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 :  June 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 August 5, 2000: 3,234,906


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


ITEMS IN FORM 10 - Q
							                                                            Page

PART I - Financial Information

Item 1. Consolidated Financial Statements:

Consolidated Balance Sheets
   at June 30, 2000 and December 31, 1999                           4-5
Consolidated Statements of Operations
   For The Three Month and Six Month Periods
   Ended June 30, 2000 and 1999                                       6
Consolidated Satements of Stockholders' Equity
   and Comprehensive Income                                           7
Consolidated Statements of Cash Flows
   For The Six Month Period
   Ended June 30, 2000 and 1999                                       8
Notes to Consolidated Financial Statements                         9-18

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations            19-22
Item 3.  Quantitative and Qualitative Disclosures About
         Market Risks                                             23-24

PART II - Other Information

Item 1.  Legal proceedings                                           24
Item 2.  Changes in Securities and Use of Proceeds                   24
Item 3.  Defaults Upon Senior Securities                             24
Item 4.  Submission of Matters to a Vote of Security Holders         24
Item 5.  Other Information                                           24
Item 6.  Exhibits and Reports on Form 8-K                            24


Signatures                                                        25-26




GRAND TOYS INTERNATIONAL, INC.

Part I. - Financial Information

Item 1. Financial Statements

Consolidated Balance Sheets


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

Assets
<S>                                                <C>          <C>
Current assets:
Cash                                               $ 1,410,217  $         -
Accounts receivable (net of allowance for
doubtful accounts; 2000-$22,288;
1999-$90,805)(note 2)                                2,893,805    8,083,004
Income taxes recoverable                             1,291,492            -
Due from affiliated companies	                          43,922       36,801
Inventory                                            3,315,371    6,065,564
Prepaid expenses	                                    1,080,426      940,435
Total current assets                                10,035,233  	15,125,804

Deferred financing charges                             393,112      425,434
Deferred income tax                                    685,453      684,996
Equipment and leasehold improvements,net (note 3)      510,646      536,157
Intangibles (net of amortization;2000-$61,740;
1999-$123,480)(note 4)                               2,284,836    2,346,126



Total assets	                                     $ 13,908,830 $ 19,118,517
</TABLE>



GRAND TOYS INTERNATIONAL, INC.

Consolidated Balance Sheets

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

<S>                                              <C>             <C>
Liabilities and Stockholders' Equity
Current liabilities:
Bank indebtedness (note 5)                      $ 	        -    $   429,526
Trade accounts payable                           	 1,125,760      2,186,525
Other accounts payable and accrued liabilities	      455,265        835,630
Royalties payable	                                    17,606          2,286
Income taxes payable	                                315,391        716,223
Current portion of long term debt                          -        166,666
Total current liabilities                          1,914,022     	4,336,856

Long term debt (note 6)                            1,500,000      1,777,778
Minority interest                                       	100           	100
Preferred stock (note 7)                             750,000      1,000,000

Stockholders' equity:
Capital stock (note 8)                                	3,185          3,135
Additional paid-in capital                        19,564,627     19,314,677
Deficit                                         	(9,029,895)    (6,725,703)
Accumulated other comprehensive income -
cumulative currency translation adjustment       	 (793,209)      (588,326)
                                                	  9,744,708     12,003,783

Commitments and contingencies (notes 13 and 14)
Subsequent events (note 16)

Total liabilities and stockholders' equity	     $ 13,908,830  $ 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 June 30,           ended June 30,
                                  2000          	1999      2000          1999
<S>                             <C>         <C>        <C>        <C>

Net sales                      $2,153,727  $8,672,561  $5,645,594 $17,307,193

Cost of goods sold	             2,479,545   6,006,377   5,492,865  12,004,419

Gross profit                    (325,818)   2,666,184     152,729   5,302,775

Operating expenses:
Selling, general and
administrative                  1,429,492   2,364,043   3,018,091   4,087,251
Foreign exchange loss (gain)     (41,460)   	(54,601)    (23,251)   (192,711)
Interest on long term debt         49,834           -     109,800           -                -
Interest                         (36,511)     125,044 	  (34,652)     252,757
Bad debt expense                   32,042       2,963      60,111      41,054
Depreciation and amortization     150,506     144,501     293,895     212,514
Unusual items (note 10)           264,000           -     264,000           -
                             		 1,847,904   2,581,949   3,687,995   4,400,866

(Loss) earnings before
income taxes                  (2,173,722)      84,235 (3,535,266)     901,908

Income tax recovery
(expense)                         692,624     (5,355)   1,231,074   (487,341)

Net (loss) earnings          $(1,481,098)     $78,880 $(2,304,192)  $ 414,567

(Loss) earnings per
share  (note 1 (j))
Basic                              (0.47)        0.05       (0.72)       0.26
Diluted                           	(0.47)        0.05       (0.72)       0.26
</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                   -             -  (2,304,192)          -  (2,304,192)
Foreign currency
adjustment              	-            	-            -  (204,883)    (204,883)
Total comprehensive
income						             -             -            -          -  (2,509,075)
Share conversion        50       249,950            -          -      250,000


June 30, 2000       $3,185   $19,564,627 $(9,029,895) $(793,209)   $9,744,708
</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 June 30,
                                           		2000              1999
<S>
Cash flows from operating activities:
Net (loss) earnings                   $(2,304,192)        $414,567
Items not affecting cash:
Depreciation and amortization              293,958         212,514
Deferred income taxes                        (456)               -
Changes in operating working capital
items, (note 12)                         4,405,957       2,744,797
Net cash provided by
operating activities	                    2,395,267       3,371,879

Cash flows from financing activities:
(Decrease) increase in bank
indebtedness                             (447,867)     (2,318,523)
Decrease in long term debt               (444,444)               -
Increase in deferred financing charges    (13,123)               -
Other	                                     (3,243)       (699,980)
Net cash used for
financing activities                     (908,677)     (3,018,503)

Cash flows from investing activities:
Additions to equipment
and leasehold improvements                (76,372)      	(104,692)
Acquisition of assets                            -         120,558
Net cash used for
investing activities	                     (76,372)       (353,375)

Net change in cash, being cash at
at end of period                       $ 1,410,217        $     	-


Supplementary disclosure of cash flow information

Cash paid during the year for:
Interest	                                 $ 75,148       $ 252,757
Income taxes                               481,159         148,698
</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 June 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 term of the financing.


(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 June 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>
                                 June 30, 2000             December 31, 1999
<S>                              <C>                       <C>
Trade receivables                $ 1,469,026               $ 7,166,705

Other                              1,447,067                 1,007,104

Allowance for Doubtful Accounts     (22,288)                  (90,805)

Total Accounts Receivable        $ 2,893,805               $ 8,083,004
</TABLE>

3.	Equipment and leasehold improvements:

<TABLE>
                              June 30,               December 31,
                               			2000                       1999
                                 		Accumulated               Accumulated
                       		Cost    	depreciation     Cost     depreciation
<S>                     <C>           <C>          <C>          <C>
Computer equipment	     $1,274,420    $900,721     $1,286,253   $857,726
Machinery and equipment 	  474,759     436,674        458,091   	430,434
Furniture and fixtures	    488,699     448,867        480,775    454,974
Trucks and automobiles	     82,535      81,146         84,335     82,665
Telephone equipment	        45,267      37,101         40,339     36,819
Leasehold improvements     378,159     328,683       	372,755    323,773
                        $2,743,838  $2,233,192     $2,722,548 $2,186,391
Net book value	                       $510,646                 $ 536,157
</TABLE>

4. Acquisition:

On January 1, 1999, the Company acquired all of the assets of Ark Foundation
LLC,(renamed Ark Creations Inc.) for proceeds of $ 2,500,000.

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.

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 June 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 June 30, 2000, the unused portion of the credit facility is
approximately $ 17,065,000. Standby fees represent 1/4 % of the unused line
of credit.

6. Long term debt:

The Company 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 net 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 stockon 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 of Series A Stock were converted to 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.

GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

8. Capital stock, continued:

(b) Issued and outstanding:

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

150,000 preferred shares (1999-200,000)             $ 750,000    $1,000,000

3,184,906 common shares, net of 375,000 shares
(note 6)(1999 - 3,134,906 common shares)
(note 1 (k))                                          $ 3,185       $ 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.

(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                             50,000

June 30, 2000                               	       3,184,906

</TABLE>


9.	Stock options and warrants:

The Company has a stock option plan (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)


GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

9. Stock options and warrants, continued:

of the Company, or, in the case of Non-statutory Stock Options, all employees
(including officers) or non-employee directors of the Company.

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
June 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	              2,000           -        -      2,000   2.08

June 30, 2000         8,000     153,500   55,000    216,500  $6.37
</TABLE>

10. Unusual item:

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

11. Earnings per share:

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

Basic EPS
 Earnings available to
 common stockholders            $(1,481,098)    3,184,906          $(0.47)

Diluted EPS
 Earnings available to
 common stockholders
 and assumed conversions         (1,481,098)    3,184,906           (0.47)


GRAND TOYS INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

11. Earnings per share, continued:

Period ended June 30, 2000

Basic EPS
 Earnings available to
 common stockholders           	$(2,304,192)    3,184,906          $(0.72)

Diluted EPS
 Earnings available to
 common stockholders
 and assumed conversions         (2,304,192)    3,184,906           (0.72)
</TABLE>


Options to purchase 1,000 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 June 30,
      	                                        	2000         	1999
<S>                                       <C>             <C>
Decrease in accounts receivable	            $5,097,538     $4,055,026
Increase in income taxes recoverable       (1,308,251)              -
(Increase) decrease in due from
affiliated company	                            (8,008)        203,772
Decrease (increase) in inventory	            2,659,579    (3,894,710)
Increase in prepaid expenses                 (255,169)      (212,576)
(Decrease) increase in trade
accounts payable                           (1,033,466)      3,248,354
Decrease in other accounts payable
and accrued liabilities                      (371,306)      (983,840)
Increase (decrease) in royalties payable        15,569       (24,402)
(Decrease) increase in income
taxes payable                                (390,549)        353,172

                                          	 $4,405,957     $2,744,797
</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                                         $	187,000
2001	                                         	311,000
2002	                                         	301,000
2003	                                         	281,000
2004                                           235,000
Thereafter	                                   	 17,000

                                       				$	1,332,000
</TABLE>

Rent expense for the period ended June 30, 2000 and 1999 amounted to
approximately $413,413 and $218,938 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 $1,845,000 as at June 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 June 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 June 30, 2000, approximately 64% (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 2% (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 event:

On or about August 11, 2000, 50,000 of Series A preferred shares were converted
into 50,000 shares of common stock.


GRAND TOYS INTERNATIONAL, INC.


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
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 and 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 receivable are receivables 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             For the Six
                              Months Ended June 30,   Months Ended June 30,
                                2000           1999        2000        1999
                                  %              %           %           %
<S>                           <C>            <C>        <C>         <C>
Net sales                     100.00         100.00     100.00      100.00
Cost of goods sold            115.13          69.26      97.29       69.36
Gross profit                 (15.13)          30.74       2.17       30.64

Operating expenses:
  Selling, general
  and administrative           66.37          27.26      53.46       23.62
  Foreign exchange
  loss (gain)                 (1.93)         (0.63)     (0.41)      (1.11)
  Interest on long
  term debt                     2.31              -       1.94           -
  Interest                    (1.61)           1.44     (0.61)        1.46
  Bad debt expense              1.49           0.03       1.06         .23
  Depreciation and
  amortization                  6.99           1.67       5.21        1.23
  Unusual items                12.26              -       4.68           -
Total operating expenses       85.80          29.77      65.33       25.43

(Loss) earnings before
 income taxes               (100.93)          0.97     (62.62)        5.21

Net (loss) earnings          (68.77)          0.01     (40.81)        2.40
</TABLE>

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

Net Loss:

Net loss was $1,481,098 for the second quarter of 2000 compared to a net
earnings of $78,880 for the same period last year.  The decrease of
$1,559,978 in earnings was mainly due to the decrease in sales and the reduced
margins on those sales during the period.  As well, 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.  Unusual expenses during the quarter further increased the net
loss.

Net Sales:

Net sales decreased by $6,518,834 or by 75.17% 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.  As well, a decline in consumer demand for WCW action
figures led to a significant sales reduction in that product line.
of the Furby (Tiger Electronics).

GRAND TOYS INTERNATIONAL, INC.

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

Gross Profit:

Gross profit for the Company decreased by $2,992,002, or, as a percentage of
sales, gros profit decreased from 30.74% to (15.13%). 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 $1,084,737 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 $934,551
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.

Unusual items:

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

Comparison of the three months ended June 30, 2000 to the six months
ended June 30, 1999.

Net Loss:

Net loss were $2,304,192 for first six months of 2000 compared to net earnings
of $414,568 for the same period last year.  The decrease of $2,718,760 in net
earnings was mainly due to the decrease in net sales and reduced sales margins
on those sales during the period.  However selling, general and administrative
expenses did not reduce in proportino to sales decrease even though total
outlays did decrease.  Unusual expenses during the period further increased the
net loss.

Net Sales:

Net sales decreased by $11,661,599 or by 67.38% over net sales during the first
half 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 six months ended June 30, 2000 to the six months ended
June 30, 1999, continued:

Gross Profit:

Gross profit for the Company decreased by $5,150,045 or as a percentage of
sales, gross profit decreased from 30.64% to 2.71%.  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 in the market demand for certain product lines, the Company
reserved an additional $1,343,493 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 $1,069,160
compared to those of the first six 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.

Unusual items:

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

Comparison of the six months ended June 30, 2000 to the six months ended June
30, 1999.

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 is three years.

The Company received $8,441,675 during the year of 1999 as a result of
options and warrants being exercised virtually eliminating all bank debt by
the end of the year.

Accounts receivable at June 30, 2000 were $2,893,8051 compared to $8,083,004
at December 31, 1999. Inventory was $3,315,371 at June 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
$8,121,211 at June 30, 2000.  Net cash provided by operating activities was
$2,395,267 in 2000 compared to net cash used for operating activities of
$3,371,879 in 1999.  Cash used for additions to equipment and leasehold

GRAND TOY INTERNATIONAL, INC.

Liquidity and Capital Resources, continued:

improvements  was $76,372 compared to $104,692 in 1999, as a result of
purchases relating to the acquisition of Ark Creations Inc.

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 has
not yet determined the impact of this statement on its results of operations.

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

Other than discussed above or in Notes 14 to the Company's Consolidated
Financial Statements included elsewhere herein, the Company is not a party
to, nor is it aware of, any other pending litigation of a material nature.

Item 2.  Changes in Securities and Use of Proceeds

Refer to the Consolidated Financial Statements in Part I of the document.

Item 3.  Defaults Upon Senior Securities

None

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

None

Item 5.  Other Information

None


Item 6.  Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended June 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:  August 14, 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:  August 14, 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)