U.S. SECURITIES AND EXCHANGE
                        COMMISSION WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

                     FOR FISCAL YEAR ENDED FEBRUARY 28, 2002

                                    000-30703
                             Commission File Number

                        COLLECTIBLE CONCEPTS GROUP, INC.

                 (Name of small business issuer in its charter)


              Delaware                                   95-4026880
              --------                                  ------------
     State or other jurisdiction                        IRS Employer
          of incorporation                            Identification No.


          1600 Lower State Road, Doylestown, PA 18901, (215) 491-1075
         (Address and telephone number of principal executive offices)

Securities registered under Section 12(b) of the Exchange Act: None.

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

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

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will 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
this Form 10-KSB. [X].

The registrant's revenues from continuing operations for the year ended February
28, 2002 were $407,106.

As of June 30, 2004, the aggregate market value of the common stock held by
non-affiliates computed by reference to the average bid and asked prices of such
stock was $950,082

As of June 30, 2004, the registrant had 478,972,190 shares of common stock, par
value $.001 per share, outstanding.

<PAGE>

                                     PART I

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
most recently 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 and
continuing for periods subsequent to February 28, 2002, we proceeded to obtain
licenses from New Line Cinema for its Austin Powers (terminated September 9,
2002) and Lord of The Rings (terminated September 9, 2002) movies, from Marvel
for its X-Men, Spiderman and Hulk movies as well 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 2002). With our
acceptance by the entertainment community as a provider of high quality
collectibles, 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 for the current fiscal year and in fiscal
periods subsequent to February 28, 2002.

      Music Art: On June 5, 2000, we acquired Music Art Corporation in
consideration of 1,000,000 shares of our common stock. Through the transaction,
Music Art became a wholly owned subsidiary of ours. We acquired certain
databases and the inventory of Music Art's music and entertainment memorabilia.
The value of the inventory was $36,056 and computer equipment was $1,368, which
represented the majority of the physical assets acquired. The purchase price for
Music Art was negotiated between the president of Music Art and our president.
Music Art's business consisted of the marketing and sale of reproductions of
signed lithographs of the Rolling Stones and photos of Bruce Springsteen signed
by well known rock photographer, Phil Cecola, a famous rock-and-roll group
photographer. The tangible assets acquired primarily consisted of Rolling Stones
signed lithographs and photos of Bruce Springsteen signed by Phil Cecola. We did
not acquire any new distribution channels through the transaction. We did
acquire a database owned by Music Art, consisting of several thousand named
persons who had purchased Music Art products in the past along with individuals
and businesses that previously had been contacted by Music Art with a view to
distribution of its products. The license relating to the Rolling Stones covers
the marketing and sale of 16 signed in-plate lithographs based on their album
covers and tour art. A royalty of twenty five percent (25%) was required to be
paid based on net sales of these lithographs with a fixed minimum for framed and
unframed pieces. The license agreement under which these products are being sold
expired September 30, 1999 with subsequent sales being sold pursuant to an
unwritten extension under the same terms and conditions as the license
agreement. One of the major assets of Music Art was its license with the Rolling
Stones who were expected to extend Music Art's license in anticipation of going
on tour. When the Rolling Stones decided not to go on tour until 2002, we
anticipated obtaining other licenses for Music Art during fiscal 2002, however,
these did not materialize. We believe the license associated with this
acquisition has expired and determined that the cost to renew is not justified
by the potential short-term revenue stream. As of February 28, 2002, all
goodwill related to Music Art has been reclassified to discontinued operations.

      In July/August, 2000, our subsidiary, Team Sports Specialties, Inc.
acquired the assets of Rooter Rattle, Ltd. Part of the consideration for that
acquisition was shares of our common stock. In connection with the acquisition,
we agreed with Rooter Rattle that if certain conditions with respect to our
stock issued to Rooter Rattle were not met on or before the first anniversary of
closing, we would either pay Rooter Rattle an amount of $545,000 or transfer to
Rooter Rattle, free and clear of all liens and encumbrances, the stock of Team
Sports. The conditions with respect to our common stock were not met, and
therefore under the agreement, we were required to pay to Rooter Rattle $545,000
or deliver the stock of Team Sports free and clear of all encumbrances. In
addition, we have not paid the $30,000 principal outstanding on a Promissory
Note issued to Rooter Rattle in connection with the acquisition, and the Note is
in default. August of 2002, we received notice from the partners of Rooter
Rattle, LP declaring our wholly-owned subsidiary, Team Sports Specialty
Corporation in default under certain terms of the August 3, 2000 Purchase and
Sale Agreement between Team Sports and Rooter Rattle, LP. The partners of Rooter
Rattle, LP and we have verbally agreed to have all assets of Team Sports, less
certain liabilities to the extent that the liabilities would exceed the assets
given back to Rooter Rattle, LP by $150,000, would revert back to Rooter Rattle,
LP as provided for in the event of default as defined in the agreement. We have
not recognized any revenue from Team Sport Specialties Corporation since August
1, 2001. As of February 28, 2002, all goodwill related to Rooter Rattle, LP has
been reclassified to discontinued operations.


                                       1
<PAGE>

                              CURRENT PRODUCT LINES

      Following the migration to entertainment related licenses, our product
line is currently comprised of items principally related to movie releases and
other figures including comic book characters. Revenues for the current year
were derived principally from the sale of X-Men products, Austin Powers'
products, Lord of the Rings products and items from Music Art's Rolling Stones
collection. These included wall scrolls depicting images from Austin Powers and
X-Men printed on silk-like fabrics, Wolverine letter openers, dog tags and rings
from X-Men, the Austin Powers Bag of Shhhh and jet plane model replicas from
both X-Men and Austin Powers' movies.

                              DISTRIBUTION CHANNELS

      We sell our collectible and high-end novelty products through retailers,
distributors, department stores and catalogers. Historically, we have placed our
products in over 4,500 retail locations including Spencer Gifts, Claire's
Boutique, Musicland, Tower Records, Halloween and costume shops, and a growing
list of retailers. We entered the Internet E-commerce world with our websites:
Austin Powers Collector's Club.com, Mini-V.com, collectbaseball.com,
X-menclub.com, MarvelFanclub.com and Terminator website. Revenues from these web
sights proved to be insufficient to cover the costs of maintaining them and we
decided to eliminate our proprietary websites in favor of selling our products
through established Internet sites such as Amazon.com, BigE.com, Newline.com,
Toysrus.com, iQVC.com, Moletown.com, Musicland.com, Boscos.com,
Anotheruniverse.com, Galacticquest.com, and Nightflightcomics.com.

                       SUBSEQUENT EVENTS AND DEVELOPMENTS

      August 2003, we reevaluated our business strategy viewing it in the light
of our declining performance in producing products in time for movie releases
and the resulting loss of potential revenue, profits and operating income. It
was determined that we did not have sufficient capital or human resources to
assume the full responsibility for all aspects of the business and, in
particular, the high cost of product development, manufacturing and inventory.
Furthermore, any financing we were successful in obtaining was utilized in
maintaining basic operations and conducting the necessary accounting and other
functions required to bring our filings up to date and back into compliance with
SEC regulations. Therefore, we proceeded to restructure the business in an
effort to leverage our strengths and move the responsibility for those elements
that we deemed unable to manage in a cost effective or efficient way, to third
parties. This strategy was more than simply outsourcing various operating
functions although we did outsource several administrative components including
internal accounting, fulfillment and warehousing. The new business configuration
was designed to go beyond traditional outsourcing maneuvers and was intended to
eliminate our role as primary party in the development and manufacturing of
products and allow us to focus our activity on those things that we believe we
are best equipped to execute; obtaining important licenses, product conception
and design, and marketing and distribution.

                                NEW OPPORTUNITIES

      We have proceeded to actively seek entities with products whose
marketability would be enhanced by the application of images, logos and other
identifying symbols available through licenses we had or could obtain. An
important part of this strategy was to seek products that had a more
"mainstream" appeal than the pure novelties and collectibles we have
historically marketed but still be driven by the "brand" appeal our licenses
would provide. These parameters led us to seek product partners whose goods
addressed three important areas; the children's market, college market and the
professional sports market. These sectors represented new market opportunities
for us; the college and children's segments are renewable markets, producing a
fresh group of consumers every year; licensed goods sales are extremely
prevalent in children's marketing circles and typically not limited to single
products; the college marketplace extends beyond that of the current student
bodies 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. During the periods of fiscal 2003 and 2004, we
entered into several relationships consistent with our new business strategy.

      LogoLite: In February of 2003 we formed a Joint Venture called LogoLite
with Jade Accessories, Inc. located in Pennsylvania. The products are mobile
telephone batteries bearing various licensed images or logos. Under the terms of
the joint venture agreement, Jade Accessories is responsible for providing the
batteries, which are replacement batteries for most popular brands of mobile
telephones. These are specially configured batteries containing a series of
lights that can be arranged in prescribed designs, colors and flashing
sequences. The battery case is laser cut with logos or images authorized under
licenses we have or are obtaining. The laser cut images are translucent and when
a call is received or initiated, the lights on the battery begin flashing and
appear vividly through the translucent image on the battery case. We are
responsible for obtaining the necessary licenses, design of the images and the
marketing of the products. Jade Accessories is responsible for the provision of
the finished products in accordance with the specifications supplied by us. The
LogoLite battery products are targeted primarily at the collegiate and
professional sports markets.

      Mighty Volt: On November 8, 2003, we modified a previous joint venture
agreement dated March of 2003 with Pivotal Self Service Technologies, Inc. and
entered into a Royalty and Services Agreement with Pivotec, a Division of
Pivotal Self Service Technologies, Inc. Through its parent company, Pivotec
imports a variety of flashlight and battery products from abroad. Under the
terms of the new agreement, we will assist Pivotec 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 titled to Pivotec
and we will receive a 1% royalty on net sales of any flashlight and/or battery
products containing images available either from licenses we have or assisted in
obtaining for Pivotec. Additionally, we may sell these licensed products through
our own distribution channels 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.


                                       2
<PAGE>

      {212} Media LLC: On December 29, 2003, we and {212} Media LLC executed a
Manufacturing and Distribution Agreement for the purpose of facilitating the
manufacturing and distribution of an audio book series comprised of a collection
of Arthur stories, a popular children's book character by author Marc Brown. In
conjunction with {212} Media, we will be responsible for the design,
manufacture, promotion and distribution of the audio books. Each of the
children's stories will be read and recorded by a celebrity figure giving added
marketing appeal. Several celebrities have been enlisted to participate in this
program and we expect that others will be added. All costs associated with the
production of the audio books will be borne by {212} Media. We will receive a
20% markup over manufacturing cost from {212} Media plus a distribution fee
ranging from 8% to 15% of wholesale prices. Additionally, an override fee of 3%
of wholesale price will be paid to us.

      Fanbana: On December 3, 2003, we secured an Alliance and Co-Marketing
Agreement with CLP Group LLC under which we and CLP will market the Banaworld
product line featuring the Fanbana which is a self-retracting, rollout banner
manufactured using a plastic material that has a "memory" for its original
shape. We believe that the Fanbana is an excellent product for sale into the
collegiate and professional sports markets as well as to political organizations
and corporations. Inexpensive, compact and versatile, the Fanbana may be used to
deliver promotional messages in a novel and entertaining way. We plan to market
the Fanbana to companies promoting their products through college and
professional sports teams and to the major political parties and believe that
these markets could produce significant Fanbana sales.

                               MARKETING STRATEGY

      We create and market unique collectible products for the entertainment and
sports markets. We are not a manufacturer, but rather source our products from a
wide range of manufacturing partners throughout the world. We market our
products primarily through various distributors and independent sales
organizations that collectively cover all of North America. We utilize outside
sales representatives to sell to the toy, gift, electronic, auto, novelty,
Halloween costume, food and drug chains and distributors. 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. The independent sales representatives take orders
from customers for our products. We introduced a "Time Stock Rotation Program"
for retail store clients. The "Time Stock Rotation Program" is based upon the
"Plan -O-Gram" practice whereby the major retail chains control their inventory
and keep products on the shelf through this inventory management technique. By
using this method when a sale is recorded at the checkout the system immediately
registers the sale in the inventory control program and replacement product is
ordered automatically to insure full stock at all times. We have taken this
concept and made it accessible to smaller chains and independent retailers.
"Time Stock Rotation Program" monitors the inventory of these retail chains and
makes new products available to them through a rotation process where older
items are replaced with higher selling items. We plan to expand our product line
to include more entertainment-based collectibles and novelty products. We also
plan to develop and market more sports-related products and intensify our
efforts to market our existing sports collectibles product line.

      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 examine 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 $50,000, plus royalties
earned over the minimum, and would normally cover a 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, 2002, we had accounts payable and accrued expenses of
approximately $2,719,652 and over $1,150,000 in loans 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 for more than thirty days without additional
cash from cash sales or the collection of accounts receivable.

      Further, our success in marketing products based upon motion pictures is
largely dependent upon the box office success of the films. Thus, there can be
no assurance that any licensing rights that we may obtain will prove profitable.


                                       3
<PAGE>

                                   COMPETITION

      We believe that direct competition for obtaining licenses in our primary
business line, reproductions and collectibles based on movie props, is not a
factor. Generally, we believe we will receive licenses in most of the cases
where we seek them. However, most of these licenses will be non-exclusive. We
are not aware of any exclusive relationships between retailers and collectible
product distributors, and therefore, we and all other competitors are free to
compete for the shelf space and other resources of retailers. However, large
nationally known distributors of toys and other products may have more
bargaining power to demand shelf space. Generally, we do not believe that there
are high barriers to entry in the collectibles market, except for the high-end
limited editions market where individual products tend to have retail purchases
of $130 to $495. Even though these licenses are non-exclusive, we have not
experienced direct competition in the form of other companies licensing and
producing the same collectibles. We experience 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.

                                  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. Subsequent to February 28, 2002, we further
ameliorated any potential risks associated with raw materials or the manufacture
of products in general, by modifying our strategic business plan and deploying
our efforts through partnerships and/or strategic relationships with entities
that have products whose marketability may be enhanced by the addition of images
or logos made possible by licenses we have or may obtain.

                              INTELLECTUAL PROPERTY

      We have several key licenses on which the continued success of our
business is dependent. These include the license with New Line for collectibles
related to the Austin Powers films and the licenses for planned new products
including the license with Marvel Characters for collectibles related to the
X-Men film, the licenses with Canal + DA and Creative Licensing for products
related to the Terminator films.

EMPLOYEES

      As of February 28, 2002 we had five full time employees, of which two are
management, two are marketing and one shipping and delivery. In addition, we had
one part time employee and three independent consultants. We consider our
relations with our employees to be good.

ITEM 2. DESCRIPTION OF PROPERTY.

      Our executive and principal administrative offices are located at 1600
Lower State Road, Doylestown, Pennsylvania 18901, where we currently occupy
approximately 2,600 square feet of office space pursuant to a lease entered into
with Hartsville Real Estate. The term of the lease is three years, expiring in
September 2004. The monthly rental payments under the lease are $1,840. 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. Except
as disclosed below, 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.

      We are required to pay a royalty of ten percent (10%) on sales of the
products licensed from Chicken Soup for the Soul Enterprises, with a minimum
royalty of $50,000. We paid $15,000 at the time of signing the license with
$10,000 due upon the first shipment of product. Efforts to terminate the license
agreement were unsuccessful and CSSE has threatened litigation to recover the
minimum royalty fee. To date, we have not received either a summons or
complaint.

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

      In July 2002 we voted to increase the number of authorized shares from
350,000,000 to 700,000,000 at the same time, we also voted to have a one for
seventy reverse stock split.


                                       4
<PAGE>

                                     PART II

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

                            MARKET FOR COMMON EQUITY

      Our common stock trades on the Pink Sheets 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.

                                    Low($)    High($)

2002
Fourth Quarter (1)                  0.01      0.01

(1) Our stock first started trading on the Pink Sheets on December 11, 2001.
Prior to December 11, 2001, our common stock traded on the Over-the-Counter
Bulletin Board. High and low bid prices for the time when our stock traded on
the Over-the-Counter Bulletin Board could not be found.

      As of June 30, 2004, management believes there to be approximately 940
holders of record of our common stock. To date, we have not paid any dividends
on our common stock. We do not currently intend to pay dividends in the future.

                     RECENT SALES OF UNREGISTERED SECURITIES

      The shares described below represent certain equity securities of
Collectible Concepts Group sold by Collectible Concepts Group during the period
covered by this report that were not registered under the Securities Act, all of
which were issued by Collectible Concepts Group pursuant to exemptions under the
Securities Act. Underwriters were involved in none of these transactions. In
each case, the securities were sold to accredited investors, as determined by an
investor questionnaire executed in conjunction with the respective subscription
agreements.

      May 7, 2002 we filed a schedule 14 with the Securities and Exchange
Commission to affect a 1 to 70 reverse stock split. The split went into effect
July 8, 2002. All shares shown in the tables below are reflective of reverse
stock split.

PRIVATE PLACEMENTS OF COMMON STOCK AND WARRANTS FOR CASH
                         SHARES OF
PURCHASER               COMMON STOCK      PRICE PAID      DATE ISSUED
-------------------------------------------------------------------------
Julia Patricia Rust          7,142          $ 5,000         04/12/01
Roger & Linda Smith          2,142            1,500         04/12/01
Robert Yastrzemski          28,571           20,000         06/29/01
Debra Lawson                14,285           10,000         06/29/01
Rolf Wolfrom                14,285           10,000         06/29/01
Timothy Toward              14,285           10,000         06/29/01
John Zagorski               28,571           20,000         09/26/01
Thomas Lotito                7,142            5,000         09/26/01
Robert Cameron              14,285           10,000         09/26/01
Robert Yastrzemski           8,571            6,000         09/26/01
Debra Lawson                14,285           10,000         09/26/01
Shirley Drewen                 714              500         12/05/01
Claire Signs                 1,428            1,000         12/05/01

SALES OF DEBT FOR CASH

         None.

OPTION GRANTS

         None.


                                       5
<PAGE>

ISSUANCES OF STOCK FOR SERVICES OR IN SATISFACTION OF OBLIGATIONS

                         SHARES OF
 NAME                   COMMON STOCK       VALUE OF SERVICES    DATE ISSUED
---------------------------------------------------------------------------
Edward L. Carduner           1,428               $2,200           04/06/01
Kenneth Volstad              4,217                7,381           04/15/01
Edward L. Carduner           4,285                6,600           05/10/01
Jim Onufrak                  3,571                5,500           05/10/01
Kanakaris Wireless          57,142               88,000           05/18/01
Robert Kramen               13,142               23,000           05/29/01
Steven Newton               20,857               36,500           05/29/01
Paul Lipschutz             142,857              250,000           05/29/01
James Mustoe                 8,571               14,400           06/01/01
Ray Maiwurm                 14,285               23,000           06/04/01
Kenneth Volstad              4,285                6,900           06/04/01
Ray Maiwurm                 14,285               24,000           06/20/01
Kenneth Volstad              5,714                9,600           06/20/01
Lacy Smith                     357                  550           06/21/01
Ray Maiwurm                    714                1,100           06/21/01
Robert Kramen                7,142               12,500           06/27/01
Paul Lipschutz                 714                1,250           06/27/01
Jeffrey Andrews                714                1,250           06/27/01
Ray Maiwurm                    714                  850           08/13/01
Ray Maiwurm                    714                  850           08/13/01
Ray Maiwurm                    714                  550           09/26/01
Steven Cotlar                1,428                1,100           09/26/01
Joseph Mannino               3,571                2,750           09/26/01
Jeffrey Andrews                357                  550           09/26/01
Paul Lipschutz                 357                  550           09/26/01
Paul Lipschutz             285,714              220,000           09/26/01
Jeffrey Andrews             14,285                6,000           12/05/01
Jeffrey Andrews                357                  300           12/05/01
Paul Lipschutz                 357                  300           12/05/01
Jay Lipschutz                4,285                1,800           12/05/01
Joe Vitelli                  7,142                3,000           12/05/01
Richard Weaver               4,285                1,800           12/05/01
Paul Lipschutz              71,428               30,000           12/05/01
Marilyn Lonker               7,142                3,000           12/05/01
Robert Fitzgerald            1,071                  450           12/05/01
Robert Kogen                14,285                6,000           12/05/01
Richard Epstein            250,000               87,500           01/14/02
Richard Epstein            392,857              110,000           01/16/02
Ray Maiwurm                514,285              144,000           01/16/02
James Keeney               642,857              180,000           01/16/02
Robert Kramen              114,285               32,000           01/16/02
Jonathan Shoolman           28,571                8,000           01/16/02
Robert Kogen                14,285                4,000           01/16/02
Martin Rhodes              142,857               40,000           01/16/02
James Mustoe                71,428               20,000           01/16/02
Marshall Braunschweig       14,285                4,000           01/16/02
Christine Mittman          100,000               28,000           01/16/02
Mark Beloyan                57,142               16,000           01/16/02
Daniel Goldberg             14,285                4,000           01/16/02
Edward Patton               14,285                4,000           01/16/02
Peter Brown                 14,285                4,000           01/16/02
Joseph Simone                7,142                2,000           01/16/02
Patricia Meding             71,428               20,000           01/16/02
Joseph Vitelli              71,428               20,000           01/16/02
Thomas Conrad               57,142               16,000           01/16/02
William Hoffman             14,285                4,000           01/16/02
Joseph LaRocco             109,890                7,692           01/16/02


                                       6
<PAGE>

ISSUANCES OF STOCK FOR CONVERSION OF DEBT

(EXCLUDING INTEREST AND GAIN OR LOSS ON CONVERSION OF DEBT)

                        SHARES OF COMMON
NAME                          STOCK          MARKET VALUE OF DEBT   DATE ISSUED
--------------------------------------------------------------------------------
Stuart Abramson               14,857               $10,000             04/06/01
Robert Kramen                  8,571                 6,000             05/29/01
Dennis Rankin                  3,200                 5,000             05/29/01
James Mustoe                  47,500                25,000             06/01/01
R. Stevens                    16,118                10,000             08/13/01
AJW Partners                  15,178                 5,313             09/26/01
New Millenium Capital         15,178                 5,313             09/26/01
Partners, LLC
Equilibrium Equity, LLC        5,357                 1,875             09/26/01
L. Gollon                     16,142                10,000             09/26/01
James Keeney                  14,285                10,000             12/05/01


                                       7
<PAGE>

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

      Some of the information in this Form 10-KSB contains forward-looking
statements that involve substantial risks and uncertainties. You can identify
these statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate" and "continue," or similar words. You should
read statements that contain these words carefully because they:

      o     discuss our future expectations;
      o     contain projections of our future results of operations or of our
            financial condition; and
      o     state other "forward-looking" information.

      We believe it is important to communicate our expectations. However, there
may be events in the future that we are not able to accurately predict or over
which we have no control. Our actual results and the timing of certain events
could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including those set forth under "Risk
Factors," "Business" and elsewhere in this prospectus. See "Risk Factors."

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.

      During the twelve months ended February 28, 2002, we signed a license
agreement with C3 Entertainment to make, market and produce scrolls, pins and
desktop collectibles for The Three Stooges(R). On January 9, 2004, we amended
our license agreement with C3. The amendment had the effect of extending the
license from January 1, 2004 through December 31, 2005. Additionally, the
advance royalty payment of $5,000 was made payable in ten monthly installments
of $500 each beginning January 15, 2004. The total guaranteed royalty under the
amendment was $10,000. All other aspects of the original agreement remained in
full force and effect.

      During the twelve months ended February 28, 2002, we also signed a license
with Marvel Entertainment to be the official website for Marvel's super heroes
fan club. On July 21, 2003, Marvel Entertainment and we mutually agreed to
terminate The Marvel Fan Club license. There will be no residual liability due
Marvel Entertainment regarding this license.

      During the twelve months ended February 28, 2002, we started shipping
product related to the Lord Of The Rings license with New Line Cinema. On
September 9, 2002, we were served with an Order of Permanent Injunction by New
Line Cinema enjoining us from distributing any goods or services relating to
"Austin Powers" or the "Lord of the Rings". Sales of Austin Power products were
insufficient to pay the minimum royalty at the contractual royalty rates
although a payment of $35,000 was made in November 2001 and was applied to the
Austin Powers minimum royalty requirement. Shortly after the injunction, New
Line Cinema initiated litigation against us for license infringement seeking $5
million in damages. We and New Line Cinema have since reached a settlement
agreement resolving the litigation. Under the agreement, the terms of the
settlement are strictly confidential however, we believe that the settlement
will not have a material adverse effect on us.

      In December of 2000 we signed a licensing agreement to distribute, "Tattle
Tail". The royalty rate for this license is 7% of sales. A minimum royalty
amount of $85,000 is payable by November 30, 2003 , the expiration date of the
license. This amount is still outstanding as of the date of this report.

      In December 2003, we and Marvel Entertainment mutually agreed to extend
the term of our X-Men and Marvel Character licenses for an additional six
months. Marvel Entertainment also agreed to extend the June 30, 2002 minimum
payment date for the Marvel Character license to December 31, 2002.

      On November 11, 2002, we executed a license agreement for the "Terminator
- 3 Rise of the Machines" movie. This license is effective through December 31,
2004 and has a minimum royalty payment of $50,000 payable in several
installments. A 12% royalty is payable on all sales under this license.

      On December 29, 2003, we and {212} Media LLC executed a Manufacturing and
Distribution Agreement for the purpose of facilitating the manufacturing and
distribution of an audio book series comprised of a collection of Arthur
stories, a popular children's book character by author Marc Brown. In
conjunction with {212} Media, we will be responsible for the design,
manufacture, promotion and distribution of the audio books. The recorded stories
are to be read by a group of selected celebrities. All costs associated with the
production of the audio books will be borne by {212} Media. We will receive a
20% markup over manufacturing cost from {212} Media plus a distribution fee
ranging from 8% to 15% of wholesale prices. Additionally, an override fee of 3%
of wholesale price will be paid to us.

      In May of 2002, we started MovieFanMall.com, our direct-to-consumer retail
website. MovieFanMall targets millions of movie fans worldwide. The site offers
collectible items from such blockbuster movies as Spiderman, Lord of the Rings
and Austin Powers. In addition to our proprietary products, we plan to add
products from other licensed manufacturers, many of whom have little or no
Internet presence. We will also sell space in our virtual mall to manufacturers,
producing additional revenue opportunities. MovieFanMall.com marks our first
entrance into the high-margin, online retail sector. Through the creative use of
search engines and innovative e-mail advertising programs, MovieFanMall.com will
address mass markets on a worldwide scale at a fraction of the cost of
traditional retail outlets. The site is designed to build distinct, new revenue
streams and achieve margins of 60-70%, contributing to our growth objectives.


                                       8
<PAGE>

      In August of 2003, we re-evaluated our business model. We believe that
licenses have evolved into more time sensitive and sale spiking properties. We
are not renewing or continuing licenses that do not fit our new business model.
Our new business model will be focused on more evergreen properties and those
with a bigger window of opportunity. We believe that with the new genre of films
being so heavily oriented to characters of comic books and fantasies that we
will pursue licenses mostly in that category and to supplement them with new
trend properties as they appear. Furthermore, we recognized 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 sought out entities with mainstream consumer products
whose marketability could be enhanced by the addition of our licenses.

      With our subsequent shift in focus to entertainment and movie related
licenses, we decided not to further pursue the Chicken Soup business opportunity
presented in the license agreement executed on May 1, 2000 with Chicken Soup for
the Soul Enterprises, with a term ending on December 31, 2002. We planned to
offer and sell a line of products derived from Chicken Soup brand, including
silver-like paperweights, paper clip holders, and costume and fine jewelry along
with other items under the terms of the agreement. We are required to pay a
royalty of ten percent (10%) on sales of the products licensed from Chicken Soup
for the Soul Enterprises, with a minimum royalty of $50,000. We paid $15,000 at
the time of signing the license with $10,000 due upon the first shipment of
product. Efforts to terminate the license agreement were unsuccessful and
Chicken Soup for the Soul Enterprises has threatened litigation to recover the
minimum royalty fee.

      In February of 2003, we entered into a LogoLite Joint Venture Agreement
with Jade Accessories, Inc. located in Pennsylvania. Under the terms of the
agreement, Jade Accessories will be providing replacement batteries for most
popular brands of mobile telephones. These are specially configured batteries
containing a series of lights that can be arranged in prescribed designs, colors
and flashing sequences. The battery case is laser cut with logos or images
authorized under licenses we have or are obtaining. The laser cut images are
translucent and when a call is received or initiated, the lights on the battery
begin flashing and appear vividly through the translucent image on the battery
case. We are responsible for obtaining the necessary licenses, design of the
images and the marketing of the products. Jade Accessories is responsible for
the provision of the finished products in accordance with the specifications
supplied by us. We are targeting the sports and college markets as primary for
the LogoLite battery products.

      In March of 2003, we entered into a Joint Venture Agreement with Pivotal
Self-Service Technologies, Inc. a Canadian company to produce and market
flashlight and battery products utilizing Pivotal's offshore manufacturing
resources and our licensing and marketing capabilities. In connection with this
joint venture, we modified its pending license agreement for Terminator 3 to
include flashlights and batteries along with scrolls, pins and other desktop
collectibles. Upon signing of this agreement Pivotal paid us $9,000 which was
used as the initial payment against the $50,000 guaranteed royalty for the
Terminator 3 license. On November 8 2003, the Joint Venture Agreement was
dissolved and a new Royalty and Services Agreement were entered into with
Pivotec, a Division of Pivotal Self Service Technologies, Inc. Under the terms
of the new agreement, we sold the Mighty Volt trade name and all intellectual
property rights developed by us in the previous joint venture with Pivotal Self
Service Technologies, Inc. in exchange for 500,000 restricted shares of Pivotal
Self Service Technologies, Inc. common stock. We will assist Pivotec 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 titled to Pivotec. This agreement provides a 1% royalty to us on net
sales of any flashlight and/or battery products containing images available
either from licenses we have or assisted in obtaining for Pivotec. Additionally,
we 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. The agreement also contains a provision in which
Pivotec paid us $16,000 for services we performed in obtaining licenses; this
money was paid as part the outstanding royalty guarantee in the Terminator 3
license agreement. We renegotiated the total advance on the guarantee amount to
$25,000 from the original amount of $50,000. Under the agreement, we will retain
ownership of the T-3 license.

      In March 2002, in line with the current economic environment, we have
followed suit of many other companies by outsourcing more of our internal
operational functions to third parties thereby reducing the fixed overhead
burden. We entered into an agreement with Maxim Logistics, a full service
fulfillment center located in Reading, Pennsylvania. Under the agreement, Maxim
will provide billing, product fulfillment, and warehouse services. Additionally,
we and Maxim have executed an agreement for Maxim to produce satin scrolls
utilizing Maxim's newly implemented large-format digital printing capabilities
which are ideally suited for production of our scroll product line. Maxim's new
technology now allows the production of samples in a wide variety and in short
lead times giving our selling agents the opportunity to present new products to
prospects in a more timely and cost effective manner than had been possible
previously. The Maxim process produces a high quality image that meets or
surpasses what we have historically been able to obtain.


                                       9
<PAGE>

      We have also outsourced our internal accounting functions. Stein, Feldman
and Sampson, LLC, has been retained to provide our general accounting and
bookkeeping requirements. This engagement is intended to improve our efficiency
in reporting and strengthen fiscal controls.

      During the twelve months ended February 28, 2002, we determined that the
license associated with the Music Art Corp. acquisition had expired and we
concluded that the potential short-term revenue stream does not justify the
prepaid license fee needed to renew. Accordingly, all goodwill related to Music
Art has been reclassified as discontinued operations.

      Sales for the twelve months ended February 28, 2002 were comprised
primarily of products from Lord Of The Rings, Austin Powers Marvel Fan Club,
X-Men and Marvel comic hero characters. The Lord of the Rings and Austin Powers
licenses were terminated in September 2002, and this significantly impacted
sales because we were unable to extend these licenses. Additional miscellaneous
revenue was generated from Internet sales through e-bay. As we make the
transition into entertainment related product sales from the more traditional
sports related products we have historically offered, 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 entertainment products is most often driven directly by the initial movie
release and followed later by the video release. After successfully obtaining
movie related licenses, chronic cash constraints and manufacturing lead times
and volume requirements have seriously inhibited our ability to provide these
samples either in a timely manner or in a sufficient variety or quantity to
satisfy the needs of the sales force. 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. As
mentioned earlier, in June of 2003, we did locate such a source in our
outsourcing vendor Maxim Logistics. Maxim acquired a large-format digital
printing system that has the capability of producing a wide variety of products
printed on various fabrics. Our principal product in the entertainment field is
its Satin Scroll line. Maxim can produce scroll samples in any combination and
in any quantities desired by us in a matter of days as opposed to the months
required by previous suppliers of scrolls. Additionally, because the scrolls are
produced by advanced digital technology, they are of higher quality than
previously available to us. We expect that the Maxim sourcing will have a
positive effect on future sales of scrolls and similar products.

      Cost of sales for the twelve months ended February 28, 2002 were comprised
of costs associated with the sale of the products related to the Austin Powers,
Lord of the Rings and X-Men movies, Team Sports Products, Music Art products as
well as sales from sports memorabilia. (In light of the termination of the Lord
of the Rings and Austin Powers licenses, on going cost of sales was reduced
commensurately with sales). These products are contract manufactured for us by
both domestic and foreign companies to specifications developed by us and
approved by the various licensors. Even though we do not feel this places us at
risk for filling future orders on a timely basis, 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 feel 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, general 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 time of issuance whichever was more readily
determinable. We capitalize the tooling costs of movie props. Only the tooling
costs of a product to be made and sold have been capitalized and no other
development costs are capitalized. We capitalized no tooling costs for the
twelve months ended February 28, 2002, but capitalized tooling cost of $13,780
during the twelve months ended February 28, 2001. All other pre-production costs
are expensed. Other pre-production costs include prototypes and samples of
packaging, displays and products. All expensed pre-production costs, and the
amortization of capitalized tooling costs, are included within selling, general
and administrative expenses.

      The amount and timing of the revenue generated from the sales of movie
related products is not possible to accurately predict because of the length of
time it may take the project to be commercially successful, if at all. As a
result, our revenues and net income may fluctuate significantly between
comparable periods. Additionally, since our inception, we have experienced
significant operating and net losses that we have been able to fund by obtaining
private capital. Therefore, we cannot predict if and when we will generate
income from operations and if we will be able to raise sufficient capital
necessary to fund future operations.

      As of the fiscal year ended February 28, 2002, we had an accumulated
deficit of $17,153,843. This deficit arose from operating losses and not any
particular transaction or transactions. We have not generated sufficient
revenues to meet our operating expenses. As a result, there is substantial doubt
about our ability to continue as a going concern.


                                       10
<PAGE>

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, sports and music 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.

      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.
During the 2002 year, we had an allowance for bad debts of $48,807. 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. During the 2002 year, we recorded a
write-down to inventory of $143,732 to adjust certain lines for obsolete
inventory.

      Goodwill and other 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 and amortizable
intangible assets. We assess the impairment of goodwill annually in our fourth
fiscal quarter and whenever events or changes in circumstances indicate that it
is more likely than not that an impairment loss has been incurred. 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.

      Our impairment review is based on comparing the fair value to the carrying
value of the assets with goodwill. The fair value of the asset is measured at
the business unit level using a discounted cash flow approach that incorporates
our estimates of future revenue and costs for those assets.

RECENT ACCOUNTING PRONOUNCEMENTS

      In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and
Other Intangible Assets," which was required to be adopted for fiscal year 2002.
SFAS No. 142 established accounting and reporting standards for goodwill and
intangible assets resulting from business combinations. SFAS No. 142 included
provisions discontinuing the periodic amortization of, and requiring the
assessment of the potential impairments of, goodwill (and intangible assets
deemed to have indefinite lives). As SFAS No. 142 replaced the measurement
guidelines for goodwill impairment, goodwill not considered impaired under
previous accounting literature may be considered impaired under SFAS No. 142.
SFAS No. 142 also requires the Company to complete a two-step goodwill
impairment test. The first step compares the fair value of each reporting unit
to its carrying amount, including goodwill. If the fair value of a reporting
unit exceeds its carrying amount, goodwill is not considered to be impaired and
the second step will not be required. SFAS No. 142 requires completion of this
first step within the first six months of initial adoption and annually
thereafter. If the carrying amount of a reporting unit exceeds its fair value,
the second step is performed to measure the amount of impairment loss. The
second step compares the implied fair value of goodwill to the carrying value of
a reporting unit's goodwill. The implied fair value of goodwill is determined in
a manner similar to accounting for a business combination with the allocation of
the assessed fair value determined in the first step to the assets and
liabilities of the reporting unit. The excess of the fair value of the reporting
unit over the amounts assigned to the assets and liabilities is the implied fair
value of goodwill. This allocation process is only performed for purposes of
evaluating goodwill impairment and does not result in an entry to adjust the
value of any assets or liabilities. An impairment loss is recognized for any
excess in the carrying value of goodwill over the implied fair value of
goodwill. Upon the initial adoption, any impairment loss identified will be
presented as a change in accounting principle, net of applicable income tax
benefit, and recorded as of the beginning of that year. Subsequent to the
initial adoption, any impairment loss recognized would be recorded as a charge
to income from operations. We will apply SFAS No. 142 for the goodwill of other
intangibles beginning March 1, 2002.


                                       11
<PAGE>

      In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 establishes standards for the initial
measurement and subsequent accounting for obligations associated with the sale,
abandonment, or other type of disposal of long-lived tangible assets arising
from the acquisition, construction, or development and/or normal operation of
such assets. SFAS No. 143 is effective for fiscal years beginning after June 15,
2002, with earlier application encouraged.

      In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This statement addresses financial
accounting and reporting for the impairment or disposal of long-lived assets and
supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of". The provisions of the statement are
effective for financial statements issued for fiscal years beginning after
December 15, 2001. The Company will apply SFAS No. 144 for the accounting for
the impairment or disposal of long-lived assets beginning March 1, 2002.

      In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." SFAS No. 145 rescinds the provisions of SFAS No. 4, which requires
companies to classify certain gains and losses from debt extinguishments as
extraordinary items, eliminates the provisions of SFAS No. 44 regarding
transition to the Motor Carrier Act of 1980 and amends the provisions of SFAS
No. 13 to require that certain lease modifications be treated as sale leaseback
transactions. The provisions of SFAS No. 145 related to classification of debt
extinguishments are effective for fiscal years beginning after May 15, 2002,
with earlier application encouraged.

      In July 2002, the FASB issued SFAS No. 146, "Accounting for Restructuring
Costs." SFAS No. 146 applies to costs associated with an exit activity
(including restructuring) or with a disposal of long-lived assets. Those
activities can include eliminating or reducing product lines, terminating
employees and contracts and relocating plant facilities or personnel. Under SFAS
No. 146, the Company will record a liability for a cost associated with an exit
or disposal activity when that liability is incurred and can be measured at fair
value. SFAS No. 146 will require the Company to disclose information about its
exit and disposal activities, the related costs, and changes in those costs in
the notes to the interim and annual financial statements that include the period
in which an exit activity is initiated and in any subsequent period until the
activity is completed. SFAS No. 146 is effective prospectively for exit or
disposal activities initiated after December 31, 2002, with earlier adoption
encouraged. Under SFAS No. 146, a company cannot restate it's previously issued
financial statements and the new statement grandfathers the accounting for
liabilities that a company had previously recorded under Emerging Issues Task
Force Issue 94-3.

      In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure - an amendment of FASB
Statement No. 123." SFAS No. 148 amends SFAS No. 123, "Accounting for Stock
Based Compensation" and provides alternative methods for accounting for a change
by registrants to the fair value method of accounting for stock-based
compensation. Additionally, SFAS No. 148 amends the disclosure requirements of
SFAS No. 123 to require disclosure in the significant accounting policy footnote
of both annual and interim financial statements of the method of accounting for
stock based-compensation and the related pro-forma disclosures when the
intrinsic value method continues to be used. The statement is effective for
fiscal years beginning after December 15, 2002, and disclosures are effective
for the first fiscal quarter beginning after December 15, 2002.

      In January 2003, The FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities", an interpretation of Accounting Research Bulletin
("ARB") No. 51, "Consolidated Financial Statements". Interpretation No. 46
addresses consolidation by business enterprises of variable interest entities,
which have one or both of the following characteristics: (i) the equity
investment at risk is not sufficient to permit the entity to finance its
activities without additional subordinated support from other parties, which is
provided through other interest that will absorb some or all of the expected
losses of the entity; (ii) the equity investors lack one or more of the
following essential characteristics of a controlling financial interest: the
direct or indirect ability to make decisions about the entities activities
through voting rights or similar rights; or the obligation to absorb the
expected losses of the entity if they occur, which makes it possible for the
entity to finance its activities; the right to receive the expected residual
returns of the entity if they occur, which is the compensation for the risk of
absorbing the expected losses.

      Interpretation No. 46 also requires expanded disclosures by the primary
beneficiary (as defined) of a variable interest entity and by an enterprise that
holds a significant variable interest in a variable interest entity but is not
the primary beneficiary. Interpretation No. 46 applies immediately to variable
interest entities created after January 31, 2003, and to variable interest
entities in which an enterprise obtains an interest after that date. It applies
in the first fiscal year or interim period beginning after June 15, 2003, to
variable interest entities in which an enterprise holds a variable interest that
it acquired before February 1, 2003. Interpretation No. 46 may be applied
prospectively with a cumulative-effect adjustment as of the date on which it is
first applied or by restating previously issued financial statements for one or
more years with a cumulative-effect adjustment as of the beginning of the first
year restated.

      In June 2003, the FASB issued an Exposure Draft for proposed SFAS entitled
"Qualifying Special Purpose Entities ("QSPE") and Isolation of transferred
Assets", an amendment of SFAS No. 140 ("The Exposure Draft"). The Exposure Draft
is a proposal that is subject to change and as such, is not yet authoritative.
If the proposal is enacted in its current form, it will amend and clarify SFAS
140. The Exposure Draft would prohibit an entity from being a QSPE if it enters
into an agreement that obliged a transferor of financial assets, its affiliates,
or its agents to deliver additional cash or other assets to fulfill the
special-purposes entity's obligation to beneficial interest holders.

      In May 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 150, "Accounting For
Certain Financial Instruments with Characteristics of both Liabilities and
Equity". SFAS No. 150 changes the accounting for certain financial instruments
with characteristics of both liabilities and equity that, under previous
pronouncements, issuers could account for as equity. The new accounting guidance
contained in SFAS No. 150 requires that those instruments be classified as
liabilities in the balance sheet. SFAS No. 150 affects the issuer's accounting
for three types of freestanding financial instruments. One type is mandatorily
redeemable shares, which the issuing company is obligated to buy back in
exchange for cash or other assets. A second type includes put options and
forward purchase contracts, which involves instruments that do or may require
the issuer to buy back some of its shares in exchange for cash or other assets.


                                       12
<PAGE>

The third type of instruments that are liabilities under this Statement is
obligations that can be settled with shares, the monetary value of which is
fixed, tied solely or predominantly to a variable such as a market index, or
varies inversely with the value of the issuers' shares. SFAS No. 150 does not
apply to features embedded in a financial instrument that is not a derivative in
its entirety.

      Most of the provisions of Statement 150 are consistent with the existing
definition of liabilities in FASB Concepts Statement No. 6, "Elements of
Financial Statements". The remaining provisions of this Statement are consistent
with the FASB's proposal to revise that definition to encompass certain
obligations that a reporting entity can or must settle by issuing its own
shares. This Statement shall be effective for financial instruments entered into
or modified after May 31, 2003 and otherwise shall be effective at the beginning
of the first interim period beginning after June 15, 2003, except for
mandatorily redeemable financial instruments of a non-public entity, as to which
the effective date is for fiscal periods beginning after December 15, 2003.

      We do not expect the adoption of these pronouncements to have a material
impact on our consolidated financial position or results of operations.

TWELVE MONTHS ENDED FEBRUARY 28, 2002 COMPARED TO TWELVE MONTHS ENDED FEBRUARY
28, 2001.

      Net revenue for the twelve months ended February 28, 2002 was $407,106 and
primarily consisted of sales of X-Men products, sales from the Marvel fan club,
sales of Lord of the Ring products, sales of Austin Powers products, and sales
of plate-signed lithographs from Rolling Stones album covers and tour art and
sales from the Team Sports product lines. Sales for Team Sports ended August 1,
2001. Net revenue for the twelve months ended February 28, 2001 was $754,613 and
primarily consisted of sales of X-Men products, sales of plate-signed
lithographs from Rolling Stones album covers and tour art and sales from the
Team Sports product lines.

      Cost of sales for the twelve months ended February 28, 2002 decreased by
$23,654 from the twelve months ended February 28, 2001. This decrease was mainly
attributable to the decrease in volume of sales for the X-Men products, of
plate-signed lithographs from Rolling Stones album covers and tour art products
and sales related to the Team Sports products. This decrease was offset by a
charge to cost of sales of $143,732 for the write down of inventory mostly
attributable to the Austin Powers product line. Due to the termination of this
license, we decided to write down the inventory related to the Austin Powers
product line. Cost of sales as a percentage of revenues increased to 107.9% for
the twelve months ended February 28, 2002 as compared to 61.3% for the same
period last year. This increase was mainly attributable to the charge of
$143,732 to cost of sales related to the write down of inventory.

      Selling, general and administrative expenses for the twelve months ended
February 28, 2002 decreased to $2,272,135 from $3,876,382 for the same period
the previous year. For the twelve months ended February 28, 2002 and February
28, 2001 the services obtained through the issuance of stock include internal
accounting and financial services, internet website creation, marketing
assistance, insurance program review and general management consulting services
in the amount of approximately $1,548,773 and $1,218,470, respectively. Staffing
decreased to five full-time employees and one-part time consultant for marketing
and licensing for the twelve months ended February 28, 2002 as compared to
thirteen full-time and two part-time employees for the same period of the
previous year. 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, 2002,
we incurred charges relating to the costs of producing the samples as well as
the related package design of approximately $12,902 versus charges of
approximately $31,430 for the same period the previous year. Also included in
the selling, general and administrative expenses were those of the two
acquisitions completed during 2001. As previously mentioned, all goodwill
related to the Music Art and Rooter Rattle, LP acquisitions has been
reclassified to discontinued operations.

      We incurred interest expense of $103,891 for the twelve months ended
February 28, 2002 as compared to $498,988 for the same period the previous year
due to decreased borrowings and the beneficial conversion calculation related to
the application of the Emerging Issues Task Force Bulletin for accounting of
convertible securities and notes and loans payable with beneficial conversion
features. The beneficial conversion calculation added $0 and $179,033 of
interest expense respectively for the twelve months ended February 28, 2002 and
2001, respectively.

      As a result of the above, we had a net loss of $3,837,951 for the twelve
months ended February 28, 2002 as compared to a net loss of $5,122,606 for the
same period last year.

LIQUIDITY AND CAPITAL RESOURCES

      As of February 28, 2002, we had a working capital deficiency of
approximately $4,014,273. The working capital deficit as of February 28, 2002 is
a direct result of the unprofitable operations for the twelve months ended
February 28, 2002 that resulted in cash used in operating activities of
approximately $510,393. We had an ending cash balance of $139 at February 28,
2002. As such, we will have to raise additional capital within the next twelve
months.


                                       13
<PAGE>

      During the twelve months ended February 28, 2002, we purchased computer
and telephone equipment for $15,202. We do not foresee any significant capital
expenditures needed in 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, 2002, we received the following capital infusions: $109,000
from issuance of common stock and exercise of stock options and $606,273 from
other borrowings. Additionally, during this period, we received notices
requesting conversion from the holders of demand notes and convertible
debentures of $188,391. These instruments were convertible into 156,390 shares
of common stock. During the twelve months ended February 28, 2002, we made
payments of $189,761 towards notes and loans payable.

      As of February 28, 2002, we had $877,845 in outstanding notes and loans
payable (of which $ 87,247 is to related parties), $96,800 in convertible
subordinated debentures and $387,500 in outstanding convertible secured
debentures. As of February 28, 2002, we had $1,253,345 in accounts payable and
$1,110,057 in accrued expenses, accrued payroll and related taxes (These
liabilities 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 and we have agreed to a payment plan for these prior
obligations), and $356,250 in accrued royalties. 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 their 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 raise additional
convertible debt, equity capital and access capital through debt and equity
funding as well as market and sell our various products.

      An event of default has occurred regarding the $400,000 convertible
secured debenture in that we did not have an effective registration statement
within 150 days of the debenture sale. 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. Subsequent to February 28, 2002, the convertible secured
debenture holders converted $65,285 of this debt into 71,812,500 shares of our
common stock

      On May 28, 2002, we issued a $75,000 in convertible debentures. The
debentures have a 12% coupon and mature July 28, 2002. Conversions to common
stock are at a 75% discount from the lowest bid price over the 30 days preceding
conversion.

      Subsequent to February 28, 2002 we issued a $550,000 in convertible
debentures. The debentures have a 15% coupon and matures one year from date of
issuance. Conversions to common stock are at the lesser of $ .01 or 75% discount
from the average of the lowest bid prices over the 3 days during the 20 days
preceding conversion.

      Subsequent to February 28, 2002, at various times we have sold shares of
common stock to current shareholders, we have received $68,000 from the issuance
of these shares. We have also raised $123,867 of cash financing through the
issuance of debt.

      May 7, 2002, we filed an S-8 registration with the Securities and Exchange
Commission for 182,500,000 shares (pre-split basis).

      May 7, 2002, we filed a schedule 14 with the Securities and Exchange
Commission to increase our authorized shares to 700,000,000 from 350,000,000.

      May 7, 2002 we filed a schedule 14 with the Securities and Exchange
Commission to affect a 1 to 70 reverse stock split. The split went into effect
July 8, 2002. We believe that the reverse stock split will make it easier for us
to raise equity capital in the future.

      In December of 2003, we and an employee entered into a five-year
Employment Agreement under which the employee would receive a weekly salary of
$500. Additionally, 20,000,000 stock options are to be 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 to a special
fund. Compensation afforded to the employee under the agreement will also
satisfy any and all our indebtedness to the employee and related parties. The
amount of this debt is estimated to be $219,530.

      In November of 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 month,
$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.


                                       14
<PAGE>

ITEM 7. FINANCIAL STATEMENTS.

                        COLLECTIBLE CONCEPTS GROUP, INC.
                                AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

<PAGE>

                        COLLECTIBLE CONCEPTS GROUP, INC.
                                AND SUBSIDIARIES

                                    CONTENTS


PAGE            1         INDEPENDENT AUDITORS' REPORT

PAGE            2         REPORT OF INDEPENDENT REGISTERED PUBLIC
                          ACCOUNTING FIRM

PAGE            3         CONSOLIDATED BALANCE SHEET AS OF FEBRUARY 28, 2002

PAGE            4         CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS
                          ENDED FEBRUARY 28, 2002 AND 2001

PAGES         5 - 6       CONSOLIDATED  STATEMENTS OF  SHAREHOLDERS'  DEFICIENCY
                          FOR THE YEARS ENDED FEBRUARY 28, 2002 AND 2001

PAGE            7         CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS
                          ENDED FEBRUARY 28, 2002 AND 2001

PAGES         8 - 24      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF
                          FEBRUARY 28, 2002

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors of:
  Collectible Concepts Group, Inc. and Subsidiaries

We have  audited the  accompanying  consolidated  balance  sheet of  Collectible
Concepts Group, Inc. and Subsidiaries  (the "Company"),  as of February 28, 2002
and the related consolidated statements of operations,  changes in shareholders'
deficiency and cash flows for the year then ended. These consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  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 audit provides a reasonable basis for our opinion.

In our opinion, the 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, 2002, and the results of their
operations  and their cash flows for the year 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 2 to the
consolidated  financial statements,  the Company's working capital deficiency of
$4,014,273,  shareholders' deficiency of $3,963,132,  net loss of $3,837,951 and
net cash used in  operations  of  $510,393  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 2. These consolidated  financial statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

WEINBERG & COMPANY, P.A.

Boca Raton, Florida
June 17, 2003, except for Note 14 as to which the date is March 16, 2004


                                      F-1
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUTING FIRM

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF COLLECTIBLE CONCEPTS GROUP, INC.:

We  have  audited  the  accompanying   consolidated  statements  of  operations,
shareholders'  deficiency and cash flows of Collectible Concepts Group, Inc. and
Subsidiaries  for the year ended February 28, 2001.  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 audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit 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  audit  provides  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the consolidated  results of operations and
cash flows of Collectible  Concepts Group,  Inc. and  Subsidiaries  for the year
ended  February 28, 2001 in  conformity  with  accounting  principles  generally
accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  As more fully  described in Note 2 to
the February 28, 2001  consolidated  financial  statements,  the Company,  as of
February 28, 2001,  had a  shareholders'  deficiency of $1,985,345 and a working
capital  deficit of $2,539,057.  Also, the Company has  experienced  significant
operating  losses and is in default with respect to certain  provisions of their
secured and subordinated  debentures.  These conditions raise  substantial doubt
about the Company's ability to continue as a going concern.  Management's  plans
in regard to these  matters,  are also  described  in Note 2 to the February 28,
2001 consolidated financial statements.  The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

WithumSmith+Brown, P.C.
Princeton, New Jersey
September 12, 2001


                                      F-2
<PAGE>



                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                             AS OF FEBRUARY 28, 2002

                                     ASSETS

CURRENT ASSETS
 Cash                                                        $        139
 Accounts receivable, net                                          41,820
 Inventories                                                       10,565
                                                             ------------
     Total Current Assets                                          52,524
                                                             ------------

PROPERTY AND EQUIPMENT, NET                                        61,641
                                                             ------------

OTHER ASSETS
 Trademarks                                                         1,300
 Security deposits                                                  3,200
                                                             ------------
     Total Other Assets                                             4,500
                                                             ------------

TOTAL ASSETS                                                 $    118,665
                                                             ============

        LIABILITIES AND SHAREHOLDERS' DEFICIENCY

CURRENT LIABILITIES
 Convertible secured debentures, net                         $    387,500
 Notes and loans payable, current portion                         775,598
 Loans payable - related parties                                   87,247
 Convertible subordinated debentures                               96,800
 Accounts payable                                               1,253,345
 Accrued expenses                                               1,110,057
 Accrued royalties                                                356,250
                                                             ------------
     Total Current Liabilities                                  4,066,797

Notes and loans payable, long-term portion                         15,000
                                                             ------------

TOTAL LIABILITIES                                               4,081,797
                                                             ------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' DEFICIENCY
 Common stock, $.001 par value, 700,000,000 shares
  authorized, 7,392,614 shares issued and outstanding               7,392
 Common stock, $.001 par value, 49,624 shares to be issued             50
 Additional paid-in capital                                    13,183,269
 Accumulated deficit                                          (17,153,843)
                                                             ------------
     Total Shareholders' Deficiency                            (3,963,132)
                                                             ------------

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY               $    118,665
                                                             ============

          See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED FEBRUARY 28, 2002 AND 2001

                                                   2002          2001
                                               -----------    -----------

SALES                                          $   407,106    $   524,213

COST OF SALES                                      439,138        472,088
                                               -----------    -----------

GROSS (LOSS) PROFIT                                (32,032)        52,125
                                               -----------    -----------

OPERATING EXPENSES
 Selling, general and administrative             2,227,598      3,567,830
                                               -----------    -----------
       Total Operating Expenses                  2,227,598      3,567,830
                                               -----------    -----------

LOSS FROM OPERATIONS                            (2,259,630)    (3,515,705)
                                               -----------    -----------

OTHER EXPENSE
 Interest expense                                 (103,891)      (498,988)
 Loss on settlement of debt and interest           (83,858)            --
                                               -----------    -----------
       Total Other Expense                        (187,749)      (498,988)
                                               -----------    -----------

LOSS BEFORE TAX PROVISION                       (2,447,379)    (4,014,693)
INCOME TAX PROVISION                                    --             --
                                               -----------    -----------
LOSS FROM CONTINUING OPERATIONS                 (2,447,379)    (4,014,693)
LOSS FROM DISCONTINUED OPERATIONS               (1,390,572)    (1,107,913)
                                               -----------    -----------

NET LOSS                                       $(3,837,951)   $(5,122,606)
                                               ===========    ===========

BASIC AND DILUTED LOSS PER SHARE
 Loss per share from continuing operations     $     (0.53)   $     (1.26)
 Loss per share from discontinued operations         (0.31)         (0.35)
                                               -----------    -----------

       Basic and Diluted Loss Per Share        $     (0.84)   $     (1.61)
                                               ===========    ===========

WEIGHTED AVERAGE SHARES USED IN
 NET LOSS CALCULATIONS - BASIC AND DILUTED       4,595,557      3,187,969
                                               ===========    ===========

          See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>

<TABLE>
<CAPTION>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIENCY
                 FOR THE YEARS ENDED FEBRUARY 28, 2002 AND 2001

                                                    Common Stock      Additional      Deferred
                            Common Stock            To be issued       Paid-In      Compensation      Accumulated
                         Shares       Amount      Shares     Amount    Capital         Expense          Deficit           Total
                        ---------    --------    --------   --------  ----------    --------------    -----------      -----------
<S>                     <C>           <C>           <C>       <C>   <C>             <C>             <C>             <C>
Balance,
February 29, 2000        2,324,335     2,324         --        --   $  7,408,376    $    (69,300)   $ (8,193,286)   $   (851,886)


Common stock
issued for cash            691,331       691         --        --      1,239,664              --              --       1,240,355


Common stock issued
for services rendered      497,307       497         --        --      1,217,973              --              --       1,218,470


Common stock
issued for
acquisition of business     66,833        67         --        --        850,558              --              --         850,625

Conversation of
convertible debentures,
notes and loans
payable to common stock     83,559        84         --        --        108,930              --              --         109,014


Exercise of stock
options for cash            50,000        50         --        --         34,950              --              --          35,000

Issuance of stock options
for services rendered           --        --         --        --         61,350              --              --          61,350

Note payable issued as
consideration for
waiver of anti-dilution
provision                       --        --         --        --        (40,000)             --              --         (40,000)


Warrants issued for
debt discount
on secured Debenture            --        --         --        --        280,000              --              --         280,000


Beneficial conversion
of notes payable                --        --         --        --        114,033              --              --         114,033

Beneficial conversion
of secured debenture            --        --         --        --         65,000              --              --          65,000

Amortization of
deferred compensation           --        --         --        --             --          55,300              --          55,300

Net loss, 2001                  --        --         --        --             --              --      (5,122,606)     (5,122,606)
                         ---------  --------   --------   -------   ------------    ------------    ------------    ------------

Balance,
February 28, 2001        3,713,365     3,713         --        --     11,340,834         (14,000)    (13,315,892)     (1,985,345)

Common stock
issued for cash            155,714       156         --        --        108,844              --              --         109,000

Common stock
issued for
services rendered        3,440,965     3,441         --        --      1,545,332              --              --       1,548,773

Common stock
to be issued
$.001 per share                 --        --     49,624        50            (50)             --              --

</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>

<TABLE>
<CAPTION>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIENCY
                 FOR THE YEARS ENDED FEBRUARY 28, 2002 AND 2001


                                                    Common Stock      Additional      Deferred
                            Common Stock            To be issued       Paid-In      Compensation      Accumulated
                         Shares       Amount      Shares     Amount    Capital         Expense          Deficit           Total
                        ---------    --------    --------   --------  ----------    --------------    -----------      -----------

<S>                     <C>           <C>           <C>       <C>   <C>             <C>             <C>             <C>
Conversion of notes
 and loans payable,
 convertible
 subordinated
 debentures,
 convertible secured
 debentures, and
 related interest
 to common stock           156,390       156         --        --        188,235              --              --         188,391

Amortization of
 deferred compensation          --        --         --        --             --          14,000              --          14,000

Decrease due to fractional
 shares as a result
 of 1 for 70
 reverse stock split       (73,820)      (74)        --        --             74              --              --              --

Net loss, 2002                  --        --         --        --             --              --      (3,837,951)     (3,837,951)
                          --------  --------   --------  --------       --------        --------       ---------       ---------

BALANCE,
 FEBRUARY 28, 2002       7,392,614  $  7,392     49,624  $     50    $13,183,269        $      -   $ (17,153,843) $  (3,963,132)
                         =========  =======      ======  ========    ===========        ========   =============  ==============

</TABLE>

          See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>

<TABLE>
<CAPTION>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED FEBRUARY 28, 2002 AND 2001

                                                                                   2002          2001
                                                                               -----------    -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                            <C>            <C>
Net loss                                                                       $(3,837,951)   $(5,122,606)
Loss from discontinued operations                                                1,390,572      1,107,913
                                                                               -----------    -----------
Loss from continuing operations                                                 (2,447,379)    (4,014,693)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation                                                                        25,984         22,567
Amortization of debt discount and interest                                          47,351        233,333
Amortization of deferred debt expense                                                   --         43,330
Amortization of deferred compensation                                               14,000         55,300
Provision for doubtful accounts                                                     15,301         42,135
Write-down of inventory                                                            143,732        122,870
Common stock issued for services rendered                                        1,548,773      1,218,470
Loss on settlement of debt and interest                                             83,858             --
Interest expense related to beneficial conversion of debt                               --        179,033
Expense related to issuance of options                                                  --         61,350
Changes in operating assets and liabilities, net of discontinued operations:
Accounts receivable                                                                (15,526)        33,413
Inventories                                                                        220,502       (265,355)
Prepaid royalties                                                                   98,051        (59,135)
Prepaid expenses and other                                                           8,970             --
Other assets                                                                        (3,200)            --
Accounts payable and accrued expenses                                              423,604        868,567
Accrued royalties                                                                  218,456         (3,493)
                                                                               -----------    -----------
Net Cash Provided By (Used In) Continuing Operations                               382,477     (1,462,308)
Net Cash Used In Discontinued Operations                                          (892,870)      (178,356)
                                                                               -----------    -----------
Net Cash Used In Operating Activities                                             (510,393)    (1,640,664)
                                                                               -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                                 (15,202)       (49,657)
Purchases of businesses, net of cash acquired of $1,426                                 --       (388,574)
                                                                               -----------    -----------
Net Cash Used In Investing Activities                                              (15,202)      (438,231)
                                                                               -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings, net of financing fees of $0 and $52,000, respectively                       --        660,193
Proceeds from issuance of capital stock and exercise of stock options, net         109,000      1,275,355
Repayment of notes and loans payable                                                (2,588)      (103,922)
Proceeds from notes and loans payable                                              399,679             --
Repayment of notes payable - related parties                                      (187,173)            --
Proceeds from notes payable - related parties                                      206,594             --
                                                                               -----------    -----------
Net Cash Provided by Financing Activities                                          525,512      1,831,626
                                                                               -----------    -----------

NET DECREASE IN CASH                                                                   (83)      (247,269)

CASH - BEGINNING OF YEAR                                                               222        247,491
                                                                               -----------    -----------

CASH - END OF YEAR                                                             $       139    $       222
                                                                               ===========    ===========

</TABLE>

          See accompanying notes to consolidated financial statements.


                                      F-7
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002


NOTE 1 NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      (A) DESCRIPTION OF BUSINESS

      Collectible  Concepts  Group,  Inc. and its  subsidiaries  (the "Company")
      distribute high-end and novelty products related to both the entertainment
      and sports  industries.  The Company sells its products through retailers,
      distributors, department stores, the Internet and catalogers.

      (B) PRINCIPLES OF CONSOLIDATION

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

      The Company has discontinued  operations of the Company's two wholly owned
      subsidiaries,   Team  Sports   Specialties   Corporation   and  Music  Art
      Corporation (See Note 3).

      (C) USE OF ESTIMATES

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

      (D) REVENUE RECOGNITION

      Revenue from the sale of products is recognized when  persuasive  evidence
      of an  arrangement  exists,  delivery  has  occurred,  the  price has been
      determined and collectability is reasonably  assured.  The Company records
      an allowance for estimated returns, as required.

      (E) CASH

      Cash consists of cash held on deposit. The Company maintains cash balances
      at  financial  institutions.  These  balances  are  insured by the Federal
      Deposit Insurance Corporation up to $100,000 at each institution.

      (F) ACCOUNTS RECEIVABLE

      The  Company's   trade  accounts  are  unsecured  with  an  allowance  for
      uncollectible  accounts provided for those amounts whose collectability is
      uncertain.  The allowance for doubtful accounts was $48,807 as of February
      28, 2002.



                                      F-8
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

      (G) PROPERTY AND EQUIPMENT

      Property  and  equipment  consists  principally  of  office  and  computer
      equipment and is recorded at cost less accumulated depreciation. Upon sale
      or  retirement,  the  cost  of  the  asset  and  the  related  accumulated
      depreciation are removed from the accounts and the resultant gain or loss,
      if any,  is included  in the  statement  of  operations.  Depreciation  is
      computed  using the  straight-line  method based on the  estimated  useful
      lives of the related assets, principally five to seven years.

      (H) INVENTORIES

      Merchandise inventories are valued at lower of cost or market on the first
      in, first out (FIFO) method. The Company recorded a write-down expense for
      obsolete  merchandise,  as deemed necessary,  of $143,732 and $122,870 for
      the years ended February 28, 2002 and 2001, respectively.

      (I) GOODWILL

      Goodwill represented the excess of the cost over the fair value of the net
      tangible and identifiable  intangible  assets acquired (See Note 3).

      (J) LONG-LIVED ASSETS

      The Company reviews  long-lived  assets for impairment  under Statement of
      Financial  Accounting Standards No. 121, "Accounting for the Impairment of
      Long-Lived Asset and for Long-Lived  Assets to be Disposed of." Long-lived
      assets to be held and used are reviewed for impairment  whenever events or
      changes in circumstances indicate that the carrying amount of an asset may
      not be  recoverable.  The  carrying  amount of a  long-lived  asset is not
      recoverable if it exceeds the sum of the undiscounted  cash flows expected
      to result from the use and eventual  disposition of the asset.  Long-lived
      assets to be disposed of are  reported at the lower of carrying  amount or
      fair value less cost to sell.

      (K) EARNINGS (LOSS) PER SHARE

      The Company follows  Statement of Financial  Accounting  Standards No. 128
      ("SFAS No. 128")  "Earnings Per Share".  Basic and fully diluted  earnings
      (loss) per share  amounts  are  computed  based on net  income  (loss) and
      divided by the weighted average number of shares actually outstanding. The
      assumed  conversion of convertible debt into 213,877 common shares in 2002
      and 198,572 common shares in 2001 and the exercise of outstanding  options
      and warrants to purchase  165,723 common shares in 2002 and 454,186 common
      shares in 2001 were not included in the  computation  of diluted  earnings
      (loss) per share in both 2002 and 2001 because the assumed  conversion and
      exercise  would be  anit-dilutive  due to the net losses  incurred  in all
      periods.



                                      F-9
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

      (L) ADVERTISING EXPENSE

      The  Company  participates  in  various  advertising  programs.  All costs
      related to advertising  are expensed in the period  incurred.  Advertising
      expense  amounted to  approximately  $30,000 and  $125,000  for the fiscal
      years ended February 28, 2002 and 2001, respectively.

      (M) FAIR VALUE OF FINANCIAL INSTRUMENTS

      Carrying  amounts of  financial  instruments  held by the  Company,  which
      includes cash, accounts receivable, accounts payable and accrued expenses,
      convertible  secured  debentures,  notes and loans payable and convertible
      subordinated  debentures  approximate  fair  value  due to the  short-term
      maturities  of  these  assets  and  liabilities.  The  carrying  value  of
      long-term debt approximates its fair value.

      (N) INCOME TAXES

      Deferred  taxes  are  accounted  for  in  accordance  with  SFAS  No.  109
      "Accounting  for  Income  Taxes."  The  Statement  requires  an asset  and
      liability  approach for  financial  accounting  and  reporting  for income
      taxes.  Deferred income taxes are provided for the difference  between the
      tax  basis  of an  asset  or  liability  and its  reported  amount  in the
      financial  statements  using  enacted tax rates that are expected to be in
      effect for the year in which the  differences  are  expected  to  reverse.
      Deferred income taxes arise principally from differences between financial
      and income tax reporting,  including  amounts recorded for inventory,  the
      allowance for doubtful accounts, accrued expenses, the availability of net
      operating  loss  carryforwards  and certain other  temporary  differences.
      Deferred  income tax assets are  reduced by a  valuation  allowance  when,
      based on the weight of evidence available, it is more likely than not that
      some portion or all of the  deferred tax assets will not be realized.  The
      determination of the requirement for a valuation allowance is an estimate,
      which is reasonably possible to change in the near term.

      (O) RECENT ACCOUNTING PRONOUNCEMENTS

      In July 2001, the Financial  Accounting  Standards  Board ("FASB")  issued
      Statement of Financial  Accounting  Standards  ("SFAS") No. 142, "Goodwill
      and Other Intangible  Assets," which was required to be adopted for fiscal
      year 2002. SFAS No. 142 established accounting and reporting standards for
      goodwill and intangible assets resulting from business combinations.  SFAS
      No. 142 included  provisions  discontinuing the periodic  amortization of,
      and requiring the  assessment of the potential  impairments  of,  goodwill
      (and intangible  assets deemed to have indefinite  lives). As SFAS No. 142
      replaced the measurement guidelines for goodwill impairment,  goodwill not
      considered impaired under previous accounting literature may be considered
      impaired  under SFAS No. 142.  SFAS No. 142 also  requires  the Company to
      complete a two-step goodwill  impairment test. The first step compares the
      fair  value  of each  reporting  unit to its  carrying  amount,  including
      goodwill.  If the fair value of a  reporting  unit  exceeds  its  carrying
      amount, goodwill is not considered to be impaired and the second step will
      not be  required.  SFAS No.  142  requires  completion  of this first step
      within the first six months of initial  adoption and annually  thereafter.
      If the carrying  amount of a reporting  unit  exceeds its fair value,  the
      second step is performed  to measure the amount of  impairment  loss.  The
      second step  compares  the implied  fair value of goodwill to the carrying
      value of a reporting unit's  goodwill.  The implied fair value of goodwill
      is determined in a manner similar to accounting for a business combination
      with the allocation of the assessed fair value determined in the first


                                      F-10
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

      step to the assets and  liabilities  of the reporting  unit. The excess of
      the fair value of the  reporting  unit over the  amounts  assigned  to the
      assets  and  liabilities  is the  implied  fair  value of  goodwill.  This
      allocation  process is only performed for purposes of evaluating  goodwill
      impairment  and does not  result  in an entry to  adjust  the value of any
      assets or liabilities.  An impairment loss is recognized for any excess in
      the  carrying  value of goodwill  over the implied fair value of goodwill.
      Upon  the  initial  adoption,  any  impairment  loss  identified  will  be
      presented as a change in accounting  principle,  net of applicable  income
      tax benefit, and recorded as of the beginning of that year.  Subsequent to
      the initial adoption,  any impairment loss recognized would be recorded as
      a charge to income from  operations.  The Company  will apply SFAS No. 142
      for the  accounting  for goodwill and other  intangible  assets  beginning
      March 1, 2002.

      In June  2001,  the  FASB  issued  SFAS No.  143,  "Accounting  for  Asset
      Retirement  Obligations."  SFAS  No.  143  establishes  standards  for the
      initial measurement and subsequent  accounting for obligations  associated
      with the  sale,  abandonment,  or other  type of  disposal  of  long-lived
      tangible assets arising from the acquisition, construction, or development
      and/or  normal  operation  of such assets.  SFAS No. 143 is effective  for
      fiscal  years  beginning  after June 15, 2002,  with  earlier  application
      encouraged.

      In  August  2001,  the FASB  issued  SFAS  No.  144,  "Accounting  for the
      Impairment or Disposal of Long-Lived  Assets."  This  statement  addresses
      financial  accounting  and  reporting  for the  impairment  or disposal of
      long-lived  assets  and  supercedes  SFAS  No.  121,  "Accounting  for the
      Impairment of Long-Lived  Assets and for Long-Lived  Assets to be Disposed
      Of".  The   provisions  of  the  statement  are  effective  for  financial
      statements  issued for fiscal years beginning after December 15, 2001. The
      Company will apply SFAS No. 144 for the  accounting  for the impairment or
      disposal of long-lived assets beginning March 1, 2002.

      In  April  2002,  the  FASB  issued  SFAS  No.  145,  "Rescission  of FASB
      Statements  No. 4, 44, and 64,  Amendment  of FASB  Statement  No. 13, and
      Technical  Corrections."  SFAS No. 145 rescinds the provisions of SFAS No.
      4, which requires companies to classify certain gains and losses from debt
      extinguishments as extraordinary items,  eliminates the provisions of SFAS
      No. 44 regarding  transition  to the Motor  Carrier Act of 1980 and amends
      the provisions of SFAS No. 13 to require that certain lease  modifications
      be treated as sale leaseback transactions.  The provisions of SFAS No. 145
      related to classification of debt extinguishments are effective for fiscal
      years beginning after May 15, 2002, with earlier application encouraged.


                                      F-11
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

      In July 2002, the FASB issued SFAS No. 146,  "Accounting for Restructuring
      Costs."  SFAS No. 146 applies to costs  associated  with an exit  activity
      (including  restructuring) or with a disposal of long-lived assets.  Those
      activities can include eliminating or reducing product lines,  terminating
      employees  and  contracts and  relocating  plant  facilities or personnel.
      Under  SFAS No.  146,  the  Company  will  record a  liability  for a cost
      associated  with an exit or  disposal  activity  when  that  liability  is
      incurred and can be measured at fair value.  SFAS No. 146 will require the
      Company to disclose  information  about its exit and disposal  activities,
      the related costs,  and changes in those costs in the notes to the interim
      and annual  financial  statements that include the period in which an exit
      activity is initiated and in any  subsequent  period until the activity is
      completed.  SFAS No. 146 is effective  prospectively  for exit or disposal
      activities  initiated  after  December  31, 2002,  with  earlier  adoption
      encouraged.  Under SFAS No. 146, a company cannot restate it's  previously
      issued  financial  statements  and  the  new  statement  grandfathers  the
      accounting for  liabilities  that a company had previously  recorded under
      Emerging Issues Task Force Issue 94-3.

      In  December  2002,  the  FASB  issued  SFAS  No.  148,   "Accounting  for
      Stock-Based  Compensation-Transition and Disclosure - an amendment of FASB
      Statement  No.  123." SFAS No. 148 amends  SFAS No. 123,  "Accounting  for
      Stock Based Compensation" and provides  alternative methods for accounting
      for a change by  registrants  to the fair value method of  accounting  for
      stock-based compensation. Additionally, SFAS No. 148 amends the disclosure
      requirements  of SFAS No. 123 to  require  disclosure  in the  significant
      accounting policy footnote of both annual and interim financial statements
      of the method of accounting for stock  based-compensation  and the related
      pro-forma  disclosures  when the  intrinsic  value method  continues to be
      used. The statement is effective for fiscal years beginning after December
      15, 2002,  and  disclosures  are  effective  for the first fiscal  quarter
      beginning after December 15, 2002.

      In January 2003, The FASB issued  Interpretation No. 46, "Consolidation of
      Variable Interest  Entities",  an  interpretation  of Accounting  Research
      Bulletin   ("ARB")   No.   51,   "Consolidated    Financial   Statements".
      Interpretation No. 46 addresses  consolidation by business  enterprises of
      variable  interest  entities,  which  have  one or both  of the  following
      characteristics:  (i) the equity  investment at risk is not  sufficient to
      permit  the  entity  to  finance   its   activities   without   additional
      subordinated  support from other parties,  which is provided through other
      interest  that  will  absorb  some or all of the  expected  losses  of the
      entity;  (ii)  the  equity  investors  lack  one or more of the  following
      essential  characteristics of a controlling financial interest: the direct
      or  indirect  ability  to make  decisions  about the  entities  activities
      through voting rights or similar  rights;  or the obligation to absorb the
      expected  losses of the entity if they occur,  which makes it possible for
      the entity to finance its  activities;  the right to receive the  expected
      residual  returns of the entity if they occur,  which is the  compensation
      for the risk of absorbing the expected losses.

      Interpretation  No. 46 also requires  expanded  disclosures by the primary
      beneficiary  (as  defined)  of  a  variable  interest  entity  and  by  an
      enterprise  that  holds a  significant  variable  interest  in a  variable
      interest entity but is not the primary beneficiary.  Interpretation No. 46
      applies  immediately to variable  interest  entities created after January
      31, 2003, and to variable interest entities in which an enterprise obtains
      an  interest  after that date.  It  applies  in the first  fiscal  year or
      interim  period  beginning  after  June 15,  2003,  to  variable  interest
      entities in which an enterprise holds a variable interest that it acquired
      before   February   1,  2003.   Interpretation   No.  46  may  be  applied
      prospectively with a cumulative-effect  adjustment as of the date on which
      it is first applied or by restating previously issued financial statements
      for  one or  more  years  with a  cumulative-effect  adjustment  as of the
      beginning of the first year restated.


                                      F-12
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

      In June 2003, the FASB issued an Exposure Draft for proposed SFAS entitled
      "Qualifying Special Purpose Entities ("QSPE") and Isolation of transferred
      Assets", an amendment of SFAS No. 140 ("The Exposure Draft"). The Exposure
      Draft is a proposal  that is  subject  to change  and as such,  is not yet
      authoritative.  If the  proposal is enacted in its current  form,  it will
      amend and clarify SFAS 140. The  Exposure  Draft would  prohibit an entity
      from being a QSPE if it enters into an agreement that obliged a transferor
      of financial assets,  its affiliates,  or its agents to deliver additional
      cash or other assets to fulfill the  special-purposes  entity's obligation
      to beneficial interest holders.

      In May 2003, the Financial  Accounting  Standards  Board  ("FASB")  issued
      Statement of Financial  Accounting Standards ("SFAS") No. 150, "Accounting
      For Certain Financial Instruments with Characteristics of both Liabilities
      and Equity".  SFAS No. 150 changes the  accounting  for certain  financial
      instruments  with  characteristics  of both  liabilities  and equity that,
      under previous  pronouncements,  issuers could account for as equity.  The
      new  accounting  guidance  contained in SFAS No. 150  requires  that those
      instruments be classified as  liabilities  in the balance sheet.  SFAS No.
      150  affects  the  issuer's  accounting  for three  types of  freestanding
      financial  instruments.  One type is mandatorily  redeemable shares, which
      the issuing company is obligated to buy back in exchange for cash or other
      assets. A second type includes put options and forward purchase contracts,
      which involves  instruments  that do or may require the issuer to buy back
      some of its shares in exchange for cash or other assets. The third type of
      instruments that are liabilities  under this Statement is obligations that
      can be settled with shares,  the  monetary  value of which is fixed,  tied
      solely or  predominantly  to a variable such as a market index,  or varies
      inversely  with the value of the  issuers'  shares.  SFAS No. 150 does not
      apply  to  features  embedded  in a  financial  instrument  that  is not a
      derivative in its entirety.

      Most of the provisions of Statement 150 are  consistent  with the existing
      definition of liabilities  in FASB Concepts  Statement No. 6, "Elements of
      Financial  Statements".  The remaining  provisions  of this  Statement are
      consistent with the FASB's proposal to revise that definition to encompass
      certain  obligations that a reporting entity can or must settle by issuing
      its  own  shares.   This  Statement   shall  be  effective  for  financial
      instruments  entered  into or modified  after May 31,  2003 and  otherwise
      shall be effective at the beginning of the first interim period  beginning
      after  June  15,  2003,  except  for  mandatorily   redeemable   financial
      instruments of a non-public  entity, as to which the effective date is for
      fiscal periods beginning after December 15, 2003.

      Management does not expect the adoption of these  pronouncements to have a
      material  impact  on the  Company's  consolidated  financial  position  or
      results of operations.


                                      F-13
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

NOTE 2   GOING CONCERN

      The Company's  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  February  28,  2002,  the  Company  had a working  capital
      deficiency of $4,014,273, shareholders' deficiency of $3,963,132, net loss
      of $3,847,474 and net cash used in operations of $510,393. The Company has
      minimal cash  available for  operations  and is in default with respect to
      repayment  provisions of certain secured and subordinated  debentures.  In
      addition,  the Company was not able to complete an effective  registration
      statement  within  150 days as  required  in  connection  with the sale of
      convertible  secured  debentures to a group of investors and, as a result,
      the  Company  is in  default  of  the  debenture  agreement.  To  generate
      additional  revenues and the working capital needed to continue and expand
      operations,  the Company 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 operating expenses.

      These  matters  raise  substantial  doubt about the  Company's  ability to
      continue as a going concern.  The 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.

NOTE 3   ACQUISITIONS AND DISCONTINUED OPERATIONS

      On June 5, 2000,  the  Company  acquired  100% of the  outstanding  common
      shares of Music Art Corporation ("Music Art") for 14,929 shares of Company
      common stock.  Music Art is primarily engaged in the business of creating,
      marketing  and  distributing  limited  edition  lithographs  derived  from
      artwork used on music albums and other music collectibles. The acquisition
      was  accounted  for as a purchase.  The shares of common  stock  issued to
      acquire  Music  Art were  valued at  $305,000,  based  upon the  Company's
      guarantee of the fair market price of the Company's  common stock one year
      from the issuance date. The assets acquired consisted primarily of current
      assets,  minimal fixed assets and no other identifiable  intangible assets
      other than goodwill. The excess of acquisition cost over the fair value of
      net assets was  approximately  $377,000.  As of  February  28,  2002,  all
      related  goodwill  to Music  Art has  been  reclassified  to  discontinued
      operations.

      On August 2, 2000, a wholly owned  subsidiary  of the Company,  Team Sport
      Specialties  Corporation,  purchased  certain  assets and  liabilities  of
      Rooter Rattle, L.P. in exchange for $965,000 of consideration,  payable as
      $390,000 in cash, a $30,000 note payable and 51,904 shares of common stock
      issued at a value of $545,000.  The  acquisition  was  accounted  for as a
      purchase.  The assets  acquired  consisted  primarily  of current  assets,
      minimal  fixed assets and no other  identifiable  intangible  assets other
      than goodwill.  The excess of acquisition  cost over the fair value of net
      assets was approximately  $1,050,000. As of February 28, 2002, all related
      goodwill  associated  with Rooter Rattle,  L.P. has been  reclassified  to
      discontinued  operations.  The Company  also  entered  into an  employment
      agreement  with a former  officer of Rooter  Rattle,  L.P. as part of this
      transaction.  The 51,900  shares of common stock issued to acquire  Rooter
      Rattle  were  valued at  $545,000,  based  upon the  trading  price of the
      Company's  common  stock on the  acquisition  date,  which was  $10.50 per
      share.


                                      F-14
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

      On August 1, 2001,  the  Company  received a notice  from the  partners of
      Rooter Rattle, L.P. declaring the Company's wholly-owned subsidiary,  Team
      Sports  Specialty  Corporation  ("Team  Sports") in default  under certain
      terms of the August 3, 2000 Purchase and Sale Agreement (the  "Agreement")
      between Team Sports and Rooter Rattle, L.P. The partners of Rooter Rattle,
      L.P.  were  seeking  to have  all  assets  of Team  Sports,  less  certain
      liabilities,  revert back to Rooter  Rattle,  L.P. as provided  for in the
      event of default as defined in the  Agreement.  In July 2003,  the Company
      received a confirmation from partners of Rooter Rattle, L.P. acknowledging
      that after examination the related assets were deemed to have little or no
      value.  All  negotiations  between the parties have ceased and upon mutual
      agreement  the  operations of Rooter  Rattle,  L.P. and Team Sports ceased
      during the third quarter of the calendar year 2001.

      The Company has  discontinued  the operations of Music Art and Team Sports
      during the year ended  February 28, 2002. The Company did not incur a gain
      or  loss  on  the  disposal  of  these   subsidiaries  since  the  Company
      unilaterally  ceased  operations of these  subsidiaries and the assets and
      liabilities  reverted back to the original  owners as per the terms of the
      original  acquisition  agreements.  The assets were  comprised of accounts
      receivables,  inventory,  fixed assets and goodwill.  The liabilities were
      comprised of accounts payable and accrued  expenses.  A loss of $1,390,572
      and  $1,107,913  was incurred  from the  discontinued  operations of these
      subsidiaries for years ended February 28, 2002 and 2001.

NOTE 4   PROPERTY AND EQUIPMENT

      As of February 28, 2002, property and
       equipment consisted of the following:

      Computer and office equipment                              $    126,179
      Depreciation and amortization                                   (64,538)
                                                                   ----------

      Property and equipment, net                                $     61,641
                                                                   ==========

      Depreciation and amortization expense amounted to
       $25,981 and $22,567 for the years ended
       February 28, 2002 and 2001, respectively.

NOTE 5   ACCRUED EXPENSES

      As of February 28, 2002, accrued
       expenses consist of the following:

      Accrued interest, of which $76,533 is due to related party $    231,355
      Accrued payroll                                                 503,894
      Other miscellaneous accrued expenses                            374,808
                                                                   ----------

      Accrued Expenses                                           $  1,110,057
                                                                   ==========


                                      F-15
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

NOTE 6   CONVERTIBLE SECURED DEBENTURES

      In May 2000, the Company issued $400,000 of secured convertible debentures
      to a group of  investors.  These  debentures  matured in April  2001,  are
      secured by substantially  all of the Company's assets and bear interest at
      10% per annum,  payable  quarterly;  the debentures are  convertible  into
      common  stock at any time at the  holder's  option at the  lesser of $2.80
      (adjusted  for 1 for 70 split) per share or 50% of market  value (the debt
      discount of $65,000  assigned to this  beneficial  conversion  feature was
      recorded as additional paid-in capital and the debt discount was amortized
      as  interest  expense  in the  quarter  ended  May 31,  2000  because  the
      debentures are convertible at any time at holder's option); the debentures
      also have  warrants to purchase  57,143  shares of common stock at 110% of
      the market value on the closing date - the warrants have a five-year  life
      and are  exercisable  immediately  (using an  option  pricing  model,  the
      warrants  were  valued at $280,000  using the  following  assumptions:  no
      expected payment of dividends,  expected lives of warrants of three years,
      a risk  free  rate of 6.5% and a  volatility  of 75%).  The  $280,000  was
      recorded as additional paid-in capital and the debt discount was amortized
      to  interest  expense  over  the  term of the  related  debentures.  As of
      February 28, 2002,  the debt  discount had been fully  amortized  with the
      Company  recognizing  interest  expense of $46,667 and $233,333 during the
      years  ended  February  28, 2002 and 2001,  respectively.  During the year
      ended  February  28,  2002,  the  Company  converted  convertible  secured
      debentures  in the amount of $12,500 into 35,714  common shares based upon
      stated conversion  prices or negotiated  conversion  prices.  Due to these
      conversions,  the  Company  incurred a loss of  $15,000 as the  negotiated
      converted  price  was less  than the fair  market  value of the  Company's
      common stock on the date of the  conversion  (See Note 15). The  debenture
      holders  also  have  certain  rights  in the  event  the  Company  files a
      registration statement.  The Company was not able to complete an effective
      registration statement within 150 days of the debenture sale. As a result,
      the Company is in default of the  debenture  agreement.  As of the date of
      this report, these debentures are still unpaid in total and in default.

NOTE 7   NOTES AND LOANS PAYABLE

      As of February  28,  2002,  notes and loans  payable  consisted of various
      unsecured notes and loans payable to certain individuals, investors and an
      auto finance  company.  The notes and loans bear interest at various rates
      ranging from 8.0% to 12.0% and had various maturities through August 2001,
      except for the  automobile  loan,  which matures on February 28, 2006. The
      balance of the notes and loans payable are in default and remain unpaid in
      total as of the date of this  report.  During the year ended  February 28,
      2002,  the  Company  converted  notes and loans  payable  in the amount of
      $36,000 into 51,429 common shares based upon stated  conversion  prices or
      negotiated  conversion  prices.  The Company also converted  approximately
      $16,000 in accrued  interest  into 11,786  common shares based upon stated
      conversion  prices  or  negotiated   conversion   prices.   Due  to  these
      conversions,  the Company  incurred a loss of $49,350,  as the  negotiated
      converted  price  was less  than the fair  market  value of the  Company's
      common stock on the date of the  conversion  (See Note 15). In  connection
      with the issuance of certain  notes  payable  during the fiscal year ended
      February 28, 2001, the Company  recorded  additional  interest  expense of
      $189,033 relating to beneficial conversion features.


                                      F-16
<PAGE>

      The Company has loans payable of approximately  $87,000, which is included
      in loans  payable  -  related  parties  in the  accompanying  consolidated
      balance sheet, due to the Company's  president and his wife as of February
      28, 2002.  During the years ended  February 28, 2002 and 2001, the Company
      recorded  interest expense of  approximately  $5,000 each year relating to
      loans from its  president and his wife.  Approximately  $77,000 in accrued
      interest  was payable  relating to these  loans as of February  28,  2002,
      which is recorded in accrued  expenses  in the  accompanying  consolidated
      balance sheet.

      As of February  28,  2001,  notes and loans  payable  consisted of various
      unsecured notes and loans payable to certain individuals, investors and an
      auto finance company. The notes and loans payable bear interest at various
      rates ranging from 8.0% to 12.0% and had various maturities through August
      2001,  except for the automobile  loan,  which matures  February 28, 2006.
      During the year ended February 28, 2001, the Company  converted  notes and
      loans  payable in the amount of $109,014  into 83,559  common shares based
      upon stated conversion prices or negotiated conversion prices.

NOTE 8   CONVERTIBLE SUBORDINATED DEBENTURES

      The Company has outstanding $96,800 of convertible subordinated debentures
      as of February 28, 2002.  The  debentures  bear  interest at rates ranging
      from 10% to 12% per annum and  matured at  various  times  through  August
      2001.  During the year ended  February  28,  2002,  the Company  converted
      convertible  subordinated  debentures in the amount of $40,000 into 57,461
      common shares based upon stated conversion prices or negotiated conversion
      prices. Due to these  conversions,  the Company incurred a loss of $19,508
      as the negotiated  converted  price was less than the fair market value of
      the Company's  common stock on the date of the conversion.  The debentures
      are in default and remain  unpaid in total as of the date of this  report.
      Each $1,000 unit is convertible at any time at the holder's  option,  into
      between 143 and 1,429  shares of Company  common stock for an aggregate of
      55,714 common shares.  In connection  with the issuance of the convertible
      subordinated debentures,  the Company recorded additional interest expense
      of $114,033 for the year ended  February 28, 2001  relating to  beneficial
      conversion features.

NOTE 9   COMMON STOCK

      In July 2002,  the Company  effected a 1 for 70 reverse stock split.  As a
      result of the reverse  stock split,  all capital  stock shares and amounts
      and per share  data  have  been  retroactively  restated  for all  periods
      presented.


                                      F-17
<PAGE>

      During the fiscal year ended  February  28,  2002,  the  Company  received
      $109,000  from the  issuance  of 155,714  shares of common  stock  through
      private placements to various investors.

      During the fiscal year ended  February  28,  2002,  the Company  converted
      approximately  $104,533 of notes and loans  payable  and  related  accrued
      interest  into  156,390  shares  of common  stock  based  upon  negotiated
      conversion  prices  with the  debtors  and  therefore  incurred  a loss of
      $83,858 as the negotiated  conversion  price was less than the fair market
      value of the Company's common stock on the date of the conversion.

      In  December  2001,  the  Company   increased  its  authorized  shares  to
      700,000,000 from 350,000,000.

      In October 2001, the Company  entered into an agreement with a third party
      whereby the third party has an  anti-dilution  of 1.603%.  The Company has
      not issued the respective shares of 49,624 for the year ended February 28,
      2002,  respectively,  to the third  party.  These  shares are  recorded as
      common stock to be issued with a corresponding decrease to additional paid
      in capital.

      During the year ended February 28, 2001, the Company  converted  notes and
      loans  payable in the amount of $109,014  into 83,559  common shares based
      upon stated conversion prices or negotiated conversion prices.

      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 interest on
      outstanding debt,  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  $1,548,773  and
      $1,218,470 for the years ended  February 28, 2002 and 2001,  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 services
      performed in 2002 and 2001 was 3,440,965 and 497,307, respectively.

      During the fiscal year ended  February  28,  2001,  the  Company  received
      $1,275,355 in the aggregate  from the issuance of 691,331 shares of common
      stock through private  placements to various investors and the issuance of
      50,000 shares related to the exercise of stock options at $.70 per share.

NOTE 10  STOCK OPTIONS

      In 1995,  the Company issued its president and  shareholder  the option to
      purchase 7,143 shares of common stock any time before December 1, 2005 for
      $7.00 per share. In January 2000, the Company issued an additional 142,857
      options  to  the  president  and   shareholder,   which  are   immediately
      exercisable,  at an  exercise  price of $.70 per share with an  expiration
      date of January  2004.  50,000 of these  options have been  exercised  and
      92,857 remain  outstanding  as of February 28, 2002.  The  agreement  also
      contains an anti-dilution  provision that has the effect of increasing the
      options as of February 28, 2002.  During the year ended February 28, 2002,
      142,857 options were granted and exercised for services rendered under the
      anti-dilution  provision.  All additional options have the same expiration
      date of January 2004.


                                      F-18
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

      In March 2000,  the Company  entered  into an agreement to issue 715 stock
      options  per month for  twelve  months  for an  aggregate  of 8,580  stock
      options to a non-employee  for consulting  services to be rendered  during
      calendar year 2000. The options are exercisable at $.70 per share and have
      no  expiration  date.  In accordance  with SFAS No. 123,  "Accounting  For
      Stock-Based Compensation",  the Company recorded an expense of $61,350 and
      an increase to additional  paid in capital for such options  issued during
      the months of March 2000 through  February 2001. The method of determining
      the  expense  was  based on using an  option-pricing  model  with  certain
      assumptions,  including a risk free interest  rate of 6.5%,  volatility of
      75%,  expected  lives of options of five years and no expected  payment of
      dividends.  The weighted average  grant-date fair value of options granted
      was $8.40 per share.

      The following is a summary of the status of stock option activity for the
fiscal years ended February 28, 2002 and 2001.


                                                              Weighted Average
                                                  Options     Exercise Price
                                                ----------      ----------

      Outstanding as of February 29, 2000          150,000      $      .70
       Granted                                       8,580      $      .70
       Exercised                                   (50,000)     $      .70
       Terminated                                     -               -
                                                ----------      ----------

      Outstanding as of February 28, 2001          108,580      $     1.11
       Granted                                     142,857      $      .70
       Exercised                                  (142,857)     $      .70
       Terminated                                     -               -
                                                ----------      ----------

      Outstanding as of February 28, 2002          108,580      $     1.11
                                                ==========      ==========

      The Company has adopted the disclosure-only provisions of SFAS No. 123 but
      applies APB Opinion 25  ("Accounting  for Stock Issued to  Employees")  in
      accounting  for  stock  options  issued  to  employees.   Accordingly,  no
      compensation has been recognized for the years ended February 28, 2002 and
      2001.  The effect of applying  SFAS 123 for the years ended  February  28,
      2002 and 2001 was not material.


                                      F-19
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

NOTE 11  INCOME TAXES

      Income tax expense  (benefit)  for the years ended  February  28, 2002 and
2001 are summarized as follows:

<TABLE>
<CAPTION>

                                                                               2002                  2001
                                                                          ---------------       ---------------
      Current:
<S>                                                                       <C>                    <C>
       Federal                                                            $             -        $            -
       State                                                                            -                     -
       Deferred Federal and State                                                       -                     -
                                                                          ---------------       ---------------

      Income tax expense (benefit)                                        $             -       $            -
                                                                          ================      ===============

      The Company's tax expense differs from the
       "expected" tax expense for the years
       ending February 28, 2002 and 2001 are as follows:

                                                                                2002                  2001
                                                                          ---------------       ---------------

      U.S. Federal income tax provision (benefit)                         $    (1,308,141)      $    (1,579,062)
      Effect of unused net operating loss carryforward                          1,308,141             1,579,062
                                                                          ---------------       ---------------

                                                                          $             -       $            -
                                                                          ===============       ===============

      The tax effects of temporary differences that gave rise to significant
      portions of deferred tax assets and liabilities at February 28, 2002 are
      as follows:

                                                                                  2002
                                                                             ---------------
      Deferred tax assets:
        Net operating loss carryforward                                      $    (5,988,141)
                                                                             ---------------
           Total gross deferred tax assets                                        (5,988,141)
        Less valuation allowance                                                   5,988,141
                                                                             ---------------

      Net deferred tax assets                                                $            --
                                                                             ===============

</TABLE>

      As of February 28, 2002, the Company has net operating loss  carryforwards
      of  approximately   $15,935,825  for  U.S.  Federal  income  tax  purposes
      available  to offset  future  taxable  income  expiring  on various  dates
      through 2022.

      The net change in the valuation  allowance  during the year ended February
28, 2002 was an increase of $1,308,141.


                                      F-20
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

NOTE 12  COMMITMENTS AND CONTINGENCIES

      (A) LEASE COMMITMENTS AND CONTINGENCIES

      The Company leases its office space under  non-cancelable  operating lease
agreements expiring in September 2004.

      The minimum annual lease payments due under these lease agreements is as
follows:

       For the Year Ended February 28,
                    2003                                  22,480
                    2004                                  23,440
                    2005                                  14,000
                                                   -------------
                                                   $      59,920
                                                   =============

      Rent  expense was  approximately  $33,000 and $25,000 for the fiscal years
ended February 28, 2002 and 2001, respectively.

      (B) EMPLOYMENT AGREEMENT

      The  Company  has  an  employment  contract  (the  "agreement")  with  its
      president  through  January 1, 2005,  which provides for annual salary and
      bonuses  based on  Company  revenues.  The  agreement  also  provides  for
      one-year extensions every January 1 unless notice is given by the Company.
      In addition,  the Company has granted this person  150,000  stock  options
      with anti-dilution provisions (See Note 10).

      (C) 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 expire
      at various dates  through 2003 and generally  require the Company to pay a
      royalty of  between  9% and 11% of sales,  with  certain  minimum  royalty
      payments  required.  The  unpaid  minimum  royalty  fees  related to these
      agreements are included in accrue  royalties in the  accompanying  balance
      sheet. Royalty expense amounted to approximately $472,000 and $134,000 for
      the fiscal years ended February 28, 2002 and 2001, respectively.

      (D) 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 Company's
      consolidated  financial  statements  or will not have a  material  adverse
      effect on its consolidated results of operations,  financial condition and
      cash  flows.  Any  amounts of cost that may be incurred in excess of those
      amounts provided as of February 28, 2002 cannot currently be determined.


                                      F-21
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

      In 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 the  subsequent  period.
      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.

      (E) OTHER CONTINGENCIES

      The  Company is  non-compliant  with  respect to payment of  employee  and
      employer payroll-related taxes. The liability is approximately $296,000 as
      of February  28,  2002,  which  includes  penalties  and  interest  and is
      included in accrued liabilities on the consolidated balance sheet.

      (F) MAJOR CUSTOMERS

      Approximately  60% and 40.5% of the  Company's  revenues were derived from
      its three  largest  customers  for the years ended  February  28, 2002 and
      2001, respectively.

NOTE 13  RELATED PARTY TRANSACTIONS

      The Company  has an  employment  agreement  with its  president  (see Note
      12(B)), who has elected to defer a portion of his salary in support of the
      cash needs of the Company. As of February 28, 2002 and 2001, the amount of
      salary deferred was approximately $167,000 and $255,000, respectively. The
      Company has also issued stock options to the president (See Note 10).

      The Company has a note payable of approximately $58,000, which is included
      in notes  payable  -  related  parties  in the  accompanying  consolidated
      balance sheet, due to the Company's president as of February 28, 2002. The
      Company  accrued  interest  related to these loans from its  president  of
      approximately  $5,000  each  year and  approximately  $77,000  in  accrued
      interest was payable relating to these loans as of February 28, 2002 which
      is recorded in accrued interest in the accompanying  consolidated  balance
      sheet.


                                      F-22
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

      The Company  issued  approximately  530,000  and 100,000  shares of common
      stock to officers,  directors  and family  members for  services  rendered
      during the years ended February 28, 2002 and 2001, respectively.

NOTE 14  SUBSEQUENT EVENTS

      On May 7, 2002,  the Company  authorized  a 1 for 70 reverse  stock split,
      effective  July 2002. As a result of the reverse stock split,  all capital
      stock  shares  and  amounts  and per share  data  have been  retroactively
      restated for all periods presented.

      On May 28, 2002, the Company issued a $75,000 convertible  promissory note
      to a group of investors.  This note bears interest of 12% simple  interest
      per annum and  matured  on July 28,  2002.  The note is  convertible  into
      shares of the  Company's  common stock at any time at the holder's  option
      equal to the quotient of (a) the  aggregate  amount of the  principle  and
      accrued  interest  and  unpaid  interest  to be so  converted  by (b)  the
      conversion  price.  As of the date of this report,  these  debentures  are
      still unpaid in total and are in default.

      Subsequent  to February  28,  2002,  the Company  issued at various  dates
      secured convertible debentures totaling $ 550,000 to a group of investors.
      These  debentures  mature  on one  year  from  date of  issuance  and bear
      interest at 15% per annum and are convertible into shares of the Company's
      common  stock at the lesser of $ .01 or 25%  discount  from the lowest bid
      price over the 3 days during the 20 days preceding conversion.

      In December of 2003, the Company and an employee  entered into a five-year
      Employment  Agreement  under  which the  employee  would  receive a weekly
      salary of $500.  Additionally,  20,000,000 stock options are to be 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 to a special fund.  Compensation  afforded to the employee under
      the  agreement  will  also  satisfy  any and all our  indebtedness  to the
      employee and related  parties.  The amount of this debt is estimated to be
      $219,530.

      In  November  of 2002,  the Company  successfully  negotiated  a long-term
      payment  plan  with  the  IRS  to  retire  its  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, the Company agreed to
      a payment schedule of $5,750 for the first six month, $13,000 for the next
      six months and  $25,000 for the final six  months.  The  Company  made the
      agreed  payments in a timely  fashion  through the first six months and is
      currently behind schedule on the balance.  The Company is negotiating with
      the IRS to recast the plan in  accordance  with its ability to make timely
      payments.


                                      F-23
<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF FEBRUARY 28, 2002

NOTE 15  NON-CASH INVESTING AND FINANCING ACTIVITIES IN THE CASH FLOW STATEMENT

      During the year ended  February  28,  2002,  the Company  entered into the
following non-cash transactions:

      The  Company  converted  $36,000  of notes and loans  payable,  $12,500 of
      convertible  secured  debentures,   $40,000  of  convertible  subordinated
      debentures, and $16,033 of related accrued interest into 156,390 shares of
      common  stock  having  an  aggregate  fair  value of  $188,391.  Since the
      conversions were based upon negotiated  conversion prices with the debtors
      the  Company  incurred a loss of $83,858 as the fair  market  value of the
      Company's  common  stock on the date of the  conversion  was more than the
      negotiated conversion prices.

      During the year ended  February  28,  2001,  the Company  entered into the
following non-cash transactions:

      The Company  converted  approximately  $109,014 of notes and loans payable
      and related accrued interest into 83,558 shares of common stock.  Issued a
      note payable for $40,000 to a  shareholder  as  consideration  for waiving
      certain  anti-dilution  privileges,  which  was  charged  against  paid-in
      capital.  Issued a note  payable in the amount of $26,605 for the purchase
      of  equipment.  Recorded a debt  discount of $280,000  related to warrants
      issued with a secured convertible  debenture.  Recorded a debt discount of
      $65,000 related to beneficial  conversion feature of a secured convertible
      debenture.

      With respect to the two business  combinations  entered into in 2001,  the
      Company  issued a note payable for $30,000 as part of the  acquisition  of
      Rooter Rattle, LP, issued 66,833 shares of common stock valued at $850,625
      for the  acquisition of the two companies,  paid cash of $388,574,  net of
      cash  acquired  of $1,426  for the  purchase  of Rooter  Rattle,  LP,  and
      recorded goodwill of approximately $1,427,259.  The Company also purchased
      inventories of $82,906,  accounts receivable of $104,757,  other assets of
      $11,821,  property and equipment of $2,243 for the  acquisition of the two
      companies and assumed  accounts payable and accrued expenses in the amount
      of $358,359.

      Cash  payments for interest  expense were  immaterial  for the years ended
      February 28, 2002 and February 29, 2001.


                                      F-24
<PAGE>

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

      On December 18, 2002,  we dismissed  Withum Smith & Brown  ("WS&B") as our
principal  independent  accountant.  On December 18, 2002, we engaged Weinberg &
Company, P.A. as our principal independent accountant.

      We  engaged  WS&B on July 5,  2001.  During  the last  fiscal  year  ended
February 28, 2001 and through  December 18,  2002,  there were no  disagreements
between  us and  WS&B on any  matter  of  accounting  principles  or  practices,
financial  statement  disclosure or auditing  scope or procedure  which,  if not
resolved to the satisfaction of WS&B would have caused WS&B to make reference to
the matter in its  reports  on our  financial  statements.  During the last most
recent fiscal year ended February 28, 2001 and through  December 18, 2002, there
were no  reportable  events  as the  term  described  in Item  304(a)(1)(iv)  of
Regulation S-B.

      During the two most recent fiscal years and through  December 18, 2002, we
have not consulted with Weinberg & Company, P.A. regarding either:

      1. the application of accounting principles to any specified  transaction,
either  completed  or  proposed,  or the type of  audit  opinion  that  might be
rendered on our financial statements,  and neither a written report was provided
to us nor oral advice was provided that Weinberg & Company,  P.A.  concluded was
an  important  factor  considered  by us  in  reaching  a  decision  as  to  the
accounting, auditing or financial reporting issue; or

      2. any matter that was either subject of disagreement or event, as defined
in Item  304(a)(1)(iv)(A)  of Regulation S-B and the related instruction to Item
304 of Regulation S-B, or a reportable  event, as that term is explained in Item
304(a)(1)(iv)(A) of Regulation S-B.

      We had  requested  that WS&B  furnish  us with a letter  addressed  to the
Securities  and  Exchange  Commission  stating  whether it agrees with the above
statements. A copy of such letter, dated December 20, 2002, was filed as Exhibit
16.1 to the Form 8-K  filed  with the  Securities  and  Exchange  Commission  on
December 20, 2002.


                                       15
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.

NAME                       AGE              POSITION
----                       ---              --------

Paul Lipschutz             55               Chief Executive Officer and Director

Jay Lipschutz              35               Secretary

Directors  serve until the next annual  meeting and until their  successors  are
elected and  qualified.  Officers are  appointed to serve for one year until the
meeting of the board of directors  following the annual meeting of  stockholders
and until their successors have been elected and qualified.

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.  Mr.  Lipschutz has been our Secretary  since December 2001. 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.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Except for two Form 3's and a Form 13D not filed,  based solely upon a review of
Forms 3, 4 and 5, and  amendments  thereto,  furnished to us during  fiscal year
2002, we are not aware of any director, officer or beneficial owner of more than
ten percent of our Common Stock that, during fiscal year 2002, failed to file on
a timely basis reports required by Section 16(a) of the Securities  Exchange Act
of 1934.


                                       16
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth certain compensation paid or accrued by us to
certain of our executive officers during fiscal years
ended 2002, 2001 and 2000. Summary Compensation Table

<TABLE>
<CAPTION>

                                                                        Other
                                                           Annual     Restricted      Options       LTIP
  Name & Principal                Salary       Bonus       Compen-      Stock          SARs       Payouts      All Other
      Position          Year        ($)         ($)      sation ($)    Awards ($)     (#)(1)        ($)      Compensation
--------------------- --------- ------------ ----------- ------------ -------------- ----------- ------------ --------------
<S>                     <C>       <C>     <C>    <C>         <C>           <C>          <C>       <C>      <C>       <C>
Paul S. Lipschutz,      2002      143,750 (1)
CEO                     2001      125,000 (1)
                        2000      108,000 (1)    0           0             0            0           503,250     8,650,000 (2)
--------------------- --------- ------------ ----------- ------------ -------------- ----------- ------------ --------------
Jeffrey Andrews, CFO    2000       76,770        0           0             0            0            67,000             0
--------------------- --------- ------------ ----------- ------------ -------------- ----------- ------------ --------------

</TABLE>

(1) Mr.  Lipschutz  agreed to defer his salary in fiscal 2002, 2001 and 2000 due
to our  financial  condition  and to help us  secure  financing.  Mr.  Lipschutz
received an  aggregate  4,950,000  shares of common  stock as  compensation  for
services in fiscal year 2000,  445,714 in fiscal year 2001 and 359,285 in fiscal
year 2002.

OPTIONS

      No options were exercised or granted during the last fiscal year.

      There were no long-term incentive plans or rewards made in fiscal 2002.

EMPLOYMENT AGREEMENTS

      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;  therefore  the  Employment  Agreement  has been extended to
January  1, 2008.  If no notice is given on  January  1,  2005,  the term of the
Employment Agreement will be extended to January 1, 2009.

      Under the Employment  Agreement,  Mr. Lipschutz was also granted an option
originally exercisable for 286,274 shares of our Common Stock at a price of $.01
per share  (the  "Option").  The  Option  may be  exercised  in whole or in part
through  January 1, 2004,  but partial  exercises  of the Option must be made in
lots of 100,000  shares or greater.  The Option will continue to be  exercisable
for its  original  term  after  in the  event  of Mr.  Lipschutz'  death  or the
termination  of his  employment  with us. Under the  Employment  Agreement,  the
number  of  shares  for  which  the  option  is  exercisable  has  anti-dilution
protection  so that the  option  will  always be  exercisable  for 11.52% of our
outstanding  Common  Stock.  Currently,  the option is  exercisable  for 108,580
shares.

      Mr.  Lipschutz  initial base salary  under the  Employment  Agreement  for
calendar year 2000 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 fiscal  year 2001,  Mr.  Lipschutz's  base salary will
increase by 15% of the sum of his  previous  year's  base salary and  additional
salary under the table above for the immediately preceding year.


                                       17
<PAGE>

DIRECTORS COMPENSATION.

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


                                       18
<PAGE>

     ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS AND MANAGEMENT.

As of June 30, 2004,  there were  478,972,190  shares of common stock, par value
$0.001 outstanding. The following table sets forth certain information regarding
the beneficial ownership of our common stock as of June 30, 2004:

      -     all directors
      -     each  person who is known by us to be the  beneficial  owner of more
            than five percent (5%) of the outstanding common stock
      -     each executive officer named in the Summary Compensation Table
      -     all directors and executive officers as a group

The number of shares beneficially owned by each director or executive officer is
determined  under  rules  of the SEC,  and the  information  is not  necessarily
indicative of beneficial  ownership for any other purpose.  Under the SEC rules,
beneficial ownership includes any shares as to which the individual has the sole
or shared voting power or investment  power. In addition,  beneficial  ownership
includes any shares that the individual has the right to acquire within 60 days.
Unless  otherwise  indicated,  each person listed below has sole  investment and
voting  power  (or  shares  such  powers  with his or her  spouse).  In  certain
instances,  the number of shares  listed  includes  (in addition to shares owned
directly), shares held by the spouse or children of the person, or by a trust or
estate of which the  person is a trustee or an  executor  or in which the person
may have a beneficial interest.


                                                  Amount of        Percent of
                  Name and Address                Beneficial         Class
Title of Class    of Beneficial Owner             Ownership           (1)
--------------------------------------------------------------------------------

Common Stock      Paul S. Lipschutz                82,165,081 (2)     17.2%
                  1600 Lower State Road
                  Doylestown, PA 18901

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

Common Stock      Shares of all directors and      83,104,722 (2)     17.4%
                  executive officers as a
                  group (2 persons)

Common Stock      Kenneth Adelberg                 43,250,000         10.2%
                  609 Longchamps Drive
                  Devon, PA 19333

Common Stock      Richard and Elizabeth Elmore     66,666,700         15.8%
                  1600 Lower State Road
                  Doylestown, PA 18901

* Represents less than 1%

(1) Based on 478,972,190 shares of common stock currently outstanding.

(2) 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.  Also
includes  10,000,000  shares of common stock  underlying  options granted to Mr.
Paul Lipschutz.

STOCK OPTION PLANS

      None.


                                       19
<PAGE>

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, 2002,  the principal  amount of Mr.  Lipschutz's  loan had
increased to $58,371  through net  borrowings.  The loan  accumulated  $5,273 in
interest  during fiscal year 2002,  and the loan had total  accrued  interest of
$76,533 at February  28,  2002.  The total  amount owed to Mr.  Lipschutz , with
interest and principal on the loan, at February 28, 2002 was $134,904.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

         None.

EXHIBITS

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 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.


                                       20
<PAGE>

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 License and Marketing Agreement between the Company and Building Q, filed
as Exhibit 10.2 to the registration statement on Form 10-SB filed with the
Commission on May 24, 2000 and incorporated herein by reference.

10.3 Merchandising Agreement between the Company and New Line Productions, Inc.,
filed as Exhibit 10.3 to the registration statement on Form 10-SB filed with the
Commission on May 24, 2000 and incorporated herein by reference.

10.4 Royalty Agreement between the Company and Galena Industries, filed as
Exhibit 10.4 to the registration statement on Form 10-SB filed with the
Commission on May 24, 2000 and incorporated herein by reference.

10.5 License Agreement between the Company and Creative Licensing Corporation,
filed as Exhibit 10.5 to the registration statement on Form 10-SB filed with the
Commission on May 24, 2000 and incorporated herein by reference.

10.6 License Agreement between the Company and Canal+ DA, filed as Exhibit 10.6
to the registration statement on Form 10-SB filed with the Commission on May 24,
2000 and incorporated herein by reference.

10.7 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.

10.8 License Agreement between the Company and Marvel Characters, Inc., filed as
Exhibit 10.8 to the registration statement on Form 10-SB filed with the
Commission on May 24, 2000 and incorporated herein by reference..

10.9 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..

10.10 Agreement by and among the Company, Verne Troyer and TC Ventures, filed as
Exhibit 10.10 to the registration statement on Form 10-SB filed with the
Commission on May 24, 2000 and incorporated herein by reference..

10.11 Separation Agreement between the Company and S.D. Studios, filed as
Exhibit 10.13 to the registration statement on Form 10-SB/A filed with the
Commission on September 7, 2000 and incorporated herein by reference.

31.1 Certification by Chief Executive Officer pursuant to Sarbanes-Oxley Section
302.

31.2 Certification by Chief Financial Officer pursuant to Sarbanes-Oxley Section
302.

32.1  Certification  by Chief Executive  Officer  pursuant to 18 U.S. C. Section
1350.

32.2  Certification  by Chief Financial  Officer  pursuant to 18 U.S. C. Section
1350.


                                       21
<PAGE>

                                   SIGNATURES

In accordance with Section 13 or 15(d) 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.,
                                               a Delaware Corporation


Dated: July 20, 2004                           By: /s/ Paul Lipschutz
                                                   ----------------------
                                                   Paul Lipschutz
                                                   Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

SIGNATURE                               TITLE                     DATE

/s/ Paul Lipschutz               Chief Executive Officer      July 20, 2004
-------------------------        and Director
Paul Lipschutz

/s/ Jay Lipschutz                Director                     July 20, 2004
-------------------------
Jay Lipschutz


                                       22