SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549

Form 10 - Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

For the quarterly period ended :  September 30, 2000


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

For the transition period from       to


Commission File number 0-22372

GRAND TOYS INTERNATIONAL, INC
(Exact name of Issuer as specified in its charter)

Nevada                  		        98-0163743
(State or other jurisdiction of	  (I.R.S. Employer Identification No.)
incorporation or organization)

1710 Route Transcanadienne, Dorval, Quebec, Canada, H9P 1H7
(Address of principal executive offices)

(514) 685-2180
(Issuer's telephone number)

(Former name, former address and former fiscal year,
if changed since last report)

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

Indicate the number of shares outstanding of each of the Issuer's classes
common equity as of November 15, 2000: 3,234,906 shares of common stock.


GRAND TOYS INTERNATIONAL, INC.
Index to Quaterly Report on Form 10 - Q
Filed with the Securities and Exchange Commission
Period ended September 30, 2000


ITEMS IN FORM 10 - Q
							                                                            Page

PART I - Financial Information

Item 1. Consolidated Financial Statements:

Consolidated Balance Sheets
   at September 30, 2000 and December 31, 1999                           4-5
Consolidated Statements of Operations
   For The Three Month and Nine Month Periods
   Ended September 30, 2000 and 1999                                       6
Consolidated Satements of Stockholders' Equity
   and Comprehensive Income                                           7
Consolidated Statements of Cash Flows
   For The Nine Month Period
   Ended September 30, 2000 and 1999                                       8
Notes to Consolidated Financial Statements                         9-20

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations            21-24
Item 3.  Quantitative and Qualitative Disclosures About
         Market Risks                                             25-26

PART II - Other Information

Item 1.  Legal proceedings                                           27
Item 2.  Changes in Securities and Use of Proceeds                   28
Item 3.  Defaults Upon Senior Securities                             28
Item 4.  Submission of Matters to a Vote of Security Holders         28
Item 5.  Other Information                                           28
Item 6.  Exhibits and Reports on Form 8-K                            28


Signatures                                                        28-29




GRAND TOYS INTERNATIONAL, INC.

Part I. - Financial Information

Item 1. Financial Statements

Consolidated Balance Sheets


<TABLE>
                                                       September 30, December 31,
                                                         		2000          	1999
                                                    (Unaudited)

Assets
S>                                                <C>          <C>
Current assets:
Cash                                               $  613,224  $         -
Accounts receivable (net of allowance for
doubtful accounts; 2000-$59,860;
1999-$90,805)(note 2)                                3,850,680    8,083,004
Income taxes recoverable                             1,223,643          -
Due from affiliated companies	                          40,386       36,801
Inventory                                            3,084,748    6,065,564
Prepaid expenses	                                      423,184      940,435
Total current assets                                 9,235,865  	15,125,804

Deferred financing charges                                -         425,434
Deferred income tax                                    684,996      684,996
Equipment and leasehold improvements,net (note 3)      495,902      536,157
Intangibles (net of amortization;2000-$2,346,126;
1999-$123,480)(note 4)                                    -       2,346,126



Total assets	                                     $ 10,416,763  $ 19,118,517
</TABLE>



GRAND TOYS INTERNATIONAL, INC.

Consolidated Balance Sheets

<TABLE>
                                                  September 30,     December 31,
                                                      2000             1999
                                               (Unaudited)

<S>                                              <C>             <C>
Liabilities and Stockholders' Equity
Current liabilities:
Bank indebtedness (note 5)                      $ 	        -    $   429,526
Trade accounts payable                           	 1,466,739      2,186,525
Other accounts payable and accrued liabilities	      305,460        835,630
Royalties payable	                                    37,397          2,286
Income taxes payable	                                295,545        716,223
Current portion of long term debt                          -        166,666
Total current liabilities                          2,105,141     	4,336,856

Long term debt (note 6)                            1,500,000      1,777,778
Minority interest                                       	100           	100
Preferred stock (note 7)                             500,000      1,000,000

Stockholders' equity:
Capital stock (note 8)                                	3,235          3,135
Additional paid-in capital                        19,814,577     19,314,677
Deficit                                         	(12,608,872)    (6,725,703)
Accumulated other comprehensive income -
cumulative currency translation adjustment       	 (897,418)      (588,326)
                                                	  6,311,522     12,003,783

Commitments and contingencies (notes 14 and 15)
Subsequent events (note 17)

Total liabilities and stockholders' equity	     $ 10,416,763  $ 19,118,517
</TABLE>

See accompanying notes to consolidated financial statements.


GRAND TOYS INTERNATIONAL, INC.

Consolidated Statements of Operations (Unaudited)

<TABLE>
                                 For the three months     For the six months
                                 ended September 30,      ended September 30,
                                  2000          	1999      2000          1999
<S>                             <C>         <C>        <C>        <C>

Net sales                      $4,592,192  $9,945,009  $10,237,786 $27,343,077

Cost of goods sold	             3,753,536   5,754,489    9,246,401  17,822,728

Gross profit                      838,656   4,190,520      991,385   9,520,349

Operating expenses:
Selling, general and
administrative                  1,451,670   2,507,543   4,469,761    6,614,831
Foreign exchange loss (gain)     (70,671)   	 194,541    (93,922)        1,562
Interest on long term debt         -           -          109,800           -                -
Interest                         (26,423)     149,376 	  (61,075)     403,417
Bad debt expense                   21,325      15,649      81,436      57,010
Depreciation and amortization     152,101      90,723     445,996     301,928
Unusual items (note 11)         2,914,783        -      3,178,783           -
                             		 4,442,785   2,957,832   8,130,779   7,378,748

(Loss) earnings before
income taxes                  (3,604,129)   1,232,688  (7,139,394)  2,141,600

Income tax recovery
(expense)                         425,151     (552,882)  1,256,225   (983,157)

Net (loss) earnings          $(3,578,978)  $679,806   $(5,883,169) $ 1,158,443

(Loss) earnings per
share  (note 1 (j))
Basic                              (1.11)        0.30       (1.84)       0.64
Diluted                           	(1.11)        0.30       (1.84)       0.64
</TABLE>

See accompanying notes to consolidated financial statements.

GRAND TOYS INTERNATIONAL, INC.
Consolidated Statements of Stockholders' Equity and
Comprehensive Income  (Unaudited)


<TABLE>
                                                      <C>
                    <C>      <C>         <C>          Accumulated
		                           Additional               Other
                   	Capital  Paid-In                  Comprehensive
                    Stock    Capital     Deficit      Income 	   Total
<S>                 <C>      <C>         <C>          <C>        <C>
January 1, 2000     $3,135  	$19,314,677 $(6,725,703) $(588,326) $12,003,783

Net loss for the
period                   -             -  (5,883,169)          -  (5,883,169)
Foreign currency
adjustment              	-            	-            -  (309,092)    (309,092)
Total comprehensive
income						             -             -            -          -  (6,192,261)
Share conversion        50       499,900            -          -      500,000


September 30, 2000   $3,185   $19,814,577 $(12,608,872) $(897,418)  $6,311,522
</TABLE>

See accompanying notes to consolidated financial statements.


GRAND TOYS INTERNATIONAL, INC.

Consolidated Statements of Cash Flows (Unaudited)


<TABLE>
                                         <C>               <C>
                                                 For the six months
                                                    ending September 30,
                                           		2000              1999
<S>
Cash flows from operating activities:
Net (loss) earnings                   $(5,883,169)        $1,158,443
Items not affecting cash:
Depreciation and amortization             445,996           301,928
Deferred financing write-off              452,683
Intangible write-off                    2,346,126
Changes in operating working capital
items, (note 13)                         3,287,317       (1,874,045)
Net cash provided by
operating activities	                    1,648,953         (413,673)

Cash flows from financing activities:
(Decrease) increase in bank
indebtedness                             (445,118)       (7,195,854)
Decrease in long term debt               (444,444)               -
Increase in deferred financing charges    (42,532)               -
Other	                                     15,349          (269,572)
Net cash used for
financing activities                     (916,745)       (6,926,282)

Cash flows from investing activities:
Additions to equipment
and leasehold improvements                (118,984)      	(170,549)
Acquisition of assets                            -        (241,899)
Net cash(used for)provided by
investing activities	                     (118,984)       7,620,002

Net change in cash, being cash at
at end of period                         $ 613,224        $     	-


Supplementary disclosure of cash flow information

Cash paid during the year for:
Interest	                                 $146,400       $ 403,417
Income taxes                               496,694         148,896
</TABLE>


See accompanying notes to consolidated financial statements.


GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements


Grand Toys International, Inc., a publicly held company, is organized under
the laws of the State of Nevada.  Its principal business activity, through
its wholly-owned Canadian and United States operating subsidiaries, is the
distribution of toys and related items.

1.	Significant accounting policies:

(a) Financial statement presentation:

The accompanying consolidated financial statements are not audited for the
mentioned periods but include all adjustments (consisting of only normal
recurring accruals) which management considers necessary for the fair
representation of results at September 30, 2000.

Moreover, these financial statements do not purport to contain complete
disclosures in conformity with generally accepted accounting principles
and should be read in conjunction with the Company's audited financial
statements at and for the fiscal year ended December 31, 1999 contained
in the Company's Annual Report on Form 10-K.

(b) Principles of consolidation:

These consolidated financial statements, presented in U.S. dollars and in
accordance with accounting principles generally accepted in the United States,
include the accounts of Grand Toys International, Inc. and its subsidiaries
(the "Company"). All significant intercompany balances and transactions have
been eliminated.


(c) Inventory:

Inventory is valued at the lower of cost, determined by the first in, first
out method, and net realizable value.  The only significant class of
inventory is finished goods.


(d) Equipment and leasehold improvements:

Equipment and leasehold improvements are stated at cost less accumulated
depreciation.  Depreciation methods and annual rates adopted by the Company
are as follows:

<TABLE>
<S>                                <C>                            <C>
Asset	                             Method	                        Rate

Computer equipment	                Declining balance             	30%
Machinery and equipment	           Declining balance             	20%
Furniture and fixtures	            Declining balance	             20%
Trucks and automobiles            	Declining balance             	30%
Telephone equipment               	Declining balance             	30%
Leasehold improvements	                Straight-line         	Term of
                                                     		lease plus one
                                                       		renewal term
</TABLE>

GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

1. Significant accounting policies, continued:

(e) Deferred financing charges:

Deferred financing charges represent the costs incurred relating to the
negotiation of the credit facility.  Deferred financing charges are
amortized over 36 months, the original term of the financing,subject to
subsequent changes in the term of the ficility.

(f) Intangibles:

Goodwill represents the excess of the purchase price over the fair value of
the net identifiable assets acquired.  Goodwill is amortized using the
straight-line method over a twenty year period.  The net book value of
goodwill would be written down if the value were permanently impaired.  The
Company assesses impairment by determining whether the unamortized intangible
balances can be recovered through undiscounted future operating cash flows
of the acquired assets over their remaining lives, and the write down would be
to fair value.


(g) Impairment of long-lived Assets and long-lived Assets to be Disposed of:

The Company accounts for long-lived assets in accordance with the provisions
of SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of".  This Statement requires that long-lived
assets and certain identifiable intangibles be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.  Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset.  If such assets are considered to
be impaired, the impairment to be recognized is measured by the amount by
which the carrying amount of the assets exceeds the fair value of the assets.
Assets to be disposed of are reported at the lower of the carrying amount or
fair value less costs to sell.


(h) Revenue recognition:

Sales are recognized at the time of shipment of products.  The Company estimates
liabilities for returns and allowances at the time of shipment.  In addition,
provisions for customer allowances are recorded when the related revenue is
recognized.


(i) Foreign currency translation:

(i)  Grand Toys Ltd. and Grand Concepts Inc., wholly-owned Canadian
     subsidiaries, use the Canadian dollar as their functional currency and
     translate their assets and liabilities into US dollars at the exchange
     rates prevailing at the balance sheet date and sales, expenses and cash
     flows translated at the average exchange rate for the year.
     The resulting currency translation adjustments are accumulated and
     reported in other comprehensive income.

(ii) Other monetary assets and liabilities denominated in foreign currencies
     are translated at the exchange rates prevailing at the balance sheet
     date.  Revenues and expenses denominated in foreign currencies are
     translated at the rates of exchange prevailing at the transaction dates.
     All exchange gains and losses are included in income.


GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements


1. Significant accounting policies, continued:

(j) Earnings (loss) per share:

(i)  Basic earnings (loss) per share is determined by dividing the
     weighted-average number of common shares outstanding during the period
     into net earnings (loss).

(ii) Diluted earnings (loss) per share gives effect to all potentially
     dilutive common shares that existed at September 30, 2000.

(k) Stock option plan:

The Company accounts for its stock option plan in accordance with the
provisions of Accounting Principles Board ("APB") Opinion No. 25,
Accounting for Stock Issued to Employees.  As such, compensation expense
is recorded on the date of grant only if the current market price of the
underlying stock exceeds the exercise price.  FASB Statement No. 123, which
became effective in 1996, allows entities to continue to apply the
provisions of APB Opinion No. 25 and requires pro-forma net earnings and
pro-forma earnings per share disclosures for employee stock option grants
made in 1995 and future years as if the fair-value-based method defined
in FASB Statement No. 123 had been applied.  This disclosure is included
in the notes to these statements.

(l) Advertising and promotion:

All costs associated with advertising and promoting products are
expensed in the period incurred.

(m) Use of estimates:

The preparation of 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 the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those estimates.


GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements, Continued

2.  Accounts receivable:

<TABLE>
                                 September 30, 2000        December 31, 1999
<S>                              <C>                       <C>
Trade receivables                $ 2,338,207                    $ 7,166,705

Other                              1,572,333                      1,007,104

Allowance for Doubtful Accounts     (59,860)                        (90,805)

Total Accounts Receivable        $ 3,850,680                     $ 8,083,004
</TABLE>

3.	Equipment and leasehold improvements:

<TABLE>
                              September 30,               December 31,
                               			2000                       1999
                                 		Accumulated               Accumulated
                       		Cost    	depreciation     Cost     depreciation
<S>                     <C>           <C>          <C>          <C>
Computer equipment	     $1,261,806     $919,389     $1,286,253   $857,726
Machinery and equipment 	  486,648     438,377        458,091   	430,434
Furniture and fixtures	    496,452     444,232        480,775    454,974
Trucks and automobiles	     81,278      80,031         84,335     82,665
Telephone equipment	        44,666      37,152         40,339     36,819
Leasehold improvements     372,400     328,167       	372,755    323,773
                        $2,743,250  $2,247,348     $2,722,548 $2,186,391
Net book value	                       $495,902                 $ 536,157
</TABLE>

4. Acquisition:

On January 1, 1999, Ark Creations, Inc. a wholly owned subsidiary acquired all
of the assets of Ark Foundation LLC, for an aggregate of $ 2,500,000, consisting
of the Company's Convertible preferred stock having a stated value of $1,000,000
and an interest bearing promissory note of Ark Creations in the principal amount
of $1,500,000.


The Company accounted for the acquisition under the purchase method of
accounting and allocated the purchase price as follows:


Net assets                    $ 120,557
Patents                       1,234,803
Goodwill                      1,234,803
                            $ 2,590,163

The acquisition of the above assets was financed as follows:

Long-term debt (note 6)     $ 1,500,000
Series A 5% Cumulative
Convertible Redeemable
Preferred Stock (note 7)      1,000,000
Direct acquisition costs         90,163
                            $ 2,590,163

Net income for Ark Creations Inc., has been included in the statement of
operations from January 1, 1999.  In the statement of cash flows, the financing
of the assets and the recognition of the intangibles have not been included as
there is no cash impact.

The Company recognized the permanent impairment in value of goodwill from an
acquisition of $2,253,516.

5.	Bank indebtedness:

The Company has a secured line of credit of $17,500,000 and can
draw down working capital advances and letters of credit in amounts determined
by percentages of its accounts receivable and inventory.  The working capital
advances are secured by all of the assets of the Company.  The effective
interest rate at September 30, 2000 on the Canadian denominated line was 7.75%
(7.50% at December 31, 1999),which represents prime plus 1 1/4% for both
years.  As at September 30, 2000, the unused portion of the credit facility is
approximately $ 17,113,224. Standby fees represent 1/4 % of the unused line
of credit. In October 2000, the banking agreement was amended to reduce the line
of credit to $3,500,000 and to expire in January 2001.  The Company is currently
in discussions to open up a new credit facility with a new financial
institution.

6. Long term debt:

Ark Creations Inc.has long-term indebtedness in the form of an interest
bearing subordinated promissory note in the aggregate principal amount of
$ 1,500,000, see note 4.  Interest is payable quarterly, commencing
April 1, 1999 at a rate of 5.76% per annum until June 1, 1999, 9.76% per
annum thereafter until the first principal installment of $ 500,000 is paid,
and 5.76% per annum thereafter to maturity.  The note is secured by a pledge
of 375,000 shares of the Company's common stock. A principal installment of
$500,000 shall be paid upon the achievement of certain sales targets, with a
second installment of $ 500,000 due six months thereafter, and a final
installment of $ 500,000 due three months after the second installment.

7. Preferred Stock:

Series A Cumulative Convertible Redeemable Preferred Stock

In connection with the acquisition of the assets Ark Foundation LLC, the
Company created a class of 200,000 shares of non-voting Series A Convertible
Redeemable Preferred Stock ("Series A Stock") with a stated value of $ 5.00
per share.  The Series A Stock ranks senior to the common stock.  The Series
A Stock has a cumulative preferred quarterly dividend of 5% per annum of the
par value, payable in cash. The Series A Stock is redeemable and
convertible at determinable prices on determinable dates. The Series A Stock
is convertible beginning on January 1, 2000 into shares of the Company's
common stock on a one-for-one basis. If upon conversion, the market value of the
common stock of the Company is less than $5.00, the Company is obligated to
make up the discrepancy.

On January 1, 2000, 50,000 shares of Series A Stock were converted to common
stock.

On July 17, 2000, 50,000 shares of Series A Stock were converted to 50,000
shares of common stock.

8.	Capital stock:

(a) Authorized capital:

    50,000,000, $0.001 par value voting common shares;

    5,000,000, $0.001 par value preferred shares, issuable in series with such
    designation, rights and preferences as may be determined from time to
    time by the Board of Directors. See note 6 for the terms of the class
    designated Series A Preferred Stock.

GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

8. Capital stock, continued:

(b) Issued and outstanding:

<TABLE>
                                                    September 30, December 31,
                                                       	2000            	1999
<S>                                                 <C>          <C>

100,000 preferred shares (1999-200,000)             $ 500,000    $1,000,000

3,234,906 common shares, net of 375,000 shares
(note 6)(1999 - 3,134,906 common shares)
                                                    $ 3,235       $ 3,135


(c) Share transactions:


-   August 1999
    1,491,794 options were exercised for total proceeds of $ 8,044,944,
    increasing capital stock by $ 1,492.

-   October 1999
    8,478 options and 57,000 warrants were exercised for total proceeds of
    $ 396,731 increasing capital stock by $65.

-   January 2000
    50,000 preferred shares of Series A Stock were converted to 50,000 shares
    of common stock.

-   July 2000
    50,000 preferred shares of Series A Stock were converted to 50,000 shares of
    of common stock.

(d) Summary of common stock outstanding:


GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

A summary of the number of common stock outstanding and share transactions
since January 1, 1999 is as follows:



</TABLE>
<TABLE>
<S>                                                   <C>
January 1, 1999          		                         1,577,634

Issued on exercise of stock options and warrants    1,557,272

Adjusted balance                                    3,134,906

Preferred share conversion                            100,000

September 30, 2000                          	       3,234,906

</TABLE>


9.	Stock options and warrants:

The Company has a stock option plan as amended (the "Option Plan") which
provides for the issuance of up to 300,000 options to acquire common stock
of the Company.  Stock options granted under the Option Plan may be Incentive
Stock Options under the requirements of the Internal Revenue Code, or may be
Non-statutory Stock Options which do not meet such requirements.  Options may be
granted under the Option Plan to, in the case of Incentive Stock Options, all
employees (including officers)of the Company,or,in the case of Non-statutory
Stock Options,all employees (including officers) or non-employee directors of
the Company.


GRAND TOYS INTERNATIONAL, INC.


9. Stock options and warrants, continued:


Under each plan, the exercise price of each option equals the market price of
the Company's stock on the grant date and an option's maximum term is ten years.
The range of exercise prices for stock options and warrants outstanding at
September 30, 2000 is $1.41 to $21.90.

Details of the options and warrants, all of which are exercisable at year-end,
are as follows:

<TABLE>
                      <C>       <C>       <C>       <C>      <C>
					                                                        Weighted-
                                                             average
                                Other                        exercise
                   	  Option    Stock                        price per
                       	Plan   	Options   Warrants  Total    share
<S>
January 1, 2000    	  5,400     175,500   55,000    235,900  $6.43

Reclassified          2,000     (2,000)        -          -      -

Cancelled           (1,400)    (20,000)        -   (21,400) (6.92)

Granted	            303,000           -        -    303,000   2.65

September 30, 2000  309,000     153,500   55,000    517,500  $4.21
</TABLE>

10.  Income Taxes:

     (a)  As of September 30, 2000, the Company has $7,758,000 (December 31,
          1999 - $6,642,000) of net operating losses available for tax purposes
          to reduce future taxable income in United States, beginning to expire
          in 2009.  Approximately $2,000,000 of taxable income must be generated
          in the U.S. subsidiaties to allow for the realization of the asset
          before valuation allowance prior to the expiration of the losses.

     (b)  As at September 30, 2000, the Canadian subsidiaries have approximately
          $1,000,000 of operating losses that can be carried forward until 2007
          and utilized against future taxable imcome.  The benefits of these
          losses have not been recorded by the Company.

11. Unusual Items:

The company incurred unusual non-recurring expenses in the current quarter.
These comprised the following items;

    (a) The Company settled a lawsuit by a lessor for $264,000.

    (b) The Company recognized the permanent impairment in value of goodwill
        from an acquisition of $2,253,516.

    (c) Due to the amendment of the credit line to a shorter period, the company
        has taken a charge against earnings of the full amount of the deferred
        financing charges of $538,062.

    (d) The Company has written off $123,205 as a result of discontinuing its
        proposed acquisition of Limited Treasures, Inc.

11. Earnings per share:

<TABLE>
                                   		Income         	Shares       	Per share
	                               (numerator)	   (denominator)	         Amount
<S>                             <C>            <C>                 <C>
Quarter ended September 30, 2000

Basic EPS
Earnings available to
common stockholders            $(3,578,978)    3,226,210          $(1.11)


Diluted EPS
Earnings available to
common stockholders
and assumed conversions         (3,578,978)    3,226,210           (1.11)


GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

11. Earnings per share, continued:

Period ended September 30, 2000

Basic EPS
Earnings available to
common stockholders           	$(5,883,169)    3,198,775          $(1.84)

Diluted EPS
Earnings available to
common stockholders
and assumed conversions         (5,883,169)    3,198,775           (1.84)
</TABLE>


Options to purchase 2,000 shares (1999 - 180,900) and no warrants to purchase
shares (1999 - 55,000) of the Company's common stock were not included
in the diluted earnings per share calculation as their effect is anti-dilutive.
The Series A Convertible Redeemable preferred stock was also not included as the
effect is anti-dilutive.

12	 Changes in operating working capital items:

<TABLE>
                                  For the six months ended September 30,
      	                                        	2000         	1999
<S>                                       <C>             <C>
Decrease in accounts receivable	            $4,065,131     $  (259,945)
Increase in income taxes recoverable       (1,262,580)              -
(Increase) decrease in due from
affiliated company	                            (5,036)         210,654
Decrease (increase) in inventory	            2,836,188      (5,387,096)
Decrease (increase) in prepaid expenses        205,994      (1,095,451)
(Decrease) increase in trade
accounts payable                             (665,486)       4,027,480
Decrease in other accounts payable
and accrued liabilities                      (518,751)         169,106
Increase (decrease) in royalties payable       36,039          (53,419)
(Decrease) increase in income
taxes payable                                (404,182)         852,837

                                          	 $4,287,317      $(1,874,045)
</TABLE>

GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

13. 	Commitments:

The Company has entered into long-term leases with minimum annual rental
payments approximately as follows:

<TABLE>
<S>                                          <C>
2000                                         $ 104,000
2001	                                         	339,000
2002	                                         	312,000
2003	                                         	286,000
2004                                           234,000
Thereafter	                                   	 17,000

                                       				$	1,292,000
</TABLE>

Rent expense for the period ended September 30, 2000 and 1999 amounted to
approximately $460,610 and $313,179 respectively.


14.	Contingencies:

(a)	Lawsuits for alleged breach of contract has been filed against the Canadian
    subsidiary by two former sales representatives. In the opinion of
    management, these actions have no merit.  At this point in time it is
    difficult to ascertain or estimate the value of a settlement, if any.

(b) On or about April 7, 2000 an action against the Company and certain of its
    current directors and former director was filed in the United States
    District Court for the Southern District of New York by Robert VanDyke,
    purportedly representing himself and a class of similarly purchasers of the
    Company's common stock.  The class-action complaint seeks damages and
    rescission and alleges that the Company's August 4, 1999 press release
    announcing an exclusive license to manufacture and distribute products in
    Canada based upon the "Pokemon" video game and television series was
    misleading because the license had not yet been executed and, when
    ultimately executed three weeks later, was non-exclusive.  The complaint
    further alleges that this affected the market price of the Company's stock
    during the three week period.  The Company believes the suit is without
    merit and intends to vigorously contest it.

(c) The Company has been named in a lawsuit for breach of contract in a
    licensing dispute, for recovery totaling in excess of $600,000.  A
    defense is being filed against the plaintiff, and in the opinion of
    management it is difficult to ascertain the likelihood of an unfavorable
    outcome to the Company.

GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

(d) The Company's Canadian subsidiary is also contingently liable for
    outstanding letters of credit of approximately $1,000,000 as at September
    30, 2000.

15. Financial instruments:

(a)	Foreign currency risk management:

The Company enters into forward foreign exchange contracts to minimize its
foreign currency exposure on purchases.  The contracts oblige the Company to
buy US dollars in the future at predetermined exchange rates.  The contracts
are not used for trading purposes.  The Company's policy is to enter into
forward foreign exchange contracts on a portion of its purchases anticipated
in the next selling season.  Gains and losses on forward exchange contracts
are recorded in income and generally offset transaction gains or losses on
the foreign currency cash flows which they are intended to hedge.

At September 30, 2000 the Company had no contracts to purchase US dollars.

(b)	Fair values:

Fair value estimates are made as of a specific point in time, using available
information about the financial instruments.  These estimates are subjective in
nature and often cannot be determined with precision.

The fair value of the Company's accounts receivable, due from affiliated
companies, bank indebtedness, trade and other payables approximate their
carrying value due to the immediate or short-term maturity of these
financial instruments.  The fair market value of long term debt approximates
its amount carrying value.

(c)	Credit risk and economic dependence:

For the period ended September 30, 2000, approximately 68% (December 31, 1999
- 64%) of the Company's sales were made to five unrelated companies.
Three customers, representing approximately 53% (December 1999 - 50%) of
total sales, individually accounted for more than 13% (December 31, 1999
- 10%) of total sales.  The Company regularly monitors its credit risk
exposure to these and other customers and takes steps to mitigate the
risk of loss.

(d)	Interest rate risk:

The Company's principal exposure to interest rate risk is with respect to its
short-term financing which bears interest at floating rates.

16. Subsequent events:

    (a) On October 24, 2000, the company amended its line of credit to
        $3,500,000.The revised credit line will expire in January 2001.

    (b) The letter if intent for the proposed acquisition of Limited Treasures
        has expired and the Company has determined not to pursue the
        acquisition.

    (c) The Company's wholly-owned subsidiary, Ark Creations, Inc. was required
        to make an interest payment of $36,600 to Ark Foundation, LLC under the
        terms of its Subordinated Promissory Note dated January 1, 1999 under
        which there remains an unpaid principal balance of $1,500,000.  On
        October 4, 2000, Ark Creations, Inc. received a demand for payment from
        Ark Foundation, LLC. Ark Creations, Inc. has not made the demanded
        payment. As of the date of this report, in addition to the unpaid
        principal amount $48,800 of interest had accrued on the note.

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

Forward looking statements.

This Form 10-Q contains forward-looking statements about events and
circumstances that have not yet occurred.  For example, statements including
terms such as the Company "expects" or "anticipates" are forward-looking
statements.  Investors should be aware that the Company's actual results
may differ materially from the Company's expressed expectations because of
risks and uncertainties about the future.  The Company will not necessarily
update the information in this Form 10-Q if and when any forward-looking
statement later turns out to be incaccurate.  Risks and uncertainties that
may affect the Company's future results and performance include, but are not
limited to, the following:  intense competition and pricing pressures in the
toy industry; the general consolidation in the toy industry; whether the
Company's general strategy with respect to the toy industry and the Company's
implementation of that strategy will correctly anticipate key trends in the
toy industry; the Company's ability to retain its product lines; the Company's
acquisition and growth strategy; the Company's ability to obtain sufficient
lines of credit to enable it to operate without restrictions; the Company's
relationships with retailers and other issues with respect to the Company's
distribution channels. Additional information about factors that could affect
future results and events is included elsewhere in this Form 10-Q, in the
Company's fiscal 1999 Form 10-K and in other reports filed with the Securities
Exchange Commission.

Overview

Net sales consist of sales of products to customers after deduction
of customer cash discounts, freight and warehouse allowances,
volume rebate allowances, and returns of merchandise.  Sales are recorded
when the merchandise is shipped.  As well, it includes commissions earned
on direct sales to retailers from vendors represented by Grand.

The cost of goods sold for products imported as finished goods
includes the cost of the product in the appropriate domestic currency, duty
and other taxes, and freight and brokerage charges.  Royalties to suppliers
not contingent upon the subsequent sales of the suppliers' products are
included in the price paid for such products.

Major components of selling, general and administrative expenses
include: payroll and fringe benefits; advertising expense, which
includes the cost of production of television commercials and the
cost of air time; advertising allowances paid to customers for
cooperative advertising programs; and royalty expense.  Royalties
include payments by Grand Canada to licensors of character
properties and to manufacturers of its toy products if such
payments are contingent upon subsequent sales of the products.
Royalties are usually a percentage of the price at which the product
is sold and are payable once a sale is made.

Accounts receivables are net of an allowance for doubtful accounts. The
allowance is adjusted periodically to reflect the current status of receivables.
Management believes that current reserves for doubtful accounts are adequate.
Sales of products to retailers and distributors are on an irrevocable basis.
Consistent with industry practices, Grand Canada may make exceptions to this
policy on a case-by-case negotiated basis.  Inventory is comprised
of finished goods at landed cost.

All amounts are in US$ unless otherwise noted.

GRAND TOYS INTERNATIONAL, INC.

Results of Operations

The following table sets forth consolidated operations data as a
percentage of net sales for the periods indicated:

<TABLE>
                              For the Three Months       For the Nine Months
                              Ended September 30,        Ended September 30,
                                2000           1999        2000        1999
                                  %              %           %           %
<S>                           <C>            <C>        <C>         <C>
Net sales                     100.00         100.00     100.00      100.00
Cost of goods sold             81.74          57.86      90.32       65.18
Gross profit                   18.26          42.14       9.68       34.82

Operating expenses:
  Selling, general
  and administrative           31.61          25.21      43.66       24.19
  Foreign exchange
  loss (gain)                 (1.54)           1.96      (0.92)       0.01
  Interest on long
  term debt                     -              -          1.07           -
  Interest                    (1.58)           1.50      (0.60)        1.48
  Bad debt expense              1.47           0.16       0.80         0.21
  Depreciation and
  amortization                  3.31           0.91       4.35        1.10
  Unusual items                63.47              -      31.05           -
Total operating expenses       96.74          29.74      79.41       26.99

(Loss) earnings before
 income taxes                (78.48)          12.40     (69.73)        7.83

Net (loss) earnings          (77.94)           6.84     (57.46)        4.24
</TABLE>

Comparison of the three months ended September 30, 2000 to the three months
ended September 30, 1999:

Net Loss:

Net loss was $3,578,978 for the second quarter of 2000 compared to a net
earnings of $679,806 for the same period last year.  The decrease of
$3,258,784 in earnings was mainly due to the unusual charge of $2,914,783
consisting of prepaid and intangible write-offs and the decrease in sales and
reduced margins on those sales during the period.  In addition, while the
Company did endeavour to reduce selling, general and administrative expenses
during the quarter, those deductions did not match, as a percentage, the
reduction of the sales volume. The net loss was further increased by the
restriction of income tax recoveries of a subsidiary to the amount that can
be recovered from taxes paid in prior years.  The Company will have until
2007 to be able to apply unutilized tax losses against future taxable income.

Net Sales:

Net sales decreased by $5,352,817 or by 53.82% over net sales during the second
quarter of 1999.  The decrease is due to the significant amount of sales of
Furby (Tiger Electronics) in 1999.  The Company no longer sells the products
of Tiger Electronics.  Net sales were also adversely affected by, a decline in
consumer demand for WCW action figures leading to a significant sales reduction
in that product line.


GRAND TOYS INTERNATIONAL, INC.

Comparison of the three months ended September 30, 2000 to the three months
ended September 30 1999, continued:

Gross Profit:

Gross profit for the Company decreased by $3,351,864, or, as a percentage of
sales, gros profit decreased from 42.14% to 18.26%. The decrease in gross
profit percentage was primarily due to the lower gross margins associtated
with the discontinuance of certain product lines during the quarter as well
as the accrual of customer incentives.

As a result of the reduction in the market demand for certain product lines, the
Company reserved an additional $254,871 against inventory on hand.  The
majority of the reserve was primarily allocated against WWF, WCW and Star Wars
products.

Selling, General and Administrative Expenses:

The decrease in selling, general and administrative expenses of $1,055,873
compared to those of the second quarter of 1999 was mainly due to a decrease
in cooperative advertising expense, as well as a reduction in compensation costs
due to a lower head count.  However, these costs, as a percentage of sales, were
significatly higher this quarter compared to the same quarter of 1999 due to the
much lower sales base. Fixed overhead expenses, such as rent and lease costs,
restricts the company's effectiveness in having a relative decrease in line
with the decrease in sales.

Unusual Items:

The Company incurred unusual non-recurring expenses this period. These expenses
comprised the following items;


     (a) The Company recognized the permanent impairment in value of goodwill
         from an acquisition of $2,253,516.

     (b) Due to the amendment of the credit line to a shorter period, the
         Company has taken a charge against earnings of the full amount of the
         deferred financing charges of $535,772.

     (c) The Company has written off $125,495 as a result of discontinuing a
         proposed acquisition of Limited Treasures.

Comparison of the nine months ended September 30, 2000 to the nine months
ended September 30, 1999.

Net Loss:

Net loss were $5,883,169 for first nine months of 2000 compared to net earnings
of $1,158,443 for the same period last year.  The decrease of $7,041,612 in net
earnings was mainly due to the unusual charge of $3,178,783 consisting of
prepaid and intangible write-offs and the decrease in net sales and reduced
sales margins on those sales during the period.  In addition, while the Company
did endeavour to reduce selling, general and administrative expenses for the
period, those deductions did not match, as a percentage, the reduction of the
sales volume. The net loss was further increased by the restriction of income
tax recoveries of a subsidiary to the amount that can be recovered from taxes
paid in prior years.  The Company will have until 2007 to be able to apply
unutilized tax losses against future taxable income.

Net Sales:

Net sales decreased by $17,105,291 or by 62.56% over net sales during the same
period of 1999.  The lower net sales volume was attributted to the loss of the
Furby (Tiger) product line aftr 1999, as well as lower consumer demand for WWF
and WCW action figures.


GRAND TOYS INTERNATIONAL, INC.

Comparison of the nine months ended September 30, 2000 to the nine months ended
September 30, 1999, continued:

Gross Profit:

Gross profit for the Company decreased by $8,528,964 or as a percentage of
sales, gross profit decreased from 34.82% to 9.68%.  The decrease in gross
profit percentage was due to the sales mix in the product line, primarily
due to the lower gross margins associated with the Furby product lines and
the discontinuance of other product lines during the period as well as the
accrual of customer incentives.

As a result of the reduction in the market demand for certain product lines, the
Company reserved an additional $1,598,364 against inventory on hand.  The
majority of the reserve was primarily allocated against WWF, WCW and Star Wars
products.

Selling, General and Administrative Expenses:

The decrease in selling, general and adminsitrative expenses of $2,145,070
compared to those of the first nine months of 1999 was due to a decrease in
cooperative advertising as well as a decline in other expenses including
compensation due to lower staffing leves.  However, these costs, as a percentage
of sales were significantly higher this period compared to the same period of
1999 due to the much lower sales base.  Fixed overhead expenses, such as rent
and lease costs, restricts the Company's effectiveness in having a relative
decrease in line with the decrease in sales.

Unusual items:

The Company recongnized unusual expenses this period while none were recorded
in the same period last year.  These expenses comprised the following items:

     (a)  The Company settled a lawsuit by a lessor for $264,000.

     (b)  The Company recognized the permanent impairment in value of goodwill
          from an acquisition of $2,253,516.

     (c)  Due to the amendment of the credit line to a shorter period, the
          Company has taken a charge against earnings of the full amount of the
          deferred financing charges of $538,062.

     (d)  The company has written off $123,205 as a result of discontinuing a
          proposed acquisition.


Liquidity and Capital Resources

In August 1999, the Company entered into a three year banking
arrangement with a new lending institution.  Grand Toys had obtained a
secured line of credit of $17,500,000 to enable it to meet its plans.
The Company may draw down working capital advances and letters of credit in
amounts determined by percentages of its accounts receivable and
inventory.  Working capital advances taken by the Company bear
interest at prime plus 1 1/4%.  The term of the loan was three years.
In October 2000, the banking agreement was amended to reduce the line of credit
to $3,500,000 and to expire in January 2001. The Company is currently in
discussions to open up new banking facilities with another financial
institution.

Failure to obtain a credit facility would have a material adverse effect on the
Company because the Company would not have the capital necessary to make product
purchases. This would force the  Company to curtail or cease business
operations.

In 1999, the Company received $8,441,675  as a result of the issuance of
1,557,272 shares upon the exercise of options and warrants. These sales allowed
the Company to eliminate vertually all of its bank debt by December 31, 1999.

Accounts receivable at September 30, 2000 were $3,850,680 compared to $8,083,004
at December 31, 1999. Inventory was $3,084,748 at September 30, 2000 compared to
$ 6,065,564 at December 31, 1999.  Due to the seasonality to the toy industry,
inventory levels will fluctuate according to customer demand.  These levels
were also less than previous periods due to the lower sales levels experienced
by the Company.

Working capital decreased from $10,788,948 at December 31, 1999 to
$7,130,724 at September 30, 2000.  Net cash provided by operating activities was
$1,648,953 in 2000 compared to net cash used for operating activities of
$413,673 in 1999.  Cash used for additions to equipment and leasehold
improvements was $118,984 compared to $170,549 in 1999.

GRAND TOY INTERNATIONAL, INC.

Liquidity and Capital Resources, continued:


Grand Canada's accounts receivable level is subject to significant seasonal
variations due to the seasonality of sales.  As a result, Grand Canada's
working capital requirements are greatest during its third and fourth
quarters.  In addition, to the extent accounts receivable, inventories and
guarantees and advance payments increase as a result of growth of Grand
Canada's  business, Grand Canada could require additional working capital to
fund its operations.  Sources of such funding include cash flow
from operations, drawings on the financing facilities, or sales of
additional equity or debt securities by the Company.

If the funds available under the Company's financing agreements,
together with its current cash and cash equivalents are not
sufficient to meet the Company's cash needs, the Company may
from time to time seek to raise capital from additional sources,
including the extension of its current lending facilities, project-
specific financing and additional public or private debt or equity
financing.  Management believes that the Company has sufficient
financing at the present time to meet its 2000 forecast.

Effects Of Inflation

The Company does not believe that inflation has had a significant
impact on its financial position or results of operations in this period.

New Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting of Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities".  This statement addresses
the accounting for derivative instruments, including forward foreign exchange
contracts.  This statement, as amended by SFAS No. 137, shall be effective for
the Company's financial statements for December 31, 2000.  The Company does not
have any derivative instruments of hedging activities.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to certain market risks, which arise from transactions
entered into in the normal course of business.  The Company's primary exposures
are changes in interest rates with respect to its debt and foreign currency
exchange fluctuations.

INTEREST RATE RISK  The intrest payable on the Company's revolving
lines-of-credit are variable based on the prime rate, and therefore,
affected by changes in market interest rates.  The Company does not use
derivative financial instruments.

GRAND TOYS INTERNATIONAL, INC.

Item 3.  Quantitive and Qualitatie Disclosures About Market Risk, continued:

FOREIGN CURRENCY RISK  While the Company's product pruchases are transacted
in United Stated dollars, most transactions among the suppliers and
subcontractors are effected in HK dollars.  Accordingly, fluctuations in
Hong Kong monetary rates may have an impact on the Company's cost of goods.
Futhermore, appreciation of Chinese currency values relative to the Hong Kong
dollar could increase the cost to the Company of the products manufactured in
the People's Republic of China, and thereby have a negative impact on the
Company.  As well since the majority of the Company's sales are in Canadian
dollars, the Company is at risk with regards to the conversion of Canadian
dolalrs to US dollars to pay its suppliers.  Therefore, fluctuations in the
conversion rate may have an impact on the Company.  The Company may use
derivative financial instruments solely to hedge the effects of such
currency fluctuations.


Part II - Other Information

Item 1.  Legal Proceedings

During the quarter ended September 30, 2000, there were no material
developements to any legal proceedings which have been previously reported by
the Company.  See Note 15(b) for a description of material legal proceedings
which were commenced after December 31, 1999.

During the second quarter of 2000, the Company settled a lawsuit for $264,000.

Item 2.  Changes in Securities and Use of Proceeds

On July 17, 2000, the Company issued 50,000 common shares upon conversion of
50,000 shares of its Series A 5% Convertible Preferred Stock.  The issuance was
exempt from the registration requirements of the Securities Act of 1933 by
virtue of Section 4(2) of the Act.

Item 3.  Defaults Upon Senior Securities

The Company's wholly-owned subsidiary, Ark Creations, Inc. was required to make
an interest payment of $36,600 to Ark Foundation, LLC under the terms of its.
Subordinated Promissory Note dated January 1, 1999 under which there remains an
unpaid principal balance of $1,500,000.  On October 4, 2000, Ark Creations, Inc.
received a demand for payment from Ark Foundation, LLC.  Ark Creations, Inc. has
not made the demanded payment. As of the date of this report, in addition to the
unpaid principal amount, $48,800 of interest had accrued on the note.

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

On September 28, 2000, Grand held its annual meeting of stockholders.  At the
 meeting, the following actions took place:

     1.   The Stockholders re-elected Stephen Altro, David Mars, Elliot Bier and
          James Rybakoff as directors of Grand.  The number of votes for and
          against each of them was as follows:

     Director Name     For         Against      Withheld        Abstain

     Stephen Altro     2,785,875   10,180        n/a            38,535
     David Mars        2,785,875   10,180        n/a            38,535
     Elliot Bier       2,795,095      960        n/a            38,535
     James Rybakoff    2,795,315      740        n/a            38,535


     2.The Stockholders approved an amendment and restatement of Grand's 1993
       Stock Option Plan which increased the number of shares available for
       grant under the plan from 300,000 to 600,000. 890,075 shares were voted
       for the amendment, 58,696 shares were voted against the amendment,
       1,864,922 shares were withheld and 20,897 shares abstained.

     3.The Stockholders ratified the approval of KPMG LLP to serve as Grand's
       auditors for the fiscal year ending December 31, 2000.  2,816,235 shares
       were voted for the appointment 9,431 shares were voted against the
       appointment, no shares were withheld and 8,924 shares adstained.



Item 5.  Other Information

None


Item 6.  Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended September 30, 2000



GRAND TOYS INTERNATIONAL, INC.

Signatures

Pursuant to the requirements of the Security Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


Dated:  November 15, 2000			GRAND TOYS INTERNATIONAL, INC.

By:  /s/ Stephen Altro
Stephen Altro
Chairman


By:  /s/ Ken Cieply
Ken Cieply
Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
(Principal Financial and Accounting Officer)


GRAND TOYS INTERNATIONAL, INC.


Signatures

Pursuant to the requirements of the Security Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated:  November 15, 2000      GRAND TOYS INTERNATIONAL, INC.

By:
Steve Altro
Chairman
(Principal Executive Officer)

By:
Ken Cieply
Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
(Principal Financial and Accounting Officer)