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

                                    FORM 10-K/A

                [X]Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                      For the year ended September 30, 2000

                         Commission File Number 1-11046

                           GLOBAL TECHNOVATIONS, INC.
             (Exact name of Registrant as specified in its charter).

     Delaware                                             84-1027821
(State or other jurisdiction of                         (I.R.S. Employer
corporation or organization)                          Identification Number)

        7108 Fairway Drive, Suite 200, Palm Beach Gardens, Florida 33418
           (Address of Principal Executive Office)           (Zip Code)

       Registrant's  telephone  number,  including  area  code:  (561)775-5756
          Securities registered pursuant to Section 12(b) of the Act:

                                                    Name of each exchange
Title of each class                                  on which registered
Common Stock                                       American Stock Exchange

           Securities registered pursuant to Section 12(g) of the Act:
                  $.001 par value Common Stock (Title of Class)

                                      None

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

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

As of January 12, 2001,  29,804,281  shares of $.001 par value Common Stock (the
Registrant's only class of voting stock) were outstanding.  The aggregate market
value of the common shares of the Registrant on January  12,2001 (on the closing
sales  price)  held  by  non-affiliates  of the  Registrant,  was  approximately
$14,735,865.

                       Documents Incorporated by Reference

 Location in Form 10-K/A                       Incorporated Document
Part III-Items 10, 11, & 12           Definitive Proxy Statement in connection
                                       with its Annual Meeting of Stockholders


<PAGE>



                                     PART I

ITEM 1.  BUSINESS

A.  General Description of Business

Global Technovations, Inc. (the "Company") was organized in 1986 to distribute a
patented  overhead  mounted  speaker  system  ("OHSS")  for  vehicles.  With the
September  30, 1999 sale of the  Company's  OHSS assets to Onkyo  America,  Inc.
("OAI"), the Company's primary business  temporarily became the assembly,  sale,
and  lease  of  its  proprietary  on-site  oil  analyzer  ("OSA-II"),  a  second
generation  proprietary oil analysis  instrument that combines two spectrometers
in  order  to  analyze  both  new or used  oil in  approximately  five  minutes.
Following  the  sale of OHSS  assets,  the  Company  re-acquired  them  with its
purchase of OAI for $25 million on August 31, 2000.


The Company  conducts  substantially  all of its  operations  through two wholly
owned  operating  subsidiaries,  OAI,  which  conducts the Company's  automotive
speaker  technology  business  and On-Site  Analysis,  Inc.  ("On-Site"),  which
conducts the Company's oil analysis  business.  In late December  2000,  On-Site
acquired  the assets of Boston  Advanced  Technologies,  Inc.  ("BAT").  BAT was
engaged in the development and manufacture of a family of portable spectroscopic
instruments and a line of diesel fuel and gasoline property analyzers.


For the fiscal year ended September 30, 2000 OAI recorded  revenue of $6,478,163
and On-Site recorded revenue of $1,124,265.  OAI revenues represent one month of
operations.

The  Company's  mission is to identify,  acquire,  and/or  incubate  proprietary
technologies  that address  specific  customer  needs.  The  Company's aim is to
maximize  technology  commercialization  through  strategic  relationships  with
business  entities,  which  share its  vision  and  possess  the  financial  and
organizational resources to realize its goals.

B.  Financial Information About Industry Segments
The Company  currently  has two  industry  segments:  oil  analysis  service and
automotive speaker technology.  See Note 17. Segment Information in accompanying
consolidated financial statements.

C.  Narrative Description of Business

General
The Company  manufactures,  assembles,  and markets two  products,  oil analysis
instruments,  which are sold and leased to a diverse  group of  industries,  and
through the sales of speakers and speaker components (collectively, "Speakers"),
which are sold to automotive  Original  Equipment  Manufacturers  ("OEMs"),  the
automotive and home aftermarkets,  and to the computer, television and telephone
industries.  With the purchase of OAI,  effective  August 31, 2000,  the Company
began including the revenues of OAI in its  consolidated  financial  statements.
Accordingly, for accounting purposes, September 2000 sales of OAI, and 12 months
of OSA-II sales  accounted for all of the Company's  revenue from  operations in
fiscal 2000.
                                        2
<PAGE>



Products and Technologies

OAI
OAI was  organized in 1987 and began  producing and selling  automotive  related
Speakers in September 1988. OAI has grown  primarily  through  internal  growth,
normal market expansion, and the September 30, 1999 acquisition of the assets of
TSA.  OAI owns a  manufacturing  plant in  Columbus,  Indiana,  has a sales  and
engineering  office  in  Troy,  Michigan  and  a  sales  office  in  San  Diego,
California.


OAI is a leading  domestic  manufacturer  of high quality  automotive  Speakers,
primarily  for four OEMs in North  America --  General  Motors  ("GM"),  Toyota,
Nissan, and Daimler-Chrysler. OAI manufactures and sells paper and plastic based
automotive  Speakers to OEMs and OEM  distributors.  OAI is also  engaged in the
development  and  manufacture  of audio  Speakers for the  consumer  electronics
industry,  which includes computers,  televisions,  telephones,  and aftermarket
home.

OAI  believes it is one of the top two OEM Speaker  manufacturers  in the United
States with Panasonic, each shipping approximately 14 million Speakers annually.
Management  believes this leading  position is  attributable  to its outstanding
quality, delivery,  manufacturing,  marketing,  flexible service and technology.
The overall  global  annual  Speaker  market is  estimated at  approximately  $1
billion.  The major  segments  that  comprise  this  market are OEM  automobile,
aftermarket  automobile,  aftermarket  home Speaker  systems,  and OEM computer,
television and telephone manufacturers.

         Industry
The automotive audio industry consists of a large array of Speaker manufacturers
that  design  various  systems  that can be added to  enhance  the  car's  sound
performance.  In addition to supplying  aftermarket systems to improve the audio
performance  of an  automobile,  the industry  also  focuses upon  manufacturing
"standard" car Speaker  systems for  automotive  OEMs. At the present day, there
exists an average of 5.1  Speakers  per car, up from 4.0 in the mid 1980s.  This
growth has been a key driver in OAI's rise to become a market  leader in the OEM
automotive Speaker manufacturing industry.

OAI's principal  business is the design,  manufacturing  and sale of Speakers to
automotive  OEMs.  These  Speakers  are  installed  in a full range of  vehicles
including sports utility  vehicles,  trucks,  passenger  sedans and coupes,  and
sport cars.

OAI manufactures  Speakers,  and produces over 150 models of various  automotive
and consumer related Speakers.  These Speakers are produced in different shapes,
such as elliptical and round. OAI's main product lines consist of 6x9, 4x6, 4, 5
1/4,  and 6 inch  Speakers  and are  primarily  for the  front,  rear,  and side
interior  panels  of a wide  array of  automobile  makes  and  models.  OAI also
provides  enclosures,  through the use of its in-house plastic injection molding
facilities, for a select number of Speakers it manufactures.

OAI's strategy has been to provide a cost  competitive,  high quality product to
automotive  OEMs,  complemented  with  quick  delivery  and  top-notch  customer
service, highlighted by engineered Speaker enclosure, and design leadership.

On  September  30,  1999,  OAI  acquired  from the Company the assets of its TSA
subsidiary,  which was a designer and  manufacturer of overhead  mounted speaker
systems for the Jeep  Wrangler  and other  sport  utility  vehicles.  TSA is now
inactive.

TSA began  importing  overhead  speaker  systems from Sweden in the early 1980s.
After distributing the product,  TSA began noticing  additional market potential
and decided to target the entire North American market.

At September 30, 2000, OAI does not have significant backlog.
                                       3
<PAGE>

The TSA acquisition presented OAI an opportunity to diversify its customer base,
reinforce    OAI's    superior    quality    standards,    acquire   a   premier
research/development   facility,   and  expand   market   presence  in  Detroit.
Significant   cost   reductions   were  achieved  in  the  areas  of  labor  and
administration due to the TSA acquisition.  With the addition of a new customer,
OAI gained entry as a supplier to a Big 3 automaker, while also diversifying its
customer base.  Since OAI acquired TSA, it has leveraged its engineering  design
expertise and customer  relationships to expand its presence within Clarion,  GM
and Daimler-Chrysler.

Following  OAI's   acquisition  by  the  Company,   OAI  leveraged  its  Speaker
manufacturing  expertise by expanding into the  manufacture and sale of Speakers
for a leading  supplier  of sound  systems  for the home  consumer  market.  OAI
received an initial $700,000 purchase order in December 2000 and a commitment in
January 2001 for an additional $1.5 million in 2001 from this supplier.

         Manufacturing
All  manufacturing  takes  place at OAI's  Columbus,  Indiana  130,000  sq.  ft.
manufacturing  facility.  OAI's QS9000 certified approved  manufacturing process
consists of several highly automated and robotic  production lines  complemented
with several shorter, more customized  manufacturing modules. The more automated
lines  allow  OAI to  engage  in long  production  runs,  utilizing  less  labor
(non-union) and increasing efficiency.  The smaller modules allow OAI to produce
low volume,  customized Speakers. This unique mix of manufacturing  capabilities
allows OAI to engage in a wide array of Speaker offerings.

         Suppliers
Currently, approximately 50% of all manufacturing, raw material and supplies are
sourced  domestically and the remainder is sourced from Asia. OAI has maintained
a long-term  relationship with its suppliers,  and believes that there are ample
alternatives  beyond its current supplier base. OAI management believes that the
loss of any one or more  suppliers  would not have a  material  effect on it nor
affect  long-term  profitability.   However,  OAI  purchases  tweeters  from  an
affiliate of Onkyo Corporation,  which was one of the August 31, 2000 sellers of
OAI. Although  alternate sources are available,  the loss of this supplier would
result in a delay in obtaining a replacement acceptable to OAI's customers.  The
Company cannot quantify the financial impact if this occurs.

         Customers
OAI sells  approximately  80% of its Speakers to three  customers - Delphi Delco
Electronics ("Delco"),  which accounted for approximately 55% of sales in fiscal
2000, and Daimler- Chrysler and Fujitsu Ten together accounted for approximately
25% of sales in fiscal 2000.  Delco is a Tier One supplier to GM and Fujitsu Ten
is a Tier One  supplier to Toyota.  A new  practice is beginning to occur in the
automotive industry as major OEMs such as GM and Daimler-Chrysler  have begun to
procure necessary  componentry  directly from manufacturers like OAI rather than
using the traditional  network of independent Tier One distributors  like Delco,
which sell the  products of Tier Two and Three  companies  (as well as their own
products).  OAI currently  acts as a Tier One supplier to  Daimler-Chrysler  and
Nissan,  and as a Tier Two supplier to GM and Toyota. OAI has been approved as a
Tier One supplier for direct sales to GM beginning in 2003.

OAI has managed to maintain a strong  relationship  with Delco and with  Delco's
drive to supply non-GM  customers,  OAI expects that it will supply  Speakers to
Delco for other OEMs.  Delco is the largest,  most  diversified  automotive  OEM
supplier in the world.  Since Delco's spin-off from GM in 1997, it has continued
to aggressively  diversify its customer base,  procure  products,  and negotiate
cost competitive market prices for its customers. Delco is the world's leader in
supplying audio systems to the OEM automotive market.
                                        4
<PAGE>

The  loss  of  Delco,  Daimler-Chrysler,  or  Fujitsu  Ten as  customers  (or an
impairment of OAI's future  relationship  with GM) could have a material adverse
effect on the Company.

         Service
OAI is always  aware that  service to the  customer  takes place both before and
after the sale.  OAI's sales and design  engineering  personnel  are in constant
contact with the customers  from the initial  design  concept stages through the
end of the  product  life  cycle.  Any  issues  at the  OEMs  assembly  plant or
dealerships for warranty claims are addressed promptly and professionally. OAI's
staff  makes  regular  visits  to  assembly  plants  to view  "first  hand"  the
installation  of its  Speakers.  Any failures in the field that are returned are
subject to complete tear down analysis and prompt corrective  actions to prevent
any future occurrences.

         Competition
OAI  faces  significant  competition  in all  aspects  of its  business.  In the
automotive  OEM market,  which  represents  the  majority of its  business,  OAI
believes it is one of two leading suppliers.  The principal  competitors include
Panasonic the other leading  manufacturer,  and Foster,  and  Harman/Oxford.  In
supplying Speakers for the computer,  television and telephone OEMs OAI competes
with virtually all-small Speaker  manufacturers.  In the consumer and automotive
aftermarket  segment, OAI competes with Eminence and Credence and a large number
of Asian manufacturers.  Additionally, in the consumer home Speaker market where
OAI is currently an insignificant  player, OAI competes with companies that have
well known brand names and broad-based distribution.

Many  of  these  competitors  are   significantly   larger  than  OAI  and  have
substantially  more financial  resources.  OAI competes in these markets through
its 12-year history and reputation for quality,  timely  service,  technological
innovations, and competitive pricing as well as its domestic presence.

         Technology
While it may seem the Speaker industry is geared towards a "commodity"  product,
manufacturers  are always  looking  for  technological  advantages  to set their
products apart. Advances in both materials and manufacturing methods can benefit
the manufacturers by improving  performance and/or reducing costs. OAI continues
to invest in the development of new processes and materials through its research
and development efforts.  OAI's technology has enabled it to remain competitive,
expand its business,  and improve the overall  performance of its products while
maintaining a centrally located U.S. manufacturing location.

  On-Site

         Oil Analysis
Oil  analysis  service  requires  extracting  a small  sample  of used  oil from
oil-lubricated  equipment  and  sending  it to a  laboratory.  Scientific  tests
identify  and quantify  metal  debris that is the result of wear.  The amount of
metal  debris,  correlated  to time or mileage that the oil has been in service,
indicates if wear is normal or abnormal.  Other  laboratory  tests  indicate and
measure  if there is any  coolant or water in the oil,  the  amount of  airborne
dirt, viscosity,  acidity, depletion level of the additive package, flash point,
coloration  and many other  factors.  Oil analysis users select the tests from a
service  menu  based on their  particular  needs.  Once  the  empirical  data is
generated  by  laboratory  tests,  a trained  evaluator  reviews the results and
generates a report, which often contains service recommendations.  The report is
then sent to the end user.

Oil  analysis is now widely used for  diagnostic  and  preventative  maintenance
programs for  equipment in many  different  industries  including  those markets
where the Company is concentrating its marketing  efforts for the OSA-II.  These
markets are the truck market which includes truck stops, truck maintenance and
                                        5
<PAGE>

truck  quick-lube  centers,  the  automotive  market which  includes  automobile
auctions,  automobile power train  development,  motorcycle engine  development,
automobile  dealerships,  automobile  and truck racing  markets,  and automotive
fleet maintenance,  the consumer market which includes retail automobile service
outlets,  marine  applications,  the government market which includes the United
States  military and  municipalities,  the  industrial  and the heavy  equipment
market  which  includes  railroads,  and  mining.  Additionally,  the Company is
marketing the OSA-II through the Internet, and direct mail.

Industry  sources have estimated that the size of the oil analysis  market is in
excess  of  two  billion  dollars.  This  includes  oil  analysis  performed  by
independent and in-house laboratories.  The Company believes that the use of oil
analysis will increase as a  preventative  maintenance  technology.  The Company
also believes that advances in oil analysis technology owned by the Company will
increase oil analysis utilization in new and existing markets.

The  concept  behind  the  OSA-II is that the oil  sample  must be tested by two
distinctly  different  types  of  spectrometers:  an  emission  spectrometer  to
identify and quantify metal elements and an infrared spectrometer to measure the
physical and chemical  properties of the used oil. Other  specifications for the
instrument  included  parameters  such as:  user  friendly,  low  cost,  minimal
maintenance,  near laboratory accuracy and repeatability,  reliability and short
turn around time.  The overall  objective is to provide high volume oil analysis
locations with an instrument  that delivers  acceptable data in minutes at about
the same price they pay for similar data by sending samples to a laboratory.

On-Site  referred  to its  initial  instruments  as the OSA-I and began  initial
testing with potential  customers in 1996 by placing them in various test market
locations  in diverse  industries  and  generated  a minimal  amount of revenue.
Between 1997 and 1998,  On-Site sold five OSA-I units.  Four of these five units
were sold to automotive OEMs.

At  the  end  of   fiscal   1997,   On-Site   began  the   development   of  the
second-generation  OSA-II unit.  By August  1998,  On-Site  completed  the first
production   run  of  seven   OSA-II  units  and  shipped  them  for  use  in  a
revenue-generating trial, at a Jacksonville,  Florida tire retailer in September
1998. Due to inconsistent  levels of interest from store to store in March 1999,
all seven OSA-II units were returned to On-Site.


On November 13, 1998,  On-Site entered into a strategic  alliance with Flying J,
Inc.  ("Flying  J"),  a company  engaged in  various  facets of  highway-related
products and services  including  the  operation of large truck stops.  Flying J
agreed to purchase  and market  OSA-IIs in up to 100 of its  truck-stop  service
centers.  The initial  purchase  order  placed by Flying J was for the  outright
purchase of 10 OSA-II units for  approximately  $700,000,  which represented the
largest single OSA-II order since the inception of the technology.


The  agreement  covered a  potential  purchase  of up to 100  OSA-IIs  and joint
development  and  marketing  of product  enhancements  to assist in the  further
commercialization of the OSA-IIs within the truck-stop  industry.  After receipt
of the initial 10 OSA-IIs,  Flying J could  terminate the agreement  without any
liability.  Flying J has not  purchased  any units since its initial order or 10
units; therefore, the original agreement is no longer in effect.

Because of the nature of Flying J's business,  its management  determined that a
self-service  OSA-II  unit was more  appropriate  for the large  majority of its
service  plazas.  On-Site's  management has been in regular  communication  with
Flying  J's  management   concerning   development  of  a  self-service  OSA-II,
("OSA-II/SS"). Additionally, On-Site's technical staff commenced initial
                                        6
<PAGE>

development of the instrument and expended funds during fiscal 1999. The primary
issue for resolution concerned the sharing of the cost of approximately $500,000
needed to complete  the  OSA-II/SS.  On-Site  worked on the  development  of the
OSA-II/SS during the fiscal 2000 year.  However,  due to the Company's financial
condition and a lack of additional funding that was expected to be received from
Flying J, this project has proceeded  much slower than  originally  anticipated.
Management believes that it will develop a working OSA-II/SS during fiscal 2001;
however,  there can be no  assurances  that  there  will be  sufficient  Company
resources to complete this project, nor can there be any assurance that Flying J
or any other current or potential customers will purchase the OSA-II/SS.

On-Site's  principal revenue during fiscal 2000 was generated primarily from the
leasing of OSA-IIs to truck-stops,  automotive auctions; and from outright sales
of OSA-II to customers in diverse industries.

During fiscal 2000,  the  principal  OSA-II  customer was Speedco,  a truck stop
operator, an affiliate of Shell/Equilon,  which currently operates approximately
40 OSA-II units.

On November 27, 2000, On-Site entered into an agreement to place five additional
revenue-generating  MotorCheck(TM)  OSA-II  instruments  with the  Shell  Global
Solutions   Technical  Group's  ("Shell  GST  Group")  facilities  at  locations
overseas.  Previously,  On-site had shipped an initial  OSA-II unit overseas for
use by the Shell GST Group overseas.  To date, four new units have been shipped,
and the remaining unit is expected to be shipped in January 2001.


As of January 2001,  there were 115 OSA-II  instruments in operation  generating
various  levels  of  revenue  from  leasing  or from  useage,  some of which was
nominal.

Sale of TSA
On September 30, 1999, the Company sold  substantially  all of the assets of its
85% owned  subsidiary,  TSA,  and certain  intellectual  property  assets of the
Company  relating to TSA's OHSS  business to OAI for  $10,000,000  consisting of
$2,500,000 cash, a $6,500,000 30-day note payable to TSA and a $1,000,000 30-day
note  payable to the Company in either cash or  convertible  preferred  stock of
OAI. The  $6,500,000  note and accrued  interest of $46,479 were paid on October
29, 1999, and the $1,000,000 note was paid through issuance of $1,000,000 of OAI
5% Series A Convertible Preferred Stock ("Onkyo Preferred").


Purchase of OAI

On August 31, 2000, the Company acquired 100% of the outstanding common stock of
OAI  from  Onkyo  Corporation,  Onkyo  Malaysia  SDN.  BHD.,  and  Onkyo  Europe
Electronics GMBH. The purchase price was $25,000,000 plus a contingent sum of up
to  $15,000,000  based upon the future  post  acquisition  earnings  of OAI (the
"Earn-Out") over a five-year period. At closing, the Company paid $13,000,000 in
cash and delivered the balance of $12,000,000  in promissory  notes due in three
years together with accrued interest of 7.51%. The Earn-Out,  if any, is due and
payable on August 31, 2005.

To facilitate the acquisition of OAI shares:

     (i)  The Company  refinanced OAI's existing  indebtedness with OAI entering
          into a  secured  three-year  $31,230,000  credit  facility  with  GMAC
          Business  Credit,  LLC ("GMAC").  The GMAC proceeds were used to repay
          OAI's existing  indebtedness owed to another  institutional lender and
          to lend part of the cash  purchase  price to the  Company.  The credit
          facility  consists of a  revolving  line of credit and two term loans.
          The revolving line of credit is for a maximum of  $20,000,000  subject
          to meeting various  financial and other  covenants.  Under the line of
          credit, OAI may borrow up to 85% of eligible accounts  receivable plus
          the lesser of 60% of all eligible  inventory or  $7,500,000.  The term
          loans are for $5,230,000 and  $6,000,000.  The $5,230,000 term loan is
          due in monthly installments of approximately $72,639 with a balloon
                                        7
<PAGE>

          payment due on August 30, 2003 of approximately $2,615,000;  the other
          term loan is due in monthly  installments  of $100,000  increasing  to
          monthly  installments  of  $150,000  on  October  1,  2001  and  again
          increasing to $250,000 per month on October 1, 2002. The final payment
          is due on  August  30,  2003.  Except  for LIBOR  loans,  which may be
          advanced under the line of credit, interest on each of the loans under
          the  credit  facility  is at the  greater  of the  federal  funds rate
          established  by the  Federal  Reserve  Bank of New York plus  one-half
          percent or the published prime rate.

          The credit facility is secured by a first lien on all of the assets of
          OAI. The Company guaranteed the credit facility and pledged all of its
          outstanding stock of OAI as additional  security.  At the closing, the
          Company borrowed a total of $20,543,338 under the credit facility.

     (ii) OAI borrowed  $7,000,000  from a family trust of which Mr. George Jeff
          Mennen,  is a director of the Company (the "Mennen Trust").  This loan
          is due in eight  years and is secured  by a second  lien on all of the
          assets of OAI; and

     (iii)The Company  borrowed  $5,000,000 from the Mennen Trust.  This loan is
          due in eight years and is secured by a first lien on all of the assets
          of GTI except for the capital stock and assets of OAI.

     (iv) In  connection  with the loans made by the Mennen  Trust,  the Company
          issued  warrants  to  purchase  1,500,000  shares of its common  stock
          exercisable at $.94 per share over a 10-year  period.  The issuance of
          these  warrants  resulted  in the  Company  recognizing  approximately
          $1,000,000  using Black Scholes  formula of original  issue  discount,
          which is being  amortized  on  interest  expense  over the life of the
          loans.

The interest on both loans made by the Mennen  Trust is 15% per annum,  of which
12.5%  payable  monthly  with  2.5% per annum  accruing  and due at the time the
principal is due.

In early January 2001, Onkyo Corporation, the Company and OAI modified the Share
Purchase  Agreement  by reducing  Onkyo  Corporation's  note by  $1,000,000  and
waiving the interest on the $1,000,000. Additionally, Onkyo Corporation extended
the time for OAI to pay it  approximately  $3,200,000 from May 31, 2000 to March
10, 2002. In making these  concessions,  Onkyo  Corporation  recognized that the
recent  softness in the  automotive  industry had reduced  OAI's cash flow.  The
Company also  believes that these  concessions  helped  facilitate  GMAC waiving
OAI's  breach  of  a  loan  covenant.  See  Item  8.  Financial  Statements  and
Supplementary Data, Note 8 and Item 7.

Purchase  of  the  Assets  of BAT
In late December 2000, On-Site purchased  substantially all of the assets of BAT
of  Marlboro,   Massachusetts.   BAT,  under  an  exclusive   agreement  with  a
multi-billion-dollar  chemical  company,  develops and  manufactures a family of
portable,  spectroscopic  instruments  marketed under the name of  SpecTrace(TM)
liquid  petroleum  marker  systems.  The  automatic  SpecTrace(TM)  instruments,
utilize  sophisticated  chemometric  analysis  to  make  accurate,  in-the-field
measurement of marker concentration in many forms of refined petroleum products.
The marker systems are currently used by a number of governments for fuel excise
tax  enforcement  and by gasoline  and oil  marketers  for brand  integrity  and
quality control.  In addition to its work with the major chemical  company,  BAT
also  manufactures  the  PetroAnalytics(TM)  line of  diesel  fuel and  gasoline
properties analyzers for the automotive,  truck and heavy-duty equipment service
markets.  The diesel fuel analyzer,  which was developed in collaboration with a
major international oil company, provides instant, on-site measurement of cetane
number and five other  important fuel  parameters  including the cetane improver
additive.  This  instrument  employs  mid-infrared  spectroscopic  analysis  and
chemometrics  to  automatically  measure fuel  properties  that  previously were
available only from testing  laboratories  at a cost of several  hundred dollars
per sample. Similarly,  BAT's gasoline analyzer measures octane, composition and
volatility  parameters  that are  important  to the  performance  of  automobile
engines.
                                        8
<PAGE>
On-Site paid $125,000 in cash,  agreed to assume  $250,000 in debt  ($150,000 of
which is  long-term  debt due in three years) and the  Company,  issued  280,000
warrants at a strike price of $3.00 per share,  and 10,000  warrants at a strike
price of $2.00 per  share.  Additionally,  On-Site  agreed  to pay a  contingent
earn-out  based upon the  performance of the BAT division  post-acquisition.  In
return,  On-Site received assets valued at approximately $100,000 and the rights
to six patents. BAT recorded approximately  $1,600,000 in unaudited revenues and
near break-even cash flow for the 12-month period ended September 30, 2000.

BioTek  Agreement
In late November 1999, the Company entered into an agreement with BioTek,  which
gave the  Company the  exclusive  worldwide  rights to market and sell  BioTek's
proprietary,  hydrocarbon eating microbes in certain defined markets.  Under the
terms of the agreement,  the Company received the exclusive world-wide rights to
market  and sell the  proprietary  microbe  biotechnology  under  the  trademark
MightyClean  2000(TM)  brand name in the  automotive,  trucking and food service
businesses.  In order to  maintain  its  exclusive  rights,  the  Company had to
generate  $1,000,000  in sales by May 31, 2001.  In December  1999,  the Company
began  actively  marketing  this product  under the name Mighty Clean  2000(TM).
These  marketing  efforts  were  unsuccessful  resulting in nominal  sales.  The
Company discontinued its marketing efforts on the product in May 2000.

ARCS  (Acceleration  Restraint  Curve  Safety  Seat)
Over the past 10 years the Company worked on developing a proprietary technology
involving  controlled  seat motion that occurs at the instant of a frontal crash
to help  restrain  vehicle  occupants and assist  automakers in meeting  federal
passive  restraint laws. The Company  labeled the technology ARCS  (Acceleration
Restraint  Curve Safety Seat).  The primary  objective of this  technology is to
provide supplemental lower torso restraint to alleviate abdominal,  hip, leg and
ankle  injuries  caused by unwanted  lower torso motion often  experienced  in a
severe frontal crash.

Management  is  unaware  of any  other  moving  seat  technology  that  has been
successfully  tested by a major automobile  manufacturer.  In December 1996, the
U.S. Patent Office granted patent  protection for ARCS  technology.  The Company
has not expended funds on ACRS development since 1997.

The Company believes  research and development costs to the Company for the ARCS
are complete and all future development and application engineering will be paid
for by the vehicle and/or seat  manufacturers.  Due to the requirement to design
and build actual  pre-production  hardware for automaker testing, the Company is
attempting  to  establish  a  strategic   partner   relationship   with  a  seat
manufacturer.  The  Company  had hoped to sell the  technology  and  maintain  a
long-term  opportunity for future royalty income;  however, the opportunities to
accomplish  this are minimal.  Even if the company is successful,  based on lead
times in the automobile industry, royalties would not be generated for a minimum
of four years after a contract is signed.

Significant  Customer  Information
During  fiscal 2000,  approximately  80% of the  Company's  Speaker  revenue was
derived from sales to three customers and  approximately  40% from the sales and
lease of  OSA-IIs,  was  derived  from  one  customer.  ( See  Item 8  Financial
Statements and Supplementary Data.)

Government Regulation
The  Company  is subject  to  government  regulations  generally  affecting  all
businesses. The Company believes that it is in material compliance with all such
regulations.

Seasonal Information
The Company's management believes that its business is not seasonal.
                                        9
<PAGE>
Offices and  Employees
The Company  maintains its executive  and  administrative  offices in Palm Beach
Gardens,  Florida.  The  Company's  subsidiaries  have  facilities  in  Atlanta,
Georgia,  Columbus,  Indiana,  Marlboro,  Massachusetts,  Troy, Michigan and San
Diego, California. On-Site is in the process of closing down its Atlanta office,
which will be completed by March 31, 2001. Future assembly of OSA-IIs will occur
at OAI's plant in Columbus,  Indiana.  BAT personnel will supply engineering and
software  support.  As of January 12,  2001,  the  Company  has 436  full-time
employees. None of which are represented by unions.


ITEM 2. DESCRIPTION OF PROPERTY

The following table sets forth the location and use of the Company's facilities.
All of the  facilities  are leased,  except for the Columbus,  Indiana  facility
which is owned.

<TABLE>
<S>                                                  <C>                                         <C>

             USE                                     LOCATION                                    EXPIRATION
Corporate Headquarters                               Palm Beach Gardens, Florida                 January 2002
On-Site                                              Atlanta, Georgia                            September 2001
On-Site                                              Marlboro, Massachusetts                     January 2006
OAI Sales and Engineering                            Troy, Michigan                              March 1, 2003
OAI Sales                                            San Diego, California                       April 30, 2003
OAI Manufacturing, Administration                    Columbus, Indiana Not Applicable
   and On-Site Assembly
</TABLE>

OAI  manufactures  Speakers  in a 130,000  square  foot  manufacturing  facility
situated within a 26-acre parcel of land.  Columbus is located  approximately 40
miles  south  of  Indianapolis,  Indiana  and 100  miles  south of  Kokomo,  the
headquarters  of  Delco.  OAI's  strategic  location  plays a major  role in its
ability to service  and  deliver  OEM  manufacturers  and  distributors  such as
Toyota, which is located in Georgetown,  Kentucky; Nissan, in Smyrna, Tennessee;
and Chrysler in Toledo, Ohio. OAI has the ability to expand its base business by
adding to its current manufacturing  facility. The Columbus facility is owned by
OAI and is located in a free trade zone.  The building is pledged as  collateral
under GMAC loan facility.

All  facilities   have  excess   capacity  and  the  capability  to  accommodate
significant  future growth.  Each of these  facilities is in good condition.  As
stated above, On-Site is in the process of closing the Atlanta facility.

ITEM 3. LEGAL PROCEEDINGS

From time to time, the Company is subject to legal proceedings and claims in the
ordinary  course of business.  The Company is not  currently  aware of any legal
proceedings  or claims that the Company  believes  are likely to have a material
adverse  effect on the Company's  financial  position or results of  operations,
except as described below.  However,  the Company may incur substantial expenses
in defending against third party claims. In the event of a determination adverse
to the Company,  the Company may incur substantial  monetary  liability,  and be
required to change its business practices. Either of these could have a material
adverse effect on the Company's financial position and results of operations.
                                       10
<PAGE>

On September 16, 1999,  NCT Audio  Products,  Inc.  ("NCT")  commenced an action
against Top Source Technologies, Inc. (known now as Global Technovations,  Inc.)
and Top Source  Automotive,  Inc.  ("TSA",  and  collectively,  "Top Source") by
filing a motion for a temporary  restraining order and a preliminary  injunction
in the  Delaware  Court of  Chancery.  In its  motion,  NCT sought to enjoin Top
Source's sale of TSA's assets to Onkyo America,  Inc. on the ground that NCT was
entitled to purchase  TSA's  assets  pursuant to the terms of an Asset  Purchase
Agreement  between NCT and Top Source dated August 14, 1998 (the "Asset Purchase
Agreement"). On October 6, 1999, NCT withdrew its motion and on May 5, 2000, the
action was dismissed with prejudice.

Also on September 16, 1999, NCT commenced an arbitration  proceeding  before the
American  Arbitration  Association (the "AAA Action").  NCT's Statement of Claim
asserts  that Top  Source  committed  breach of  contract  and  fraud,  breached
fiduciary duties,  and violated Section 10(b) of the Securities  Exchange Act of
1934 and Rule 10b-5 promulgated  thereunder in connection with NCT's attempts to
acquire  substantially  all of the assets of TSA.  Specific  performance  of the
Asset Purchase Agreement and compensatory  damages in excess of $3.5 million are
sought.

On December 8, 1999,  Top Source filed an answer to NCT's  Statement of Claim in
which it sought a more specific statement of NCT's claims of wrongdoing,  denied
the claims  asserted  in the  statement  of Claim,  and  asserted  counterclaims
against NCT.

On June 20, 2000,  a  preliminary  hearing was held by the American  Arbitration
Association  for the matter  between Top Source and NCT. A schedule  for amended
filings and  discovery  was set forth and agreed to by the parties.  On November
17, 2000, a conference call was held to resolve any discovery  issues  remaining
between the parties. Depositions are scheduled to be completed in February 2001.
This case is at a preliminary stage, and is being defended vigorously.  However,
the Company has recorded amounts due to NCT on its balance sheet.


On July 19, 2000, a former  employee  filed an action  against OAI in the United
States  District  Court,  Southern  District  of Indiana,  alleging  that he was
terminated  and denied  contractual  severance  benefits three months after such
termination  because of his age and further alleging  discriminatory acts on the
part of OAI.  The  complaint  sought  severance  payments  and other  damages in
unspecified  amounts,  compensatory and punitive  damages,  and attorneys' fees.
Recently,  counsel  for the  former  employee,  has  filed a motion to amend the
complaint to add claims for treble  damages.  OAI ceased the severance  payments
after  discovering  what it believed  to be improper  conduct on the part of the
former  employee.  This  suit  is  at an  early  stage  and  is  being  defended
vigorously. The Company cannot quantify OAI's potential liability, if any.

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

None


ITEM 5.   MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED
             STOCKHOLDER MATTERS

Market  Information  For  Common  Stock The  following  table sets forth for the
periods  indicated  the range of quarterly  high and low  representative  market
prices for the Company's  Common Stock. The Company's Common Stock trades on the
American Stock Exchange under the symbol "GTN".
                                       11
<PAGE>
                                     Fiscal 2000             Fiscal 1999

                                   High       Low         High           Low
First Quarter  (December 31)      $1.43      $ .50       $1.32         $ .50
Second Quarter (March 31)         $1.94      $ .69       $1.75         $ .82
Third Quarter  (June 30)          $1.44      $ .75       $1.50          $.95
Fourth Quarter (September 30)     $1.50      $ .75       $1.57         $ .95

Holders
As of January 12, 2001, there were approximately  1,072 holders of record of the
Company's Common Stock.

Dividend Policy

The  Company  has never  paid cash  dividends  on its Common  Stock.  Payment of
dividends is within the discretion of the Company's  Board of Directors and will
depend upon the  earnings,  capital  requirements  and  operating  and financial
condition of the Company,  and any  restrictions in loan agreements  among other
factors.  Currently,  the Company intends to follow a policy of retaining future
earnings in order to finance the growth and development of its  businesses.  The
Company is required to pay  dividends to its  outstanding  Series B and Series C
Preferred Stock.

Recent Sales of Unregistered Securities
During the past three years, the following  persons and entities acquired shares
of stock and other  securities  from us as set forth in the  following  tables .
These  securities  were not  registered  under the  Securities  Act of 1933.  No
underwriters  were  employed  with respect to the sale of any of the  securities
listed below. All securities were sold to accredited investors,  which purchased
for investment in reliance on Section 4(2) and Rule 506 thereunder.
<TABLE>
<S>                         <C>                       <C>                            <C>

Date                        Name                       No. and Type of Securities   Consideration
May 1998                    Excalibur Limited          700 shares of Series A        $700,000
                            Partnership                Preferred  Stock
                                                       131,250 Warrants

May 1998                    Gundyco in Trust for RRSP  300 shares of Series A        $300,000
                                                       Preferred Stock
                                                       56,250 Warrants

May 1998                    H & H Securities Limited   20,500 Warrants               Commission

May 1998                    Intercontinental Holding   21,000 Warrants               Commission
                            Company, Ltd.

May 1998                    San Rafael Consulting      21,000 Warrants               Commission
                            Group

November  17,1998           Mennen Trust               3,500 shares of Series B      $3,500,000
                                                       Preferred Stock
                                                       350,000 Warrants

November 8, 1998            Excalibur Limited          271,288 shares of Common      Conversion of Series A
                            Partnership                Stock                         Preferred
                                                       17,500 Warrants

November 8, 1998            Gundyco in Trust for RRSP  116,266 shares of Common      Conversion of Series A
                                                       Stock                         Preferred
                                                       7,500 Warrants

December 15, 1998           Ganz Noteholders           248,383 Warrants              Restructuring of debt
March 30,1999               Excalibur Limited          245,000 shares of Common      Conversion of Series A
                            Partnership                Stock

March 30,1999               Gundyco in Trust for RRSP  105,000 shares of Common      Conversion of Series A
                                                       Stock

May 1, 1999                 Mennen Trusts              50,000 Warrants               Modification of Series B
                                                                                     Preferred registration rights
                                                                                     and redemption provisions
                                                                                     ("Modification")

August 13, 1999             Mennen Trusts              $500,000 Note                 Loan
                                                       100,000 Warrants

October 21, 1999            Mennen Trusts              250,000 Warrants              Modification

August 31, 2000             Mennen Trust               $5,000,000 Note               Loan
                                                       1,500,000 Warrants
November 30, 2000           Mennen Trust               150,000 Warrants              Loan Guarantee

December 21, 2000           BAT                        280,000 Warrants              Acquisition of BAT

December 21, 2000           B.U.N.P.                   10,000 Warrants               Restructure of BAT debt

January 9, 2001             Mennen Trusts              25,000 Warrants               Modification

January 11, 2001            Mennen Trust               400,000 Warrants              Standby commitment fee

January 12, 2001            Mennen Trust               2,000 shares of Series C      $2,000,000
                                                       Preferred Stock
                                                       200,000 Warrants
</TABLE>

All of the warrants became (or will become ) exercisable upon the earlier of (i)
the effective date of a registration statement or (ii) one year from the date of
issuance.  For a  description  of the terms of the various  series of  preferred
stock and the warrants,  see Item 8. Financial  Statements  and Financial  Data,
Notes 13, 19 and 20. All of the proceeds  were used for working  capital  except
the August 31, 2000 proceeds that were used to acquire OAI



                                       12
<PAGE>



ITEM 6.  SELECTED FINANCIAL DATA

The following table summarizes  certain selected financial data of the Company's
financial  condition  and  results of  operations  as of and for the years ended
September 30, 2000,  1999,  1998,  1997 and 1996.  The selected  financial  data
should  be  read  in  conjunction   with  Item  8.   Financial   Statements  and
Supplementary Data and Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
<TABLE>

AS OF AND FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999, 1998, 1997 AND 1996
<S>                                             <C>             <C>             <C>             <C>                <C>
Balance Sheet Data                               2000            1999           1998             1997           1996


Total Assets                               $67,966,631    $15,674,348      $7,273,095     $ 11,355,030   $ 16,012,716
Long-term Debt                              32,200,045            -0-       3,020,000        3,020,000      3,020,000
Total Liabilities                           64,085,638      7,158,293       6,816,124        6,870,577      7,095,991
Stockholders' Equity                         3,880,993      8,516,055         456,971        4,484,453      8,916,725

Statement of Operations Data

Net Sales                                   $7,602,428     $10,253,492    $11,207,858      $16,984,123    $16,146,524

Income (loss)                               (5,417,118)      5,189,874     (5,529,562)      (3,304,057)    (4,831,786)
Net Income (Loss) Available to Common
    Stockholders                            (6,039,654)      3,973,882     (5,852,382)      (3,235,316)    (6,698,787)
Net Income (Loss) per Basic
    Weighted Average Common Share
    From Continuing Operations                  (0.21)           0.14          (0.21)           (0.12)         (0.17)
Net Income (Loss) per Basic
    Weighted Average Common Share               (0.21)           0.14          (0.21)           (0.12)         (0.24)
Net Income (Loss) per Diluted
    Weighted Average Common Share               (0.21)           0.13          (0.21)           (0.12)         (0.17)
Net Income (Loss) per Diluted
    Weighted Average Common Share               (0.21)           0.13          (0.21)           (0.12)         (0.24)

</TABLE>

See Notes to Consolidated  Financial  Statements for information on transactions
and accounting  classifications,  which have affected the  comparability  of the
periods  presented  above.  The Company has not declared  cash  dividends on its
Common Stock for any of the periods presented above.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

Results of Operations

On September  30, 1999 the Company sold  substantially  all of the assets of its
85%  owned  subsidiary,  TSA and other  assets  used in TSA's  business  to OAI.
Accordingly, the operations and financial activity associated with this business
were previously reclassified as discontinued operations, but have now been
                                       13
<PAGE>
reclassified as continuing operations as a result of the Company's re-entry into
the automotive  speaker business with the acquisition of OAI on August 31, 2000.
Therefore, the consolidated statements of operations of the Company for the year
ended September 30, 2000 include one month of operations for OAI and a full year
of  operations  for On-Site.  The  consolidated  statements of operations of the
Company for the years ended September 30, 1999 and 1998 each include a full year
of operations for both TSA and On-Site.

2000  Compared to 1999
Total revenue for the year ended  September 30, 2000 was $7,602,428  compared to
$10,253,492  for the same  period in 1999.  The  decrease  in  Speaker  sales of
$2,385,651 or 26.9% is  attributable  to a comparison of different  entities for
different  time  periods.  Fiscal year 2000 sales  include one month's  worth of
Speaker  revenues  of  $6,478,163  from OAI,  compared  to 12  month's  worth of
revenues  of  $8,863,814  from TSA.  The  decrease in On-Site  sales  revenue of
$687,612 or 73.9% is primarily  attributable to the sale of four OSA-II machines
during the year  ended  September  30,  2000  compared  to the sale of 13 OSA-II
machines  during same period in 1999.  The increase in On-Site  lease revenue of
$422,199  or 92.0% is  primarily  attributable  to an  increase in the number of
units leased and on trial (generally for three to six months) generating various
levels of revenue (some of which were  nominal)  compared to the number of units
leased and on trial for the same period in 1999.  The units  currently  on lease
and on  trial  are in a  variety  of  industries  which  includes  truck  stops,
auctions,  automobile  dealerships,   truck  lube  centers,  engine  development
laboratories, municipalities, and others.

Gross profit margin for year ended September 30, 2000 was 0.8% compared to 33.9%
for the same period in 1999.  The  decrease in gross  profit  margin is due to a
reduction in On-Site  sales  revenue due to lower sales and reduced  sales price
and a decrease in overall gross profit  margin on OAI speaker sales  compared to
TSA sales.

General and administrative expenses were $3,305,067 for the year ended September
30, 2000  compared to  $4,015,748  for the same period in 1999.  The decrease of
$710,681 or 17.7% is primarily  attributable  to the decrease in TSA as a result
of the sale and a reduction in expenses for both corporate and On-Site partially
offset by the addition of OAI expenses of $192,982.

Selling and marketing  expenses were $1,078,796 for the year ended September 30,
2000 compared to $1,078,626 for the same period in 1999. The slight  increase of
$170 or 0.1% is primarily  attributable  to the decrease in TSA of $326,000 as a
result of the sale offset by an increase in salaries and benefits as a result of
additions to On-Site sales personnel of $72,000 and an increase in promotion and
advertising  expenses of $113,000 at On-Site and the addition of OAI expenses of
$113,000.

Depreciation and amortization was $521,914 (excluding  depreciation  included in
cost of sales) for the year ended  September  30, 2000  compared to $439,186 for
the same  period in 1999.  This  increase  of  $82,728  or  18.84% is  primarily
attributable  to the  amortization  of goodwill  recorded in connection with the
acquisition  of OAI of  $132,000  offset by the  decrease in TSA of $60,000 as a
result of the sale. For fiscal 2001,  depreciation and amortization  relating to
the OAI acquisition will be approximately $1,700,000.

Interest  income was $216,427 for the year ended  September 30, 2000 compared to
$80,774  for the same  period in 1999.  The  increase  of  $135,653 or 167.9% is
primarily due to an increase in cash and cash equivalents from the sale of TSA.
                                       14
<PAGE>

Interest  expense was $755,097 for the year ended September 30, 2000 compared to
$589,909  for the same  period in 1999.  The  increase  of  $165,188 or 28.0% is
primarily due to the interest expense on the  approximately  $45 million in debt
incurred in  connection  with the  acquisition  of OAI  partially  offset by the
payoff of the Nations  Credit  Facility  on October 1, 1999.  Higher debt levels
will cause the Company to incur  significantly  higher  interest costs in fiscal
2001.

Other  income  (expense)  was  $121,270  for the year ended  September  30, 2000
compared to ($10,141) for the same period in 1999.  This increase of $131,411 is
primarily  attributable to the $100,000  redemption  premium  incurred in fiscal
year 1999 in  connection  with the  redemption  of 50% of the Series A Preferred
Stock.

Gain on sale of subsidiary of $8,030,832  for the year ended  September 30, 1999
represents the sale of TSA to OAI on September 30, 1999.

Loss on  extinguishment of debt of $27,266 for the year ended September 30, 1999
represents  loss of $186,011 on early payoff the credit  facility  offset by the
gain of $158,745 from  restructuring of a portion of the outstanding  $3,020,000
of Notes in fiscal year 1999. See Item 8. Financial Statements and Supplementary
Data, Note 9. Debt.

For fiscal 2000, the Company sustained a net loss of $5,417,118 and a Net Income
(Loss) Available to Common  Stockholders of $6,039,654 after reductions  related
to preferred stock transactions and dividends.  The comparable numbers in fiscal
1999  were net  income  of  $5,162,608  (as the  result  of the one time gain of
$8,030,832  on  the  TSA  sale)  and  Net  Income  (Loss)  Available  to  Common
Stockholders of $3,973,882.

The recent  slowness  in the  economy  including  the United  States  automotive
industry resulting in customers not operating at full capacity has substantially
affected  OAI's results of operations for the first three months of fiscal 2001.
The Company is realizing benefits in reducing costs and improving  efficiencies,
however, the Company cannot predict when sales will return to historic levels or
what total fiscal 2001 revenue will be.

On  a  consolidated   basis,  future  operating  results  will  be  affected  by
amortization  expense  of  approximately  $1,700,000  per  year  resulting  from
goodwill  related  to the OAI  acquisition  and  amortization  of the  value  of
1,500,000  outstanding  warrants  and  options,  most of which  were  issued  in
connection with the Company's continuing financing efforts.

In January 2001, the Company  announced that it was closing its OSA facility and
redploying  personnel  to Columbus,  Indiana and  Marlboro,  Massachusetts.  The
result is a  one-time  charge  at  approximately  $250,000  to  earnings  in the
Company's second fiscal quarter.

1999  Compared to 1998
Total revenue for the year ended September 30, 1999 was $10,253,492  compared to
$11,207,858  for the same  period  in  1998.  TSA  speaker  sales  decreased  by
$1,951,391 or 18.0% for the year ended September 30, 1999 due to the loss of the
Grand Cherokee  contract,  which expired in October 1998.  On-Site sales revenue
increased  by  $735,073  or 375.7% for the year ended  September  30,  1999 as a
result  of the  sale  of 13  OSA-II  machines  compared  to the  sale of 3 OSA-I
machines  during same period in 1998.  The increase in lease revenue of $261,952
or 133.0% is primarily attributable to an increase in the number of units leased
and on trial  generating  various levels of revenue (some of which were nominal)
compared to the number of units leased and on trial for the same period in 1998.
The units  currently on lease and on trial are in a variety of industries  which
includes  automobile  dealerships,  mini labs, truck lube centers,  truck stops,
engine development laboratories, municipalities, and others.

Gross  profit  margin for year ended  September  30, 1999 was 33.9%  compared to
28.4% for the same period in 1998.
                                       15
<PAGE>
General and administrative expenses were $4,015,748 for the year ended September
30, 1999  compared to  $4,562,183  for the same period in 1998.  The decrease of
$546,435 or 12.0% is  attributable  to a reduction in expenses at the  corporate
office  offset  partially by increases in expenses at On-Site as a result of the
growth and expansion of the business.

Selling and marketing  expenses were $1,078,626 for the year ended September 30,
1999  compared  to  $1,258,681  for the same  period in 1998.  The  decrease  of
$180,055  or 14.3% is  attributable  to a  reduction  in  personnel  expenses at
On-Site.

Write-down  of fixed  assets of $880,911 for the year ended  September  30, 1998
related to the  original  OSA-I  machines,  which were deemed to be impaired and
were written off. (See Item 8. Financial Statements and Supplementary Data, Note
2. Oil Analysis Service Segment.)

Severance  expense  of  $1,085,587  for the year  ended  September  30,  1998 is
attributable to the  resignation of the Company's  former Chairman and CEO. (See
Item 8. Financial  Statements  and  Supplementary  Data,  Note 13. Related Party
transactions).

Depreciation and amortization was $439,186 for the year ended September 30, 1999
compared to $922,820 for the same period in 1998.  This  decrease of $483,634 or
52.4% is primarily attributable to the write-down of the original OSA-I machines
in September 1998.

Research and  development  was $208,674  for the year ended  September  30, 1999
compared to $325,212 for the same period in 1998.  This  decrease of $116,538 or
35.8% is primarily attributable to the initial costs incurred in the development
of the OSA-II machine in fiscal year 1998.


Interest  income was $80,774 for the year ended  September  30, 1999 compared to
$74,669 for the same period in 1998. The increase of $6,105 or 8.2% is primarily
due to an increase in the average cash balance in fiscal year 1999.

Interest  expense was $589,909 for the year ended September 30, 1999 compared to
$664,142 for the same period in 1998. The decrease of $74,233 or 11.2% is due to
a  decrease  in  interest  as a  result  of  the  restructuring  of  the  senior
subordinated  convertible  notes in November  and  December  1998,  offset by an
increase in interest expense associated with a loan from a trust controlled by a
director of the Company and issuance of warrants as additional consideration for
the loan.

Other income  (expense)  was  ($10,141)  for the year ended  September  30, 1999
compared  to $9,978 for the same  period in 1998.  This  decrease  of $20,119 or
201.6% is primarily  attributable to the $100,000 redemption premium incurred in
fiscal  year  1999 in  connection  with the  redemption  of 50% of the  Series A
Preferred  Stock offset  partially  by an increase in royalty and  miscellaneous
income.

Gain on sale of subsidiary was $8,030,832 for the year ended  September 30, 1999
compared to $962,760 for the same period in 1998.  The increase of $7,068,072 or
734.2% is primarily due to the sale of 14.5% equity in TSA during the year ended
September 30, 1998 with the remainder  portion of the sale completed  during the
year ended September 30, 1999.

Loss on  extinguishment of debt of $27,266 for the year ended September 30, 1999
represents  loss of $186,011 on early payoff the credit  facility  offset by the
gain of $158,745 from  restructuring of a portion of the outstanding  $3,020,000
of Notes. (See Note 9. Debt)
                                       16
<PAGE>
Liquidity  and  Capital  Resources
Net  cash  used in  operating  activities  was  $6,372,910  for the  year  ended
September  30,  2000.  This  usage  of cash  was  attributable  to a net loss of
$4,296,307,  which  excludes  depreciation  and  amortization.  In addition,  an
increase in accounts receivable of $2,008,474 and a decrease in accounts payable
$1,998,549  offset by an increase in deferred revenue of $971,606 and a decrease
in inventory of $990,978 contributed to net cash used in operating activities.


Net  cash  used in  investing  activities  was  $8,788,242  for the  year  ended
September 30, 2000. This decrease in cash was attributable to the acquisition of
OAI and  expenditures  by On-Site for  capital  assets  partially  offset by the
receipt  of a  $6,500,000  9% secured  note paid by OAI to TSA in  October  1999
offset by payment of expenses  associated with the sale of TSA. For fiscal 2001,
OAI does not have material  capital  commitments.  On-Site capital  expenditures
will vary depending upon the number of OSA-II leases.

Net cash  provided by financing  activities  was  $13,898,352,  which  consisted
primarily of proceeds from the GMAC Revolving  Credit  Facility and Term A and B
loans and the senior  secured  promissory  notes from the  Mennen  Trust.  These
proceeds were utilized for the cash portion of the OAI acquisition and repayment
of debt assumed in connection with the OAI acquisition.

As a condition of granting the Credit  Facility to OAI,  GMAC required that this
facility  be used  to  provide  working  capital  to OAI  only.  Except  for the
possibility  of the payment of  management  fees and a dividend on the Company's
over $3,000,000  preferred stock investment in OAI, OAI is restricted from using
its credit facility to fund the activities of the Company's  corporate office or
any of its other  subsidiaries.  As of January  12,  2001,  OAI had not paid the
Company  any  management  fees or  preferred  dividends  and none are  presently
anticipated to be paid.

In order to acquire  OAI,  the Company  occurred  substantial  debt as described
elsewhere in this Report. In addition to substantial  interest  payments,  which
are required to be paid by OAI, the senior debt owed to GMAC requires  principal
payments of approximately $173,000 per month through August 31, 2001, increasing
to  approximately  $223,000  per month on  September  1,  2001.  These  required
principal  payments  will  continue  to  place  substantial  pressure  on  OAI's
liquidity.

As of January 12, 2001,  OAI was current on all principal  payments and interest
payments  to  GMAC  and  the  Mennen  Trust.  However,  due to  significant  and
unexpected  downturn in the automotive  industry,  which uses OAI Speakers,  OAI
breached its Fixed Charge Coverage Ratio ("Coverage  Ratio") in November 2000 by
going below the required 1.15 to 1 ratio.  On January 12, 2001,  GMAC waived the
covenant  violation  ("Waiver") and reset the monthly Coverage Ratio and certain
other operating  ratios to lower levels.  As a condition of the Waiver,  OAI and
the Mennen Trust agreed to suspend all interest payments due to the Mennen Trust
until OAI  reaches a  cumulative  Coverage  Ratio of 1.15 to 1. The  Company has
agreed to pay monthly interest payments to the Mennen Trust from corporate funds
until OAI resumes payments.

In order to meet its working capital needs, the Company has entered into several
recent  transactions  with  the  Mennen  Trust.  Initially,   the  Mennen  Trust
guaranteed a $1,000,000  note from the Company to TSA, the  Company's  85% owned
subsidiary.  This guarantee  permitted the Company to use TSA's cash,  which had
been  allocated  in  the  event  the   arbitration   proceeding   with  NCT  was
unsuccessful. In January 2001, a Mennen Trust purchased $2,000,000 of 10% Series
Convertible Preferred Stock and also agreed to purchase an additional $2,000,000
of another series of 10%  convertible  preferred stock if the Company's cash and
cash  equivalents  (apart from OAI) fell below  $400,000  during the fiscal year
ending September 30, 2001. Also, the Company also entered into an agreement with
one of the  sellers  of OAI  common  stock  extending  the  time  for OAI to pay
approximately $3,200,000 from May 31, 2001 until March 10, 2002.

                                       17
<PAGE>
The Company has incurred  significant  losses since its inception and has funded
these losses through equity offerings of preferred  stock,  debt instruments and
the sale of assets.  The Company is and will continue to be highly leveraged for
the immediate  future.  The Company has incurred  substantial  indebtedness as a
result of its  acquisitions,  new product research and development and operating
losses.  Cash flows from operations were inadequate to cover these charges.  The
Company's  high level of debt may have several  important  effects on its future
operations  including the following:  (i) a substantial portion of the Company's
cash  flow must be  dedicated  to the  payment  of  interest  and  dividends  on
indebtedness and preferred stock (ii) the financial  covenants  contained in the
GMAC facility will require the Company to meet certain financial tests and other
restrictions  which limits its ability to borrow  additional funds or to dispose
of assets, and (iii) the Company's ability to obtain additional financing in the
future for working  capital,  capital  expenditures  and for  general  corporate
purposes may be limited.

In addition,  the Company's  ability to meet its debt  obligations and to reduce
its total debt will be dependent upon the Company's  future  performance,  which
will be subject to general  economic  conditions and to financial,  business and
other factors affecting the operations of the Company,  many of which are beyond
its control.  There can be no assurance  that the Company's  future  performance
will not be  adversely  affected  by such  economic  conditions  and  financial,
business and other factors.

As of January 15, 2001,  the Company had  approximately  $2,000,000 in cash. The
Company  believes that its current cash on hand,  the Mennen  commitment  for an
additional $2,000,000, and its continuing ability to reduce operating costs will
be sufficient to fund its operations through at least September 30, 2001.

Forward-Looking  Statements
The matters  discussed in this Report in the Business section (Item 1) and above
in Liquidity  and Capital  Resources  relating to (1) OAI's future  relationship
with GM and with Delco,  (2) On-Site's  completion of a working  OSA-II/SS,  (3)
On-Site's  future  shipments to the Shell GST Group, (4) increases in its OSA-II
sales, (5) the capability of the Company's facilities to accommodate significant
future growth, (6) the Company's ability to reduce expenses, (7) the adequacy of
the Company's  working capital and its ability to obtain new working capital and
(8) receipt of an order by OAI for the sale of Speakers to a leading supplier of
home sound systems. Additionally, words such as "expects", "intends", "believes"
and similar  words are used to identify  forward-looking  statements  within the
meaning of the Private Securities Litigation Reform Act of 1995.

Some or all of these forward-looking  statements may not occur. These statements
are subject to risks and uncertainties that could cause actual results to differ
materially from those  contemplated  in such  forward-looking  statements.  Such
risks and uncertainties include the following:  (1) the continued reliability of
the OSA technology over an extended period of time, (2) the Company's ability to
expand the market of OSA-IIs,  (3) the  acceptance of the OSA  technology by the
marketplace,  (4) the general  tendency of large  corporations  to slowly change
from  known  technology  to  emerging  new  technology,   (5)  potential  future
competition from third parties that may develop  proprietary  technology,  which
either does not violate the  Company's  proprietary  rights or is claimed not to
violate  the  Company's  proprietary  rights,  (6) the  ability  of the  leading
supplier  of  home  systems  to  market  the  Speakers  supplied  by OAI and the
performance  of these  Speakers,  (7)  unanticipated  problems  arising from the
performance of Speakers sold to Delco for  installation in GM vehicles,  (8) the
ability of Delco to develop  relationships  with other OEMs,  (9) the ability of
the  Company to raise  additional  working  capital to permit it to develop  the
OSA-II/SS,  (10)  improvements  in the United States  economy in general and the
United States  automobile  industry in  particular,  and (11) the ability of the
OSA-II units to operate as anticipated at the Shell GST Group installations. The
Company  does not intend to update  any  forward-looking  statements.  Investors
should also  consider the factors  contained in the  Company's  filings with the
Securities and Exchange Commission.
                                       18
<PAGE>
Inflation The impact of inflation has become less  significant  in recent years.
The Company  believes  inflation has not had a material  effect on the Company's
operations.

New Accounting  Standards In June 1997, the Financial Accounting Standards Board
("FASB")" issued Statement of Financial  Accounting  Standards ("SFAS") No. 131,
"Disclosures about Segments of an Enterprise and Related Information",  which is
required to be adopted in fiscal years  beginning  after December 15, 1997. This
statement  establishes  standards for the way public business enterprises report
information about products, services,  geographic areas and major customers. The
Company has adopted SFAS No. 131 for fiscal year ended  September 30, 1999.  The
adoption  of SFAS  No.  131 did not  have a  material  impact  on its  financial
position or results of operations.

In June 1999, the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133,
amended by SFAS No. 137 requires companies to recognize all derivative contracts
as either assets or liabilities in the balance sheet and to measure them at fair
value.  If  certain  conditions  are  met,  a  derivative  may  be  specifically
designated as a hedge,  the objective of which is to match the timing of gain or
loss  recognition  on the hedging  derivative  with the  recognition  of (i) the
changes  in the  fair  value  of the  hedged  assets  or  liabilities  that  are
attributable  to the  hedged  risk or (ii) the  earnings  effect  of the  hedged
forecasted transaction. For a derivative not designated as a hedging instrument,
the gain and loss is recognized in income in the period of change.  SFAS No. 133
is effective for all fiscal  quarters of all fiscal years  beginning  after June
15, 2000.

Historically,  the Company has not entered into derivative  contracts  either to
hedge existing risks or for speculative purposes.  Accordingly, the Company does
not expect the  adoption  of the new  standard  to have  material  impact on the
Company's financial position, results of operations, or cash flows.

In December 1999, the SEC staff  released  Staff  Accounting  Bulletin (SAB) No.
101, Revenue Recognition in Financial  Statements,  which provides  interpretive
guidance on the recognition presentation, and disclosure of revenue in financial
statements.  SAB 101 must be applied to financial  statements  no later than the
quarter  ended  September  30,  2000.  There  was no  material  impact  from the
application  of  SAB  101  on  the  Company's  financial  position,  results  of
operations, or cash flows.

In March 2000, the FASB issued  Interpretation  No. 44 (FIN 44),  Accounting for
Certain Transactions Involving Stock Compensation,  and an interpretation of APB
Opinion No. 25. FIN 44 clarifies the  application  of Opinion No. 25 for (a) the
definition  of an employee  for  purposes  of  applying  Opinion No. 25, (b) the
criteria for determining  whether a plan qualifies as a  non-compensatory  plan,
(c) the  accounting  consequences  of  various  modifications  to the terms of a
previously  fixed stock option or award,  and (d) the accounting for an exchange
of stock compensation  awards in business  combination.  FIN 44 became effective
July 2, 2000, but certain  conclusions  cover  specific  events that occur after
either  December 15, 1998,  or January 12, 2000.  FIN 44 did not have a material
impact on the  Company's  financial  position,  results of  operations,  or cash
flows.

                                       19

<PAGE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of September 30, 2000, the Company had approximately  $23,071,000 in variable
rate short and long-term  debt tied directly to the prime rate. See Note 9. Debt
in the accompanying  consolidated  financial statements.  Since August 31, 2000,
when the Company first incurred this debt in connection  with the acquisition of
OAI, this balance has fluctuated  between  $16,000,000  and  $23,200,000  due to
varying levels of borrowing on OAI's line of credit.

Each 100 basis point  increase or decrease in the prime rate would  result in an
increase or decrease in the Company's annual interest  expense  equivalent to 1%
times the average total indebtedness or between $160,000 to $230,000 per year.



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<S>                                                                                                                <C>
------------------------------------------------------------------------------------------------------------------- -----------
                                   INDEX                                                                                PAGE
------------------------------------------------------------------------------------------------------------------- -----------

Reports of Independent Certified Public Accountants                                                                     21-22
------------------------------------------------------------------------------------------------------------------- -----------
------------------------------------------------------------------------------------------------------------------- -----------
Consolidated Balance Sheets as of September 30, 2000 and 1999                                                           23
------------------------------------------------------------------------------------------------------------------- -----------
------------------------------------------------------------------------------------------------------------------- -----------
Consolidated Statements of Operations for the Years Ended September 30, 2000, 1999 and 1998                             24
------------------------------------------------------------------------------------------------------------------- -----------
------------------------------------------------------------------------------------------------------------------- -----------
Consolidated Statements of Stockholders' Equity for the Years Ended September 30, 2000, 1999 and 1998                   25
------------------------------------------------------------------------------------------------------------------- -----------
------------------------------------------------------------------------------------------------------------------- -----------
Consolidated Statements of Cash Flows for the Years Ended September 30, 2000, 1999 and 1998                             26
------------------------------------------------------------------------------------------------------------------- -----------
------------------------------------------------------------------------------------------------------------------- -----------
Notes to Consolidated Financial Statements                                                                              27
------------------------------------------------------------------------------------------------------------------- -----------

</TABLE>
                                       20
<PAGE>


                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS



To the Stockholders of Global Technovations, Inc.

We  have  audited  the  accompanying   consolidated   balance  sheet  of  Global
Technovations,  Inc. (a Delaware  corporation)  and subsidiaries as of September
30, 2000, and the related consolidated  statements of operations,  stockholders'
equity and cash flows for the year ended  September  30, 2000.  These  financial
statements  and the schedules  referred to below are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements and schedules based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,   in  all  material   respects,   the   financial   position  of  Global
Technovations, Inc. and subsidiaries as of September 30, 2000 and the results of
its  operations  and its cash flows for the year  ended  September  30,  2000 in
conformity with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic  financial
statements  taken as a whole.  Schedules I and II are  presented for purposes of
complying with the Securities and Exchange  Commission's  rules and are not part
of the basic  financial  statements.  These schedules have been subjected to the
auditing procedures applied in the audit of the basic financial  statements and,
in our opinion,  fairly  state,  in all material  respects  the  financial  data
required to be set forth  therein,  as of and for the year ended  September  30,
2000 in relation to the basic financial statements taken as a whole.

BDO SEIDMAN, LLP



West Palm Beach, Florida
January 12, 2001


                                       21
<PAGE>

                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS



To the Stockholders of Global Technovations, Inc.

We  have  audited  the  accompanying   consolidated   balance  sheet  of  Global
Technovations,   Inc.  (f/k/a/  Top  Source   Technologies,   Inc.,  a  Delaware
corporation)  and  subsidiaries  as of  September  30,  1999,  and  the  related
consolidated  statements of operations,  stockholders' equity and cash flows for
each of the two years in the period ended  September 30, 1999.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.


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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Global Technovations,  Inc. and
subsidiaries  as of September 30, 1999 and the results of its operations and its
cash flows for each of the two years in the period ended  September  30, 1999 in
conformity with accounting principles generally accepted in the United States.


ARTHUR ANDERSEN LLP



West Palm Beach, Florida,
November 24, 1999.

                                       22
<PAGE>


                                     <TABLE>
                            GLOBAL TECHNOVATIONS, INC
                                    FORM 10-K/A

                           CONSOLIDATED BALANCE SHEETS
                        AS OF SEPTEMBER 30, 2000 and 1999

       -------------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                            <C>

       ASSETS                                                                         2000                           1999
                                                                                -----------------               ----------------
       Current Assets:
         Cash and cash equivalents                                                   $ 1,046,152                    $ 2,308,952
         Trade accounts receivable, net of allowance for doubtful
             accounts of $120,000 at September 30, 2000                               13,105,629                        209,554
         Due from buyer of automotive subsidiary                                               -                      6,000,000
         Inventories                                                                   7,465,007                      1,935,832
         Prepaid expenses                                                                 82,662                         76,657
         Other                                                                           100,224                        102,867
                                                                                -----------------               ----------------
       Total current assets                                                           21,799,674                     10,633,862
       Property and equipment, net                                                    11,662,864                      1,533,117
       Capitalized database, net                                                       1,651,527                      1,862,361
       Due from buyer of automotive subsidiary                                                 -                      1,500,000
       Goodwill, net of amortization of $132,000                                      31,439,799                              -
       Other assets, net                                                               1,412,767                        145,008
                                                                                -----------------               ----------------
       TOTAL ASSETS                                                                 $ 67,966,631                   $ 15,674,348
                                                                                =================               ================

       LIABILITIES AND STOCKHOLDERS' EQUITY
       Current Liabilities:
         Line of credit                                                             $ 11,841,418                    $ 1,913,986
         Current portion of long term debt                                             3,449,666                      1,207,000
         Accounts payable                                                             11,053,264                        302,553
         Deferred revenue                                                                312,801                         98,675
         Accrued liabilities                                                           3,336,192                      2,515,445
         Payable to former buyer of automotive subsidiary                                994,232                      1,030,835
                                                                                -----------------               ----------------

       Total current liabilities                                                      30,987,573                      7,068,494
                                                                                -----------------               ----------------
         Long term debt, less current portion                                         32,200,045                              -
         Other liabilities                                                               898,020                         89,799
                                                                                -----------------               ----------------

       Total long term liabilities                                                    33,098,065                         89,799
                                                                                -----------------               ----------------
       Total liabilities                                                              64,085,638                      7,158,293

       Commitments and contingencies (See Notes 3 and 10)                                      -                              -

       Stockholders' equity:
         Preferred stock - $.10 par value, 5,000,000 shares
          authorized; 3,500 shares issued and
          outstanding in 2000 and 1999                                                 3,500,000                      3,444,644
         Common stock-$.001 par value, 50,000,000 shares
          authorized; 29,804,281 and 29,799,281 shares issued and
          outstanding in 2000 and 1999, respectively                                      29,804                         29,799
         Additional paid-in capital                                                   32,557,802                     31,208,571
         Accumulated deficit                                                         (30,857,259)                   (24,817,605)
         Treasury stock-at cost; 466,234  shares                                      (1,349,354)                    (1,349,354)
                                                                                -----------------               ----------------
       Total stockholders' equity                                                      3,880,993                      8,516,055
                                                                                -----------------               ----------------

       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                   $ 67,966,631                   $ 15,674,348
                                                                                =================               ================

</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these consolidated statements.
                                       23

<PAGE>

<TABLE>
                            GLOBAL TECHNOVATIONS, INC
                                    FORM 10-K/A

                      CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998

-----------------------------------------------------------------------------        -------------------------------------
<S>                                                           <C>                    <C>                <C>

                                                                   2000                  1999                  1998
                                                              ---------------        --------------       ----------------
Revenue:
  Sales revenue - speakers                                        $6,478,163            $8,863,814            $10,815,205
  Sales revenue - instruments                                        243,137               930,749                195,676
  Lease revenue - instruments                                        881,128               458,929                196,977
                                                              ---------------        --------------       ----------------
   Total revenue                                                   7,602,428            10,253,492             11,207,858
Cost of sales and leasing
  Cost of sales - speakers                                         5,712,543             5,523,319              7,417,402
  Cost of sales - instruments                                        119,024               357,845                 73,270
  Cost of leasing - instruments                                    1,708,150               898,776                535,818
                                                              ---------------        --------------       ----------------

    Total of cost of sales and leasing                             7,539,717             6,779,940              8,026,490
                                                              ---------------        --------------       ----------------
Gross profit                                                          62,711             3,473,552              3,181,368
                                                              ---------------        --------------       ----------------
Expenses:
  General and administrative                                       3,305,067             4,015,748              4,562,183
  Selling and marketing                                            1,078,796             1,078,626              1,258,681
  Write down of fixed assets                                               -                     -                880,911
  Severance expense                                                        -                     -              1,085,587
  Depreciation and amortization                                      521,914               439,186                922,820
  Research and development                                           156,652               208,674                325,212
                                                              ---------------        --------------       ----------------
Total expenses                                                     5,062,429             5,742,234              9,035,394
                                                              ---------------        --------------       ----------------
Loss from operations                                              (4,999,718)           (2,268,682)            (5,854,026)
Other income (expense):
  Interest income                                                    216,427                80,774                 74,669
  Interest expense                                                  (755,097)             (589,909)              (664,142)
  Gain on sale of subsidiary                                               -             8,030,832                962,760
  Other (expense) income, net                                        121,270               (10,141)                 9,978
                                                              ---------------        --------------       ----------------
Net other income (expense)                                          (417,400)            7,511,556                383,265
                                                              ---------------        --------------       ----------------
Income (loss) before income taxes                                 (5,417,118)            5,242,874             (5,470,761)
Income tax expense                                                         -               (53,000)               (58,801)
                                                              ---------------        --------------       ----------------
Income (loss) before extraordinary item                           (5,417,118)            5,189,874             (5,529,562)
 Loss on extinguishment of debt                                            -               (27,266)                     -
                                                              ---------------        --------------       ----------------
Net income (loss)                                                 (5,417,118)            5,162,608             (5,529,562)
Embedded dividends on preferred stock                                (55,356)             (619,462)              (193,807)
Preferred dividends                                                 (315,000)             (277,458)               (20,034)
Value of warrants issued with preferred stock                       (252,180)             (291,806)              (108,979)
                                                              ---------------        --------------       ----------------
Net income (loss) available to common stockholders               ($6,039,654)           $3,973,882            ($5,852,382)
                                                              ===============        ==============       ================

Basic Earnings (Loss) Per Share
Income (loss) before extraordinary item                        $       (0.21)    $           0.14     $             (0.21)
Extraordinary item                                                          -               (0.00)                       -
                                                              ---------------        --------------       ----------------

Net Income (Loss)                                                    $ (0.21)               $ 0.14                $ (0.21)
                                                              ===============        ==============       ================

Diluted Earnings (Loss) Per Share
Income (loss) before extraordinary item                        $      (0.21)    $           0.13     $             (0.21)
Extraordinary item                                                        -                (0.00)                      -
                                                              ---------------        --------------       ----------------

Net Income (Loss)                                                    $ (0.21)               $ 0.13                $ (0.21)
                                                              ===============        ==============       ================

Basic weighted average common shares outstanding                  29,333,047            29,108,705             28,242,005
                                                              ===============        ==============       ================
Diluted weighted average common shares outstanding                29,333,047            33,147,737             28,242,005
                                                              ===============        ==============       ================
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these consolidated statements .
                                       24

<PAGE>
<TABLE>
                           GLOBAL TECHNOVATIONS, INC.
                                    FORM 10-K/A
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
<S>                                      <C>                  <C>       <C>        <C>           <C>         <C>

                                                                          ADDITIONAL                                  TOTAL
                                             COMMON STOCK      PREFERRED    PAID-IN    ACCUMULATED     TREASURY      STOCKHOLDERS'
                                          -------------------

                                           SHARES    AMOUNT     STOCK      CAPITAL      DEFICIT         STOCK           EQUITY
                                          --------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 1997               28,461,477  $28,461          - $28,744,451  $(22,939,105)   $(1,349,354)    $4,484,453
Exercise of stock options
  ($.53 to $1.50 per share)                  549,700      550          -     387,791             -             -         388,341
Issuance of convertible preferred stock
  - Series A-                                     -         -  1 ,000,000          -             -             -       1,000,000
Preferred stock issuance costs and fees           -         -          -    (118,606)            -             -        (118,606)
Issuance of common stock for payment of
 dividend on preferred stock                 42,626        43          -      19,991       (20,034)            -               -
Intrinsic value of preferred stock
 conversion feature                               -         -   (250,000)    250,000             -             -               -
Preferred stock embedded dividend                 -         -    193,807           -      (193,807)            -               -
Value of warrants issued with preferred
 stock                                            -         -          -     108,979      (108,979)            -               -
Options and warrants issued for services          -         -          -     232,345             -             -         232,345
Net loss                                          -         -          -           -    (5,529,562)            -      (5,529,562)
                                          --------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 1998              29,053,803    29,054    943,807  29,624,951   (28,791,487)   (1,349,354)        456,971
Exercise of stock options
 ($.53 to $.875 per share)                   50,550        51          -      26,827             -             -          26,878
Redemption of convertible preferred
 stock - Series A                                 -         -   (500,000)          -             -             -        (500,000)
Conversion of convertible preferred
 stock - Series A to common stock            669,149      668   (500,000)    499,332             -             -               -
Issuance of convertible preferred
 stock - Series B                                 -         -  3,500,000           -             -             -       3,500,000
Preferred stock issuance costs and fees           -         -          -    (129,701)            -             -        (129,701)
Issuance of common stock for payment
 of dividend on preferred stock              25,779        26          -      12,105       (12,131)            -               -
Preferred stock dividend                          -         -          -           -      (265,327)            -        (265,327)
Intrinsic value of preferred stock
 conversion feature                               -         -   (618,625)    618,625             -             -               -
Preferred stock embedded dividend                 -         -    619,462           -      (619,462)            -               -
Value of warrants issued with
 preferred stock                                  -         -          -     291,806      (291,806)            -               -
Options and warrants issued for services          -         -          -     264,626             -             -         264,626
Net Income                                        -         -          -           -     5,162,608             -       5,162,608
                                          --------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 1999               29,799,281   29,799  3,444,644  31,208,571   (24,817,605)   (1,349,354)      8,516,055
Exercise of stock options
 ($.53 per share)                              5,000       5           -       2,645             -             -           2,650
Preferred stock issuance costs and fees           -        -           -     (27,332)            -             -         (27,332)
Preferred stock dividend                          -        -           -           -      (315,000)            -        (315,000)
Preferred stock embedded dividend                 -        -      55,356           -       (55,356)            -               -
Value of warrants issued with
 preferred stock                                  -        -           -     252,180      (252,180)            -               -
Options and warrants issued for services          -        -           -   1,121,738             -             -       1,121,738
Net loss                                          -        -           -           -    (5,417,118)            -      (5,417,118)
                                          --------------------------------------------------------------------------------------
BALANCE, SEPTEMBER 30, 2000               29,804,281 $29,804  $3,500,000 $32,557,802   $(30,857,259)  $(1,349,354)    $3,880,993
                                          ======================================================================================


The accompanying notes to consolidated financial statements are an integral part
of these consolidated statements . </TABLE>
                                       25
<PAGE>

<TABLE>

                           GLOBAL TECHNOVATIONS, INC.
                                    FORM 10-K/A

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999, AND 1998

----------------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>                <C>                 <C>
                                                                      2000               1999                1998
                                                               ---------------    ---------------     ----------------
OPERATING ACTIVITIES:
    Net income (loss)                                            $ (5,417,118)       $ 5,162,608         $ (5,529,562)
    Adjustments to reconcile net income (loss) to
       net cash used in operating activities:
    Gain on sale of subsidiary                                              -         (8,030,832)            (962,760)
    Depreciation                                                      648,440            459,118              950,503
    Amortization                                                      461,764            383,113              341,204
    Amortization of original issue discount on debt                    10,607                  -                    -
    Write down of fixed assets and inventory                                -                  -            1,294,045
    Loss on extinguishment of debt                                          -             27,266                    -
    Loss on disposal of equipment                                           -              3,100              160,963
    Non cash value of services                                         64,771            184,620              232,345
    Repayments from officers                                                -             26,260              107,661
    (Increase) decrease in accounts receivable, net                (2,008,474)          (626,340)             598,986
    Decrease (increase) in inventories                                990,978           (842,740)          (1,021,951)
    Decrease in prepaid expenses                                       29,581             87,435               24,964
    (Increase) decrease in other assets                               (21,036)            31,977              745,187
    (Decrease) increase in accounts payable                        (1,998,549)           279,144              170,067
    Increase in deferred revenue                                      971,606                  -                    -
    Increase (decrease) in accrued liabilities                         20,922            261,417             (340,695)
    Decrease in payable to former buyer of automotive subsidiary      (36,603)                 -                    -
    (Decrease) increase in other liabilities                          (89,799)          (339,725)             429,524
                                                               ---------------    ---------------     ----------------
Net cash used in operating activities                              (6,372,910)        (2,933,579)          (2,799,519)
                                                               ---------------    ---------------     ----------------

INVESTING ACTIVITIES:
    Payment for purchase of stock of OAI, net of cash acquired    (12,815,724)                 -                    -
    Proceeds from sale of subsidiary                                5,549,978          4,497,750            1,326,917
    Purchases of property and equipment, net                       (1,519,989)        (1,338,955)            (631,412)
    Additions to patent costs, net                                     (2,507)          (114,644)            (102,995)
                                                               ---------------    ---------------     ----------------
Net cash (used in) provided by investing activities                (8,788,242)         3,044,151              592,510
                                                               ---------------    ---------------     ----------------

FINANCING ACTIVITIES:
    Proceeds from exercises of stock options                            2,650             26,878              388,341
    Preferred stock issuance, net                                     (27,332)         3,370,299              881,394
    (Repayment) proceeds from loan payable                           (500,000)           500,000                    -
    Redemption of preferred stock Series A                                  -           (500,000)                   -
    Repayments of Senior Convertible Notes                           (329,000)        (2,064,617)                   -
    Payment of extinguishment of debt costs                                 -           (110,403)                   -
    Payment of preferred stock dividend                              (393,750)          (107,827)                   -
    Payment of deferred financing costs                            (1,187,010)                 -                    -
    Proceeds from revolving line of credit                         11,841,418                  -                    -
    Proceeds from term loans                                       11,230,000                  -                    -
    Proceeds from senior secured promissory note                   12,000,000                  -                    -
    Repayment of debt assumed on acquisition                      (16,824,638)                 -                    -
    (Repayments) proceeds from borrowings, net                     (1,913,986)           595,151             (677,506)
                                                               ---------------    ---------------     ----------------
Net cash provided by financing activities                          13,898,352          1,709,481              592,229
                                                               ---------------    ---------------     ----------------

Net (decrease) increase in cash and cash equivalents               (1,262,800)         1,820,053           (1,614,780)
Cash and cash equivalents at beginning of period                    2,308,952            488,899            2,103,679
                                                               ---------------    ---------------     ----------------
Cash and cash equivalents at end of period                         $1,046,152         $2,308,952             $488,899
                                                               ===============    ===============     ================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest                                              $ 327,513          $ 338,878            $ 564,091
Cash paid for income taxes                                          $ 150,000           $ 60,000            $ 108,801

The accompanying notes to consolidated financial statements are an integral part
of these consolidated statements.
</TABLE>
                                       26
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business  and  Basis  of  Presentation  -  As  of  September  30,  2000,  Global
Technovations,   Inc.,  (the  "Company),   or  ("GTI")  has  five  wholly  owned
subsidiaries,  including  On-Site  Analysis,  Inc.  ("On-Site"),  which markets,
leases and sells oil analysis services through use of the OSA-II, a freestanding
oil  analyzer  used  primarily  by  truck-stops,   and  numerous  other  diverse
industries;  Onkyo America,  Inc.  ("OAI"),  which  manufactures,  assembles and
distributes  audio  speakers  for  the  automotive,   computer,  television  and
telephone industries;  Top Source Oil Analysis,  Inc. ("TSOA"),  and ARCS Safety
Seat,  Inc.;  and  HairTek,  LCC , which are both  inactive.  Additionally,  the
Company has one 85% owned subsidiary, Top Source Automotive,  Inc. ("TSA"). (See
Note 3. Sale of TSA.)

The accompanying  Consolidated  Financial Statements include the accounts of the
Company,  and  its  subsidiaries.  All  significant  intercompany  accounts  and
transactions  have  been  eliminated.  In  order  to  maintain  consistency  and
comparability  between periods  presented certain amounts have been reclassified
from  previously  reported  financial  statements  in  order to  conform  to the
financial statement  presentation of the current year. On September 30, 1999 the
Company sold  substantially all of the assets of its 85% owned  subsidiary,  TSA
and other assets used in TSA's business to OAI. Accordingly,  the operations and
financial activity  associated with this business were previously  classified as
discontinued operations,  but have been reclassified as continuing operations as
a result of the Company acquiring 100% of the outstanding stock of OAI on August
31, 2000. Therefore, the consolidated statement of operations of the Company for
the year ended  September 30, 1999  includes a full year of  operations  for TSA
(see Note 4).

Cash Equivalents - The Company considers all highly liquid investments purchased
with an original maturity of three months or less to be cash equivalents.

Principles of Consolidation - The consolidated  financial statements include the
accounts of the  Company and its  subsidiaries.  All  significant  inter-company
accounts and transactions have been eliminated.


Revenue  Recognition - The Company recognizes revenue from sales of speakers and
OSA units at the time the products are shipped. Revenue from leased OSA units is
recognized  ratably  over the lease term,  which range from 3 to 48 months.  All
existing leases are classified as operating leases.


Inventories  -  Inventories  are stated at the lower of cost  (standards,  which
approximate actual cost on first-in-first out basis) or market.


Fair  value of  Financial  Instruments  - The  carrying  amount of cash and cash
equivalents,  accounts  receivable,  accounts payable,  and accrued  liabilities
approximates fair value.

Property and Equipment - Property and equipment are stated at cost.  Repairs and
maintenance  costs  are  charged  to  expense  as  incurred.   Depreciation  and
amortization  are computed  using the  straight-line  method over the  estimated
useful  lives  of the  assets,  or the  lease  term if  shorter  in the  case of
leasehold  improvements,  ranging  from two to thirty  years.  When  property or
equipment is retired or otherwise disposed of, the cost less related accumulated
depreciation  is removed from the accounts and the resulting gains or losses are
included in other expense in the accompanying statements of operations.
                                       27
<PAGE>
Capitalized Database - The capitalized database relates to a portion of the cost
in excess of the fair value related to the TSOA acquisition,  which was retained
by On-Site to support  its OSA  technology.  The  capitalized  database is being
amortized over 15 years using the straight-line  method (see Note 8. Capitalized
Database).


Goodwill - Goodwill represents the excess of the cost of OAI over the fair value
of the net assets  acquired.  Amortization  is computed using the  straight-line
method over twenty years.

Long-Lived  Assets - The  Company  continually  evaluates  factors,  events  and
circumstances,  which  include,  but are not  limited  to,  the  historical  and
projected operating  performance,  specific industry trends and general economic
conditions  to  assess  whether  the  remaining  estimated  useful  life  of the
Company's  long-lived  assets may warrant revision or that the assets may not be
recoverable.  When such  factors,  events  or  circumstances  indicate  that the
long-lived assets should be evaluated for possible impairment,  the Company uses
an estimate of undiscounted  cash flow generated from the long-lived assets over
the remaining lives of those assets in measuring its recoverability.

Research and Development - The costs associated with research and development of
products and technologies are expensed as incurred.

Use of Estimates - The preparation of the consolidated  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  assets  and  liabilities  at the  date  of the
consolidating  financial  statements,  and the reported  amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

Comprehensive  Income - For the years ended  September 30, 2000,  1999 and 1998,
there were no differences between net income and comprehensive income.

Stock-Based  Compensation - Statement of Financial Accounting Standards ("SFAS")
No. 123,  "Accounting for Stock-Based  Compensation,"  encourages,  but does not
require companies to record  compensation plans using a fair value based method.
The Company has chosen to continue to account for stock-based compensation using
the  intrinsic  value based method  prescribed in  Accounting  Principles  Board
Opinion  No.  25,  "Accounting  for  Stock  Issued to  Employees."  Accordingly,
compensation  cost for stock  options is measured as the excess,  if any, of the
quoted market price of the Company's  Common Stock at the date of the grant over
the amount an employee must pay to acquire the stock.

Option and  Warrant  Valuation  - The value of options  and  warrants  issued to
non-employees  are calculated  using the  Black-Scholes  Option Pricing Model in
accordance with SFAS No. 123.


2.  OIL ANALYSIS SERVICE

During  fiscal 1998,  and as a result of the  introduction  of the OSA-IIs,  the
original  OSA-I units and  related  inventory  were  deemed to be  impaired  and
written-off.  An impairment  loss, in the amounts of $880,911 and $413,134,  was
charged to operations and are included in "Write down of fixed assets" and "Cost
of Sales and Service", respectively, in the accompanying Consolidated Statements
of Operations for the year ended September 30, 1998.
                                       28
<PAGE>
The Company  believes that its marketing  efforts relating to the OSA-II will be
successful.  However,  if the  Company  is unable  to meet  goals or to have the
necessary resources to sustain its marketing activities it could have a material
adverse  effect on the Company's  financial  condition and the carrying value of
its assets.


3.  SALE OF TSA

On September 30, 1999, the Company sold  substantially  all of the assets of its
85% owned  subsidiary,  TSA,  and certain  intellectual  property  assets of the
Company relating to TSA's Overhead Sound Systems ("OHSS")  business,  to OAI for
total  consideration of $10,000,000  consisting of $2,500,000 cash, a $6,500,000
30-day note payable to TSA and a  $1,000,000  30-day note payable to the Company
in either  cash or  convertible  preferred  stock of OAI.  OAI was  subsequently
purchased  by the Company on August 31, 2000 (see Note 4.) The  $6,500,000  note
and  accrued  interest  of  $46,479  were  paid on  October  29,  1999,  and the
$1,000,000  note was paid  through  issuance  of  $1,000,000  of OAI 5% Series A
Convertible Preferred Stock.

Previously,  the Company and TSA had entered into a TSA Asset Purchase Agreement
with NCT Audio  Products,  Inc.  ("NCT") on August 14,  1998.  During the period
August 14, 1998 and July 15, 1999, the Company  received in excess of $3,500,000
from NCT and granted NCT two extensions to close the  transaction.  NCT's parent
company  issued a press  release on July 16, 1999  stating that it was unable to
obtain the necessary  financing to complete the  transaction  and  acknowledging
that NCT thereby let its rights under the asset purchase  agreement to lapse. As
a result, the Company and TSA proceeded to negotiate a definitive  agreement and
ultimately  close on the sale of the assets to OAI on  September  30,  1999.  In
September 1999, NCT commenced an arbitration proceeding NCT Audio Products, Inc.
v. Top Source Technologies,  Inc. et al. (American Arbitration Association):  As
previously reported in the Company's 1999 Form 10-K and its Reports on Form 10-Q
for the quarters ending December 31, 1999, March 31, 2000 and June 30, 2000, GTI
and TSA  are  respondents  in an  arbitration  proceeding  before  the  American
Arbitration Association;  GTI and TSA have asserted counterclaims against NCT in
the same proceeding.

On July 18, 2000, NCT served a revised Demand For Arbitration.  NCT continues to
assert that, in connection with NCT's attempts to acquire  substantially  all of
the assets of TSA, GTI and TSA committed breach of contract, breach of fiduciary
duties and engaged in fraudulent  inducement;  NCT also asserts that GTI and TSA
made  negligent  misrepresentations.  All claims  asserted in the initial Demand
against GTI and TSA are  reasserted  in the revised  Demand,  except that NCT no
longer asserts a claim for fraud under Section 10(b) of the Securities  Exchange
Act of 1934 and Rule 10b-5  thereunder.  The revised Demand seeks  rescission of
the Asset Purchase Agreement and compensatory damages in excess of $3.5 million.

The  Company  believes  that  NCT's  claim for  damages  beyond  its 15%  equity
ownership of TSA, less certain  adjustments  and offsets that are subject to the
counterclaims, is without merit. The Company has recorded the amounts due to NCT
as  "payable  to former  buyer of  automotive  subsidiary"  in the  accompanying
consolidated balance sheets.

4.  ACQUISITION OF OAI

Pursuant to a Share Purchase  Agreement,  effective August 31, 2000, the Company
acquired  for $25 million  ($13  million in cash and $12  million in  promissory
notes  certain  assets  and  assumed  certain  liabilities  of  OAI  from  Onkyo
Corporation ("ONKYO"). The acquisition has been accounted for under the purchase
method of  accounting.  The  results of OAI's  operations  are  included  in the
statement of operations for the year ended September 30, 2000, since the date of
acquisition.  The excess of the purchase  price over the estimated fair value of
net assets  acquired was $31.6 million.  The allocation of the purchase price is
based upon preliminary estimates made by the Company and is subject to change.
                                       29
<PAGE>
Certain  litigation   contingencies  of  OAI,  which  existed  at  the  date  of
acquisition,  may offset the final purchase price allocation when resolved.  The
components of the purchase price and its allocation are as follows:

                  Purchase Price - Cash                            $13,000,000
                  Purchase Price - Notes                            12,000,000
                  Acquisition Costs                                    522,581
                      Liabilities assumed                           33,611,035
                      Allocation of purchase price:
                      Current assets                               (18,311,817)
                      Property and equipment                        (9,250,000)
                                                                    ----------
                      Cost in excess of nets assets acquired       $31,571,799
                                                                   ===========

The following  unaudited pro forma summary presents the consolidated  results of
operations  as if the  acquisition  had  occurred at the  beginning of the years
ended  September 30, 2000 and 1999 presented and do not purport to be indicative
of what would have occurred had the  acquisition  been made as of those dates or
of results  that may occur in the future.  The pro forma  amounts give effect to
appropriate  adjustments  for  the  fair  value  of  the  net  assets  acquired,
amortization  of the excess of the cost over the net assets  acquired,  interest
expense, and intercompany transactions.
<TABLE>
<S>                                                         <C>                    <C>

                                                                  2000                    1999
                                                                  ----                    ----
        Net sales                                          $76,911,000             $83,168,000
        Income before extraordinary item                   (10,348,000)                806,000  (1)
        Net income (loss)                                  (10,348,000)                778,734
        Earnings per common share:
        Basic:
        Income before extraordinary item                         (0.35)                   0.03
        Net income (loss)                                        (0.35)                   0.03
        Diluted:                                                 (0.35)                   0.03
        Income before extraordinary item
        Net income (loss)                                        (0.35)                   0.03

(1)      Net income includes a one-time gain of $8,030,832 on the sale of TSA.
</TABLE>


5.  STATEMENT OF CASH FLOWS

See Note 4 for non-cash  investing and financing  activities  resulting from the
acquisition of OAI during fiscal 2000

In connection with the  restructuring  of  substantially  all of the outstanding
Senior Subordinated Convertible Notes (see Note 9. Debt), the Company recorded a
non-cash  gain on  extinguishments  of  debt of  $248,383  for  the  year  ended
September 30, 1999.

There were no  significant  non-cash  investing or financing  activities for the
year ended September 30, 1998.
                                       30
<PAGE>
6. INVENTORIES

Inventories consisted of the following at September 30, 2000 and 1999:
<TABLE>
<S>   <C>                       <C>                     <C>

                                              2000                  1999
      ------------------------ ----------------------- ---------------------
      ------------------------ ----------------------- ---------------------
      Raw materials                        $5,519,573              $984,082
      ------------------------ ----------------------- ---------------------

      Finished goods                        2,125,434               951,750
      ------------------------ ----------------------- ---------------------

      Less    allowance   for
      obsolescence                           (180,000)                   --
      ------------------------ ----------------------- ---------------------
                                           $7,465,007            $1,935,832
      ------------------------ ----------------------- ---------------------
</TABLE>

7.  PROPERTY AND EQUIPMENT

Property  and  equipment  consisted of the  following at September  30, 2000 and
1999:
<TABLE>
<S>                                           <C>             <C>             <C>

      --------------------------------------- ------------- ----------------- ------------------
                                              Useful Life
                                                (Years)
                                              Life (Years)              2000               1999

      --------------------------------------- ------------- ----------------- ------------------

      Building                                     30             $4,000,000                 $0
      --------------------------------------- ------------- ----------------- ------------------
      Land                                        N/A                500,000                  0
      --------------------------------------- ------------- ----------------- ------------------
      Construction in process                     N/A              1,222,838                  0
      --------------------------------------- ------------- ----------------- ------------------
      Computer equipment                          3-4              1,132,433           $967,753
      --------------------------------------- ------------- ----------------- ------------------
      Machinery and equipment                      7               2,910,712                 --
      --------------------------------------- ------------- ----------------- ------------------
      On-Site Analyzers                            5               2,729,415          1,482,829
      --------------------------------------- ------------- ----------------- ------------------
      Tooling                                      5                 372,998             24,253
      --------------------------------------- ------------- ----------------- ------------------
      Furniture and fixtures                      3-5                463,675            190,452
      --------------------------------------- ------------- ----------------- ------------------
      Leasehold improvements                      2-5                126,845             26,555
      --------------------------------------- ------------- ----------------- ------------------
                                                                  13,458,916          2,691,842
      --------------------------------------- ------------- ----------------- ------------------
      Less: accumulated depreciation and
      amortization                                                (1,796,052)        (1,158,725)
      --------------------------------------- ------------- ----------------- ------------------
                                                                 $11,662,864         $1,533,117
                                                                 ===========         ==========

</TABLE>
Depreciation  of leased  OSA-II  machines in the amount of $440,271 and $160,029
for the  years  ended  September  30,  2000  and  1999,  respectively,  has been
allocated to cost of sales as it directly relates to cost of services.


8.  CAPITALIZED DATABASE

Capitalized database consisted of the following at September 30, 2000 and 1999:
<TABLE>
<S>                                             <C>             <C>                <C>
                                                  Useful
                                                Life (Years)          2000               1999
    ------------------------------------------ ---------------- ------------------ ------------------

        Capitalized database                           15           $3,162,500         $3,162,500
    ------------------------------------------ ---------------- ------------------ ------------------
        Less:  accumulated amortization                             (1,510,973)        (1,300,139)

    ------------------------------------------ ---------------- ------------------ ------------------
                                                                    $1,651,527         $1,862,361
                                                                    ==========         ==========

</TABLE>
                                       31
<PAGE>

The capitalized  database contains an active library of engine and machine tests
that  have a  diagnosed  history.  The  value of the  capitalized  database  was
determined  based on an  assessment  of the  number of samples  included  in the
database and a per unit cost to develop/buy the data.
<PAGE>


  9.  DEBT

           Lines of credit at September 30, 2000 and 1999 are as follows:
<TABLE>
<S>                                                                      <C>               <C>

                                                                              2000             1999
             ----------------------------------------------------------- ---------------- ----------------

             ----------------------------------------------------------- ---------------- ----------------
             Nations Credit Commercial Corporation                                $   --       $1,913,986

             ----------------------------------------------------------- ---------------- ----------------
             GMAC Business Credit, LLC                                        11,841,418               --
             ----------------------------------------------------------- ---------------- ----------------
                                                                             $11,841,418       $1,913,986
             ----------------------------------------------------------- ---------------- ----------------
</TABLE>
         Long-term debt at September 30, 2000 and 1999 is as follows:
<TABLE>
<S>                                                    <C>              <C>              <C>               <C>
                                                        Due Date           Rate                2000             1999

           Short-term unsecured loan                February 2000          10%         $         --           $500,000

           Note payable - Onkyo                     May 31, 2001          6.06%             1,000,000               --

           Senior subordinated convertible
           notes                                    June 2001              10%                378,000          707,000

           Term A Loan                              August 2003        (see below)          5,230,000               --

           Term B Loan                              August 2003        (see below)          6,000,000               --
           Promissory notes                         August 2003           7.51%            12,000,000               --
           Senior secured promissory notes          August 2008            15%             12,000,000               --
                                                                                           ----------       ----------
           Less:                                                                           36,608,000        1,207,000
           Original issue discount - Warrants                                                (958,289)
                                                                                                                    --
           Current maturities                                                              (3,449,666)      (1,207,000)
                                                                                          ----------        -----------
                                                                                          $32,200,045
                                                                                          ===========      $===========

</TABLE>
Scheduled maturities of notes payable are as follows:

         Fiscal Year Ending September 30:

                            Consolidated                   GTI

         2001             $3,449,000                   $  378,000
         2002              2,672,000                           --
         2003             18,487,000                   12,000,000
         2004                     --                           --
         Thereafter       12,000,000                    5,000,000
                          ----------                    ---------
                         $36,608,000                  $17,378,000
                         ===========                  ===========
                                       32
<PAGE>
Senior Subordinated  Convertible Notes
On June 9, 1995, the Company entered into an agreement with advisory  clients of
Ganz Capital Management,  Inc., now Mellon Private Asset Management  ("Mellon"),
whereby  the  holders  would  purchase   $3,020,000  nine  percent  (9%)  Senior
Subordinated  Convertible Notes (the "Notes") from the Company, which matured in
June 2000. The Notes were subject to an  Indebtedness to Equity ratio that could
not  exceed  1.5 to 1.0.  As of  September  30,  1998,  the  Company  was not in
compliance   with  the  ratio.   In  fiscal  1999,   the  Company   restructured
substantially all of the $3,020,000  Notes,  which included a waiver of the debt
to equity ratio until September  30,1999.  As of September 30, 1999, the Company
was in compliance with this ratio.

During December 1998, in connection with the restructure of substantially all of
the outstanding  $3,020,000  Notes, the Company prepaid an aggregate of $745,000
principal  amount of Notes for  $496,617  resulting  in a savings of $248,383 in
principal  amount (not including  future debt service costs.) In connection with
the discounting of these Notes,  the Company issued to the Noteholders  warrants
to  purchase  an  aggregate  of 248,383  shares of the  Company's  Common  Stock
exercisable over a five-year period at $1.78 per share. In addition, on December
15, 1998 concurrent with the approval of the sale of TSA Assets by the Company's
stockholders, Noteholders representing $2,240,000 of the remaining $2,275,000 in
Notes outstanding agreed to be prepaid $1,568,000 of the Notes, leaving $707,000
of principal outstanding due in June 2000.

In  connection  with this  redemption,  the  Noteholders  agreed  to reduce  the
interest rate from 9% to 5% and reduce the conversion price on the remaining 30%
Note balance from $10.00 per share to $2.00 per share.  In  connection  with the
repayment of the Notes, a waiver of certain  restrictive  provisions of the Note
Purchase Agreement, including the requirement that the Company maintain a 1.5 to
1 debt to equity ratio, was received (through and including September 30, 1999).

In June 2000, the Company repaid $329,000 of the outstanding Notes. In addition,
the Company and Noteholders  representing $363,000 of Notes agreed to extend the
due date of the Notes until June 2001. In return, the Company agreed to increase
the interest rate from 5% to 10% and reduce the conversion  price from $2.00 per
share to $1.50 per share. Additionally by allowing the Company to enter into the
OAI acquisition,  the remaining Ganz Noteholders  permanently  waived the 1.5 to
1.0 indebtedness requirement.

Short-Term  Unsecured  Loan
On August 13,  1999,  a trust in which Mr. G. Jeff  Mennen,  a  director  of the
Company,  is one of the  trustees  provided  the Company a six-month  short-term
unsecured loan of $500,000 at a 10% interest rate. As  consideration,  the Trust
received 50,000 warrants at the market price of $.875  exercisable  immediately,
and 50,000  warrants at the market price of $.875  exercisable  in one year. The
value of these warrants of $76,344 has been deducted as interest  expense in the
fourth quarter of fiscal year 1999. The loan plus accrued interest was repaid in
January 2000.

Lines  of  Credit
On July 1, 1997,  the Company  entered into a three-year  asset-based  financing
agreement  with  Nations  Credit   Commercial   Corporation   ("Nations   Credit
Facility").  The Nations Credit Facility, which was secured by substantially all
of the assets of the  Company,  enabled the  Company to borrow up to  $5,000,000
based upon certain  percentages of accounts  receivable and inventory  balances.
The interest rate on the Nations Credit  Facility was 1-1/2% over the prime rate
and was payable  monthly.  The weighted  average  interest  rate during the year
ended September 30, 1999 was 17.4%. The maximum amount  outstanding at any month
end was  $1,913,986 at September 30, 1999. The average  outstanding  balance was
$1,090,287  during the year ended September 30, 1999. As a result of the sale of
TSA assets,  the note  balance of  approximately  $1,914,000,  which  included a
redemption  fee of $100,000,  was paid, the Credit  Facility was cancelled,  and
liens on all assets of the Company were released on October 1, 1999.
                                       33
<PAGE>
In connection  with the  acquisition of OAI, the Company  entered into a secured
three-year  $31,230,000  credit  facility with GMAC Business  Credit,  LLC, (the
"GMAC  Credit  Facility").  The  proceeds  were  used to  repay  OAI's  existing
indebtedness owed to another  institutional  lender and to lend part of the cash
purchase price to GTI. The GMAC Credit Facility  consists of a revolving line of
credit and two term loans.

The revolving line of credit is for a maximum of $20,000,000  subject to meeting
various financial and other covenants.  Under the line of credit, OAI may borrow
up to 85% of eligible accounts receivable plus the lesser of 60% of all eligible
inventory or $7,500,000.  This facility cannot be used to fund the operations of
the Company and its subsidiaries, other than OAI. As a condition of granting the
GMAC  Credit  Facility,  GMAC  required  that this  facility  be used to provide
working  capital  to OAI only.  Except  for the  possibility  of the  payment of
management fees and a dividend on the Company's over $3,000,000  preferred stock
investment in OAI, OAI is restricted  from using its credit facility to fund the
activities of the Company's  corporate office or any of its other  subsidiaries.
As of January 12,  2001,  OAI had not paid the Company  any  management  fees or
preferred  dividends and none are  presently  anticipated  to be paid.  The GMAC
Credit  Facility  includes,  among other  things,  covenants  regarding  certain
financial  ratios of OAI. At September 30, 2000,  Management  believes OAI is in
compliance with such covenants. See Note 20. Subsequent Events.

The weighted  average  interest rate at and during the year ended  September 30,
2000 was 10.5%. The maximum amount  outstanding at any month end was $11,841,418
at September 30, 2000. The average outstanding balance was $9,841,267 during the
year ended September 30, 2000.

Term A and B Loans
The GMAC term loans are for $5,230,000 and $6,000,000.  The $5,230,000 term loan
("Term  A") is due in  monthly  installments  of  approximately  $72,639  with a
balloon payment due on August 30, 2003 of  approximately  $2,615,000;  the other
term loan ("Term B") is due in monthly  installments  of $100,000  increasing to
monthly installments of $150,000 on October 1, 2001 and to $250,000 per month on
October 1, 2002.  The final payment is due on August 30, 2003.  Except for LIBOR
loans, which may be advanced under the line of credit, interest on the revolving
line and the Term A loan is the greater of the Federal  Funds Rate plus one-half
percent or prime,  increased by one percent.  Interest on the Term B loan is the
greater of the Federal Funds Rate plus one-half  percent or prime,  increased by
one and  one-half  percent.  At the  closing,  the  Company  borrowed a total of
$20,543,338 under the GMAC Credit Facility.  The GMAC Credit Facility is secured
by a first  lien on all of the assets of OAI.  GTI  guaranteed  the GMAC  Credit
Facility and pledged all of its outstanding stock of OAI as additional security.

Senior Secured  Promissory Notes
As a part of the OAI  acquisition,  GTI and OAI borrowed a combined  $12,000,000
from the Wilmington  Trust Company and George Jeff Mennen,  co-trustee u\a dated
November 25, 1970 with George S. Mennen FBO John Henry Mennen, collectively (the
"Mennen  Trusts").  The OAI  loan of  $7,000,000  is due in  August  2008 and is
secured by a second lien on all of the assets of OAI. The GTI loan of $5,000,000
is due  August  2008 and is  secured by a first lien on all of the assets of GTI
except for the capital  stock and assets of OAI. The interest rate on both loans
is 15% per  annum,  of which  12.5% is  payable  monthly,  with  2.5% per  annum
accruing and due at maturity.
                                       34
<PAGE>
In  connection  with the loans made by the Mennen  Trusts,  the  Company  issued
warrants to purchase  1,500,000  shares of its Common Stock  exercisable at $.94
per share over a 10-year period. The value of these warrants, $968,896; has been
recorded as an original  issue  discount,  which is being  amortized as interest
expense over the term of the loans.

Promissory Notes
Onkyo accepted  $12,000,000  unsecured  promissory  notes due on August 31, 2003
bearing interest at 7.51%, as a part of the  consideration  for the sale of OAI.
See Notes 4 and 20. Subsequent Events.

Note  Payable-Onkyo
OAI has a $1,000,000  unsecured promissory note payable to Onkyo due on May 2001
bearing interest at the Federal Funds Rate less.5% (See Note 20.)

10. COMMITMENTS AND CONTINGENCIES

The  Company  leases  office  space  under   non-cancelable   operating  leases.
Approximate future minimum rental commitments under these leases are as follows:

         Fiscal Year Ending September 30:

         2001               $496,000
         2002                336,000
         2003                163,000
         2004                 63,000
         Thereafter           66,000

Total rental expense for operations amounted to approximately $222,000, $379,000
and  $372,000  for  the  years  ended   September  30,  2000,   1999  and  1998,
respectively.

The Company has commitments  under certain  employment  agreements  entered into
with individuals in management  positions.  Approximate base salary payments due
under these agreements are as follows:  $1,300,000 in fiscal 2001, and $650,000
in fiscal 2002, and $400,000 in fiscal 2003.

The Company has from time to time incurred  expenses  associated with litigation
defense  and  payment  of  settlements  or  judgments  in  connection  with  its
businesses.  The Company  believes that such  litigation and other legal matters
should not have a significant adverse effect on the Company's financial position
or results of operations.


11. EARNINGS PER SHARE

Net income  (loss) per common  share is  calculated  according  to SFAS No. 128,
"Earnings Per Share",  which establishes  standards for computing and presenting
basic and diluted earnings per share. Basic earnings per share are calculated by
dividing Income (Loss) Available to Common  Stockholders by the weighted average
number of shares  of  Common  Stock  outstanding  during  each  period.  Diluted
earnings  per share is  calculated  by dividing Net Income  (Loss)  Available to
Common Stockholders by the weighted average number of shares of common Stock and
dilutive potential common Stock equivalents outstanding during each period.

For the years  ended  September  30,  2000,  and 1998,  the  dilutive  effect of
convertible  securities  and common stock  equivalent  shares of 4,088,871,  and
1,274,896, respectively, were not included in the dilutive average common shares
outstanding, as the effect would have been antidilutive.
                                       35
<PAGE>
<TABLE>
<S>                                               <C>                   <C>                     <C>
                                                         For the Year Ended September 30, 1999
                                                  Income                   Share               Per-Share
                                                (Numerator)            (Denominator)            Amount
Basic
Income available
    To common stockholders                        $3,973,882              29,108,705            $0.14

Effect of Dilutive Securities
Options and Warrants                                                         138,009
Convertible preferred stock                          265,327               3,901,023

Diluted
Income available to common
Shareholders plus assumed
Conversion                                        $4,239,209              33,147,737            $0.13

</TABLE>

Options  and  warrants to purchase  3,272,795  shares of common  stock at prices
ranging from $1.06 to $8.75 were  outstanding  during the period ended September
30, 1999 but were not included in the computation of diluted  earnings per share
because exercise price was greater than the market price of the common shares.


12.  INCOME TAXES

Income tax expense for the years ended  September 30, 2000,  1999,  and 1998 was
$0, $53,000, and $58,801, respectively.

A valuation  allowance is provided to reduce the deferred tax assets to a level,
which, more likely than not, will be realized. The Company has determined, it is
not more likely than not that the net deferred tax assets at September  30, 2000
will be realized  before the  expiration of the  underlying  net operating  loss
carryforwards which will begin expiring in 2002.  Accordingly,  a 100% valuation
allowance  has been recorded on the  potential  tax benefit  generated  from the
operating loss carryforwards.

At September  30, 2000,  the Company has net tax basis  Federal  operating  loss
carryforwards of approximately  $34,000,000,  which may be used to offset future
taxable income,  if any. The Company's net operating loss  carryforwards  expire
between 2002 and 2019.


13.  RELATED PARTY TRANSACTIONS

In order to assure the Company would not violate a covenant under the Notes,  in
January  1998,  G. Jeff  Mennen,  a director  of the  Company,  agreed to infuse
sufficient capital into the Company to maintain compliance of this ratio through
October 1, 1998 or refinance the Notes (see Note 9. Debt). In consideration  for
this  guarantee,  the Company  issued to Mr.  Mennen  50,000,  10-year  warrants
exercisable at $2.00 per share and agreed to register the  underlying  shares of
Common Stock at its sole expense. These warrants were valued at $31,854 and were
recorded as an expense in fiscal 1999.
                                       36

<PAGE>
On November  17,  1998,  the Company  sold  $3,500,000  of Series B  Convertible
Preferred  Stock  ("Series  B  Preferred")  to the  Mennen  Trust.  The Series B
Preferred is  convertible  into a number of shares of Common  Stock  computed by
dividing the stated value of $1,000 per share (the "Stated Value") by 85% of the
closing  bid  price  of the  Common  Stock  on the  previous  trading  day  (the
"Conversion Price"). The Company had the option to redeem the Series B Preferred
at a price of 115% of Stated Value plus accrued dividends,  which option expired
on  January 1,  2001.  The  intrinsic  value of the above  described  beneficial
conversion  feature of  ($618,625)  was  recognized as an increase in additional
paid-in-capital and a decrease in Series B Preferred. This beneficial conversion
feature  was  amortized  as an  embedded  Series B  Preferred  dividend  through
November  1, 1999 (the date on which the stock  could have been  converted  into
Common  Stock).  The Series B Preferred  pays a dividend of 9% per annum in cash
or, if the Company is unable to pay cash, in shares of Common Stock.  The number
of shares of Common  Stock to be issued in such event shall equal to the sum of:
(A) the amount of the dividend  divided by the Conversion  Price plus (B) 25% of
the amount  obtained  in clause (A). As  additional  consideration,  the Company
issued to the Mennen Trust  350,000  warrants to purchase the  Company's  Common
Stock exercisable over a 10-year period at a price of $1.94 per share (which was
equivalent  to $1.00 above the closing price on the day of  consummation  of the
Series B Preferred  sale  transaction).  These warrants were valued at $177,251,
and have been deducted from Net Income (Loss).  Available to Common Stockholders
for the purpose of calculating  income per share for the period ended  September
30,  1999.  Additionally,  since the  Series B  Preferred  was not  redeemed  or
converted into Common Stock on or before May 1, 1999 (which conversion  required
the Company's  consent),  the Company  issued to the Mennen Trusts an additional
50,000 10-year warrants  exercisable at a price of $1.75,  $0.50 per share above
the  closing  price of the  Company's  Common  Stock on April  30,  1999.  These
warrants  were valued at $27,048 and have been  deducted  from Net Income (Loss)
Available to Common Stockholders for the purpose of calculating income per share
for the period ended September 30, 1999.

Under the original  terms of the Series B Preferred,  the Company was allowed to
redeem the Series B Preferred  Stock at a 15% premium  until October 27, 1999. A
redemption  did not occur by that date,  so the Company  was  required to file a
registration  statement no later than November 30, 1999. However, on October 21,
1999,  the  Mennen  Trust  agreed  to  allow  the  Company  to  delay  filing  a
registration  statement until January 1, 2001 to cover the potential public sale
of the shares of the  Company's  Common Stock  issuable  upon  conversion of the
Preferred  Stock and  warrants.  Under the terms of the  agreement,  the  Mennen
Trusts  received  250,000  warrants at a strike price of $2.38.  In return,  the
Company  maintained  its 15%  redemption  right and was  allowed  to extend  the
required  registration or redemption  until January 1, 2001. These warrants were
valued at $252,180 and were deducted from Net Income (Loss)  Available to Common
Stockholders  for the  purpose  of  calculating  income  per share for the first
quarter of fiscal year 2000. On January 5, 2001,  the Mennen Trust again granted
an  extension  to the  Company to redeem the  Series B  Preferred.  See Note 20.
Subsequent Events.

On August  13,  1999,  the  Mennen  Trusts  provided  the  Company  a  six-month
short-term  unsecured loan of $500,000 at a 10% interest rate. As consideration,
the  Mennen  Trusts  received  50,000  warrants  at the  market  price  of $.875
exercisable  immediately,  and  50,000  warrants  at the  market  price of $.875
exercisable in one year. These warrants were valued at $76,344 and were deducted
as interest  expense in the fourth  quarter of fiscal year 1999.  The loan along
with accrued interest was repaid in January 2000.

In fiscal 1993,  Stuart Landow,  the former  Chairman of the Board of Directors,
President and Chief Executive  Officer of the Company entered into an employment
agreement ("Employment  Agreement") which provided a base salary of $200,000 per
year.  Additionally,  the Employment Agreement called for incentive compensation
payments.  The incentive cash  compensation  expense for fiscal 2000,  1999, and
1998 was $0, $0 and $92,760, respectively.
                                       37
<PAGE>
As a result of the hiring of a new CEO, who  replaced  Mr.  Landow as CEO in May
1997, a breach in the terms of the  Employment  Agreement  occurred;  thus,  Mr.
Landow could have  requested  that the "Good  Reason"  clause of his contract be
triggered  effective  July 1, 1997.  Mr.  Landow  waived  this  clause  with the
approval of the Board of  Directors.  This waiver was  effective  until June 30,
1998 or  earlier,  if  elected  by Mr.  Landow  at which  time the  terms of the
original  Employment  Agreement  remained in effect,  with the  exception of the
incentive payments which would be calculated based on the previous sales for the
period from July 1, 1996 through June 30, 1997.

In June 1998,  Mr.  Landow  agreed to modify  his  Employment  Agreement,  which
resulted in Mr. Landow resigning as Chairman and as a director of the Company.

Mr.  Landow  agreed  to a  reduction  of  approximately  $195,000  of the  total
compensation  he was entitled to receive by reducing  the  36-month  term of the
severance to 30 months. Mr. Landow agreed to raise the exercise price on 200,000
of his options to purchase  600,000 shares of the Company's Common Stock (all of
which remain vested) from $2.06 to $3.56. In return for these  modifications  to
the Employment  Agreement,  the Company agreed to extend the exercise period for
all of Mr. Landow's 600,000 vested options from the original  expiration date of
July 1, 1999 to the new date of July 1, 2001.

Additionally,  the modified Employment  Agreement provides that Mr. Landow would
repay the Company approximately  $105,000 he previously borrowed,  together with
9% per annum  interest  over the 30-month  term.  The Company is  deducting  the
monthly installments from Mr. Landow's monthly severance compensation payments.

As a result of the modification to the Employment Agreement the Company recorded
a  one-time  charge  against  earnings  of  $1,085,587,  which  is  included  in
"Severance expense" in the accompanying Consolidated Statement of Operations for
the year ended  September  30,  1998.  This charge was  comprised of $918,507 in
future  severance  payments and a non-cash charge of $167,080,  recorded for the
change in the stock option measurement date.

As of  September  30,  2000,  the Company owes Mr.  Landow  additional  payments
totaling $89,799,  which is included in accrued  liabilities in the accompanying
financial statements.

For addtional related party transactions. See Notes 9, 19 and 20.


14. STOCK AND STOCK OPTION PLANS

The 1990 Stock Plan, as amended,  covers 3,630,000 shares of Common Stock and is
intended  to  provide:   (a)  officers  and  other   employees  of  the  Company
opportunities to purchase stock in the Company  pursuant to options  ("Options")
granted  hereunder which qualify as Incentive  Stock Options  ("ISOs") under the
Internal Revenue Code of 1986, as amended;  (b) directors,  officers,  employees
and  consultants of the Company  opportunities  to purchase stock in the Company
pursuant  to  Options   granted   hereunder   which  do  not  qualify  as  ISO's
("Non-Qualified Options"); (c) directors, officers, employees and consultants of
the Company awards of stock in the Company ("Awards"); (d) directors,  officers,
employees and consultants of the Company  opportunities to make direct purchases
of stock in the Company ("Purchases");  and (e) directors of the Company who are
not employees of the Company with Non-Discretionary Options.
                                       38
<PAGE>
The 1990  Stock  Plan is  administered  by a  committee  of  three  non-employee
directors.  The  committee,  subject to certain  restrictions  in the 1990 Stock
Plan, has the authority to grant or issue,  as applicable,  ISOs,  Non-Qualified
Options,  Awards,  Purchases and  Non-Discretionary  Options. The committee also
establishes exercise or issue prices, vesting schedules and expiration dates.

The Company's 1993 Stock Option Plan (the "1993 Plan") covers  2,150,000  shares
of Common Stock. The 1993 Plan provides: (a) officers and other employees of the
Company  opportunities  to  purchase  stock in the  Company  pursuant to Options
granted hereunder which qualify as ISOs; and (b) directors,  officers, employees
and  consultants of the Company  opportunities  to purchase stock in the Company
pursuant to Non-Qualified Options.

A committee of non-employee  directors administers the 1993 Plan. The committee,
subject  to certain  restrictions  in the 1993 Plan,  has the  authority  to (i)
determine  the  employees  of the  Company  to whom  ISOs  may be  granted,  and
determine to whom Non-Qualified  Options may be granted; (ii) determine the time
or times at which Options may be granted;  (iii) determine the exercise price of
shares subject to Options;  (iv) determine whether Options granted shall be ISOs
or Non-Qualified Options; (v) determine the time or times when the Options shall
become  exercisable,  the duration of the  exercise  period and when the Options
shall vest; (vi) determine whether  restrictions such as repurchase  Options are
to be imposed on shares subject to Options and the nature of such  restrictions,
if any, and (vii)  interpret the 1993 Plan and  promulgate and rescind rules and
regulations relating to it.

The 1993 Plan also  provides  for the  automatic  grant of 30,000  Non-Qualified
Options to any  director who is not an employee of the  Company.  These  Options
vest in increments of 5,000 Options per director  every June 30 and December 31,
provided that they are still serving as a director at that time. However, in the
event any director  resigns  prior to full  vesting,  the Options will vest on a
pro-rata basis.

The  Company  has  issued the  following  Options  and  warrants  to  directors,
officers,  employees and  consultants  during fiscal 2000, 1999 and 1998. All of
the following  Options and warrants issued to employees,  directors and officers
were  issued at the fair  market  value of the  underlying  stock at the date of
grant; therefore, no compensation expense has been recognized. The fair value of
Options or warrants issued to consultants was charged to operations.
                                       39
<PAGE>

<TABLE>

<S>                      <C>                  <C>              <C>                 <C>              <C>
                                          2000                             1999                             1998
                                          ----                             ----                             ----


                                               WEIGHTED                            WEIGHTED                       WEIGHTED
                                               AVERAGE                             AVERAGE                        AVERAGE
                              OPTIONS/         EXERCISE           OPTIONS/         EXERCISE          OPTIONS/     EXERCISE
                              WARRANTS          PRICE             WARRANTS          PRICE            WARRANTS      PRICE
                              -------           -----             -------           -----            -------       -----

Outstanding,
beginning of year:
                            3,960,461              $1.94         3,265,872              $2.34       3,160,580      $2.66

Granted                     2,801,750              $1.11         1,219,748              $1.53       1,683,727      $1.79

Expiration Dates             10/20/04 -                          11/13/03 -                          01/12/2002-
                             9/1/2010                            9/22/2009                           09/01/2008

Exercised                     (5,000)               $.53          (50,550)               $.53       (549,700)      $.71

Expired or Canceled
                             (90,379)              $3.18         (474,609)              $3.23     (1,028,735)      $3.33
                             -------                             --------                         ----------       -----

Outstanding, end
of year:                    6,666,832              $1.57         3,960,461              $1.94       3,265,872      $2.34
                            =========              =====         =========              =====       =========      =====

Exercisable,end
of year:                    5,093,532              $1.73         3,117,323              $2.12       1,802,234      $2.94
                            =========              =====         =========              =====       =========      =====

Weighted-average
fair value of
options granted
during the year                  $.85                                 $.60                          $.98
                                 ====                                 ====                          ====


Available for
grant, end of year:           331,242
                              =======


</TABLE>

Included  in the above  table at  September  30,  2000 are  575,000  outstanding
options, which were granted outside of the Stock Option Plans during fiscal 1998
and 1997 with a weighted average price of $2.00, and $1.98, respectively.  Also,
included in the above table are 2,823,383  warrants,  which were granted  during
fiscal 1998, 1999 and 2000 at prices ranging from $.875 - $2.00.
                                       40


<PAGE>
Information  about stock  options in various  price ranges at September 30, 2000
follows:
<TABLE>
<S>                               <C>              <C>               <C>                   <C>


                                 OPTIONS/WARRANTS OUTSTANDING                                  OPTIONS/WARRANTS EXERCISABLE
--------------------------------------------------------------------------------------    ----------------------------------


                                                    Weighted-Average      Weighted-Average
                                     Outstanding      Remaining              Exercise          Exercisable     Weighted-Average
              Range of                  as of       Contractual Life           Price              as of         Exercise Price
          Exercise Prices             09/30/00         (Years)                                  09/30/00

         $0.00  -     $1.00           2,923,250          7.1                    $0.92          1,809,453              $0.91
         $1.01  -     $2.00           2,515,276          7.0                    $1.63          2,060,773              $1.70
         $2.01  -     $3.00             824,820          5.2                    $2.28            824,820              $2.28
         $3.01  -     $5.00             295,000          6.0                    $3.47            295,000              $3.47
         $5.01  -     $8.00              78,486          4.5                    $6.81             73,486              $6.83
         $8.01  -    $10.00              30,000          3.5                    $8.75             30,000              $8.75
         -----                           ------          ---                    -----             ------              -----
                                      6,666,832          6.8                    $1.57          5,093,532              $1.73
                                      =========                                                =========

</TABLE>

The  Company  has  adopted  the  disclosure  only  provisions  of SFAS No.  123,
Accordingly,  no  compensation  cost has been  recognized  for its Stock  Option
Plans. Had compensation for the Company's  stock-based  compensation  plans been
determined  pursuant to SFAS No. 123, the  Company's  net income (loss) and loss
per share would have decreased (increased) accordingly.  Using the Black-Scholes
Option  Pricing  Model for all  Options  granted  after  October  1,  1995,  the
Company's  pro forma net loss and pro forma  net loss per  share,  with  related
assumptions, are as follows:

<TABLE>
<S>                                                      <C>                    <C>                <C>

                                                          2000                  1999                1998
                                                          ----                  ----                ----

Pro forma net income
(loss)                                                 $(6,445,393)           $3,445,032         $(6,577,819)
Pro forma  basic and  diluted  net income  (loss)
per share                                                 (.22)                  .12                  (.23)
Expected life (years)                                       7                     7                     7
Risk-Free interest rate                                   6.14%                 6.14%                 5.67%
Expected volatility                                        75%                   69%                   86%
Quarterly dividend                                         None                  None                  None

</TABLE>
Because  SFAS No.  123  method of  accounting  has not been  applied  to Options
granted prior to October 1995, the resulting pro forma compensation cost may not
be representative of that to be expected in future years.


15. CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS



During fiscal 2000, 80% of OAI sales were derived from three  customers.  Delphi
Delco  Electronics  accounted for  approximately  55% and  Daimler-Chrysler  and
Fujitsu Ten together, accounted for approximately 25%.

During fiscal 2000,  approximately  40% of On-Site's  revenues were derived from
one customer, Speedco, Inc.
                                       41
<PAGE>
In fiscal 1999,  On-Site derived  approximately 50% of its revenue from the sale
of 10  OSA-II  units to Flying J, Inc.  Additionally,  in fiscal  1999,  On-Site
derived  approximately  14% of its revenue  from ongoing  long-term  leases with
Speedco, Inc., a major truck stop company affiliated with Shell/Equilon. Loss of
Speedco,  Inc.  ongoing  revenues  during fiscal year 2001 would have a material
adverse impact on the Company.


In fiscal  1999 and  1998,  TSA  derived  approximately  99% of its  sales  from
Daimler-Chrysler.

During  fiscal 1998,  approximately  63% of On-Site's  revenues was derived from
four  customers,  all of which were different than the key customers noted above
in fiscal 1999.


16.  DISCONTINUED OPERATIONS

On September 30, 1999, the Company sold  substantially  all of the assets of its
85%  owned  subsidiary,  TSA and other  assets  used in TSA's  business  to OAI.
Accordingly, the operations and financial activity associated with this business
were   previously   classified  as  discontinued   operations,   but  have  been
reclassified as continuing  operations as a result of the Company acquiring 100%
of the outstanding stock of OAI on August 31, 2000.


17.  SEGMENT INFORMATION

The Company currently classifies its operations into the following segments: (1)
Automotive Audio Technology, which consists of OAI and TSA, and (2) Oil Analysis
Service,  which  consists of On-Site  operations.  Corporate and other  includes
general  corporate  assets  consisting  primarily of cash and cash  equivalents,
property and  equipment,  and  corporate  expenses.  The material  components of
corporate general and administrative expenses are salaries and benefits;  travel
and entertainment; consulting; and proxy, printing and transfer costs. In fiscal
2000,  1999 and 1998,  corporate  expenses  (salaries,  benefits and general and
administrative  expenses)  have  been  allocated  to  the  segments.   Financial
information  about the  Company's  operations  by  segments  for the years ended
September 30, 2000, 1999 and 1998 is as follows:
                                       42
<PAGE>
<TABLE>
<S>                  <C>           <C>                    <C>                  <C>                   <C>

                                       Automotive         Oil Analysis           Corporate
                                    Audio Technology         Service             And Other            Consolidated
Revenue:
                      2000             $ 6,478,163         $ 1,124,265                $    -            $ 7,602,428
                      1999               8,863,814           1,389,678                     -             10,253,492
                      1998              10,815,205             392,653                     -             11,207,858


Net Income (Loss):
                      2000               $(61,143)       $ (4,462,969)           $ (893,006)           $(5,417,118)
                      1999               9,263,284         (3,563,404)             (537,270)              5,162,608
                      1998               1,949,924         (5,550,296)           (1,929,190)            (5,529,562)

Assets:
                      2000             $60,301,707          $5,453,413            $2,211,511           $ 67,966,631
                      1999                    -              5,682,570             9,991,778             15,674,348
                      1998               2,432,786           3,943,553               896,756              7,273,095


Depreciation and
Amortization:
                      2000                $285,779            $788,661              $ 35,764             $1,110,204
                      1999                 201,980             506,598               133,653                842,231
                      1998                 306,130             847,236               138,341              1,291,707
</TABLE>

18.  SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED):
<TABLE>
<S>                           <C>                 <C>               <C>                    <C>                  <C>

                                     First              Second               Third             Fourth
                                    Quarter             Quarter             Quarter            Quarter           Total
                             ---------------------------------------------------------------------------------------------
                                                                     (unaudited)
                                                        For the year ended September 30, 2000
Net sales                         $ 185,050          $ 298,503           $ 311,097         $ 6,807,778       $ 7,602,428

Gross profit (loss)                 (87,442)          (123,853)           (151,039)            425,045            62,711
Loss before
 extraordinary items             (1,414,438)        (1,440,784)         (1,509,678)         (1,674,754)       (6,039,654)
Net loss available to
 common stockholders             (1,414,438)        (1,440,784)         (1,509,678)         (1,674,754)       (6,039,654)

Net loss per share                    (0.05)             (0.05)              (0.05)              (0.06)            (0.21)

                                    First              Second               Third              Fourth
                                   Quarter             Quarter             Quarter             Quarter           Total
                             ---------------------------------------------------------------------------------------------
                                                                     (unaudited)
                                                        For the year ended September 30, 1999

Net sales                        $ 2,092,889        $ 2,591,664         $ 2,858,094        $ 2,710,845     $ 10,253,492
Gross profit                         781,398            915,807           1,165,029            611,318        3,473,552
Income (loss) before
 extraordinary items                 326,473           (830,595)            237,175          4,268,095        4,001,148
Net income (loss) available
 to common stockholders              485,218           (830,595)            237,175          4,082,084        3,973,882

Net income (loss) per share             0.02              (0.03)               0.01               0.14             0.14
</TABLE>
                                       43
<PAGE>
19.  PRIVATE PLACEMENT OF SERIES A AND B CONVERTIBLE PREFERRED STOCK

In May 1998, the Company completed the sale in a private offering to two foreign
investors of 1,000 shares of Series A  Convertible  Preferred  Stock  ("Series A
Preferred  ") with a  liquidation  value of $1,000  per share and a par value of
$.10 per share.  This funding was comprised of $1,000,000 in Series A Preferred,
less placement and legal fees, yielding $881,394 in net proceeds to the Company.
This Series A Preferred  paid an annual  dividend of 5% in cash or Common Stock.
The Company  issued an aggregate of 25,779 and 42,626 shares of Common Stock for
payment of the  dividend  due on the Series A Preferred  for the periods  ending
September 30, 1999, and 1998, respectively.


As part of the  transaction,  the  foreign  investors  and the  placement  agent
received a total of 250,000 three-year  warrants  exercisable at $1.10, of which
100,000  warrants  were fully  vested  upon  funding and the  remaining  150,000
warrants  vested upon the  redemption on November 13, 1998.  These warrants were
valued  at  $77,209  and  $108,070  and were  deducted  from Net  Income  (Loss)
Available  to Common  Stockholders  for the purposes of  calculating  net income
(loss)  per  share  for  the  periods  ending   September  30,  1999  and  1998,
respectively.

Under  the terms of the  Preferred  Stock  agreement,  the  holders  of Series A
Preferred  had the right to  convert  each  share of Series A  Preferred  into a
number of shares of Common Stock in whole or in part  cumulatively.  The Company
had the right to redeem the Series A Preferred, at any time, in whole or in part
at 120% of the  purchase  price of the Series A  Preferred  plus all accrued and
unpaid  dividends.  The  intrinsic  value  of  the  above  described  beneficial
conversion  feature of  ($250,000)  was  recognized as an increase in additional
paid-in-capital and a decrease in Series A Preferred. This beneficial conversion
feature  was  amortized  as an  embedded  Series A  Preferred  dividend  through
November 8, 1998 (the date on which all the stock could have been converted into
Common Stock).  On November 8, 1998, the Company  redeemed  one-half or $500,000
Stated Value of the existing  Series A Preferred  Stock by paying the holders an
aggregate  purchase  price of  $600,000.  The holders also agreed not to convert
$350,000  Stated Value of Series A Preferred until after March 31, 1999 (and the
Company retained the right to redeem $350,000 Stated Value of Series A Preferred
Stock at a 20% premium  above Stated Value at any time before or after March 31,
1999).  The remaining  $150,000 Stated Value of Series A Preferred was converted
into  an  aggregate  of  387,554  shares  of  Common  Stock  (including  accrued
dividends)  in  accordance  with  the  terms  of  the  Series  A  Preferred.  As
consideration for the delay in converting  $350,000 Stated Value of the Series A
Preferred, the Company issued to the two holders thereof,  five-year warrants to
purchase an aggregate of 25,000 shares of Common Stock exercisable at $.8937 per
share  commencing in April 1999.  These warrants were valued at $10,298 and were
deducted from Net Income (Loss) Available to Common Stockholders for the purpose
of calculating net income per share for the year ended September 30, 1999.

On March 30, 1999, the Company and the holders of the Series A Preferred  agreed
to modify the conversion  terms of the remaining  $350,000 of Series A Preferred
resulting in the conversion of the Series A Preferred into Common Stock at $1.00
per share, or 350,000 shares. The holder agreed to restrict public sale of these
350,000  shares of Common  Stock  until  October 1, 1999 and  thereafter  70,000
shares,  on a  cumulative  basis,  may be sold each  month.  The $1.00 price was
substantially  higher than the price  permissible  and occurred as the result of
the Company agreeing not to redeem the $350,000 Series A Preferred.

On November 17, 1998,  the Company sold  $3,500,000  of its Series B Convertible
Preferred Stock (see Note 13. Related Party Transactions).
                                       44
<PAGE>
20. SUBSEQUENT EVENTS

On November 30, 2000,  the Mennen Trust  guaranteed a 13 month  $1,000,000  note
from the Company to TSA, the  Company's 85% owned  subsidiary.  This permits the
Company to use TSA's cash, which had been allocated in the event the arbitration
proceeding with NCT was unsuccessful.  In consideration  for the guarantee,  the
Company  agreed to pay the Mennen  Trust a $50,000  fee on January  15, 2001 and
issued  to them  150,000  ten year  warrants  exercisable  at a strike  price of
$.4375. These warrants were valued at approximately $54,000 and will be deducted
from Net Income  (Loss)  Available  to Common  Stockholders  for the  purpose of
calculating  income  (loss) per share  during the first  quarter of fiscal  year
2001.

If the Mennen Trust is required to pay under the  guarantee in whole or in part,
the Company shall issue to them 10% convertible preferred stock,  convertible at
a 30% discount from market (but not less than $.60 per share), redeemable at the
Company's  option  at 115%  of face  value  through  June  30,  2001,  and  120%
thereafter.  Such conversion  feature would result in an embedded  dividend that
would be deducted from Net Income (Loss) Available to Common  Stockholders.  The
Company  shall use it best efforts to register the Common  Stock  issuable  upon
conversion  within six months of issuance of the  preferred  stock.  Only 1/6 of
face value of the underlying Common Stock can be sold per month, cumulative.

On January 9, 2001, the Mennen Trust extended the time for the Company to redeem
the Series B Preferred  at 115% of stated  value plus  accrued  dividends  until
January 1, 2002. The Series B Preferred  cannot be converted prior to January 1,
2002 without the express written consent of the Company.  Under the terms of the
extension,  the Company shall not be obligated to file a registration  statement
for the underlying Common Stock until January 1, 2002. As consideration for this
modification, the Company issued 25,000 warrants to the Mennen Trust at a strike
price of $.4375.  These  warrants  were valued at  approximately  $9,000 will be
deducted from Net Income (Loss) Available to Common Stockholders for the purpose
of  calculating  income  (loss) per share for the second  quarter of fiscal year
2001.

In early  December  2000,  the Company  notified  GMAC that OAI had violated the
Fixed  Charge  Coverage  Ratio of at least 1.15 to 1 covenant of the GMAC Credit
Facility.  This violation occurred due to the unexpected significant slowdown in
the OEM  automobile  market during the fourth  calendar  quarter of 2000. Due to
this  slowdown,  OAI  sales  and  earnings,   which  are  historically  directly
correlated to OEM sales volumes were lower than expected.

In  recognition  of  the  severity  of  the  unexpected   downturn  and  due  to
management's  efforts  to reduce  operating  costs,  GMAC  waived  the  covenant
violation and reset OAI's operating covenants to lower levels through the period
ending December 31, 2001.

In early  January  2001,  Onkyo and the  Company  modified  the  Share  Purchase
Agreement by reducing the  promissory  notes payable to Onkyo by $1,000,000  and
waiving the interest on the  $1,000,000.  Additionally,  Onkyo extended the time
for OAI to pay approximately  $3,200,000  comprised of a $1,000,000 note payable
(see Note 9. Debt) and approximately $2,200,000 in royalties payable included in
accounts payable at September, 30, 2000, from May 31, 2001 to March 10, 2002.
                                       45


<PAGE>
In January  2001,  the  Company  sold  $2,000,000  of its  Series C  Convertible
Preferred  Stock  ("Series C  Preferred")  to the Mennen  Trusts and  received a
commitment  for an  additional  $2,000,000  during  fiscal 2001 from Mr. G. Jeff
Mennen, (the "Standby Commitment"), if required as described below. The Series C
Preferred is  convertible  into a number of shares of Common  Stock  computed by
dividing the stated value of $1,000 per share (the "Stated Value") by 75% of the
closing bid price of the Common Stock on the  previous  trading day but not less
than $.4375 per share (the  "Conversion  Price").  The Company has the option to
redeem the Series C Preferred  at a price of 115% of Stated  Value plus  accrued
dividends,  which option  expires on June 30, 2001.  Thereafter,  the redemption
premium increases to 120% of stated value plus accrued  dividends.  The Series C
Preferred  pays a dividend of 10% per annum in cash or, if the Company is unable
to pay cash, in shares of Common Stock.  The number of shares of Common Stock to
be  issued  in such  event  shall  equal to the sum of:  (A) the  amount  of the
dividend  divided by the Conversion Price plus (B) 25% of the amount obtained in
clause (A). As additional consideration, the Company issued to the Mennen Trusts
200,000  warrants to purchase  the  Company's  Common Stock  exercisable  over a
10-year  period at a price of $.4375 per share.  These  warrants  were valued at
approximately  $72,000 and will be deducted from Net Income (Loss)  Available to
Common  Stockholders for the purpose of calculating  income (loss) per share for
the second quarter of fiscal year 2001. Mr. G. Jeff Mennen,  a co-trustee of the
Mennen Trusts,  agreed to fund the Standby Commitment if the Company `s cash and
cash  equivalents fall below $400,000 during fiscal year 2001. To the extent the
Company obtains equity capital from another source,  the Standby Commitment will
be reduced  dollar for dollar.  To the extent that Mr.  Mennen funds the Standby
Commitment,  he  will  receive  a new  series  of  convertible  preferred  stock
substantially  similar to the Series C; except that the conversion price will be
equal to fair  market  value at the time of funding  divided  by 70%  without an
absolute floor price. As consideration  for issuance of the Standby  Commitment,
the Company  issued to the Mennen Trust 400,000  warrants  exercisable at $.6875
per share.  These  Warrants  were valued at  approximately  $204,000 and will be
deducted from Net Income (Loss) Available to Common Stockholders for the purpose
of  calculating  income  (loss) per share for the second  quarter of fiscal year
2001.


21.      LIQUIDITY

As more fully  explained  in Note 19,  subsequent  to year end, the Company sold
$2,000,000  of Series C  Convertible  Preferred  Stock and received a commitment
from Mr. G. Jeff Mennen to provide  $2,000,000 to purchase  additional shares of
preferred  stock  should  the  Company's  cash and cash  equivalents  fall below
$400,000.

As also explained in Note 20, Onkyo,  among other things,  extended the due date
on $3,200,000 payable to March 2002 from May 2001.

Further,  GMAC has  reduced  the  requirements  of  certain  loan  covenants  to
recognize the effect of the anticipated  reduction in automobile production that
reflect on OAI products.

Based  upon the above  factors,  coupled  with  Management's  ability  to reduce
expenses  should its plan to accelerate  the sales of OSA-II units during fiscal
2001 not materialize,  Management believes it has the resources to fund its cash
requirements through the next twelve months.
                                       46
<PAGE>
ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE

Changes in Accountants

On October 5, 2000,  Global  Technovations,  Inc. (the  "Company")  retained BDO
Seidman,  LLP ("BDO  Seidman")  as its auditors to replace  Arthur  Andersen LLP
("Arthur Andersen"), who was dismissed.

On October 5,  2000,  the  Company  engaged  BDO  Seidman to audit the books and
accounts  of the  Company  for  the  fiscal  year  ending  September  30,  2000.
Previously,  the Board of  Directors  of the  Company  and its  Audit  Committee
approved the decision to change the Company's independent accountants.

The reports of Arthur  Andersen on the  financial  statements of the Company for
the two fiscal  years ended  September  30, 1999  contain no adverse  opinion or
disclaimer of opinion and were not qualified or modified as to any  uncertainty,
audit scope or accounting principle.

In connection  with the audits for the past two fiscal years and through October
5, 2000,  there were no  disagreements  with  Arthur  Andersen  on any matter of
accounting principles or practices,  financial statement disclosure, or auditing
scope or procedure, which disagreements,  if not resolved to the satisfaction of
Arthur Andersen,  would have caused the firm to make reference  thereto in their
reports on the financial statements for such period.

During the past two fiscal years and through  October 5, 2000,  Arthur  Andersen
has not  advised  the  Company  of any  reportable  events  (as  defined in Item
304(a)(1)(v)   of  Regulation   S-K  issued  by  the   Securities  and  Exchange
Commission). The Company has not consulted with BDO Seidman on any matter during
the past two fiscal years and through October 5, 2000.

Disagreements

None.

                                    PART III

ITEM 10.          DIRECTORS   AND   EXECUTIVE   OFFICERS  OF  THE  COMPANY

Board of Directors

         The Company's business is managed under the direction of the Board. The
Board is  responsible  for  establishing  broad  corporate  policies and for the
Company's overall performance.  It is not involved in the operating details on a
day-to-day basis.  Management  advises the Board of the status of GTI's business
through  frequent  Board  meetings  and  regular  written   communications   and
discussions.

         GTI has a  classified  Board,  which  provides  for  three  classes  of
directors  each of which  serves a  three-year  term.  One class is elected each
year.  One director was elected at the 2000 Annual  Meeting and will hold office
until his term expires in the year 2003 and until his successor has been elected
and qualified. Two directors are up for election at the 2001 Annual Meeting. The
Company's by-laws provide that the Board shall consist of no less than three and
no more  than  nine  members,  with  the  actual  number  to be  established  by
resolution of the Board.  The current Board has by  resolution  established  the
number of directors at seven.  There are  currently  two vacancies on the Board.
GTI intends to fill one vacancy by May 31, 2001.

Compensation of Directors

         The Company's  outside directors each receive a fee of $1,000 per Board
meeting  attended.  Additionally,  annually they receive options  ("Options") to
purchase  15,000 shares of the Company's  Common Stock Options in lieu of higher
cash attendance fees. All outside directors also automatically receive grants of
30,000  Options upon  election or  appointment  to the Board,  and an additional
grant every three-year anniversary thereafter.  They are reimbursed for expenses
incurred  in  attending  Board  and  Committee  meetings.  Except  as  otherwise
disclosed  in this  Report,  all Options  vest  semi-annually  over a three-year
period  subject to continued  service with the  Company.  Options are  generally
exercisable for 10 years from the date of grant.

Board Meetings and Committees

         The Board held nine meetings during the fiscal year ended September 30,
2000. All directors were present at each of the meetings except for one meeting,
where Mr. Natan was absent. On several occasions  throughout the year, the Board
took action by unanimous consent in lieu of holding a meeting.

         The Board has a  Compensation  Committee  comprised of Messrs.  Willis,
Mennen and Vickar; an Audit Committee comprised of Messrs. Burd, and Vickar; and
a Nominating  Committee comprised of Messrs.  Willis,  Mennen, and Vickar, which
met three,  three and one times,  respectively,  during the year ended September
30, 2000.

                                       47
<PAGE>


<TABLE>
<S>                             <C>     <C>                                     <C>           <C>     <C>

                                             Current Board of Directors

------------------------------- -------- ---------------------------------------- --------- ---------- ----------
             Name                Age              Position With Company            Since      Term      Ending

------------------------------- -------- ---------------------------------------- --------- ---------- ----------
William C. Willis, Jr.(1)(2)      49     President, Chief Executive Officer and     1997      Three      2001
                                         Chairman of the Board of Directors                   Years

------------------------------- -------- ---------------------------------------- --------- ---------- ----------
David Natan                       47     Vice-President, Chief Financial            1995      Three      2002
                                         Officer, Secretary and Director                      Years

------------------------------- -------- ---------------------------------------- --------- ---------- ----------
Ronald P. Burd(3)                 54     Director                                   1992      Three      2002
                                                                                              Years

------------------------------- -------- ---------------------------------------- --------- ---------- ----------
G. Jeff Mennen(1)(2)              61     Director                                   1998       Two       2003
                                                                                              Years

------------------------------- -------- ---------------------------------------- --------- ---------- ----------
L. Kerry Vickar(1)(2)(3)          43     Director                                   1998      Three      2001
                                                                                              Years
------------------------------- -------- ---------------------------------------- --------- ---------- ----------
</TABLE>

(1)      Member of the Nominating Committee
(2)      Member of the Compensation Committee.
(3)      Member of the Audit Committee.
                                       48
<PAGE>


BOARD MEMBERS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

     WILLIAM C. WILLIS,  JR. - Mr. Willis has been  President,  Chief  Executive
Officer and a member of the Board since May 1997. Since July 1, 1998, Mr. Willis
has served as Chairman of the Board. As President and Chief Executive Officer of
the  Company,  Mr.  Willis is  responsible  for the  overall  management  of the
business,  with an emphasis on business  strategy and  long-term  planning.  Mr.
Willis also actively supervises the daily operations of OAI and the marketing of
the Company's OSA-IIs.  Prior to joining the Company, Mr. Willis was Chairman of
Willis & Associates,  a management  consulting  firm assisting  small and medium
sized  technology,  health care and consumer  products  companies.  From 1994 to
1995, Mr. Willis was President and Chief  Operating  Officer of MBf USA, Inc., a
marketer  and  distributor  of latex  products whose Common Stock was traded on
NASDAQ.  From 1990 to 1994, Mr. Willis was President and Chief Executive Officer
of Insituform  Technologies,  Inc., a state of the art provider of  technologies
for the reconstruction of pipelines and  infrastructure.  From 1985 to 1990, Mr.
Willis was President of The Paper Art Company,  Inc., a subsidiary of The Mennen
Company.  Since  December  2000,  Mr.  Willis  has been a member of the board of
directors of Insituform  East,  Inc., whose common stock is traded on the Nasdaq
Stock  Market.  In  January  2001,  Mr.  Willis  was  appointed  to the board of
directors  of SFBC  International,  Inc.,  a North  Miami,  Florida  provider of
clinical  research and other services to the  pharmaceutical  and  biotechnology
industries, whose securities are traded on the American Stock Exchange.

     DAVID NATAN - was  appointed a director of the Company on April 16, 1998 in
order to fill a vacancy.  Mr. Natan has been Vice President and Chief  Financial
Officer of the Company since June 1995 and Secretary from August 1997. Mr. Natan
previously  served on the Company's  Board from June 1995 to January  1997.  Mr.
Natan brings  nearly 25 years of  management  and  analytical  experience to his
responsibilities.  Prior to joining the Company, from November 1992 through June
1995, Mr. Natan was Chief Financial Officer of MBf USA, Inc., which was a NASDAQ
listed  subsidiary of MBf Holdings Berhad, a multi-national  conglomerate.  From
August 1987 through  October 1992,  Mr. Natan was Treasurer and  Controller  for
Jewelmasters,  Inc., an AMEX listed company. Since July 2000, Mr. Natan has been
a member of the board of directors  of IMX  Pharmaceuticals,  Inc.  whose common
stock was traded on the Over-the-Counter Bulletin Board.
                                       49
<PAGE>

     RONALD P. BURD - Mr. Burd has been a director  of the  Company  since March
1992.  From 1984  through the  present,  Mr. Burd has been  President  and Chief
Executive Officer of the Devereux  Foundation.  Devereux,  founded in 1912, is a
nationwide,  private, not-for-profit organization that treats individuals of all
ages  who  have  a  wide  range  of  emotional  disorders  and/or  developmental
disabilities.  Headquartered in Villanova, Pennsylvania, Devereux is the largest
non-profit provider of residential,  day and community-based  treatment programs
located in 13 states and the District of Columbia.

     G. JEFF MENNEN - was  appointed a director of the Company in October  1997.
Currently,  Mr. Mennen is President of Peak Management, a consulting firm, which
he founded in 1989.  Also,  Mr. Mennen is a Managing  Partner of TMF  Investment
Holdings,  a family  investment  firm. From 1981 until 1992, Mr. Mennen was Vice
Chairman of The Mennen  Company  where he served  until that company was sold to
Colgate-Palmolive.  From 1977 until 1981,  Mr.  Mennen was  President  of Mennen
International. Mr. Mennen is a director of Corbin, Ltd. and WRP Corporation.

     L. KERRY  VICKAR - Mr.  Vickar was  appointed  a director of the Company in
January  1998.  Mr.  Vickar has a Bachelor of Law degree from the  University of
Manitoba  and  has  extensive   experience  with   divestitures,   acquisitions,
operations and financial  re-structuring.  Currently, Mr. Vickar is Chairman and
Chief Executive  Officer of CorrFlex  Graphics,  LLC, a privately held packaging
company. In 1994, Mr. Vickar negotiated the sale of Gravure  International Corp.
to ACX  Technologies,  Inc.,  where he  remained  until 1995 as  Executive  Vice
President and Chief Operating  Officer of Flexible Division of Graphic Packaging
(a subsidiary of ACX  Technologies,  Inc.).  From 1983 through 1994,  Mr. Vickar
held various  positions,  including  President and Chief Operating  Officer with
Gravure International Corp.

         GREG  BROWN - Mr.  Brown  joined  the  Company  in  March  1998 as Vice
President of Sales and is  responsible  for all direct  sales of GTI's  patented
technologies as well as for the development of corporate  partnership  programs.
From September 1996 to March 1998, Mr. Brown was Vice President of Marketing and
Sales for BAT,  where he was  responsible  for infrared fuel and raman  analyzer
distribution.  From  March  1993 to  August  1996,  Mr.  Brown was the Sales and
Service Manager for Perkin-Elmer Corporation,  Real Time Systems Division, where
he developed Latin American,  European,  and Far Eastern markets. From June 1992
to March 1993,  Mr.  Brown was the  National  Sales  Manager at UOP Guided Wave,
where he  established  national  account  status for  DuPont,  Dow,  and Ashland
Chemical,  assisted in market development for Plastic  Extrusions,  Polymers and
Refineries  and  introduced  the sale of value  added  model  calibrations  with
analyzer  packages.  Prior to Guided  Wave,  he served 10 years as the  National
Sales and Service Manager for Moisture Systems,  Corp. He received his BS at the
University of Massachusetts.

         DAVID F. E. FARR - Mr. Farr left  retirement  after  approximately  one
year to join GTI on  December 6, 1999 as Vice  President  of  Marketing,  and is
responsible for all marketing  functions  charged with increasing  awareness and
ultimately  orders for the OSA-II.  Mr. Farr is also  responsible  for marketing
additional  technologies and/or products in the Company's future arsenal.  Prior
to joining the Company,  from 1978 to 1998,  Mr. Farr was Sr. Vice President and
General  Manager  of  Corporate  Communications  for North  and  South  American
operations  for  more  than 20  years  with  the  Canon  Corporation.  He was an
important  member of the  executive  team that built  Canon  into a Fortune  100
enterprise.  Before  joining Canon from 1972 to 1978,  Mr. Farr was with British
American  Tobacco  as  President  and CEO of its New  York  affiliate,  Turnpike
Tobacco.  He also  spearheaded  British  American's  multi-billion  dollar  U.S.
acquisition   program.   Mr.  Farr's  career  includes  numerous  award  winning
advertising and public relations campaigns.  A native of the United Kingdom, Mr.
Farr earned his  undergraduate  degree from  Cambridge  University in the United
Kingdom,  where he later  received  two MBA degrees,  in marketing  and business
administration.
                                       50
<PAGE>

ITEM 11.          EXECUTIVE COMPENSATION

Executive Officer Compensation

         The following table sets forth certain summary  information  concerning
the compensation we paid to the Chief Executive  Officer and the Company's other
four most highly  compensated  executive  officers of the Company whose combined
salary and bonus for the fiscal year ended September 30, 2000 exceeded  $100,000
(collectively, the "Named Executive Officers") for the years indicated.
<TABLE>
<S>                      <C>      <C>           <C>        <C>               <C>             <C>              <C>



                           Summary Compensation Table

------------------------- --------------------------------------------------- ------------------------------ -----------------
                          Annual Compensation                                    Long-Term Compensation
                                                                                         Awards
------------------------- ------- ------------ ------------- ---------------- --------------- -------------- -----------------
(a)                       (b)     (c)          (d)           (e)              (f)             (g)            (i)
------------------------- ------- ------------ ------------- ---------------- --------------- -------------- -----------------

                                                                                               Securities    All Other
Name and Principal                                                            Restricted       Underlying    Compensation
Position                  Year      Salary        Bonus       Other Annual        Stock         Option/SARs  ($) (5)
                                      ($)          ($)        Compensation     Award(s)($)         (#)
                                                                 ($)(4)
------------------------- ------- ------------ ------------- ---------------- --------------- -------------- -----------------

EXECUTIVE OFFICERS
------------------------------------------------------------------------------------------------------------------------------

William C. Willis, Jr.    2000    $335,390     $0            $12,000          $0              100,000         $  6,385
President and Chairman    1999    $319,725     $300,000      $12,000          $0              150,000         $  5,306
of the Board              1998    $303,750     $0            $12,000          $0              100,000          $11,543


------------------------- ------- ------------ ------------- ---------------- --------------- --------------- ----------------

David Natan               2000    $140,000     $0            $12,000          $0                 -0-          $  9,289
Vice President, Chief     1999    $135,417     $55,000       $12,000          $0               38,000         $  6,706
Financial Officer,        1998    $126,667     $0            $12,000          $0              100,000         $  6,117
Secretary and Director

</TABLE>

(4)  Amounts consist of automobile allowances paid by the Company. The Company's
     policy is to provide  executive  officers with an  automobile  allowance of
     $600 per month and a  maintenance  allowance of $400  intended to cover the
     cost of all other  expenses of  operating  the vehicle  such as  insurance,
     maintenance, repairs and gasoline costs.

(5)  These amounts,  as follows,  represent  group term life insurance  premiums
     paid by the Company,  the Company's  match of the Retirement  Salary Saving
     Plan - 401(k) and  reimbursement of  out-of-pocket  medical,  dental,  etc.
     expenses not covered by the Company's insurance:

(a)  The 2000 group term life  insurance  premiums  were as follows:  Mr. Willis
     $1,480 and Mr. Natan $1,513.

(b)  The 2000 employer match of the Retirement  Salary Savings Plan - 401(K) was
     as follows: Mr. Willis $2,500 and Mr. Natan $2,676.

(c)  The 2000  reimbursement  of out-of pocket  medical and dental  expenses not
     covered by the Company's  insurance was as follows:  Mr. Willis $2,405, and
     Mr. Natan $5,100.


                                       51
<PAGE>


                            Stock Option Information

The following  table sets forth certain  information  regarding  options granted
during fiscal 2000 to the named Executive Officer.

<TABLE>
<S>                         <C>                <C>             <C>           <C>            <C>

                    Option/SAR Grants During The Fiscal Year
                            Ended September 30, 2000

------------------------------------------------------------------------------------------- ------------------------------
                                                                                            Potential   Realizable  Value
                                                                                            at  Assumed  Annual  Rates of
                                    Individual Grants                                       Stock Price  Appreciation for
                                                                                            Option Term(6)
------------------------------------------------------------------------------------------- ------------------------------
(a)                        (b)                (c)               (d)          (e)            (f)             (g)
-------------------------- ------------------ ----------------- ------------ -------------- --------------- --------------
          Name                 Number of         % of Total
                              securities        Options/SARs     Exercise
                              Underlying         Granted to       or Base     Expiration
                             Options/SARs       employees in       Price         Date           5%($)          10%($)
                              granted (#)       Fiscal Year      ($/Share)
-------------------------- ------------------ ----------------- ------------ -------------- --------------- --------------
EXECUTIVE OFFICER
-------------------------- ------------------ ----------------- ------------ -------------- --------------- --------------

William C. Willis, Jr.          100,000            9.5%           $1.50       4/10/2010    $94,334(7)      $239,061(8)

-------------------------- ------------------ ----------------- ------------ -------------- --------------- --------------

David Natan                       --               --              --            --              --             --
-------------------------- ------------------ ----------------- ------------ -------------- --------------- --------------
</TABLE>

(6)      The  values  shown  are  based on  indicated  assumed  annual  rates of
         appreciation  compounded  annually  through the  applicable  expiration
         date.  Actual gains  realized,  if any, on stock option  exercises  and
         Common Stock  holdings are dependent on the future  performance  of the
         Common Stock and overall market conditions.  There can be no assurances
         that the values shown on this table will be achieved.

(7)      Represents an assumed market price per share of Common Stock of $2.44.

(8)      Represents an assumed market price per share of Common Stock of $3.89.


         The following table sets forth certain  information with respect to the
exercise  of Options to  purchase  Common  Stock and SARs during the fiscal year
ended September 30, 2000, and the unexercised Options held and the value thereof
at that date, by each of the Named Executive Officers.

                                       52
<PAGE>


<TABLE>
<S>                <C>            <C>              <C>                              <C>

            Aggregated Option/SAR Exercises In Last Fiscal Year 2000
                      And Fiscal Year-End Option/SAR Values

------------------- ------------- ----------------- -------------------------------- ---------------------------------
(a)                 (b)           (c)               (d)                              (e)

------------------- ------------- ----------------- -------------------------------- ---------------------------------
                              Number of Securities
                                                        Underlying Unexercised             Value of Unexercised
                                                      Options/SARs at Fiscal Year       In-the-Money Options/SARs
                                                                End (#)                 at Fiscal Year End ($)(9)

------------------- ------------- ----------------- ------------- ------------------ ---------------------------------
                       Shares
                      Acquired    Value Realized
Name                On Exercise         ($)         Exercisable     Unexercisable    Exercisable     Unexercisable
                      (#)(10)

----------------------------------------------------------------------------------------------------------------------

EXECUTIVE  OFFICERS
----------------------------------------------------------------------------------------------------------------------

William C.               0              N/A           449,999          200,001             -0-              -0-
Willis, Jr.
------------------- ------------- ----------------- ------------- ------------------ ---------------- ----------------

David Natan              0              N/A           186,332          33,668              -0-              -0-
------------------- ------------- ----------------- ------------- ------------------ ---------------- ----------------
</TABLE>

(9)  Based on the  difference  between the closing market price of the Company's
     Common  Stock on the AMEX at  September  30,  2000 of $.875 and the  Option
     exercise price.

(10) All Options were granted at 100% of fair market value.


Executive Compensation Agreements

         In April 2000, the Company entered into a new employment agreement with
William C. Willis,  Jr., its President and Chief Executive Officer.  The term of
this  employment  agreement is three years through  April 10, 2003  ("Employment
Period").  The  employment  agreement  provides  for a base  salary of  $344,000
("Annual Base Salary").  During the last year of the three-year  agreement,  Mr.
Willis was  receiving  $327,600  per year.  Mr.  Willis  receives an  automobile
allowance of $600 per month and an automobile maintenance and gasoline allowance
of $400 per month.  Mr.  Willis  shall also be  eligible to receive a cash bonus
("Performance  Bonus") as  described  below for each  successive  period of four
fiscal quarters  (prorated for any partial period) during the Employment Period,
as defined in the employment agreement, in an amount of between zero and 100% of
the Annual Base Salary. The Performance Bonus shall consist of the following two
components:

o    The first component of the Performance  Bonus shall be an amount of between
     zero and 50% of the Annual Base Salary based on the Company  meeting annual
     financial targets.

o    The second component of the Performance Bonus shall be an amount of between
     zero and 50% of the Annual Base Salary based on the Company  achieving five
     annual  performance  based  targets for each period of a fiscal year during
     the Employment Period. The targets shall be established by mutual agreement
     of the Compensation Committee and Mr. Willis.

o    Mr. Willis did not earn a Performance Bonus for fiscal 2000.


                                       53
<PAGE>

     In the event Mr. Willis'  employment is terminated by the Company for other
than cause, death or disability or Mr. Willis terminates his employment for good
reason, all as defined in his employment agreement,  the Company is obligated to
pay Mr.  Willis (1) his annual  base  salary for 12 months,  (2) a lump cash sum
paid  within 30 days equal to  accrued  obligations  consisting  of any owed but
unpaid  Performance  Bonus,  vacation pay and other monetary payments Mr. Willis
was  entitled  to on the  date of his  termination,  and (3)  continued  medical
coverage for Mr. Willis and his dependents for 12 months following  termination.
The  12-month  period  increases  to 36 months if Mr.  Willis is  terminated  or
resigns for good reason following a change of control of the Company, as defined
in the employment  agreement.  Concurrent  with entering into the new employment
agreement  with Mr.  Willis,  the  Compensation  Committee  granted  him 100,000
10-year  Options  exercisable  at $1.50 per share.  Additionally,  following the
acquisition  of OAI,  the  Compensation  Committee  granted Mr.  Willis  150,000
10-year Options exercisable at $.75 per share.


     The Company also pays the premiums on a $1,000,000 life insurance policy on
Mr.  Willis  where  he is the  beneficiary.  Additionally,  the  Company  is the
beneficiary on a $15,000,000 key-man policy on Mr. Willis.

     Effective  October  2000,  Mr.  David Natan,  receives an annual  salary of
$150,000 per year, an increase of $10,000 per year. Natan's employment agreement
provides for 12 months of severance  benefits which include salary,  medical and
dental benefits in the event of a qualifying  termination of Mr. Natan,  defined
as (1) a material adverse change to his job duties and  responsibilities;  (2) a
material reduction in his salary,  compensation or eligibility to participate in
GTI benefit programs;  or (3) an unwilling relocation to a location greater than
50 miles away from his current work location. The Company also pays the premiums
on a $1,000,000 life insurance policy on Mr. Natan, which he is the beneficiary.

     Mr. Greg Brown  receives an annual  salary of $130,000  per year,  which an
increase  of $5,000 per year.  On April 11,  2000,  Mr.  Brown  received  25,000
10-year Options exercisable at $1.50 per share.

     Mr. David F. E. Farr, Vice President of Marketing joined GTI on December 6,
1999  at an  annual  salary  of  $110,000.  As  part  of Mr.  Farr's  employment
agreement,  he was granted 25,000 Options exercisable at $.945. Mr. Farr is also
eligible for an annual  performance  bonus of up to 25% of his annual salary. On
April 11, 2000, Mr. Farr received  25,000 10-year  Options  exercisable at $1.50
per share.


Retirement Salary Savings Plan

         In October 1993,  the Company  established a 401(k)  Retirement  Salary
Savings Plan (the "Plan"). All current employees,  including executive officers,
were eligible to  participate as of October 1, 1993.  Any  individuals  employed
thereafter must complete three months of service and be at least 21 years old to
meet the  eligibility  requirements.  The enrollment  dates are the first day of
each quarter.  Employees may voluntarily  contribute from 1% to 15% of their pay
each plan year although certain  requirements may limit the contribution  levels
of highly  compensated  employees.  During fiscal 2000, the Company  contributed
matching  dollars equal to 25% of every dollar invested in the Plan on the first
6% of salary  savings.  The cost the  Company  incurred  for  matching  employee
contributions  during fiscal 2000 was approximately  $18,000.  The Plan provides
that the Company's  matching  contribution may change from year to year and that
the Company may declare additional  matching dollars at year-end.  All employees
vest ratably over a five-year term. Any forfeited non-vested amounts contributed
are used to reduce required Company matching contributions.

                                       54

<PAGE>

Report on Executive Compensation by the Compensation Committee

         The primary  objective of the compensation  policy of the Company is to
align executive  compensation in a way that will encourage enhanced  stockholder
value,  while  concurrently  allowing us to attract,  retain and  satisfactorily
reward all  employees who  contributed  to the  Company's  long-term  growth and
economic  success.  The main principles of the compensation  program are (1) the
development  of  incentive  plans,  (2) the  attainment  of both  the  Company's
short-term and long-term growth operational goals and strategic  initiatives (3)
the  development  of  competitive  compensation  packages that will enable us to
attract  retain and  motivate  high  caliber  employees  without  depleting  the
Company's  resources,  and (4) to provide incentives to the Company's executives
and other  employees  to share in  appreciation  of the  price of the  Company's
Common  Stock,  thereby  aligning  their  interests  with those of the Company's
stockholders.  The compensation program for the Company's executives includes an
annual based salary,  appropriate  fringe  benefits,  some of which are standard
Company  policy  for all  employees  and some of  which  may be  negotiated  for
management, the potential for an annual cash bonus and grants of long-term stock
option incentives, which in the case of the Company Chief Executive Officer, are
in large part performance based.



Chief Executive Officer

WILLIAM C. WILLIS, JR.

         Mr.  Willis'  received a new three-year  employment  agreement in April
2000  replacing  his prior  three-year  agreement.  The  Compensation  Committee
increased his annual base salary by 5% in  recognition of his efforts during the
past year,  which  included  the TSA sale and the  liquidity it  generated.  The
Compensation Committee also recognized that retaining Mr. Willis was critical as
the Company  was  immersed  in  delicate  negotiations  to acquire OAI and at an
important stage of a number of potential OSA-II initiatives. Mr. Willis' package
meets  the  Company's  compensation  goals as  stated  above.  The  Compensation
Committee  believes  that Mr.  Willis'  annual  base  salary  at  $344,000,  his
potential bonus and Option  incentives  represent  compensation  commensurate to
attract an executive of Mr.  Willis's  experience  and  background.  At the same
time,  his agreement  ties a large portion of any future bonus payment or Option
appreciation to performance. The initial 100,000 Options grant to Mr. Willis was
not based on any formula or general  Company  policy.  The October 2000 grant of
150,000  Options was in recognition of the OAI  acquisition  and the exceptional
efforts extended to complete it.

DAVID NATAN

         The  Compensation  Committee  increased Mr.  Natan's base annual salary
from  $140,000  to  $150,000 on October 1, 2000 in  recognition  of Mr.  Natan's
exceptional   efforts  in  obtaining  the   Company's   financing  for  the  OAI
acquisition.

         The following Compensation Committee members submit this report.

         William C. Willis, Jr.
         G. Jeff Mennen
         L. Kerry Vickar
                                       55
<PAGE>


ITEM 12.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS  AND
                  MANAGEMENT

Security Ownership of Certain Beneficial Owners

         The  following  table sets forth the number of shares of the  Company's
Common  Stock  beneficially  owned as of January  28, 2001 by (i) owners of more
than 5% of the Company's Common Stock,  (ii) by each director,  and (iii) all of
the Company's directors and named executive officers as a group.

<TABLE>
<S>                       <C>                                                      <C>                    <C>

                                                                                      Amount and Nature
                                                                                        of Beneficial         Percent
Title of                                                                                  Ownership              Of
Class                     Name and Address of Beneficial Owner                                                 Class
------------------------- ---------------------------------------------------------- --------------------- ---------------
Common Stock              William C. Willis, Jr.(11)                                 599,999               1.98%
And Vested                7108 Fairway Drive, Suite 200
Options                   Palm Beach Gardens, FL  33418

------------------------- ---------------------------------------------------------- --------------------- ---------------
Common Stock              David Natan(12)                                            224,716               *
And Vested                7108 Fairway Drive, Suite 200
Options                   Palm Beach Gardens, FL  33418
------------------------- ---------------------------------------------------------- --------------------- ---------------
Common Stock              Ronald P. Burd(13),(14)                                    233,000               *
And Vested                710 Harvard Road
Options                   Balla Cynwyd, PA  19004

------------------------- ---------------------------------------------------------- --------------------- ---------------
Common Stock, Vested
Options, Warrants and     G. Jeff Mennen(15) (16)                                    955,000               3.12%
Convertible Preferred     TMF Investments
Stock                     25B Hanover Road
                          Florham Park, NJ  07932
------------------------- ---------------------------------------------------------- --------------------- ---------------
Common Stock              L. Kerry Vickar(17)                                        55,625                *
And Vested                19010 Mary Ardrey Circle
Options                   Cornelius, NC  28031
------------------------- ---------------------------------------------------------- --------------------- ---------------

------------------------------------------------------------------------------------ --------------------- ---------------
All  directors  and  named  executive  officers  of  the  Company  as  a  group  (6  2,068,340             6.56%
persons)(11)(12)(13)(14)(15)(16)(17)
*Less than 1% of class
------------------------------------------------------------------------------------ --------------------- ---------------
</TABLE>


  (11)   Includes  300,000  vested  Options held by Mr. Willis at  approximately
         $2.00 per share, 83,333 vested Options at approximately $.88 per share,
         50,000  vested  Options at $1.00 per share,  50,000  vested  Options at
         $1.32 per share,  16,666 vested options at $1.50 per share, and 100,000
         shares of Common Stock held by Mr. Willis.

  (12)   Includes  75,000  vested  Options  held  by Mr.  Natan  exercisable  at
         approximately  $3.00 per share,  7,000 vested  Options  exercisable  at
         approximately   $1.56  per  share  and   50,000   vested   Options   at
         approximately  $1.38 per  share,  66,666  vested  Options  at $1.00 per
         share, 6,500 vested Options at $1.32 per share, 18,550 shares of Common
         Stock held by Mr.  Natan and 1,000  shares of Common  Stock held by Mr.
         Natan's wife.

  (13)   Includes 25,000 vested Options  exercisable at approximately  $3.38 per
         share,  40,000 vested Options  exercisable at  approximately  $1.78 per
         share and 30,000 vested  Options  exercisable at  approximately  $6.25,
         7,500 vested Options exercisable at approximately $1.75, 30,000 Options
         exercisable at approximately $1.32 per share, 5,000 Options exercisable
         at $.75 per share,  and 5,000 vested options at $1.06 per share held by
         Mr. Burd.

  (14)   Includes  87,000  shares of Common  Stock held jointly by Mr. Burd and
         his wife and 3,500 shares of Common Stock gifted by Mr. Burd to the
         Devereux Foundation, of which Mr. Burd is President and Chief Executive
         Officer.

  (15)   Includes  110,000  shares of  Common  Stock  beneficially  owned by Mr.
         Mennen,  which are held of record by the  Wilmington  Trust Company and
         George Jeff Mennen,  Co-Trustees for Christina M. Andrea and John Henry
         Mennen.  Also includes the shares of Common Stock reserved for exercise
         of presently exercisable Options and Warrants beneficially owned by Mr.
         Mennen as follows:

                                       56
<PAGE>
                                            Type of        Approximate
                         No. of Shares     Security       Exercise Price


                    ------------------- ---------------- -----------------
                                 5,000      Options           $ .75

                    ------------------- ---------------- -----------------
                                30,000      Options           $1.38

                    ------------------- ---------------- -----------------
                                 5,000      Options           $1.06
                    ------------------- ---------------- -----------------

                                 5,000      Options           $2.00
                    ------------------- ---------------- -----------------

                                50,000     Warrants           $2.00
                    ------------------- ---------------- -----------------

                                21,500     Warrants           $1.75
                    ------------------- ---------------- -----------------

                                28,500     Warrants           $1.75
                    ------------------- ---------------- -----------------

                               150,000     Warrants           $1.94
                    ------------------- ---------------- -----------------

                               200,000     Warrants           $1.94
                    ------------------- ---------------- -----------------

                               107,500     Warrants           $2.38
                    ------------------- ---------------- -----------------

                               142,500     Warrants           $2.38
                    ------------------- ---------------- -----------------

                               100,000     Warrants           $.875
                    ------------------- ---------------- -----------------

 (16)    Does not  include  12,806,723  Common  Stock  reserved  in the event of
         exercise  of  Series  B  and  Series  C  Convertible   Preferred  Stock
         beneficially  owned by Mr.  Mennen,  which  are not  convertible  until
         January  2002.  Also does not include  2,275,000  shares  issuable upon
         exercise of warrants  not  exercisable  within 60 days from the date of
         this Report, as amended. Mr. Mennen has agreed not to convert preferred
         stock or exercise  Options or warrants where he would  beneficially own
         20% or more of the Company's Common Stock until he receives stockholder
         approval to do so.

(17)     Includes 12,500 shares held by Mr. Vickar,  33,125 vested Options
         exercisable at approximately  $1.13 per share, 5,000 vested Options at
         $.75 per share, and 5,000 vested options at $1.06 per share.

                                       57
<PAGE>

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
                  Incorporated  by reference  from the Proxy  Statement  for the
                  Annual Meeting of Stockholders section entitled "Related Party
                  Transactions".

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
                                                                            Page

(a)      (1)  Financial Statements. (See Item 8. of Form 10-K/A............  22

(a)      (2)  Financial Statement Schedules required to be filed.

              Schedule I  - Condensed Financial Information of Registrant.61-63
              Schedule II - Valuation and Qualifying Accounts................64

              All  other  schedules  have  been  omitted  because  the  required
              information is shown in the consolidated  financial  statements or
              notes thereto or they are not applicable.

(a)      (3)      Exhibits

<TABLE>
<S>               <C>                                                                                          <C>
                   EXHIBIT INDEX
------------------- ------------------------------------------------------------------------------------------ --------------
NUMBER                                                 EXHIBIT                                             Footnote

3.0                 Amended and Restated Certificate of Incorporation                                          1
3.1                 Amendment to Certificate of Incorporation                                                  2
3.2                 By-Laws                                                                                    3
3.3                 Amendment to By-Laws                                                                       2
3.4                 Amendment to the Amended and Restated Certificate of Incorporation                         4
3.5                 Form of Third Certificate of Designation (Series B Preferred Stock)                        5
3.6                 Form of Fourth Certificate of Designation (Series C Preferred Stock)
4.0                 1990 Stock Plan                                                                            6
4.1                 1993 Stock Option Plan                                                                     4
10.1                First Amendment to Lease of On-Site Analysis, Inc., Atlanta, GA                            4
10.2                Shareholder Rights Plan                                                                    7
10.3                Note Purchase Agreement dated as of June 9, 1995                                           8
10.4                First Amendment to Shareholder Rights Plan                                                 2
10.5                Second Amendment to Shareholder Rights Plan                                                9
10.6                Employment Agreement of David Natan                                                        10
10.7                Lease of office space, Palm Beach Gardens, FL                                              11
10.8                Employment Agreement of William C. Willis, Jr.                                             12
10.9                Asset Purchase Agreement - NCT Audio Products, Inc.                                        13
10.10               Amendment to Asset Purchase Agreement - NCT Audio Products, Inc.                           14
10.11               Second Amendment to Asset Purchase Agreement - NCT Audio Products, Inc.                    15
10.12               Amendment to Note Purchase Agreement dated as of June 9, 1995                              16
10.13               Amended Stock Purchase Agreement - Series B Preferred Stock                                16
10.14               Speedco,  Inc. Long-Term Lease                                                             18
10.15               Warrant - 1970 Mennen Trust
10.16               Warrant - 1985 Mennen Trust
10.17               Senior Secured Promissory Note                                                             19
10.18               Security Agreement                                                                         19
                                       58
<PAGE>

10.19               Audit Committee Charter                                                                    19
10.20               Credit Agreement between GMAC Business Credit, L.L.C. ("GMAC") and Onkyo Acquisition       20
                    Corporation ("OAC") with Schedules
10.21               Subordination Agreement of Mennen Trust in favor of GMAC                                   20
10.22               Guaranty of Global Technovations, Inc.                                                     20
10.23               Stock Pledge Agreement of Global Technovations, Inc.                                       20
10.24               Omnibus Amendment Agreement of Onkyo America ("OAI") and OAC                               20
10.25               Mortgage and Security Agreement of OAI                                                     20
10.26               Security Agreement of Onkyo America Specialty Products, Inc. ("OASP")                      20
10.27               Security Agreement of OAI                                                                  20
10.28               Patent and License Security Agreement of OASP                                              20
10.29               Stock Pledge Agreement from OAI                                                            20
10.30               $7,000,000 Senior Secured 8-year Note of OAC payable to Mennen Trust                       20
10.31               Subordinated Loan and Security Agreement of OAC in favor of Mennen                         20
10.32               Plan and Agreement of Merger between OAI and OAC                                           20
10.33               Security Agreement of GTI to Mennen Trust                                                  20
10.34               Share Purchase Agreement with Schedules                                                    20
10.35               Amendment to Share Purchase Agreement                                                      20
10.36               Second Amendment to Share Purchase Agreement
10.37               BAT $3.00 Warrants
10.38               Guarantee
10.39               Mennen Letter Agreement re: Guarantee
10.40               Mennen Agreement re: Series B Extension
10.41               Mennen Agreement re: $2,000,000 standby commitment

</TABLE>

                                       59

<PAGE>

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
              (Continued)

(b)      Reports on Form 8-K

Form 8-K dated August 31, 2000 was filed on September  14, 2000,  and amended on
November 13, 2000.


          Exhibit Index -   Footnotes

<TABLE>
<S>             <C>

        1       Contained in the Form 8-A dated July 10, 1993.

        2       Contained in the Form 8-K/A No. 1 dated July 17, 1995.

        3       Contained in the documents  previously filed with the Securities
                and  Exchange  Commission  in  conjunction  with the Form 8-B on
                11/16/92.

        4       Contained  in  the  documents  filed  with  the  Securities  and
                Exchange Commission in conjunction with the 9/30/94 Form 10-K.

        5       Contained in Form 10-K/A No. 1 for the year ended September 30, 1998.

        6       Contained in the documents  previously filed with the Securities
                and Exchange  Commission in  conjunction  with the 12/31/90 Form
                10-K.

        7       Contained in Form 8-K dated January 5, 1995.

        8       Contained in documents  filed with the  Securities  and Exchange
                Commission in conjunction with the 6/30/95 Form 10-Q.

        9       Contained in the Form 8-K/A No. 2 dated December 5, 1995.

        10      Contained in Amendment No. 3 to the Registration Statement on Form S-3 filed September 27, 1995.

        11      Contained in documents  filed with the  Securities  and Exchange
                Commission in conjunction with The September 30, 1995 Form 10-K.

        12      Contained in documents filed with the Securities and Exchange Commission in conjunction with
                September 30, 1997 Form 10-K/A No. 3.

        13      Contained in documents  filed with the  Securities  and Exchange
                Commission in conjunction with The June 30, 1998 Form 10-Q.

        14      Contained as an exhibit to the November 6, 1998 Proxy Statement.

        15      Contained in Amendment No. 5 to the Registration Statement Form S-3 filed May 21, 1999.

        16      Contained in Form 10-K for the year ended September 30, 1998.

        17      Contained in Form 10-K for the year ended September 30, 1999.

        18      Contained in Amendment No. 6 to the Registration Statement Form S-3 filed September 3, 1999.

        19      Contained in Form 10-Q dated August 21, 2000.

        20      Contained in Form 8-K dated September 14, 2000.


</TABLE>
                                       60
<PAGE>

<TABLE>
           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT



                            GLOBAL TECHNOVATIONS, INC
                                   SCHEDULE I
                             CONDENSED BALANCE SHEET
                           AS OF SEPTEMBER 30, 2000
<S>                                                                           <C>

ASSETS                                                                               2000
                                                                              -------------------
Current Assets:
  Cash and cash equivalents                                                    $       2,031,083
  Other current assets                                                                    72,920

                                                                              -------------------
Total current assets                                                                   2,104,003
Property and equipment, net                                                               34,174
Investment in subsidiaries                                                            20,205,501
Other assets, net                                                                        249,913
                                                                              -------------------
TOTAL ASSETS                                                                   $      22,593,591
                                                                              ===================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current portion of long term debt                                                     378,000
  Accounts payable and accrued liabilities                                            2,189,680
                                                                              -------------------
Total current liabilities                                                             2,567,680
                                                                              -------------------
  Long term debt                                                                     16,041,711
  Other liabilities                                                                     103,207
                                                                              -------------------
Total long term liabilities                                                          16,144,918
                                                                              -------------------
Total liabilities                                                                    18,712,598
Total stockholders' equity                                                            3,880,993
                                                                              -------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                     $     22,593,591

                                                                              ===================

The "Notes to Consolidated  Financial Statements of Global  Technovations,  Inc.
and  Subsidiaries"  are an integral part of these  statements.  See accompanying
"Note to Condensed Financial Information of Registrant."


                                       61

<PAGE>
                       GLOBAL TECHNOVATIONS, INC.
                               SCHEDULE I
                   CONDENSED STATEMENT OF OPERATIONS
                 FOR THE YEAR ENDED SEPTEMBER 30, 2000

-------------------------------------------------------------------------------------------
                                                                               2000
                                                                        -------------------
Total revenue
                                                                        $                -
                                                                        -------------------
Expenses:
  General and administrative                                                       717,502
  Selling and marketing                                                            237,324
  Depreciation and amortization                                                     35,764
  Research and development                                                          15,613
                                                                        -------------------
Total expenses                                                                   1,006,203
Loss from operations before equity in net loss of subsidiaries                  (1,006,203)
Equity in net loss of subsidiaries                                              (4,524,112)
                                                                         -----------------
Loss from operations                                                            (5,530,315)

Other income (expense) including interest expense of $233,868                      113,197
                                                                        -------------------
Net loss                                                                        (5,417,118)
Embedded dividends on preferred stock                                              (55,356)
Preferred dividends                                                               (315,000)
Value of warrants issued with preferred stock                                     (252,180)
                                                                        -------------------
Net loss available to common stockholders                                      ($6,039,654)
                                                                        ===================
</TABLE>
The "Notes to Consolidated  Financial Statements of Global  Technovations,  Inc.
and  Subsidiaries"  are an integral part of these  statements.  See accompanying
"Notes to Condensed Financial Information of Registrant."


                                   62
<PAGE>


<TABLE>
                           GLOBAL TECHNOVATIONS, INC.
                                   SCHEDULE I
                        CONDENSED STATEMENT OF CASH FLOWS
                       FOR THE YEAR ENDED SEPTEMBER 30, 2000
<S>                                                                                  <C>
-------------------------------------------------------------------------------------------------------
                                                                                             2000
                                                                                    -------------------
OPERATING ACTIVITIES:
    Net loss                                                                         $      (5,417,118)
    Adjustments to reconcile net loss to
       net cash used in operating activities:
    Equity in net loss of subsidiaries                                                       4,524,112
    Depreciation and amortization                                                               35,764
    Amortization of original issue discount on debt                                             10,607
    Non cash value of services                                                                  64,771
    Decrease in other assets                                                                    22,844
    Decrease in accounts payable and accrued liabilities                                       (62,356)
    Increase in other liabilities                                                               13,408
                                                                                    -------------------
Net cash used in operating activities                                                         (807,968)
                                                                                    -------------------

INVESTING ACTIVITIES:
    Investment in subsidiaries                                                              (6,880,207)
    Proceeds from sale of subsidiary                                                         5,549,978
    Purchases of property and equipment                                                        (17,115)
                                                                                    -------------------
Net cash used by investing activities                                                       (1,347,344)
                                                                                    -------------------

FINANCING ACTIVITIES:
    Proceeds from exercises of stock options                                                     2,650
    Preferred stock issuance costs                                                             (27,332)
    Repayment from loan payable                                                               (500,000)
    Repayments of Senior Convertible Notes                                                    (329,000)
    Payment of preferred stock dividends                                                      (393,750)
    Payment of deferred financing costs                                                       (210,000)
    Proceeds from senior secured promissory note                                             5,000,000
    Repayments on borrowings, net                                                           (1,913,986)
                                                                                    -------------------
Net cash provided by financing activities                                                    1,628,582
                                                                                    -------------------

Net decrease in cash and cash equivalents                                                     (526,730)
Cash and cash equivalents at beginning of period                                             2,557,813
                                                                                    -------------------
Cash and cash equivalents at end of period                                                  $2,031,083
                                                                                    ===================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest                                                               $         143,472
Cash paid for income taxes                                                           $         150,000
</TABLE>

The "Notes to Consolidated  Financial Statements of Global  Technovations,  Inc.
and  Subsidiaries" are an integral part of these  statements.  See accompanying
"Notes to Condensed Financial Information of Registrant."

Notes To Condensed Financial Information of Registrant
     1.   Basis of  Presentation

Pursuant to the rules and regulations of the Securities and Exchange Commission,
the Condensed  Financial  Statements of the Registrant do not include all of the
information and notes normally  included with financial  statements  prepared in
accordance with generally  accepted  accounting  principles.  It is,  therefore,
suggested that these Condensed Financial  Statements be read in conjunction with
the  Consolidated  Financial  Statements  and  Notes on page 20.

                                       63
<PAGE>

<TABLE>
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
<S>                                 <C>                 <C>          <C>                <C>              <C>

--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
                                     Balance at       Charged to     Additions Charged                      Balance at
                                    Beginning of      Costs and      to Other Accounts   Deductions       End of Period
          Description                  Period          Expenses

--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
Deducted from Accounts
Receivable - Allowance for
Doubtful Accounts
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
Year Ended Sept. 30, 2000               $ -            $20,000           $100,000              $ -           $120,000
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
Year Ended Sept. 30, 1999               $ -              $ -                $ -                $ -             $ -
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
Year Ended Sept. 30, 1998               $ -              $ -                $ -                $ -             $ -
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------

--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
Deducted from
Inventories-Allowance for
Obsolescence
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
Year Ended Sept. 30, 2000               $ -              $ -             $180,000              $ -           $180,000
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
Year Ended Sept. 30, 1999               $ -              $ -                $ -                $ -             $ -
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
Year Ended Sept. 30, 1998               $ -              $ -                $ -                $ -             $ -
--------------------------------- ----------------- --------------- -------------------- ---------------- ---------------
</TABLE>
                                       64

<PAGE>
                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Registrant  has duly caused this  Registrant's  report on Form
10-K/A to be signed on its behalf by the undersigned, thereunto duly authorized.

GLOBAL TECHNOVATIONS, INC.



/s/ William C. Willis, Jr.
President and Chief Executive Officer           Dated:   January 29, 2001

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


Signatures                                     Title                                  Date



/s/ William C. Willis, Jr.                     Director                         January 29, 2001
William C. Willis, Jr.


/s/ David Natan                         Vice President and CFO                  January 29, 2001
David Natan                           (Principal Financial and
                                     Accounting Officer) and Director


/s/ Ronald Burd                                Director                         January 29, 2001
Ronald Burd


/s/ G. Jeff Mennen                             Director                         January 29, 2001
G. Jeff Mennen


/s/ L. Kerry Vickar                            Director                         January 29, 2001
L. Kerry Vickar


</TABLE>
                                       65