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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[x]              ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended February 28, 2001.

[_]              TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

Commission file number            000-30703
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                        COLLECTIBLE CONCEPTS GROUP, INC.
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                 (Name of Small Business Issuer in its charter)

           Delaware                             95-4026880
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(State or other jurisdiction of    (I.R.S. Employer Identification No.)
 incorporation or organization)

                   1600 Lower State Road, Doylestown, PA 18901
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               (Address of principal executive offices) (Zip Code)

Issuer's telephone number:  (215) 491-1075
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Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:
             Common Stock, $.001 par value
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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) been subject to such filing
requirements for the past 90 days.  Yes             No      X

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

The issuer's revenues for its most recent fiscal year are: $804,983.


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The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of September 4, 2001: Common Stock, par value $0.001 per share --
$4,397,787. As of September 4, 2001, the Registrant had 293,185,826 shares of
common stock issued and outstanding.


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

a) Business Development

Background. Collectible Concepts Group, Inc. ("CCGR" or the "Company") was
originally formed on March 1, 1986 as "Amour Corporation". It changed its name
to "Bard Sports Corp." in September 1988, and changed its name again on February
28, 1993 to "USA Sports Corp". The Company most recently changed its name to
"Collectible Concepts Group, Inc." on April 27, 1999. The Company is
incorporated under the laws of the State of Delaware.

The Company is focused on creating and distributing high-end and novelty
products related to both the entertainment and sports industries. During fiscal
2000, the Company's revenues were primarily derived from the sale of collectible
products related to the Austin Powers films. In May 1999, the Company was
granted licensing rights by New Line Cinema to manufacture, sell and distribute
collectibles relating to the Austin Powers films. The Company has shipped orders
of Austin Powers merchandise to approximately 4,500 retailers since production
began in June 1999.

In November, 1999 the Company was granted a non-exclusive license by Marvel
Characters, Inc. to sell and distribute novelties and collectibles based upon
certain X-Men character props as they appear in the X-Men film scheduled to be
released in July 2000.The company shipped orders during year ended February
28,2001. The Company also has non-exclusive licenses to sell and distribute
novelties and collectibles based on props from the Terminator movies. . During
the year ended February 28, 2001, a licensing agreement was signed with IMS
Properties and Titan Motorcycle Company of America for the manufacture, sale and
distribution of a limited edition replica of the Indy 500 Titan Motorcycle.
During the year ended February 28, 2001 the Company also signed a licensing
agreement with Chicken Soup for the Soul Enterprises, Inc. for the manufacture,
sale and distribution of more than two-dozen collectibles to be sold in
bookstores and other retail chains. The collectibles will include penholders,
nightlights and sports-related items such as tennis rackets covers, all carrying
an inspirational phrase from a Chicken Soup book. Additionally, the Company
signed a licensing agreement with Stan Lee Media, Inc. to develop collectibles
based on Stan Lee's signature style and global lifestyle brand, as well as his
latest project, the 7th Portal- a team of 21st Century Super Heroes and Super
Villains. These collectibles will include sculptures, lithographs, pins,
bookends, desk sets and fountain pens based on the image of Stan Lee, the image
of "Evil Stan" - the alter ego of Stan Lee and the 7th Portal. The license
agreement also includes rights to develop merchandise in connection with a
theatrical release of a "7th Portal" feature film during the term of the
agreement which expires May 1, 2003. During the year ended February 28, 2001, in
an effort to expand its revenue base, and become a broad based sports and
entertainment products company, the Company entered into several additional
license agreements. The Company signed an agreement with master artists Boris
Vallejo and Julie Bell to extend their fine art mastery into the Company's
product line. Their work has graced movie posters, novel covers and calendars.
The first products of the series will be collectible wall scrolls featuring
digitally mastered images derived from hand painted fantasy art from the "Master
Touch" collection of Boris and Julie. The company also signed a licensing
agreement with Marvel Enterprises, Inc. to create a variety of merchandise based
on well known characters within the Marvel Universe, including Spider-Man,
Captain America, Wolverine, Dr. Doom, Daredevil and Magneto. The licensed
articles will initially include character replicas and wall scrolls. The Company
plans to release a line of desktop sculptures such as Helmets, Masks and Weapon
Replicas featuring these Marvel super heroes and villains.


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The Company is awaiting approval of prototypes from Marvel and does not have a
definite time when these products would be available for distribution. The
Company also signed a licensing agreement to distribute the "Tattle Tail", which
is a stylized cloth lanyard that serves as a holder for remote controls.
Initially, the Tattle Tails TM marketed by the Company will contain licensed
team logos including Major and Minor League Baseball, the American and East
Coast Hockey Leagues, Arena Football, select universities and the National
Professional Soccer League. A full-page advertisement for these products
appeared in the 2001 edition of Media File and Media File on-line, the
advertising specialty industry bible, published by the Advertising Specialty
Institute ("ASI"). The Company also signed a license with The Jim Henson Company
for products related to the hit sci-fi series Farscape. The Company will be
producing resin sculptures, spaceships, transport vehicles, jewelry replicas,
weapons replicas in two scales and other key icons for use as Desk Top
Collectibles. The signing of this agreement was part of the Company's ongoing
plan to become a broad based sports and entertainment products company.

The Company sells its products through retailers, distributors, department
stores and catalogers. Currently CCGR has placed its products in over 4,500
retail locations including Spencer Gifts, Claire's Boutique, Musicland,
TowerRecords, Halloween and costume shops, and a growing list of retailers. CCGR
has expanded its marketing horizons to Internet E-commerce, with its websites:
Austin Powers Collector's Club.com, Mini-V.com, collectbaseball.com,
X-Menclub.com and soon to go online Terminator website. In addition, CCGR's
products are sold on many significant E-commerce sites for this type of
merchandise, including Amazon.com, BigE.com, Newline.com, Toysrus.com, iQVC.com,
Moletown.com, Musicland.com, Boscos.com, Anotheruniverse.com, Galacticquest.com,
and Nightflightcomics.com. The Company believes that it is respected for the
quality and authenticity of its merchandise.

Prior Operations. The Company was incorporated in Delaware on March 1, 1986 to
engage in the business of custom designing and importing sports equipment and
accessories. In 1991, the Company acquired the marketing rights to All Sports
Tattoos, a collection of removable tattoos licensed by the Collegiate and
National Football League. In October 1993, the Company acquired all of the
outstanding capital stock of Sports World Production, a corporation engaged in
the business of producing sports collectibles and organizing and promoting
sports autograph shows. In 1994, the Company established USA Tellcards, a new
division formed for the purpose of creating and marketing collectible and
promotional prepaid phone cards. In February 1995, the Company purchased an 80%
interest in USA Diversified Plastics, Inc., a corporation that was formed for
the purpose of manufacturing point-of-purchase plastic products and phone cards
for wholesale distribution. In 1996, the Company acquired the Atlantic City
Seagulls, a franchise purchased from the United States Basketball League. The
Company operated the franchise for one year as a general partner. The Company
discontinued operations in All Sports Tattoos, Sports World Production in 1995,
and USA Tellcards and USA Diversified Plastics in 1996. In 1995 and 1996, the
basketball team and other operations were discontinued because they were not
profitable, the Company lacked working capital to support them, and because
management had identified more promising opportunities.

The Company acquired its current management team in 1992. Since this change in
management, the Company has engaged in various business activities relating to
marketing of sports-related events and collectibles. As discussed in greater
detail below, the Company is now focused on creating and distributing high-end
and novelty products related to both the entertainment and sports industries.

(b) The Company's Business:

The Company's Current Product Lines.

The Company believes it has developed a successful process for identifying,
designing and marketing unique products for its target markets. The Company's
development process includes researching, developing and effectively
merchandising and packaging its products in a manner consistent with its product
image. The Company enhances its product development process by giving careful
attention to design and price points and through its proven method of testing
new products with selected retailers and

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consumers prior to introduction. The Company believes that its close
relationships with its suppliers, retailers and customers allow it to quickly
introduce new products, accurately estimate consumer demand, promptly identify
new product categories and trends regarding existing lines, and substantially
reduce development costs.

In the calendar year 1998, substantially all of the Company's revenues were
derived from the sale of the Company's Stadium Collectibles product line. The
Stadium Collectibles product line includes a Yankee Stadium Lithograph, which
contains an authentic piece of a bench that was housed in Yankee Stadium in
1973, and smaller segments of the same Yankee Stadium bench and authentic bricks
from the Ebbets Field stadium rotunda. The Company's target markets for its
Stadium Collectibles product line are sports fans and collectors. The Company
intends to increase its efforts to reach the target market for its Stadium
Collectibles through Internet links and its own website. The Company expects,
but cannot guarantee, that the existing Stadium Collectibles line of products
(the Yankee Stadium Lithograph, bench and bricks) will be expanded to include
several additional products.

The Company's current business plan is to concentrate most of its effort on
cultivating business relationships with film production companies that may lead
to opportunities for the Company to purchase licensing rights to market products
that are based on motion pictures. To this end, the Company entered into a
Merchandise License Agreement with Time Warner's New Line Cinema Division in May
1999 (the "New Line License" or "Agreement"). According to the New Line License,
the Company was granted the exclusive right to manufacture, sell and distribute
in the United States and Canada certain collectibles relating to the film
"Austin Powers: International Man of Mystery" and its sequel, "Austin Powers:
The Spy Who Shagged Me," which was released in theatres in the summer of 1999.
The license with New Line Cinema relates only to the manufacture, sale and
distribution of the scaled models of props identified in this section. In
exchange, the Company has agreed to pay New Line a royalty in an amount equal to
ten percent (10%) of the Company's gross sales of the Austin Powers product line
including those sold on the Austin Powers website, which includes the membership
fee for the Austin Powers Club. In addition, pursuant to the Agreement, the
Company has paid Thirty Thousand Dollars ($30,000) to New Line as a
non-refundable advance (the "Advance"). The Advance will be applied against
royalties derived from sales made by the Company pursuant to the New Line
License. The Company also guaranteed that the minimum aggregate amount of
royalties paid to New Line during the term of the Agreement (including the
Advance) will be One Hundred Thousand Dollars ($100,000). The Company received
revenues of approximately $273,000 from Austin Powers products in the year ended
February 29, 2000, constituting approximately ninety-two percent (92%) of its
revenues. Through February 29, 2000, the Company had paid New Line approximately
Thirty Thousand Dollars ($30,000) in royalties. The Company received revenues of
approximately $10,000 from Austin Powers products in the year ended February
28,2001 The Company has not been able to predict with any certainty the sales
levels for the Austin Powers products. Since the last movie, product sales have
not had any discernible pattern. The Company believes sales during the remaining
months of the license will be at a level sufficient to cover the remaining
royalty at the rate of 10% of gross sales, due to the release of the Austin
Powers movies on DVD in early October 2000 and the release of new Austin Powers
movies during the term of the license. The Company continues to receive revenues
from these products but in an insufficient amount to meet its minimum royalty
requirements. The Company believes that it will be in a better position to make
significant sales if a new Austin Powers movie is released during the term of
the License, as the Company will have product available immediately upon release
of any new movie. However, if a new Austin Powers movie is not released, or if
the Company is unable to generate significant sales even if an Austin Powers
movie is released, the Company may be required to meet its minimum royalty
requirements from other revenue sources. If the Company has not paid $100,000 in
royalties within the term of the license, it will be required to pay the
shortfall to New Line.

The Company considers the New Line License to be a major marketing and sales
opportunity. The Company was granted the license to manufacture and market a
unique line of collectible merchandise to commemorate the Austin Powers films.
These collectibles include various props from the films, including replicas of
Dr. Evil's ring, the Jumbo Jet, the Male and Female Charm Symbols and the
Swinger License Plate.

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The Company has also developed "The Bag of Shhh!," another collectible based on
the Austin Powers films. "The Bag of Shhh!," based on a phrase used by Dr. Evil,
a character in the films, is silver to match Dr. Evil's costume and bears the
Dr. Evil company logo. When the bag is squeezed, it responds with an audible
"shhh!." On October 1, 1999, the Company established "The Official Austin Powers
Collectors Club" as part of its marketing program. The Company has established a
website for this club at www.powersclub.com. For $19.95, the Club offers
prospective members a unique set of items, not available elsewhere, (e.g. Dr.
Evil's money clip, and Austin Powers computer wrist pad, etc) and a variety of
other exclusive items, including "inside info" about Austin Powers and other
film characters. The Club is promoted both on the Web (links and banners) and on
radio and TV spots. The Company's target markets for its Austin Powers product
line are fans of the Austin Powers films and collectors. The Company is
obligated, under the terms of the licenses for the above-referenced products to
pay a royalty to New Line Cinemas in connection with the sale of any products
described in this paragraph.

Verne Troyer License and Website. The Company has an agreement with Verne
Troyer, also known as "Mini V", who played Mini Me in the second Austin Powers
film. Under this agreement, the Company operates a Mini-V fan club and website,
and sells merchandise related to Mr. Troyer's character. Under the terms of the
agreement, the Company is required to pay Mr. Troyer, on a monthly basis, two
percent (2%) of gross revenues from the sales of all related products offered on
the Company's internet sites, including membership sold for the "Mini-V Club".
To date, the Company has not had any sales of the products offered under the
agreement and no memberships have been issued for the "Mini-V Club".
Accordingly, the Company has not performed any analysis relating to the sales of
the products offered under the agreement. The Company is currently working with
Mr. Troyer to develop new products related to his Mini V character to be sold on
the website. The license and associated rights to Verne Troyer and the related
"Mini-V" products expires December 31, 2001.

On May 3, 2000, the Company entered into a license with IMS Properties and the
Titan Motorcycle Company ("Titan") with a term through December 21, 2002. The
Company will offer and sell a Titan Indy Collectible Motorcycle Replica ("Indy
500") motorcycle under the terms of the agreement. The Company is required to
pay a royalty to Titan of seven percent (7%) on sales of the Indy 500, with a
minimum royalty of $20,000 by December 31, 2002. The Company paid a $10,000
advance against this minimum royalty in May, 2000. For the period beginning May
3, 2000 and ending September15,20,01 the Company had no sales and made no
royalty payments to Titan.

On May 1, 2000 the Company entered into a licensing agreement with Chicken Soup
for the Soul Enterprises ("CSSE"), with a term ending on December 31, 2002. The
Company will offer and sell a line of products derived from Chicken Soup brand,
including silver-like paper weights, paper clip holder, costume and fine jewelry
along with other items under the terms of the agreement. The Company is required
to pay a royalty of ten percent (10 %) on sales of the licensed products to
CSSE, with a minimum royalty of $50,000. The Company paid $15,000 at the time of
signing the license with $10,000 due upon the first shipment of product. No
product under this license has yet been shipped. One half of the remaining
minimum royalty ($12,500) is due on May 1, 2001 and the other half is due on May
1, 2002. The May1,2001 payment has been postponed until the Company starts
shipping product. The Company anticipates shipping product towards the end of
2001.

On July 17, 2000 the Company entered into a licensing agreement with Stan Lee
Media, Inc. ("Stan Lee"), with a term ending on May 1, 2003. The Company will
offer and sell Stan Lee products including Stan Lee wall Scroll, pens and rings,
lithographs, official Cross-like fountain pen, book-ends, and desk accessories,
along with other items under the terms of the agreement. The Company is required
to pay a royalty of ten percent (10 %) on sales of the licensed products, with a
minimum royalty of $40,000. The Company was required to pay $20,000 at the time
of signing the license with $20,000 payable no later than November 1, 2001. The
Company has made these payments.

In November 1999, the Company signed a License Agreement with Marvel Characters,
Inc., which grants the Company the non-exclusive right to market and sell in the
U.S. and Canada novelties and collectibles

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based on certain X-Men comic character props that appear in the new X-Men
full-length Twentieth Century Fox motion picture. The movie was released in
July, 2000 and stars Patrick Stewart, Ian McKellan, Rebecca Romijn-Stamos and
Halle Berry. The licensed articles include the following novelties: graduation
rings, dog tags, pins and belt buckles. The licensed articles also include
collectible resin replicas of the black jet and the team motorcycle, and resin
or metal replicas of Cyclop's Visor, Magneto's Helmet, Professor X's Computer
and other products. The Company expects products offered through this license
will broaden its retail and e-commerce accounts. The Company has also been
licensed to create an X-Men Collector's Club, which will be offered via website,
direct mail brochures and display advertising in record and video stores. The
Company is obligated, under the terms of the licenses for the above-referenced
products to pay a royalty to Marvel Characters, Inc. in connection with the sale
of any products described in this paragraph.

The Marvel license has a term through December 31, 2002. The Company is required
to pay a royalty of ten percent (10%) on sales of licensed products, with a
minimum royalty of $45,000, which has been paid. During year ended February 28,
2001, the Company had either shipped sufficient product or had orders in hand
with an aggregate sales price which would require payment in excess of the
minimum royalty.

In June 1999, the Company entered into licensing agreements with Canal+ DA of
France and Creative Licensing to market products related to the films
"Terminator" and "Terminator 2: Judgment Day," respectively. According to these
licenses, the Company was granted rights to manufacture, sell and distribute
certain collectibles relating to these films worldwide. In exchange, the Company
has agreed to pay Canal+ DA and Creative Licensing ten percent (10%) of the
Company's gross sales of the Terminator product lines under their respective
licensing agreements. In addition, Canal+ DA and Creative Licensing each
received a non-refundable $7,500 advance that will be applied against royalties
derived from sales made by the Company pursuant to these license agreements. The
Company also guaranteed that the minimum aggregate amount of $15,000, of which
an additional payment 0f $3,750 was paid against the $15,000, in royalties will
be paid to Canal+ DA and $15,000, of which an additional payment of $3,750 was
paid against the $15,000, in royalties to Creative Licensing during the term of
the licensing agreements. The licensing agreements expire on December 31, 2001.
The Company has contracted the production of Terminator products, and the
products are expected to be available in before the end of 2001. No products for
this line have been produced to date. The Company expects, but cannot guarantee
that there will be a strong demand for the Terminator products. The Company
further anticipates that the demand for these products will increase upon the
happening of the announcement of the next Terminator film. The Company believes
that it presently has the capital resources to have the Terminator products
manufactured and distributed.

In September 2000 the Company also signed a licensing agreement to distribute
the "Tattle Tail", which is a stylized cloth lanyard that serves as a holder for
remote controls. Initially, the Tattle Tails TM marketed by the Company will
contain licensed team logos including Major and Minor League Baseball, the
American and East Coast Hockey Leagues, Arena Football, select universities and
the National Professional Soccer League. A full-page advertisement for these
products appeared in the 2001 edition of Media File and Media File on-line, the
advertising specialty industry bible, published by the Advertising Specialty
Institute ("ASI"). The Company has paid the Licensor $5,000 in cash an issued
100,000 shares of the Company's common stock to the Licensor against the
guaranteed minimum royalty payment of $85,000. The royalty rate for this product
ranges from 3% to 7% depending upon sales volume. The license expires September
2003. The Company plans to introduce these products by the end of 2001.

Collectbaseball.com Website. In early May 2000, the Company launched the collect
baseball.com website, which is devoted to baseball fans and baseball memorabilia
collectors. While the website will offer memorabilia from different baseball
eras, it is targeted to the "Golden Age" of baseball, in the 1950's and 1960's.
The products offered on this website include a proprietary product, the
Permagraph(TM), a product designed to preserve fragile autographs which are
otherwise highly likely to deteriorate over time. Each Permagraph(TM) includes
real autographs on enameled metal, mounted on an ebony-toned plaque. The
collectbaseball.com site will also include authentic memorabilia including
photos, autographs and artworks of such players as Hank Aaron, Mickey Mantle,
Nolan Ryan, Ken Griffey, Jr., Cal Ripkin and Roberto Alomar. The collection
offered on the site also includes signed baseballs, special lithographs of old
baseball

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stadiums, such as Ebbets Field, and other collectibles. This site began
producing a small amount of revenues for the Company shortly after its opening
in May 2000. Some of the merchandise which the Company sells on this site is
merchandise already in the Company's inventory. Other items are items the
Company does not stock but orders for its own account only after a customer has
ordered them from the Company's site. The Company records the full amount of the
sale as revenue in both cases, with the cost or the purchase price of the
acquired item recorded as costs of sales.

Music Art. On June 5, 2000, the Company acquired Music Art Corporation ("Music
Art") in consideration of 1,000,000 shares of Company common stock . Through the
transaction, Music Art became a wholly owned subsidiary of the Company. The
Company 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 represent the majority of the physical assets
acquired. The purchase price for Music Art was negotiated between the president
of Music Art and the president of the Company. 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 famous rock photographer, Phil
Cecola, a well known rock-and-roll group photographer. The tangible assets
acquired primarily consisted Rolling Stones signed lithographs and photos of
Bruce Springsteen signed by Phil Cecola. The Company did not acquire any new
distribution channels through the transaction. The Company 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 who 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%) is 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 the
Company decided to write down the goodwill associated with the purchase of Music
Art. The write down of goodwill associated with this transaction during year
ended February 28, 2001 was approximately $300,000 and is reflected in the
"Statement of Operations" under the caption of "Impairment of long-lived
assets". The Company anticipates obtaining other licenses for Music Art during
fiscal 2002. The agreement with Phil Cecola for the marketing and sale of the 5
signed photos of Bruce Springsteen does not have a stated termination date and
requires a royalty of twelve and one half percent (12-1/2%) of sales of these
photos calculated on the wholesale price. During year ended February 28, 2001the
Company had revenues from this product line of $24,694.

Team Sports. On August 2, 2000, when the Company acquired Rooter Rattle, L.P. in
consideration of $965,000, payable as $390,000 in cash, a $30,000 note payable
and 3,663,334 Shares of Common Stock issued at a value of $545,000 based upon
the trading price of the Company's common stock on the acquisition date, which
was $.15 per share. The acquisition was accounted for as a purchase. Rooter
Rattle markets novelties bearing the Logos of professional and amateur sports
teams under license from the teams. The excess of acquisition costs over the
fair value of net assets acquired was approximately $1,050,000 which will be
amortized over seven (7) years beginning August, 2000. The Company also entered
into an Employment Agreement with a former officer of Rooter Rattle, L.P. as
part of the transaction. As part of the sales agreement, the Company granted the
sellers the option to acquire more stock of the Company if after one year from
the acquisition the price of the Company's stock was not a least .15 cents a
share. The Company also had the right to pay to the sellers the difference in
cash between the market price of the stock and the original issue price of the
stock. After evaluating the strategic alliance of this acquisition with the
Company's current marketing goals, the management of the Company decided that it
would be in the best interest of the shareholders of Collectible Concepts Group,
Inc .to enter into discussions with the prior owners of Rooter Rattle, L.P. for
them to reacquire Rooter Rattle, L.P. and for Collectible Concepts to become a
distributor of Rooter Rattle's products. In anticipation of these discussions
with the prior management of Rooter Rattle, L.P. the Company decided to write
off a portion of the original goodwill. The Company wrote off approximately
$500,000 of goodwill during year ended February 28,2001. The write down of
goodwill associated with this transaction during year ended February 28, is
reflected in the

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"Statement of Operations" under the caption of "Impairment of long-lived
assets". During year ended February 28, 2001 the Company had revenues from this
product line of $256,076.

Planned New Product Line:

Baseball Hall of Fame Permagraphs. Each permagraph is a 1000 piece,
---------------------------------
limited-edition brass plate autographed and authenticated collectible,
highlighting the Hall of Fame careers of such stars as, Robin Roberts, Jim
Bunning, Duke Snider and Brooks Robinson. These items will be sold through its
collectbaseball.comm. website.

Marvel Universe. CCGR obtained a License from Marvel Enterprises, Inc., the
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world-renowned comic book and toy company, to use its characters in a wide range
of products such as pins, desktop sculptures and wall scrolls. The Company has
paid Marvel Enterprises $40,000against the guaranteed minimum royalty payment of
$75,000. The royalty rate for these products is 12%. The license expires
December 31, 2003. The Company plans to introduce these products by the end of
2001. Subsequent to the year ended February 28, 2001 the Company also signed a
licensing agreement with Marvel enterprises administer the official Marvel
Universe Fan Club The Fan Club is marketed in Marvel comic books, over the
internet and other mediums. The Company anticipates opening the club for members
by the end of September 2001.Currently the Company has approximately eight
thousand requested members at approximately twenty dollars per member. The
Company has paid $63,500 towards the minimum guaranteed royalty payment of
$1,500,000. The balance of the royalty payments are due as follows: $86,500 is
due currently, $150,000 is due December 31, 2001, and $200,000 is due on each of
March 31, 2002, June 30, 2002, December 31, 2002, March 31, 2003, June 30, 2003
and December 31, 2003. The license expires December 31, 2003. The royalty rate
for this license is 15%.

FarScape. The Company also signed a licensing agreement with The Jim Henson
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Company. The Company's Farscape products range from collectors pins and wall
scrolls to replicas of featured spacecraft and other items used on the show. The
Company has paid The Jim Henson Company $10,000against the guaranteed minimum
royalty payment of $25,000. The royalty rate for these products is 10%. The
license expires December 31, 2003. The Company plans to introduce these products
by the end of 2001.

Planet Of The Apes. CCGR also signed a licensing agreement with Twentieth
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Century Fox to produce a wide variety of collectibles for it's feature film.
Licensed items include, desktop collectibles, decorative pins and wall scrolls.
The Company has paid Twentieth Century Fox $15,000 against the guaranteed
minimum royalty payment of $30,000. The other minimum royalty payments are
$5,000 due June 30, 2002 and $10,000 due July 1, 2002. The royalty rate for
these products is 10%. The license expires June 30, 2003. The Company plans to
introduce these products by the end of 2001.

Three Stooges. Subsequent to February 28, 2001 the Company signed a licensing
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agreement with Global Icons. The Company will be producing scrolls and desktop
collectibles. The Company believes The Stooges have a universal appeal and this
License isn't based on a movie coming out, even though Global Icons is talking
about one for the near future. The Company has paid Global Icons $5,000 against
the guaranteed minimum royalty payment of $10,000. The royalty rate for these
products is 10%. The license expires December 31, 2003. The Company plans to
introduce these products by the end of 2001.

Spiderman The Movie. Subsequent to February 28, 2001 the Company signed a
-------------------
licensing agreement with Spider-Man Merchandising L.P. The movie Spider-Man will
be released May of 2002. Spider-Man was first introduced, by Marvel, to the
world 38 years. The Company will be creating desktop collectibles, pins and
scrolls. The Company has paid Spider-Man Merchandising L.P. $40,000 against the
guaranteed minimum royalty payment of $80,000. The other minimum royalty
payments are $20,000 due June 30, 2002 and $20,000 due December 31, 2002. The
royalty rate for these products is 14%. The license expires March 31, 2003. The
Company plans to introduce these products in early 2002 prior to the release of
the movie.

                                       8

<PAGE>

Lord Of The Rings. Subsequent to February 28, 2001 the Company signed a
-----------------
licensing agreement with New Line Cinema. One of the "most read" series of books
is now a trilogy of motion pictures from New Line Cinema to be release starting
in December of 2001, with additional releases scheduled in December of 2002 &
2003. The Company will create products that will include wall scrolls depicting
maps and family trees, movie scenes and characters, and desktop collectibles,
including "the ring". The Company will pay New Line Cinema a guaranteed minimum
royalty payment of $190,000. The minimum royalty payments are $40,000 due upon
signing of contract, $35,000 due December 31, 2001, $32,500 due by June 30,
2002, $32,500 due by December 31, 2002, $25,000 due by June 30, 2003 and $25,000
due by December 31, 2003, June 30, 2002 and $20,000 due December 31, 2002. The
royalty rate for these products is 14%. The license expires December 31, 2004.
The Company plans to introduce these products prior to the release of the
movies.

The Boys of Summer. The Company entered into an agreement with JMJ Films ("JMJ")
------------------
that entitles the Company to ten percent (10%) of JMJ's net revenue in a movie
project titled, "The Boys of Summer." The terms of the arrangement between the
Company and JMJ provided that the Company would advance JMJ an aggregate of
$55,000 in consideration of the foregoing rights. Representatives of JMJ have
assured the Company that it will be accorded favored status with respect to
licensing rights to market memorabilia if the film is produced and distributed.
The Company has not entered into a written contract providing for the licensing,
the Company's rights to revenues in the future or the repayment terms for the
$55,000. Consequently, the Company has provided a full allowance for this
advance and no amount of this advance appears on the Company's balance sheet.

"The Boys of Summer" is based on a book by the same name that was written by
famed sportswriter Roger Kahn. The book was published by Harper Collins and is
now in its 42nd printing. Production of the film has not begun and is contingent
upon JMJ negotiating acceptable terms for financing and distribution of the
film. There can be no assurance that the movie will receive adequate funding or
that the Company's loan will be repaid. The Company has fully reserved the loan
in the Company's financial statements. In addition, contracts relating to the
financing and distribution of the film may restrict the Company's right to
market memorabilia based on the film.

S. D. Studios, Inc. In 1997, the Company entered into an Option agreement with
S.D. Studios, Inc. ("SDS"). SDS is a manufacturer, distributor and marketer of
high-end replicas of props and weaponry for motion pictures and television
shows. SDS had obtained a license to manufacture collectibles based on motion
pictures depicting the characters James Bond and Judge Dredd. On January 1,
1998, the Company exercised its Option and acquired a 51% ownership interest in
SDS from existing SDS shareholders, and, in exchange, the Company issued
1,200,000 shares of the Company's Common Stock to SDS and agreed to make its
best efforts to reduce approximately Two Hundred and Fifty Thousand Dollars
($250,000) in debt incurred by SDS (the "Indebtedness"). At the time of the
Separation Agreement (as discussed below), any unpaid balance remaining on the
Indebtedness became the responsibility of SDS. Later in 1998, the Company
acquired an additional 16% ownership interest in SDS in exchange for an
additional 500,000 shares of Common Stock of the Company.

Some time after its acquisition of ownership in SDS, the Company encountered
policy differences with SDS' management and decided that it would shift its
resources towards developing collectibles for a more youthful market. To this
end, the Company entered into a Business Separation Agreement with SDS on April
28, 1999 (the "Separation Agreement"). Except as provided below, SDS will be
solely liable for all debts, obligations, undertakings, liabilities, commitments
or claims of SDS ("Obligations") incurred prior to January 1, 1998 and after
April 28, 1999 pursuant to the Separation Agreement. In turn, the Company will
be solely liable for all obligations incurred between January 1, 1998 and April
28, 1999. Both the Company and SDS agreed to indemnify the other against any
liability or claims arising from their respective obligations. Paul Lipschutz,
the only officer or director of the Company to serve as an officer or director
of SDS, agreed to resign from all positions he held as director, officer or
employee of SDS. The officers and directors of SDS agreed to resign from all
positions they held as director, officer or employee of the Company and tender
to the Company their shares of the Company's Common Stock. This did not include
all shares of the Company issued to all shareholders of SDS. Paul Lipschutz also
agreed to tender to SDS

                                       9

<PAGE>

his equity interest in SDS. Mr. Lipschutz had acquired his interest in SDS by
transfer to him of the shares the Company received in SDS upon exercise of the
Option. Mr. Lipschutz did not give any consideration for the receipt of these
SDS shares. The SDS shares that were ultimately relinquished by Mr. Lipschutz
according to the Separation Agreement included all of the SDS Common Stock that
was originally acquired by the Company pursuant to the Option Agreement.

Pursuant to the Separation Agreement, the Company and SDS have assumed a
prorated amount of the outstanding balance owed by the Company and/or SDS to a
specific list of vendors that performed services relating to products
manufactured by SDS. In addition, SDS has agreed to manufacture forty-five
briefcases relating to the James Bond films, and the Company has agreed to pay
One Hundred Dollars ($100) for each briefcase. The Company retains the right to
sell these briefcases and collect all profits realized on their sale. In
addition, SDS will make a reasonable effort to sell sixty attaches relating to
the James Bond films, and the Company is entitled to receive a royalty payment
of One Hundred Dollars ($100) on the sale of each attached.

Pursuant to the Separation Agreement, the Company is no longer responsible to
reduce the $250,000 in SDS debt which the Company originally agreed to attempt
to reduce. The Company never made any payments with respect to this $250,000.
The Company has made some payments of the prorated amount of the outstanding
balance owed by the Company and/or SDS to the vendors listed in the Separation
Agreement. The majority of these have not been paid, and are included in the
Company's balance sheet at February 29, 2000 and later dates, at accounts
payable.

The Separation Agreement provides that the Company is entitled to receive a five
percent (5%) royalty payment on the first One Hundred Thousand Dollars
($100,000) of sales made by SDS to any member of the client base established
through the Company's efforts. Upon receiving the first royalty payment, the
Company will be entitled to receive a six percent (6%) royalty payment on the
next One Hundred and Fifty Thousand Dollars ($150,000) of future sales and
another five percent (5%) on the next Two Hundred and Fifty Thousand Dollars
($250,000) of future sales, with such entitlement to royalty payments expiring
five years from the date of the Separation Agreement.

(b)(2)   Marketing Strategy:

     The Company creates and markets unique collectible products for the
entertainment and sports markets. The Company is not a manufacturer, but rather
sources its products from a wide range of manufacturing partners throughout the
world. The Company markets its products primarily through various distributors
and independent sales organizations that collectively cover all of North
America. The Company utilizes outside sales representatives to sell to the toy,
gift, electronic, auto, novelty, Halloween costume, food and drug chains and
distributors. The Company also markets "clubs" and other merchandise directly to
consumers online on its own websites. The Company's 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 the Company's products. The
Company also sells products directly to other e-commerce marketing such as
Toysrus.com. As of May 5, 2000, products from the Austin Powers product line
were available in over 4,500 retail locations. In order to maximize the
marketing and sales value from these licenses the Company has hired a seasoned
Director of National Sales. The Director of National Sales has more than twenty
years of extensive experience in mass market merchandising to major retail
chains and will set up distribution to the "Convenience" stores. The Director Of
National Sales will also add more seasoned sale representatives. The Director Of
National Sales is currently introducing a "Time Stock Rotation Program" for the
retail stores. The "Time Stock Rotation Program" is based upon a program named
"Plan -O-Gram" 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. Collectible Concepts Group,
Inc. has 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
program where older items are replaced with higher selling items.

                                       10

<PAGE>

Of these 4,500 retail locations, approximately 2,000 were Claire's Boutiques,
approximately 650 were Spencer Gifts, approximately 75 were Tower Records,
approximately 55 were Electronic Boutiques and approximately 1,400 were
MusicLand. The balance of the retail outlets were independent retailers.

The Company also plans to market its products internationally. The Company's
Terminator, Marvel Universe and Marvel Super Hero Fan Club licenses permit
worldwide distribution of the Company's products. The Company's other licenses
are generally only for U.S. and Canadian distribution. The Company plans to
request an expansion of its current licenses for other products to include
worldwide distribution of its products.

The Company's marketing program is focused on: (1) the creation of unique
collectible products tied to well known licensed properties, (2) the
establishment of the Company as the premier firm in the creation and management
of web-based "Collectors Clubs" and (3) utilization of the Company's reputation
in authenticity of collectibles to establish "the Collectory" as an Internet
clearing house.

The Company plans to expand its product line to include more entertainment-based
collectibles and novelty products. It also plans to develop and market more
sports-related products and intensify its efforts to market its existing sports
collectibles product line. The Company intends to maximize and expand its
business through a variety of marketing efforts, including the development of
its own Internet website, participation in trade shows, and posting of
advertisements on the internet and at point-of-purchase retail displays. The
Company currently operates the following websites: collectbasball.com,
collectmusicart.com, powersclub.com, mini-v.com, x-menclub.com,
marvelfanclub.com and moviefanmall.com. Of course, this marketing strategy will
require increased funding and there is no assurance that the Company will obtain
the necessary funding to effect its marketing plan.

Exclusive Licensing Agent Agreement. In August 1998 the Company entered into an
Exclusive Licensing Agent Agreement with Building Q. At the initiation of this
Agreement, Building Q received 3,000,000 shares of the Company's common stock.
Building Q is entitled to a commission of 2% of all Company sales from licenses
negotiated, acquired or introduced during the term of the Agreement, and is paid
$2,500 per month as a consulting fee. The Agreement runs for terms of one year,
beginning with August 1, 1998, and can be terminated upon at least 60 days
notice prior to the expiration of the current term.

Under the terms of the Agreement, Building Q will not represent any other
company that produces products in the high-end limited edition prop replica
category.

The Company has negotiated several licenses where it has not utilized the
services of Building Q. The Company is not obligated to pay Building Q a
commission on these licenses. The Company does expect that it will continue to
negotiate licenses on its own behalf, without utilizing the services of Building
Q. The licenses negotiated by the Company, without the services of Building Q,
generally are not as significant as the licenses negotiated, acquired or
introduced by or through Building Q.

Required Financial Resources. In addition to posing substantial risks, the
Company's business plan requires substantial amounts of capital to begin, and
later to continue to expand, the Company's operations. The Company's plan of
operations is to make strategic acquisitions of vendors and companies that will
enhance the Company's operations. Of course, the actual amounts may be higher or
lower. Regardless, these figures do not include the development costs associated
with the Company's products. The Company's plan of operations likely will
require infusions of capital, as the Company will not likely have sufficient
assets to accomplish these acquisitions on its own. This likely will require
additional sales of the Company's securities, either in the form of common stock
or debt.

The Company does not believe it can define the cash needs to expand the
Company's business. The Company is investigating several potential acquisitions
and routinely examines license opportunities. There likely is significant
variation in the range of dollars needed if any of these potential business
arrangements to come to fruition. In general, the fixed cost of a license, or
minimum royalty, can range from $10,000 to

                                       11

<PAGE>

$50,000, plus royalties earned over the minimum, and would normally cover a two
or three year period. While the Company has experienced generally decreasing
pre-production costs associated with its products, the actual costs will vary
depending upon the nature and type of the product to be developed and the
expected revenue stream to the licensor. The Company's pre-production costs
include prototype and sample package and display artwork and models, all of
which may go through several iterations as both the Company and the licensor
review the samples. Pre-production costs also include tooling, once prototypes
are approved. The tooling costs are capitalized and the other pre-production
costs are expensed. The total of these pre-production costs has ranged from
$5,000 to $100,000.

As of February 28, 2001, the Company had accounts payable and accrued expenses
of approximately $2,090,000 and over $986,000 in loans coming due within the
next 12 months. The Company does not currently have sufficient financial
resources to meet these obligations and will depend on new outside financing to
satisfy its pending obligations. The Company also lacks 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. The Company has secured accounts receivable
and purchase order financing. However, there can be no assurance that the
Company will obtain additional adequate outside financing to purchase inventory,
meet its current obligations or continue to expand its operations. The Company
would not be able to continue at its current staffing and expense levels for
more than thirty (30) days without additional cash from cash sales or the
collection of accounts receivable.

Further, the Company's 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 the Company may obtain will prove
profitable.

(b)(3) Status of Publicly Announced New Products:

The Company's current planned new product lines, Baseball Hall of Fame
Permagraphs, Marvel Universe, FarScape, Planet Of The Apes, Three Stooges,
Spiderman The Movie, and Lord Of The Rings. The Company received $400,000 of
purchase orders for scrolls for the aforementioned products through September
15, 2001. Substantially all of these orders were received after February 28,
2001. None or these orders have been shipped as September 15, 2001

(b)(4) Competition:

The Company believes that direct competition for obtaining licenses in its
primary business line, reproductions and collectibles based on movie props, is
not a factor. Generally, the Company believes it will receive licenses in most
of the cases where it seeks them. However, most of these licenses will be
non-exclusive. The Company is not aware of any exclusive relationships between
retailers and collectible product distributors, and therefore, the Company 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,
the Company does 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, the Company has not experienced direct
competition in the form of other companies licensing and producing the same
collectibles. The Company experiences its most significant competition in
obtaining shelf space in retail outlets for its products. For example, a large
toy company might offer products on a movie for which the Company is selling
prop replicas. Even though the large toy company's product is not the same as
the Company's product, a retail outlet may decide that it only wants to allocate
a certain amount of space to products based on that movie, and may be more
likely to give the shelf space to the large toy company that is its regular
supplier.

There are numerous outlets and venues for baseball collectors to obtain the
baseball memorabilia and collectibles offered by the Company. However, the
Company believes that some of its baseball products are unique and that the
collectbaseball.com website will provide a unique venue for sale of these
products. The Company's unique product includes the Permagraph(TM), described
above under "The Company's Business -

                                       12

<PAGE>

Collectbaseball.com Website." The Company is unaware of any other product on the
market similar to the permagraph. In addition, the Company is unaware of any
other company marketing Yankee Stadium lithographs or Yankee Stadium or Ebbets
Fields plaques with portions of bricks or segments of benches from the stadiums
attached.

(b)(5) Raw Materials:

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

(b)(6) Customers:

In the fiscal year 2001, 18.1 percent or the Company's sales were to Coss Toys
International, 12.2 percent of the Company's sales were to Twentieth Century Fox
and 10.3percent of the Company's sales were to Diamond Comics. The sales to
these customers were for sales of the X-Men product.

In the fiscal year 2000, 27.3 percent of the Company's sales were to Spencer
Gifts, 7.6 percent of the Company's sales were to New Line Cinema (representing
sales of Austin Powers merchandise that the Company sold to New Line for New
Line to use for promotional purposes) and 5.6 percent of sales were to Tower
Records stores.

(b)(7) Patents, Trademarks, Licenses, etc.: The Company has several key licenses
on which the continued success of its 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.

(b)(8) Governmental Approvals: The Company's operations are not dependent on any
specific government approvals.

(b)(9) Governmental Regulations: The Company's operations are not significantly
impacted on any specific government regulations.

(b)(10) Research and Development: The Company has no significant research and
development activities.

(b)(11) Environmental Laws: The Company's operations are not significantly
affected by environmental regulations.

(b)(12) Employees: As of February 28, 2000, the Company had eleven full-time
employees, one part-time employees and three independent consultants. The
Company has not had any material employee relations problems or disputes.

Item 2.  Description of Property.

Nature and Extent of Issuer's Facilities:

The Company's executive and principal administrative offices are located at 1600
Lower State Road, Doylestown, Pennsylvania 18901, where the Company currently

                                       13

<PAGE>

occupies 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. The Company believes that this facility is sufficient for its current
and planned operations in the near future. The Company stores some inventory at
this location; other inventory is held in outside storage facilities as well as
by the manufacturers pending delivery to customers.

Item 3. Legal Proceedings.

Other than as stated below, the issuer is not a party to any material pending
legal proceedings at this time.

In July/August 2000, the Company's subsidiary, Team Sports Specialties, Inc.,
acquired the assets of Rooter Rattle, Ltd. In connection with this acquisition,
and as a result of failure by the Company to meet certain conditions regarding
its stock price, Rooter Rattle has now made claims against the Company in an
amount equal to $545,000. No litigation has been begun as yet. The Company
believes that the ultimate legal and financial liability of the Company with
respect to the above matter cannot be estimated at this time.

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

Not applicable.

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

Purchases of securities during the fourth quarter that were not registered under
the Securities Act included the following:

<TABLE>
<CAPTION>
         Purchaser                  Shares of Common Stock       Price Paid     Date Issued
<S>                                 <C>                         <C>            <C>
Ankathreen Raley & Barbara Nash             35,000               $       700    12/6/00
John D Marks                             1,600,000                    14,200    12/19/00
Ira L Fox and Kate Fox                   1,000,000                    10,000    2/2/01
</TABLE>

No underwriting discounts or commissions were paid on these shares. The issuer
relied on the exemption found in Section 4(2) of the Securities Act of 1933 for
placement of these shares. No general solicitation was made in this connection.,
and the shares were privately placed to individuals.

Item 6. Management's Discussion and Analysis

               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS


General
-------

            The Company earns revenues from distributing high-end and novelty
products related to both the entertainment and sports industries. These products
are sold through retailers, distributors, department stores, the Internet and
catalogs.

       During the year ended February 28, 2001, the Company in an effort to
expand its revenue base, and become a broad based sports and entertainment
products company, entered into several additional license agreements. A
licensing agreement was signed with IMS Properties and Titan Motorcycle Company
of America for the manufacture, sale and distribution of a limited edition
replica of the Indy 500 Titan Motorcycle. The Company also signed a licensing
agreement with Chicken Soup for the Soul Enterprises, Inc. for the manufacture,
sale and distribution of more than two-dozen collectibles to be sold in
bookstores and other retail chains. The collectibles will include penholders,
nightlights and sports-related items such as tennis rackets covers, all carrying
an inspirational phrase from a Chicken Soup book. Additionally, the Company
signed a licensing agreement with Stan Lee Media, Inc. to develop collectibles
based on Stan Lee's signature style and global lifestyle brand, as well as his
latest project, the 7th Portal- a team of 21st Century Super Heroes and Super
Villains. The collectibles will include sculptures, lithographs, pins, bookends,
desk sets and fountain pens based on the image of Stan Lee, the image of "Evil
Stan" - the alter ego of Stan Lee and the 7th Portal. The license agreement also
includes rights to develop merchandise in connection with a theatrical release
of a "7th Portal" feature film during the term of the agreement which expires
May 1, 2003. The Company signed an agreement with master artists Boris Vallejo
and Julie Bell to extend their fine art mastery into the Company's product line.
Their work has graced movie posters, novel covers and calendars. The first
products of the series will be collectible wall scrolls featuring digitally
mastered images derived from hand painted fantasy art from the "Master Touch"
collection of Boris and Julie. The company also signed a licensing agreement
with Marvel Enterprises, Inc. to create a variety of merchandise based on well
known characters within the Marvel Universe, including Spider-Man, Captain
America, Wolverine, Dr. Doom, Daredevil and Magneto. The licensed articles will
initially include character replicas and wall scrolls. The Company plans to
release a line of desktop sculptures such as Helmets, Masks and Weapon Replicas
featuring these Marvel super heroes and villains. The Company is awaiting
approval of

                                       14

<PAGE>

prototypes from Marvel and does not have a definite time when these products
would be available for distribution. The Company also signed a licensing
agreement to distribute the "Tattle Tail", which is a stylized cloth lanyard
that serves as a holder for remote controls. Initially, the Tattle Tails (TM)
marketed by the Company will contain licensed team logos including Major and
Minor League Baseball, the American and East Coast Hockey Leagues, Arena
Football, select universities and the National Professional Soccer League. A
full-page advertisement for these products appeared in the 2001 edition of Media
File and Media File on-line, the advertising specialty industry bible, published
by the Advertising Specialty Institute ("ASI"). The Company also signed a
license with The Jim Henson Company for products related to the hit sci-fi
series Farscape. The Company will be producing resin sculptures, spaceships,
transport vehicles, jewelry replicas, weapons replicas in two scales and other
key icons for use as Desk Top Collectibles. The signing of this agreement was
part of the Company's ongoing plan to become a broad based sports and
entertainment products company.

Also, completed during year ended February 28, 2001 was a website devoted to the
"Golden Age of Baseball" (www.collectbaseball.com) with Bill Gilbert, a
                          -----------------------
nationally known writer ("The Duke of Flatbush"), hosting a weekly column.

Subsequent to February 28, 2001, the Company signed a license agreement with C3
Entertainment to make, market and produce scrolls, pins and desktop collectibles
for The Three Stooges(R). The company signed a license with Spider Man
Merchandising LP to market and produce products for the 2002 theatrical release
of "Spiderman the movie". The agreement with Spider Man Merchandising ties
together approvals by Columbia Pictures Industries, Inc., Sony Pictures Consumer
Products Inc. and Marvel Characters. The Company will produce scrolls, mouse
pads, wrist rests, paperweights, letter openers, pencil holders, movie prop
replicas, small holiday ornaments and a press pass replica. The Company also
signed a license with Marvel Entertainment to be the official website for
Marvel's super heroes fan club. The Company will market the club via Marvel's
comic books, other magazines, television and other online services. The Company
anticipates the club opening by the middle of September 2001. As of the end of
August 2001 the Company has already received approximately eight thousand
inquiries to join the club with an anticipated membership fee of approximately
twenty dollars per member. In order to maximize the marketing and sales value
from these licenses the Company has hired a seasoned Director of National Sales.
The Director of National Sales has more than twenty years of extensive
experience in mass market merchandising to major retail chains and will set up
distribution to the "Convenience" stores. The Director of National Sales will
also add more seasoned sale representatives. The Director Of National Sales is
currently introducing a "Time Stock Rotation Program" for the retail stores. The
"Time Stock Rotation Program" is based upon a program named "Plan -O-Gram"
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 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. Collectible Concepts Group, Inc. has taken this
concept and made it accessible to smaller chains and independent retailers. The
"Time Stock Rotation Program" monitors the inventory of these retail chains and
makes new products available to them through a rotation program where older
items are replaced with higher selling items.

                                       15

<PAGE>

The Company's fiscal year ends February 28 (or 29). References to fiscal years
mean fiscal years ending on February 28 (or 29) of that year. For example,
fiscal year 2001 is the twelve-month period ended February 28, 2001.

In its continual search to find ways to even out the fluctuation in the
Company's revenue cycle, the Company made two acquisitions during the year ended
February 28, 2001. On June 5, 2000, the Company acquired 100% of the outstanding
common shares of Music Art Corporation ("Music Art") for 1,045,000 shares of
Company common stock. The 1,045,000 shares of common stock issued to acquire
Music Art was valued at approximately $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 excess of acquisition cost over the fair value of net
assets acquired was approximately $377,000, which is being amortized over seven
years beginning in June 2000. 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. Music Art also has a
license with Phil Ceccola, a photographer of many rock bands, to distribute
signed photographs of Bruce Springsteen. The Company also plans to market Music
Art products to retailers on its recently launched website,
www.collectmusicart.com. 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, the Company decided to write down the goodwill associated with the
purchase of Music Art. The write down of goodwill associated with this
transaction during year ended February 28, 2001 was approximately $300,000 and
is reflected in the "Statement of Operations". The Company anticipates obtaining
other licenses for Music Art during fiscal 2002.

The second of these acquisitions occurred on August 2, 2000, when the Company
acquired Rooter Rattle, L.P. in consideration of $965,000, payable as $390,000
in cash, a $30,000 note payable and 3,633,334 Shares of Common Stock issued at a
value of $545,000 based upon the trading price of the Company's common stock on
the acquisition date, which was $.15 per share. The acquisition was accounted
for as a purchase. The excess of acquisition costs over the fair value of net
assets acquired was approximately $1,050,000 which will be amortized over seven
(7) years beginning August 2000. Rooter Rattle, L.P. markets novelties bearing
the Logos of professional and amateur sports teams under licenses from the
teams. The Company also entered into an Employment Agreement with a former
officer of Rooter Rattle, L.P. as part of the transaction. As part of the
purchase agreement the company granted the sellers the option to acquire more
stock of the Company if after one year from the acquisition the price of the
Company's stock was not a least $0 .15 a share. The Company also had the right
to pay to the sellers the difference in cash between the market price of the
stock and the original issue price of the stock. After evaluating the strategic
alliance of this acquisition with the Company's current marketing goals the
management of the Company concluded that it would be in the best interest of the
shareholders of Collectible Concepts Group, Inc. to enter into discussions with
the prior owners of Rooter Rattle, L.P. for them to reacquire Rooter Rattle,
L.P. and for Collectible Concepts to become a distributor of Rooter Rattle,
L.P.'s products. In anticipation of these discussions with the prior management
of Rooter Rattle, L.P. the Company decided to write off a portion of the
original goodwill. The Company wrote off approximately $500,000 of goodwill
during year ended February 28, 2001. The write down of goodwill associated with
this transaction during the year ended February 28, 2001 is reflected in the
"Statement of Operations".

                                       16

<PAGE>

The Company, during year ended February 28, 2001, continued to invest in its
infrastructure by hiring experienced professionals for two newly created
positions: National Sales Manager, Director of Purchasing and other staff as
needed to support the acquisitions and expanding websites.

     Cost of sales for year ended February 28, 2001 were comprised of costs
associated with the sale of the products related to the Austin Powers and X-Men
movies, Team Sports Products as well as sales from sports memorabilia. Costs
also include the cost of the products and related freight and handling charges.
These products are contract manufactured for the Company by both domestic and
foreign companies to specifications developed by the Company and approved by the
various licensors. Even though the Company does not feel this places it at risk
for filling future orders on a timely basis, it has developed relationships with
alternate suppliers for most of its products. Several of its manufacturers will
also store and ship product directly to a customer, thereby reducing shipping
time and eliminating the costs the Company would incur if the product was first
shipped to its location. The Company also feels it is not at risk for any
currency fluctuations in its dealing with its foreign manufacturers since all
orders are based on U.S. dollars and the Company does not have any long term
purchase commitments.

                                       17

<PAGE>

     Selling, general and administrative expense consists of payroll and related
fringe benefits, royalties; commissions paid to manufacturers sales
representatives, and 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 Company stock. The services provided were in direct support of
the operations of the Company. As the Company grows, through acquisitions and
the sales of current product, it anticipates it will have to rely less on the
issuance of stock for services due to increased cash flow as well as its access
to capital increases. The benefits to the Company from these stock transactions
are to reduce the use of cash, which allowed the Company to devote the maximum
resources to expanding the business. For accounting purposes, the Company 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. The Company capitalizes 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. The Company capitalized $13,779 in
tooling costs during the year 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. Costs of manufacturing products for sale are
included within costs of sales.

   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, the Company's revenues and net income may fluctuate significantly
between comparable periods. Additionally, since the Company's inception,

                                       18

<PAGE>

it has experienced significant operating and net losses that it has been able to
fund by obtaining private capital. The Company, therefore, cannot predict if and
when it will generate income from operations and if it will be able to raise
sufficient capital necessary to fund future operations.

   As of the year ended February 28, 2001, the Company had an accumulated
deficit of $13,315,892. This deficit arose from operating losses and not any
particular transaction or transactions. The Company has not generated sufficient
revenues to meet its operating expenses. As a result, there is substantial doubt
about the Company's ability to continue as a going concern. The added revenue
generated by the acquisitions of Music Art, along with the revenue generated
from its new licenses, is expected to improve this situation.

     The Company has taken significant steps to ensure its fiscal viability in
the future and continues to pursue additional licenses to even out any
fluctuations in the revenue stream. It is also looking to acquire companies that
have licenses not only related to movies and entertainment industry but in the
sports area also.

     The Company shipped X-Men products with sales in excess of $515,000 for
year ended February 28, 2001. The royalties payable on these sales are in excess
of the minimum required royalty for X-Men products. The Company has not yet had
any sales of Terminator products, and does not anticipate beginning selling
Terminator products unless a new Terminator movie is released. The Company
anticipates that another Terminator movie may be released in 2002. If a new
movie is released, the Company will be prepared with product and believes it
will able to sell enough products to justify its minimum royalty. The Company
also has not had sales of Austin Power products sufficient to pay the minimum
royalty at the contractual royalty rates. The Company believes that there will
be another Austin Powers movie released in 2002, and the Company will be
prepared with product upon that release and will generate significant sales of
Austin Power products. The Company's license for Austin Powers's products
expires in 2001. However, the Company believes that both the term of the license
and the period in which it has to meet the minimum royalty will be extended
through 2002. If new movies are not released, or if the Company does not realize
significant sales if new movies are released, the Company might be required to
use other sources of cash flow to pay the remaining $15,000 in minimum royalties
on Terminator products and the remaining $70,000 of minimum royalties on the
Austin Powers products. The Company

                                       19

<PAGE>

also signed a license with Marvel Enterprises. Currently the Company is just in
the beginning phases of obtaining product approval from Marvel Enterprises. The
royalty rate for this license is 12% of sales with a minimum royalty of $75,000
of which $40,000 has been paid as of February 28, 2001; the balance of the
minimum royalty payment has to be made by the December 31, 2003 expiration date
of the license. Based upon the Company's current distribution channels as well
as the Company's previous success with Marvel products, the Company believes
that it will generate sufficient revenue during the life of the license to meet
it's minimum royalty commitment. The Company also signed a licensing agreement
to distribute, "Tattle Tail". The royalty rate for this license is 7% of sales.
A minimum royalty amount of $84,000 is payable by November 30, 2003 the
expiration date of the license. Based upon the Company's current channels of
distribution within the Team Sports Division, the Company believes that it will
generate sufficient revenue to meet its minimum royalty commitment. On May 1,
2000 the Company entered into a licensing agreement with Chicken Soup for the
Soul Enterprises ("CSSE"), with a term ending on December 31, 2002. The Company
will 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. The Company is
required to pay a royalty of ten percent (10%) on sales of the products
licensed from CSSE, with a minimum royalty of $50,000. The Company paid $15,000
at the time of signing the license with $10,000 due upon the first shipment of
product. No product under this license has yet been shipped. One half of the
remaining minimum royalty ($12,500) is due on May 1, 2001 and the other half is
due on May 1, 2002. The May 1, 2001 payment has been postponed until the Company
starts shipping product. The Company anticipates shipping product towards the
end of 2001. Based upon the Company's current distribution channels as well as
the Company's previous success with similar products, the Company believes that
it will generate sufficient revenue during the life of the license to meet it's
minimum royalty commitment. On July 17, 2000 the Company entered into a
licensing agreement with Stan Lee Media, Inc. ("Stan Lee"), with a term ending
on May 1, 2003. The Company will offer and sell Stan Lee products including Stan
Lee wall scrolls, pens and rings, lithographs, official Cross-like fountain
pens, book-ends, and desk accessories, along with other items under the terms of
the agreement. The Company is required to pay a royalty of ten percent (10 %) on
sales of the licensed products, with a minimum royalty of $40,000. The Company
was required to pay $20,000 at the time of signing the license with $20,000
payable no later than November 1, 2001. The Company has made these payments.
Based upon the Company's current distribution channels as well as the Company's
previous success with similar products, the Company believes that it will
generate sufficient revenue during the life of the license to meet it's minimum
royalty commitment. The Company also signed a licensing agreement with The Jim
Henson Company to sell Farscape products range which from collectors pins and
wall scrolls to replicas of featured spacecraft and other items used on the
show. The Company has paid The Jim Henson Company $10,000 against the guaranteed
minimum royalty payment of $25,000. The royalty rate for these products is 10%.
The license expires December 31, 2003. The Company plans to introduce these
products by the end of 2001. Based upon the Company's current distribution
channels as well as the Company's previous success with similar products, the
Company believes that it will generate sufficient revenue during the life of the
license

                                       20

<PAGE>

to meet it's minimum royalty commitment. The Company also signed a licensing
agreement with Twentieth Century Fox to produce a wide variety of collectibles
for its feature film Planet Of The Apes that was released in July 2001. Licensed
items include, desktop collectibles, decorative pins and wall scrolls. The
Company has paid Twentieth Century Fox $15,000 against the guaranteed minimum
royalty payment of $30,000. The other minimum royalty payments are $5,000 due
June 30, 2002 and $10,000 due July 1, 2002. The royalty rate for these products
is 10%. The license expires June 30, 2003. The Company plans to introduce these
products by the end of 2001. Based upon the Company's current distribution
channels as well as the Company's previous success with similar products, the
Company believes that it will generate sufficient revenue during the life of the
license to meet its minimum royalty commitment.

     Subsequent to the year ended February 28, 2001 the Company also signed a
licensing agreement with Marvel enterprises to administer the official Marvel
Universe Fan Club. The Fan Club is marketed in Marvel comic books, over the
internet and other mediums. The Company anticipates opening the club for members
by the end of September 2001. Currently the Company has received approximately
eight thousand inquiries regarding membership with an anticipated membership fee
of approximately twenty dollars per member. The Company has paid $63,500 towards
the minimum guaranteed royalty payment of $1,500,000. The balance of the royalty
payments are due as follows: $86,500 is due immediately, $150,000 is due
December 31, 2001, $200,000 is due March 31, 2002, June 30, 2002, December 31,
2002, March 31, 2003, June 30, 2003 and December 31, 2003. The license expires
December 31, 2003. The royalty rate for this license is 15%.

     Subsequent to February 28, 2001 the Company signed a licensing agreement
with Global Icons who represents the Three Stooges. The Company will be
producing scrolls and desktop collectibles. The Company believes The Stooges
have a universal appeal.This license isn't based on a movie coming out, even
though Global Icons is talking about one for the near future. The Company has
paid Global Icons $5,000 against the guaranteed minimum royalty payment of
$10,000. The royalty rate for these products is 10%. The license expires
December 31, 2003. The Company plans to introduce these products by the end of
2001. Based upon the Company's current distribution channels as well as the
Company's previous success with similar products, the Company believes that it
will generate sufficient revenue during the life of the license to meet it's
minimum royalty commitment.

                                       21

<PAGE>

     Subsequent to February 28, 2001 the Company signed a licensing agreement
with Spider-Man Merchandising L.P. The movie Spider-Man will be released in May
of 2002. Spider-Man was first introduced to the world, by Marvel, 38 years ago.
The Company will be creating desktop collectibles, pins and scrolls. The Company
has paid Spider-Man Merchandising L.P. $40,000 against the guaranteed minimum
royalty payment of $80,000. The other minimum royalty payments are $20,000 due
June 30, 2002 and $20,000 due December 31, 2002. The royalty rate for these
products is 14%. The license expires March 31, 2003. The Company plans to
introduce these products in early 2002 prior to the release of the movie. Based
upon the Company's current distribution channels as well as the Company's
previous success with similar products, the Company believes that it will
generate sufficient revenue during the life of the license to meet its minimum
royalty commitment.

     Subsequent to February 28, 2001 the Company signed a licensing agreement
with New Line Cinema to produce collectibles related to the movie Lord Of The
Rings. One of the "most read" series of books is now a trilogy of motion
pictures from New Line Cinema to be released starting in December of 2001, with
additional releases scheduled in December of 2002 & 2003. The Company's products
will include wall scrolls depicting maps and family trees, movie scenes and
characters, and desktop collectibles, including "the ring". The Company will pay
New Line Cinema a guaranteed minimum royalty payment of $190,000. The minimum
royalty payments are $40,000 due upon signing of contract, $35,000 due December
31, 2001, $32,500 due by June 30, 2002, $32,500 due by December 31, 2002,
$25,000 due by June 30, 2003 and $25,000 due by December 31, 2003. The royalty
rate for these products is 14%. The license expires December 31, 2004. The
Company plans to introduce these products prior to the release of the movies.
Based upon the Company's current distribution channels as well as the Company's
previous success with similar products, the Company believes that it will
generate sufficient revenue during the life of the license to meet it's minimum
royalty commitment.

                                       22

<PAGE>

Results of Operations
---------------------

Year Ended February 28, 2001 compared to Year ended February 29, 2000.
----------------------------------------------------------------------

Net revenue for the year ended February 28, 2001 was $804,983 and primarily
consisted of sales of X-Men products of approximately $515,000, sales of
plate-signed lithographs from Rolling Stones album covers and tour art of
approximately $24,694 and sales from the Team Sports product lines of
approximately $256,076. Revenue for the year ended February 29, 2000 was
$296,261, and was predominantly comprised of sales of Austin Powers's products.

     Cost of sales for year ended February 28, 2001 increased by $421,587 from
the year ended February 29, 2000. This increase was mainly attributable to the
increased volume of sales of the products related to the X-Men movies and the
two acquisitions made during the year. Cost of sales as a percentage of revenues
increased to 77.1% for the year ended February 28, 2001 as compared to 67.2% for
the same period last year. The increase in cost of sales as a percent of
revenues for the year ended February 28, 2001 over the same period the previous
year is primarily due to a charge to cost of sales for slow moving inventory of
$120,000 as it related to Austin Powers inventory, X-Men inventory and inventory
related to the Rolling Stones products sold through the Music Art subsidiary. As
previously mentioned the Company has started to employ its "Time Stock Rotation
Program" which will greatly enhance the Company's ability to control its
inventory. The Company's will be able to match more closely the inventory stock
levels to the customers' orders thereby reducing the chances for obsolete
inventory.

     Selling, general and administrative expenses for the year ended February
28, 2001 increased to $4,807,790 from $3,064,285 for the same period the
previous year. For the years ended February 28, 2001 and February 29, 2000 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 of approximately
$1,218,000 and $2,070,000 respectively. Staffing increased to eleven full time
employees and one-part time consultants for marketing and licensing for the year
ended February 28, 2001 as compared to three full-time and two part time
employees for the same period the previous year. As previously mentioned, the
Company incurs 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 year ended February 28, 2001, the Company incurred charges relating to
the costs of producing the samples as well as the related package design of
approximately $31,400 versus charges of approximately $72,000 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. The Music Art and Team Sport acquisitions contributed approximately
$111,458 and $248,706 respectively of the selling, general and administrative
expenses during the year ended February 28, 2001. Due to the acquisitions, the
Company incurred charges related to the amortization of goodwill during the year
ended

                                       23

<PAGE>

February 28, 2001 of approximately $127,900 as compared to $0 for the same
period last year. As previously mentioned, the Company incurred a charge of
approximately $802,000 for impairment of long-lived asset related to the write
down of goodwill for two acquisitions completed during year ended February 28,
2001.

The Company incurred interest expense of approximately $499,000 for the year
ended February 28, 2001 as compared to approximately $244,300 for the same
period the previous year due to increased borrowings and the beneficial
conversion calculation related to the application of the EITF ("Emerging Issues
Task Force") Bulletin for accounting of convertible securities and notes and
loans payable with beneficial conversion features. The beneficial conversion
calculation added approximately $179,033 and $184,202 of interest expense
respectively for the years ended February 28, 2001 and February 29, 2000.

     As a result of the above, the Company had a net loss of $5,122,606 for the
year ended February 28, 2001 as compared to a net loss of $3,215,514 for the
same period last year.


Liquidity and Capital Resources
-------------------------------


As of February 28, 2001, the Company had a working capital deficiency of
approximately $2,539,000. The deficit working capital as of February 28, 2001 is
a direct result of the unprofitable operations for the year ended February 28,
2001 that resulted in a cash used in operating activities of approximately
$1,641,000. The Company had an ending cash balance of $222 at February 28, 2001.

     During the year ended February 28, 2001, the Company purchased computer
equipment and a delivery van, and incurred tooling costs of approximately
$76,000. The delivery van was financed through the credit company associated
with the manufacturer of the vehicle. This note payable is approximately
$26,600. The Company does not foresee any significant capital expenditures
needed in the next twelve months.

The Company has financed its losses through private sales of equity and debt
securities and the issuance of stock for services. During the year ended
February 28, 2001, the Company received the following capital infusions:
approximately $1,275,000 (net of fees) from issuance of common stock and
exercise of stock options and approximately $660,000 (net of fees) in
convertible debentures and other borrowings. Additionally, during this period
the Company received notices requesting conversion from the holders of
convertible debentures and demand notes of approximately $109,000. These
instruments were convertible into 5,489,000 shares of common stock.

During the year ended February 28, 2001, the Company started making payments on
approximately

                                       24

<PAGE>

$54,000 of demand notes. These notes were originally scheduled to be paid by
December 31, 2000. During the latter half of the year ending February 28, 2001,
the Company ceased making payments on certain demand notes. In the past, the
Company has been successful in renegotiating terms on its debt. The Company is
confident that it will be successful in renegotiating payment terms on these
demand notes.

   An event of default has occurred regarding the $400,000 convertible debenture
in that the Company did not have an effective registration statement within 150
days of the debenture sale. As a result of this default, the Company is
obligated to pay the debenture holders the principal amount of the debentures
together with interest and certain other amounts. The Company does not have the
capital resources to pay the amounts required under this agreement. The secured
convertible debenture holders have informed the Company that they do not intend
to take any action at this time due to the default. The Company does not,
however, have any legally binding commitment from the debenture holders to waive
the default provision of the debenture.

     Subsequent to February 28, 2001, the Company has received approximately
$519,000 of cash financing through the issuance of debt and stock and the
Company has converted approximately $63,000 of debt into approximately 5,317,000
shares of common stock of the Company.

     As of February 28, 2001, the Company had $497,183 in outstanding notes and
loans payable, $136,266 in convertible subordinated debentures and $353,333 in
outstanding convertible secured debentures net of contra discount of
approximately $46,667 related to the 4,000,000 warrants issued with the
convertible debenture of $400,000 as mentioned in a preceding paragraph. The
Company also made approximately $103,000 of scheduled payments against the
remaining debt that matures at varying dates throughout fiscal year ending
February 28, 2001. As of February 28, 2001, the Company had $1,287,665 in
accounts payable and accrued expenses, $530,188 in accrued payroll and related
taxes and $275,772 in accrued interest and royalties expenses. The Company has
been successful at renegotiating the repayment terms on its debt in the past and
feels that it will be able to do so in the future. However there is no guarantee
that it will continue to be successful in renegotiating the payment terms on its
debt and may need outside capital. Furthermore, 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. It is for these reasons that the Company's independent auditors have
issued a going concern opinion with respect to the Company's financial
statements as of February 28, 2001.

Forward Looking Statements
--------------------------

Sections of this Report contain forward looking statements, including without
limitation, statements concerning possible or assumed future results of
operations of the Company preceded by, followed by, or that include the words
"believe," "expects," "anticipate," "estimates," "intends," "plans," or similar
expressions.

Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties, and assumptions. Due to the fact that the Company
faces competition from other licensors for shelf space, the ability of the
Company to obtain additional licenses and the uncertainty of the public's
response to the Company's properties as well as uncertainty as to the Company's
ability to raise sufficient capital to fund losses from operations, actual
results or outcomes may differ materially from any such forward-looking
statements.

                                       25

<PAGE>

Item 7. Financial Statements.


<TABLE>
<CAPTION>

                                                                         PAGE(s)
                                                                         -------
<S>                                                                      <C>
INDEPENDENT AUDITORS' REPORTS                                              26

CONSOLIDATED BALANCE SHEET AT FEBRUARY 28, 2001                          26-27

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
 FEBRUARY 28, 2001, AND FEBRUARY 29, 2000                                  28

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIENCY FOR
 THE YEARS ENDED FEBRUARY 28, 2001, AND FEBRUARY 29, 2000                  29

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
 FEBRUARY 28, 2001, AND FEBRUARY 29, 2000                                  30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                               31-45

</TABLE>


INDEPENDENT AUDITORS' REPORT


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


We have audited the accompanying consolidated balance sheet of Collectible
Concepts Group, Inc. and Subsidiaries as of February 28, 2001, and the related
consolidated statements of operations, shareholders' deficiency and cash flows
for the year then ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Collectible
Concepts Group, Inc. and Subsidiaries as of February 28, 2001, and the
consolidated results of its operations and its cash flows for the year then
ended 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 financial statements, the Company, as of February 28, 2001, had a
shareholders' deficit 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. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



WithumSmith+Brown
Newtown, Pennsylvania
September 12, 2001



Board of Directors and Shareholders
Collectible Concepts Group, Inc.
Doylestown, Pennsylvania

     We have audited the accompanying statements of operations and shareholders'
deficiency and cash flows of Collectible Concepts Group, Inc. for the year ended
February 29, 2000. 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 auditing standards generally
accepted in the United States of America. 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 financial statements present fairly, in all material
respects, the results of operations and cash flows of Collectible Concepts
Group, Inc. for the year ended February 29, 2000, in conformity with accounting
principles generally accepted in the United States of America.

     The February 29, 2000, financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 2 to the February
29, 2000 financial statements, the Company has suffered recurring losses from
operations and at February 29, 2000 has negative working capital and a
shareholders' deficiency. These conditions raise substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 2 to the February 29, 2000 financial
statements. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Blue Bell, Pennsylvania

May 8, 2000, except as to Note 12 to the February 29, 2000 financial statements,
  which is as of June 5, 2000 and August 2, 2000

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                FEBRUARY 28, 2001

                                                             2001
                                                             ----

                                     ASSETS

CURRENT ASSETS
     Cash                                               $      222
     Accounts receivable, net                               41,595
     Inventories                                           374,799
     Prepaid royalties                                      98,051
     Prepaid expenses and other                              8,970
                                                        ----------

            Total current assets                           523,637
                                                        ----------

PROPERTY AND EQUIPMENT, NET                                 73,723
                                                        ----------

OTHER ASSETS

     Goodwill, net                                         497,702
                                                        ----------

                Total assets                            $1,095,062
                                                        ==========




                 See notes to consolidated financial statements.

                                       26

<PAGE>


                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEET (CONTINUED)
                                FEBRUARY 28, 2001



<TABLE>
<CAPTION>

                   LIABILITIES AND SHAREHOLDERS' DEFICIENCY
<S>                                                             <C>
Current Liabilities

 Convertible secured debentures, net                            $    353,333
 Notes and loans payable, current portion                            479,470
 Convertible subordinated debentures                                 136,266
 Accounts payable and accrued expenses                             1,287,665
 Accrued payroll                                                     365,957
 Payroll taxes payable                                               164,231
 Accrued interest                                                    137,978
 Accrued royalties                                                   137,794
                                                                ------------

  Total current liabilities                                        3,062,694
                                                                ------------

Notes Payable, Net of Current Portion                                 17,713
                                                                ------------

Commitments and Contingencies

Shareholders' Deficiency
 Capital stock, $.001 par value,
  350,000,000 shares authorized;
  259,935,503 shares issued and
    outstanding                                                      259,936
 Additional paid-in-capital                                       11,084,611
 Accumulated deficit                                             (13,315,892)
 Deferred compensation/services                                      (14,000)
                                                                ------------

  Total Shareholders' Deficiency                                  (1,985,345)
                                                                ------------

    Total Liabilities and Shareholders' Deficiency              $  1,095,062
                                                                ============

</TABLE>



                 See notes to consolidated financial statements.

                                       27

<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000

<TABLE>
<CAPTION>
                                                     2001             2000
                                                     ----             ----
<S>                                            <C>              <C>
Sales                                          $     804,983    $     296,261

Cost of Sales                                        620,811          199,224
                                               -------------    -------------

          Gross Profit                               184,172           97,037

Selling, General and Administration Expenses       4,807,790        3,064,285
                                               -------------    -------------

Loss from Operations                              (4,623,618)      (2,967,248)

Other Expense, Principally Interest Expense         (498,988)        (248,266)
                                               -------------    -------------

Net Loss                                       $  (5,122,606)   $  (3,215,514)
                                               =============    =============


Net Loss Per Share:
          Basic and Diluted                    $       (0.02)   $       (0.03)
                                               =============    =============


Weighted Average Shares Used In Net
          Loss Per Share Calculations:
          Basic and Diluted                      223,157,835      116,713,182
                                               =============    =============
</TABLE>


                 See notes to consolidated financial statements.

                                       28


<PAGE>

                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIENCY
               YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


<TABLE>
<CAPTION>
                                              Common Stock          Additional                      Deferred
                                     --------------------------      Paid-in      Accumulated     Compensation/
                                         Shares       Amount         Capital        Deficit         Services          Total
                                     -----------   ------------   ------------    ------------    -------------   ------------

<S>                                   <C>          <C>            <C>             <C>             <C>             <C>
Balance, February 28, 1999            90,721,289   $     90,722   $  4,156,636    $ (4,977,772)   $       --      $   (730,414)

Common stock issued for
 cash and services rendered           67,452,946         67,453      2,855,685            --           (69,300)      2,853,838

Conversion of convertible
 debentures, notes
 and loans payable to
 common stock                          4,529,183          4,529         51,473            --              --            56,002

Beneficial conversion of debt               --             --          184,202                                         184,202

Net loss                                    --             --             --        (3,215,514)           --        (3,215,514)
                                     -----------   ------------   ------------    ------------    -------------   ------------

Balance, February 29, 2000           162,703,418        162,704      7,247,996      (8,193,286)        (69,300)       (851,886)

Common stock issued for cash          48,393,200         48,393      1,191,962            --              --         1,240,355

Common stock issued for
  services rendered                   34,811,452         34,812      1,183,658            --              --         1,218,470

Common stock issued for
  acquisition of businesses            4,678,334          4,678        845,947            --              --           850,625

Conversion of convertible
  debentures, notes
  and loans payable
  to common stock                      5,849,099          5,849        103,165            --              --           109,014

Exercise of stock
  options for cash                     3,500,000          3,500         31,500            --              --            35,000

Issuance of stock
  options for services                      --             --           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 unearned
  compensation                              --             --             --              --            55,300          55,300

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

Balance, February 28, 2001           259,935,503   $    259,936   $ 11,084,611    $(13,315,892)   $    (14,000)   $ (1,985,345)
                                     ===========   ============   ============    ============    =============   ============

</TABLE>

                 See notes to consolidated financial statements.

                                       29

<PAGE>


                COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000

<TABLE>
<CAPTION>

                                                                           2001          2000
                                                                           ----          ----

<S>                                                                   <C>            <C>
Cash Flow from Operating Activities:
 Net loss                                                             $(5,122,606)   $(3,215,514)
 Adjustments to reconcile net loss to
    net cash used in operating activities:
        Depreciation                                                       22,567          5,885
        Amortization of goodwill                                          127,912           --
        Amortization of debt discount                                     233,333           --
        Amortization of deferred debt expense                              43,330           --
        Amortization of deferred services                                  55,300           --
        Impairment of long lived assets                                   801,645           --
        Provision for doubtful accounts                                    42,135          6,077
        Provision for obsolete inventory                                  122,870           --
        Common stock issued for services rendered                       1,218,470      2,070,520
        Interest expense related to beneficial conversion of debt         179,033        184,202
        Expense related to issuance of options                             61,350           --
        Changes in operating assets and liabilities, net of effects
        from acquired companies:
           Accounts receivable                                             33,413        (13,670)
           Inventories                                                   (265,355)      (140,532)
           Prepaid royalties                                              (59,135)       (28,821)
           Prepaid expenses and other                                        --            2,000
           Accounts payable and accrued expenses                          721,779        189,185
           Accrued payroll                                                (39,751)       201,441
           Payroll taxes payable                                          127,030         10,892
           Accrued interest                                                59,509         28,219
           Accrued royalties                                               (3,493)         5,462
                                                                      -----------    -----------

           Net Cash Used in Operating Activities                       (1,640,664)      (694,654)

Cash Flow from Investing Activities:
 Purchase of property and equipment                                       (49,657)       (22,902)
 Purchases of businesses, net of cash acquired of $1,426                 (388,574)          --
                                                                      -----------    -----------

           Net Cash Used in Investing Activities                         (438,231)       (22,902)

Cash Flow from Financing Activities:
 Borrowings, net of financing fees of $52,000                             660,193        205,161
 Proceeds from issuance of capital stock and exercise of
  stock options, net                                                    1,275,355        783,318
 Repayment of notes and loans payable                                    (103,922)       (27,614)
                                                                      -----------    -----------

          Net Cash Provided by Financing Activities                     1,831,626        960,865
                                                                      -----------    -----------

Net Increase (Decrease) In Cash                                          (247,269)       243,309

Cash, Beginning                                                           247,491          4,182
                                                                      -----------    -----------

Cash, Ending                                                          $       222    $   247,491
                                                                      ===========    ===========

</TABLE>


                 See notes to consolidated financial statements

                                       30

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 1.   Description of Business and Summary of Significant Accounting Policies

          Description of Business

               Collectible Concepts Group, Inc. (the "Company") distributes
          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.

          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.

          Risks, Uncertainties and Management 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.

          Revenue Recognition

               Revenue from the sale of products is recognized at the time of
          delivery. The Company records an allowance for estimated returns, as
          required.

          Cash and Cash Equivalents

               Cash and cash equivalents consist of cash in bank and other
          short-term investments with original maturities of three months or
          less. 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. The Company has no
          cash equivalents at February 28, 2001.

          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 $66,804 at
          February 28, 2001.

                                       31

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 1.   Description of Business and Summary of Significant Accounting Policies
          (Continued)

          Property and Equipment and Depreciation

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

          Inventories

               Merchandise inventories are valued at lower of cost or market on
          the first in, first out (FIFO) method.

          Goodwill

               Goodwill represents the excess of the cost of businesses acquired
          by the Company over the fair value of their net assets (liabilities)
          at the date of acquisition and is being amortized on the straight-line
          method over a seven year term.

          Impairment of Goodwill and Other Long-lived Assets

               The Company reviews long-lived assets, certain identifiable
          intangibles and goodwill related to these assets for impairment in
          accordance with SFAS No. 121, "Accounting for the Impairment of
          Long-lived Assets and for Long-lived Assets to be Disposed Of."

               For assets to be held and used, including acquired intangibles,
          the Company initiates its review whenever events or changes in
          circumstances indicate that the carrying amount of a long-lived asset
          may not be recoverable. Recoverability of an asset is measured by
          comparison of its carrying amount to the future undiscounted cash
          flows that the asset is expected to generate. Any impairment to be
          recognized is measured by the amount by which the carrying amount of
          the asset exceeds its fair market value.

               Assets to be disposed of and for which management has committed
          to a plan to dispose of the assets, whether through sale or
          abandonment, are reported at the lower of carrying amount or fair
          value less cost to sell.

               During the year ended February 28, 2001, goodwill that was
          acquired in the purchases of Music Art Corporation and Rooter Rattle,
          LP was deemed to be impaired. After evaluating the strategic alliance
          between Rooter Rattle, L.P. and the Company, in relationship to the
          Company's marketing goals, the management of the Company concluded
          that the Rooter Rattle, L.P growth would be better served with the
          prior owners. As a result of this decision the Company decided to
          write down the goodwill associated with this acquisition. One of the
          major assets acquired with Music Art acquisition was a license with a
          major rock and roll group who decided not to go on tour.

                                       32

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 1.   Description of Business and Summary of Significant Accounting Policies
          (Continued)

          Impairment of Goodwill and Other Long-lived Assets (Continued)

          Since the majority the of the goodwill associated with the Music Art
          acquisition related to this license the Company concluded that the
          revenue and corresponding cash flow associated with this license would
          be substantially curtailed. As a result, the Company wrote down the
          goodwill associated with this acquisition. The Company recorded a
          write-off to goodwill in the amount of $500,000 related to the
          acquisition of Rooter Rattle, LP and $301,645 related to the
          acquisition of Music Art Corporation. (See Note 3)

          Earnings (Loss) Per Share

               The Company follows Statement of Financial Accounting Standards
          No. 128 ("FAS 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 13,900,000 common
          shares in 2001 and 3,000,000 common shares in 2000 and the exercise of
          outstanding options and warrants to purchase 31,793,000 common shares
          in 2001 and 15,706,000 common shares in 2000 were not included in the
          computation of diluted earnings (loss) per share in both 2001 and 2000
          because the assumed conversion and exercise would be anti-dilutive due
          to net losses incurred in all periods.

          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 $150,386 in 2001 and
          $25,000 in 2000.

          Fair Value of Financial Instruments

               Carrying amounts of financial instruments held by the Company,
          which includes cash equivalents, accounts receivable, other current
          assets, accounts payable and accrued expenses are reflected in the
          accompanying consolidated financial statements at fair value due to
          the short-term nature of those instruments. The carrying value of
          long-term debt approximates its fair value.

          Income Taxes

               Deferred taxes are accounted for in accordance with Statement of
          Financial Accounting Standards ("Statement") No. 109 "Accounting for
          Income Taxes." The Statement requires the use of the liability method
          to account for income taxes. Deferred

                                       33

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 1.   Description of Business and Summary of Significant Accounting Policies
          (Continued)

          Income Taxes (Continued)

          income taxes are provided for the difference between the tax basis of
          an asset or liability and its reported amount in the financial
          statements and at the tax rates that are expected to be in effect when
          the taxes are actually paid or recovered. 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.

          Major Customers

               Approximately 40.5% and 40.6% of the Company's revenues were
          derived from its three largest customers for the years ended February
          28, 2001 and February 29, 2000, respectively.

          Effects of Recent Accounting Pronouncements

               In June 1998, 1999, and 2000, the FASB issued SFAS No. 133,
          Accounting for Derivative Instruments and Hedging Activities, SFAS
          No. 137, Accounting for Derivative Instruments and Hedging
          Activities-Deferral of the Effective Date of FASB Statement No.133,
          and SFAS No.138, Accounting for Certain Derivative Instruments and
          Certain Hedging Activities, respectively. These statements require
          companies to record derivatives on the balance sheet as assts or
          liabilities, measured at fair value. Gains or losses resulting from
          changes in the values of those derivatives would be accounted for
          depending on the use of the derivative and whether it qualifies for
          hedge accounting. SFAS No.133 will be effective as of March 1, 2001,
          the first day of fiscal year 2002. The adoption of these statements
          will have no significant impact on the Company's financial position or
          results of operations.

               In December 1999, the SEC issued Staff Accounting Bulletin
          No.101 ("SAB 101), Revenue Recognition in Financial Statements.
          SAB 101 provides guidance on the recognition, presentation, and
          disclosure of revenues in financial statements of all public
          registrants. In October 2000, the SEC issued a Frequently Asked
          Questions document related to SAB 101 which provides interpretive
          guidance. The Company adopted SAB 101 in fiscal year 2001, and the
          adoption of SAB 101 did not have a significant impact on the Company's
          financial position or results of operations.

               In June 2001, the FASB issued SFAS No.141, Business Combinations.
          SFAS No.141 addresses the initial recognition and measurement of
          goodwill and other intangible assets acquired in a business
          combination. SFAS No. 141 is applicable to business combinations
          beginning July 1, 2001. The adoption of this statement will have no
          significant impact on the Company's financial position or results of
          operations.

                                       34

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 1.   Description of Business and Summary of Significant Accounting Policies
          (Continued)

          Effects of Recent Accounting Pronouncements (Continued)

               In June 2001, the FASB issued SFAS No.142, Goodwill and Other
          Intangible Assets. SFAS No.142 addresses the recognition and the
          measurement of goodwill and other intangible assets subsequent to
          their acquisition. SFAS No. 142 also addresses the initial recognition
          and measurement of intangible assets acquired outside of a business
          combination whether acquired individually or with a group of other
          assets. Goodwill and intangible assets previously recorded, in the
          Compnay's financial statements, will be affected by the provisions of
          SFAS No. 142. This statement provides that intangible assets with
          finite useful lives be amortized and that intangible assets with
          indefinite lives and goodwill will not be amortized, but will rather
          be tested at least annually for impairment. SFAS No. 142 will be
          effective for the Company's fiscal year 2003, however management is
          assessing the impact that SFAS No. 142 will have on the Company's
          financial position and results of operations and investigating the
          possibility of early adoption, as allowed by the statement, in the
          first quarter of fiscal 2002.

NOTE 2.   Going Concern

               The Company's financial statements have been prepared in
          conformity with generally accepted accounting principles, which
          contemplates the continuation of the Company as a going concern. Since
          inception, the Company has not generated sufficient revenues to meet
          its operating expenses and has incurred significant operating losses
          and net losses. At February 28, 2001, the Company has a shareholders'
          deficit of $1,985,345 and a working capital deficiency of $2,539,057.
          The Company has minimal cash available for operations and is in
          default with respect to repayment provisions of certain secured and
          subordinated debentures. Also, although required, the Company was not
          able to complete an effective registration statement within 150 days
          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.

               The above 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.


                                       35

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 3.   Acquisitions

               On June 5, 2000, the Company acquired 100% of the outstanding
          common shares of Music Art Corporation ("Music Art") for 1,045,000
          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, which is being amortized over seven
          years beginning in June 2000.

               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
          3,633,334 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, which is being amortized over seven years
          beginning in August 2000. The Company also entered into an employment
          agreement with a former officer of Rooter Rattle, L.P. as part of this
          transaction. The 3,633,000 shares of common stock issued to acquire
          Rooter Rattle was valued at $545,000, based upon the trading price of
          the Company's common stock on the acquisition date, which was $.15 per
          share.

               The results of operations for both purchases are included from
          the date of their acquisitions. The following unaudited pro forma
          summary combines the results of operations of the Company, Music Art
          Corporation and Rooter Rattle, L.P. as if the acquisition had occurred
          on March 1, 2000 and 1999 after giving effect to certain adjustments,
          including amortization of intangible assets and increased interest
          expense. The pro forma information is presented for informational
          purposes only and is not necessarily indicative of what would have
          occurred if the acquisition had been made as of that date. In
          addition, the pro forma information is not intended to be a projection
          of future results.

<TABLE>
<CAPTION>
                                                           Years Ended
                                                  February 28 and February 29
                                                    2001               2000
                                                    ----               ----
<S>                                             <C>                <C>
          Revenues                              $ 1,201,000        $ 1,824,000
                                                ===========        ============

          Net Loss                              $(5,380,000)       $(3,552,000)
                                                ============       ============

          Basic and diluted net loss
            per share                              $(.02)             $(.03)
                                                   ======             ======
</TABLE>

                                       36

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 4.   Property and Equipment

               At February 28, 2001, property and equipment consisted of the
          following:

          Computer and Office Equipment                           $ 115,929
          Less- Accumulated Depreciation                            (42,206)
                                                                  ---------

          Property and Equipment, net                           $    73,723
                                                                ===========

               Depreciation expense amounted to $ 22,567 and $5,885 for the
          years ended February 28, 2001 and February 29, 2000, respectively.

NOTE 5.   Goodwill

               At February 28, 2001, goodwill consisted of the following (see
          Note 3):

          Rooter Rattle Acquisition                             $ 1,050,202
          Music Art Acquisition                                     377,057
                                                              -------------
                                                                  1,427,259

          Impairment of goodwill                                   (801,645)
          Amortization of goodwill                                 (127,912)
                                                              -------------

          Goodwill, net                                        $    497,702
                                                               ============

               Amortization of goodwill for the year ended February 28, 2001 was
          approximately $127,912 and is included in selling, general and
          administrative expense in the consolidated statements of operations.

NOTE 6.   Convertible Secured Debentures

               In May, 2000, the Company issued $400,000 of secured convertible
          debentures to a group of investors. These debentures mature 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 $.04 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 related debt discount was
          amortized as interest expense in the quarter ended May 31, 2000
          because debentures are convertible at any time at the note holder's
          option); the debentures also have warrants to purchase 4,000,000
          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 a debt discount and is being amortized
          to interest expense over the term of the related debentures. As of
          February 28, 2001, the debentures are offset by a net unamortized
          contra debt discount of approximately $46,667 and the Company
          amortized $233,333 of the $280,000 to interest

                                       37

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 6.   Convertible Secured Debentures (Continued)

          expense for the year ended February 28, 2001 related to these
          warrants. The debenture holders also have certain rights in the event
          the Company files a registration statement. Although required, 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. Furthermore, the Company may be
          subject to penalties under the agreements relating to these debentures
          for failure to timely register.

NOTE 7.   Notes and Loans Payable

               At 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 have
          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 5,849,099 common shares based upon stated conversion
          prices or negotiated conversion prices.

               Included in notes and loans payable is $60,876 due to the
          Company's President as of February 28, 2001. During the year ended
          February 28, 2001, the Company accrued interest of approximately
          $5,466 relating to loans from its President and approximately $71,260
          in accrued interest was payable relating to these loans as of February
          28, 2001, which is recorded in "accrued interest" in the accompanying
          consolidated balance sheets.

               Subsequent to February 28, 2001, certain of the debt was
          converted (See Note 15).

NOTE 8.   Convertible Subordinated Debentures

               The Company has outstanding $136,266 of convertible subordinated
          debenture, net of discount as of February 28, 2001. The debentures
          bear interest at rates ranging from 10% to 12% per annum and mature at
          various times through August 2001. Each $1,000 unit is convertible at
          any time at the holder's option, into between 10,000 and 100,000
          shares of Company common stock for cumulative 3,900,000 common shares.
          In connection with the issuance of the convertible subordinated
          debentures, the Company recorded additional interest expense of
          $114,033 and $184,202 for the years ended February 28, 2001 and
          February 29, 2000, respectively, relating to beneficial conversion
          features.

               Subsequent to February 28, 2001, certain of the debt was
          converted (See Note 16).

NOTE 9.   Common Stock

               During the year ended February 28, 2001, the Company received
          $1,275,355 from the issuance of 48,393,200 shares of common stock
          through private placements to various investors and the issuance of
          3,500,000 shares related to the exercise of stock options at $.01 per
          share.

                                       38

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 9.  Common Stock (Continued)

               During the year ended February 29, 2000, the Company received
          $783,318 (net of $101,000 of financing costs) from the issuance of
          36,787,232 shares of common stock through private placements to
          various investors.

               During the year ended February 28, 2001, the Company converted
          approximately $109,014 of accounts payable, notes and loans payable
          and related accrued interest into 5,849,099 shares of common stock
          based upon negotiated conversion prices with the debtors.

               In connection with the issuance of $400,000 of debentures issued
          in May 2000, the Company issued warrants to purchase 4,000,000 shares
          of common stock at 110% of the market value on the closing date. Using
          an option pricing model, the warrants were valued at $280,000.

               During year ended February 29, 2000, the Company received cash
          from an investor group in the form of a note payable. This note
          provided the investor group with anti dilution rights. The note was
          converted into common stock of the Company during year ended February
          29, 2000. During year ended February 28, 2001 the Company negotiated
          with the investor group to exchange their anti dilution rights for a
          non interest bearing note payable of $40,000 which was charged against
          paid in capital.

               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 $1,218,470 and $2,070,520 for the years ended February
          28, 2001 and February 29, 2000, respectively. These transactions have
          been recorded at the fair value of the services rendered or the fair
          value of the common stock issued, whatever was more readily evident.
          For transactions recorded at the fair value of the Company's common
          stock issued, a 20% discount was applied due to certain trading
          restrictions placed on such shares, which limited the transferability
          of such shares until after a twelve month holding period. The number
          of shares of common stock issued for services performed in 2001 and
          2000 was 34,811,452 and 30,665,714, respectively.

NOTE 10.  Stock Options

               In 1995, the Company issued its president and shareholder the
          option to purchase 500,000 shares of common stock any time before
          December 1, 2005 for $.10 per share. In January 2000, the Company
          issued an additional 10,000,000 options, which are immediately
          exercisable, at an exercise price of $.01 per share with an expiration
          date of January 2004. 3,500,000 of these options have been exercised
          and 7,000,000 remain outstanding as of February 28, 2001. The
          agreement also contains an anti-dilution provision that has the effect
          of increasing the options by 11,201,000 and 8,650,000 as of February
          28, 2001 and February 29, 2000, respectively. However, no additional
          options

                                       39

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 10.  Stock Options (Continued)

          have been issued. It is anticipated that any additional options issued
          will have the same expiration date of January 2004.

               In March 2000, the Company entered into an agreement to issue
          50,000 stock options per month for twelve months to a non-employee for
          consulting services to be rendered during calendar year 2000. The
          options are exercisable at $.01 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 $ .12 per share.

               The following is a summary of the status of stock option activity
          for the years ended February 28, 2001 and February 29, 2000.

<TABLE>
<CAPTION>
                                                                 Weighted-Average
                                                    Options       Exercise Price
          <S>                                     <C>                  <C>

          Outstanding
            February 28, 1999                        500,000           $ .10
              Granted                             10,000,000           $ .01
              Exercised                                  --
              Terminated                                 --
                                                  ----------

          Outstanding
            February 28, 2000                     10,500,000          $ .01
              Granted                                600,000          $ .01
              Exercised                           (3,500,000)         $ .01
              Terminated                                 -
                                                  ----------

          Outstanding
            February 28, 2001                      7,600,000          $ .01
                                                  ==========
</TABLE>

               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 cost has been recognized for the years
          ended February 28, 2001 and February 29, 2000.

                                       40

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 11.  Income Taxes

               The Company accounts for income taxes in accordance with SFAS
          No. 109, "Accounting for Income Taxes". The Company incurred no income
          tax expense for the years ended February 28, 2001 or February 29, 2000
          due to operating losses incurred.

               The net deferred tax asset at February 29, 2001 included the
          following:

          Deferred tax asset                                     $4,680,000
          Valuation allowance                                    (4,680,000)
                                                                 ----------
          Net deferred tax asset, after
            valuation allowance                                  $      --
                                                                 ==========

               The tax effects of major temporary differences that gave rise to
          the Company's net deferred tax asset are as follows:

          Net operating loss carryforwards                       $4,432,000
          Accrued expenses                                          231,000
          Other                                                      17,000
                                                                 ----------
          Total                                                  $4,680,000
                                                                 ==========

               The Company has experienced significant losses since inception.
          As a result of various common stock transactions over the years,
          certain of the accumulated net operating loss carryforwards generated
          by these losses, which total approximately $11,700,000, may be lost
          and/or substantially limited. Notwithstanding such effect, any
          deferred tax asset recorded as a result of potential net operating
          loss carryforwards, available to offset future taxable income, would
          be offset by an equivalent valuation allowance, since management
          believes that it is more likely than not that such deferred tax asset
          will not be realized. These carryforwards expire through 2021.


                                       41

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 12.  Commitments and Contingencies

          Lease Commitments and Contingencies

               The Company leases its office and certain office equipment under
          various operating lease agreements expiring in September 2004.

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

          YEAR ENDING
          FEBRUARY 28,                                               AMOUNT
          ------------                                              -------
              2002                                                  $20,400
              2003                                                   22,480
              2004                                                   23,440
              2005                                                   14,000
                                                                    -------
                                                                    $80,320
                                                                    =======

               Rent expense was approximately $25,232 in 2001 and $19,000 in
          2000.

          Employment Agreement

               The Company has an employment contract (the "agreement") with its
          President through January 1, 2005 which provides for minimum 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 granted this person
          10,500,000 stock options with anti-dilution provisions (see Note10 ).

          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

                                       42

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 12.  Commitments and Contingencies (Continued)

          Licenses (Contined)

          various dates through 2003 and generally require the Company pay a
          royalty of between 9% and 11% of sales, with certain minimum royalty
          payments required. Royalty expense amounted to $134,400 and $37,000
          for the years ended February 28, 2001 and February 29, 2000,
          respectively.

          Contingenies

               In July/August, 2000, the Company's subsidiary, Team Sports
          Specialities, Inc., acquired the assets of Rooter Rattle, Ltd. Part of
          the consideration for that acquisition was shares of the Company's
          common stock. In connection with the acquisition, the Company agreed
          with Rooter Rattle that if certain conditions with respect to the
          Company's stock issued to Rooter Rattle were not met on or before the
          first anniversary of closing, the Company 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 the Company's common stock were not
          met, and therefore under the agreements the Company was required to
          pay to Rooter Rattle $545,000 or deliver the stock of Team Sports free
          and clear of all encumbrances. The Company has not been able to
          deliver the purchase price nor deliver the stock free and clear of
          encumbrances. In addition, the Company has not paid the $30,000
          principal outstanding on a Promissory Note issued to Rooter Rattle in
          connection with the acquisition, and that Note is in default. In
          addition, counsel to Rooter Rattle has alleged that the Company did
          not pay debts of Rooter Rattle which it had agreed to assume in
          connection with the acquisition, that the Company incurred
          unauthorized debt in the manner of Team Sports, Specialities,
          commingled funds of Team Sports Specialities with other funds of the
          Company, in violation of acquisition agreements, and permitted a
          security interest to be filed against the assets of Team Sports
          Specialities in violation of the acquisition agreements. The Company
          believes that the ultimate legal and financial liability of the
          Company with respect to the above matter, including a range of
          possible losses, cannot be estimated at this time. Therefore, no
          provision has been recorded in the Company's financial statements.

               In the normal course of business The Company is subject to
          various regulations, proceedings, lawsuits, claims and other matters.
          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.

NOTE 13.  Statements of Cash Flows

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

               Converted approximately $109,014 of notes and loans payable and
          related accrued interest into 5,849,099 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.

               Recorded the following with respect to two business combinations
          entered into in 2001:

               o    Issued a note payable for $30,000 as part of the acquisition
                    of Rooter Rattle, LP.

               o    Issued 4,678,334 shares of common stock valued at $850,625
                    for the acquisition of two companies.

                                       43

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 13.  Statements of Cash Flows (Continued)


               o    Paid cash of $388,574, net of cash acquired of $1,426 for
                    the purchase of Rooter Rattle, LP

               o    Recorded goodwill of approximately $1,427,259

               o    Assets purchased and liabilities assumed are as follows:


               Inventories                                        $  82,906
               Accounts receivable                                  104,757
               Other assets                                          11,821
               Property and equipment                                 2,243
                                                                  ---------
                                                                    201,727

               Accounts payable and accrued expenses                358,359
                                                                  ---------

               Net liabilities assumed in
                 business combinations                           $ (156,632)
                                                                 ==========


          Cash payments for interest expense were immaterial for the years
          ended February 28, 2001 and February 29, 2000.

NOTE 14.  Related Party Transactions

               The Company has an employment agreement with its President (see
          Note 10), who has elected to defer a portion of his salary in support
          of the cash needs of the Company.

               At February 28, 2001 and February 29, 2000, the amount of salary
          deferred was $254,893 and $234,000 respectively.

               Included in notes and loans payable is $60,876 due to the
          Company's President as of February 28, 2001. The Company accrued
          interest related to these loans from its President of approximately
          $5,466 during 2001, and approximately $71,260 in accrued interest was
          payable relating to these loans at February 28, 2001, which is
          recorded in "accrued interest" in the accompanying consolidated
          balance sheet.

               The Company issued 7,256,250 and 6,600,000 shares of common stock
          to officers, directors and family members for services rendered during
          the years ended February 28, 2001 and February 29, 2000, respectively.

                                       44

<PAGE>

               COLLECTIBLE CONCEPTS GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 15.  Subsequent Events (Unaudited)

               Subsequent to February 28, 2001, the following occurred:

               The Company issued notes payable and convertible subordinated
          debentures for cash proceeds of $367,500, including $22,500 received
          from the Company's CEO and CFO;

               The Company received $151,500 from the sale of 15,150,000 shares
          of Company common stock to various investors;

               The Company converted $38,000 of notes and loans payable
          outstanding at February 28, 2001, along with related accrued interest
          of $1,250 into 3,925,000 shares of Company common stock.

               The Company converted $25,000 of subordinated debentures
          outstanding at February 28 2001, along with related accrued interest
          of $2,283 into 1,392,300 shares of Company common stock.

               The Company received a notice from the partners of Rooter Rattle,
          LP 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, LP (see Note 12).

               The Company signed a licensing agreement with Marvel Enterprises
          to administer the official Marvel Universe Fan Club. The Fan Club is
                                     ------------------------
          marketed in Marvel comic books, over the internet and other mediums.
          The license expires December 31, 2003.

                                       45

<PAGE>

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

On August 4, 2000, the Company filed a current report on Form 8-K, under Item 4,
reporting the change in its certifying accountant due to the merger of its prior
accountant, Rudolph Palitz, LLC with McGladrey & Pullen, LLP. The letter from
the previous accountant required by paragraph (a)(3) of Regulation S-B Item 304
was included as an exhibit to this filing.

On July 12, 2001, the Company filed a current report on Form 8-K, under Item 4,
reporting the change in its certifying accountant from McGladrey & Pullen, LLP,
to Withum Smith & Brown of New Brunswick, New Jersey. Reponse to this Item is
incorporated from that filing.

                                    PART III

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

(a)  Directors and Officers:

     The directors and executive officers of the Company as of February 28, 2001
are as follows:

            Name            Age                       Position

Paul S. Lipschutz           54             Chief Executive Officer and Director

Jeffrey Andrews             49             Chief Financial Officer and Director

All directors hold office until the next annual meeting of stockholders of the
Company and until their successors have been elected and qualified. There are no
family relationships among the directors and officers.

Paul S. Lipschutz has served as Chief Executive Officer and director for the
Company since 1992. Mr. Lipschutz' experience includes strategic planning,
product development, operational systems development and sales management for
numerous companies. Mr. Lipschutz is also a recognized expert in the direct
response marketplace. Mr. Lipschutz is a 1967 graduate of The Wharton School of
Finance and Commerce of the University of Pennsylvania.

Jeffrey Andrews was appointed Chief Financial Officer for the Company in May
1999, and became a director since October, 1999. Mr. Andrews is a certified
public accountant and has extensive financial and accounting experience in the
private and public sectors. He has worked for several public companies and was
directly involved in the roll-up of a publicly held subsidiary into an IPO. From
May 1996 to March 1999, Mr. Andrews was the Chief Financial Officer and Vice
President of Strategic Planning for the Judge Group, a publicly traded staffing

                                       46

<PAGE>

company. Prior to joining the Judge Group, Mr. Andrews had his own consulting
firm from 1995 to May 1996 and worked for Ernst & Young from 1993 to 1995 in the
area of corporate finance. Mr. Andrews received a Bachelors of Arts degree from
Villanova University in 1974.

There can be no assurance that these persons will remain affiliated with the
Company or that the scope of their involvement will not change.

     (b) Key Employees: There are no key employees in addition to those
     mentioned above.

     (c) Family Relationships: There are no family relationships among the
     directors and officers.

     (d) Legal Proceedings: None of the directors and officers have been
     involved in any bankruptcy proceeding, proceeding under the Federal or
     State Securities Laws or Commodities Futures Law, any proceeding adverse to
     the Company or any other legal proceeding material to their evaluation as
     an officer or director.

Item 10. Executive Compensation.

(a) Summary Compensation Table: The following table describes the
         compensation of the company's five most highly compensated officers:

                           Summary Compensation Table
<TABLE>
<CAPTION>
                       Annual Compensation                                            Long Term Compensation

                                                                           Awards                                Payouts
Name and Principal Position       Year    Salary      Bonus      Other     Restricted  Securities     LTIP Pay outs       All other
                                                                 Annual    Stock       Underlying          ($)          compensation
                                                              Compensation Awards ($)  Options (SARs)
<S>                               <C>    <C>          <C>     <C>          <C>         <C>            <C>              <C>
Paul S. Lipschutz                 2001   125,000(1)
Chief  Executive Officer          2000   108,000                                                       503,250          8,650,000*

Jeffrey Andrews                   2001    96,000
Chief Financial Officer           2000    76,770                                                        67,000
</TABLE>
*    Mr. Lipschutz did not receive any option awards in fiscal year 2000.
     However, he received an option for 10,000,000 shares in fiscal year 1999.
     Pursuant to anti-dilution terms described below under "Employment Contracts
     and Termination of Employment and Change In Control Arrangements," these
     options became exercisable for an additional 8,650,000 shares in Fiscal
     2000. As of May 2, 2000, these options were exercisable for 20,039,235
     shares.

(1)  Mr. Lipschutz agreed to defer his $108,000 salary in fiscal 2000 and
     deferred $54,447 in fiscal 2001 due to the financial condition of the
     Company and to help the Company secure financing. In addition, Mr.
     Lipschutz received an aggregate 4,950,000 shares of Common Stock as
     compensation for services in fiscal 2000 and 31,200,000 shares as of
     November 13, 2001, in fiscal 2001.

(2)  Mr. Andrews received $47,550 and $52,700 in cash compensation for fiscal
     2001 and 2000 respectively. He also deferred -- compensation in the amount
     of $48,450 and $24,000 during that period, due to the financial condition
     of the Company. In addition to his salary, Mr. Andrews also received a
     total of 800,000

                                       47

<PAGE>

     shares of Common Stock as compensation for services in fiscal 2000.

(b)  Options/SAR Grants: The only options granted to executive officers in
     fiscal year 2000 were the options for an additional 8,650,000 shares
     received by Mr. Lipschutz by virtue of anti-dilution rights in options
     granted in fiscal 1999. No SARs were granted in fiscal 2000.

(c)  Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value: None.

(d)  Long-Term Incentive Plans: None.

(e)  Compensation of Directors: The Company issues to its directors 50,000
     shares of common stock each quarter as a director's fee.

(f)  Employment Contracts and Termination of Employment and Change in Control
     Arrangements:

Mr. Lipschutz has an Employment Agreement with the Company 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 the Company gives ninety
days prior notice of intent not to have the Agreement renewed. No notice was
given on January 1, 2000; therefore the Employment Agreement has been extended
to January 1, 2005. If no notice is given on January 1, 2001, the term of the
Employment Agreement will be extended to January 1, 2006.

Under the Employment Agreement, Mr. Lipschutz was also granted an option
originally exercisable for 10,000,000 shares of the Company's 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 the Company. 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 the Company's outstanding Common Stock. Currently, the option is
exercisable for 20,039,235 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 the gross
sales of the Company 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.

                                       48

<PAGE>

There are no other employment agreements with any executive officer of the
Company.

(g)  Report on Repricing of Options/SARS: Not Applicable.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of September 4, 2001 with respect
to the beneficial ownership of the Company's securities by officers and
directors, individually and as a group, and all holders of more than 5% of the
shares of any class of the Company's voting securities. Unless otherwise
indicated, all shares are beneficially owned and sole investment and voting
power is held by the beneficial owners indicated.

On September 4, 2001, there were 293,185,826 shares of Common Stock outstanding.

<TABLE>
<CAPTION>
            Name and Address of Beneficial Owner                                 Common Stock
                                                                    Number of Shares      Percent of Class

<S>                                                                 <C>                   <C>
(a)      Officers and Directors:

     Paul S. Lipschutz                                              33,515,560 (1)        19.27
     1600 Lower State Road
     Doylestown, PA 18901

     Jeffrey Andrews                                                800,000               *
     1600 Lower State Road
     Doylestown, PA 18901

     Officers and Directors as a group (2 persons)

     (b) Other beneficial owners                                    N/A                   N/A

     *  Less than 1%
</TABLE>


(1) Does not include 3,075,000 shares owned by Marilyn Lonker, as to which he
disclaims beneficial ownership. Includes 26,333 shares owned by the estate of
Harvey Benson, of which Mr. Lipschutz serves as Executor. Also includes
10,000,000 options issued on January 1, 1999 under an arrangement in which the
ratio of those options to the total shares outstanding when the options were
issued would always be maintained until all 10,000,000 options were exercised.
At the original issue date, this ratio was 11.52%. As of May 2, 2000, CCGR had
issued 173,951,697 shares of common stock. As of that date, Mr. Lipschutz was
eligible to exercise options worth 11.52% of 173,951,697 shares. This equals
options worth 20,039,235 of underlying common stock.

Also included are 500,000 options the Company issued to Mr. Lipschutz on
November 30, 1995. Mr. Lipschutz may exercise these options to purchase 500,000
shares of common stock for $.10 per share. The options expire on December 1,
2005.

Item 12. Certain Relationships and Related Transactions.

The Company believes that the terms of the transactions described below were as

                                       49

<PAGE>

favorable to the Company as would have been obtained by the Company in
arms-length negotiations.

Beginning in fiscal year 1996, Mr. Lipschutz made various loans to the Company
to assist it with meeting its important expenditures. From that period to the
present, the Company repaid Mr. Lipschutz various amounts at unscheduled times.
Repayments and new loans were made during the same fiscal periods. The aggregate
outstanding principal balance of the loans have accrued interest at 10 % per
annum, and continues to accrue interest at that rate. At February 28, 1998, the
Company owed Mr. Lipschutz $83,464 in principal on the loan. In addition, for
that year the loan had accumulated $10,313 in interest, and the loan had total
accrued interest of $52,376 at February 28, 1998. The total amount owed to Mr.
Lipschutz, with interest and principal on the loan, at February 28, 1998 was
$135,840.

On April 28, 1999, pursuant to the Separation Agreement between the Company and
SDS, Mr. Lipshutz resigned from his position as an officer and director of SDS.
Mr. Lipshutz also tendered his equity interest in SDS to SDS under the terms of
the Separation Agreement. Mr. Lipshutz had acquired his equity interest by
transfer of the SDS shares the Company had received upon exercise of an option
to purchase SDS shares. This transaction is discussed in the "Description of
Business" section of this registration statement. Mr. Lipshutz did not give any
consideration to the Company for the SDS shares he received in the transaction.

At February 28, 1999, the principal amount of Mr. Lipschutz's loan had decreased
to $67,101 through net repayments. The loan accumulated $7,528 in interest
during Fiscal Year 1999, and the loan had total accrued interest of $59,904 at
February 28, 1999. The total amount owed to Mr. Lipschutz, with interest and
principal on the loan, at February 28, 1999 was $127,005.

At February 29, 2000, the principal amount of Mr. Lipschutz's loan had decreased
to $50,376 through net repayments. The loan accumulated $5,890 in interest
during Fiscal Year 2000, and the loan had total accrued interest of $65,794 at
February 29, 2000. The total amount owed to Mr. Lipschutz, with interest and
principal on the loan, at February 29, 2000 was $116,170.

At Fecruary 28, 2001, the principal amount of Mr. Lipschutz loan had increased
to $60,876 throuygh net borrowings. The loan accumulated $5,466 in interest
during fiscal year 2001, and the loan had total accrued interest of $71,260 at
Febraru 28, 2001. The total amount owed to Mr. Lipschutz , with interest and
principal on the loan, at February 28, 2001 was $132,136.

Item 13. Exhibits and Reports on Form 8-K.

Exhibits

3.1      Certificate of Incorporation *

3.2      Bylaws. *

4.1      Form of Debenture used in outstanding debt of approximately $70,000 as
         of 2/29/00. *

4.2      Form of Debentures Due April 2001 (aggregate $400,000). *

4.3      Form of Warrants issued in connection with 4.2 (exercisable for an
         aggregate 4,000,000 shares). *

                                       50

<PAGE>

4.4      Form of Registration Rights Agreement with holders of 4.2 and 4.3. *

10.1     Paul S. Lipschutz Employment Agreement. *

10.2     Exclusive Licensing Consultant Agreement with Building Q. *

10.3     Merchandise License with New Line Productions, Inc. for Austin Powers
         products. *

10.4     Royalty Agreement with Galena Industries.  *

10.5     License Agreement with Creative Licensing Corporation for Terminator
         Products. *

10.6     License Agreement with Canal+ DA for Terminator 2 products. *

10.7     Financial Consulting Agreement with NIR Group, LLC. *

10.8     License Agreement with Marvel Characters, Inc. for X-Men products.  *

10.9     Lease for 1600 Lower State Road. *

10.10    Agreement with Verne Troyer and TC Ventures. *

10.11    Secured Convertible Debenture Purchase Agreement. **

10.12    Security Agreement executed in connection with Exhibit 10.11. **

10.13    Separation Agreement with S.D. Studios. **

16       Letter on change in certifying accountant, incorporated by reference to
         Form 8-K filed on 8/4/2000.

       * Incorporated by reference to Form 10KSB 12G filed on 5/24/2000.

      ** Incorporated by reference to Form 10-KSB 12G filed on 9/7/2000.

Reports on Form 8-K.

On February 15, 2001, the Company filed a report on Form 8-K to diclose on
Item 2 its entering into an asset purchase agreement with Rattle Rooter, LP.

On February 20, 2001, the Company filed a reoirt on Form 8-K to disclose on
Item 2 its acquisition of the assets of Rooter Rattle, LP. In Item 7, the
financial statements of Rooter Rattle were reported, as was Proforma financial
information.

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<PAGE>

                                   SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                        COLLECTIBLE CONCEPTS GROUP, INC.

                                        By: /s/ Paul S. Lipschutz
                                            ----------------------------
                                                Paul S. Lipschutz,
                                                Chief Executive Officer


                                        Date:   November 21, 2001



                                        By: /s/ Jeffrey Andrews
                                            ----------------------------
                                                Jeffrey Andrews,
                                                Chief Financial Officer


                                        Date:   November 21, 2001

Pursuant to the requirement of the Securities and Exchange Act of 1934, this
Amendment to registration statement has been signed by the following persons on
behalf of the registrant and in the capacities and on the date indicated.

Signatures                        Title                          Date
----------                        -----                          ----

/s/ Paul S. Lipschutz        Chief Executive                November 21, 2001
---------------------

                             Officer and Director

Paul S. Lipschutz

/s/ Jeffrey Andrews          Chief Financial Officer        November 21, 2001
-------------------           and Director


Jeffrey Andrews

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