UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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                                   FORM 10-KSB

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                   FOR THE FISCAL YEAR ENDED FEBRUARY 28, 2006

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  FOR THE TRANSITION PERIOD FROM _____ TO _____

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                        Commission File Number 000-30703


                        COLLECTIBLE CONCEPTS GROUP, INC.
        (Exact name of small business issuer as specified in its charter)


                    DELAWARE                        95-4026880
           (State or other jurisdiction           (IRS Employer
                 of incorporation               Identification No.)
                 or organization)


         1600 LOWER STATE ROAD
            DOYLESTOWN, PA                    18901           (215) 491-1075
(Address of principal executive office)    (Postal Code)         (Issuer's
                                                              telephone number)

Securities registered under Section 12(b) of the Exchange Act:

Securities  registered  under Section  12(g) of the Exchange Act:  Common Stock,
$0.001 par value

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 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 |X| No |_|

Indicate by check mark whether the  registrant is a shell company (as defined in

Yes |_| No |X|

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-B is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
Form 10-KSB.

Yes |_| No |X| Delinquent filers are disclosed herein.

Total revenues for Fiscal Year Ended February 28, 2006 were $569,847.

The  aggregate  market  value of the  Common  Stock held by  non-affiliates  (as
affiliates  are defined in Rule 12b-2 of the  Exchange  Act) of the  registrant,
computed by  reference  to the average of the high and low sale price on July 5,
2006, was $757,023.17.

As of July 5, 2006 there were  5,139,143,049  shares of  issuer's  common  stock
outstanding.

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                                       1

<PAGE>

                        COLLECTIBLE CONCEPTS GROUP, INC.
                                   FORM 10-KSB
                   FOR THE FISCAL YEAR ENDED FEBRUARY 28, 2006

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Part I
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                                                                         Page
                                                                         ----

Item 1.    Description of Business.                                       3

Item 2.    Description of Property.                                      14

Item 3.    Legal Proceedings.                                            14

Item 4.    Submission of Matters to a Vote of Security Holders.          14

Part ll
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                                                                         Page
                                                                         ----

Item 5.    Market for Common Equity and Related Stockholder Matters.     15

Item 6.    Management's Discussion and Analysis or Plan of Operation.    17

Item 7.    Financial Statements                                         F-1

Item 8.    Changes In and Disagreements With Accountants on Accounting
           and Financial Disclosure.                                     24

Item 8A.   Controls and Procedures.                                      24

Item 8B.   Other Information.                                            24

Part lll
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                                                                         Page
                                                                         ----

Item 9.    Directors, Executive Officers, Promoters and Control
           Persons; Compliance with Section 16(a) of the Exchange Act.   25

Item 10.   Executive Compensation.                                       27

Item 11.   Security Ownership of Certain Beneficial Owners and
           Management and Related Stockholder Matters                    28

Item 12.   Certain Relationships and Related Transactions.               29

Item 13.   Exhibits.                                                     30

Item 14.   Principal Accountant Fees and Services.                       33

Signatures.                                                              34

                                       2

<PAGE>

                                     PART I

FORWARD-LOOKING INFORMATION

         This Annual Report of Collectible  Concepts Group,  Inc. on Form 10-KSB
contains  forward-looking  statements,  particularly  those  identified with the
words,  "anticipates,"  "believes," "expects," "plans," "intends",  "objectives"
and similar  expressions.  These statements  reflect  management's best judgment
based on  factors  known at the time of such  statements.  The  reader  may find
discussions containing such forward-looking statements in the material set forth
under "Legal Proceedings" and "Management's  Discussion and Analysis and Plan of
Operations,"  generally,  and specifically therein under the captions "Liquidity
and  Capital  Resources"  as well as  elsewhere  in this  Annual  Report on Form
10-KSB.  Actual  events or results may differ  materially  from those  discussed
herein.

ITEM 1.  DESCRIPTION OF BUSINESS.

BUSINESS DEVELOPMENT & HISTORICAL PERSPECTIVE

      Collectible Concepts Group, Inc. was originally formed on March 1, 1986 as
"Amour  Corporation".  We changed our name to "Bard  Sports  Corp." in September
1988,  and changed our name again on February 28, 1993 to "USA Sports Corp".  We
changed our name to "Collectible Concepts Group, Inc." on April 27, 1999. We are
incorporated under the laws of the State of Delaware.

         Our roots are in the production and  distribution of collectible  items
principally related to various sports. Following what management perceived to be
a change in consumer trends from high end sports  collectibles to more commodity
types of sports items such as trading cards, we modified our business  direction
and refocused  our efforts on the emerging  consumer  interest in  entertainment
related  collectibles.  This redirection to the entertainment markets required a
significant  development  effort  on our  part,  particularly  in  terms  of the
procurement  of new licenses and marketing  privileges  necessary to produce and
distribute  collectibles  in this new  marketing  area.  Beginning  in 1999,  we
proceeded  to obtain  licenses,  from Marvel for its X-Men,  Spiderman  and Hulk
movies as well as licenses to produce  products  related to the  Terminator 1, 2
and 3 movie  series.  Expanding  on our plan to  provide  entertainment  related
goods; we also purchased  licenses from Marvel for its comic book characters and
additional  licenses  for the  Three  Stooges  and  Chicken  Soup  for the  Soul
(terminated  December 31, 2002). We proceeded to secure more licenses  including
Planet of the Apes,  Farscape,  Stan Lee Media, Vern Troyer and Titan Motorcycle
Company.  Items covered by these licenses included hanging wall scrolls produced
in a silk-like  fabric,  collector  pins,  sculpted items and items shown in the
film  such as dog tags,  rings  and  replicas  of jet  airplanes.  While we were
successful  in  presenting  the Company to the  entertainment  marketplace  as a
viable licensee,  we made significant  investments in the cost of these licenses
both in terms of the down payments and,  importantly,  the guaranteed  royalties
stipulated under the license agreements.  Additional  investment both in dollars
and human resources was also required to develop the authorized products.  These
expenditures  taxed our financial  resources placing serious  limitations on our
ability to deliver  products in a timely  fashion,  a crucial  requirement  when
consumer  demand is driven by  scheduled  events  such as movie  releases.  This
proved to be a major factor in the decline in our revenues.

         We continued to seek a business  model that would enable us to leverage
our strengths in licensing and  distribution of  collectibles  and not burden us
with  the   financial   requirements   associated   with  product   development,
manufacturing  and  inventory.  Additionally,  we sought to alter our  strategic
direction  to  focus on  markets  that had a more  mainstream  profile  than the
entertainment  industry provides. We concluded that the College affinity market,
the children's  market and the  professional  sports market were venues where we
could  perform in a modality that would more fully utilize our strengths and not
be seriously affected by our weaknesses.  We adopted this new business model and
proceeded to secure  business  opportunities  in the new target  markets.  Since
then, we have focused on a greater  variety of products but virtually all in the
sports licensing industry. We have created master distributorship  agreements so
that more expanded lines of products are available to our sales force.

                                       3

<PAGE>

         We  have  allowed  all of our  licenses  related  to the  entertainment
industry  lapse as we  pursue  the  college  and  professional  sports  markets.
Currently,  we have  licensing  agreements  with  the  National  Hockey  League,
National Basketball Association and Arena Football League.

CURRENT PRODUCT LINES

         Following the migration to entertainment related licenses,  our product
line is currently comprised of items principally related to our new professional
sports licenses. Revenues for the current year were derived principally from the
sale of products  for these  licenses.  These  include  our satin wall  scrolls,
Fanbana's  and  megaphone  caps.  This core  grouping of products  provides  the
foundation  for  our  catalog  of  goods  to all  four  of our  target  markets;
entertainment,   children's,  collegiate  and  professional  sports.  We  obtain
licenses  within  each of the target  markets  and  produce  products  using the
licensed  images  appropriate to that market.  We produce our satin wall scrolls
with  images  of  mascots  and  school  logos  from  colleges  with whom we have
licenses. By simply changing the licensed image, we are able to produce products
from the core  family  group for all of our  markets.  In this  manner,  we have
dramatically reduced the number of manufacturing  resources necessary to run our
business  without  limiting the scope of our  marketplace.  New products include
wooden  collectibles  licenses  by the NFL and NCAA and MLB and  covered  by our
Joint Venture  Agreement  with  GridWorks,  Inc. and Salt and Pepper Shakers and
Lenticular Cups licensed by MLB, NFL and NASCAR through our master  distribution
agreement with Brax3D.

DISTRIBUTION CHANNELS

         We  sell  our  collectible  products  through  traditional   retailers,
distributors, online merchants and catalogers. Additionally, we sell our college
affinity products through college bookstores on and off campus as well as a host
of retailers located in and around college campuses.  Our products are presented
to these  channels  through  manufacturer's  representatives  as well as our own
internal  sales staff.  Our Stories for Heroes  audio book,  though a very small
part of our business is distributed through Baker Video sales.

LICENSING AGREEMENTS

         In March 2005,  and amended in  September  2005,  we signed a licensing
agreement  with the NBA,  which  expires on September  30, 2006.  The  agreement
includes a 12% royalty paid on sales,  with a minimum  royalty for the period of
$35,000,  of which  $25,000 was owed upon signing the agreement and $10,000 owed
upon signing the amendment.

         On May 12,  2005,  we  signed a  licensing  agreement  with  the  Arena
Football  League,  which expires on June 30, 2007. The agreement  includes a 12%
royalty paid on sales with no minimum royalty guarantees.  We paid $10,000 first
advance for the rights to the license.

         In June 2005, we renewed our licensing  agreement  with the NFL for the
period April 2005 through March 2006. The agreement  includes a 12% royalty paid
on sales with a minimum  annual  royalty of $100,000,  of which  $30,000 was due
upon signing the agreement. We did not renew this license and have since changed
our  license  with the NFL from a retail  license  to being  listed on the NFL's
promotional  products  list  which has  royalties  negotiated  on a deal by deal
basis.

         On April 10, 2006 we signed a license  agreement with Diann Wall-Wilson
for a broad line of products  utilizing her  copyrighted  designs for the United
States  Marine Corp Bulldog,  United  States Navy Goat,  United States Air Force
Falcon and the Coast Guard  Otter.  We paid  $20,000 for this  license in $5,000
monthly  increments  beginning April 10, 2006 and the final payment due July 10,
2006.  This licensing  agreement is for 5 years.  The agreement  calls for a 10%
royalty of which the $20,000 in initial payments are a pre-paid royalty.

                                       4

<PAGE>

NEW OPPORTUNITIES

         Building on our revised  business  model, we continued to seek products
whose  marketability  would be enhanced by the application of images,  logos and
other identifying  symbols available through licenses we had or could obtain. We
looked for product partners whose goods addressed our new target markets.  These
sectors  represent  new revenue  opportunities  for us; the college and military
segments are renewable markets, producing a fresh group of consumers every year;
licensed  goods sales are  extremely  prevalent in these  marketing  circles and
typically not limited to single products;  the college and military  marketplace
extends beyond that of the current student bodies and enlistees and includes the
alumni  populations as well; the collegiate and professional  sports markets are
well known as popular areas for the  distribution of various  promotional  items
bearing  team and  sponsor  company  logos and  slogans.  Our long  history  and
experience in the sports markets provide  additional  benefits to this endeavor.
We have executed  several  licensing  agreements and continue to seek additional
ones consistent with our new business strategy.

MARKETING STRATEGY

         We have  expanded  our  marketing  strategies  and now  produce  unique
collectible products for the college,  military and professional sports markets.
We market our products  primarily  through various  distributors and independent
sales organizations that collectively cover all of our markets both domestic and
international.  We also  market our  merchandise  directly to  consumers  online
through  established  websites such as Amazon.com  and others.  Our  independent
representatives  also sell to mass  merchandisers  such as Target,  Wal-Mart and
K-Mart as well as smaller chains and independently owned stores.

         Additionally,  our college affinity products are sold through retailers
located  around  the  main  campuses  of our  licensed  schools.  We  are  not a
manufacturer,  but rather source our products from a wide range of manufacturing
partners.  As our new  marketing  plan rolls out,  we plan to expand our product
line to include more products especially in the military and collegiate markets.
The current line of collegiate and many of our professional  sports products are
produced for us under joint venture or master distributor agreements.

         We do not believe we can clearly define the cash needs to stabilize and
expand our business.  We continue to investigate  various merger and acquisition
opportunities and routinely examined license opportunities.  Accordingly,  there
may be  significant  variation  in the range of  dollars  needed if any of these
potential business  arrangements come to fruition. In general, the fixed cost of
a  license,  or  minimum  royalty,  can range from  $10,000  to  $100,000,  plus
royalties  earned  over the  minimum,  and would  normally  cover a one,  two or
three-year  period.  While we have  refocused  our business  model to ameliorate
traditional  product  development and production  costs,  actual costs will vary
depending  upon the  nature  and type of the  product  to be  developed  and the
expected revenue stream to the licensor.  Our  pre-production  activity includes
prototype and sample package and display artwork and models, all of which may go
through  several  iterations  as both we and the  licensor  review the  samples.
Historically,  pre-production  costs also  included  tooling  costs,  which were
capitalized, and the other pre-production costs that were expensed. In the past,
these pre-production costs have ranged from $5,000 to $100,000.

         As of February 28, 2006, we had accounts  payable and accrued  expenses
of $3,643,238  and $2,500,036 in loans,  notes and debentures  (net) past due or
coming  due  within  the next 12 months.  We do not  currently  have  sufficient
financial  resources  to meet these  obligations  and will depend on new outside
financing to satisfy our pending  obligations.  We also lack adequate  financial
resources  to  purchase  inventory  and  meet all of the  financial  commitments
necessary  to enter into new  product  ventures,  and will depend on new outside
financing to further these  efforts.  There can be no assurance  that we will be
able to obtain additional adequate outside financing to purchase inventory, meet
our current  obligations or continue to expand our  operations.  We would not be
able to continue at our current  staffing and expense levels without  additional
cash from cash sales, collection of accounts receivable or additional funding.

                                       5

<PAGE>

COMPETITION

         Our licenses typically grant us the exclusive right to produce specific
products  utilizing specific images and logos so competition for our products in
the marketplace is generally quite limited.  We believe that direct  competition
for  obtaining  licenses  in our  entertainment  is not a  factor.  We  consider
competition  for  licenses  in the  college  and  children's  markets to be more
significant   although  we  have   experienced   good  results  in  our  initial
applications to various schools.  Generally, we believe we will receive licenses
in most of the cases where we seek them.  Historically,  we experienced our most
significant  competition  in  obtaining  shelf  space in retail  outlets for our
products,  however,  under the new  business  configuration  that  channels  our
efforts and talents through partnerships and strategic  relationships with other
entities with existing  products,  the impact of competition is greatly softened
and actually  reduced to the level of competing for the  strategic  relationship
rather than  competing  for the  end-user  consumer.  Here,  the strength of our
licenses  and/or  product  positions (as in the case of our exclusive  marketing
rights for the Fanbana), serve to neutralize competition and afford us a clearer
path to market. This is especially true in the college market where our products
will be featured in college bookstores and other on-campus retailers creating an
acutely focused retail environment servicing our target consumers exclusively.

MANUFACTURERS

         We  do  not  manufacture   our  own  products,   but  rely  on  outside
manufacturers.  Several of these outside  manufacturers are located overseas and
we believe that there are sufficient  numbers of manufacturers  that we will not
have to rely  upon any  single  source  and will be able to  obtain  alternative
manufacturing  facilities if chosen  manufacturers do not perform.  We generally
enter into  exclusive  manufacturing  agreements  with our  manufacturers  for a
single product,  but may use various  manufacturers for all of the products in a
series.  The main raw materials used by our manufacturers are plastics,  pewter,
resins and packaging  material.  We do not believe that there is any significant
risk of shortages in these raw  materials,  nor is  fluctuation  in the price of
these  raw  materials  likely to have an  adverse  impact on our costs or profit
margins. All of our manufacturing agreements are U.S. dollar denominated,  so we
generally do not face exchange rate risks.

FILM LIBRARY

         We acquired a historical film library containing  thousands of hours of
sports events  including,  among  others,  boxing,  baseball,  football and auto
racing.  The asset acquisition  agreement was entered into December 15, 2005 and
gives us title to the entire  library.  The film library  consists of over 5,000
hours of sporting events from the years 1948 through 1972.  Additionally,  there
are also sports films in the library after 1972.  As well,  there is an old time
cartoon library as well as classic  movies.  The film library was acquired for a
purchase price of $250,000 with $50,000 paid in cash and the remainder in a note
payable due five years from the acquisition  date along with interest accrued at
6% per annum.  As part of  acquisition  of the film library,  we were assigned a
licensing  agreement  whereby  royalties  (minimum  of $50,000 per year) will be
received over the next ten years,  although  there are questions  concerning the
ability of the licensee to pay such royalties.

INTELLECTUAL PROPERTY

We have several key licenses and business arrangements upon which the success of
our business is dependent,  including  licenses with the National Hockey League,
the National Basketball Association and the Arena Football League.

                                       6

<PAGE>

EMPLOYEES

         As of July 1, 2006,  we had 10 full time  employees,  of which four are
management;  five are marketing and one shipping and delivery.  In addition,  we
had one part time  employee  and two  independent  consultants.  We consider our
relations with our employees to be good.

RISKS RELATED TO BUSINESS

         You should carefully  consider the following risk factors and all other
information  contained herein as well as the information included in this Annual
Report in evaluating  our business and  prospects.  The risks and  uncertainties
described  below  are  not  the  only  ones  we  face.   Additional   risks  and
uncertainties,  other than those we describe below, that are not presently known
to us or that we currently believe are immaterial,  may also impair our business
operations.  If any of the  following  risks occur,  our business and  financial
results could be harmed. You should refer to the other information  contained in
this Annual  Report,  including our  consolidated  financial  statements and the
related notes.

RISKS RELATING TO OUR BUSINESS:
-------------------------------

WE HAVE A HISTORY OF LOSSES WHICH MAY CONTINUE,  WHICH MAY NEGATIVELY IMPACT OUR
ABILITY TO ACHIEVE OUR BUSINESS OBJECTIVES.

         We incurred net losses of  $8,554,857  for the year ended  February 28,
2006 and  $3,793,501  for the year ended February 28, 2005. We cannot assure you
that we can achieve or sustain  profitability  on a quarterly or annual basis in
the future. Our operations are subject to the risks and competition  inherent in
the  establishment  of a business  enterprise.  There can be no  assurance  that
future  operations  will be  profitable.  Revenues  and profits will depend upon
various factors,  including  whether we will be able to increase  revenue.  As a
result of  continuing  losses,  we may  exhaust  all of our  resources  prior to
completing  the  development  of our products.  Additionally,  as we continue to
incur losses,  our  accumulated  deficit will continue to increase,  which might
make it harder for us to obtain financing in the future.  We may not achieve our
business  objectives and the failure to achieve such goals would have an adverse
impact on us, which could result in reducing or terminating our operations.

IF WE ARE UNABLE TO OBTAIN  ADDITIONAL  FUNDING OUR BUSINESS  OPERATIONS WILL BE
HARMED AND IF WE DO OBTAIN ADDITIONAL  FINANCING OUR THEN EXISTING  SHAREHOLDERS
MAY SUFFER SUBSTANTIAL DILUTION.

         We will  require  additional  funds to sustain  and expand our  product
manufacturing and licensing activities. We anticipate that we will require up to
approximately  $750,000 to fund our  anticipated  operations for the next twelve
months,  depending  on  revenue  from  operations.  Additional  capital  will be
required to effectively  support the  operations and to otherwise  implement our
overall business strategy.  Even if we do receive additional  financing,  it may
not be sufficient to sustain or expand our research and  development  operations
or continue our business operations.

         There can be no assurance  that  financing will be available in amounts
or on terms  acceptable  to us, if at all. The  inability  to obtain  additional
capital will restrict our ability to grow and may reduce our ability to continue
to conduct business operations. If we are unable to obtain additional financing,
we will likely be required to curtail our research and  development  plans.  Any
additional  equity  financing  may  involve  substantial  dilution  to our  then
existing shareholders.

OUR INDEPENDENT  REGISTERED  PUBLIC  ACCOUNTING  FIRM HAS EXPRESSED  SUBSTANTIAL
DOUBT ABOUT OUR ABILITY TO  CONTINUE  AS A GOING  CONCERN,  WHICH MAY HINDER OUR
ABILITY TO OBTAIN FUTURE FINANCING.

                                       7

<PAGE>

         In their report dated June 23, 2006, our independent  registered public
accounting firm stated that our consolidated  financial  statements for the year
ended February 28, 2006 were prepared assuming that we would continue as a going
concern.  Our ability to continue as a going  concern is an issue  raised due to
our working  capital  deficiency  of  $5,734,951,  shareholders'  deficiency  of
$19,480,090,  net  loss  of  $8,554,857  and net  cash  used  in  operations  of
$1,611,998  as of and for the year ended  February  28,  2006.  We  continue  to
experience net operating  losses.  Our ability to continue as a going concern is
subject to our ability to generate a profit and/or obtain necessary funding from
outside sources,  including  obtaining  additional  funding from the sale of our
securities,  generating  sales  or  obtaining  loans  and  grants  from  various
financial  institutions  where  possible.  Our continued  net  operating  losses
increase the  difficulty  in meeting  such goals and there can be no  assurances
that such methods will prove successful.

MANY OF OUR  COMPETITORS  ARE  LARGER  AND  HAVE  GREATER  FINANCIAL  AND  OTHER
RESOURCES  THAN WE DO AND THOSE  ADVANTAGES  COULD MAKE IT  DIFFICULT  FOR US TO
COMPETE WITH THEM

         The  general   market  for  our  products  and  services  is  extremely
competitive and includes  several  companies  which have achieved  substantially
greater market shares than we have, and have longer  operating  histories,  have
larger customer bases, have  substantially  greater  financial,  development and
marketing  resources  than we do. If  overall  demand  for our  products  should
decrease it could have a materially adverse affect on our operating results.

WE ARE DEPENDENT ON CERTAIN LICENSING  RELATIONSHIPS TO GENERATE  REVENUES,  THE
LOSS OF WHICH COULD SIGNIFICANTLY REDUCE REVENUE

         Our sales are  dependent to a significant  degree upon the  contractual
relationships  we can  establish  with  licensors  to  exploit,  on a  generally
non-exclusive basis,  proprietary rights in well-known sports teams and players.
Although  we believe we will  continue to meet all of our  material  obligations
under such license  agreements,  there can be no assurance  that such  licensing
rights  will  continue or will be  available  for  renewal on  favorable  terms.
Failure to obtain new licenses or extensions on current licenses or to sell such
products,  for any  reason,  could  have a  significant  negative  impact on our
revenue.

A   MANUFACTURER'S   INABILITY   TO  PRODUCE  OUR  GOODS  ON  TIME  AND  TO  OUR
SPECIFICATIONS COULD RESULT IN LOST REVENUE AND NET LOSSES

         We do not own or operate any  manufacturing  facilities  and  therefore
depend  upon  independent  third  parties  for  the  manufacture  of  all of our
products.  Our  products are  manufactured  to our  specifications  by a foreign
manufacturer.  During fiscal 2006,  all of our products were  manufactured  by a
small number of  manufacturers,  including four  manufacturers who accounted for
84% of our manufactured products. The inability of a manufacturer to ship orders
of our products in a timely manner or to meet our quality  standards could cause
us to miss the delivery  date  requirements  of our  customers  for those items,
which could result in cancellation of orders,  refusal to accept deliveries or a
reduction in purchase prices,  any of which could have a material adverse effect
as our  revenues  would  decrease  and we would  incur net losses as a result of
sales of the product, if any sales could be made. Further,  because quality is a
leading factor when customers and retailers  accept or reject goods, any decline
in quality by our third-party  manufacturers  could be detrimental not only to a
particular  order,  but also to our  future  relationship  with that  particular
customer.

IF WE NEED TO REPLACE  MANUFACTURERS,  OUR EXPENSES COULD INCREASE  RESULTING IN
SMALLER PROFIT MARGINS OR NEGATIVE GROSS MARGINS.

         We compete  with other  companies  for the  production  capacity of our
manufacturers.  Some of these  competitors  have  greater  financial  and  other
resources  than we have, and thus may have an advantage in the  competition  for
production.  If we  experience  a  significant  increase  in  demand,  or if our
existing  manufacturers must be replaced,  we may have to expand our third-party
manufacturing  capacity. We cannot assure you that this additional capacity will
be  available  when  required on terms that are  acceptable  to us or similar to
existing  terms  which we have with our  current  manufacturers,  either  from a
production standpoint or a financial standpoint. The manufacturers we use do not
produce our products exclusively.

                                       8

<PAGE>

         Should we be forced to replace our current  manufacturers,  who we rely
upon  for  all of our  production  needs,  then  we may  experience  an  adverse
financial impact, or an adverse  operational impact, such as being forced to pay
increased costs for such replacement  manufacturing or delays upon  distribution
and  delivery  of our  products to our  customers,  which could cause us to lose
customers or lose revenues because of late shipments.

IF A MANUFACTURER OF OURS FAILS TO USE ACCEPTABLE LABOR PRACTICES, WE MIGHT HAVE
DELAYS IN  SHIPMENTS  OR FACE  JOINT  LIABILITY  FOR  VIOLATIONS,  RESULTING  IN
DECREASED REVENUE AND INCREASED EXPENSES

         While we require our independent manufacturers to operate in compliance
with  applicable  laws and  regulations,  we have no control  over the  ultimate
actions  of  our  independent  manufacturers.  While  our  internal  and  vendor
operating guidelines promote ethical business practices and our staff and buying
agents  periodically  visit  and  monitor  the  operations  of  our  independent
manufacturers,  we do not control these  manufacturers or their labor practices.
The violation of labor or other laws by an independent  manufacturer of ours, or
by  one  of  our  licensing  partners,  or  the  divergence  of  an  independent
manufacturer's  or licensing  partner's  labor  practices  from those  generally
accepted as ethical in the United States, could interrupt,  or otherwise disrupt
the shipment of finished products to us or damage our reputation.  Any of these,
in turn,  could have a material  adverse  effect on our financial  condition and
results of operations.

THE FAILURE TO MANAGE OUR GROWTH IN OPERATIONS AND  ACQUISITIONS  OF NEW PRODUCT
LINES AND NEW BUSINESSES COULD HAVE A MATERIAL ADVERSE EFFECT ON US.

         The expected  growth of our operations  (as to which no  representation
can  be  made)  will  place  a  significant  strain  on our  current  management
resources. To manage this expected growth, we will need to improve our:

         o  operations and financial systems;

         o  procedures and controls; and

         o  training and management of our employees.

         Our  future  growth  may be  attributable  to  acquisitions  of and new
product  lines  and new  businesses.  We expect  that  future  acquisitions,  if
successfully  consummated,  will create increased working capital  requirements,
which will likely  precede by several  months any  material  contribution  of an
acquisition to our net income.

         Our failure to manage growth or future acquisitions  successfully could
seriously harm our operating  results.  Also,  acquisition costs could cause our
quarterly operating results to vary significantly. Furthermore, our stockholders
would be diluted if we financed the  acquisitions by incurring  convertible debt
or issuing securities.

         Although we currently only have operations within the United States, if
we were to acquire an international  operation;  we will face additional  risks,
including:

         o  difficulties  in staffing,  managing and  integrating  international
            operations due to language, cultural or other differences;

         o  Different or conflicting regulatory or legal requirements;

         o  foreign currency fluctuations; and

         o  diversion of significant time and attention of our management.

                                       9

<PAGE>

IF WE ARE UNABLE TO RETAIN THE  SERVICES  OF MR.  PAUL  LIPSCHUTZ,  OR IF WE ARE
UNABLE TO SUCCESSFULLY  RECRUIT QUALIFIED  MANAGERIAL AND SALES PERSONNEL HAVING
EXPERIENCE IN BUSINESS, WE MAY NOT BE ABLE TO CONTINUE OUR OPERATIONS.

         Our success depends to a significant  extent upon the continued service
of Mr. Paul Lipschutz,  our Chief Executive Officer and director.  We do have an
employment agreement with Mr. Lipschutz, however, Mr. Lipschutz can give 90 days
notice  prior to each  renewal  period on January 1. Loss of the services of Mr.
Lipschutz  could have a material  adverse  effect on our growth,  revenues,  and
prospective  business.  We do not maintain key-man  insurance on the life of Mr.
Lipschutz.  In  addition,  in order to  successfully  implement  and  manage our
business  plan,  we will be dependent  upon,  among other  things,  successfully
recruiting  qualified  managerial  and  sales  personnel  having  experience  in
business.  Competition  for qualified  individuals  is intense.  There can be no
assurance that we will be able to find, attract and retain existing employees or
that we will  be  able to  find,  attract  and  retain  qualified  personnel  on
acceptable terms.

POTENTIAL  PRODUCT  LIABILITY  CLAIMS COULD  AFFECT OUR  EARNINGS AND  FINANCIAL
CONDITION.

         We face a potential risk of liability  claims based on our products and
services,  and we have faced such claims in the past.  We  currently do not have
any product  liability  coverage but are attempting to obtain  coverage which we
will believe to be adequate. We cannot assure,  however, that we will be able to
obtain or maintain this insurance at reasonable cost and on reasonable terms. We
also cannot assure that this insurance, if obtained, will be adequate to protect
us against a product  liability  claim,  should  one arise.  In the event that a
product liability claim is successfully brought against us, it could result in a
significant  decrease in our  liquidity  or assets,  which  could  result in the
reduction or termination of our business.

A  SUBSTANTIAL  PORTION  OF OUR  REVENUE  IS  DERIVED  FROM A  SMALL  NUMBER  OF
CUSTOMERS.

         Our three largest customers, Brainstorm Promotions, Delta Airlines, and
the New  York  Jets,  accounted  for  approximately  16.5%,  41.7%,  and  13.4%,
respectively,  of our gross revenue  during fiscal year ended February 28, 2006.
CLP Group  accounted for  approximately  90% of our gross revenue  during fiscal
year ended February 28, 2005. We do not enter into long-term agreements with any
of our customers.  Instead,  we enter into a number of individual purchase order
commitments with our customers.  A decision by any of our significant customers,
whether  motivated  by  competitive   conditions,   financial   difficulties  or
otherwise, to decrease the amount of merchandise purchased from us, or to change
their manner of doing business with us, could have a material  adverse effect on
our financial condition and results of operations.

RISKS RELATING TO OUR CURRENT FINANCING ARRANGEMENT:
----------------------------------------------------

THERE ARE A LARGE NUMBER OF SHARES UNDERLYING OUR SECURED  CONVERTIBLE NOTES AND
WARRANTS  THAT MAY BE AVAILABLE FOR FUTURE SALE AND THE SALE OF THESE SHARES MAY
DEPRESS THE MARKET PRICE OF OUR COMMON STOCK.

         As of July 14, 2006, we had 5,139,143,049 shares of common stock issued
and outstanding,  secured  convertible  notes  outstanding that may be converted
into an  estimated  186,549,000,000  shares of common  stock at  current  market
prices and outstanding  warrants to purchase 257,618,422 shares of common stock.
In addition,  the number of shares of common stock  issuable upon  conversion of
the outstanding  secured  convertible  notes may increase if the market price of
our stock declines. All of the shares, including all of the shares issuable upon
conversion of the notes and upon  exercise of our warrants,  may be sold without
restriction.  The sale of these shares may adversely  affect the market price of
our common stock.

                                       10

<PAGE>

THE CONTINUOUSLY  ADJUSTABLE CONVERSION PRICE FEATURE OF OUR SECURED CONVERTIBLE
NOTES COULD REQUIRE US TO ISSUE A SUBSTANTIALLY  GREATER NUMBER OF SHARES, WHICH
WILL CAUSE DILUTION TO OUR EXISTING STOCKHOLDERS.

         Our  obligation  to  issue  shares  upon   conversion  of  our  secured
convertible notes is essentially  limitless.  The following is an example of the
amount of shares of our common stock that are issuable,  upon  conversion of our
secured  convertible notes (excluding accrued interest),  based on market prices
25%,  50% and 75% below the  market  price as of July 12,  2006 of  $0.0001  per
share.

Secured Convertible Notes at 75% Discount

                                              Number           % of
% Below    Price Per    With Discount        of Shares      Outstanding
Market       Share          at 75%           Issuable          Stock
------       -----          ------           --------          -----

25%         $.000075      $.00001875     195,398,666,666       97.44%
50%         $.00005       $.0000125      293,098,000,000       98.28%
75%         $.000025      $.00000625     586,196,000,000       99.13%

Secured Convertible Notes at 80% Discount

                                              Number           % of
% Below    Price Per    With Discount        of Shares      Outstanding
Market       Share         at 80%            Issuable          Stock
------       -----         ------            --------          -----

25%         $.000075     $.000015          53,333,333,334      91.21%
50%         $.00005      $.00001           80,000,000,000      93.96%
75%         $.000025     $.000005         160,000,000,000      96.89%

         As  illustrated,  the number of shares of common  stock  issuable  upon
conversion of our secured convertible notes will increase if the market price of
our stock declines, which will cause dilution to our existing stockholders.

THE CONTINUOUSLY  ADJUSTABLE CONVERSION PRICE FEATURE OF OUR SECURED CONVERTIBLE
NOTES MAY  ENCOURAGE  INVESTORS TO MAKE SHORT SALES IN OUR COMMON  STOCK,  WHICH
COULD HAVE A DEPRESSIVE EFFECT ON THE PRICE OF OUR COMMON STOCK.

         The secured convertible notes are convertible into shares of our common
stock at a 75% or 80% discount to the trading price of the common stock prior to
the  conversion.  The significant  downward  pressure on the price of the common
stock as the investors  convert and sells material amounts of common stock could
encourage short sales by investors.  This could place further downward  pressure
on the price of the common stock. The investors could sell common stock into the
market  in  anticipation  of  covering  the  short  sale  by  converting   their
securities,  which could cause the further downward pressure on the stock price.
In addition,  not only the sale of shares issued upon  conversion or exercise of
the secured  convertible  notes,  but also the mere  perception that these sales
could occur, may adversely affect the market price of the common stock.

THE  ISSUANCE OF SHARES UPON  CONVERSION  OF THE SECURED  CONVERTIBLE  NOTES AND
EXERCISE OF OUTSTANDING WARRANTS MAY CAUSE IMMEDIATE AND SUBSTANTIAL DILUTION TO
OUR EXISTING STOCKHOLDERS.

                                       11

<PAGE>

         The issuance of shares upon conversion of the secured convertible notes
and exercise of warrants may result in substantial  dilution to the interests of
other  stockholders since the investors may ultimately convert and sell the full
amount  issuable on  conversion.  Although the  investors  may not convert their
secured  convertible  notes and/or exercise their warrants if such conversion or
exercise would cause them to own more than 4.9% of our outstanding common stock,
this  restriction  does  not  prevent  the  investors  from  converting   and/or
exercising  some of  their  holdings  and  then  converting  the  rest of  their
holdings. In this way, the investors could sell more than this limit while never
holding  more than this  limit.  There is no upper limit on the number of shares
that  may  be  issued   which  will  have  the   effect  of   further   diluting
186,549,000,000 the proportionate equity interest and voting power of holders of
our common stock, including investors in this offering.

IN THE EVENT THAT OUR STOCK PRICE DECLINES, THE SHARES OF COMMON STOCK ALLOCATED
FOR CONVERSION OF THE SECURED  CONVERTIBLE NOTES TO BE REGISTERED  PURSUANT TO A
REGISTRATION  STATEMENT  MAY NOT BE  ADEQUATE  AND WE MAY BE  REQUIRED TO FILE A
SUBSEQUENT  REGISTRATION  STATEMENT COVERING ADDITIONAL SHARES. IF THE SHARES WE
HAVE ALLOCATED AND PLAN TO REGISTER ARE NOT ADEQUATE AND WE ARE REQUIRED TO FILE
AN  ADDITIONAL  REGISTRATION  STATEMENT,  WE  MAY  INCUR  SUBSTANTIAL  COSTS  IN
CONNECTION THEREWITH.

         Based on our current  market  price and the  potential  decrease in our
market  price as a result of the  issuance  of  shares  upon  conversion  of the
secured  convertible  notes, we have made a good faith estimate as to the amount
of shares of common  stock that we are  required to register  and  allocate  for
conversion of the secured convertible notes.  Accordingly,  assuming we are able
to increase the number of shares of authorized  shares of common stock,  we plan
to allocate and register at least 186,549,000,000 shares to cover the conversion
of the secured  convertible  notes. In the event that our stock price decreases,
the shares of common  stock we have  allocated  for  conversion  of the  secured
convertible  notes and plan to register  may not be  adequate.  If the shares we
allocate and register  pursuant to the  registration  statement are not adequate
and we are required to file an additional  registration  statement, we may incur
substantial  costs  in  connection  with  the  preparation  and  filing  of such
registration statement.

IF WE ARE REQUIRED FOR ANY REASON TO REPAY OUR OUTSTANDING  SECURED  CONVERTIBLE
NOTES,  WE WOULD BE REQUIRED TO DEPLETE OUR WORKING  CAPITAL,  IF AVAILABLE,  OR
RAISE ADDITIONAL FUNDS. OUR FAILURE TO REPAY THE SECURED  CONVERTIBLE  NOTES, IF
REQUIRED,  COULD RESULT IN LEGAL ACTION AGAINST US, WHICH COULD REQUIRE THE SALE
OF SUBSTANTIAL ASSETS.

         Between 2000 and 2006, we entered into Securities  Purchase  Agreements
for  the  sale  of an  aggregate  of  $4,677,597  principal  amount  of  secured
convertible  notes,  of  which  $4,463,725  remains  outstanding.   The  secured
convertible  notes are due and  payable,  with  interest,  between one and three
years from the date of  issuance  (or the date from  which we are in  compliance
with the terms of the securities purchase  agreements),  unless sooner converted
into shares of our common stock.  In addition,  any event of default such as our
failure to repay the principal or interest when due, our failure to issue shares
of common  stock upon  conversion  by the  holder,  our failure to timely file a
registration  statement or have such registration  statement declared effective,
breach of any covenant,  representation  or warranty in the Securities  Purchase
Agreements or related  convertible  note,  the  assignment or  appointment  of a
receiver to control a substantial  part of our property or business,  the filing
of a money  judgment,  writ or similar  process against our company in excess of
$50,000,  the  commencement  of  a  bankruptcy,  insolvency,  reorganization  or
liquidation proceeding against our company and the delisting of our common stock
could require the early repayment of the secured convertible notes,  including a
default interest rate of 15% on the outstanding  principal  balance of the notes
if the default is not cured with the specified grace period.  We anticipate that
the full amount of the secured  convertible  notes will be converted into shares
of our common  stock,  in accordance  with the terms of the secured  convertible
notes.  If we are required to repay the secured  convertible  notes, we would be
required to use our limited  working capital and raise  additional  funds. If we
were unable to repay the notes when  required,  the note holders could  commence
legal  action  against us and  foreclose  on all of our  assets to  recover  the
amounts due. Any such action would require us to curtail or cease operations.

                                       12

<PAGE>

WE ARE CURRENTLY IN DEFAULT UNDER THE SECURITIES PURCHASE AGREEMENTS AND SECURED
CONVERTIBLE NOTES AND THE INVESTORS HAVE THE RIGHT TO TAKE POSSESSION OF ALL OUR
GOODS,  INVENTORY,  CONTRACTUAL  RIGHTS AND  GENERAL  INTANGIBLES,  RECEIVABLES,
DOCUMENTS, INSTRUMENTS, CHATTEL PAPER, AND INTELLECTUAL PROPERTY.

         In connection with the Securities  Purchase  Agreements we entered into
in between 2000 and 2006, we granted in favor of the investors a first  priority
security interest in all of our goods, inventory, contractual rights and general
intangibles,   receivables,   documents,   instruments,   chattel   paper,   and
intellectual  property.  Pursuant  to  the  terms  of  the  Securities  Purchase
Agreements,  an  event  of  default  has  occurred.  Pursuant  to  the  Security
Agreements,  in the event of a  default,  the  Investors  have the right to take
possession of the collateral, to operate our business using the collateral,  and
have the right to assign, sell, lease or otherwise dispose of and deliver all or
any part of the  collateral,  at public or private  sale or otherwise to satisfy
our  obligations  under these  agreements.  As of the date of this  filing,  the
Investors  have not declared a default by the Company,  although there can be no
assurance that they will not declare a default in the future.

RISKS RELATING TO OUR COMMON STOCK:
-----------------------------------

IF WE FAIL TO REMAIN CURRENT IN OUR REPORTING REQUIREMENTS,  WE COULD BE REMOVED
FROM THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF  BROKER-DEALERS  TO
SELL OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR  SECURITIES IN
THE SECONDARY MARKET.

         Companies  trading  on the OTC  Bulletin  Board,  such  as us,  must be
reporting  issuers under Section 12 of the  Securities  Exchange Act of 1934, as
amended,  and must be current in their  reports  under  Section  13, in order to
maintain price quotation privileges on the OTC Bulletin Board. Additionally,  in
the event  that a company  fails to timely  file  three of their  quarterly  and
annual  reports under  Section 13 within a two year period,  the company will be
ineligible to have their  securities  quoted on the OTC Bulletin Board for a one
year period.  We have filed two reports  within the last two years that were not
timely. If we fail to remain current on our reporting  requirements for the next
two years,  we will be removed from the OTC  Bulletin  Board.  As a result,  the
market  liquidity for our  securities  could be severely  adversely  affected by
limiting the ability of broker-dealers to sell our securities and the ability of
stockholders to sell their securities in the secondary market.

OUR  COMMON  STOCK IS  SUBJECT  TO THE  "PENNY  STOCK"  RULES OF THE SEC AND THE
TRADING MARKET IN OUR  SECURITIES IS LIMITED,  WHICH MAKES  TRANSACTIONS  IN OUR
STOCK CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR STOCK.

         The  Securities  and Exchange  Commission  has adopted Rule 15g-9 which
establishes the definition of a "penny stock," for the purposes  relevant to us,
as any equity  security  that has a market price of less than $5.00 per share or
with an  exercise  price of less  than  $5.00  per  share,  subject  to  certain
exceptions.  For any  transaction  involving a penny stock,  unless exempt,  the
rules require:

         o  that a broker or dealer approve a person's  account for transactions
            in penny stocks; and

         o  the broker or dealer  receive from the investor a written  agreement
            to the  transaction,  setting forth the identity and quantity of the
            penny stock to be purchased.

In order to approve a person's  account for  transactions  in penny stocks,  the
broker or dealer must:

         o  obtain financial information and investment experience objectives of
            the person; and

         o  make a  reasonable  determination  that  the  transactions  in penny
            stocks are  suitable  for that person and the person has  sufficient
            knowledge  and  experience  in  financial  matters  to be capable of
            evaluating the risks of transactions in penny stocks.

                                       13

<PAGE>

The broker or dealer  must also  deliver,  prior to any  transaction  in a penny
stock, a disclosure  schedule prescribed by the Commission relating to the penny
stock market, which, in highlight form:

         o  sets  forth  the  basis on  which  the  broker  or  dealer  made the
            suitability determination; and

         o  that the broker or dealer received a signed,  written agreement from
            the investor prior to the transaction.

Generally,  brokers may be less willing to execute  transactions  in  securities
subject  to the  "penny  stock"  rules.  This  may  make it more  difficult  for
investors to dispose of our common stock and cause a decline in the market value
of our stock.

         Disclosure  also has to be made about the risks of  investing  in penny
stocks  in  both  public  offerings  and in  secondary  trading  and  about  the
commissions payable to both the broker-dealer and the registered representative,
current  quotations for the securities and the rights and remedies  available to
an  investor  in cases of fraud in penny stock  transactions.  Finally,  monthly
statements  have to be sent  disclosing  recent price  information for the penny
stock held in the account and information on the limited market in penny stocks.

ITEM 2.  DESCRIPTION OF PROPERTY.

         Our executive and principal  administrative offices are located at 1600
Lower State Road,  Doylestown,  Pennsylvania  18901,  where we  currently  lease
approximately  2,600 square feet of office space. The lease expires in September
2009.  The  monthly  rental  payments  under the lease are $2,960 in 2006,  with
annual  increases of $960. We believe that our leased property is sufficient for
our current and immediately foreseeable operating needs.

ITEM 3.  LEGAL PROCEEDINGS.

         From time to time, we may become involved in various lawsuits and legal
proceedings which arise in the ordinary course of business.  However, litigation
is subject to inherent  uncertainties,  and an adverse  result in these or other
matters may arise from time to time that may harm our business. We are currently
not aware of any such legal  proceedings  or claims  that we believe  will have,
individually  or in the  aggregate,  a material  adverse affect on our business,
financial condition or operating results.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         None.

                                       14

<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

         Our common stock is quoted on the OTC  Bulletin  Board under the symbol
"CCGI".

         For the periods indicated,  the following table sets forth the high and
low bid prices per share of common stock.  These prices  represent  inter-dealer
quotations  without  retail  markup,   markdown,   or  commission  and  may  not
necessarily represent actual transactions.

                                       FISCAL YEAR 2005
                                       ----------------
                                   HIGH                 LOW
                                   ----                 ---

       First Quarter               $0.01                $0.01
       Second Quarter              $0.01                $0.01
       Third Quarter               $0.01                $0.01
       Fourth Quarter              $0.01                $0.01

                                       FISCAL YEAR 2006
                                       ----------------
                                   HIGH                 LOW
                                   ----                 ---
       First Quarter               $0.01                $0.01
       Second Quarter              $0.01                $0.01
       Third Quarter               $0.01                $0.01
       Fourth Quarter              $0.01                $0.01

                                       FISCAL YEAR 2007
                                       ----------------
                                   HIGH                 LOW
                                   ----                 ---
       First Quarter               $0.01                $0.01
       Second Quarter (1)          $0.01                $0.01
       Third Quarter               Xxx                  Xxx
       Fourth Quarter              Xxx                  Xxx

(1) As of July 5, 2006.

HOLDERS

         As of July 5,  2006,  we had  approximately  950  holders of our common
stock.  The number of record  holders  was  determined  from the  records of our
transfer  agent and does not  include  beneficial  owners of common  stock whose
shares  are  held  in the  names  of  various  security  brokers,  dealers,  and
registered clearing agencies. The transfer agent of our common stock is American
Registrar & Transfer Co., 342 East 900 South, Salt Lake City, Utah 84111.

DIVIDENDS

         We have never paid any cash  dividends on our capital  stock and do not
anticipate  paying any cash  dividends  on our common  stock in the  foreseeable
future.  We intend to retain  future  earnings to fund  ongoing  operations  and
future capital  requirements of our business.  Any future  determination  to pay
cash dividends will be at the discretion of the Board and will be dependent upon
our financial  condition,  results of operations,  capital requirements and such
other factors as the Board deems relevant.

                                       15

<PAGE>

RECENT SALE OF UNREGISTERED SECURITIES

         None.

                                       16

<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

         The  following  information  should  be read in  conjunction  with  the
consolidated  financial  statements and the notes thereto contained elsewhere in
this report.  The Private  Securities  Litigation  Reform Act of 1995 provides a
"safe  harbor"  for  forward-looking  statements.  Information  in this  Item 6,
"Management's  Discussion and Analysis or Plan of  Operation,"  and elsewhere in
this 10-KSB  that does not consist of  historical  facts,  are  "forward-looking
statements." Statements accompanied or qualified by, or containing words such as
"may," "will," "should," "believes,"  "expects," "intends," "plans," "projects,"
"estimates,"  "predicts,"  "potential,"  "outlook,"  "forecast,"  "anticipates,"
"presume," and "assume" constitute forward-looking  statements, and as such, are
not a guarantee of future performance. The statements involve factors, risks and
uncertainties  including those discussed in the "Risk Factors" section contained
elsewhere in this  report,  the impact or  occurrence  of which can cause actual
results  to  differ  materially  from the  expected  results  described  in such
statements.  Risks and uncertainties can include, among others,  fluctuations in
general  business  cycles and changing  economic  conditions;  changing  product
demand and  industry  capacity;  increased  competition  and pricing  pressures;
advances in technology that can reduce the demand for the Company's products, as
well as other factors, many or all of which may be beyond the Company's control.
Consequently,  investors  should not place  undue  reliance  on  forward-looking
statements as predictive of future results. The Company disclaims any obligation
to update the forward-looking statements in this report.

GENERAL

         We earn  revenues  from  distributing  high-end  and  novelty  products
principally  related to the entertainment and sports industries.  These products
are sold through  retailers,  distributors,  department stores, the Internet and
catalogs.

         We continue to pursue our re-evaluated  business model. We believe that
licenses have evolved into less time sensitive and sale spiking properties.  Our
new business model focuses on more evergreen  properties and those with a longer
window of opportunity. We recognize the need to have products that addressed the
mainstream  consumer  market where  market size and repeat  sales  opportunities
could give us a means to  stabilize  and grow our  revenues.  To avoid the time,
expense and risks  associated  with  in-house new product  development,  we have
sought out entities with mainstream  consumer products whose marketability could
be enhanced by the addition of our licenses. These activities produced new joint
ventures  and  products  that  addressed  new  markets in  keeping  with our new
marketing   direction   aimed  at  the   collegiate  and   professional   sports
marketplaces.

         Our Stories for Heroes audio book of Arthur children's stories are sold
exclusively  on  Amazon.com.  We  partnered  with 212 Media  Group to manage the
manufacturing, marketing and distribution of the audio book. The CD itself is an
enhanced audio CD that features stories, pictures, music and games for children,
parents and teachers. Celebrity readers include Clay Aiken, Kelly Ripa and Kevin
Bacon.

         We have entered into an exclusive  licensing agreement with Dimensional
Products & Imaging, Inc.(DPI), to develop and market unique print products using
DPI's Vertical D TM dimensional imaging.

         We had a licensing  agreement with the NFL by which we have  permission
to produce and sell our products for all 32 NFL teams.  This license ended March
31, 2006 and was not renewed.

                                       17
<PAGE>

         On  February  28,  2005,  we sold to Alizay  Consultant  Limited a 2.5%
interest  in our  future  revenues  generated  under  our NFL,  NBA  license  in
2005-2006 and any future license in 2006 with Major League Baseball ("MLB"),  if
obtained.  The agreement included a clause that would extend the partial sale of
revenues  to an  additional  year of sales under the NBA  license,  should we be
unsuccessful  in obtaining  the MLB license.  We did not obtain the MLB license,
therefore  Alizay will  receive a 2.5%  interest in the NBA  revenues  generated
during the 2006-2007 license period.

TWELVE MONTHS ENDED  FEBRUARY 28, 2006 COMPARED TO TWELVE MONTHS ENDED  FEBRUARY
28, 2005.

         Net revenue for the twelve  months ended  February 28 2006 was $569,847
and primarily  consisted of sales of professional and collegiate  sports related
products,  promotional  Fanbana sales and E-Bay Internet sales.  Net revenue for
the twelve months ended  February 28, 2005 was $679,682 and primarily  consisted
of sales of professional and collegiate sports related products, X-Men products,
Terminator  products,  Marvel Character products,  promotional Fanbana sales and
E-Bay Internet sales.  Sales from X-men and Marvel Character  products were sell
offs of merchandise remaining under licenses that previously expired.

         Sales for the twelve  months  ended  February  28, 2006 were  comprised
primarily  of products  offered with our National  Football  League  License and
College Licenses. The National Football League license expired on March 31, 2006
and was not  renewed.  Instead  of  paying  the  royalties  for the NFL  license
ourself, we have decided to work with distributors who have NFL licenses to sell
their  products  instead.  Since the NFL season does not start until August,  we
cannot determine what impact,  if any, the change in our business  strategy will
have on our sales.

         Additional  revenues  were  also  produced  from the  sale of  products
related to our Marvel,  Three Stooges and Terminator license and a special order
of Nurse Dana scrolls. In addition to income from traditional  sources,  revenue
was generated  from Internet  sales through e-bay.  The timely  availability  of
product  samples has become a critical  element in the  ability to  successfully
obtain orders from  distributors  and especially  retailers who prepare  product
sales plans  (plan-o-gram)  at least six months in advance.  Consumer demand for
these  products is most often driven  directly by the initial  start of a sports
season and followed later by the success of individual teams.  Consequently,  we
have missed the window of opportunity afforded us by certain of our licenses. We
are  constantly  seeking to remedy this  serious  problem by raising  additional
working capital and, most importantly, by seeking new sourcing for our principal
products that can produce  samples in a timely and cost effective way to support
the sales efforts.

         Cost of sales for the twelve months ended  February 28, 2006  increased
by $25,095 from the twelve  months ended  February 28, 2005.  This  increase was
mainly   attributable  to  added  expenses  incurred  from  changing  to  better
performing suppliers in an effort to meet our customer demands. Cost of sales as
a  percentage  of  revenues  increased  to 109.3%  for the twelve  months  ended
February 28, 2006 as compared to 87.9% for the same period last year.

         Cost of sales  for the  twelve  months  ended  February  28,  2006 were
comprised  of costs  associated  with the sale of the  products  related  to the
National  Football  League  License and College  Licenses.  These  products  are
contract  manufactured  for  us  by  both  domestic  and  foreign  companies  to
specifications  developed by us and approved by the various licensors. We do not
feel this places us at risk for filling  future orders on a timely basis because
we  have  developed  relationships  with  alternate  suppliers  for  most of our
products. Several of our manufacturers will also store and ship product directly
to a customer, thereby reducing shipping time and eliminating the costs we would
incur if the product was first shipped to our location. We also feels we are not
at  risk  for  any  currency  fluctuations  in  our  dealing  with  our  foreign
manufacturers  since all orders are based on U.S. dollars and we do not have any
long term purchase commitments.

         Selling  and  administrative  expenses  for  the  twelve  months  ended
February 28, 2006  increased to $1,446,180  from  $1,215,122 for the same period
the previous  year.  For the twelve months ended  February 28, 2006 and February
28, 2005 the services  obtained through the issuance of stock included  internal
accounting  and  financial  services,   internet  website  creation,   marketing
assistance,  insurance program review and general management consulting services
in the amount of $30,000 and $176,209, respectively. As previously mentioned, we
incur charges to bring the product to market.  These charges relate to the costs
of producing  samples as well as the related  package  design costs that must be
approved by the licensor prior to full production  runs of the product.  For the
twelve months ended February 28, 2006, we incurred charges relating to the costs
of producing the samples as well as the related package design of $44,952 versus
charges of $36,975 for the same period the previous year.

                                       18

<PAGE>

         Selling  and  administrative  expense  consists  of payroll and related
fringe   benefits,   royalties,   commissions   paid  to   manufacturers   sales
representatives,   advertising,  rent,  depreciation  and  other  related  fixed
overhead  expenses.  Also included in this category are the expenses  related to
the replication of movie props to ready them for mass production by the contract
manufacturers,  as well as the non-cash  costs related to services  satisfied by
the issuance of our stock.  The services  provided were in direct support of our
operations. As we grow through acquisitions and the sales of current product, we
anticipate  we will have to rely less on the  issuance of stock for services due
to increased cash flows as well as capital.  The benefits to us from these stock
transactions are to reduce the use of cash, which allow us to devote the maximum
amount of resources to expanding  the  business.  For  accounting  purposes,  we
valued these  services at the fair market value of the services  rendered or the
fair market value of the stock at times of issuance  whichever  was more readily
determinable.  Production  costs  include  prototypes  and samples of packaging,
displays and products. All expensed production costs are included within selling
and administrative expenses.

         We incurred  interest expense of $1,116,910 for the twelve months ended
February 28, 2006 as compared to $744,370 for the same period the previous  year
due to increased borrowings and the debt accretion related to the application of
SFAS 133.  The  accretion  of debt  calculation  added  $748,306 and $482,123 of
interest expense  respectively for the twelve months ended February 28, 2006 and
February 28, 2005, respectively.

         For the twelve  months ended  February 28, 2006, we incurred a non-cash
loss  in  adjusting  the  fair  value  of  the  debenture  and  related  warrant
derivatives  relating to the  convertible  debentures  of $6,034,623 as compared
with $2,160,086 during the prior year.

         As a  result  of the  above,  we had a net loss of  $8,554,857  for the
twelve  months ended  February 28, 2006 as compared to a net loss of  $3,793,501
for the same period last year.

LIQUIDITY AND CAPITAL RESOURCES

         As of  February  28,  2006,  we had a  working  capital  deficiency  of
$5,734,951.  The working  capital  deficit as of  February  28, 2006 is a direct
result of the  unprofitable  operations  for prior years as well as for the past
twelve  months ended  February 28, 2006 that  resulted in cash used in operating
activities of  $1,611,998.  We had an ending cash balance of $74,738 at February
28, 2006.  As such,  we will have to raise  additional  capital  within the next
twelve months.

         We have  financed our losses  through  private sales of equity and debt
securities  and the  issuance of stock for  services.  During the twelve  months
ended February 28, 2006, we received the following capital infusions: $1,726,457
from issuance of secured convertible debentures and $60,000 from the sale of our
common stock.

         We  are  working  with  various   distributors  and  independent  sales
representatives  in an effort to cut costs,  offer a greater variety of products
and to increase the customer  base for our  products.  We believe that if we can
increase our  revenues and improve our gross profit  margin that this will allow
us to reach profitability.

                                       19

<PAGE>

         While we have raised capital to meet our working  capital and financing
needs in the past, additional financing is required within the next 12 months in
order to meet our current and projected  cash flow deficits from  operations and
development.  We have  sufficient  funds to conduct our  operations  for several
months,  but  not  for  12  months  or  more.  We  believe  that  we  will  need
approximately  $750,000 in additional funds to continue  operations for the next
12 months,  depending on revenues from  operations.  We are  constantly  seeking
additional  sources  of  financing,  however,  there  can be no  assurance  that
financing will be available in amounts or on terms acceptable to us, if at all.

         As of February 28, 2006, we had $485,337 in outstanding notes and loans
payable,  (of which $1,878 is due to related  parties)  $127,300 in  convertible
subordinated  debentures and $1,887,399 (net) in outstanding convertible secured
debentures.  As of February 28, 2006,  we had  $3,643,238  in accounts  payable,
accrued expenses, accrued payroll, accrued royalties and related taxes. (Some of
the  accrued  expenses  are for  federal  withholding  taxes and are  related to
calendar  years 1999,  2000 and 2001.  We are currently  making  payments on our
current federal  payroll tax  obligations as well as monthly  payments for these
prior  obligations).  We have been able to operate based on deferring vendor and
employee  payments,   deferring  interest  and  debt  repayments  and  obtaining
additional borrowings and proceeds from equity.  However,  there is no guarantee
that  we  will  continue  to  be  successful  with  respect  to  these  actions.
Furthermore,  there  can be no  assurances  that we will be able to  obtain  the
necessary  funding to  finance  our  operations  or grow  revenue in  sufficient
amounts to fund our operating expenses.

         Our independent auditors have issued a going concern paragraph in their
opinion  on  our  consolidated   financial   statements  that  states  there  is
substantial doubt about our ability to continue as a going concern.  Our ability
to continue as a going  concern is  dependent  on our ability to access  capital
through debt and equity funding as well as market and sell our various products.

         To obtain funding for its ongoing  operations,  the Company has entered
into Securities  Purchase Agreements with several accredited  investors,  on the
following dates for the sale of secured convertible notes and warrants:

<TABLE>
<CAPTION>
                             SECURED
                           CONVERTIBLE       INTEREST
TRANSACTION DATE           NOTES SOLD          RATE                             CONVERSION PRICE                          WARRANTS
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                <C>         <C>                                                           <C>
May 2000                    $400,000           10%         $0.04 or 25% of market value                                  4,000,000
                            ($258,820
                            remaining)
------------------------------------------------------------------------------------------------------------------------------------
May 28, 2002                $75,000            12%         $.01 or 25% of the  average  of the  lowest  three  intraday  150,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
November 26, 2002           $250,000           15%         $.01 or 25% of the  average  of the  lowest  three  intraday  500,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
May 15, 2003                $25,000            15%         $.01 or 25% of the  average  of the  lowest  three  intraday  50,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
June 20, 2003               $25,000            15%         $.01 or 25% of the  average  of the  lowest  three  intraday  50,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
July 23, 2003               $25,000            15%         $.01 or 25% of the  average  of the  lowest  three  intraday  50,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
November 14, 2003           $50,000            15%         $.01 or 25% of the  average  of the  lowest  three  intraday  100,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
January 13, 2004            $50,000            15%         $.01 or 25% of the  average  of the  lowest  three  intraday  100,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
February 13, 2004           $25,000            15%         $.01 or 25% of the  average  of the  lowest  three  intraday  50,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
March 16, 2004              $100,000           15%         $.01 or 25% of the  average  of the  lowest  three  intraday  200,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
May 28, 2004                $550,000           15%         $.01 or 25% of the  average  of the  lowest  three  intraday  1,650,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
September 30, 2004          $250,000           15%         $.0026 or 25% of the  average of the lowest  three  intraday  1,250,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
May 18, 2005                $400,000           10%         $.0016 or 25% of the  average of the lowest  three  intraday  47,368,422
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
July 7, 2005                $850,000           10%         $.0016 or 25% of the  average of the lowest  three  intraday  1,700,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
September 29, 2005          $302,597           2%          $0.0016 or 25% of the average of the lowest  three  intraday  -0-
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
January 20, 2006            $400,000           10%         $0.0016 or 20% of the average of the lowest  three  intraday  400,000
                                                           trading  prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
March 23, 2006              $400,000           8%          $0.03 or 20% of the  average of the lowest  three  intraday  100,000,000
                                                           trading prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2006                $500,000           8%          $0.03 or 25% of the  average of the lowest  three  intraday  100,000,000
                                                           trading prices during the twenty  trading days  immediately
                                                           preceding conversion
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       20

<PAGE>

         The  secured  convertible  notes  bear  interest  as  described  above,
typically  mature one to three  years from the date of  issuance or one to three
years from when we are in compliance  with the terms of the securities  purchase
agreements, and are convertible into our common stock, at the investors' option,
on the terms as described  above.  As of July 14, 2006, the average of the three
lowest  intraday  trading  prices for our common stock  during the  preceding 20
trading days as reported on the Over the Counter  Bulletin Board was $.0001 and,
therefore,  the conversion price for the secured  convertible notes was $.000025
at 25% or $.00002 at 20%.  Based on this  conversion  price,  the  $4,463,725 in
secured  convertible  notes remaining,  excluding  interest,  would convert into
186,549,000,000  shares of our common  stock.  If the price of our common  stock
should decrease,  we will be required to issue substantially more shares,  which
will cause dilution to our existing stockholders. There is no upper limit on the
number of shares  that may be  issued,  which  will have the  effect of  further
diluting the  proportionate  equity  interest and voting power of holders of our
common stock.

         In  connection  with the sale of  convertible  notes,  we  granted  the
investors  registration rights.  Pursuant to the registration rights agreements,
we were required to file  registration  statements for the shares underlying the
convertible  notes and warrants within a specified  period of time from the sale
of such securities and to have the registration  statement declared effective by
the Securities and Exchange  Commission within another specified period of time.
In the event that we did not timely  file the  registration  statements  or have
them declared effective, we are obligated to pay liquidated damages. We have not
filed any  registration  statements  registering  the securities  underlying the
convertible securities.  As a result, an event of default has occurred regarding
all of the above  listed  secured  convertible  debentures.  As a result of this
default,  we are obligated to pay the debenture  holders the principal amount of
the debentures  together with interest and certain other amounts. We do not have
the capital  resources to pay the amounts  required  under this  agreement.  The
secured  convertible  debenture holders have informed us that they do not intend
to take any action at this time due to the default. We do not, however, have any
legally  binding  commitment  from the  debenture  holders to waive the  default
provision of the  debenture.  In addition,  we granted the  investors a security
interest in substantially all of our assets,  including the assets of our wholly
owned subsidiaries, and intellectual property. These events of default, taken as
a whole,  are reasonably  likely to have a material impact on our short-term and
long-term  liquidity.  The investors have been willing in the past to provide us
with  capital  as needed to  sustain  our  day-to-day  operations  and to forego
enforcing default provisions,  however, no assurance can be given that they will
provide  such  capital in the future or  continue  to forego  enforcing  default
provisions,  which they are under no  obligation  to do so. In the event that we
need  additional  capital in the future for our day-to-day  operations,  and the
investors  do not provide  such  funds,  we will have to seek  capital  from new
investors. As a result of these events of default and that all of our assets are
secured by the current investors, it is highly unlikely that we would be able to
obtain  additional  capital  from  other  investors.  If we are unable to obtain
additional  capital,  we would  likely  be  required  to  curtail  or cease  our
operations.  As all of our assets are secured by our existing lenders,  of which
we  are  currently  in  default,  we do not  anticipate  filing  for  bankruptcy
protection, as all of our assets would be transferred to our lenders pursuant to
our existing security agreements.

                                       21

<PAGE>

         In  August  2001,  we  issued  $71,800  in   subordinated   convertible
debentures.  The  debentures  have a 12% coupon and mature one year from date of
issuance.  Conversions  to common  stock are at the lower of $0.01 or 25% of the
average of the lowest three  intraday  trading  prices during the twenty trading
days immediately preceding conversion. The debentures are in default.

         In May 2004, we issued $65,500 in subordinated  convertible debentures.
The  debentures  have a 12% coupon  and  mature one year from date of  issuance.
Conversions  to common stock are at a price of $.001 per share of common  stock.
Conversions of any interest on the  debentures  are at current market price.  On
September 1, 2004,  $10,000 of the note,  and $1,200 in interest were  converted
into 11,428,571 shares of common stock. The debentures are in default.

         The  Company  recently  increased  the number of  authorized  shares of
common stock to  15,000,000,000,  but this is still not a  sufficient  number of
authorized  shares of common  stock  available  if all debt  holders  decided to
convert their convertible  secured debentures in the Company's common stock. The
Company is working on  rectifying  the  situation.  The  provisions  of the debt
instruments  call for a 24%  penalty on the amount of debt owed if a  noteholder
attempts to convert and there are not enough authorized  shares  available.

         The lack of a sufficient  number of  authorized  shares of common stock
available for the conversion of all our  outstanding  convertible  debt resulted
from a combination of issues.  First,  as a result of the variable  conversation
price,  as our stock price has declined  since we first  issued the  convertible
notes/debentures,  resulting in a  significant  increase in the number of shares
issuable upon conversion of all our outstanding  convertible debt. Second, since
becoming a public company,  we have had problems in filing our periodic  reports
on a timely  basis.  Between the filing of our  quarterly  report on January 14,
2002 for the quarter  ended August 31, 2001 (which  itself was not timely filed)
and the filing of our  quarterly  report on July 20, 2004 for the quarter  ended
November 30, 2001, we did not file any periodic  reports.  On April 14, 2005, we
filed our  quarterly  report for the quarter  ended  November  30,  2004,  which
brought us current for the first time in several  years.  Unfortunately,  we did
not file our annual report for the year ended February 28, 2005 or our quarterly
reports for the quarter ended May 31, 2005 on a timely basis. Those reports have
subsequently  been filed and we are now current in our  reporting  requirements.
However,  as a  result  of our  lack  of  filings,  we  were  unable  to file an
information/proxy statement during that time to increase the number of shares of
our authorized common stock. In addition, as a result of our lack of filings, we
had limited  ability to raise funds.  As a result,  we sold  multiple  rounds of
convertible  debentures/notes  at a significant  discount to the market price in
order to continue our operations  during such time. As a result,  there were not
enough shares of common stock that were authorized but unissued underlying those
convertible debentures/notes, when issued.

                                       22

<PAGE>

         In November 2002, we successfully  negotiated a long-term  payment plan
with the IRS to retire our  outstanding  payroll tax  obligations.  The plan was
executed in December 2002 and calls for escalating  monthly  payments to be made
over a period of 18 months. After an initial down payment of $25,800 in December
2002,  we have agreed to a payment  schedule of $5,750 for the first six months,
$13,000 for the next six months and  $25,000  for the final six months.  We made
the agreed  payments  in a timely  fashion  through the first six months and are
currently  behind schedule on the balance.  We are  negotiating  with the IRS to
recast the plan in accordance with our ability to make timely payments.

         We  will  still  need  additional  investments  in  order  to  continue
operations to cash flow break even. Additional investments are being sought, but
we cannot guarantee that we will be able to obtain such  investments.  Financing
transactions  may include the issuance of equity or debt  securities,  obtaining
credit facilities, or other financing mechanisms.  However, the trading price of
our common stock and the downturn in the U.S.  stock and debt markets could make
it more  difficult  to obtain  financing  through the issuance of equity or debt
securities. Even if we are able to raise the funds required, it is possible that
we could  incur  unexpected  costs and  expenses,  fail to  collect  significant
amounts owed to us, or experience  unexpected cash requirements that would force
us to seek alternative financing. Further, if we issue additional equity or debt
securities,  stockholders may experience  additional  dilution or the new equity
securities  may  have  rights,  preferences  or  privileges  senior  to those of
existing  holders of our common stock. If additional  financing is not available
or is not available on acceptable terms, we will have to curtail our operations.

         By  adjusting  our   operations   and   development  to  the  level  of
capitalization,  we  believe  we  have  sufficient  capital  resources  to  meet
projected cash flow deficits.  However, if during that period or thereafter,  we
are not  successful in generating  sufficient  liquidity  from  operations or in
raising sufficient capital resources, on terms acceptable to us, this could have
a material adverse effect on our business,  results of operations  liquidity and
financial condition.

CRITICAL ACCOUNTING POLICIES

         Our  financial  statements  are prepared  based on the  application  of
accounting principles generally accepted in the United States of America.  These
accounting  principles require us to exercise  significant judgment about future
events that affect the amounts  reported  throughout  our financial  statements.
Actual  events could unfold quite  differently  than our previous  judgments had
predicted.  Therefore the estimates  and  assumptions  inherent in the financial
statements  included in this report  could be  materially  different  once those
actual events are known. We believe the following  policies may involve a higher
degree of judgment and complexity in their  application  and represent  critical
accounting  policies used in the  preparation  of our financial  statements.  If
different  assumptions or estimates were used, our financial statements could be
materially different from those included in this report.

         Revenue  Recognition:  We recognize  revenues in accordance  with Staff
Accounting Bulletin 104, Revenue Recognition in Financial  Statements (SAB 104).
We develop  and sell  collectibles  in the  entertainment  and  sports  markets.
Revenue from such product sales is  recognized  when  persuasive  evidence of an
arrangement exists,  delivery has occurred, the fee is fixed or determinable and
collectibility  is probable.  At this time the earnings  process is complete and
the risks and rewards of ownership have  transferred  to the customer,  which is
generally  when the goods are shipped  and all  significant  obligations  of the
Company have been satisfied.

                                       23

<PAGE>

         Accounts Receivable: We must make judgments about the collectibility of
our accounts receivable to be able to present them at their net realizable value
on the balance sheet. To do this, we carefully analyze the aging of our customer
accounts,  try to  understand  why  accounts  have not  been  paid,  and  review
historical  bad debt  problems.  From this  analysis,  we  record  an  estimated
allowance for receivables that we believe will ultimately become  uncollectible.
As of February  28,  2006,  we had an  allowance  for bad debts of  $10,517.  We
actively manage our accounts receivable to minimize our credit risks and believe
that our current allowance for doubtful accounts is fairly stated.

         Realizability of Inventory Values: We make judgments about the ultimate
realizability  of our inventory in order to record our inventory at its lower of
cost or  market.  These  judgments  involve  reviewing  current  demand  for our
products in comparison to present inventory levels and reviewing inventory costs
compared to current market values.  As of February 28, 2006, we had inventory of
$189,844 on hand.

         Long-lived  Assets:  We assess  the  impairment  of  long-lived  assets
whenever events or changes in  circumstances  indicate that their carrying value
may not be recoverable  from the estimated  future cash flows expected to result
from their use and eventual  disposition.  Our long-lived assets subject to this
evaluation include property and equipment. Intangible assets other than goodwill
are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying  value may not be fully  recoverable.  We are required to make
judgments  and   assumptions   in   identifying   those  events  or  changes  in
circumstances that may trigger impairment.

         Fair Value of  Financial  Instruments:  Carrying  amounts of  financial
instruments  held by the Company,  which  includes  cash,  accounts  receivable,
accounts  payable  and  accrued  expenses  approximate  fair  value  due  to the
short-term   maturities  of  these  assets  and  liabilities.   Long-term  debt,
convertible  secured  debentures,   notes  and  loans  payable  and  convertible
subordinated  debentures  approximate fair value based upon debt terms available
for entities under similar terms.

         Derivative Valuations:  In accordance with SFAS 133, we are required to
estimate  the fair value of any embedded  derivatives  and  detachable  warrants
relating  to  our  secured  convertible  debentures.   These  estimates  require
significant  assumptions  and  management  judgment which may affect the amounts
reported  throughout  the  financial  statements.  This  resulted in the Company
recognizing  expense of $6,034,623  and  $2,160,086 for the years ended February
28, 2006 and 2005, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

         In  December  2004,  the FASB  issued  SFAS No.  123 (R),  "Share-Based
Payment".  SFAS No. 123 (R) revises SFAS No. 123,  "Accounting  for  Stock-Based
Compensation" and supersedes APB Opinion No. 25, "Accounting for Stock Issued to
Employees".   SFAS  No.  123  (R)  focuses   primarily  on  the  accounting  for
transactions in which an entity obtains employee services in share-based payment
transactions.  SFAS No. 123 (R) requires companies to recognize in the statement
of operations the cost of employee  services  received in exchange for awards of
equity  instruments  based on the  grant-date  fair value of those  awards (with
limited  exceptions).  SFAS No. 123 (R) is effective as of the first  interim or
annual reporting  period that begins after June 15, 2005 for non-small  business
issuers and after December 15, 2005 for small business issuers. Accordingly, the
Company will adopt SFAS No. 123 (R) in its quarter  ending  March 31, 2006.  The
Company did not have an impact  from this  revised  standard or any  significant
impact on the Company's results of operations.


         In November  2004,  the FASB issued  Statement of Financial  Accounting
Standards No. 151,  "Inventory Costs". This statement amends the guidance in ARB
No. 43 Chapter 4 Inventory Pricing to require items such as idle facility costs,
excessive  spoilage,  double  freight and  handling  costs to be expenses in the
current period,  regardless if they are abnormal  amounts or not. This Statement
will become  effective  for the Company in the quarter  ended May 31, 2006.  The
adoption of this Statement had no immediate material impact on the Company.


                                       24

<PAGE>

         In May 2005,  the FASB  issued SFAS No.  154,  "Accounting  Changes and
Error  Corrections"  ("SFAS 154") which  replaces  Accounting  Principles  Board
Opinions  No. 20  "Accounting  Changes"  and SFAS No. 3,  "Reporting  Accounting
Changes in Interim  Financial  Statements-An  Amendment  of APB Opinion No. 28."
SFAS 154 provides  guidance on the  accounting  or and  reporting of  accounting
changes and error corrections.  It establishes retrospective application, or the
latest  practicable  date,  as the  required  method for  reporting  a change in
accounting  principle and the reporting of a correction of an error. SFAS 154 is
effective for accounting changes and a correction of errors made in fiscal years
beginning  after  December 15, 2005 and is required to be adopted by the Company
in the first  quarter of fiscal 2007.  The Company has elected to adopt SFAS 154
with the current 10-KSB financial reporting.  The Company changed its accounting
policy  with  how it  accounts  for  derivatives  and  the  relating  detachable
warrants.  The  impact  of  this  adoption  resulted  in the  Company  recording
additional expense of $2,160,086, for the year ended February 28, 2005.

                                       25

<PAGE>

ITEM 7.  FINANCIAL STATEMENTS.

                        COLLECTIBLE CONCEPTS GROUP, INC.
                          INDEX TO FINANCIAL STATEMENTS

                                                                            Page

   Reports of Independent Registered Public Accounting Firm                  F-2

   Consolidated Balance Sheet as of February 28, 2006 and February 28, 2005  F-3

   Consolidated Statements of Operations for the years ended
   February 28, 2006 and 2005                                                F-4

   Consolidated Statement of Changes in Shareholders' Deficiency for the
   years ended February 28, 2006 and 2005                                    F-5

   Consolidated Statements of Cash Flows for the years ended
   February 28, 2006 and 2005                                                F-6

   Notes to Consolidated Financial Statements                                F-7


                                      F-1

<PAGE>

REPORT OF INDEPENDENT  REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Collectible Concepts Group, Inc.

We have audited the  accompanying  consolidated  balance  sheets of  Collectible
Concepts Group, Inc. and Subsidiaries  (the "Company"),  as of February 28, 2006
and 2005 and the  related  consolidated  statements  of  operations,  changes in
stockholders'  deficiency  and  cash  flows  for the  years  then  ended.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Collectible Concepts
Group,  Inc. and  Subsidiaries as of February 28, 2006 and 2005, and the results
of their operations and their cash flows for the years then ended, in conformity
with accounting principles generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note N to the
financial  statements,  the Company's working capital  deficiency of $5,734,951,
stockholders'  deficiency  of  $19,480,090  at February  28,  2006,  net loss of
$8,554,857  and net cash used in  operations  of  $1,611,998  for the year ended
February 28, 2006,  raise  substantial  doubt about its ability to continue as a
going concern.  Management's  plan in regards to these matters is also described
in Note N. These financial  statements do not include any adjustments that might
result from the outcome of this uncertainty.

As more fully  described  in Note O of the notes to the  consolidated  financial
statements,  errors  resulting  in  (i)  an  understatement  of  the  derivative
liability  relating to the embedded  beneficial  conversion feature and warrants
relating to convertible secured debentures and a corresponding understatement of
the loss on  adjustment of  derivative  and warrant  liability to fair value and
(ii) an  overstatement of both selling and  administrative  expense and accounts
payable  as of and for the year  ended  February  28,  2005 were  discovered  by
management of the Company  during  fiscal 2006.  Accordingly,  the  consolidated
balance  sheet as of  February  28,  2005  and the  consolidated  statements  of
operations,  stockholders' deficiency and cash flows for the year ended February
28,  2005 have been  restated  to reflect  corrections  to  previously  reported
amounts.

/s/ WEINBERG & COMPANY, P.A.
----------------------------
Boca Raton, Florida
June 23, 2006

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                            February 28,
                                                               2006            2005
                                                           ------------    ------------
                                                                         Restated See Note O
                                      ASSETS
<S>                                                        <C>             <C>
CURRENT ASSETS
Cash and cash equivalents                                  $     74,738    $      1,040
Accounts receivable, net of allowance of $10,517 and
        $40,587, respectively                                    57,835         216,794
Inventories                                                     189,844              --
Loans receivable                                                     --           1,245
Prepaid royalties                                                62,416              --
Prepaid interest                                                 20,625              --
Other prepaid expenses                                            2,865              --
                                                           ------------    ------------
  Total current assets                                          408,323         219,079
                                                           ------------    ------------
Property and equipment, net                                       1,130           6,045
                                                           ------------    ------------
Other assets:
Film library, net                                               245,800              --
Trademarks                                                        1,300           1,300
Deposits                                                          3,200           3,200
                                                           ------------    ------------
 Total other assets                                             250,300           4,500
                                                           ------------    ------------
TOTAL ASSETS                                               $    659,753    $    229,624
                                                           ============    ============
LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY
CURRENT LIABILITIES

Accounts payable and accrued expenses                      $  2,898,725    $  3,019,263
Accrued expenses-related parties                                744,513         745,961
Notes and loans payable                                         483,459         501,801
Loans payable-related party                                       1,878           4,297
Convertible subordinated debentures                             127,300         127,300
Convertible secured debentures                                1,887,399         879,436
                                                           ------------    ------------
  Total current liabilities                                   6,143,274       5,278,058
                                                           ------------    ------------
Notes payable                                                   200,000              --
Convertible secured debentures                                       --         156,533
Derivative liability relating to convertible debentures      13,743,000       5,801,000
Warrant liability related to convertible debentures              53,569           8,349
                                                           ------------    ------------
  Total long term liabilities                                13,996,569       5,965,882
                                                           ------------    ------------
  Total liabilities                                          20,139,843      11,243,940
                                                           ------------    ------------
COMMITMENTS AND CONTINGENCIES
DEFICIENCY IN STOCKHOLDERS' EQUITY
Common stock, par value $0.001 per share;
        700,000,000 shares authorized,
699,695,037 issued and outstanding                              699,694         699,694
Common stock to be issued, 313,573,817 and
        7,162,036 shares, respectively                          149,714          24,802
Common stock subscription                                        15,000              --
Subscription receivable                                         (15,000)             --
Additional paid in capital                                   14,107,115      14,102,944
Deferred equity based expense                                   (40,000)             --
Accumulated deficit                                         (34,396,613)    (25,841,756)
                                                           ------------    ------------
 Total deficiency in stockholders' equity                   (19,480,090)    (11,014,316)
                                                           ------------    ------------
TOTAL LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY   $    659,753    $    229,624
                                                           ============    ============
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements

                                       F-3

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                             Year ended February 28,
                                                              2006             2005
                                                         -------------    -------------
REVENUES:                                                               Restated-see note O
<S>                                                      <C>              <C>
Net sales                                                $     569,847    $     679,682
Cost of sales                                                  622,862          597,767
                                                         -------------    -------------
  Gross (loss) profit                                          (53,015)          81,915
                                                         -------------    -------------
OPERATING EXPENSES:
Selling and administrative                                   1,446,180        1,215,122
Depreciation                                                     9,115           14,788
                                                         -------------    -------------
  Total operating expenses                                   1,455,295        1,229,910
                                                         -------------    -------------
LOSS FROM OPERATIONS                                        (1,508,310)      (1,147,995)
                                                         -------------    -------------
Other income (expense)
Gain on forgiveness of debt                                    104,986          111,287
Loss on adjustment of derivative and warrant liability
     to fair value                                          (6,034,623)      (2,160,086)
Other income                                                        --          147,663
Interest expense                                            (1,116,910)        (744,370)
                                                         -------------    -------------
Total other expenses                                        (7,046,547)      (2,645,506)
                                                         -------------    -------------
Net loss before income taxes                                (8,554,857)      (3,793,501)
Income taxes                                                        --               --
                                                         -------------    -------------
NET (LOSS)                                               $  (8,554,857)   $  (3,793,501)
                                                         =============    =============
Net loss per common share (basic and diluted)            $       (0.01)   $       (0.01)
                                                         =============    =============
Weighted average common shares outstanding
(basic and diluted)                                        699,695,037      555,933,697
                                                         =============    =============
</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements

                                       F-4

<PAGE>

<TABLE>
<CAPTION>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                 STATEMENT OF DEFICIENCY IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED FEBRUARY 28, 2006 AND 2005

                                                                                                                    Common
                                                     Common          Stock         Common stock to be issued         Stock
                                                     Shares          Amount          Shares          Amount       Subscription
                                                  ------------    ------------    ------------    ------------    ------------
<S>                                                <C>            <C>               <C>           <C>             <C>
Balance as of February 29, 2004 (RESTATED
-NOTE O)                                           422,299,964    $    422,299      10,062,999    $     30,293    $         --
Common stock issued for services rendered           59,103,100          59,103              --              --              --
Common stock issued related to financing             5,000,000           5,000              --              --              --
Common stock to be issued related to
anti-dilution note provisions                               --              --       4,399,037           9,109              --
Common stock issued related to anti-dilution
note provisions                                      7,300,000           7,300      (7,300,000)        (14,600)             --
Acquisition of treasury stock from CEO             (21,000,000)        (21,000)             --              --              --
Conversion of secured convertible debentures
to common stock                                    138,563,402         138,563              --              --              --
Conversion of convertible subordinated
debentures to common stock                          11,428,571          11,429              --              --              --
Conversion of notes and loans payable and
accrued interest to common stock                    77,000,000          77,000              --              --              --
Issuance of options and warrants for services
rendered and accrued interest                               --              --              --              --              --
Net loss                                                    --              --              --              --              --
                                                  ------------    ------------    ------------    ------------    ------------
Balance as of February 28, 2005-RESTATED
- (NOTE O)                                         699,695,037         699,694       7,162,036          24,802              --

Acquisition of treasury stock from CEO             (15,000,000)        (15,000)             --              --              --

Common stock issued for services rendered           15,000,000          15,000              --              --              --

Common stock to be issued for services rendered             --              --      50,000,000          60,000              --

Common stock subscription  (135,000,000 shares)             --              --              --              --          75,000

Cash received on subscription                               --              --     108,000,000          60,000         (60,000)
Common stock to be issued under stock
subscription late issuance provision                        --              --     143,500,000              --              --

Issuance of options for services rendered                   --              --              --              --              --
Common stock to be issued related to
anti-dilution note provisions                               --              --       4,911,781           4,912              --
Net loss                                                    --              --              --              --              --
                                                  ------------    ------------    ------------    ------------    ------------
Balance at February 28, 2006                       699,695,037    $    699,694     313,573,817    $    149,714    $     15,000
                                                  ============    ============    ============    ============    ============
</TABLE>

<TABLE>
<CAPTION>
                                                   Additional                      Deferred
                                                    Paid in       Subscription    Equity based    Accumulated
                                                    Capital        Receivable     Compensation      Deficit           Total
                                                  ------------    ------------    ------------    ------------    ------------
<S>                                               <C>             <C>             <C>             <C>             <C>
Balance as of February 29, 2004 (RESTATED
-NOTE O)                                          $ 13,918,029    $         --    $         --    $(22,048,255)   $ (7,677,634)
Common stock issued for services rendered              117,106              --              --              --         176,209
Common stock issued related to financing                 5,000              --              --              --          10,000
Common stock to be issued related to
anti-dilution note provisions                           (9,109)             --              --              --              --
Common stock issued related to anti-dilution
note provisions                                          7,300              --              --              --              --
Acquisition of treasury stock from CEO                 (21,000)             --              --              --         (42,000)
Conversion of secured convertible debentures
to common stock                                        (62,668)             --              --              --          75,895
Conversion of convertible subordinated
debentures to common stock                                (229)             --              --              --          11,200
Conversion of notes and loans payable and
accrued interest to common stock                       117,975              --              --              --         194,975
Issuance of options and warrants for services
rendered and accrued interest                           30,540              --              --              --          30,540
Net loss                                                    --              --              --      (3,793,501)     (3,793,501)
                                                  ------------    ------------    ------------    ------------    ------------
Balance as of February 28, 2005-RESTATED
- (NOTE O)                                          14,102,944              --              --     (25,841,756)    (11,014,316)

Acquisition of treasury stock from CEO                 (15,000)             --              --              --         (30,000)

Common stock issued for services rendered               15,000              --              --              --          30,000

Common stock to be issued for services rendered             --              --         (40,000)             --          20,000

Common stock subscription  (135,000,000 shares)             --         (75,000)             --              --              --

Cash received on subscription                               --          60,000              --              --          60,000
Common stock to be issued under stock
subscription late issuance provision                        --              --              --              --              --

Issuance of options for services rendered                9,083              --              --              --           9,083
Common stock to be issued related to
anti-dilution note provisions                           (4,912)             --              --              --              --
Net loss                                                    --              --              --      (8,554,857)     (8,554,857)
                                                  ------------    ------------    ------------    ------------    ------------
Balance at February 28, 2006                      $ 14,107,115    $    (15,000)   $    (40,000)   $(34,396,613)   $(19,480,090)
                                                  ============    ============    ============    ============    ============
</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements

                                       F-5

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOW

<TABLE>
<CAPTION>
                                                                                        Year ended February 28,
                                                                                          2006           2005
                                                                                       -----------    -----------
                                                                                                     Restated-note O
<S>                                                                                    <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                               $(8,554,857)   $(3,793,501)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization                                                                9,115         14,788
Provision for bad debt expense                                                              48,630         40,857
Common stock issued in connection with services rendered                                    50,000        185,146
Expense recognized for stock-based compensation                                              9,083         31,603
Gain on forgiveness of debt                                                               (104,986)      (111,287)
Amortization of prepaid interest                                                                --         61,875
Accretion of convertible secured debentures                                                748,305        482,123
Loss on adjustment of derivative and warrant liability to fair value                     6,034,623      2,160,086
(Increase) decrease in:
Accounts receivable                                                                        110,329       (254,849)
Inventories                                                                               (189,844)            --
Loans receivable                                                                             1,245         (1,245)
Prepaid royalties                                                                          (62,416)            --
Prepaid interest                                                                             6,043             --
Other prepaid expenses                                                                      (2,865)            --
Increase (decrease) in:
Accounts payable and accrued expenses                                                      287,045        448,739
Accrued expenses-related parties                                                            (1,448)            --
                                                                                       -----------    -----------
Net cash used in operating activities                                                   (1,611,998)      (735,665)
                                                                                       -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in film library                                                                 (50,000)            --
                                                                                       -----------    -----------
Net cash used in investing activities                                                      (50,000)            --
                                                                                       -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible secured debentures                                 1,726,457        735,000
Proceeds from sale of common stock                                                          60,000             --
Proceeds from notes and loans payable                                                       51,767        240,189
Repayments of notes and loans payable                                                      (70,109)      (131,430)
Proceeds from related party notes                                                            2,200         47,130
Repayments of related party notes                                                          (34,619)      (154,277)
                                                                                       -----------    -----------
                                                                                         1,735,696        736,612
                                                                                       -----------    -----------
Net increase in cash and cash equivalents                                                   73,698            947
Cash and cash equivalents at beginning of year                                               1,040             93
                                                                                       -----------    -----------
Cash and cash equivalents at end of year                                               $    74,738    $     1,040
                                                                                       ===========    ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for interest                                                          --             --
Cash paid during the year for taxes                                                             --             --
</TABLE>

The  accompanying  notes  are an  integral  part of the  consolidated  financial
statements

                                       F-6

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE A -NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

Business and Basis of Presentation
----------------------------------

Collectible  Concepts Group, Inc. (the "Company") was formed on March 1, 1986 as
"Amour  Corporation"  under  the  laws of  Delaware.  The name  was  changed  in
September 1988 to Bard Sports Group.  On February 28, 1993, the name was changed
to "USA Sports Corp".  On April 27, 1999,  the name was changed to  "Collectible
Concepts Group, Inc."

Principles of Consolidation
---------------------------

The consolidated  financial  statements  include the accounts of the Company and
its wholly owned subsidiaries, Team Sports Specialties Corporation and Music Art
Corporation.  All significant  intercompany  transactions and balances have been
eliminated in consolidation.

Revenue Recognition
-------------------

For revenue from product  sales,  the Company  recognizes  revenue in accordance
with Staff Accounting  Bulletin No. 104, REVENUE RECOGNITION  ("SAB104"),  which
superseded Staff Accounting  Bulletin No. 101, REVENUE  RECOGNITION IN FINANCIAL
STATEMENTS  ("SAB101").  SAB 101 requires  that four basic  criteria must be met
before  revenue can be  recognized:  (1)  persuasive  evidence of an arrangement
exists;  (2)  delivery  has  occurred;  (3)  the  selling  price  is  fixed  and
determinable;  and (4)  collectibility is reasonably  assured.  Determination of
criteria (3) and (4) are based on  management's  judgments  regarding  the fixed
nature of the selling prices of the products delivered and the collectibility of
those  amounts.  Provisions  for discounts  and rebates to customers,  estimated
returns and  allowances,  and other  adjustments  are  provided  for in the same
period the related sales are recorded.

SAB  104   incorporates   Emerging  Issues  Task  Force  00-21  ("EITF  00-21"),
MULTIPLE-DELIVERABLE  REVENUE ARRANGEMENTS.  EITF 00-21 addresses accounting for
arrangements that may involve the delivery or performance of multiple  products,
services and/or rights to use assets.  The effect of implementing  EITF 00-21 on
the Company's  consolidated financial position and results of operations was not
significant.

Cash Equivalents
----------------

For the  purpose of the  accompanying  consolidated  financial  statements,  all
highly liquid investments with a maturity of three months or less are considered
to be cash equivalents.

Inventories
-----------

Inventories are stated at the lower of cost or market determined by the weighted
average  cost  method.  Inventories  consist of products  available  for sale to
distributors and customers.

Components of inventories as of February 28, 2006 and 2005 are as follows:

                                                          2006        2005
                                                          ----        ----
Finished goods                                          $189,844     $ -0-
                                                        ========     =====

                                       F-7

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE A -NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES- (CONTINUED)

Property and Equipment
----------------------

Property and equipment are stated at cost less  accumulated  depreciation.  When
retired or  otherwise  disposed,  the  related  carrying  value and  accumulated
depreciation  are removed from the  respective  accounts and the net  difference
less  any  amount   realized  from   disposition,   is  reflected  in  earnings.
Depreciation  is provided using the  straight-line  method over their  estimated
useful lives as follows:

Computer                                             5 years
Office equipment                                     3 to 5 years

Impairment of Long-Lived Assets
-------------------------------

The Company has adopted  Statement of  Financial  Accounting  Standards  No. 144
("SFAS 144"). SFAS 144 requires that long-lived assets and certain  identifiable
intangibles  held and used by the Company be reviewed  for  impairment  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may  not  be  recoverable.   Events  relating  to  recoverability   may  include
significant  unfavorable changes in business conditions,  recurring losses, or a
forecasted  inability to achieve  break-even  operating results over an extended
period. The Company evaluates the recoverability of long-lived assets based upon
forecasted  discounted cash flows. Should impairment in value be indicated,  the
carrying  value of  intangible  assets will be  adjusted,  based on estimates of
future discounted cash flows resulting from the use and ultimate  disposition of
the asset.  SFAS 144 also  requires  assets to be disposed of be reported at the
lower of the carrying amount or the fair value less disposal costs.

Advertising
-----------

The Company  follows the policy of charging the costs of  advertising to expense
as incurred. The Company charged to operations $12,950 and $8,680 as advertising
costs for the years ended February 28, 2006 and 2005, respectively.

Use of estimates
----------------

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

Fair Value of Financial Instruments
-----------------------------------

Carrying amounts of financial  instruments  held by the Company,  which includes
cash,  accounts  receivable,  accounts payable and accrued expenses  approximate
fair value due to the  short-term  maturities  of these assets and  liabilities.
Long-term  debt,  convertible  secured  debentures,  notes and loans payable and
convertible subordinated debentures approximate fair value based upon debt terms
available for entities under similar terms.

                                       F-8

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE A -NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES- (CONTINUED)

Segments
--------

The  Company  applies  Statement  of  Financial  Accounting  Standards  No. 131,
"Disclosures about Segments of an Enterprises and Related  Interpretation."  The
Company  operates  in one  segment  and  therefore  segment  information  is not
presented.

Shipping and Handling Fees
--------------------------

The Company  includes  shipping and handling fees billed to customers as revenue
and the  related  costs as cost of sales.  Such  fees and  costs  are  primarily
comprised  of outbound  freight.  Shipping  and  handling  fees are  included in
revenues in the accompanying consolidated statements of income.

Stock Based Compensation
------------------------

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement
amends  SFAS  123,   "Accounting  for  Stock-Based   Compensation,"  to  provide
alternative methods of transition for a voluntary charge to the fair value based
method of accounting for stock-based employee  compensation.  In addition,  this
statement  amends  the  disclosure  requirements  of  SFAS  No.  123 to  require
prominent  disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported  results.  The Company has chosen to continue to account
for stock-based  compensation using the intrinsic value method prescribed in APB
Opinion No. 25 and related  interpretations.  Accordingly,  compensation expense
for stock options is measured as the excess, if any, of the fair market value of
the  Company's  stock at the date of the grant  over the  exercise  price of the
related option. Options and warrants issued to non employees and consultants are
recorded  using the fair value  method,  based on Black  Scholes  option-pricing
model.  There were no options issued to employees during the periods  presented.
Therefore,  the  required  disclosure  of pro forma  amounts  under SFAS 123, as
modified by SFAS 148, "Accounting for Stock-Based  Compensation - Transition and
Disclosure" has not been presented.

                                       F-9

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE A -NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES- (CONTINUED)

Loss per Share
--------------

The Company follows Statement of Financial  Accounting  Standards No. 128 ("SFAS
No. 128")  "Earnings  Per Share".  Basic and diluted  earnings  (loss) per share
amounts are computed based on net income (loss) divided by the weighted  average
number of common shares outstanding.  The assumed conversion of convertible debt
into  15,057,893,120  common shares in 2006 and  3,097,253,333  common shares in
2005 and the exercise of outstanding options and warrants to purchase 82,615,165
common shares in 2006 and 21,203,886  common shares in 2005 were not included in
the  computation  of diluted loss per share because the assumed  conversion  and
exercise would be anti-dilutive  for all periods  presented.  As of February 28,
2006,  the Company does not have enough common  shares  available to convert all
the eligible debt to shares if the debt holders  elected to convert all of their
notes and if all of the options and warrants were to be exercised. Subsequently,
the Company has increased their  authorized  number of shares to  15,000,000,000
but this is still not  sufficient  to have enough  common  shares  available  to
convert all eligible debt to shares if the debt holders elected to convert.

Recent Accounting Pronouncements
--------------------------------

In November 2004, the Financial  Accounting  Standards  Board (FASB) issued SFAS
151,  Inventory  Costs--an  amendment of ARB No. 43,  Chapter 4. This  Statement
amends the guidance in ARB No. 43,  Chapter 4,  "Inventory  Pricing," to clarify
the accounting for abnormal amounts of idle facility expense,  freight, handling
costs,  and  wasted  material  (spoilage).  Paragraph  5 of ARB 43,  Chapter  4,
previously  stated  that ". . . under  some  circumstances,  items  such as idle
facility expense,  excessive spoilage, double freight, and re-handling costs may
be so abnormal as to require  treatment as current period  charges.  . . ." This
Statement  requires  that those items be recognized  as  current-period  charges
regardless  of whether they meet the  criterion of "so  abnormal."  In addition,
this Statement  requires that  allocation of fixed  production  overheads to the
costs  of  conversion  be  based  on  the  normal  capacity  of  the  production
facilities.  This  Statement is effective for inventory  costs  incurred  during
fiscal years  beginning  after June 15, 2005. The adoption of this Statement had
no immediate material impact on the Company.

On  December  16,  2004,  the  Financial  Accounting  Standards  Board  ("FASB")
published  Statement of Financial  Accounting  Standards No. 123 (Revised 2004),
Share-Based  Payment ("SFAS 123R").  SFAS 123R requires that  compensation  cost
related to  share-based  payment  transactions  be  recognized  in the financial
statements.  Share-based  payment  transactions  within  the  scope of SFAS 123R
include stock options,  restricted stock plans,  performance-based awards, stock
appreciation  rights,  and employee share purchase plans. The provisions of SFAS
123R are  effective  as of the first  interim  period that begins after June 15,
2005 for non small  issuers and  December 15, 2005 for small  business  issuers.
Accordingly,  the  Company  will  implement  the  revised  standard in the first
quarter of fiscal  year 2007.  The  Company had  accounted  for its  share-based
payment  transactions  under the provisions of APB 25, which did not necessarily
require the recognition of compensation  cost in the financial  statements.  The
Company did not have an impact  from this  revised  standard or any  significant
impact on the Company's results of operations.

                                      F-10

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE A -NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES- (CONTINUED)

Recent Accounting Pronouncements
--------------------------------

On December 16, 2004, FASB issued  Statement of Financial  Accounting  Standards
No. 153,  Exchanges of Nonmonetary  Assets,  an amendment of APB Opinion No. 29,
Accounting for Nonmonetary Transactions (" SFAS 153"). This statement amends APB
Opinion 29 to  eliminate  the  exception  for  nonmonetary  exchanges of similar
productive  assets and  replaces it with a general  exception  for  exchanges of
nonmonetary assets that do not have commercial  substance.  Under SFAS 153, if a
nonmonetary  exchange of similar productive assets meets a  commercial-substance
criterion and fair value is determinable,  the transaction must be accounted for
at fair  value  resulting  in  recognition  of any  gain or  loss.  SFAS  153 is
effective for  nonmonetary  transactions in fiscal periods that begin after June
15,  2005.  The Company  does not  anticipate  that the  implementation  of this
standard  will have a  material  impact on its  financial  position,  results of
operations or cash flows.

In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, "Accounting for
Conditional  Asset Retirement  Obligations,  an interpretation of FASB Statement
No. 143," which  requires an entity to recognize a liability  for the fair value
of a conditional  asset  retirement  obligation when incurred if the liability's
fair value can be  reasonably  estimated.  The  Company is required to adopt the
provisions of FIN 47 no later than the first quarter of fiscal 2006. The Company
did not have a material  impact wth the adoption of this  Interpretation  on its
consolidated financial position, results of operations or cash flows.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections"  ("SFAS 154") which replaces  Accounting  Principles Board Opinions
No. 20 "Accounting  Changes" and SFAS No. 3,  "Reporting  Accounting  Changes in
Interim  Financial  Statements-An  Amendment  of APB  Opinion  No. 28." SFAS 154
provides guidance on the accounting for and reporting of accounting  changes and
error  corrections.  It  establishes  retrospective  application,  or the latest
practicable  date,  as the required  method for reporting a change in accounting
principle and the  reporting of a correction of an error.  SFAS 154 is effective
for  accounting  changes and the  reporting of a correction  of an error made in
fiscal years  beginning after December 15, 2005 and is required to be adopted by
the  Company in the first  quarter of fiscal  2007.  The  Company has elected to
adopt SFAS 154 for their current financial statements (See note O).

On February 16, 2006 the Financial Accounting Standards Board (FASB) issued SFAS
155,  "Accounting  for  Certain  Hybrid  Instruments,"  which  amends  SFAS 133,
"Accounting for Derivative  Instruments and Hedging  Activities,"  and SFAS 140,
"Accounting for Transfers and Servicing of Financial Assets and  Extinguishments
of  Liabilities."  SFAS 155  allows  financial  instruments  that have  embedded
derivatives  to be accounted for as a whole  (eliminating  the need to bifurcate
the  derivative  from its host) if the holder  elects to  account  for the whole
instrument on a fair value basis.  SFAS 155 also  clarifies  and amends  certain
other  provisions of SFAS 133 and SFAS 140. This  statement is effective for all
financial  instruments  acquired  or  issued  in fiscal  years  beginning  after
September  15,  2006.  The  Company  does not  expect its  adoption  of this new
standard  to have a  material  impact  on its  financial  position,  results  of
operations or cash flows.

Reclassifications
-----------------

Certain  items  in  the  prior  year  have  been   reclassified  to  conform  to
classifications used in the current year.

                                      F-11

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE B - FILM LIBRARY

The Company acquired a historical film library containing  thousands of hours of
sports events including  boxing,  baseball,  football and auto racing along with
others. The asset acquisition agreement made December 15, 2005 gives the Company
title to the entire  library.  The Film library  consists of over 5,000 hours of
sporting  events from the years 1948 - 1972;  there are also  additional  sports
films in the library after 1972 in addition there is an old time cartoon library
as well as classic movies. The film library was acquired for a purchase price of
$250,000  with $50,000 paid in cash and the remainder due in five years from the
date of a note payable issued to the seller,  along with interest  accrued at 6%
per annum. As part of acquisition of the film library,  the Company was assigned
an exclusive licensing agreement whereby royalties (minimum of $50,000 per year)
will be  received  over  the next  ten  years.  Since  collectiblity  cannot  be
reasonably  assured,  the Company has not recorded  revenue  from the  licensing
agreement.

The total cost of the film library is being  amortized over the expected  useful
life of ten years.  The Company  recorded $4,200 as amortization  expense in the
year ended February 28, 2006.

NOTE C - PROPERTY AND EQUIPMENT

Property and equipment at February 28, 2006 and 2005 are as follows:

                                    2006         2005
                                 ---------    ---------
Computer  and office equipment   $ 126,179    $ 126,179
Less: Accumulated depreciation    (125,049)    (120,134)
                                 ---------    ---------
Net property and equipment       $   1,130    $   6,045
                                 =========    =========

The total  depreciation  expense for the years ended  February 28, 2006 and 2005
amounted to $4,915 and $14,788, respectively.

NOTE D - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts  payable and accrued  liabilities  at February 28, 2006 and 2005 are as
follows:

                                                        2006         2005
                                                    ----------   ----------
Accounts payable                                    $1,378,816   $1,527,291
Accrued interest, of which $77,456 and $76,636 is
for related party, respectively                        576,093      623,411
Accrued payroll  and payroll taxes                     323,157      330,517
Accrued royalties                                      335,344      238,969
Other accrued expenses                                 285,315      299,075
                                                    ----------   ----------
                                                    $2,898,725   $3,019,263
                                                    ==========   ==========

                                      F-12

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE E - CONVERTIBLE SECURED DEBENTURES (SEE NOTE O - RESTATEMENT)

Notes payable at February 28, 2006 and 2005 are as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                                    2006            2005
                                                                                    ----            ----
-----------------------------------------------------------------------------------------------------------
<S>                                                                                <C>             <C>
10% convertible  debenture dated May 2000, face value of $400,000,  due one year
from the date of the note with interest payable quarterly during the life of the
note. The note is convertible into the Company's common stock at the lower of a)
$0.04 or b) 25% of market  value.  The  Company  has  granted  the note holder a
security  interest in substantially all of the Company's assets and intellectual
property.  Additionally,  the note holder has certain  registration  rights. The
Company is in violation of the loan covenants (see below)                          $258,820        $258,820
-----------------------------------------------------------------------------------------------------------
12% convertible  debenture  dated May 28, 2002,  face value of $75,000,  due one
year  from  date of the  note  with  interest  payable  per  annum.  The note is
convertible  into the Company's  common stock at the lower of a) $0.01 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                                75,000          75,000
-----------------------------------------------------------------------------------------------------------
15% convertible  debenture dated November 26, 2002, face value of $250,000,  due
one year from date of the note with  interest  payable  per  annum.  The note is
convertible  into the Company's  common stock at the lower of a) $0.01 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's  assets and  intellectual  property.  Additionally the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                               250,000         250,000
-----------------------------------------------------------------------------------------------------------
15% convertible  debenture  dated May 15, 2003,  face value of $25,000,  due one
year  from  date of the  note  with  interest  payable  per  annum.  The note is
convertible  into the Company's  common stock at the lower of a) $0.01 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                                25,000          25,000
-----------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-13

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE E - CONVERTIBLE SECURED DEBENTURES (SEE NOTE O - RESTATEMENT) (CONTINUED)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                                    2006            2005
                                                                                    ----            ----
-----------------------------------------------------------------------------------------------------------
<S>                                                                                <C>             <C>
15% convertible  debenture  dated June 20, 2003, face value of $25,000,  due one
year  from  date of the  note  with  interest  payable  per  annum.  The note is
convertible  into the Company's  common stock at the lower of a) $0.01 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                                25,000          25,000
-----------------------------------------------------------------------------------------------------------
15% convertible  debenture  dated July 23, 2003, face value of $25,000,  due one
year  from  date of the  note  with  interest  payable  per  annum.  The note is
convertible  into the Company's  common stock at the lower of a) $0.01 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                                25,000          25,000
-----------------------------------------------------------------------------------------------------------
15% convertible  debenture  dated November 14, 2003, face value of $50,000,  due
one year from date of the note with  interest  payable  per  annum.  The note is
convertible  into the Company's  common stock at the lower of a) $0.01 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                                50,000          50,000
-----------------------------------------------------------------------------------------------------------
15% convertible debenture dated January 13, 2004, face value of $50,000, due one
year  from  date of the  note  with  interest  payable  per  annum.  The note is
convertible  into the Company's  common stock at the lower of a) $0.01 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                                50,000          50,000
-----------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-14

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE E - CONVERTIBLE SECURED DEBENTURES (SEE NOTE O - RESTATEMENT) (CONTINUED)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                                    2006            2005
                                                                                    ----            ----
-----------------------------------------------------------------------------------------------------------
<S>                                                                                <C>             <C>
15% convertible  debenture  dated February 13, 2004, face value of $25,000,  due
one year from date of the note with  interest  payable  per  annum.  The note is
convertible  into the Company's  common stock at the lower of a) $0.01 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                                25,000          25,000
-----------------------------------------------------------------------------------------------------------
15% convertible  debenture March 16, 2004, face value of $100,000,  due one year
from date of the note with interest  payable per annum.  The note is convertible
into  the  Company's  common  stock  at the  lower  of a) $0.01 or b) 25% of the
average of the three lowest  intraday  trading  prices for the common stock on a
principal market for twenty days before, but not including, conversion date. The
Company granted the note holder a security  interest in substantially all of the
Company's assets and intellectual  property.  Additionally,  the note holder has
certain  registration  rights. The Company is in violation of the loan covenants
(see below)                                                                         100,000          95,616
-----------------------------------------------------------------------------------------------------------
15% convertible  debenture  dated May 28, 2004, face value of $550,000,  due two
years  from  date of the note  with  interest  payable  per  annum.  The note is
convertible  into the Company's  common stock at the lower of a) $0.01 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                               482,945         104,820
-----------------------------------------------------------------------------------------------------------
15% convertible debenture dated September 30, 2004, face value of $250,000,  due
two years from date of the note with  interest  payable  per annum.  The note is
convertible into the Company's common stock at the lower of a) $0.0026 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                               176,712          51,712
-----------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-15

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE E - CONVERTIBLE SECURED DEBENTURES (SEE NOTE O - RESTATEMENT) (CONTINUED)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                                    2006            2005
                                                                                    ----            ----
-----------------------------------------------------------------------------------------------------------
<S>                                                                                <C>             <C>
10% convertible debenture dated May 18, 2005, face value of $400,000,  due three
years  from  date of the note  with  interest  payable  per  annum.  The note is
convertible into the Company's common stock at the lower of a) $0.0016 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                               104,475             -0-
-----------------------------------------------------------------------------------------------------------
10% convertible debenture dated July 7, 2005, face value of $850,000,  due three
years  from  date of the note  with  interest  payable  per  annum.  The note is
convertible into the Company's common stock at the lower of a) $0.0016 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                               183,196             -0-
-----------------------------------------------------------------------------------------------------------
2% convertible  debenture dated September 29, 2005, face value of $302,597,  due
three years from date of the note with interest  payable per annum.  The note is
convertible into the Company's common stock at the lower of a) $0.0016 or b) 25%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                                42,004             -0-
-----------------------------------------------------------------------------------------------------------
10% convertible  debenture  dated January 20, 2006, face value of $400,000,  due
three years from date of the note with interest  payable per annum.  The note is
convertible into the Company's common stock at the lower of a) $0.0016 or b) 20%
of the average of the three lowest intraday  trading prices for the common stock
on a principal  market for twenty days  before,  but not  including,  conversion
date. The Company granted the note holder a security  interest in  substantially
all of the Company's assets and intellectual  property.  Additionally,  the note
holder has certain  registration rights. The Company is in violation of the loan
covenants (see below)                                                                14,247             -0-
                                                                                     ------             ---
-----------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------
                                                                                  1,887,399       1,035,969
-----------------------------------------------------------------------------------------------------------
Less current portion                                                              1,887,399         879,436
                                                                                  ---------         -------
-----------------------------------------------------------------------------------------------------------
Long term portion                                                                      $-0-        $156,533
                                                                                       ====        ========
-----------------------------------------------------------------------------------------------------------
</TABLE>

                                      F-16

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE E - CONVERTIBLE SECURED DEBENTURES (SEE NOTE O - RESTATEMENT) (CONTINUED)

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  in  May  2000  for  the  issuance  of an  aggregate  of  $400,000  of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were warrants to purchase  4,000,000  shares of the Company's common stock at an
exercise price of $0.20 for five years. The Convertible Notes accrue interest at
10% per  annum,  payable  quarterly,  and were due one year from the date of the
note. The note holder has the option to convert any unpaid note principal to the
Company's  common  stock  at a rate of the  lower  of a)  $0.04 or b) 25% of the
current market value. The Company issued to the investors  Convertible  Notes of
$400,000 in exchange for net proceeds of $400,000.  As of February 28, 2006, the
remaining  balance  of these  debentures  of  $258,820  is still  unpaid  and in
default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on May 28,  2002 for the  issuance  of an  aggregate  of  $75,000  of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were warrants to purchase  150,000  shares of the  Company's  common stock at an
exercise price $0.005 for five years.  The Convertible  Notes accrue interest at
12% per annum and were due one year from the date of the note.  The note  holder
has the option to convert  any unpaid note  principal  to the  Company's  common
stock at a rate of the lower of a) $0.01 or b) 25% of the  average  of the three
lowest  intraday  trading prices for the common stock on a principal  market for
the 20 trading days before,  but not  including,  conversion  date.  The Company
issued  to the  investors  Convertible  Notes of  $75,000  in  exchange  for net
proceeds of $75,000.  As of February 28, 2006,  the  remaining  balance of these
debentures of $75,000 is still unpaid and in default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on November  26, 2002 for the issuance of an aggregate of $250,000 of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were warrants to purchase  500,000  shares of the  Company's  common stock at an
exercise price of $0.0045 for five years. The Convertible  Notes accrue interest
at 15% per  annum  and  were due one year  from the date of the  note.  The note
holder has the option to convert  any unpaid  note  principal  to the  Company's
common  stock at a rate of the lower of a) $0.01 or b) 25% of the average of the
three lowest intraday  trading prices for the common stock on a principal market
for the 20 trading days before, but not including,  conversion date. The Company
issued to the  investors  Convertible  Notes of  $250,000  in  exchange  for net
proceeds of $250,000.  As of February 28, 2006,  the remaining  balance of these
debentures of $250,000 is still unpaid and in default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on May 15,  2003 for the  issuance  of an  aggregate  of  $25,000  of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were  warrants to purchase  50,000  shares of the  Company's  common stock at an
exercise price of $0.004 for five years.  The Convertible  Notes accrue interest
at 15% per  annum  and  were due one year  from the date of the  note.  The note
holder has the option to convert  any unpaid  note  principal  to the  Company's
common  stock at a rate of the lower of a) $0.01 or b) 25% of the average of the
three lowest intraday  trading prices for the common stock on a principal market
for the 20 trading days before, but not including,  conversion date. The Company
issued  to the  investors  Convertible  Notes of  $25,000  in  exchange  for net
proceeds of $25,000.  As of February 28, 2006,  the  remaining  balance of these
debentures of $25,000 is still unpaid and in default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on June 20,  2003 for the  issuance  of an  aggregate  of  $25,000 of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were  warrants to purchase  50,000  shares of the  Company's  common stock at an
exercise price of $0.002 for five years.  The Convertible  Notes accrue interest
at 15% per  annum  and  were due one year  from the date of the  note.  The note
holder has the option to convert  any unpaid  note  principal  to the  Company's
common  stock at a rate of the lower of a) $0.01 or b) 25% of the average of the
three lowest intraday  trading prices for the common stock on a principal market
for the 20 trading days before, but not including,  conversion date. The Company
issued  to the  investors  Convertible  Notes of  $25,000  in  exchange  for net
proceeds of $25,000.  As of February 28, 2006,  the  remaining  balance of these
debentures of $25,000 is still unpaid and in default.

                                      F-17

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE E - CONVERTIBLE SECURED DEBENTURES (SEE NOTE O - RESTATEMENT) (CONTINUED)

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on July 23,  2003 for the  issuance  of an  aggregate  of  $25,000 of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were  warrants to purchase  50,000  shares of the  Company's  common stock at an
exercise price of $0.001 for five years.  The Convertible  Notes accrue interest
at 15% per  annum  and  were due one year  from the date of the  note.  The note
holder has the option to convert  any unpaid  note  principal  to the  Company's
common  stock at a rate of the lower of a) $0.01 or b) 25% of the average of the
three lowest intraday  trading prices for the common stock on a principal market
for the 20 trading days before, but not including,  conversion date. The Company
issued  to the  investors  Convertible  Notes of  $25,000  in  exchange  for net
proceeds of $25,000.  As of February 28, 2006,  the  remaining  balance of these
debentures of $25,000 is still unpaid and in default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on November  14, 2003 for the  issuance of an aggregate of $50,000 of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were warrants to purchase  100,000  shares of the  Company's  common stock at an
exercise price of $0.001 for five years.  The Convertible  Notes accrue interest
at 15% per  annum  and  were due one year  from the date of the  note.  The note
holder has the option to convert  any unpaid  note  principal  to the  Company's
common  stock at a rate of the lower of a) $0.01 or b) 25% of the average of the
three lowest intraday  trading prices for the common stock on a principal market
for the 20 trading days before, but not including,  conversion date. The Company
issued  to the  investors  Convertible  Notes of  $50,000  in  exchange  for net
proceeds of $50,000.  As of February 28, 2006,  the  remaining  balance of these
debentures of $50,000 is still unpaid and in default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on January 13, 2004 for the  issuance of an  aggregate  of $50,000 of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were warrants to purchase  100,000  shares of the  Company's  common stock at an
exercise price of $0.001 for five years.  The Convertible  Notes accrue interest
at 15% per  annum  and  were due one year  from the date of the  note.  The note
holder has the option to convert  any unpaid  note  principal  to the  Company's
common  stock at a rate of the lower of a) $0.01 or b) 25% of the average of the
three lowest intraday  trading prices for the common stock on a principal market
for the 20 trading days before, but not including,  conversion date. The Company
issued  to the  investors  Convertible  Notes of  $50,000  in  exchange  for net
proceeds of $50,000.  As of February 28, 2006,  the  remaining  balance of these
debentures of $50,000 is still unpaid and in default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on February  13, 2004 for the  issuance of an aggregate of $25,000 of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were  warrants to purchase  50,000  shares of the  Company's  common stock at an
exercise price of $0.0015 for five years. The Convertible  Notes accrue interest
at 15% per  annum  and  were due one year  from the date of the  note.  The note
holder has the option to convert  any unpaid  note  principal  to the  Company's
common  stock at a rate of the lower of a) $0.01 or b) 25% of the average of the
three lowest intraday  trading prices for the common stock on a principal market
for the 20 trading days before, but not including,  conversion date. The Company
issued  to the  investors  Convertible  Notes of  $25,000  in  exchange  for net
proceeds of $25,000.  As of February 28, 2006,  the  remaining  balance of these
debentures of $25,000 is still unpaid and in default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on March 16,  2004 for the  issuance of an  aggregate  of $100,000 of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were warrants to purchase  200,000  shares of the  Company's  common stock at an
exercise price of $0.0015 for five years. The Convertible  Notes accrue interest
at 15% per  annum  and  were due one year  from the date of the  note.  The note
holder has the option to convert  any unpaid  note  principal  to the  Company's
common  stock at a rate of the lower of a) $0.01 or b) 25% of the average of the
three lowest intraday  trading prices for the common stock on a principal market
for the 20 trading days before, but not including,  conversion date. The Company
issued to the  investors  Convertible  Notes of  $100,000  in  exchange  for net
proceeds of $100,000.  As of February 28, 2006,  the remaining  balance of these
debentures of $100,000 is still unpaid and in default.

                                      F-18

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE E - CONVERTIBLE SECURED DEBENTURES (SEE NOTE O - RESTATEMENT) (CONTINUED)

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on May 28,  2004 for the  issuance  of an  aggregate  of  $550,000 of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were warrants to purchase  1,650,000  shares of the Company's common stock at an
exercise price of $0.03 for seven years.  The Convertible  Notes accrue interest
at 15% per  annum and were due two  years  from the date of the  note.  The note
holder has the option to convert  any unpaid  note  principal  to the  Company's
common  stock at a rate of the lower of a) $0.01 or b) 25% of the average of the
three lowest intraday  trading prices for the common stock on a principal market
for the 20 trading days before, but not including,  conversion date. The Company
issued to the  investors  Convertible  Notes of  $550,000  in  exchange  for net
proceeds of $550,000.  As of February 28, 2006,  the remaining  balance of these
debentures of $550,000 is still unpaid and in default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors on September  30, 2004 for the issuance of an aggregate of $250,000 of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were warrants to purchase  1,250,000  shares of the Company's common stock at an
exercise price of $0.03 for seven years.  The Convertible  Notes accrue interest
at 15% per  annum and were due two  years  from the date of the  note.  The note
holder has the option to convert  any unpaid  note  principal  to the  Company's
common  stock at a rate of the lower of a) $0.0026  or b) 25% of the  average of
the three  lowest  intraday  trading  prices for the common stock on a principal
market for the 20 trading days before,  but not including,  conversion date. The
Company  issued to the investors  Convertible  Notes of $250,000 in exchange for
net proceeds of $250,000.  As of February 28,  2006,  the  remaining  balance of
these debentures of $250,000 is still unpaid and in default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on May 18,  2005 for the  issuance  of an  aggregate  of  $400,000 of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were warrants to purchase  47,368,422 shares of the Company's common stock at an
exercise price of $0.0016 for five years. The Convertible  Notes accrue interest
at 10% per annum (current default rate of 15%) and were due three years from the
date of the note.  The note  holder has the option to  convert  any unpaid  note
principal to the Company's  common stock at a rate of the lower of a) $0.0016 or
b) 25% of the average of the three lowest intraday trading prices for the common
stock on a principal  market for the 20 trading days before,  but not including,
conversion  date.  The  Company  issued to the  investors  Convertible  Notes of
$400,000 in exchange for net proceeds of $400,000.  As of February 28, 2006, the
remaining  balance  of these  debentures  of  $400,000  is still  unpaid  and in
default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on July 7, 2005 for the  issuance  of an  aggregate  of  $850,000  of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were warrants to purchase  1,700,000  shares of the Company's common stock at an
exercise price of $0.0016 for five years. The Convertible  Notes accrue interest
at 10% per annum (current default rate of 15%) and were due three years from the
date of the note.  The note  holder has the option to  convert  any unpaid  note
principal to the Company's  common stock at a rate of the lower of a) $0.0016 or
b) 25% of the average of the three lowest intraday trading prices for the common
stock on a principal  market for the 20 trading days before,  but not including,
conversion  date.  The  Company  issued to the  investors  Convertible  Notes of
$850,000 in exchange for net proceeds of $850,000.  As of February 28, 2006, the
remaining  balance  of these  debentures  of  $850,000  is still  unpaid  and in
default.

                                      F-19

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE E - CONVERTIBLE SECURED DEBENTURES (SEE NOTE O - RESTATEMENT) (CONTINUED)

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors on September  29, 2005 for the issuance of an aggregate of $302,597 of
convertible  notes  ("Convertible  Notes") in exchange for accrued  interest due
said accredited investors. The Convertible Notes accrue interest at 2% per annum
and were due three  years  from the date of the note.  The note  holder  has the
option to convert any unpaid note  principal to the Company's  common stock at a
rate of the lower of a)  $0.0016 or b) 25% of the  average  of the three  lowest
intraday  trading  prices for the common stock on a principal  market for the 20
trading days before,  but not including,  conversion date. The Company issued to
the  investors  Convertible  Notes of $302,597 in exchange  for net  proceeds of
$302,597.  As of February 28, 2006, the remaining balance of these debentures of
$302,597 is still unpaid and in default.

The  Company  entered  into a  Securities  Purchase  Agreement  with  accredited
investors  on January 20, 2006 for the  issuance of an  aggregate of $400,000 of
convertible  notes  ("Convertible  Notes") and attached to the Convertible Notes
were warrants to purchase  400,000  shares of the  Company's  common stock at an
exercise price of $0.002 for five years.  The Convertible  Notes accrue interest
at 10% per annum and were due three  years  from the date of the note.  The note
holder has the option to convert  any unpaid  note  principal  to the  Company's
common  stock at a rate of the lower of a) $0.0016  or b) 20% of the  average of
the three  lowest  intraday  trading  prices for the common stock on a principal
market for the 20 trading days before,  but not including,  conversion date. The
Company  issued to the investors  Convertible  Notes of $400,000 in exchange for
net proceeds of $400,000.  As of February 28,  2006,  the  remaining  balance of
these debentures of $400,000 is still unpaid and in default.

Due to the  indeterminate  number of  shares  which  might be  issued  under the
embedded  convertible  host debt  conversion  feature of these  debentures,  the
Company  is  required  to record a  liability  relating  to both the  detachable
warrants and embedded  convertible feature of the notes payable (included in the
liabilities as a "derivative liability").

The accompanying  financial statements comply with current requirements relating
to warrants and embedded  derivatives  as described in FAS 133 as follows:  (See
Note O)

      o     The Company  treats the full fair market value of the derivative and
            warrant  liability  on  the  convertible  secured  debentures  as  a
            discount  on the  debentures  (limited  to their  face  value).  The
            excess,  if  any,  is  recorded  as an  increase  in the  derivative
            liability and warrant  liability  with a  corresponding  increase in
            Loss on adjustment of the derivative  and warrant  liability to fair
            value.

      o     Subsequent to the initial recording, the change in the fair value of
            the detachable  warrants,  determined under the Black-Scholes option
            pricing  formula  and the change in the fair  value of the  embedded
            derivative  (utilizing the Black-Scholes  option pricing formula) in
            the conversion feature of the convertible debentures are recorded as
            adjustments  to the  liabilities  as of February  28, 2006 and 2005,
            respectively,  with a corresponding  change in Loss on adjustment of
            the derivative and warrant liability to fair value..

      o     The  expense  relating  to the  change  in  the  fair  value  of the
            Company's  stock  reflected  in the  change in the fair value of the
            warrants and  derivatives  (noted above) is included in other income
            in the accompanying consolidated statements of operations.

The  following  table  summarizes  the  various  components  of the  convertible
debentures as of February 28, 2006 and 2005:

                                             2006           2005
                                         -----------    -----------
Convertible debentures described above   $ 3,636,417    $ 1,683,820
Less: proceeds in transit                         --       (103,125)
Less: discount                            (1,749,018)      (544,726)
                                         -----------    -----------
Convertible debentures as reported       $ 1,887,399    $ 1,035,969
                                         ===========    ===========

                                      F-20

<PAGE>


                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE F - NOTES AND LOANS PAYABLE

The  Company  has  various   unsecured   notes  and  loans  payable  to  certain
individuals, investors and an auto finance company with interest ranging from 8%
to 12% per annum with  various  maturity  dates up through  August 2001 with the
exception of the auto loan due February 28, 2006.  Excluding the auto loan which
has been paid in full,  the Company  currently  is in default  with the balances
remaining unpaid as of February 28, 2006.

During the year ended February 28, 2006 and 2005, respectively, the note holders
converted notes and loans in the amount of $0 and $151,500 and accrued  interest
of $0 and $43,475 into 0 and  77,000,000  shares of the  Company's  common stock
based on stated or negotiated prices at the time of conversion.

During the year ended  February  28,  2005,  one of the  Company's  note holders
forgave  $115,000  of the  $165,000  owed to him  leaving  an unpaid  balance of
$50,000.

During the years ended  February 28,  2006,  the Company  borrowed  $53,967 from
individuals and repaid notes payable totaling $74,728.

The Company has $1,878 in related  party loans  payable as of February 28, 2006.
The  Company  recorded  an  interest  charge of $820  relating to loans from the
President and other related  parties.  A total of $77,456 is accrued relating to
these loans as of February 28, 2006.

During the year ended February 28, 2005,  the Company  borrowed and repaid notes
totaling  $32,500 to note holders.  Additionally,  the Company issued  8,500,000
shares of its common stock having a value of $20,500 as settlement of debt.  The
Company also issued warrants to purchase  5,000,000  shares of the common stock.
The warrants were valued at $13,371.

NOTE G - CONVERTIBLE SUBORDINATED DEBENTURES

Convertible  subordinated  debentures  as of  February  28, 2006 and 2005 are as
follows:

<TABLE>
<CAPTION>
                                                                     2006             2005
                                                                     ----             ----
-------------------------------------------------------------------------------------------
<S>                                                               <C>              <C>
12% convertible debenture, unsecured with a maturity of August
2001. The debenture is convertible  into the Company's  common
stock at $0.05 per share. The note is currently in default.        $40,000          $40,000
-------------------------------------------------------------------------------------------
12% convertible debenture, unsecured with a maturity at August
2001. The debenture is convertible  into the Company's  common
stock at $0.075 per share. The note is currently in default.        31,800           31,800
-------------------------------------------------------------------------------------------
12% convertible debenture, unsecured with an original one year
maturity at May 2004.  The debenture is  convertible  into the
Company's  common  stock at $0.04 or 50% of the average of the
lowest three intraday trading prices during the twenty trading
days immediately preceding conversion.
-------------------------------------------------------------------------------------------
The note is currently in default                                    55,500           55,500
                                                                    ------           ------
-------------------------------------------------------------------------------------------
Total                                                              127,300          127,300
-------------------------------------------------------------------------------------------
Less: current portion                                             (127,300)        (127,300)
                                                                  --------        ---------
-------------------------------------------------------------------------------------------
Long term debt                                                         $ 0              $ 0
                                                                       ===              ===
-------------------------------------------------------------------------------------------
</TABLE>

                                      F-21

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE H - COMMON STOCK

In October  2001,  the  Company  entered  into an  agreement  with a third party
whereby the third party has an anti-dilution ownership of 1.603% of the Company.
During the year ended February 28, 2005, the Company issued  7,300,000 shares of
common  stock  owed as  part  of this  agreement.  The  Company  has not  issued
8,873,817 shares owed as of February 28, 2006, to the third party.  These shares
are  shown as  common  stock  to be  issued  with a  corresponding  decrease  to
additional  paid in capital as of  February  28,  2006.  On February  28,  2005,
ownership of the 1.603% anti-dilution agreement was sold to another company.

In December 2003, the Company agreed to issue 3,200,000  shares of the Company's
common stock to settle  $145,763 of notes and loans payable  (including  accrued
interest of $4,733).  These  shares have not been issued and are shown as common
stock to be issued as of February 28, 2006 and February 28, 2005.

During the year ended February 28, 2006, the Company acquired  15,000,000 shares
of its common  stock from the Chief  Executive  Officer in  exchange  for a note
payable of  $30,000.  The  15,000,000  shares  were  immediately  reissued to an
unrelated party as payment for services rendered valued at $30,000.

During the year ended  February  28,  2005,  the  Company  converted  $75,895 of
convertible  secured debentures into 138,563,402 shares of common stock. No gain
or loss has been  recognized on the  aforementioned  conversions  of convertible
secured debentures.

During the year ended  February  28,  2005,  the  Company  converted  $10,000 of
convertible   subordinated  debentures  and  $1,200  of  related  interest  into
11,428,571  shares of common stock.  No gain or loss has been  recognized on the
aforementioned  conversions of convertible  subordinated  debentures and accrued
interest.

During the year ended February 28, 2005, the Company converted $151,500 of notes
and loans  payable and $43,475 of accrued  interest  into  77,000,000  shares of
common  stock.  No  gain or  loss  has  been  recognized  on the  aforementioned
conversions of notes and loans payable and accrued interest.

During the year ended February 28, 2005, the Company acquired  21,000,000 shares
of its common  stock from the Chief  Executive  Officer in  exchange  for a note
payable of $42,000.  The 21,000,000 shares were immediately reissued to the note
and  loan  holders  as part of the  77,000,000  shares  discussed  in the  above
paragraph. See note L for additional related party transactions.

From time to time,  the Company  has issued  common  stock in  exchange  for the
performance  of  services  or as an  alternative  to  the  payment  of  internal
accounting  and  financial  services,  internet  website  creation,   marketing,
insurance program review and general management consulting.  The dollar value of
these activities  included in the selling,  general and administrative  expenses
was $30,000 and $186,209  for the year ended  February 28, 2006 and February 28,
2005,  respectively.  These transactions have been recorded at the fair value of
the services  rendered or the fair value of the common stock  issued,  whichever
was more  readily  evident.  The number of shares of common stock issued for the
aforementioned  activities in the years ended February 28, 2006 and February 28,
2005 was 15,000,000 and  64,103,100 (of which  12,000,000  shares were issued to
its president), respectively.

During the year ended February 28, 2006,  the Company became  obligated to issue
50,000,000  shares of common  stock having a value of $60,000 for  services,  of
which  $40,000 has been  deferred.  These shares are shown as common stock to be
issued  with a  corresponding  decrease  to  additional  paid in  capital  as of
February 28, 2006.

During the year ended  February 28,  2006,  the Company  received a  135,000,000
common stock  subscription  for $75,000,  of which  $60,000 was received  during
fiscal 2006 in exchange  for  108,000,000  shares of common  stock to be issued.
Additionally, the Company is obligated to issue 143,500,000 additional shares of
common stock under a late issuance  provision.  These shares are shown as common
stock to be issued with a  corresponding  decrease to additional paid in capital
as of February 28, 2006.

                                      F-22

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE I - STOCK OPTIONS

In December 2003, the Company issued 20,000,000 options to a consultant having a
ten-year  term. The exercise  price is $0.001 for the first  5,000,000  options,
$0.002 for the next 5,000,000 options, $0.003 for the next 5,000,000 options and
$0.004 for the last 5,000,000 options. The only restriction is that no more than
5,000,000 options can be exercised in any one year. The total expense associated
with  issuing  the  options  of $40,000 is being  recognized  over the  earliest
periods that the options may be  exercised.  The expense  associated  with these
options was $7,083 and $15,833  for the year ended  February  28, 2006 and 2005,
respectively.

In September 2004, the Company issued  2,000,000  options to an advisor having a
five-year  term.  The  exercise  price is $0.0015.  The options are  immediately
exercisable.  The fair value of the  options of $3,000 was  expensed  during the
year ended February 28, 2005.

In May 2005,  the  Company  issued  12,000,000  options to an  advisor  having a
three-year  term.  The  exercise  price is $0.003.  The options are  immediately
exercisable. The fair value of the options of $7,200 is being amortized over the
life of the contract.  The expense  associated with these options was $2,000 for
the year ended  February 28, 2006. The advisor is also to receive 5% of sales on
certain licensing agreements (See Note K).

The weighted  average fair value of the options  granted during the year,  using
the Black-Scholes option pricing model, was $0.0006. The significant assumptions
used to determine the fair value are as follows:

Risk-free interest rate:            5.25%
Expected stock price volatility:    108%
Expected dividend payout            --
Expected option life-years (a)      1
(a) The expected option life is based on contractual expiration dates

The following is a summary of the status of stock option activity for the fiscal
years ended February 28, 2006 and 2005.

                                                 Weighted Average
                                        Options   Exercise Price
                                       ----------    ------
Outstanding as of February 29, 2004    20,007,143    $ .003
Granted                                 2,000,000    $ .002
Exercised                                      --        --
Forfeited                                      --        --
Expired                                        --        --
                                       ----------
Outstanding as of February 28, 2005    22,007,143    $ .003
Granted                                12,000,000    $ .003
Exercised                                      --        --
Forfeited                                      --
-Expired                                   (7,143)   $ 7.00
                                       ----------
Outstanding as of February 28, 2006    34,000,000    $ .003
                                       ==========

NOTE J - INCOME TAXES

     The components of the (benefit)  provision for income taxes from continuing
operations are as follows:

                                      F-23

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE J - INCOME TAXES (CONTINUED)

<TABLE>
<CAPTION>
                                                                 2006           2005
                                                             ------------   ------------
<S>                                                          <C>            <C>
Current (benefit) provision: federal                         $         --   $         --
Current provision: state                                               --             --
                                                             ------------   ------------
Total current provision                                                --             --
                                                             ------------   ------------
Deferred provision: federal                                            --             --
Deferred provision: state                                              --             --
                                                             ------------   ------------
Total deferred provision                                               --             --
                                                             ------------   ------------
Total provision (benefit) for income taxes from continuing
operations                                                   $         --   $         --
                                                             ============   ============
</TABLE>

     Significant  items  making up the  deferred  tax  assets and  deferred  tax
liabilities are as follows:

<TABLE>
<CAPTION>
                                                                   2006            2005
                                                               ------------    ------------
<S>                                                            <C>             <C>
Long-term deferred taxes:
Realized losses on change in fair value of the derivative and
warrant Liabilities                                            $  4,672,620    $  1,972,340
Operating loss carryforwards and tax credits                    (13,097,147)     (9,560,156)
 Less valuation allowance                                        (8,424,527)      7,587,816
                                                               ------------    ------------
 Total net deferred tax liabilities                            $         --    $         --
                                                               ============    ============
</TABLE>

A valuation allowance is established if it is more likely than not that all or a
portion of the deferred tax asset will not be realized. Accordingly, a valuation
allowance was  established  in 2006 and 2005 for the full amount of the deferred
tax asset due to the uncertainty of realization.  Management believes that based
upon its  projection  of future  taxable  operating  income for the  foreseeable
future,  it is more likely than not that the Company will not be able to realize
the  benefit of the  deferred  tax asset at February  28,  2006.  The  valuation
allowance as of March 1, 2005 was  $7,587,816.  The net change in the  valuation
allowance  during the year ended  February  28, 2006 was a increase of $836,711.
The valuation allowance as of March 1, 2006 was $8,424,527.

The  Company  had net  operating  loss  carry-forwards  for  federal  income tax
purposes of approximately  $23,160,985 at February 28, 2006. These net operating
loss carry-forwards expire at various dates from 2013 through 2025.


The Company's  effective  income tax (benefit)  rate for  continuing  operations
differs from the statutory federal income tax benefit rate as follows:

<TABLE>
<CAPTION>
                                                                   2006            2005
                                                               ------------    ------------
<S>                                                            <C>             <C>
Federal Statutory Rate                                                   35%             35%
State taxes, net                                                         10%             10%
Permanent differences                                                   (32)%           (11)%
Valuation allowance                                                     (13)%           (34)%
                                                               ------------    ------------
Effective income tax (benefit) provision
rate from continuing operations                                          --%             --
                                                               ============    ============
</TABLE>

                                      F-24

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE K - COMMITMENTS AND CONTINGENCIES

Lease Commitments and Contingencies
-----------------------------------

The Company  leases its office  space  under a  non-cancelable  operating  lease
agreement expiring in September 2009.

The minimum annual lease payments due under the lease agreement are as follows:

      For the Year Ended February 28,

                2007                   $26,400
                2008                    27,360
                2009                    28,320
                2010                    14,400
                                       -------
                                       $96,480
                                       =======

Rent expense was approximately  $28,160 and $28,720 for the years ended February
28, 2006 and 2005, respectively.

Employment Agreements
---------------------

The Company has an  employment  contract  (the  "agreement")  with its president
through  January 1, 2007,  which provides for annual salary and bonuses based on
Company  revenues.  The agreement  also provides for one-year  extensions  every
January 1 unless the Company gives notice.

In December of 2003,  the Company and a former note holder  entered  into a five
year  Employment  Agreement  under which the Company  agreed to  compensate  the
individual  $500 per month (when not fully  available for work) or $500 per week
plus commissions (when fully available for work). Additionally, 20,000,000 stock
options were granted at exercise prices ranging from $.001 to $.004. The options
have a ten-year term. An additional  3,200,000 shares of our common stock are to
be issued in trust to a special  fund.  Compensation  afforded  to the  employee
under this  agreement  satisfied any and all of our  indebtedness  to the former
note holder.

Licenses
--------

The Company has entered into various licensing agreements (the "Agreements") for
the right to manufacture, sell and distribute certain collectibles and novelties
relating to current and future movie characters,  as well as certain accessories
containing  logos and names of  professional,  minor  league and college  sports
teams.  The Agreements for the collectibles  initially  expired at various dates
through  2004 and  generally  require the Company to pay a royalty of between 9%
and 12% of sales,  with certain minimum royalty payments  required.  The Company
has decided not to renew royalty  agreements  as they pertain to college  sports
teams and current and future movie  characters.  The unpaid minimum royalty fees
of $335,344 ($215,750 which are owed on non renewed agreements) related to these
agreements  are included in accrued  expenses in the  accompanying  consolidated
balance sheet.  Royalty expense amounted to approximately  $154,617 and $124,000
for the years ended February 28, 2006 and 2005, respectively.

On February 28, 2005, the Company sold a partial  interest  (2.5%) in its future
revenues  generated  under each of its National  Football League ("NFL") license
(2005), its National Basketball Association ("NBA") license in 2005-2006 and its
upcoming  license in 2006 with Major  League  Baseball  ("MLB").  The  agreement
included  a  clause  that  would  extend  the  partial  sale of  revenues  to an
additional  year  of  sales  under  the  NFL  license,  should  the  Company  be
unsuccessful in obtaining the MLB license. The 2.5% revenues stake was sold to a
third-party company for a total of $80,000.  Additionally, the purchaser assumed
the rights to a 1.603% anti-dilution  ownership in the Company from its previous
owner, as well as all of the issued shares of common stock  previously  owned by
that party.

                                      F-25

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE K - COMMITMENTS AND CONTINGENCIES (CONTINUED)

In May 2005,  the Company  agreed to give an advisor a 5% royalty for five years
for helping the Company  secure the  following  licensing  agreements,  National
Hockey League ("NHL"),  Minor League  Baseball,  Arena Football and the National
Basketball Association ("NBA").

Payroll Related Taxes
---------------------

The Company is  non-compliant  with  respect to payment of employee and employer
payroll-related  taxes.  The  estimated  liability  that is  included in accrued
expenses (see Note D) was approximately $196,000 and $231,000 as of February 28,
2006 and 2005, respectively, which includes penalties and interest.

Other Contingencies
-------------------

In the normal course of business the Company is subject to various  regulations,
proceedings,  lawsuits,  claims and other matters,  including actions under laws
and regulations related to the environment and health and safety,  among others.
The  Company  believes  the  amounts  provided  in  its  consolidated  financial
statements,  as  prescribed by generally  accepted  accounting  principles,  are
adequate in light of the probable and estimable liabilities.  However, there can
be  no  assurances  that  the  actual  amounts  required  to  discharge  alleged
liabilities from various lawsuits,  claims, legal proceedings and other matters,
and to comply with applicable laws and regulations,  will not exceed the amounts
reflected in the accompanying consolidated financial statements or will not have
a material adverse effect on its consolidated  results of operations,  financial
condition  and cash  flows.  Any costs that may be  incurred  in excess of those
amounts provided as of February 28, 2006 cannot currently be determined.

In fiscal 2002, a licensing  company  commenced a lawsuit for various  causes of
action for breach of contract,  trademark  infringement  and seeking a permanent
injunction precluding the Company from using any of the plaintiffs' intellectual
property.  The Company consented to the entry of a permanent  injunction and the
parties entered into a settlement agreement,  which resulted in the dismissal of
the action in December 2003.  However,  despite the dismissal of the action, the
plaintiff  reserves the right to pursue  monetary claims against the Company for
its breach of various license agreements.

Agreements
----------

In February  2003,  the Company  entered  into a joint  venture  agreement  with
another  party  whereby  the  other  party was  responsible  for  producing  and
marketing  flashlight  and battery  products.  The Company was  responsible  for
obtaining the necessary licenses,  design of the images and the marketing of the
products. Under the terms of the agreement, 50% of the sales were to be retained
by the  Company  and the other  50% were to be  remitted  to the  other  entity.
Nothing had ever  transpired  under the joint venture.  On November 8, 2003, the
Company  replaced its joint  venture  agreement  and entered into a new services
agreement.  The Company  will assist in obtaining  licenses  and managing  other
aspects of the business of selling licensed flashlight and battery products. Any
licenses obtained in this manner will be assigned.  This agreement provides a 1%
royalty to the Company on net sales of any flashlight  and/or  battery  products
containing  images available either from licenses the Company has or assisted in
obtaining.  Additionally,  the Company may sell these licensed products and will
receive a sales  commission  based on a formula  of  several  variables  that is
expected to produce an average  commission  of 15% of the sale price.  As of the
date of this report,  the Company has not sold any of the licensed  products and
has earned no royalties as provided by this agreement.

In September  2004, the Company  signed a licensing  agreement with the National
Football League,  which expired on March 31, 2005. The agreement was renewed for
the period April 2005 through March 2006.  The agreement  includes a 12% royalty
paid on sales with a minimum  annual  royalty of $100,000,  which is included in
prepaid  royalties as of February 28, 2006, and is being amortized over the term
of the agreement or until the minimum is met which ever is sooner.

                                      F-26

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE K - COMMITMENTS AND CONTINGENCIES (CONTINUED)

The Company  decided not to renew its National  Football  League ("NFL") license
which  ended  March 31,  2006.  The  Company  will still have the  ability to do
promotional items with companies who partner with NFL teams.

In March 2005,  the Company  signed a licensing  agreement  with the NBA,  which
expires on September  30,  2006.  The  agreement  includes a 12% royalty paid on
sales,  with a minimum royalty for the period of $25,000.  On September 9, 2005,
the Company  signed an amendment  to its license with the NBA to add  additional
products.  This increase in products changed the minimum royalty  agreement from
$25,000 to $35,000,  which is included in prepaid  royalties  as of February 28,
2006, and is being amortized over the term of the agreement or until the minimum
is met, whichever is sooner. In addition, the amendment also changed the royalty
percentage from 12% to 16%.

On May 12,  2005,  the  Company  signed a  licensing  agreement  with the  Arena
Football  League,  which expires on June 30, 2007. The agreement  includes a 12%
royalty  paid on sales with no minimum  royalty  guarantees.  The Company paid a
"First  Advance" of $10,000 for the rights to the license,  which is included in
prepaid  royalties as of February 28, 2006, and is being amortized over the term
of the agreement or until the royalties  exceed the First Advance,  whichever is
sooner.

On  September  12,  2005,  the  Company  signed a licensing  agreement  with the
National Hockey League, which expires on June 30, 2007. The agreement includes a
10%  royalty  paid on sales with a minimum  royalty  for the period of  $50,000,
which is included in prepaid  royalties as of February  28,  2006,  and is being
amortized over the term of the agreement or until the minimum is met,  whichever
is sooner.

Concentrations
--------------

For the year ended February 28, 2006, 72% of the Company's revenues were derived
from its three largest  customers.  For the year ended February 28, 2005, 89% of
the Company's revenues were derived from its largest customer.

For the year ended February 28, 2006,  four  companies  supplied an aggregate of
84% of the Company's products.

The  Company  obtains  a  significant  portion  of its new  borrowings  from one
investment group.  During the year ended February 28, 2006, the Company borrowed
$1,650,000  from this  investment  group.  As of February  28,  2006, a total of
$3,636,417 was owed to this investment group (See Note E).

Debt Conversions
----------------

As of  February  28,  2006,  the  Company  did not have a  sufficient  number of
authorized  shares of common stock available if all of the  convertible  secured
and  convertible  subordinated  debenture  holders decided to convert their debt
into the  Company's  common  stock.  The  Company  has  increased  the number of
authorized  shares to  15,000,000,000  to partly rectify the situation (See Note
P), but a possible  shortfall  still exists.  The provisions of the  convertible
secured  debentures  call for a 24%  penalty on the amount of debt a note holder
attempts to convert and if there are not enough  authorized  shares available to
do so (See Note E with regard to the convertible secured dentures).  However the
convertible  subordinated  debenture  agreements  do not contain a provision  to
address the inability of the debt holders to convert and the possible  financial
effects of this are unknown (See Note G).

In the year ended  February  28,  2006,  the  Company  recorded  a  discount  on
convertible  secured debentures with a corresponding  increase in the derivative
and warrant liabilities.

In the year ended  February 28, 2006, the Company issued $60,000 in common stock
for services, of which $40,000 has been deferred to future periods.

                                      F-27

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE L - RELATED PARTY TRANSACTIONS

The Company has an employment  agreement with its president,  who has elected to
defer a portion of his salary in support of the cash needs of the Company. As of
February  28,  2006,  and 2005,  the amount of salary  deferred was $575,537 and
$577,000, respectively, which is included in accrued expenses - related parties.
Also  $168,975 and $168,961 of accrued  compensation  were due to the  Company's
President's wife as of February 28, 2006 and 2005, respectively.

The Company issued shares to its president (0 shares and  12,000,000  shares for
the years ended  February  28,  2006 and 2005,  respectively),  in exchange  for
electing to defer his salary.

During the year  ended  February  28,  2006,  the  Company  received  15,000,000
treasury shares from the Company's President valued at $30,000 in exchange for a
related party note payable of $30,000.  These shares were subsequently issued as
part of a payment for services.

During the year  ended  February  28,  2005,  the  Company  received  21,000,000
treasury shares from the Company's President valued at $42,000 in exchange for a
related party note payable of $42,000.  These shares were subsequently issued as
part of debt conversions.

The Company has loans  payable of $1,878,  which are included as loans payable -
related party in the accompanying  consolidated  balance sheet, due to a related
party as of February 28,  2006.  During the year ended  February  28, 2006,  the
Company  recorded  interest expense of $820 relating to loans from its president
and other related parties and $77,456 in accrued  interest was payable  relating
to these loans as of February 28, 2006, which is included in accrued expenses in
the accompanying consolidated balance sheet.

NOTE M - NON-CASH  INVESTING AND FINANCING  ACTIVITIES IN THE STATEMENTS OF CASH
FLOWS

During the year ended  February 28,  2006,  the Company  increased  discounts on
convertible  secured  debentures by $1,952,597 with a corresponding  increase in
the derivative liability.

During the year ended February 28, 2006, the Company prepaid interest of $26,668
with a corresponding increase in the convertible secured debenture.

During the year ended  February  28,  2006,  the Company  converted  $302,597 in
previously accrued interest to a convertible secured debenture.

During the year  ended  February  28,  2006,  the  Company  received  15,000,000
treasury shares from the Company's President valued at $30,000 in exchange for a
related party note payable of $30,000.  These shares were subsequently issued as
part services rendered.

During the year ended  February 28, 2006,  the Company  purchased a film library
from Pacificap  Entertainment  Corp, for $250,000,  payable as follows:  $50,000
down payment and $200,000 note payable bearing 6% interest due November 2010.

During the year ended  February  28,  2005,  the  Company  converted  $75,895 of
convertible secured debentures into 138,563,402 shares of common stock.

During the year ended  February  28,  2005,  the  Company  converted  $10,000 of
convertible  subordinated debentures and $1,200 of related accrued interest into
11,428,571 shares of common stock.

During the year ended February 28, 2005, the Company converted $151,500 of notes
and loan  payable  and $43,475 of accrued  interest  into  77,000,000  shares of
common stock.

                                      F-28

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE M - NON-CASH  INVESTING AND FINANCING  ACTIVITIES IN THE STATEMENTS OF CASH
FLOWS (CONTINUED)

During the year  ended  February  28,  2005,  the  Company  received  21,000,000
treasury shares from the Company's President valued at $42,000 in exchange for a
related party note payable of $42,000.  These shares were subsequently issued as
part of debt conversions.

During the year ended February 28, 2006,  the Company became  obligated to issue
50,000,000  shares of common  stock having a value of $60,000 for  services,  of
which $40,000 has been deferred.

During the year ended  February 28,  2006,  the Company  received a  135,000,000
common stock  subscription  for $75,000,  of which  $60,000 was received  during
fiscal 2006 in exchange  for  108,000,000  shares of common  stock to be issued.
Additionally, the Company is obligated to issue 143,500,000 additional shares of
common stock under a late issuance provision.

NOTE N - GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going
concern basis,  which  contemplates the realization of assets and the settlement
of  liabilities  and  commitments  in  the  normal  course  of  business.  Since
inception,  the  Company  has not  generated  sufficient  revenues  to meet  its
operating expenses and has incurred significant operating losses and net losses.
As of and for the year  ended  February  28,  2006,  the  Company  had a working
capital  deficiency of $5,734,951,  a stockholders'  deficiency of $19,480,090 a
net loss of  $8,554,857  and net cash  used in  operations  of  $1,611,998.  The
Company has minimal cash available for operations and is in default with respect
to  repayment   provisions  of  certain   convertible  secured  and  convertible
subordinated debentures,  and notes and loans payables. In addition, the Company
was not able to complete an effective  registration statement within 150 days as
required in connection with the sale of certain  convertible  secured debentures
to a group of  investors  and,  as a result,  the  Company  is in default of the
debenture  agreement.  These matters raise substantial doubt about the Company's
ability to continue as a going concern. The consolidated financial statements do
not include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts and  classification of liabilities that might be
necessary in the event the Company cannot continue in existence.

In order to  generate  additional  revenues  and the working  capital  needed to
continue and expand operations, the Company's management has committed to a plan
for reducing expenses,  increasing retail distribution channels for its products
and raising additional capital. There can be no assurances that the Company will
be able to obtain the  necessary  funding to finance  their  operations  or grow
revenue in sufficient amounts to fund their operations.

NOTE O - RESTATEMENT

During  fiscal 2006, it was  determined  the correct  application  of accounting
principles had not been applied in the accounting for convertible debentures and
detachable warrants (See note E).

Based on the original  accounting for the convertible  debentures and detachable
warrants,  the Company  recognized  an embedded  beneficial  conversion  feature
present in the convertible note and allocated a portion of the proceeds equal to
the intrinsic value of that feature  (limited to the face value of the notes) to
additional paid in capital.  Accordingly,  the proceeds attributed to the common
stock,  convertible  debt and  warrants  have been  restated to reflect the fair
value method.

Additionally,  it was  discovered in fiscal 2006 that common stock issued for an
existing  liability in fiscal 2005 had been  erroneously  charged to selling and
administrative expenses.

In accordance  with SFAS 154, the necessary  corrections to apply the accounting
principles on the  aforementioned  transactions  are currently  reflected in the
accompanying  February  28,  2005  financial  statements.   The  impact  to  the
previously issued February 28, 2005 financial statements is as follows:

                                      F-29

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE O - RESTATEMENT (CONTINUED)

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                                  RESTATEMENTS

<TABLE>
<CAPTION>
                                                                         February 28,
                                                                             2005                                       February 28,
                                                                         As Previously                                      2005
                                                                           Reported                   Adjustment         (Restated)
                                                                        -----------------------------------------------------------
<S>                                                                      <C>           <C>           <C>             <C>
BALANCE SHEET:

ASSETS

CURRENT ASSETS

Cash and cash equivalents                                                $       1,040                                 $      1,040
Accounts receivable, net of allowance for
   doubt accounts of $40,587                                                   216,794                                      216,794
Loan receivable                                                                  1,245                                        1,245
                                                                        --------------                                -------------
  Total current assets                                                         219,079                                      219,079
                                                                        --------------                                -------------
PROPERTY AND EQUIPMENT, NET                                                      6,045                                        6,045
                                                                        --------------                                -------------
OTHER ASSETS
Film library
Trademarks                                                                       1,300                                        1,300
Deposits                                                                         3,200                                        3,200
                                                                        --------------                                -------------
                                                                                 4,500                                        4,500
                                                                        --------------                                -------------
TOTAL ASSETS                                                             $     229,624                                 $    229,624
                                                                        ==============                                =============

LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable and accrued expenses                                    $   3,061,439      (a)       $   (42,177)     $  3,019,262
Accrued expenses-related parties                                               745,961                                      745,961
Notes and loans payable                                                        501,801                                      501,801
Loans payable-related party                                                      4,297                                        4,297
Convertible subordinated debentures                                            127,300                                      127,300
Convertible secured debentures                                                 883,820      (c)            (4,384)          879,436
                                                                        --------------                                 ------------
  Total current liabilities                                                  5,324,618                                    5,278,057
                                                                        --------------                                 ------------
Convertible secured debentures                                                 696,875      (c)          (540,342)          156,533
    --      (c)         5,801,000         5,801,000
Warrant liability related to convertible debentures
Warrant liability related to convertible debentures                                 --      (c)             8,349             8,349
                                                                        --------------                                 ------------
  Total long term debt                                                         696,875                                    5,965,882
                                                                        --------------                                 ------------
TOTAL LIABILITIES                                                            6,021,493                                   11,243,939
                                                                        --------------                                 ------------
COMMITMENT AND CONTINGENCIES
DEFICIENCY IN STOCKHOLDERS EQUITY

Common stock, par value $0.001 per share; 700,000,000 shares
     authorized, 699,695,037  issued and outstanding as of
     February 28, 2005                                                         699,694                                      699,694
Common stock to be issued, 302,362,036  shares as of February 28, 2005          24,802                                       24,802
Additional paid in capital                                                  15,873,654      (b)        (1,770,710)       14,102,944
Deferred equity based expense                                                 (531,250)     (b)           531,250                --
Accumulated deficit                                                        (21,858,769)     (b),(C)    (3,982,986)      (25,841,755)
                                                                        --------------      -------   -----------       -----------
TOTAL DEFICIENCY IN STOCKHOLDERS EQUITY                                     (5,791,869)                                 (11,014,315)
                                                                        --------------                                  -----------
                                                                         $     229,624                                  $   229,624
                                                                        ==============                                  ===========
</TABLE>

                                      F-30

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE O - RESTATEMENT (CONTINUED)

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                                  RESTATEMENTS

<TABLE>
<CAPTION>
                                                                         February 28,
                                                                             2005                                       February 28,
                                                                         As Previously                                      2005
                                                                           Reported                   Adjustment         (Restated)
                                                                        -----------------------------------------------------------
<S>                                                                      <C>           <C>           <C>           <C>
                             STATEMENT OF OPERATIONS

REVENUES:

Net sales                                                                     679,682                                     679,682
Cost of sales                                                                 597,767                                     597,767
                                                                        -------------                                   ---------
  Gross Profit                                                                 81,915                                      81,915

OPERATING EXPENSES:
Selling and administrative                                                  1,275,122        (a)         (60,000)       1,215,122
Depreciation                                                                   14,788                                      14,788
                                                                        -------------                               -------------
  Total operating expenses                                                  1,289,910                                   1,229,910
                                                                        -------------                               -------------
LOSS FROM OPERATIONS                                                       (1,207,995)                                 (1,147,995)
                                                                        -------------                               -------------
Other income (expense)

Reduction in liability relating to settlement of debt                         129,111        (a)         (17,823)         111,286
Unrealized loss on adjustment of derivative and warrant
   liability to fair value of underlying securities                                          (c)      (2,160,086)      (2,160,086)
Other income                                                                  147,663                                     147,663
Interest expense                                                             (749,747)     (b),(c)       (18,913)        (768,660)
                                                                        -------------     -------    -----------    -------------
  Total other  (expense)                                                     (472,973)                                 (2,669,797)
                                                                        -------------                               -------------

NET LOSS BEFORE TAX PROVISION                                              (1,680,968)                                 (3,817,791)

TAX PROVISION                                                                      --                                          --

NET LOSS                                                                $  (1,680,968)                              $  (3,817,791)
                                                                        =============                               =============
BASIC AND DILUTED LOSS PER SHARE                                        $      (0.003)                   $(0.004)   $      (0.007)
                                                                        =============                ===========    =============
Weighted average shares used in net loss
        calculations-basic and diluted                                    555,933,697                                 555,933,697
                                                                        =============                               =============
</TABLE>

(a)      Change  due to  correction  of error in  payment  of  common  stock for
         liabilities

(b)      Reverse  beneficial  conversion feature computed at intrinsic value and
         correct accretion of secured convertible debentures

(c)      To record the derivative  liability and warrant liability at fair value
         relating to convertible debentures

The  restatement  resulted in an increase  in the Net Loss  $2,136,823  or a per
share loss of $0.004 per share.

                                      F-31

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2006 AND 2005

NOTE P - SUBSEQUENT EVENTS

In  March  2006,  the  Company  at  various  dates  issued  convertible  secured
debentures  totaling  $400,000 to an investment  group.  These debentures mature
three years from the date of  issuance,  bear  interest at 10% per annum and are
convertible  into shares of the Company's  common stock at 20% of the average of
the  lowest  three  intraday  trading  prices  during the  twenty  trading  days
immediately  preceding  conversion.  These debentures also have warrants for the
holders to  purchase  100,000,000  shares of common  stock  from the  Company at
$0.005 per share.

In  March  2006,  the  Company  signed a one year  renewable  Purchase  and Sale
Agreement with Brax-3D, LLC. This agreement gives the Company an exclusive right
to sell products  produced by Brax-3D,  LLC as long as the Company meets minimum
purchasing requirements of $1,284,750 in products.

In March  2006,  the  Company  amended  its  article  of  incorporation  with an
effective  date of March 24, 2006.  This amendment was to increase the number of
authorized  $0.001 par value common shares from  700,000,000 to  15,000,000,000.
This amendment  also created and authorized a new class of preferred  $0.001 par
value stock with 10,000,000 shares.

In March 2006,  the Company  consummated  a contract  whereby the  Company,  for
product  delivered,  has  available  for usage:  media,  goods and services with
certain  restrictions  and  limitations   collectively  referred  to  as  "trade
credits".  The Company's  ability to access these trade credits has not yet been
determined.

Subsequent  to February 28, 2006,  the Company  issued the  following  shares of
common stock:

    Number of shares  Purpose                             Value
    ----------------- ----------------------------------- --------
         688,700,000  Services rendered                   $341,800
       3,453,720,012  Debt conversion                     $412,273
         135,000,000  Common Stock Subscription           $     --
         143,500,000  Penalty shares due                  $     --
           3,921,000  Anti dilution provisions            $     --

In  February,  2006,  The  Company  approved a 2005  Incentive  Stock Plan which
provides  50,000,000  shares of  common  stock to be  issued  pursuant  to stock
options or stock grants.  The stock option plan is administered  directly by our
board of  directors.  Subject to the  provisions  of the stock option plan,  the
board will  determine who shall  receive  stock  options and stock  grants,  the
number of shares of common stock that may be purchased  under the options or the
number of shares of common  stock  granted,  the time and manner of  exercise of
options and exercise  prices.  As of June 26, 2006, we have not issued any stock
or options to purchase  shares of our common  stock  pursuant  to our  Incentive
Stock Plan.

In May 2006, the Company at various dates issued convertible  secured debentures
totaling  $500,000 to an investment  group.  These debentures mature three years
from the date of  issuance,  bear  interest at 8% per annum and are  convertible
into shares of the  Company's  common  stock at 25% of the average of the lowest
three  intraday  trading  prices  during the  twenty  trading  days  immediately
preceding  conversion.  These  debentures  also have warrants for the holders to
purchase  100,000,000  shares of common  stock  from the  Company  at $0.005 per
share.

                                      F-32

<PAGE>

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

         There  have  been  no   disagreements   between  the  Company  and  its
accountants as to matters which require disclosure.

ITEM 8A - CONTROLS AND PROCEDURES

      a) EVALUATION OF DISCLOSURE  CONTROLS AND  PROCEDURES.  As of February 28,
         2006, the Company's  management  carried out an  evaluation,  under the
         supervision  of  the  Company's  Chief  Executive   Officer  and  Chief
         Financial  Officer of the  effectiveness of the design and operation of
         the Company's system of disclosure  controls and procedures pursuant to
         the Securities and Exchange Act, Rule 13a-15(e) and 15d-15(e) under the
         Exchange Act). Based upon that evaluation,  the Chief Executive Officer
         and Chief  Financial  Officer  concluded that the Company's  disclosure
         controls  and  procedures  were  effective,  as of the  date  of  their
         evaluation, for the purposes of recording, processing,  summarizing and
         timely  reporting  material  information  required to be  disclosed  in
         reports filed by the Company under the Securities Exchange Act of 1934.

      b) CHANGES  IN  INTERNAL  CONTROLS.  There  were no  changes  in  internal
         controls  over  financial  reporting  that  occurred  during the period
         covered by this report that has  materially  affected,  or is likely to
         materially  effect,  the  Company's  internal  control  over  financial
         reporting.

ITEM 8B - OTHER INFORMATION

None.

                                       24

<PAGE>

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

DIRECTORS AND EXECUTIVE OFFICERS

 NAMES:            AGES    TITLES:                   BOARD OF DIRECTORS
 ------            ----    -------                   ------------------
 Paul Lipschutz     60     Chief Executive Officer   Director
 Jay Lipschutz      38     Secretary                 Director

         Directors  are  elected  to serve  until  the next  annual  meeting  of
stockholders  and until their  successors are elected and  qualified.  Currently
there are two seats on our board of directors.

         Currently,  our  Directors  are not  compensated  for  their  services,
although  their  expenses in  attending  meetings are  reimbursed.  Officers are
elected by the Board of Directors and serve until their successors are appointed
by the Board of Directors. Biographical resumes of each officer and director are
set forth below.

PAUL  LIPSCHUTZ.  Mr.  Lipschutz  has been our  Chief  Executive  Officer  and a
director since 1992.  Mr.  Lipschutz is a 1967 graduate of The Wharton School of
Finance and Commerce of the University of  Pennsylvania.  Jay Lipschutz and Paul
Lipschutz are first cousins, once removed.

JAY LIPSCHUTZ.  Mr.  Lipschutz has been our Secretary  since December 2001 and a
director since March 2006. From 1999 until December 2001, Mr.  Lipschutz  served
as our director of shipping and receiving.  Prior to 1999, Mr.  Lipschutz served
as  the  director  of  shipping  and   receiving  at   Children's   Hospital  of
Philadelphia. Jay Lipschutz and Paul Lipschutz are first cousins, once removed.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

         Section  16(a) of the  Securities  Exchange Act of 1934 (the  "Exchange
Act") requires the Company's directors and executive  officers,  and persons who
own  more  than ten  percent  of a  registered  class  of the  Company's  equity
securities, to file with the Commission initial reports of ownership and reports
of  changes  in  ownership  of the  Company's  Common  Stock  and  other  equity
securities  of the  Company.  Officers,  directors  and greater than ten percent
shareholders are required by the Commission's regulations to furnish the Company
with copies of all Section 16(a) forms they filed.

         We have been  provided  with  copies of all forms (3, 4 and 5) filed by
officers,  directors,  or ten  percent  shareholders  within  three days of such
filings.  Based  on our  review  of such  forms  that we  received,  or  written
representations  from reporting  persons that no Forms 5s were required for such
persons,  we  believe  that,  during  fiscal  2006,  all  Section  16(a)  filing
requirements  have been  satisfied on a timely basis for members of the Board of
Directors and Executive Officers.

CODE OF ETHICS

         A code of ethics  relates  to  written  standards  that are  reasonably
designed to deter wrongdoing and to promote:

            (1)   Honest and ethical conduct,  including the ethical handling of
                  actual or apparent  conflicts of interest between personal and
                  professional relationships;

            (2)   Full, fair, accurate,  timely and understandable disclosure in
                  reports and  documents  that are filed with,  or submitted to,
                  the Commission and in other public  communications  made by an
                  issuer;

            (3)   Compliance  with  applicable   governmental  laws,  rules  and
                  regulations;

                                       25

<PAGE>

            (4)   The prompt internal  reporting of violations of the code to an
                  appropriate person or persons identified in the code; and

            (5)   Accountability for adherence to the code.

         We have not  adopted a  corporate  code of ethics  that  applies to our
principal executive officer,  principal financial officer,  principal accounting
officer or controller, or persons performing similar functions.

         Our decision to not adopt such a code of ethics results from our having
only a limited number of officers and directors  operating as the management for
the Company. We believe that as a result of the limited interaction which occurs
having such a small management  structure for the Company eliminates the current
need for such a code, in that violations of such a code.

ITEM 10.  EXECUTIVE COMPENSATION.

         The following  tables set forth certain  information  regarding our CEO
and each of our most  highly-compensated  executive  officers whose total annual
salary and bonus for the fiscal  years ending  February 28, 2006,  2005 and 2004
exceeded $100,000:

<TABLE>
<CAPTION>
                                                    SUMMARY COMPENSATION TABLE
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                Long-Term Compensation
-----------------------------------------------------------------------------------------------------------------------------------
                                       Annual Compensation                         Awards               Payouts
-----------------------------------------------------------------------------------------------------------------------------------
                                                          Other                        Securities
                                Annual      Annual        Annual        Restricted      Underlying       LTIP         All Other
     Name and        Fiscal     Salary      Bonus      Compensation    Stock Awards    Options/SARs     Payouts     Compensation
Principal Position    Year       ($)         ($)           ($)             ($)             (#)            ($)           ($)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>        <C>          <C>          <C>           <C>               <C>             <C>           <C>

-----------------------------------------------------------------------------------------------------------------------------------
Paul Lipschutz,      2006      172,500        0             0               0               0              0             0
CEO (1)
-----------------------------------------------------------------------------------------------------------------------------------
                     2005      150,000        0             0             34,000            0              0             0
-----------------------------------------------------------------------------------------------------------------------------------
                     2004      142,750        0             0            177,000            0              0             0
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Mr.  Lipschutz  agreed to defer his salary in fiscal years 2005 and 2004 due
to our  financial  condition  and to help us  secure  financing.  Mr.  Lipschutz
received an  aggregate  67,800,000  shares of common stock as  compensation  for
services in fiscal year 2004 and  12,000,000 in fiscal year 2005. For the fiscal
year ended  February  28, 2006,  Mr.  Lipschutz  received  $53,000 in salary and
agreed  to defer  the  remaining  portion  of his  salary  due to our  financial
condition.

                                       26

<PAGE>

ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

         The following table sets forth certain information regarding beneficial
ownership of our common stock as of July 5, 2006.

         o  by each person who is known by us to  beneficially  own more than 5%
            of our common stock;

         o  by each of our officers and directors; and

         o  by all of our officers and directors as a group.

<TABLE>
<CAPTION>
             NAME AND ADDRESS      TITLE OF             NUMBER OF       PERCENTAGE OF
                 OF OWNER           CLASS            SHARES OWNED(1)      CLASS (2)
<S>                              <C>                 <C>                   <C>
Paul Lipschutz                   Common Stock        91,382,271 (3)         1.78%
1600 Lower State Road
Doylestown, PA 18901

Jay Lipschutz                    Common Stock            939,641              *
1600 Lower State Road
Doylestown, PA 18901

All Officers and Directors       Common Stock        92,321,912 (3)         1.80%
As a Group (2 persons)
</TABLE>

* Less than 1%.

(1)  Beneficial  Ownership is  determined  in  accordance  with the rules of the
Securities and Exchange  Commission and generally  includes voting or investment
power with respect to  securities.  Shares of common stock subject to options or
warrants  currently  exercisable or  convertible,  or exercisable or convertible
within  60 days of July  5,  2006  are  deemed  outstanding  for  computing  the
percentage  of the person  holding  such  option or  warrant  but are not deemed
outstanding for computing the percentage of any other person.

(2) Based upon 5,139,143,049 shares issued and outstanding on July 5, 2006.

(3) Include 3,500,000 shares owned by Paul Lipschutz's wife,  Marilyn Lonker, as
to which Mr. Lipschutz disclaims beneficial ownership. Includes 375 shares owned
by the estate of Harvey Benson, of which Mr. Lipschutz serves as Executor.

REMUNERATION OF DIRECTORS

         Each  director  receives  50,000 shares of our common stock per quarter
for their services.

EMPLOYMENT AGREEMENTS

Paul Lipschutz
--------------

         Mr. Lipschutz, our Chief Executive Officer, has an Employment Agreement
with us which became effective on January 1, 1999 and which  originally  expired
on January 1, 2004. At each  anniversary date of the Employment  Agreement,  the
Employment  Agreement will extend for another year,  unless either Mr. Lipschutz
or we give ninety days prior notice of intent not to have the Agreement renewed.
No notice has been given to date,  therefore the  Employment  Agreement has been
extended to January 1, 2007.

                                       27

<PAGE>

         Mr. Lipschutz's initial base salary under the Employment  Agreement for
calendar year 1999 was $125,000. During the calendar year 2000 and for each year
thereafter, Mr. Lipschutz is entitled to an additional salary based on our gross
sales as follows:

                    Annual Revenues                  Additional Salaries
                    ---------------                  -------------------

               $1,000,000 to $1,999,999                     $25,000

               $2,000,000 to $2,999,999                     $50,000

               $3,000,000 to $4,999,999                     $75,000

        Each $1,000,000 increment thereafter                $25,000

         Beginning  with the calendar  year 2001,  Mr.  Lipschutz's  base salary
increased  by 15% of the sum of his previous  year's base salary and  additional
salary under the table above for the immediately  preceding year. Mr.  Lipschutz
agree to forgo his 15% increase in lieu of a 5% increase for calendar year ended
2005.

STOCK OPTION PLANS

         We currently have a 2005 Incentive Stock Plan,  which has been approved
by our directors and  shareholders,  which provides  50,000,000 shares of common
stock to be issued  pursuant to stock options or stock grants.  The stock option
plan is administered directly by our board of directors.

         Subject to the  provisions  of the stock  option  plan,  the board will
determine who shall receive stock options and stock grants, the number of shares
of common stock that may be purchased  under the options or the number of shares
of common stock granted, the time and manner of exercise of options and exercise
prices.

         As of June 26,  2006,  we have not  issued  any  stock  or  options  to
purchase shares of our common stock pursuant to our Incentive Stock Plan.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

         None.

                                       28

<PAGE>

EQUITY COMPENSATION PLAN INFORMATION

         The  following  table sets forth certain  information  about the common
stock that may be issued upon the exercise of options, warrants and rights under
all of the existing equity compensation plans as of June 26, 2006.

<TABLE>
<CAPTION>
                                                                                                        NUMBER OF SHARES
                                                                                                            REMAINING
                                                                                                          AVAILABLE FOR
                                                            NUMBER OF SHARES      WEIGHTED-AVERAGE       FUTURE ISSUANCE
                                                              TO BE ISSUED            EXERCISE            UNDER EQUITY
                                                            UPON EXERCISE OF          PRICE OF            COMPENSATION
                                                               OUTSTANDING           OUTSTANDING        PLANS (EXCLUDING
                                                                OPTIONS,              OPTIONS,          SHARES REFLECTED
                                                              WARRANTS AND          WARRANTS AND          IN THE FIRST
                      PLAN CATEGORY                              RIGHTS                RIGHTS                COLUMN)
-------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                    <C>                   <C>
Equity compensation plans approved by shareholders                  0                     --                50,000,000
Equity compensation plans not approved by shareholders             --                     --                        --
                                                               ------                 ------                    ------
Total                                                               0                     --                50,000,000
                                                               ======                 ======                ==========
</TABLE>

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Beginning  in fiscal  year 1996,  Mr.  Lipschutz,  our Chief  Executive
Officer,  made  various  loans  to us  to  assist  with  meeting  our  important
expenditures.

         At February 28, 2005, the principal amount of Mr.  Lipschutz's loan had
decreased to $0 through net borrowings.  The loan accumulated $1,921 in interest
during fiscal year 2005,  and the loan had total accrued  interest of $76,636 at
February 28, 2005.  The total amount owed to Mr.  Lipschutz,  with  interest and
principal on the loan, at February 29, 2004 was $133,418.

         We have no policy regarding  entering into transactions with affiliated
parties.

                                       29

<PAGE>

ITEM 13.  EXHIBITS.

Exhibit No.       Description
-----------       -----------
3.1               Certificate of  Incorporation  of the Company filed as Exhibit
                  3.1 to the registration statement on Form 10-SB filed with the
                  Commission  on  May  24,  2000  and  incorporated   herein  by
                  reference.

3.2               Amendment  to  Certificate  of  Incorporation  of the Company,
                  changing  the name of the Company  from Amour  Corporation  to
                  Bard Sports  Corp.,  filed as Exhibit 3.1 to the  registration
                  statement on Form 10-SB filed with the  Commission  on May 24,
                  2000 and incorporated herein by reference.

3.3               Amendment  to  Certificate  of  Incorporation  of the Company,
                  changing the name of the Company from Bard Sports Corp. to USA
                  Sports Group, Inc. and increasing the authorized common stock,
                  filed as Exhibit  3.1 to the  registration  statement  on Form
                  10-SB  filed  with  the   Commission   on  May  24,  2000  and
                  incorporated herein by reference.

3.4               Amendment  to  Certificate  of  Incorporation  of the Company,
                  changing the name of the Company from USA Sports  Group,  Inc.
                  to  Collectible   Concepts  Group,  Inc.  and  increasing  the
                  authorized   common  stock,   filed  as  Exhibit  3.1  to  the
                  registration statement on Form 10-SB filed with the Commission
                  on May 24, 2000 and incorporated herein by reference.

3.5               By-Laws  of  the   Company,   filed  as  Exhibit  3.2  to  the
                  registration statement on Form 10-SB filed with the Commission
                  on May 24, 2000 and incorporated herein by reference.

4.1               Form of  debenture,  filed as Exhibit 4.1 to the  registration
                  statement on Form 10-SB filed with the  Commission  on May 24,
                  2000 and incorporated herein by reference.

4.2               Form of debenture  issued April 2000,  filed as Exhibit 4.2 to
                  the  registration  statement  on Form  10-SB  filed  with  the
                  Commission  on  May  24,  2000  and  incorporated   herein  by
                  reference.

4.3               Form of Stock  Purchase  Warrant,  filed as Exhibit 4.3 to the
                  registration statement on Form 10-SB filed with the Commission
                  on May 24, 2000 and incorporated herein by reference.

4.4               Form of Registration Rights Agreement, filed as Exhibit 4.4 to
                  the  registration  statement  on Form  10-SB  filed  with  the
                  Commission  on  May  24,  2000  and  incorporated   herein  by
                  reference.

4.5               Secured  Convertible  Debenture  with New  Millennium  Capital
                  Partners II, LLC, AJW Partners,  LLC and  Equilibrium  Equity,
                  LLC, filed as Exhibit 10.11 to the  registration  statement on
                  Form 10-SB/A  filed with the  Commission  on September 7, 2000
                  and incorporated herein by reference.

4.6               Security  Agreement by and among the Company,  New  Millennium
                  Capital  Partners II, LLC, AJW Partners,  LLC and  Equilibrium
                  Equity,  LLC,  filed  as  Exhibit  10.12  to the  registration
                  statement  on  Form  10-SB/A  filed  with  the  Commission  on
                  September 7, 2000 and incorporated herein by reference.

10.1              Paul Lipschutz employment agreement,  filed as Exhibit 10.1 to
                  the  registration  statement  on Form  10-SB  filed  with  the
                  Commission  on  May  24,  2000  and  incorporated   herein  by
                  reference.

10.2              Financial  Consulting  Agreement  between  the Company and NIR
                  Group, LLC filed as Exhibit 10.7 to the registration statement
                  on Form 10-SB  filed with the  Commission  on May 24, 2000 and
                  incorporated herein by reference.

                                       30

<PAGE>

Exhibit No.       Description
-----------       -----------
10.3              Lease for 1600 Lower State Road,  filed as Exhibit 10.9 to the
                  registration statement on Form 10-SB filed with the Commission
                  on May 24, 2000 and incorporated herein by reference.

10.4              Professional  Services  Agreement,  dated as of  September  1,
                  2004,  by and between the  Company and JRT  Associates,  Inc.,
                  filed as an  exhibit  to the  amended  annual  report  on Form
                  10-KSB,  field with the  Commission  on October  20,  2005 and
                  incorporated herein by reference.

10.5              Amendment,  dated May 4, 2005,  to the  Professional  Services
                  Agreement by and between the Company and JRT Associates, Inc.,
                  filed as an  exhibit  to the  amended  annual  report  on Form
                  10-KSB,  field with the  Commission  on October  20,  2005 and
                  incorporated herein by reference.

10.6              Amendment,  dated May 4, 2005,  to the  Professional  Services
                  Agreement by and between the Company and JRT Associates, Inc.,
                  filed as an  exhibit  to the  amended  annual  report  on Form
                  10-KSB,  field with the  Commission  on October  20,  2005 and
                  incorporated herein by reference.

10.7              Amendment,  dated May 4, 2005,  to the  Professional  Services
                  Agreement by and between the Company and JRT Associates, Inc.,
                  filed as an  exhibit  to the  amended  annual  report  on Form
                  10-KSB,  field with the  Commission  on October  20,  2005 and
                  incorporated herein by reference.

10.8              Amendment,  dated May 4, 2005,  to the  Professional  Services
                  Agreement by and between the Company and JRT Associates, Inc.,
                  filed as an  exhibit  to the  amended  annual  report  on Form
                  10-KSB,  field with the  Commission  on October  20,  2005 and
                  incorporated herein by reference.

10.9              Amendment,   dated  January  31,  2005,  to  the  Professional
                  Services   Agreement  by  and  between  the  Company  and  JRT
                  Associates,  Inc.,  filed as an exhibit to the amended  annual
                  report on Form 10-KSB,  field with the  Commission  on October
                  20, 2005 and incorporated herein by reference.

10.10             License  Agreement,  dated May 12,  2005,  by and  between the
                  Company  and   Bravado   International   Group   Merchandising
                  Services,  Inc.,  filed as an  exhibit to the  amended  annual
                  report on Form 10-KSB,  field with the  Commission  on October
                  20, 2005 and incorporated herein by reference.

10.11             Amendment,  dated  September  9, 2005,  to the Retail  Product
                  License   Agreement   by  and  between  the  Company  and  NBA
                  Properties,  Inc.,  filed as an exhibit to the amended  annual
                  report on Form 10-KSB,  field with the  Commission  on October
                  20, 2005 and incorporated herein by reference.

10.12             Retail Product  License  Agreement,  dated August 26, 2005, by
                  and between the Company and NHL Enterprises, L.P., filed as an
                  exhibit to the amended  annual  report on Form  10-KSB,  field
                  with the  Commission  on  October  20,  2005 and  incorporated
                  herein by reference.

31.1              Certification  of Chief  Executive  Officer  pursuant  to Rule
                  13a-14 and Rule  15d-14(a),  promulgated  under the Securities
                  and Exchange Act of 1934, as amended

31.2              Certification  of Chief  Financial  Officer  pursuant  to Rule
                  13a-14 and Rule 15d 14(a),  promulgated  under the  Securities
                  and Exchange Act of 1934, as amended

32.1              Certification  pursuant to 18 U.S.C.  Section 1350, as adopted
                  pursuant  to  Section  906 of the  Sarbanes-Oxley  Act of 2002
                  (Chief Executive Officer)

                                       31

<PAGE>

Exhibit No.       Description
-----------       -----------
32.2              Certification  pursuant to 18 U.S.C.  Section 1350, as adopted
                  pursuant  to  Section  906 of the  Sarbanes-Oxley  Act of 2002
                  (Chief Financial Officer)

                                       32

<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

         The aggregate fees billed by our auditors,  for  professional  services
rendered for the audit of the  Company's  annual  financial  statements  for the
years ended  February  28, 2006 and 2005,  and for the reviews of the  financial
statements included in the Company's Quarterly Reports on Form 10-QSB during the
fiscal years were $114,107 and $91,649, respectively.

AUDIT-RELATED FEES

         Our  independent  registered  public  accounting  firm did not bill the
Company for any other  audit-related work during fiscal years ended February 28,
2006 or 2005.

TAX FEES

         Our  independent  registered  public  accounting  firm did not bill the
Company for tax related  work during  fiscal  years ended  February  28, 2006 or
2005.

ALL OTHER FEES

         Our  independent  registered  public  accounting  firm did not bill the
Company for other services  during fiscal years ended February 28, 2006 and 2005
respectively.

         The  Board  of  Directors  has  considered  whether  the  provision  of
non-audit  services is compatible with  maintaining  the principal  accountant's
independence.

                                       33

<PAGE>

                                   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.

                         COLLECTIBLE CONCEPTS GROUP, INC.

Date:  July 18, 2006     By: /s/ PAUL S. LIPSCHUTZ
                             ---------------------
                         Paul S. Lipschutz
                         Chief Executive Officer (Principal Executive Officer),
                         Principal Financial Officer and Principal Accounting
                         Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Name                                    Position                                                         Date
-------------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                                                              <C>
/s/ PAUL S. LIPSCHUTZ                   Chief Executive Officer (Principal Executive Officer),           July 18, 2006
---------------------                   Principal Financial Officer and Principal Accounting Officer
Paul S. Lipschutz

/s/ JAY LIPSCHUTZ                       Director                                                         July 18, 2006
-----------------
Jay Lipschutz
</TABLE>

                                       34