Directors took action to cancel those
shares. Additionally, the Board of Directors approved the purchase of
738,975,280 common restricted shares by the current Board members for services
and cash contributions of $7,677.

---

ITEM
2.Managements
Discussion and Analysis of Financial Conditions and Plan of Operations.

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, 2001.

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 and then have an
unaffiliated licensed broker/dealer make application with NASD for the common
stock of the Company to trade before an acquisition could occur. At the time or
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 28, 2002 compared to the same period in 2001 are not necessarily
indicative of the results that may be expected for the year ended May 31, 2001.

The Company has no business
operations. The Company had $5,145 and $5,145 in expenses for the three and nine
months ended February 28, 2002 and $O and $O for the three and nine months ended
2001. The Company had no revenues for the three and nine month periods ended
February 28, 2002 and 2001. 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.

## Plan of
Operations

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 shot-term financing, the net proceeds from the sale of comnon
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 fnancing or finding opportunities.

---

## 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.   Change in Securities

On December 17, 2001 the
Board of Directors canceled 203,250,000 common shares previously issued
to twenty-one persons who entered into an agreement to cancel these shares with
thc underwriter in the event that the Company did not achieve certain revenue
projections following the IPO in 1988. The Company did not achieve those revenue
projections and the current Board of Directors took action to cancel those
shares. Additionally, the Board of Directors approved the purchase of
758,975,280 common restricted shares by the current Board members for services
and cash contributions of $7,677.

ITEM 3.   
Default 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 of Form 8-K

The Company did not file a
report on Form 8-K during the three months ended February 28, 2002.

# SIGNATURES

In accordance with the
requirements of  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:  April 12, 2002 
             
             
             
             
             
             
             
           
By   /s/ Robert W. Marsik
             
             
             
             
             
             
             
             
             
             
              
Robert W. Marsik, President

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