SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-K


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

                    For the fiscal year ended June 30, 2001

                                       OR

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

For the transition period from             to
                              ------------   ------------

                         Commission file number 1-11988

                          GREG MANNING AUCTIONS, INC.
               (Name of Registrant as specified in its Charter)


                  Delaware                                 22-2365834
       ------------------------------                 ------------------
      (State or Other Jurisdiction of                  (I.R.S. Employer
       Incorporation or Organization)                 Identification No.)


          775 Passaic Avenue
       West Caldwell, New Jersey                            07006
---------------------------------------                   ---------
(Address of Principal Executive Offices)                  (Zip code)


Registrant's telephone number, including area code:  (973) 882-0004
                                                    -----------------


Securities registered pursuant to Section 12(b) of the Act:

                                               Name of Each Exchange on
Title of each class                                 Which Registered
-------------------                            ------------------------
Common Stock, $.01 par value                   The Nasdaq National Market


Securities registered pursuant to Section 12(g) of the Act:  None

      Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.   Yes |X|    No |_|

      Check if  disclosure  of  delinquent  filers  in  response  to Item 405 of
Regulation S-K is not contained herein, and no disclosure will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. |_|

      The aggregate market value of the Common Stock held by  non-affiliates  of
the Issuer as of  September  25, 2001 (based on closing  sale price of $1.95 per
share as reported on NASDAQ), was $10,703,523. For purposes of this computation,
the  registrant  has  excluded  the market  value of all shares of Common  Stock
reported  as  beneficially  owned  by  Afinsa  Bienes  Tangibles,  S.A.  and all
directors and executive officers of the registrant;  such exclusion shall not be
deemed an admission that any such person is an "Affiliate" of the registrant.

      As of September 25, 2001, Issuer had 12,733,642 shares of its Common Stock
outstanding.

      Portions of the Registrant's  definitive  proxy  statement,  which will be
filed within 120 days of June 30, 2001, are  incorporated by reference into Part
III.

<PAGE>


                           Greg Manning Auctions, Inc.
                                      Index


                                                                            Page
                                                                            ----

PART I

Item 1   Description of Business.............................................  4

Item 2   Description of Property............................................. 14

Item 3   Legal Proceedings................................................... 14

Item 4   Submission of Matters to a Vote of Security Holders................. 14


PART II

Item 5   Market For Common Equity and Related Shareholder Matters............ 14

Item 6   Selected Consolidated Financial Data................................ 15

Item 7   Management's Discussion and Analysis of Financial Condition
         And Results of Operations........................................... 18

Item 8   Financial Statements and Supplementary Data......................... 27

Item 9   Changes in and Disagreements with Accountants on
         Accounting and Financial Disclosure................................. 56


PART III

Item 10  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(A) of the Exchange Act................... 56

Item 11  Executive Compensation.............................................. 58

Item 12  Security Ownership of Certain Beneficial Owners and Management...... 58

Item 13  Certain Relationships and Related Transactions...................... 58


PART IV

Item 14  Exhibits, Financial Statement Schedules and Reports on Form 8-K..... 60



                                       2
<PAGE>


                                     PART I


Item 1.   Description of Business

                                   A. OVERVIEW

Greg  Manning  Auctions,  Inc.  (the  "Company"  or "GMAI") is a  multi-category
business-to-business   and   business-to-consumer   collectibles   auctioneer  &
merchant. The Company combines traditional and electronic (Internet, interactive
telephone, and live with simulcast Internet) capabilities to sell coins, stamps,
sports trading cards & memorabilia, comic books & comic art, Hollywood & Rock `n
Roll memorabilia, movie posters, and affordable fine art. Vertically integrated,
the Company's  offerings and  distribution  channels span the entire price range
from low end to ultra-high  end, its businesses  include  wholesale,  retail and
direct  response sales,  and it possesses a branded  presence in all major sales
channels both in the traditional and the eCommerce worlds. On the Internet, GMAI
offers products  through two owned web sites and on GMAI branded and non-branded
pages on other persons' web sites, including (without limitation)  www.ebay.com,
www.amazon.com,  and www.yahoo.com.  GMAI generates income through the resale of
goods  purchased  directly by the Company  and from  sellers and buyers  through
auctions of consigned goods.

The Company seeks to provide the highest quality service and personal  attention
to its clients.  Its longevity in its core auction  business selling rare stamps
and stamp  collections  has  enabled it to develop an  international  network of
clients, both dealers and collectors,  buyers and sellers, who use the Company's
services on a consistent  basis.  These  relations,  coupled with the  Company's
quality  reputation  and  extensive  auction  and  marketing  experience,   have
permitted it to expand beyond its core philatelic  roots into other areas of the
collectibles business, and to make opportunistic investments in, or acquisitions
of, other collectibles companies, both domestically and in Europe and Asia.

For  purposes  of  competitive  analysis  and market  positioning,  the  Company
organizes its business into four units:  collectibles auctions (both traditional
and  electronic);  collectibles  merchant/dealer;  coin  wholesaler;  and direct
response merchant. Each unit is described separately below.


                           B. COLLECTIBLES AUCTIONEER

General

The  Company  conducts  both  traditional  auctions  featuring  full  electronic
capabilities  and   Internet-only   auctions.   Its  traditional   auctions  and
Internet-only  auctions are targeted to both collectors and dealers, and feature
offerings  spanning the modest to ultra-high  end price  spectrum.  Based on its
knowledge of the  collectibles  markets,  the Company believes that it is one of
the world's largest (measured by aggregate sales)  auctioneers of stamps,  and a
leading  auctioneer of rare coins,  comic books & comic art, and sports  trading
cards &  memorabilia.  Additionally,  the Company  believes  that it possesses a
significant market share as an auctioneer of other high-end collectibles.

      Traditional Auctions

"Traditional  auctions"  are live,  in-person  auctions  conducted by a licensed
auctioneer.  The  Company  holds  several  traditional  auctions  each year in a
variety of venues,  including  strategically  located hotels, and at major trade
conferences  and  conventions.   All  traditional   auctions  are  augmented  by
electronic  catalogs and most are  augmented by one or more forms of  electronic
bidding. Commissions are typically charged from the seller of 5% to 15% and from
the buyer of 10% to 15%.

The Company's  traditional  auctions are based on a "Full Service" auction model
in which the Company takes physical  possession of all items offered for sale in
its  auctions,  inspects and  describes  all  offerings,  receives all sums due,
remits sale  proceeds to the seller,  and  professionally  packs and ships items
sold  to  the  buyer.   Additionally,   the  Company  generally  guarantees  the
genuineness  of all items sold  (subject to the terms of sale) and that each lot
is "as described" in the auction catalog.

In the Company's traditional auctions, prospective buyers place bids on each lot
as  presented  in the  order  shown in the  catalog  at the time and date of the
auction.  Before the auction,  prospective buyers may bid by lot as shown in the
catalog and communicate such bids to the Company by mail, fax, telephone, or the
Internet. At the auction, the auctioneer typically opens bidding at levels based
on bids  received  prior to auction or a percentage  of  previously  established
reserve prices. The item offered is sold to the highest bidder, whether such bid
was  received  before the  auction or at the time of sale,  and such high bidder
must pay the hammer


                                       3
<PAGE>


price,  the  applicable  buyer's  premium,   and  all  applicable  sales  taxes.
Additionally,  buyers  pay a  shipping  and  handling  fee if they do not accept
delivery of the items at the place of the auction.

The  auctioneer  regulates  the bidding and reserves the right to refuse any bid
believed by him/her not to be made in good faith.

Costs involved in conducting a traditional auction include,  among other things,
the cost of inspecting, describing and storing the items to be offered for sale,
catalog  creation,  printing and  mailing,  insurance,  transportation,  auction
advertising,  auction venue site rental fees, security,  temporary personnel and
expenses  of  certain   additional   auction-related   accounting  and  shipping
functions.

      Internet Auctions

"Internet  Auctions"  are  auctions  wherein  there is no  live,  natural-person
auctioneer and no bidders in a single physical location orally making bids as in
a  "traditional  auction."  Rather,  all bids are  made  electronically  via the
Internet or telephone,  and a computer system  processes the bids and determines
the highest bidder.

In October 1998,  the Company  acquired  Teletrade,  Inc. and entered the online
auction  market.  Since that time the Company has expanded its online  offerings
and presence,  improved its technologies,  and created new proprietary  Internet
auction  technologies.  Currently,  the Company's  only owned online auction web
site is www.teletrade.com (the Company uses its  www.gregmanning.com web site to
present  electronic  catalogs  of its  "traditional  auctions"  and  to  receive
electronic bids for its  traditional  auctions,  but does not currently  conduct
Internet auctions on that site).  Additionally,  the Company offers via Internet
auctions Company owned  collectibles and collectibles  consigned to it by others
on third persons' Internet auction web sites.

Consistent with the Company's full service  traditional  auction  business model
and its commitment to customer service,  the Company's Internet auctions feature
many  of  the  same  full  service   amenities  as  its  traditional   auctions.
Specifically,   unless  otherwise  noted  in  a  particular   sale's  terms  and
conditions,  the Company takes physical possession of all items offered for sale
prior to the sale,  guarantees the  genuineness of all items offered,  describes
the items,  collects all sums due,  remits the sale proceeds to the seller,  and
professionally  packs  and  ships the  items  sold to the  buyer.  Additionally,
because  the  buyer  in an  Internet  auction  has  not  had an  opportunity  to
personally  view  the  item  offered,  the  Company  also  offers  buyers a 100%
Satisfaction Guaranty.

The Company's  Internet  auction business model is distinct from the more common
consumer-to-consumer  model employed by Internet auctioneers such as eBay(R) and
Yahoo(R) wherein the auctioneer creates and manages the bidding facility and the
buyer and seller must work-out  themselves  the  procedures  for  completing the
transaction.  The Company believes that its  business-to-consumer,  full service
model provides it competitive  advantages,  distinguishes the Company from other
Internet  auctioneers,  and permits the Company to sell  mid-range  to high-end,
high value collectibles over the Internet.

The Company charges sellers a commission for its Internet auction services of 5%
to 15%. Buyers in its Internet auctions on the teletrade.com  site are charged a
commission of 10% to 15%.  Depending on the  particular  auction  conducted on a
third  party's  web site,  buyers may or may not be charged a  commission.  When
charged, the commissions are typically 15% however they may be less.

Costs  involved in conducting the Company's  Internet  auctions  include,  among
other things, the cost of inspecting,  describing, imaging and storing the items
to  be  offered  for  sale.  Other  costs  include  technology  development  and
maintenance,   computer  and  Internet  hardware  procurement  and  maintenance,
advertising,  and expenses of certain additional  auction-related accounting and
shipping functions.

Auction Venues/Brands

      Traditional Auctions

The Company  conducts  traditional  auctions  under two  distinct  brands:  Greg
Manning Auctions ("GMA") and Ivy & Mader Philatelic Auctions ("Ivy & Mader").

The GMA brand was created in 1966 and has  historically  been used primarily for
auctions of stamp collections and accumulations  targeted to philatelic dealers.
Commencing  in  1998,   the  GMA  brand  was  expanded  and  used  for  high-end
business-to-business


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<PAGE>


and  business-to-consumer  auctions of comic books & comic art, Hollywood & Rock
'n Roll memorabilia, movie posters, and sports trading cards & memorabilia.

The  Company  created  the  Ivy & Mader  brand  in 1993  when  it  acquired  the
predecessor to Ivy & Mader Philatelic Auctions,  Inc. Since that time, the Ivy &
Mader brand has been used for high-end philatelic auctions of rare single stamps
and collections targeted to individual collectors as well as dealers.

During fiscal year 2001,  four stamp and five  comic/movie  poster auctions were
conducted under the GMA brand, and three stamp auctions were conducted under the
Ivy & Mader brand.

The Company's  traditional  auctions are held in locations  appropriate  for the
particular auction and all catalogs are available online.

      Internet Auctions

The  Company  offers  coins and sports  trading  cards on its  www.teletrade.com
Internet auction web site. The Company offers affordable fine art, coins,  comic
books & comic art, Hollywood & Rock `n Roll memorabilia,  movie posters,  sports
trading cards & memorabilia,  stamps and other fine  collectibles on third party
owned web  sites,  the  Company  selecting  the  electronic  auction  venue most
suitable for the particular  items being  offered.  As a result of the Company's
highly regarded brand and the quality and quantity of its offerings, the Company
is typically able to negotiate  favorable terms from owners of third party owned
Internet auction web sites.

Proprietary Auction Technology

      Interphonic(TM)

"Interphonic(TM) " is a Company owned and developed  telephone/Internet  auction
technology.   Interphonic(TM)   is  the   technology   operating  the  Company's
Internet/telephone  auctions  conducted on the Company's  www.teletrade.com  web
site. The  technology  permits  bidders to  participate  in electronic  auctions
either by touch-tone telephone or via the Internet.

      MaxBid(TM)

"MaxBid(TM)  " is a Company  owned and  developed  proprietary  technology  that
enables  absentee  participants  in an  electronic  auction to enter the highest
amount they are willing to bid for a particular  lot.  The computer  records the
amount bid on each lot and,  during the auction,  bids on behalf of the absentee
bidder entering bids up to the maximum amount authorized.

      TouchBid(TM)

"TouchBid(TM)  "  is  a  Company  co-owned  and  developed  proprietary  auction
technology.  Intended to bring live auctions to bidders all over the world,  the
TouchBid(TM)  technology broadcasts through the telephone a live audio feed from
the auction floor, and permits bidders to place bids using their telephones. The
Company  believes that  "TouchBid"  will offer material  advantages over current
technologies.

Auction Offerings

      Traditional Auction Offerings

                                    Philately

Philately, often referred to as stamp collecting, has grown in the United States
and globally during the twentieth century. The hobby is increasing in popularity
due in part to the increased  offerings from the United States Postal Service of
popular interest  issues.  The Company  believes,  based on its knowledge of the
market,  that the combination of GMA with Ivy & Mader creates one of the world's
largest combined  philatelic auction houses,  although there is limited publicly
available data with respect to stamp auction  sales,  and provides a competitive
advantage  to the Company  through the  complementary  nature of the two brands'
targeted  customer  bases.  In fiscal year 2001, the Company  offered over 8,400
philatelic  lots in its  traditional  auctions  yielding  over $ 15  million  in
aggregate sales.


                                       5
<PAGE>


                                   Comic Books

Comic book and comic art collecting have recently experienced dramatic growth in
popularity,  stimulated in part by the  introduction  of third party grading and
certification  of comic books.  Recognizing  this trend, the Company pursued the
comic  book/art  category  during  fiscal  year 2001 and  conducted  three major
traditional auctions of comic books/art.

              Hollywood & Rock `n Roll Memorabilia, Movie Posters
                     and Sports Trading Cards & Memorabilia

During the last several years, the Company has expanded its collectibles product
lines,  adding  Hollywood & Rock 'n Roll  memorabilia,  original movie posters &
lobby cards, and sports trading cards & memorabilia to its offerings.

                                Internet Auctions

                                  teletrade.com

The  Company  currently  offers  rare  coins  and  sports  trading  cards in its
teletrade.com  auctions.  During  fiscal year 2001,  the  Company  held 126 coin
auctions  comprising  approximately  1,100 lots each and 111 sports trading card
auctions comprising approximately 800 lots per auction.

Third Party Owned Web Sites

In the past 36 months the Internet  auction  industry has  experienced  dramatic
consolidation leaving a very small number of viable broad-based Internet auction
websites and several  smaller,  "niche"  Internet  auction web sites featuring a
limited type and quality of offerings. The Company's  www.teletrade.com web site
is a successful  "niche"  Internet  auction web site  featuring  coin and sports
trading cards generally  spanning the $50 - $5,000 price spectrum.  Lower priced
items and  non-coin  and sports  trading  card items  generally  sell for higher
yields on other web sites,  hence when the Company has products  that do not fit
within the "niche"  offering  categories  of the  www.teletrade.com  web site it
offers such items on third  parties'  web sites  including  sites owned by eBay,
Inc., Amazon.com, Inc. and Yahoo, Inc.

Collectibles Auction Competition

The auction market, both traditional and Internet,  for the collectibles offered
by the Company is highly  competitive  and  dynamic.  With the  exception of the
low-end and consumer-to-consumer segments of the Internet auction market wherein
eBay,  Inc.  has secured a dominant  market  position,  no clear  market  leader
exists.

      Traditional Auction Competitors

Among the Company's primary competitors in the domestic and worldwide philatelic
auction business are Matthew Bennett, Inc., Charles Shreve Galleries, Inc., H.R.
Harmer, and Robert A. Siegel Auction Galleries,  Inc. In the sports trading card
auction  business,  the  Company's  primary  competitors  are Mastro Fine Sports
Auctions,  Superior Galleries,  Inc., Sports Trading Cards Plus, LLC, Collectors
Universe,  Inc. and Sales OnLine  Direct,  Inc.  (d/b/a  Rotman  Auctions).  The
Company's  principal coin auction  competitors are Heritage Rare Coin Galleries,
Inc., Stacks Rare Coins,  Collectors  Universe,  Inc.'s Bower's and Merena,  and
Superior  Galleries,  Inc. With respect to the Company's  Hollywood Rock `n Roll
memorabilia  business,  the Company's  primary  competitors  are  Butterfields &
Butterfields  Auctioneers,  Inc., Sotheby's Holdings, Inc. and Christie's,  Inc.
With  respect  to the  Company's  comic book  business,  the  Company's  primary
competitor  is Sotheby's  Holdings,  Inc.  With respect to the  Company's  movie
poster business, the Company's primary competitors are Ron Moore, Skinner, Inc.,
Butterfields &  Butterfields  Auctioneers,  Inc.,  Sotheby's  Holdings,  Inc.and
Christie's, Inc.

      Internet Auction Competitors

A  number  of  companies  offer  business-to-business  and  business-to-consumer
auctions of collectibles,  including eBay, Inc., Yahoo!, Inc., Amazon.com, Inc.,
Interactive Collector,  Inc. (d/b/a  iCollector.com),  Collectors Universe, Inc.
and Sothebys.com, Inc. Additionally, several companies host consumer-to-consumer
auctions of collectibles.  While the Company is not in the  consumer-to-consumer
auction  business,  these companies'  services provide  collectors the option to
sell or buy their collectibles  themselves.  Consumer-to-consumer  auction sites
selling  collectibles  include:  eBay, Inc.,  Yahoo!,  Inc.,  Amazon.com,  Inc.,
FairMarket  Network,  Inc.,  The boxLot  Company,  eDeal  Auction  Network,  and
eHammer, LLC, among others.


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<PAGE>


                               C. MERCHANT/DEALER

General

In order to complement and enhance the Company's auction  business,  the Company
buys collectibles in its own name and resells them as a merchant/dealer.

For a variety of reasons,  some collectors require the immediate  liquidation of
their collections and cannot wait for an appropriate  auction.  Other collectors
do not wish to sell by auction and prefer a  negotiated,  fixed  price sale.  In
these  instances,  the Company uses its  knowledge of the markets and product to
make  what the  Company  calls  "opportunistic  purchases."  In most  instances,
collectibles  purchased in this manner are resold  within 180 days either in one
of  the  Company's  auctions  or  in a  private  treaty  transaction.  In  other
instances, either because the markets are not yet ripe or because the collection
purchased is so large,  it is most  profitably  sold over a period of time,  the
collectibles  purchased are held in the Company's inventory and resold after 180
days.

In addition to these "opportunistic  buys," the Company continually searches the
collectibles  markets for favorable  buying  opportunities  and buys  individual
pieces and  collections  to  re-sell to a  particular  collector  pursuant  to a
specific purchase  request,  to fill a need for one of its auctions to make that
auction more attractive to the targeted  audience,  or to take advantage of what
the  Company  believes  is a favorable  price and buying  opportunity.  In these
circumstances, items purchased are generally resold in less than 180 days.

The Company  earns a profit or incurs a loss on the sale of owned  inventory  to
the extent the sale price exceeds or is less than the purchase price paid by the
Company.  The  Company  intends  to sell its  owned  inventory  as  quickly  and
efficiently as possible,  thereby  promoting a high level of inventory  turnover
and maintaining maximum liquidity.

Merchant/Dealer Sales Venues

The  Company  conducts  its   merchant/dealer   business  through  five  primary
distribution channels: auctions, private sales, print advertisements (usually in
collector   specific   publications),   Internet   fixed-price   sales   on  the
www.gregmanning.com web site and on third parties' Internet web sites.

      Private Sales

In a private sale,  the Company  contacts known  collectors and sells  specific,
usually  high or  ultra-high  end  items,  to  such  collectors  at a  privately
negotiated  price.  When such sales are conducted of  Company-owned  items,  the
Company earns a profit based upon the sale price paid by the private buyer.  The
Company also conducts private sales of consigned  items. In such instances,  the
Company earns a fee for its services.  Generally, the fee is a percentage of the
sale  price  however in some  circumstances  the  Company  will be paid a fixed,
negotiated fee.

Private  treaty sales are typically  settled more  promptly than auction  sales,
with the buyer paying all or substantially all of the purchase price at the time
of sale. In some circumstances,  however, the buyer may receive extended payment
terms.  When this occurs,  the Company and the seller  negotiate a settlement of
the  remaining  amounts due the seller which may or may not include a sharing of
the credit risk or a deferral of a portion or all of the Company's fee until the
Company has collected all of the outstanding balance from the buyer.

A private  treaty sale is attractive  to some  potential  consignors  because it
provides an opportunity for a sale at a fixed price or at a price  controlled by
the consignor rather than by bidders as is the case at public auction.  Often, a
private  treaty sale can be  consummated  more  quickly  than a sale at auction,
providing  increased  liquidity for the seller. For the Company,  private treaty
sales provide an opportunity to realize  increased  revenues  because such sales
involve  less costs than  auction  sales,  primarily  because  there are minimal
expenses associated with such sales.


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<PAGE>


      Internet Retail Sales

The  Company  sells  its  owned  inventory  on  its  owned  eCommerce  web  site
www.gregmanning.com and on Internet web sites owned by others.

                               www.gregmanning.com

The  Company  has  developed  the  gregmanning.com  web site as a  resource  for
collectors' needs.  Currently the site offers fixed priced collectibles from the
Company's own inventory.  In the future, it is expected that the site will offer
collectibles from various collectibles categories.

Items are offered with a stated sale price,  and are  purchased by  "clicking" a
buy button and  proceeding to the Company's  eCommerce  sales facility where the
name, address,  ship to and other information  necessary to complete the sale is
gathered.  The Company  offers  customers  the option of paying by major  credit
card,  check,  or wire  transfer.  If by credit card,  the Company's  electronic
systems  process the  transaction.  If by check or wire transfer,  the Company's
Customer Service  department  assists in facilitating  the  transaction.  In all
circumstances, the merchandise is only shipped after the Company is paid in full
or appropriate credit arrangements have been made.

Merchant/Dealer Competition

Competition  among dealers and merchants of the collectibles sold by the Company
is intense. The market is comprised of thousands of merchant/dealers, as well as
individual  collectors buying and selling directly through  consumer-to-consumer
Internet trading  platforms and at collectibles  shows and conventions.  Most of
these competitors,  however, are small, privately owned companies,  and no large
dominant  competitor  exists.  Additionally,  most  competitors are focused on a
single collectible category and do not have a multi-category presence similar to
the Company's.

Among the Company's primary competitors in the domestic and worldwide philatelic
merchant/dealer  business  are Mystic Stamp  Company,  Superior  Galleries,  and
Regency Stamps,  Ltd. The Company's principal coin competitors are Heritage Rare
Coin  Galleries,  Inc.  and Stack's  Rare Coins.  In the sports  trading  card &
memorabilia  business,  the Company's primary competitors are Sports Cards Plus,
Piedmont  Cards and Goodwin & Company.  With respect to the Company's  Hollywood
Rock `n Roll memorabilia  business,  the Company's primary competitors are Stars
and Starifacts. The Company's principal comic book and comic art competitors are
Metropolis,  Pacific  Comics  Exchange,  and Comic  Heaven.  With respect to the
Company's  movie poster  business,  the Company's  primary  competitors are Last
Moving Picture Company and Cinema Icons.


                             D. WHOLESALE COIN SALES

In February 2000, the Company acquired Spectrum Numismatics International,  Inc.
("Spectrum"),  one of the leading coin  wholesalers  in the United  States.  The
Spectrum  business   complements  the  Company's  auction  and   merchant/dealer
businesses  by providing a supply of  favorably  priced coin  offerings  for its
auctions and fixed price sales venues.

The majority of Spectrum's  revenue is generated from  wholesale  sales of coins
and from sales of coins to retailers and auction houses. Additionally,  Spectrum
sells directly to a limited number of select private collectors.

Based on its  knowledge of the market,  Spectrum  believes that it is one of the
largest  wholesalers  of rare coins in the United States  (although  there is no
publicly  available data to confirm this belief).  Spectrum  currently sells, in
the aggregate, over $44 million of coins per year.


                            E. DIRECT RESPONSE SALES

Effective  January  2000,  the Company  entered  into  agreements  with  Tristar
Products,  Inc. to create and mass-market high interest collectibles targeted to
the beginning collector. Under the agreements, the Company created a subsidiary,
Greg Manning Direct, Inc. ("GMD"),  and is pursuing its direct response business
through that entity.

GMD will utilize  television  commercials  and  infomercials,  print  media,  TV
shopping  channels,  major retail chains and the Internet to sell and distribute
its offerings.  Sales operations  commenced in 2000 with the 50 State US Quarter
Map and coin set. Other products have included the  "Presidential  Coin" series,
coin  related  jewelry,  signed  photographs  of the rock  group  Kiss and other
products intended to appeal to the mass market collector.


                                       8
<PAGE>


                             F. GMAI-Asia.com, Inc.

In March 1999, GMAI, along with other investors,  formed GMAI-Asia.Com,  Inc., a
Delaware  corporation  ("GMAI-Asia"),  with the intent to expand  into China and
South-East Asia via the Internet GMAI's core philatelic and collectible  auction
and merchant/dealer businesses.

Consistent with GMAI's initial goals,  GMAI-Asia  developed a technology package
for the People's Republic of China ("PRC")  marketplace and an Internet presence
in the PRC.  Additionally,  GMAI-Asia  launched its China  business  with a very
successful electronic auction of stamps during the World Stamp Exposition, which
was held in Beijing in June, 1999.

While  the  initial  stamp  auction  was  successful,   the  opportunity  for  a
collectibles  focused  Internet  business in the PRC in 1999 and the foreseeable
future proved very limited given the early state of  development of the Internet
infrastructure in the PRC at that time. Thus, GMAI-Asia determined to expand its
focus and mission by developing a broad based cybermall.

In October,  1999, new branding for the company was created under the trade name
"iAtoZ.com"  and a new  re-designed web site created for GMAI-Asia's new mission
was launched, www.iatoz.com.  Additionally, the company commenced a search for a
traditional, "bricks and mortar" business which was synergistic with GMAI-Asia's
eCommerce strategy and possessed a common customer base, and which would support
GMAI-Asia's   eCommerce   vision   and   activities   while  the  PRC   Internet
infrastructure developed. The result of that search was GMAI-Asia's acquisition,
in  February,  2000,  of 65% of,  and  the  exclusive  right  to  manage,  China
Everbright Telecom Land Network, Ltd., Shanghai's largest chain of retail stores
devoted  exclusively to the sale of cellular  telephone  handsets,  pagers,  and
related communication devices.

China  Everbright  Telecom Land  Network,  Ltd., a company  created and existing
pursuant to the laws of the British  Virgin  Islands,  operated  under the brand
names "EBT" and "Everbright  Telecommunications"  and its 100% owner immediately
prior  to  GMAI-Asia's  purchase  of 65% of the  company  was  China  Everbright
Technology Limited, a publicly listed company (SEHK: 256) ("EB Technology").  At
the time of GMAI-Asia's acquisition, China Everbright Telecom Land Network, Ltd.
owned or  controlled  200+  physical  stores and kiosks in Shanghai  and several
smaller cities in the East China region of the PRC.

Immediately  following the acquisition,  GMAI-Asia and EB Technology  re-branded
the China  Everbright  Telecom  Land  Network,  Ltd.  stores as  "iAtoZ.com/EBT"
("IAE").  Additionally,  GMAI-Asia,  as the  exclusive  manager  of  the  chain,
commenced a process of consolidating  the chain's  operations in order to reduce
costs and improve profitability, and eliminated unprofitable and marginal stores
shrinking  the total number of stores to  approximately  150 by December,  2000.
GMAI-Asia also commenced  implementing a strategy to convert the physical stores
from single purpose retail sales facilities into dual purpose facilities: retail
stores selling cell phones and related  equipment and  accessories  and Internet
service  centers at which  customers  of the iAtoZ  cybermall  can  "browse" the
iAtoZ.com   cybermall  (not  the  Internet)  on  publicly   accessible  computer
terminals,  pay for goods  purchased  on-line by  delivering  payment to the IAE
staff, and receive delivery of goods purchased on-line.

GMAI-Asia's operations are conducted through four companies: i) China Everbright
Telecom Land Network,  Ltd., a company created and existing pursuant to the laws
of the British Virgin Islands ("IAE"); ii) iAtoZ.com, Limited, a company created
and existing pursuant to the laws of the PRC ("iAtoZ"); iii) iAtoZ International
Trade (Shanghai) Co., Ltd., a company created and existing  pursuant to the laws
of the PRC ("iAtoZ Trade"),  and; iv) iAtoZ.com (HK) Ltd., a company created and
existing pursuant to the laws of the Special  Administrative Region of Hong Kong
("iAtoZ HK").

GMAI-Asia  owns 100% of the shares of iAtoZ Trade and  iAtoZ.com  HK, and 65% of
the shares of IAE plus the  exclusive  right to manage  IAE.  GMAI-Asia  owns an
option to acquire  100% of the  outstanding  stock of that company for a nominal
amount,  exerciseable  under  certain  circumstances.  GMAI-Asia  also  has  the
exclusive right to manage iAtoZ.

GMAI-Asia's business operations are principally conducted through two companies,
iAtoZ and China Everbright  Telecommunications Products Limited ("Products"),  a
company  created and existing  pursuant to the laws of the PRC.  iAtoZ Trade and
iAtoZ  HK are  trading  companies  used to  support  the  activities  of the two
operating companies, iAtoZ and Products.

iAtoZ is  GMAI-Asia's  eCommerce  company.  It owns the iAtoZ.com  cybermall and
related  technology and technological  infrastructure,  as well as the rights to
the  domain  name  iAtoZ.com.  Additionally,  iAtoZ  owns the right to build and
operate a  business-to-business  web-site  and  electronic  exchange for China's
automotive  industry  pursuant  to an  official  grant of the  PRC's  Bureau  of
Internal Trade.


                                       9
<PAGE>


Products is the PRC  operating  company of IAE. It owns all of the retail stores
of IAE and  operates  under the brand  iAtoZ.com/EBT.  Substantially  all of the
retail sales  transactions of IAE are conducted  through  Products.  Immediately
prior to GMAI-Asia's acquisition of its 65% interest in IAE, EB Technology owned
75% of IAE and a third party,  Shanghai  Everbright  Hite  Communications  Chain
Limited ("Hite"), owned the remaining 25% of IAE. Under this structure,  some of
the  retail  stores  comprising  the IAE chain of stores  acquired  and  certain
additional  assets  utilized  by IAE were  owned by Hite  and  another  company,
Everbright  Telecom Land  Communication  System  (Shanghai)  Co., Ltd.  ("ETL").
Concurrent  with the  closing of the  GMAI-Asia/EB  Technology  transaction,  EB
Technology  agreed to cause all of the IAE related  assets owned by Hite and ETL
to be  transferred  to Products.  The  transfer  process  commenced  immediately
following  the closing and was  completed  prior to June 30,  2001.  Some of the
assets to be transferred  included  licenses to retail stores comprising the IAE
chain.

PRC law does not currently permit non-PRC citizens or companies to own companies
carrying out certain  types of  activities,  including  the business  activities
conducted by IAE. As a result, IAE, a British Virgin Islands company, cannot own
directly the shares of Products.  Thus,  the shares of Products are owned by PRC
companies  controlled  by EB  Technology,  and IAE and  GMAI-Asia own options to
purchase for a nominal  amount 65%  (GMAI-Asia)  and 35% (EB  Technology) of the
shares of Products.  GMAI-Asia also owns the exclusive right to manage Products.
Accordingly,  Products  and  iAtoZ are not  consolidated  in the  operations  of
GMAI-Asia.  The pro-forma net sales  attributable  to the operations  managed by
GMAI-Asia  in fiscal  2001 were  approximately  $49  million,  on an  unaudited,
unconsolidated  basis.  (These pro-forma results are presented for informational
purposes  only  and are not  prepared  in  accordance  with  generally  accepted
accounting principles.)


                         G. AUCTION POLICY & PROCEDURES

Unless  otherwise  stated in the terms and conditions of a particular sale, each
lot is sold as genuine  and as  described  by the Company in the catalog or item
description.  However,  when, in the opinion of a competent  authority  mutually
acceptable to the Company and the purchaser,  a lot is declared  otherwise,  the
purchase  price will be  refunded  in full if the lot is returned to the Company
within a  specified  period.  In such  event,  if the item is  consigned  to the
Company,  the Company will return the item to the consignor  before a settlement
payment  has  been  made to such  consignor.  To  date,  returns  have  not been
material. Large collections are generally sold on an "as is" basis.

After an auction,  purchasers  must make  arrangements to take possession of the
items bought.  The Company generally  forwards the property to its buyer by mail
unless other arrangements are requested. As agent of the consignor,  the Company
bills the buyer for property  purchased,  receives  payment from the buyer,  and
remits to the consignor at the settlement  date the  consignor's  portion of the
buyer's payment,  less consignor cash advances,  if any, and commissions payable
to the Company.  The Company often releases property sold at auction to buyers -
primarily dealers - before the Company receives payment,  permitting such buyers
to take immediate possession on an open credit account basis (within established
credit limits) and to make payment generally within 30 days.

Whether or not the  Company  has  received  payment  from such  well-established
customers,  it must pay the consignor and generally will do so no later than the
contracted  settlement date (generally 45 days after the sale of the consignor's
property).  In instances where the buyer has not paid as of settlement date, the
Company  assumes all risks of loss and  responsibility  of  collection  from the
buyer.

Extending  credit to  creditworthy  buyers at auction is an important  marketing
tool for the  Company  because  it allows  buyers  who may not have  immediately
available  funds at time of auction the  opportunity  to settle at a later date.
The Company will  generally  extend credit only to buyers who have done business
with the  Company in the past and have an  established  credit  standing  in the
industry.

When the Company does not grant credit to a buyer,  under the standard terms and
conditions  of the  Company's  auction  sales,  it is not  obligated  to pay the
consignor  of the  property  if it has  not  been  paid  by the  buyer.  In such
instances,  the Company holds auctioned  property until it receives payment from
the buyer. If the buyer defaults on payment, the Company may cancel the sale and
return the property to the owner,  re-offer the property at another auction,  or
contact other bidders to negotiate a private sale.


         CLIENT SERVICES AND METHODS OF SALE FOR COLLECTIBLES OWNERS

The Company's  business  depends,  in part, on its ability to attract  owners of
collectibles  who desire to sell their property at auction or by private treaty.
The  Company  seeks to provide  the  highest  quality  service  to such  owners,
providing  them  with


                                       10
<PAGE>


an efficient  and secure means by which to sell their  property.  The  Company's
ability to provide  quality  service to its  clients on a  consistent  basis has
enabled it to develop long-standing relationships with many professional dealers
and collectors  and to develop a reputation in the industry for client  service.
The Company enjoys repeat business and receives a substantial amount of business
as a result of referrals.  In addition to its industry  reputation,  the Company
relies on advertising in trade publications to promote its services to potential
clients, such as professional dealers, collectors, and estate administrators.

The Company is able to offer most clients  several options for the sale of their
property. An owner desiring to sell property may choose to: 1) consign it to the
Company for sale at auction to the highest bidder;  2) place it with the Company
under a private  treaty for sale at a price  negotiated  by the  Company  with a
buyer; or 3) sell it directly to the Company for a negotiated price. The Company
has  available to it a staff of experts who are  knowledgeable  in many areas of
collectibles,  and who are able to make  reasonable  estimates  of the  price at
which an item may be expected  to sell at auction or  privately.  The  Company's
experts can examine an owner's property and furnish a presale auction  estimate,
which  represents  the  Company's  opinion of the current  value of the property
based on recent selling prices of similar properties,  and the quality,  rarity,
authenticity,  physical  condition and history of prior ownership of the subject
item. These  capabilities  permit the Company to assist a client in deciding the
appropriate method of sale.

Generally,  an owner desiring to use the Company's  services to sell property at
auction or by private  treaty  will  deliver  the  property  to the Company on a
consignment  basis,  contracting  with the  Company to sell the  property to the
highest bidder. The Company and the consignor will enter into a written contract
which sets forth the terms and  conditions  of the  consignment  with respect to
settlement,  commissions and cash advances, if any, and the determination of the
authenticity  of the  property.  Generally,  the Company  will hold  consignment
property until the next regularly  scheduled  auction sale, or if the sale is to
be by private  treaty,  for no longer than six months.  With  respect to private
treaty sales, if the consigned property is not sold within the agreed upon price
parameters  during such time, the Company will inform the owner of the situation
and provide the owner with the following options: 1) continue for another period
under a private treaty  arrangement at the existing or at new price  parameters;
2) consign  the  property  for sale at the next  auction;  3) sell the  property
outright to the Company at a price  determined by the Company's  experts;  or 4)
have the property returned.

The  Company's  range of client  services  for  owners of items to be  auctioned
includes  making  arrangements  for the pick-up and transport of property (fully
insured for loss or damage) to the Company's vault for storage and safe-keeping,
and all matters  relating to displaying  and promoting the property to potential
buyers.  Certain  aspects of these  services are discussed in more detail in the
following subsections.

                               CONSIGNOR ADVANCES

Frequently,  an owner  consigning  property to the Company  will  request a cash
advance at the time the  property  is  delivered  to the  Company,  prior to its
ultimate  sale at auction  or  otherwise.  The cash  advance is in the form of a
self-liquidating secured loan, usually bearing an interest rate of 12% per year,
using the consigned property as collateral.  The Company is a secured party with
respect to the  collateral,  holds a security  interest  in the  collateral  and
maintains possession of the collateral until it is sold.

The ability to offer cash advances is often critical to the Company's ability to
obtain  consignments of desirable  property.  In the case of property sold at an
auction, an owner may have to wait up to 45 days after the auction sale date for
settlement  and payment of the owner's  portion of the sales  proceeds.  In many
instances, an owner's motivation to consign property for sale may include a need
for cash on an immediate  basis.  Offering cash  advances  allows the Company to
attract owners who desire  immediate  liquidity while preserving the opportunity
to sell at auction at the highest available price. The Company believes that its
ability to make  consignor  advances  on a  consistent  basis has  enabled it to
receive regular  consignments of high value lots from  professional  dealers and
private collectors.

The amount of a cash  advance  generally  does not  exceed 50% of the  Company's
estimate of the value of the property when sold at auction.

                          COMPUTERIZATION AND SECURITY

The Company maintains computerized tracking systems that are used to catalog and
describe all of the property delivered to the Company. Property is stored in the
Company's specialized vaults until it is sold or put on public exhibition, which
in the case of  property  to be sold at  auction  is  generally  21 days  before
auction.

Tracking the consigned  property aids in the prompt and efficient  production of
catalogs for  auctions.  Such catalogs are an important  marketing  tool for the
Company to solicit  business with both  potential  consignors  and bidders.  For
potential


                                       11
<PAGE>


consignors,  the Company  utilizes  the  catalogs  from prior  auction  sales to
demonstrate  its expertise in presenting  property to the bidders.  For bidders,
the Company  utilizes the catalog as a direct  solicitation  and  enticement for
participation in a given auction.  The Company believes that the computerization
of the auction  operations  enables it to compete  favorably  with other auction
houses in terms of service.

The Company  stores  consigned  property in high security  vaults located at the
West Caldwell  headquarters and the Kingston,  New York facility.  Additionally,
the Company stores consigned and owned property in its California  facilities in
the offices of Spectrum.  The installed  security system at all of the Company's
facilities is rated by an alarm service  company,  and the Company believes that
there is a significant  level of  protection of an owner's  property from theft,
fire and other causes of damage.

In addition to the  protection  provided  by the  vaults,  the Company  provides
insurance coverage for consigned property and the inventory of the Company.  The
Company  maintains  a policy  with  Lloyds of London  that  management  believes
provides  adequate  coverage  for damage or loss while the property is stored at
the Company's  offices.  The policy also provides  what  management  believes is
adequate coverage for damage or loss during the  transportation of property from
the  customer  to the  Company's  offices and from the  Company's  offices to an
auction location.  The Company maintains the flexibility to obtain higher limits
for coverage as circumstances may require.

                            FUTURE PLANNED EXPANSION

The  Company  continues  to evaluate  potential  acquisition  candidates  in the
collectibles  industry and believes that  acquisitions  are potentially the most
effective means to grow market share in its existing collectibles categories and
to expand into certain new collectibles areas.

                               REGULATORY MATTERS

Regulation of the auction business varies from jurisdiction to jurisdiction, and
to the best of management's  knowledge and belief,  the Company is in compliance
with all material and significant regulations governing its business activities.

                                 REINCORPORATION

On January 25, 2001, at a special meeting of  shareholders,  the shareholders of
the Company  approved a proposal to  reincorporate  the Company from New York to
Delaware.   The   reincorporation   was  effected  on  February  16,  2001.  The
reincorporation  changed  the legal  domicile  of the  Company  from New York to
Delaware,  but did not  result  in a  change  in the  name,  principal  offices,
business, management, capitalization, assets or liabilities of the Company.

The Board of Directors  believes that the more favorable  corporate  environment
afforded  by  Delaware  will enable it to compete  more  effectively  with other
public companies, most of which are incorporated in Delaware.

                                    EMPLOYEES

The Company presently has 64 full-time employees, including its President, Chief
Executive  Officer and  Chairman of the Board,  Greg  Manning,  Chief  Operating
Officer,  Tom Davanzo and Chief Financial Officer,  Larry Crawford.  The Company
also hires persons on a temporary basis to assist in organizing its auctions and
for other specialized purposes.





                                       12
<PAGE>


                                  RECENT EVENTS

During  September  , 2001,  the  Company  was  considering  an offer to purchase
substantially  all of the  assets  comprising  its  comics  division,  including
comics, comic books, certain Hollywood and "rock `n' roll" memorabilia and movie
posters.  This  proposal is still being  discussed and there can be no assurance
that the transaction will be consummated.


Item 2.   DESCRIPTION OF PROPERTY

      The Company's  headquarters are located in space leased under an agreement
that  extends to January 31, 2005 (with an option to  purchase)  and consists of
approximately  18,600 square feet of office and warehouse  facilities located at
775  Passaic   Avenue,   West  Caldwell  New  Jersey  at  an  annual  rental  of
approximately  $137,000. The Company also leases approximately 7,300 square feet
of office space for its Teletrade subsidiary in Kingston,  New York at an annual
rental of approximately  $89,000.  The Company also leases  approximately  7,500
square feet of office space in Santa Ana, California for its Spectrum subsidiary
at an annual  rental of  approximately  $192,000.  The Company  also rents other
storage   facilities  located  mostly  in  New  Jersey,  at  annual  rentals  of
approximately $21,000.


Item 3.   LEGAL PROCEEDINGS

      The Company is not a party to any  litigation  material  to the  Company's
financial  position  or results  of  operations  nor,  to the  knowledge  of the
Company, is any litigation of a material nature threatened.


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

      During the fourth  quarter of the fiscal year covered by this  report,  no
matter was submitted to a vote of security holders of the Company.


                                     PART II

Item 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      The Company's Common Stock is listed on NASDAQ National Market  ("NASDAQ")
under the symbol  "GMAI".  According to American  Stock Transfer & Trust and ADP
Proxy Services,  the holders of record of the Company's  Common Stock totaled 89
and beneficial owners of record totaled 2,241 at June 30, 2001.

      The  Company  has not paid  any  dividends.  The  Company  expects  that a
substantial  portion of the  Company's  future  earnings  will be  retained  for
expansion  or  development  of the  Company's  business.  However,  the  Company
intends,  to the extent that earnings are available,  consistent  with the above
objectives, to consider paying cash dividends on its Common Stock in the future.
The amount of any such dividend payments could be restricted by the covenants or
other terms of any loan agreements to which the Company is then a party.

      The  quarterly  high and low bid ranges on the NASDAQ for the Common Stock
of the Company for the years ended June 30, 2001, 2000 and 1999 are shown in the
following schedule:

                            For the years ended June 30,
               --------------------------------------------------------
                      2001               2000               1999
               ------------------  -----------------  -----------------
     (Quarter)    High      Low       High     Low       High     Low
     ----------  ----------------  -----------------  -----------------
     First        $11.88  $ 7.69    $ 28.50  $10.88    $  2.41  $ 1.50
     Second       $ 8.69  $ 1.75    $ 17.50  $ 9.31    $ 21.75  $ 1.63
     Third        $ 3.22  $ 1.78    $ 27.81  $12.88    $ 14.50  $ 7.50
     Fourth       $ 3.01  $ 1.25    $ 21.50  $ 9.53    $ 22.00  $ 9.25

The quotations shown above reflect inter-dealer prices,  without retail mark-up,
mark-down or commission, and may not represent actual transactions.

      On May 14, 2001, the Company  entered into an agreement with The Tail Wind
Fund  Ltd.,  LBI Group  Inc.,  and  Lombard  Odier & Cie which  amended  certain
provisions  of the  original  purchase  agreement  between  the Company and such
investors,  dated  January  25,  2000.  Under  the terms of the  amendment,  the
Investors  waived rights to receive  additional stock


                                       13
<PAGE>


of the Company pursuant to the terms of the original agreement,  (which they had
received  as  anti-dilution  protection)  in  exchange  for the  issuance to the
investors of an aggregate of 627,500 shares of the Company's  common stock,  par
value $.01 per share, and subject to certain other conditions.  In addition,  on
that date, the Company entered into a purchase agreement with The Tail Wind Fund
Ltd. pursuant to which the Company sold an aggregate of 500,000 shares of common
stock of  GMAI-Asia.com,  Inc.,  par value $1.00 per share,  owned by it to such
investor.

      In addition,  during the fourth quarter the Company entered into two stock
purchase  agreements  with  Auctentia,   S.A.  ("Auctentia"),   a  wholly  owned
subsidiary  of  Afinsa  Bienes  Tangibles,  S.A.  ("Afinsa").  Under  the  first
agreement,  dated as of May 16, 2001, the Company issued to Auctentia  1,000,000
shares of the Company's  common  stock,  for an aggregate  purchase  price of $2
million, which represents the closing price of the Company's common stock on May
16, 2001.  Under the second  agreement,  dated as of May 23,  2001,  the Company
agreed to issue an additional  1,000,000 shares of the Company' common stock for
an aggregate purchase of $2 million, in five installments (which vary in amount)
commencing  June 15, 2001 and ending  October 15, 2001.  Subsequent  to June 30,
2001, Afinsa has paid $1.4 million for 700,000 shares.

      Esteban  Perez,  a director  of the  Company,  is Chairman of the Board of
Directors and Chief  Executive  Officer of Auctentia.  Albertino de  Figueiredo,
also a director of the Company, is Chairman of the Board of Afinsa. At September
10,  2001,  Auctentia  held  4,771,630  shares of common  stock of the  Company,
representing approximately 42.4% of the total number of shares outstanding as of
May 10,  2001,  plus  126,833  shares  into which the 126,833  warrants  held by
Auctentia may be exercised,  according to the Amendment to Schedule 13D filed by
Afinsa with the Securities and Exchange Commission, dated September 10, 2001.

      The stock of the  Company  issued and to be issued as  described  above is
subject to certain registration rights.


Item 6.   SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data should be read in conjunction
with, and are qualified by reference to, the Consolidated  Financial  Statements
and Notes  thereto  and  "Management's  Discussion  and  Analysis  of  Financial
Condition and Results of  Operations"  appearing  elsewhere in this report.  The
consolidated statement of operations and the consolidated balance sheet data for
the years  ended June 30,  2001,  2000,  and 1999,  are  derived  from,  and are
qualified by reference to, the audited consolidated financial statements of Greg
Manning Auctions, Inc.






                                       14
<PAGE>


<TABLE>
<CAPTION>
                                                                                  Years Ended June 30,
                                                                          (In Thousands, except per share data)
                                                           ------------------------------------------------------------------------
                                                             2001             2000          1999(1)         1998(1)           1997
                                                           --------        --------        --------        --------        --------
<S>                                                        <C>             <C>             <C>             <C>             <C>
Consolidated Statements of Operations Data
     Net Revenues                                          $ 67,396        $ 62,379        $ 77,484        $  8,690        $ 15,051
     Cost of merchandise sold                                62,354          50,559          65,741           4,569           8,287
                                                           --------        --------        --------        --------        --------
        Gross profit                                          5,042          11,820          11,743           4,121           6,764

     Sales and marketing expenses                             1,879           2,442           2,033             581             777
     Depreciation and Amortization                            1,564           1,010             739             374             343
     Other Expense                                              340              --              --              --              --
     Acquisition and merger costs                               205             926              --              --              --
     Intangible Impairment                                    2,158              --              --              --              --
     General and administrative expenses                     10,536          10,845           9,136           3,892           4,262
                                                           --------        --------        --------        --------        --------
        Total operating expenses                             16,682          15,223          11,908           4,847           5,382
                                                           --------        --------        --------        --------        --------
     Income (loss) from operations                          (11,640)         (3,403)           (165)           (726)          1,382

     Interest and other expense (net)                        (1,136)         (1,090)         (1,201)           (233)           (138)
     Gain on sale of marketable securities
        and investments                                          --              14           2,555             672              --
     Income (loss) from operations of investees              (4,951)           (851)             95
                                                           --------        --------        --------        --------        --------
     Income (loss) before income taxes                      (17,727)         (5,330)          1,284            (287)          1,244
     Provision for (benefit from)
        income taxes                                         (1,404)         (1,661)            461             (55)            583
                                                           --------        --------        --------        --------        --------
     Net income (loss)                                     $(16,323)       $ (3,669)       $    823        $   (232)       $    661
                                                           ========        ========        ========        ========        ========

     Net income (loss) per share:
        Basic                                              $  (1.58)       $  (0.38)       $   0.11        $  (0.05)       $   0.15
                                                           ========        ========        ========        ========        ========
        Diluted                                            $  (1.58)       $  (0.38)       $   0.11        $  (0.05)       $   0.15
                                                           ========        ========        ========        ========        ========

     Weighted average shares:
        Basic                                                10,299           9,710           7,355           4,420           4,520
                                                           ========        ========        ========        ========        ========
        Diluted                                              10,299           9,710           7,799           4,420           4,520
                                                           ========        ========        ========        ========        ========
 Consolidated Balance Sheet Data:
     Cash and cash equivalents                             $  2,158        $  1,092        $    811        $    603        $    635
                                                           ========        ========        ========        ========        ========
     Total Current Assets                                    24,235          33,265          33,967          12,465          22,019
                                                           ========        ========        ========        ========        ========
     Total Assets                                            40,452          55,443          46,772          18,663          25,529
                                                           ========        ========        ========        ========        ========

     Total Current Liabilities                             $ 16,885        $ 17,365        $ 22,840        $ 11,010        $ 17,373
                                                           ========        ========        ========        ========        ========
     Total Long-Term Liabilities                                168             111           3,605             118             421
                                                           ========        ========        ========        ========        ========
     Total Liabilities                                       17,053          17,476          26,445          11,128          17,794
                                                           ========        ========        ========        ========        ========
     Total Stockholders' Equity                              23,399          37,967          20,327           7,536           7,735
                                                           ========        ========        ========        ========        ========
     Total Liabilities and Stockholders' Equity            $ 40,452        $ 55,443        $ 46,772        $ 18,663        $ 25,529
                                                           ========        ========        ========        ========        ========
</TABLE>

----------

(1)   All  1999  amounts  reflect  the   acquisition  of  Spectrum   Numismatics
      International,  Inc.,  which  was  accounted  for  using  the  pooling  of
      interests  method  of  accounting,  as if it had  been  acquired  July  1,
      1998,and  also  include  the  operations  of  Teletrade,  Inc.  (which was
      accounted for using the purchase  method of  accounting)  from November 1,
      1998


                                       15
<PAGE>


                        Condensed Interim Financial Data
                                   (unaudited)

<TABLE>
<CAPTION>
                                                       1st               2nd              3rd              4th
 (In Thousands except per share amounts)             Quarter           Quarter          Quarter          Quarter
----------------------------------------------------------------------------------------------------------------
     2001
     -----------------------------------------------------------------------------------------------------------
<S>                                                  <C>              <C>              <C>              <C>
     Net Revenues                                    $ 14,407         $ 13,527         $ 17,836         $ 21,626
     Cost of merchandise sold                          11,945           11,288           16,683           22,438
                                                     --------         --------         --------         --------
         Gross profit                                   2,462            2,239            1,153             (812)

     Sales and marketing expenses                         616              461              306              496
     Depreciation and Amortization                        363              373              424              404
     Other Expense                                         --               --               --              340
     Acquisition and merger costs                          --              205               --               --
     Intangible Impairment                                 --               --              300            1,858
     General and administrative expenses                2,356            2,542            2,665            2,973
                                                     --------         --------         --------         --------
         Total operating expenses                       3,335            3,581            3,695            6,071
                                                     --------         --------         --------         --------
     Income (loss) from operations                       (873)          (1,342)          (2,542)          (6,883)

     Interest and other expense (net)                    (173)            (265)            (344)            (354)
     Gain on sale of marketable
       securities and investments                          --               --               --               --
     Income (loss) from operations of investees          (277)            (432)            (245)          (3,997)
                                                     --------         --------         --------         --------
     Income (loss) before income taxes                 (1,323)          (2,039)          (3,131)         (11,234)
     Provision for (benefit from) income taxes           (423)            (604)            (977)             600
                                                     --------         --------         --------         --------
     Net income (loss)                               $   (900)        $ (1,435)        $ (2,154)        $(11,834)
                                                     ========         ========         ========         ========

     Net income (loss) per share:
         Basic
                                                     $  (0.09)        $  (0.14)        $  (0.21)        $  (1.07)
                                                     ========         ========         ========         ========
         Diluted
                                                     $  (0.09)        $  (0.14)        $  (0.21)        $  (1.07)
                                                     ========         ========         ========         ========

<CAPTION>
                                                       1st               2nd              3rd              4th
 (In Thousands except per share amounts)             Quarter           Quarter          Quarter          Quarter
----------------------------------------------------------------------------------------------------------------
     2001
     -----------------------------------------------------------------------------------------------------------
<S>                                                  <C>              <C>              <C>              <C>
     Net Revenues                                    $ 15,208         $ 12,981         $ 18,050         $ 16,140
     Cost of merchandise sold                          12,863           10,918           13,335           13,443
                                                     --------         --------         --------         --------
         Gross profit                                   2,345            2,063            4,715            2,697

     Sales and marketing expenses                         560              577              624              681
     Depreciation and Amortization                        231              235              226              318
     Acquisition and merger costs                          15              553               66              292
     Intangible Impairment                                 --               --               --               --
     General and administrative expenses                2,213            2,737            2,605            3,290
                                                     --------         --------         --------         --------
         Total operating expenses                       3,019            4,102            3,521            4,581
                                                     --------         --------         --------         --------
     Income (loss) from operations                       (674)          (2,039)           1,194           (1,884)
     Interest and other expense (net)                    (177)            (266)            (384)            (263)
     Gain on sale of marketable securities
       and investments                                     14               --
     Income (loss) from operations of investees           (59)              64             (103)            (753)
                                                     --------         --------         --------         --------
     Income (loss) before income taxes                   (876)          (2,241)             707           (2,900)
     Provision for (benefit from) income taxes           (408)            (708)             205             (750)
                                                     --------         --------         --------         --------
     Net income (loss)                               $   (488)        $ (1,533)        $    502         $ (2,150)
                                                     ========         ========         ========         ========

     Net income (loss) per share:
         Basic                                       $  (0.06)        $  (0.18)        $   0.05         $  (0.22)
                                                     ========         ========         ========         ========
         Diluted                                     $  (0.06)        $  (0.18)        $   0.05         $  (0.22)
                                                     ========         ========         ========         ========
</TABLE>


                                       16
<PAGE>


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

Overview

The  following  discussion  and  analysis  should be read with the  Consolidated
Financial Statements and Notes to Consolidated Financial Statements contained in
this report. (Dollars in thousands except as noted or per share information)

      Effective  February  18,  2000,  the  Company's  acquisition  of  Spectrum
Numismatics  International,  Inc. ("Spectrum") was consummated.  The acquisition
has been accounted for using the pooling of interests  method of accounting.  In
accordance  with  Generally  Accepted  Accounting  Principles,   the  historical
financial  statement  information  presented  below  include the  balances  from
Spectrum's  financial  statements as if the acquisition had been made as of July
1, 1998.

General

      The Company has one segment  consisting of various  collectibles which are
summarized in the accompanying table.

      The  Company's  aggregate  sales are  generated by the sale of property at
auction, by private treaty and by sale of the Company's inventory. The following
table displays the aggregate  sales for the Company for the years ended June 30,
2001,  2000 and  1999,  and  shows  the  comparisons  for the  respective  years
subdivided by source and collectible type:

<TABLE>
<CAPTION>
                                                         For the Years Ended June 30,
                                     -----------------------------------------------------------------
                                                 (In Thousands, except for percentages)

                                                                                  Percentages
                                                                      --------------------------------
                                       2001       2000       1999        2001       2000        1999
                                     --------   --------   --------   --------    --------    --------
<S>                                  <C>        <C>        <C>             <C>         <C>         <C>
Aggregate Sales                      $ 96,489   $114,122   $102,288        100%        100%        100%
                                     ========   ========   ========   ========    ========    ========
    By Source:
       A. Auction                      34,156   $ 58,459   $ 24,804         35%         51%         24%
       B. Sales of Inventory           62,333     55,663     77,484         65%         49%         76%
                                     --------   --------   --------   --------    --------    --------

    By Collectible Type:
       A. Philatelics                  15,192   $ 14,125   $ 18,501         16%         12%         18%
       B. Numismatics                  58,641     60,110     74,078         61%         53%         72%
       C. Mass Market Collectibles      5,313     26,925         --          6%         24%          0%
       D. Sports Collectibles           7,034      8,078      7,248          7%          8%          7%
       E. Diamond                          93        484        422          0%          0%          0%
       F. Art                              39         74      1,359          0%          0%          2%
       G. Other Collectibles           10,177      4,326        680         11%          4%          1%
</TABLE>

      Aggregate sales consist of the aggregate  proceeds  realized from the sale
of property,  which include the Company's commissions when applicable.  Property
sold by the Company is either  consigned to it by the owner of the property,  or
is owned by the Company directly. Aggregate sales of the Company's inventory are
classified  as such  without  regard as to  whether  the  inventory  was sold at
auction or  directly to a  customer.  Aggregate  sales by auction and by private
treaty  represent the sale of property  consigned by third parties.  Mass market
collectibles  as shown  above are the  sales of the Greg  Manning  Direct,  Inc.
subsidiary.

      The Company's revenues are represented by the sum of (a) the proceeds from
the sale of the Company's  inventory,  and (b) the portion of sale proceeds from
auction or private treaty that the Company is entitled to retain after remitting
the sellers'  share,  consisting  primarily of  commissions  paid by sellers and
buyers.  Generally,  the Company earns a commission from the seller of 5% to 15%
(although the commission may be slightly lower on high value  properties)  and a
commission of 10% to 15% from the buyers.

      The following  table sets forth,  for the periods  presented  certain data
from our consolidated  statements of operations as a percentage of net revenues.
The information  contained in the table below should be read in conjunction with
the Consolidated  Financial  Statements and Notes thereto included  elsewhere in
this report.


                                       17
<PAGE>

<TABLE>
<CAPTION>
                                                                        Percentage Increase
                                                Fiscal Year                (Decrease) in $
                                              2001      2000       1999   2001 vs 2000   2000 vs
                                            -----------------     -----------------------------
<S>                                          <C>        <C>       <C>         <C>         <C>
Net Revenue                                   100.0%    100.0%    100.0%        8.0%      -19.5%
Gross Profit                                    7.5      18.9      15.2       (57.3)        0.7
Operating Expenses
       General and Administrative               8.0       9.7       6.2       (10.8)       25.5
       Depreciation and Amortization            2.3       1.6       1.0        54.9        36.6
      Intangible Impairment                     3.2        --        --         N/A         N/A
       Other Expense                            0.5        --        --         N/A         N/A
       Salaries and Wages                       7.7       7.7       5.6         7.1        11.2
       Acquisition and Merger Costs             0.3       1.5        --       (77.9)         --
       Marketing                                2.8       3.9       2.6       (23.1)       20.1
                                            -------     -----     -----     -------     -------
Total Operating Expenses                       24.8      24.4      15.4        (9.6)       27.8
                                            -------     -----     -----     -------     -------
                                              (17.3)     (5.5)     (0.2)      242.1     1,961.6

Interest and other Expense net                 (1.7)     (1.7)     (1.5)        4.2        (9.2)
Loss from operations of investees              (7.3)     (1.4)      0.1       481.5      (993.6)
Gain on sale of marketable securites             --        --       3.3      (100.0)      (99.4)
                                            -------     -----     -----     -------     -------
Loss before income taxes                      (26.3)     (8.5)      1.7       232.6      (515.0)
                                            -------     -----     -----     -------     -------
Provision for (Benefit from) income taxes      (2.1)     (2.7)      0.6       (15.4)     (460.0)
                                            -------     -----     -----     -------     -------
Net Loss                                      (24.2)     (5.9)      1.1       344.9      (545.8)
                                            =======     =====     =====     =======     =======
</TABLE>


Results of Operations Years ended June 30, 2001 and 2000 (Dollars in thousands
except as noted or per share information)

      Revenues:  For the year ended June 30, 2001,  operating revenues increased
approximately $ 5,017 (8%) to approximately $ 67,396 compared with approximately
$ 62,379 for the year ended June 30, 2000. This increase is largely attributable
to an  increase  in sales of  owned  inventory  of  approximately  $6,670.  This
increase was primarily the result of higher sales by Spectrum of approximately $
2,356,  and increased  sales of comics and movie posters.  These  increases were
partially offset by an decrease in commission  revenue of approximately $ 1,653,
which was primarily the result of decreased commissions earned from Greg Manning
Direct Inc. of approximately $ 1,640.

      The variation in any year in the composition of total revenues (as between
revenues   resulting  from  inventory  sales  and  commissions   resulting  from
consignment  sales) is largely a function  of  availability,  market  demand and
conditions  rather than any  deliberate  attempt by the Company to emphasize one
area over the other.  Sellers/consignors  of property  to the Company  generally
make their own  determinations  as to whether the property should be sold to the
Company for the  specified  price  offered by the Company or offered for sale at
auction at a price that cannot be predicted in advance.  Such  determination  is
based on the potential risks and rewards involved, and includes an evaluation of
the marketability of the property and the potential pool of buyers.  The Company
engages in a similar  analysis in determining  whether to acquire  inventory for
its own account and the price it is willing to pay for such inventory.

      Gross profit  decreased , from  approximately  $ 11,820 for the year ended
June 30, 2000 to  approximately  $5,042 for the year ended June 30,  2001.  This
represents a decrease of approximately  $6,778.  Included in Cost of Merchandise
Sold are reserves  recorded to reflect  management's  estimate of net realizable
value of inventories  relating to price variability of approximately  $2,400 and
$500 for the years  ended June 30,  2001 and 2000,  respectively.  This  reduced
gross profit also reflects  management's  aggressive  program to lower inventory
balances which was initiated earlier this year.

      Operating Expenses: The Company's aggregate operating expenses,  exclusive
of  cost  of  merchandise  sold,  for the  year  ended  June  30,  2001  totaled
approximately  $16,682  compared with  approximately  $15,223 for the year ended
June 30,  2000,  representing  an  increase  of  approximately  $1,459 (or 10%).
Included  in the  operating  loss for  fiscal  2001  are  expenses  relating  to
intangible  impairment of $2,158 and  acquisition  and merger costs of $205. The
primary changes in the operating  expenses for the year ended June 30, 2001 from
the prior year were decreases in marketing costs of approximately $563 (23%) and
general and  administrative  expenses of  approximately $ 651 (11%),  which were
partly offset by increases in depreciation  and  amortization  of  approximately
$554 (55%) and salaries and wages of approximately $342 (7%). These increases in
overall  costs,  in  combination  with the revenue  increases  had the effect of
increasing operating costs as a percent


                                       18
<PAGE>


of operating  revenue from 24% during the year ended June 30, 2000 to 25% in the
year ended June 30, 2001. The Company recorded expenses relating to bad debts of
$415 in fiscal 2001 and $534 during fiscal 2000.  Over the past five years,  the
average ratio of bad debt to aggregate sales was less than 1%.

      Interest income and expense: Interest expense decreased approximately $115
(11%) to  approximately  $1,428 for the year ended June 30,  2001 as compared to
that of the previous  year.  This  decrease was  attributable  to lower  average
borrowings caused primarily by the repayment of loans. Interest income decreased
during the year ended June 30, 2001 by approximately $161 (36%). This was caused
by an overall decrease in advances to consignors.

      Provision for Income Taxes:  . The Company's  effective tax rate (benefit)
for the year ended  June 30,  2001 and 2000 were  approximately  (8%) and (31%),
respectively. The difference primarily relates to a valuation allowance provided
for net operating loss carryforwards.  This rate may change in future periods if
operating results or acquisition related costs differ significantly from current
projections.

      Net Income (Loss): The Company recorded a net loss for the year ended June
30, 2001 of approximately  $16,323 compared to approximately $3,669 for the year
ended June 30, 2000 and  reflected an increased  loss of  approximately  $12,654
during this period.  The decrease in operating  income of  approximately  $8,237
during the year ended June 30,  2001,  coupled  with the increase in losses from
operations of investees of approximately  $4,100 and a decrease in the provision
for income taxes (benefit) of  approximately  $257 compared to the previous year
were the main contributors to the change in earnings.

      Of the  aforementioned  loss from  operations of investees,  approximately
$3,186  relates  directly to advances made by GMAI-Asia,  to its  unconsolidated
affiliates,  China Everbright  Telecommunication Products, Ltd. ("Products") and
iAtoZ.Com,  Limited  ("iAtoZ").  These advances were written off in Fiscal 2001;
the effect of this  write-off on GMAI's  fiscal 2001  results was  approximately
$2,086.  The effect on the  Company  relating  to  GMAI-Asia's  amortization  of
goodwill expense was approximately $1,200.

Results of Operations Years Ended June 30, 2000 and 1999 (Dollars in thousands
except as noted or per share information)

      Revenues:  For the year ended June 30, 2000,  operating revenues decreased
approximately   $  15,105  (19%)  to   approximately   $  62,379  compared  with
approximately  $ 77,484 for the year  ended  June 30,  1999.  This  decrease  is
largely  attributable to a decrease in sales of owned inventory of approximately
$ 16,888.  This  decrease was primarily the result of lower sales by Spectrum of
approximately $ 20,419,  and the deferral of an Ivy & Mader auction,  ordinarily
held during the fourth  quarter,  which was deferred until July, 2000 so that it
could be held  during  the World  Stamp Expo 2000,  which was  sponsored  by the
United States Postal  Service,  for which Ivy & Mader was appointed the official
exclusive  auctioneer.  These decreases were partially  offset by an increase in
commission  revenue of approximately $ 1,783,  which was primarily the result of
commissions earned from Greg Manning Direct Inc. of approximately $ 2,027.

      The Company  believes the reduced  Spectrum sales resulted  primarily from
non-recurring  Y2K influenced sales of generic gold coins and bullion during the
year ended June 30,  1999.  At that time,  Spectrum  experienced  these types of
sales  in  significantly  greater  than  historical  amounts  due,  the  Company
believes,  to fears over Y2K and Spectrum's customers building their inventories
of gold to meet  perceived  market  demands  for  hard  currency.  Additionally,
Spectrum's sales during the current year were negatively  affected by Spectrum's
customers' reduced cash availability  resulting from their inventories of unsold
or repurchased generic gold coins and bullion.

      The variation in any year in the composition of total revenues (as between
revenues   resulting  from  inventory  sales  and  commissions   resulting  from
consignment  sales) is largely a function  of  availability,  market  demand and
conditions  rather than any  deliberate  attempt by the Company to emphasize one
area over the other.  Sellers/consignors  of property  to the Company  generally
make their own  determinations  as to whether the property should be sold to the
Company for the  specified  price  offered by the Company or offered for sale at
auction at a price that cannot be predicted in advance.  Such  determination  is
based on the potential risks and rewards involved, and includes an evaluation of
the marketability of the property and the potential pool of buyers.  The Company
engages in a similar  analysis in determining  whether to acquire  inventory for
its own account and the price it is willing to pay for such inventory.

      Gross  profit  increased by 1%, from  approximately  $ 11,743 for the year
ended June 30, 1999 to  approximately  $11,820 for the year ended June 30, 2000.
This represents an increase of approximately $77.


                                       19
<PAGE>


      Operating Expenses: The Company's aggregate operating expenses,  exclusive
of  cost  of  merchandise  sold,  for the  year  ended  June  30,  2000  totaled
approximately  $15,223  compared with  approximately  $11,908 for the year ended
June 30, 1999,  representing  an increase of  approximately  $3,315 (or 28%). Of
this increase, approximately $1,578 (48%) was attributable to the inclusion of a
full year of operating  expenses by  Teletrade,  of which only eight months were
included last year. The primary  changes in the operating  expenses for the year
ended June 30, 2000 from the prior year were  increases  in  marketing  costs of
approximately  $409 (20%),  depreciation and amortization of approximately  $270
(37%) and  salaries and wages of  approximately  $486 (11%).  Also  included are
approximately $926 in acquisition costs, approximately $534 in non-cash Bad Debt
expense,  approximately $280 in non-cash inventory reserves,  approximately $227
in other  non-recurring  costs and approximately $655 in costs incurred to build
the  infrastructure  of the  Company.  These  increases  in  overall  costs,  in
combination  with the revenue  decreases had the effect of increasing  operating
costs as a percent of operating  revenue from 15% during the year ended June 30,
1999 to 24% in the year ended June 30, 2000.

      The Company recorded  expenses relating to bad debts of $534 at the end of
fiscal  2000,  compared  to $86 in fiscal  1999.  While the fiscal  2000  amount
represents a significant  increase  over the prior year,  it is consistent  with
prior years as a percentage of aggregate  sales. The fiscal 2000 bad debt charge
represents .5% of aggregate sales . Over the past five years,  the average ratio
of bad debt to aggregate sales was less than 1%.

      Interest income and expense: Interest expense decreased approximately $101
(6%) to  approximately  $1,543 for the year ended June 30,  2000 as  compared to
that of the previous  year.  This  decrease was  attributable  to lower  average
borrowings  caused  primarily  by the  repayment of loans  outstanding  with the
proceeds of the sale of common  stock  during the third  quarter of fiscal 2000.
Interest income  increased  during the year ended June 30, 2000 by approximately
$5 (1%). This was caused by an overall increase in advances to consignors.

        Provision for Income Taxes.  The Company's  effective tax rate (benefit)
for the year  ended  June 30,  2000 and 1999 were  approximately  (31%) and 44%,
respectively. The difference primarily relates to a valuation allowance provided
for net operating loss carryforwards.  This rate may change in future periods if
operating results or acquisition related costs differ significantly from current
projections.

      Net Income (Loss): The Company recorded a net loss for the year ended June
30, 2000 of  approximately  $3,669 compared to net income of approximately $ 823
for the year ended June 30, 1999,  reflecting a decrease of approximately $4,492
during this period.  The decrease in operating  income of  approximately  $3,238
during the year ended June 30, 2000, coupled with a decrease in the gain on sale
of marketable  securities  and  investments  of  approximately  $2,540,  and the
increase in losses from  operations  of  investees of  approximately  $851 and a
decrease in the provision for income taxes of  approximately  $2,122 compared to
the previous year were the main contributors to the change in earnings.

European Monetary Union

      The European  Monetary Unit (the "euro") was introduced on January 1, 1999
as a wholesale currency. The eleven participating European Monetary Union member
countries  established fixed conversion rates between their existing  currencies
and the euro. The existing  currencies  will continue to be used as legal tender
through January 1, 2002;  thereafter,  on July 1, 2002, the existing  currencies
will be cancelled and euro bills and coins will be used for cash transactions in
the participating countries.

      The Company  believes  that its  European  financial  and cash  management
operations affected by the euro conversion have adequately been prepared for its
introduction.  For the  transition  period and the period after January 1, 2002,
the  Company has  established  an internal  group of  management  to analyze the
potential business implications of converting to a common currency.  The Company
is able to  determine  the  ultimate  financial  impact,  if  any,  of the  euro
conversion on its  operations,  given that the impact will be dependent upon the
competitive  situations that exist in the various  regional markets in which the
Company participates.

Liquidity and Capital Resources

      The Company experienced a positive cash flow from operating  activities of
approximately  $620 for the year ended June 30,  2001 as  compared to a negative
cash flow of approximately  $7,639 for fiscal 2000, an increase of approximately
$8,259.  This  increase  in cash  flow for the  year  ended  June  30,  2001 was
primarily  attributable to a decrease in inventory of approximately $6,248 and a
decrease in advances it  consignors  of  approximately  $2,000 and a decrease in
accounts payable to third party consignors of approximately $1,243.


                                       20
<PAGE>


      The Company experienced a negative cash flow from operating  activities of
approximately  $7,639 for the year ended June 30, 2000 as compared to a negative
cash flow of  approximately  $5,514 for fiscal 1999, a decrease of approximately
$2,125.  This  decrease  in cash  flow for the  year  ended  June  30,  2000 was
primarily  attributable to a decrease in net income of approximately  $4,492, an
increase in inventory  and deferred  tax benefit of  approximately  $1,567 and a
decrease in accounts payable and other assets of approximately  $3,643 which was
partly  offset by  increases  in  accounts  payable to third  party  consignors,
accrued  expenses,  bad debt  reserves  and  depreciation  and  amortization  of
approximately $3,474.

      The  Company  had a  negative  cash  flow  from  investing  activities  of
approximately  $720 for the year ended June 30,  2001 as  compared to a negative
cash  flow of  approximately  $2,743  for the  previous  year,  an  increase  of
approximately  $2,023.  The negative  cash flow for the year ended June 30, 2001
was primarily attributable to additional purchases of property and equipment.

      The  Company  had a  negative  cash  flow  from  investing  activities  of
approximately  $2,743 for the year ended June 30, 2000 as compared to a negative
cash  flow of  approximately  $1,316  for  the  previous  year,  a  decrease  of
approximately  $1,262.  The negative  cash flow for the year ended June 30, 2000
was primarily attributable additional cash investment in GMAI-Asia.com.

      The  Company  had  positive  cash  flow  from   financing   activities  of
approximately $1,166 for the year ended June 30, 2001 as compared to $10,663 for
the  previous  year,  a decrease of  approximately  $9,497.  This  decrease  was
primarily caused by a decrease in proceeds from stock  subscriptions  receivable
of  approximately  $3,000  and  proceeds  from  the  sale  of  common  stock  of
approximately  $13,868  which was partly  offset by  decreases  in  repayment of
demand and loans payable of approximately $7,318.

      The  Company  had  positive  cash  flows  from  financing   activities  of
approximately $10,663 for the year ended June 30, 2000 as compared to $6,314 for
the  previous  year,  an increase of  approximately  $4,349.  This  increase was
primarily caused by an increase in proceeds from stock subscriptions  receivable
of  approximately  $3,000 and an increase  in  proceeds  from the sale of common
stock of  approximately  $12,669  which  was  partly  offset by an  increase  in
repayment of demand and notes payable of approximately $5,361.

      During the year ended June 30,  2000,  the Company paid off two term loans
aggregating $1,587 from Brown Brothers Harriman & Co. ("Brown Brothers"). During
this same period,  the Company  decreased  its  borrowings  under its  revolving
credit  facility  by $  2,102.  The  Company  also  paid off $650 to the Bank of
America under its revolving  credit facility and $2,000 to a former  shareholder
of  Spectrum.  In  addition,  the Company  paid $750 to former  shareholders  of
Teletrade as part of the purchase of Teletrade and approximately  $1,333 for the
purchase  of  treasury  stock.  These  amounts  were  offset by the  exercise of
employee stock options,  receipt of proceeds from stock subscriptions receivable
and the sale of the Company's Common Stock totaling  approximately $19,000. This
provided  for a net  increase  in  cash  provided  by  financing  activities  of
approximately $10,663.

      The credit agreement with Brown Brothers was entered into in May 1995, and
was amended in February 1998 and June 1999.  Borrowings  under this facility are
based on a formula of account  receivables,  inventory and  consignor  advances.
This credit  facility is used to fund cash advances and  inventory  purchases as
well as to provide additional  liquidity using the Company's auction receivables
and other assets as collateral. At June 30, 2001 and 2000, borrowings under this
facility aggregated $2,400 and $1,600, respectively,  and are payable on demand.
The  Company is seeking  alternate  financing  sources  and plans to repay these
facilities by October 31, 2001.  As of September  25, 2001,  the balance owed to
Brown Brothers was $600.

      As of June 30, 2001 the Company was not in compliance  with  guidelines in
the  loan  agreement  relating  to the  formula  of  earnings  before  interest,
depreciation  and taxes to interest  expense and  increase in tangible net worth
(as defined in the agreement).  As a result,  Brown Brothers has the right under
the credit  agreement to demand immediate  repayment of all amounts  outstanding
without the  otherwise  applicable  120 day notice  period.  As of September 25,
2001, Brown Brothers had not demanded such repayment.

      At June 30,  2001,  Spectrum  was a party to a  secured  revolving  credit
facility  with Bank of America,  and provides for a credit  facility for working
capital  purposes in an aggregate  amount of $10,000  subject to  adjustments as
defined in the agreement.  Borrowings under this facility are based on a formula
of account  receivables  and  inventory  and  consignor  advances.  This  credit
facility is used to fund cash  advances  and  inventory  purchases as well as to
provide additional liquidity using the Company's receivables and other assets as
collateral.  At June 30, 2001,  borrowings under this facility aggregated $5,200
and are payable on demand.  Greg  Manning,  Chairman of the Board of  Directors,
President and Chief Executive Officer of the Company, has personally  guaranteed
this line of credit.  Spectrum is seeking alternate  financing sources and plans
to repay these  facilities by October 31, 2001.  As of September  25, 2001,  the
balance owed to Bank of America was $1,275.


                                       21
<PAGE>


      Subsequent  to June 30, 2001,  the Company  obtained a secured loan from a
privately held capital fund for a $1,600,  which is due July 31, 2002. This loan
is collateralized by certain inventories and bears interest at a rate of 10% per
annum. The Company will continue to seek new sources of financing.

      A buyer of auctioned  property may be permitted to take  possession of the
property before payment is made. Most accounts  receivable are collected  within
30 to 60 days,  which is consistent  with business  practice in the  collectible
markets.  For the years  ended June 30,  2001 and 2000,  the  Company's  expense
relating to bad debt was approximately $0 and $534  respectively.  For the years
ended June 30, 2001 and 2000 the Company's  history of bad debts has been 0% and
 .47% respectively, of aggregate sales.

      Because of the nature of the auction  business of the Company,  there is a
relationship between accounts receivable, advances to consignors, and payable to
consignors. Depending upon the relationship of the balance sheet date to a given
auction  sale date and a settlement  date for a given  auction,  these  balances
could change substantially from one balance sheet date to another.

      In the cycle of any single auction, the effect on the balance sheet and on
the Company's cash flows is significant when compared to the total assets of the
Company.

      The cycle for a single auction begins with consignors contracting with the
Company to sell their property at auction.  Typically these contracts are signed
from 8 to 16 weeks in advance of the auction sale date.  No entry is made on the
balance sheet of the Company when the Company  receives the property for auction
or when a contract  for the  consignment  to the  auction  is signed.  Since the
contract for the sale of the property is for services not yet rendered, there is
no financial statement impact.

      At the time of the  consignment,  or any time thereafter until the auction
sale date,  the consignor may request a cash advance which is a prepaid  portion
of the prices to be realized of the property irrevocably committed to be sold in
the auction. The cash advance takes the form of a self-liquidating, secured loan
to the consignor,  using the property consigned as collateral.  Cash advances to
consignors are often used as a marketing tool in order to obtain  property for a
sale. When the cash advance is made, there is an increase of the accounts of the
Company  in  cash  advances  to  consignors,  and  simultaneously,  there  is  a
corresponding decrease in cash.

      Approximately  6 weeks after the auction  date,  often  referred to as the
settlement  date,  the  payables  to  consignors  decrease  to  zero  as all the
consignors  are paid and the Company  withholds a portion of the amounts due the
consignor  for the sale of the  property  as an offset  to repay  the  principal
amount and the accrued interest on, the cash advances to consignors (or loans to
consignors),  and there is a decrease in cash,  corresponding  to the net amount
paid to the consignors.

      The entire cycle for a single auction typically is about 14 to 22 weeks in
duration.  Because of the high level of activity in the Company,  single auction
cycles do not occur in series,  with the next cycle beginning  immediately after
the previous cycle ends.  Rather,  single auction cycles occur in parallel.  For
example, when a certain cycle ends, a second cycle may be at the midpoint, while
yet a third cycle is just  beginning.  Depending upon the relative values of the
property  consigned  to each  sale in the  three  cycles  in this  example,  and
depending  upon the demand  for  auction  advances  in each of the  cycles,  the
cumulative  effect on the balance sheet, and particularly the current assets and
current liabilities and the Company's cash flows, is very significant.

      The Company  has  developed  both a customer  and  supplier  base of major
stamp,  numismatic,   sports  and  other  collectibles  dealers  and  collectors
throughout the world that services the Company's  operations.  Although  intense
competition  exists for the  acquisition  of quality  properties for purchase or
consignment from estates and private  collectors,  the Company believes that the
short-term  and  long-term  availability  of these  items  will  continue  to be
sufficient  to augment  the core  dealer-based  business.  While there can be no
assurance that prices of and demand for the collectibles  offered by the Company
will not decrease in the future,  demand has  traditionally  not been  adversely
affected by negative economic conditions.

      However, the Company's need for liquidity and working capital may increase
as a result of its potential business expansion  activities.  In addition to the
need for such capital to enhance the Company's ability to offer cash advances to
a larger  number of  potential  consignors  of property  (which is an  important
aspect of the  marketing  of an auction  business),  the  Company  will  require
additional  working  capital in the future in order to further expand its sports
trading card and sports memorabilia  auction business,  to acquire  collectibles
for sale in the Company's  business,  to expand into sales of other collectibles
and to initiate any other new business activities.


                                       22
<PAGE>


      Management  believes that the Company's cash flow from ongoing  operations
supplemented by the Company's working capital credit facilities will be adequate
to fund the  company's  working  capital  requirements  for the next 12  months.
However,  to complete any of the Company's proposed  expansion  activities or to
make any significant acquisitions, the Company will consider exploring financing
alternatives  including  increasing  its working  capital  credit  facilities or
raising  additional  debt or equity  capital.  The raising of additional  equity
capital will cause dilution to existing shareholders.

Inflation

      The effect of inflation on the Company has not been significant during the
last three fiscal years.

Safe Harbor Statement

      From time to time, information provided by the Company,  including but not
limited to statements in this report,  or other  statements made by or on behalf
of the Company, may contain "forward-looking"  information within the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange  Act  of  1934.  Such   statements   involve  a  number  of  risks  and
uncertainties.  The Company's actual results could differ  materially from those
discussed in the forward-looking statements. The cautionary statements set forth
below  identify  important  factors  that could cause  actual  results to differ
materially from those in any forward-looking  statements made by or on behalf of
the Company:

      o     The Company incurred a net loss of $16,323 for the fiscal year ended
            June 30, 2001. The Company is seeking to reduce operating  expenses,
            optimize  profitability and align resources with long-term  business
            growth strategies, as well as to explore new sources of collectibles
            in an effort to increase  margins  and  revenues  from  commissions.
            There can be no assurance, however, that these steps (or any others)
            will result in a significant  improvement in the Company's financial
            condition,  on either a short or  long-term  basis  particularly  in
            light of generally  unfavorable  economic  conditions and changes in
            the collectibles marketplace.

      o     The Company is currently seeking new sources of financing to replace
            its current credit facilities,  which will expire shortly. While the
            Company believes it will be able to obtain such new financing, if it
            fails to do so on a timely basis and upon  satisfactory  terms,  the
            Company's operations and cash flow could be materially and adversely
            affected.

      o     If the revenue of the Company fails to offset operating  expenses in
            the future,  the  Company may be required to fund future  operations
            through the sale of additional  common stock,  which could cause the
            market  price of the stock to  decline,  as well as have a  dilutive
            effect on the value of the common stock currently outstanding.

      o     At times there may be a limited supply of collectibles available for
            sale by the Company, and such supply varies from time to time. While
            the Company  generally has not  experienced  a lack of  collectibles
            that has prevented it from conducting  appropriately  sized auctions
            on an  acceptable  schedule,  no  assurance  can be  given  that the
            Company will be able to obtain  consignments of suitable  quantities
            of collectibles in order to conduct auctions of the size, and at the
            times, the Company may desire in the future. The Company's inability
            to do so would have a material adverse effect on the Company.

      o     The development  and success of the Company's  business has been and
            will  continue to be  dependent  substantially  upon its  President,
            Chairman   and  Chief   Executive   Officer,   Greg   Manning.   The
            unavailability of Mr. Manning, for any reason, would have a material
            adverse  effect upon the business,  operations  and prospects of the
            Company if a suitable replacement is not engaged.

      o     The Company  frequently  grants credit to certain  purchasers at its
            auctions  permitting them to take immediate  possession of auctioned
            property on an open account basis, within established credit limits,
            and to make payment in the future,  generally  within 30 days.  This
            practice  facilitates  the orderly conduct and settlement of auction
            transactions,  and enhances participation at the Company's auctions.
            In such  events,  however,  the  Company is liable to the seller who
            consigned the property to the Company for the net sale proceeds even
            if the buyer defaults on payment to the Company. While this practice
            has not  resulted in any material  loss to the  Company,  the dollar
            volume of the Company's  potential exposure from this practice could
            be substantial at any particular point in time.


                                       23
<PAGE>


      o     The business of selling  stamps,  coins,  and other  collectibles at
            auction  and in retail  sales is  highly  competitive.  The  Company
            competes with a number of auction houses and collectibles  companies
            throughout  the  United  States  and the  world.  While the  Company
            believes  that there is no dominant  company in the stamp auction or
            collectibles  business  in  which  it  operates,  there  can  be  no
            assurances  that other  companies  with greater  financial and other
            resources and name recognition will not enter the market.

      o     The Company may be adversely affected by the costs and other effects
            associated with (i) legal and administrative  cases and proceedings;
            (ii) settlements, investigations, claims and changes in those items;
            and (iii)  adoption of new, or changes in,  accounting  policies and
            practices and the application of such policies and practices.

      o     The Company intends to consider appropriate  acquisition  candidates
            as described in "Future Planned Expansion"  herein.  There can be no
            assurance that the Company will find or consummate transactions with
            suitable acquisition candidates in the future.

      o     The Company's  operations may be adversely  affected by governmental
            regulation and taxation of the Internet, which is subject to change.
            A number of legislative and regulatory proposals under consideration
            by federal, state, local and foreign governmental  organizations may
            result in there being enacted laws concerning various aspects of the
            Internet,  including online content,  user privacy,  access charges,
            liability for third-party  activities,  and  jurisdictional  issues.
            These laws could harm our business by increasing  the Company's cost
            of doing business or discouraging use of the Internet.

      o     The  Company's  business  will be  adversely  affected if use of the
            Internet by consumers, particularly purchasers of collectibles, does
            not continue to grow. A number of factors may inhibit consumers from
            using the Internet. These include inadequate network infrastructure,
            security  concerns,  inconsistent  quality of service  and a lack of
            cost-effective  high-speed service.  Even if Internet use grows, the
            Internet's  infrastructure  may not be able to support  the  demands
            placed on it by this growth and its  performance and reliability may
            decline.  In  addition,  many Web  sites  have  experienced  service
            interruptions  as a result of  outages  and other  delays  occurring
            throughout the Internet  infrastructure.  If these outages or delays
            occur frequently in the future, use of the Internet,  as well as use
            of the Company's Web sites, could grow more slowly or decline.

      o     A number of legislative and regulatory proposals under consideration
            by federal, state, local and foreign governmental  organizations may
            result in there being enacted laws concerning various aspects of the
            Internet,  including online content,  user privacy,  access charges,
            liability for third-party  activities,  and  jurisdictional  issues.
            These laws could harm the Company's  business by increasing its cost
            of doing business or discouraging use of the Internet.

            In  addition,  the tax  treatment  of the  Internet  and  electronic
            commerce is currently  unsettled.  A number of  proposals  have been
            made that could result in Internet activities, including the sale of
            goods and services,  being taxed.  The U.S.  Congress has passed the
            Internet Tax Information  Act, which placed a three-year  moratorium
            on new state and local taxes on Internet  commerce  and is currently
            considering  extending  such  moratorium.  There  may,  however,  be
            enacted in the future laws that change the  federal,  state or local
            tax  treatment of the Internet in a way that is  detrimental  to our
            business.

            Some local telephone  carriers claim that the increasing  popularity
            of  the  Internet  has  burdened  the  existing   telecommunications
            infrastructure  and that  many  areas  with  high  Internet  use are
            experiencing interruptions in telephone service. These carriers have
            petitioned  the Federal  Communications  Commission to impose access
            fees on  Internet  service  providers.  If  these  access  fees  are
            imposed,  the cost of  communicating on the Internet could increase,
            and this could  decrease the demand for the  Company's  services and
            increase its cost of doing business.

      o     The Company holds rights to various Web domain  names.  Governmental
            agencies  typically  regulate  domain names.  These  regulations are
            subject  to  change.  The  Company  may not be able  to  acquire  or
            maintain  appropriate  domain names in all  countries in which it or
            its  affiliates  do  business.  Furthermore,  regulations  governing
            domain names may not protect the  Company's  trademarks  and similar
            proprietary  rights.  The  Company  may be unable to  prevent  third
            parties from  acquiring  domain names that are similar to,  infringe
            upon or diminish  the value of the  Company's  trademarks  and other
            proprietary rights.


                                       24
<PAGE>


      o     The Company cannot accurately forecast revenues of its business. The
            Company may  experience  significant  fluctuations  in its quarterly
            operating  results.  Future  fluctuations  in  operating  results or
            revenue  shortfalls  could  adversely  affect  the  success  of  the
            Company.

      o     The popularity of collectibles could decline.  This could affect the
            market value of inventory the Company currently holds or may hold in
            the future.

      o     The  Company's  future  results  of  operations  could be  adversely
            affected  by changes in  accouanting  standards  promulgated  by the
            Financial  Accounting  Standards  Board, the Securities and Exchange
            Commission,   and  the  American   Institute  of  Certified   Public
            Accountants.


This list should not be  considered  an  exhaustive  statement of all  potential
risks and uncertainties.






                                       25
<PAGE>


Item 8.   FINANCIAL STATEMENTS and SUPPLEMENTARY DATA

      The  Financial  Statements  of the  Company,  together  with the report of
independent accountants thereon, are presented under this Item 8:


                                      INDEX

                                                                           Page
                                                                          Number

Report of Independent Accountants .......................................... 28

Report of Management ....................................................... 29

Consolidated Balance Sheets - June 30, 2001 and 2000 ....................... 30

Consolidated Statements Of Operations - Years ended
June 30, 2001, 2000 And 1999 ............................................... 31

Consolidated Statement of Stockholders' Equity--Years ended
June 30, 2001, 2000 and 1999 ............................................... 32

Consolidated Statements of Cash Flows - Years ended
June 30, 2001, 2000 And 1999 ............................................... 35

Consolidated Statements of Comprehensive Income--Years ended
June 30, 2001, 2000 and 1999 ............................................... 36

Notes to Consolidated Financial Statements ................................. 37







                                       26
<PAGE>


                        Report of Independent Accountants






To the Board of Directors and
Stockholders of Greg Manning Auctions, Inc.


We have audited the  accompanying  consolidated  balance  sheets of Greg Manning
Auctions,  Inc. and  Subsidiaries  as of June 30, 2001 and 2000, and the related
consolidated  statements of  operations,  stockholders'  equity,  cash flows and
comprehensive  income for each of the three  years in the period  ended June 30,
2001.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  Untied  States of  America.  Those  standards  require  that we plan and
perform the audits 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 consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  financial  position  of Greg  Manning
Auctions,  Inc.  and its  Subsidiaries  as of June 30,  2001 and  2000,  and the
results of their  operations and their cash flows for each of the three years in
the  period  ended June 30,  2001,  in  conformity  with  accounting  principles
generally accepted in the United States of America.



/s/ Amper, Politziner & Mattia P.A.
-----------------------------------

September  14,  2001
Edison, New Jersey




                                       27
<PAGE>



Greg Manning Auctions, Inc.
775 Passaic Avenue
West Caldwell, New Jersey 07006


September 14, 2001


REPORT OF MANAGEMENT

The Company's  consolidated  financial  statements  were prepared by management,
which  is  responsible  for  their  integrity  and  objectivity.  The  financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America and, as such,  include amounts based on
management's best estimates and judgements.

Management is further  responsible for maintaining a system of internal  control
structure and related  policies and  procedures  designed to provide  reasonable
assurance that assets are adequately safeguarded and that the accounting records
reflect transactions executed in accordance with management's authorization.

The  Company's  financial  statements  have been audited by  independent  public
accountants  who have  expressed  their  opinion with respect to the fairness of
these statements.

The  Audit  Committee  of the  Board  of  Directors,  composed  of  non-employee
directors,  meets  periodically  with  the  independent  public  accountants  to
evaluate the  effectiveness  of the work performed by them in discharging  their
responsibilities  and  to  assure  their  independent  and  free  access  to the
Committee.



            /s/  GREG MANNING                       /s/  LARRY CRAWFORD
            -----------------------                 -----------------------
            Greg Manning                            Larry Crawford
            Chairman, President and                 Chief Financial Officer
            Chief Executive Officer





                                       28
<PAGE>


                           GREG MANNING AUCTIONS, INC.
                           Consolidated Balance Sheets
                                    June 30,
                     (In Thousands except Per Share Amounts)


                                                           2001          2000
                                                         --------      --------
                   Assets

 Current Assets

      Cash and Cash Equivalents                          $  2,158         1,092
      Accounts Receivable, net
        Auctions Receivable                                 7,480         6,748
        Auctions Receivable - Related Party                    --           614
        Advances to Consignors                                853         2,852
        Other                                                 700            16
      Inventory                                            12,866        20,601
      Deferred Tax Asset                                    1,590           824
      Prepaid Expenses                                        324           518
                                                         --------      --------
        Total Current Assets                               25,971        33,265

      Property and Equipment, Net                           1,422           928
      Goodwill, Net                                         5,122         6,601
      Other Purchased Intangibles, Net                      3,022         3,022
      Marketable Securities                                   147           231
      Investment in Equity Method Investees                    --         5,937

      Other Non-Current Assets
        Deferred Tax Asset                                  2,554         1,920
        Inventory                                           1,700         2,400
        Advances to Consignors                                358           753
        Other                                                 156           386
                                                         --------      --------
        Total Assets                                       40,452        55,443
                                                         ========      ========

         Liabilities and Stockholders' Equity

 Current Liabilities
      Demand Notes Payable                                  8,040         7,950
      Notes Payable                                            75           182
      Payable to Third Party Consignors                     2,711         1,468
      Accounts Payable                                      4,135         3,493
      Advance from Related Party                               90         2,422
      Accrued Expenses                                      1,834         1,850
                                                         --------      --------
        Total Current Liabilities                          16,885        17,365
      Notes Payable - Long Term                               168           111
                                                         --------      --------
 Total Liabilities                                         17,053        17,476

Stockholders' Equity
Preferred Stock, $.01 par value. Authorized
      10,000 shares; none issued
Common Stock, $.01 par value
      Authorized: 40,000 shares
      Issued June 30, 2001 - 11,987 shares
     Issued June 30, 2000 - 10,025 shares                     120           100
Additional paid in capital                                 44,252        41,251

Accumulated other comprehensive income:
Unrealized loss on marketable securities,
      net of tax                                             (143)          (92)
Accumulated Deficit                                       (18,282)       (1,959)
 Treasury stock, at cost
     368 shares at June 30, 2001
     100 shares at June 30, 2000                           (2,548)       (1,333)
                                                         --------      --------
        Total Stockholders' Equity                         23,399        37,967
                                                         --------      --------
        Total Liabilities and Stockholders' Equity       $ 40,452      $ 55,443
                                                         ========      ========

   See accompanying notes to consolidated financial statements.


                                       29
<PAGE>


                           GREG MANNING AUCTIONS, INC.
                      Consolidated Statements of Operations
                          For the Years Ended June 30,
                    (In Thousands, Except Per Share Amounts)

<TABLE>
<CAPTION>
                                                                  2001           2000            1999
                                                                --------       --------        --------
<S>                                                             <C>            <C>             <C>
 Operating Revenues
     Sales of merchandise
                                                                $ 62,333       $ 55,663        $ 72,551
     Commissions earned                                            5,063          6,716           4,933
                                                                --------       --------        --------
       Total Revenues                                             67,396         62,379          77,484

 Cost of merchandise sold                                         62,354         50,559          65,741
                                                                --------       --------        --------
       Gross profit                                                5,042         11,820          11,743

 Operating Expenses
     General and Administrative                                    5,373          6,024           4,801
     Salaries and Wages                                            5,163          4,821           4,335
     Depreciation and Amortization                                 1,564          1,010             739
     Intangible Impairment                                         2,158             --              --
     Marketing                                                     1,879          2,442           2,033
     Other Expense                                                   340             --              --
     Acquisition and Merger Costs                                    205            926              --
                                                                --------       --------        --------
 Total Operating Expenses                                         16,682         15,223          11,908
                                                                --------       --------        --------
       Operating Loss                                            (11,640)        (3,403)           (165)

 Other Income (expense)
     Gain on sale of marketable
    securities and investments                                        --             14           2,555
     Interest Income                                                 292            453             448
     Interest Expense                                             (1,428)        (1,543)         (1,644)
     Minority Interest                                                --             --              (5)
     Income (Loss) from operations of investees                   (4,951)          (851)             95
                                                                --------       --------        --------
        Income (Loss) before income taxes                        (17,727)        (5,330)          1,284
 Provision for (Benefit from) income taxes                        (1,404)        (1,661)            461
                                                                --------       --------        --------
 Net Income (Loss)                                              $(16,323)      $ (3,669)       $    823
                                                                ========       ========        ========

 Basic Earnings (Loss) per Share:

     Weighted average shares outstanding                          10,299          9,710           7,355
                                                                ========       ========        ========
     Basic Earnings (Loss) per Share                            $  (1.58)      $  (0.38)       $   0.11
                                                                ========       ========        ========
 Diluted Earnings (Loss) per Share:

     Weighted average shares outstanding                          10,299          9,710           7,799
                                                                ========       ========        ========
     Diluted Earnings (Loss) per Share                          $  (1.58)      $  (0.38)       $   0.11
                                                                ========       ========        ========
</TABLE>

         See accompanying notes to consolidated financial statements


                                       30
<PAGE>


                           Greg Manning Auctions, Inc.
                 Consolidated Statement of Stockholders' Equity
                          July 1, 1998 to June 30, 2001
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                                Unrealized
                                                                                  Gain
                                               Common Stock        Additional   (loss) on                               Total
                                           --------------------      Paid-In    Marketable   Retained    Treasury    Stockholders'
                                            Shares         $         Capital    Securities   Earnings      Stock        Equity
                                           -------      -------     ----------  ---------    --------    --------    -------------
<S>                                        <C>          <C>         <C>         <C>          <C>         <C>         <C>
Balance June 30, 1998                        6,174           62        7,330          19       1,275           --       8,686

Options Exercised                              535            5          887                                              892

Income Tax Benefit from
  Exercise of stock options                                            1,374                                            1,374

Options issued relating to loan                                          200                                              200

Options issued relating to
  acquisition of subsidiary                                               75                                               75

Options issued relating to
  Professional services                                                  150                                              150

Unrealized loss from  marketable
   securities, net of tax                                                            (19)                                 (19)

Common shares sold for cash                  1,076           11        6,489                                            6,500

Common shares issued relating
  to acquisition of subsidiary                 750            7        1,868                                            1,875

Shareholder Distributions-Spectrum                                                              (229)                    (229)

Net income - June 30, 1999                                                                       823                      823
                                           -------      -------      -------     -------     -------     --------     -------
Balance June 30, 1999                        8,535      $    85      $18,373     $    --     $ 1,869     $     --     $20,327
</TABLE>



                                       31
<PAGE>


<TABLE>
<CAPTION>
                                                                                   Unrealized
                                                                                     Gain
                                                  Common Stock        Additional   (loss) on                             Total
                                             --------------------      Paid-In     Marketable   Retained   Treasury  Stockholders'
                                              Shares        $          Capital     Securities   Earnings     Stock      Equity
                                             --------    -------      ----------   ----------   --------   --------   -------------
<S>                                            <C>         <C>         <C>         <C>          <C>        <C>        <C>
 Balance June 30, 1999                          8,535         85        18,373             -       1,869          -      20,327

 Options Exercised
                                                  123          1           226                                              227

 Income Tax Benefit from exercise of
   stock options                                                           284                                              284

 Common shares sold for cash                    1,036         10        16,989                                           16,999

 Expenses relating to sale of common stock                               (793)                                            (793)

 Common shares issued relating to
    acquisition of subsidiary                     168          2         3,612                                            3,614

 Common shares issued relating to
    acquisition of GMD                            163          2         2,276                                            2,278

 Common Shares repurchased as
    Treasury Shares                                                                                          (1,333)     (1,333)

 Shareholder Distributions-Spectrum                                                                 (159)                  (159)

 Options issued relating to common
     shares sold for cash                                                  245                                              245

 Unrealized loss from marketable
     securities, net of tax                                                              (92)                               (92)

 Spectrum shareholder purchase of
     additional shares for cash                                             39                                               39

 Net loss - June 30, 2000                                                                         (3,669)                (3,669)
                                             --------    -------      --------      ---------  ---------   --------   ---------
 Balance June 30, 2000                         10,025    $   100      $ 41,251      $    (92)  $  (1,959)   $(1,333)   $ 37,967
</TABLE>



                                       32
<PAGE>

<TABLE>
<CAPTION>
                                                                                  Unrealized
                                                                                     Gain
                                                  Common Stock        Additional   (loss) on                             Total
                                             --------------------      Paid-In     Marketable   Retained   Treasury  Stockholders'
                                              Shares        $          Capital     Securities   Earnings     Stock      Equity
                                             --------    -------      --------     ----------   ---------   --------  -------------
<S>                                          <C>          <C>         <C>          <C>          <C>         <C>         <C>
 Balance June 30, 1999                         10,025        100        41,251           (92)     (1,959)    (1,333)     37,967

 Options Exercised                                 25          -            40                                               40

 Income Tax Benefit from exercise of
   stock options, net of valuation allowance                                58                                               58

 Common shares issued relating to
   acquisition of GMD, net of expenses            159          2           530                                              532

 Common shares sold for cash                    1,150         12         2,289                                            2,301

 Common shares issued to private
    placement investors                           628          6            (6)                                               -

 Options issued relating to
    professional services                                                   90                                               90

 Unrealized loss from marketable securities,
    net of tax                                                                           (51)                               (51)

 Common shares repurchased as
     Treasury Shares                                                                                         (1,215)     (1,215)

 Net loss - June 30, 2001                                                                        (16,323)               (16,323)
                                             --------    -------      --------      ---------  ---------   --------   ---------
 Balance June 30, 2001                         11,987    $   120      $ 44,252      $   (143)  $ (18,282)   $(2,548)   $ 23,399
</TABLE>

           See accompanying notes to consolidated financial statements


                                       33
<PAGE>


                           GREG MANNING AUCTIONS, INC.
                      Consolidated Statements of Cash Flows
                          For the Years Ended June 30,
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                         2001          2000           1999
                                                                       --------      --------       --------
<S>                                                                    <C>           <C>            <C>
 Cash flows from operating activities:
     Net Income (Loss)                                                 $(16,323)     $ (3,669)      $    823
     Adjustments to reconcile net loss to net
     cash from operating activities:
        Depreciation and amortization                                     1,564         1,361            801
       Intangible impairment                                              2,158
        Provision for bad debts (recovery) and
          consignor advance                                                 415           524            (92)
        Provision for inventory reserve                                   2,388           290             --
        Gain on sale of marketable securities and investments                --           (14)        (2,555)
        Equity in loss (income) of equity method investees                4,951           851            (95)
        Deferred tax (benefit) expense                                   (1,346)         (952)         1,096
       Income tax benefit relating to exercise of stock options             (58)         (284)        (1,374)

        (Increase) decrease in assets:
          Auctions receivable                                              (286)        2,061          1,883
          Advances to consignors                                          2,000           131           (814)
          Inventory                                                       6,248        (6,104)        (5,495)
          Prepaid expenses and deposits                                     202          (104)          (101)
          Other assets                                                     (502)          (39)         2,046

        Increase (decrease) in liabilities:
          Payable to third-party consignors                               1,243        (2,416)        (3,136)
          Accounts payable                                                  119        (1,656)           (98)
          Accrued expenses and other liabilities                            179           (41)           803
         Advance from Related Party                                      (2,332)        2,422             --
          Income taxes payable                                               --            --            794
                                                                       --------      --------       --------
                                                                            620        (7,639)        (5,514)

 Cash flows from investing activities
     Capital expenditures for property and equipment                       (928)         (650)          (280)
     Additional goodwill and acquisition                                   (332)          (97)           (66)
     Purchase of customer list                                               --            --           (100)
     Acquisition of subsidiary                                               --            --         (3,270)
     Proceeds from sale of interest in equity method investee               500            --             --
     Investment in equity method investee                                    40        (2,060)          (271)
     Purchase of marketable securities                                       --            --           (100)
     Distribution from investees                                             --            41             --
     Proceeds from sale of marketable securities and investments             --            23          2,660
                                                                       --------      --------       --------
                                                                           (720)       (2,743)        (1,427)

 Cash flows from financing activities:
     Net proceeds from (repayment of) demand notes payable                   90        (2,752)          (501)
     Net proceeds from (repayment of) loans and loans payable               (50)       (4,526)         2,418
     Repayment of notes receivable                                           --            --            234
     Proceeds from exercise of options                                       40           227            892
     Proceeds from sale of common stock (net of expenses)                 2,301        16,169          3,500
     Dividend to Spectrum partners                                           --          (160)          (229)
     Investment by Spectrum partner                                          --            38             --
     Payment for Treasury Stock                                          (1,215)       (1,333)            --
     Proceeds from Stock Subscriptions Receivable                            --         3,000             --
                                                                       --------      --------       --------
                                                                          1,166        10,663          6,314

 Net change in cash and cash equivalents                                  1,066           281           (627)

 Cash and cash equivalents:
     Beginning of period                                                  1,092           811          1,438
                                                                       --------      --------       --------
     End of period                                                     $  2,158      $  1,092       $    811
                                                                       ========      ========       ========
</TABLE>


           See accompanying notes to consolidated financial statements


                                       34
<PAGE>


                           GREG MANNING AUCTIONS, INC.
                 Consolidated Statements of Comprehensive Income
                          For the Years Ended June 30,
                                 (In Thousands)


<TABLE>
<CAPTION>
                                                                  2001         2000         1999
                                                                --------     --------      -------
<S>                                                             <C>          <C>           <C>
Net Income (Loss)                                               $(16,323)    $ (3,669)     $   823

Other Comprehensive Income (Loss)
    Unrealized gain (loss) from marketable securities,
      net of tax                                                     (77)         (92)       1,195

    Less: reclassification adjustment for gains included
      in net income, net of tax                                        -            -       (1,214)
                                                                --------     --------      -------
Comprehensive Income (Loss)                                     $(16,400)    $ (3,761)     $   804
                                                                ========     ========      =======
</TABLE>



           See accompanying notes to consolidated financial statements



                                       35
<PAGE>


                           Greg Manning Auctions, Inc.
                   Notes to Consolidated Financial Statements
            ($ in Thousands Except for Per Share Amounts or as noted)


(1) Nature of Business and Summary of Significant Accounting Policies

           Greg  Manning   Auctions,   Inc.  together  with  its  wholly-owned
subsidiaries,   Ivy  and  Mader  Philatelic   Auctions,   Inc.,  Greg  Manning
Galleries,  Inc.,  Teletrade Inc., Spectrum Numismatics  International,  Inc.,
Kensington  Associates L.L.C. and Greg Manning Direct, Inc. (the "Company") is
an  eCommerce  and  collectibles  company  as well as a public  auctioneer  of
collectibles,  including rare stamps,  stamp  collections  and stocks,  sports
trading cards and memorabilia,  movie posters,  fine art, coins,  diamonds and
jewelry,  comic  books,  and  Hollywood  and Rock and  Roll  memorabilia.  The
Company  conducts both in-person  event  auctions and electronic  auctions via
the Internet and touch-tone telephone.

Liquidity

            During the year ended June 30, 2001, the Company incurred a net loss
of $16,323 and as of June 30, 2001, the Company's has an accumulated  deficit of
$18,282.  Included in the current  year net loss are the special  charges in the
aggregate  of $5,158,  which  Company has  incurred  pursuant to its action plan
(Note 18). In  addition,  as part of the overall  plans to  alleviate  liquidity
concerns,  the Company is  currently  seeking  new bank debt and is  considering
raising additional capital through the issuance of securities. Additionally, the
Company  entered into a stock  purchase  agreement  for an  aggregate  amount of
$2,000, of which $1,400 was received subsequent to June 30, 2001 (See Note 14).

            Subsequent  to June 30,  2001,  the Company  obtained a secured loan
from a privately  held  capital  fund for a $1,600,  which is due July 31, 2002.
This loan is collateralized by certain  inventories and bears interest at a rate
of 10% per annum.

            Management  believes  that  the  Company  will  have  the  liquidity
necessary to implement its plan and support its operations.

Principles of Consolidation

            The  consolidated  financial  statements of the Company  include the
accounts  of its  wholly  owned  subsidiaries.  All  intercompany  accounts  and
transactions have been eliminated in consolidation. Investments in equity-method
investees are  accounted  for under the equity  method of  accounting  since the
Company can exercise significant influence, but less than majority owned and not
otherwise controlled by the Company.

Revenue Recognition

            Revenue is recognized when the  collectibles are sold at auction and
is  represented  by an auction  commission  received  from the buyer and seller.
Auction commissions  represent a percentage of the hammer price at auction sales
as paid by the buyer and the seller.

           In addition  to auction  sales,  the  Company  also sells via private
treaty.  This occurs when an owner of property arranges with the Company to sell
such  property  to a third  party at a  privately  negotiated  price.  In such a
transaction,  the owner may set selling price parameters for the Company, or the
Company may solicit selling prices for the owner,  and the owner may reserve the
right to reject any selling price.  The Company does not guarantee a fixed price
to the owner,  which  would be payable  regardless  of the  actual  sales  price
ultimately received.  The Company recognizes as private treaty revenue an amount
equal to a percentage of the sales price.

           The Company also sells its own  inventory at auction,  wholesale  and
retail.  Revenue with respect to inventory  sold at auction is  recognized  when
sold at auction, and for wholesale or retail sales, revenues are recognized when
delivered or released to the customer for  acceptance or to a common carrier for
delivery. Sales returns have not been material.

           The  Company  does not  provide  any  guarantee  with  respect to the
authenticity  of  property  offered  for  sale at  auction.  Each lot is sold as
genuine and as described by the Company in the catalogue.  When however,  in the
opinion of a  competent  authority  mutually  acceptable  to the Company and the
purchaser,  a lot is declared otherwise,  the purchase price will be refunded in
full if the lot is returned to the Company  within a specified  period.  In such
event,  the Company  will return such lot to the  consignor  before a settlement
payment  has  been  made to such  consignor  for the lot in  question.  To date,
returns have not been material.  Large  collections are generally sold on an "as
is" basis.


                                       36
<PAGE>


                           Greg Manning Auctions, Inc.
                   Notes to Consolidated Financial Statements
            ($ in Thousands Except for Per Share Amounts or as noted)


                     The  Company   accounts   for  revenue   recognition   in
accordance with Staff Accounting  Bulletin No. 101, ("SAB 101"),  which provides
guidance on the recognition, presentation and disclosure of revenue in financial
statements,  and  Emerging  Issues Task Force  Issue No.  99-19  ("EITF  99-19")
"Reporting  Revenue  Gross as a Principal  vs. Net as an Agent"  which  provides
guidance on the  recognition  of revenue  gross as a principal  versus net as an
agent.

Use of Estimates

           The  preparation of 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 contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.


Concentration of Credit Risk

           The Company  frequently  extends trade credit in connection  with its
auction  sales,  which  are held  throughout  the  United  States.  The  Company
evaluates each customer's  creditworthiness on a case-by-case  basis;  generally
the  customers  who  receive  trade  credit are  professional  dealers  who have
regularly  purchased  property at the  Company's  auctions  or whose  reputation
within the industry is known and respected by the Company.

           In situations where trade credit is extended, the purchaser generally
takes  possession of the property before payment is made by the purchaser to the
Company,  and the Company is liable to the consignor for the net sales  proceeds
(auction  hammer price less  commission  to the  Company).  The Company pays the
consignor  generally not later than the 45th day after the sale,  and when trade
credit is extended,  the Company  assumes all risk of loss  associated  with the
trade credit,  and the  responsibility  of collection of the trade credit amount
from  the  purchaser.  Losses  to date  under  these  situations  have  not been
material.

           Certain  significant sales of inventory owned by the Company are made
with extended  payment terms (up to twelve months).  The Company  evaluates each
customer's credit worthiness on a case-by-case basis;  generally these customers
are professional dealers or other individuals who have purchased property at the
Company's  auctions  or whose  reputation  within  the  industry  is  known  and
respected by the Company.  These significant  receivables are  collateralized by
certain assets held by the Company.

Cash Equivalents and Concentration of Cash

           The Company  considers  all highly liquid  investments  with original
maturities of three months or less to be cash equivalents. The Company maintains
its cash in bank deposit accounts,  which, at times may exceed federally insured
limits. The Company has not experienced any losses in such accounts.

Inventories

                Inventories  are  stated at the  lower of cost or  market  which
reflects management's estimates of net realizable value. In instances where bulk
purchases are made, the cost  allocation is based on the relative  market values
of the respective  goods.  The Company has agreements with certain  suppliers to
share the net profits or losses  attributable  to the sale of specific  items of
inventory.  As of June 30,  2001 and 2000 the amount of  inventories  subject to
these arrangements was approximately $4,800 and $4,500,  respectively,  which is
included in current inventory in the accompanying consolidated balance sheets.

                   The Company  periodically reviews the age and turnover of its
inventory to determine  whether any inventory has declined in value and incurs a
charge to operations for such declines.  Inventory,  which is not expected to be
sold  within  one year,  is  classified  with  other  Non-Current  Assets in the
accompanying consolidated balance sheets.

Property and Equipment

           Property and equipment are carried at cost.  Depreciation is computed
using the straight-line  method.  When assets are retired or otherwise  disposed
of, the cost and related accumulated depreciation are removed from the accounts,
and any resulting  gain or loss is  recognized in results of operations  for the
period.  Leasehold  improvements are amortized over the


                                       37
<PAGE>


                           Greg Manning Auctions, Inc.
                   Notes to Consolidated Financial Statements
            ($ in Thousands Except for Per Share Amounts or as noted)


shorter of the estimated useful lives or the remaining life of the lease,  which
is  generally 5 years.  Equipment,  furniture  and  fixtures,  and  vehicles are
amortized  over a period of generally 5 years or less.  Property  under  capital
leases are amortized  over the life of the lease which is normally three to five
years. The cost of repairs and maintenance is charged to operations as incurred.

Web Site Development Costs

           Web site development  costs include expenses  incurred by the Company
to maintain,  monitor and manage the Company's  website.  The Company recognizes
the development  costs in accordance with EITF Issue No. 00-02,  "Accounting for
Website  Development  Costs".  As such, the Company  expenses all costs incurred
that relate to the planning and post implementation phases of development of its
website.  Costs incurred in the development  phase are capitalized and amortized
over its estimated  useful life of three years.  Costs associated with repair or
maintenance  for the website or the  development of website content are included
in  general  and  administrative  expenses  in  the  accompanying   consolidated
statement of operations.

Intangible Assets

      Goodwill

                Goodwill  primarily includes the excess purchase price paid over
the fair value of the net assets  acquired.  Goodwill  is being  amortized  on a
straight-line basis over periods ranging from five to twenty years.

      Other Purchased Intangibles

             Other purchased  intangibles  consisting of trademarks and customer
list,  purchased as part of business  acquisitions  are presented net of related
accumulated amortization and are being amortized on a straight-line basis over a
20-year period for trademarks and a 5-year period for customer list.

           The carrying value of intangible assets and other long-lived  assets,
including  equity  method  investments,  are reviewed on a regular basis for the
existence of facts or  circumstances,  both internally and externally,  that may
suggest  impairment.  To  date no  such  impairment  has  been  indicated.  This
evaluation is based on historical and projected  results of operations and gross
cash flow for the underlying business.

 Investments in Marketable Securities

           The  Company  accounts  for  marketable  securities  pursuant  to the
Statement of Financial  Accounting  Standards  (SFAS) No. 115,  "Accounting  for
Certain  Investments in Debt and Equity Securities".  Under this Statement,  the
Company's marketable securities with a readily determinable fair value have been
classified  as  available  for  sale  and  are  carried  at fair  value  with an
offsetting  adjustment to Stockholders'  Equity. Net unrealized gains and losses
on  marketable  securities  are  credited or charged to a separate  component of
Stockholders' Equity, net of tax.

Financial Instruments

           The carrying  amounts of financial  instruments,  including  cash and
cash  equivalents,  accounts  receivable and accounts payable  approximated fair
value as of June 30, 2001 and 2000  because of the  relative  short  maturity of
these instruments. The carrying value of notes receivable,  demand notes payable
to bank and loans  payable  approximated  fair  value at June 30,  2001 and 2000
based upon quoted market prices for the same or similar instruments.

Stock-Based Compensation

           Statement  of  Financial  Accounting  Standards  No. 123 ("SFAS 123")
"Accounting for Stock Based Compensation" allows a company to adopt a fair value
based method of accounting for its stock-based compensation plans or continue to
follow  the  intrinsic  value  method of  accounting  prescribed  by  Accounting
Principles  Board  Opinion  ("APB")  No.  25,  "Accounting  for Stock  Issued to
Employees". The Company accounts for stock-based compensation in accordance with
the provisions of APB No. 25, FASB  Interpretation No. 44 ("FIN 44") "Accounting
for Certain Transactions Involving Stock Compensation - an Interpretation of APB
25", and complies with the disclosure  provisions of SFAS No. 123. Under APB No.
25,  compensation  cost for stock options is measured as the excess,  if any, of
the quoted market price of the Company's stock at the date of the grant over the
amount an employee must pay to acquire the stock.


                                       38
<PAGE>

                           Greg Manning Auctions, Inc.
                   Notes to Consolidated Financial Statements
            ($ in Thousands Except for Per Share Amounts or as noted)


           The Company  accounts for stock issued to non-employees in accordance
with the  provisions of SFAS No. 123 and the EITF Issue No.  96-18,  "Accounting
for Equity Instruments that are Issued to other than Employees for Acquiring, or
in Conjunction with Selling Goods or Services".

Advertising Costs

           Advertising  and catalogue  costs are included in marketing costs and
are  expensed as  incurred,  which  occurs in the same  quarter that the related
auction  takes place.  As a result,  assets of the Company do not include any of
these costs.  Advertising  expenses for the years ended June 30, 2001,  2000 and
1999 were approximately $796, $846 and $1,006, respectively.

Income Taxes

           The Company  recognizes  deferred tax assets and liabilities based on
differences  between  the  financial  reporting  and tax  bases  of  assets  and
liabilities  using the  enacted  tax rates and laws that are  expected  to be in
effect when the differences are expected to be recovered. The Company provides a
valuation  allowance  for  deferred  tax assets  for which it does not  consider
realization of such assets to be more likely than not.

Earnings (loss) per share

               Basic earnings  (loss) per share are computed by dividing  income
(loss) available to common shareholders by the weighted-average number of common
shares  outstanding  during the  period.  Diluted  earnings  (loss) per share is
computed by dividing  income  (loss)  available  to common  shareholders  by the
weighted-average number of common shares outstanding during the period increased
to  include  the  number  of  additional  common  shares  that  would  have been
outstanding  if the  dilutive  potential  common  shares  had been  issued.  The
dilutive  effect  of the  outstanding  options  would be  reflected  in  diluted
earnings per share (loss) by application of the treasury stock method.

Comprehensive income

                        Comprehensive  income as defined  includes all changes
in equity (net assets) during a period from non-owner sources. Accumulated other
comprehensive  income,  as presented on the  accompanying  consolidated  balance
sheets consist of the net unrealized gains (losses) on securities, net of tax.

Segment Information

           The Company operates principally in one segment consisting of various
collectibles.  All of the Company's sales and identifiable assets are located in
the United States. No individual  customer  accounted for 10% or more of revenue
for the years ended June 30, 2001, 2000 and 1999.

New Accounting Pronouncements

           In June 1998,  the  Financial  Accounting  Standards  Board  ("FASB")
issued  SFAS  No.  133,  Accounting  for  Derivative   Instruments  and  Hedging
Activities.  As amended  by SFAS 138,  SFAS No 133 is  effective  for all fiscal
quarters of all fiscal years beginning after June 15, 2000.  During Fiscal 2001,
the Company  adopted this  statement.  SFAS No. 133  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts,  and for hedging activities.  There was
no impact from the adoption of this statement.

           In  June  2001,  the  FASB  issued   Statement  No.  141,   "Business
Combinations",  and Statement No. 142,  "Goodwill and Other Intangible  Assets".
Statement  141 requires  that the purchase  method of accounting be used for all
business  combinations  initiated  after June 30,  2001 as well as all  purchase
method business  combinations  completed after June 30, 2001. Statement 141 also
specifies  criteria  intangible  assets  acquired in a purchase  method business
combination  must  meet to be  recognized  and  reported  apart  from  goodwill.
Statement 142 will require that goodwill and intangible  assets with  indefinite
useful lives no longer be  amortized,  but instead be tested for  impairment  at
least annually in accordance with the provisions of Statement 142. Statement 142
will  also  require  that  intangible  assets  with  estimable  useful  lives be
amortized  over  their  respective  estimated  useful  lives to their  estimated
residual  values,  if any, and reviewed for  impairment in accordance  with SFAS
Statement No. 121,  "Accounting for the Impairment of Long-Lived  Assets and for
Long-Lived Assets to be Disposed of".


                                       39
<PAGE>

                           Greg Manning Auctions, Inc.
                   Notes to Consolidated Financial Statements
            ($ in Thousands Except for Per Share Amounts or as noted)


      The Company had not initiated any business  combinations  prior to July 1,
2001. Goodwill and intangible assets acquired in business combinations completed
before July 1, 2001 will continue to be amortized  and tested for  impairment in
accordance with the appropriate  pre-Statement 142 accounting requirements prior
to the adoption of Statement 142.

      Statement  141 will  require,  upon  adoption of Statement  142,  that the
Company evaluate its existing  intangible assets and goodwill that were acquired
in  a  prior  purchase  business   combinations,   and  to  make  any  necessary
reclassifications in order to conform with the new criteria in Statement 141 for
recognition  apart from  goodwill.  Upon adoption of Statement  142, the Company
will be  required  to  reassess  the  useful  lives and  residual  values of all
intangible  assets  acquired,   and  make  any  necessary   amortization  period
adjustments by the end of the first interim period after adoption.  In addition,
to the extent an intangible  asset is identified as having an indefinite  useful
life, the Company will be required to test the  intangible  asset for impairment
in  accordance  with the  provisions  of Statement  142 within the first interim
period.  Any  impairment  loss will be measured  as of the date of adoption  and
recognized as the cumulative  effect of a change in accounting  principle in the
first interim period.

      In  connection  with  Statement  142's  transitional  goodwill  impairment
evaluation,  the Statement  will require the Company to perform an assessment of
whether  there is an  indication  that  goodwill  is  impaired as of the date of
adoption.  To accomplish this, the Company must identify its reporting units and
determine the carrying  value of each reporting unit by assigning the assets and
liabilities,  including the existing  goodwill and intangible  assets,  to those
reporting units as of the date of adoption. The Company will then have up to six
months from the date of adoption to determine  the fair value of each  reporting
unit and compare it to the reporting  unit's  carrying  amount.  To the extent a
reporting  unit's carrying  amount exceeds its fair value, an indication  exists
that the reporting  unit's goodwill may be impaired and the Company must perform
the second step of the  transitional  impairment  test. In the second step,  the
Company must compare the implied fair value of the  reporting  unit's  goodwill,
determined  by allocating  the  reporting  unit's fair value to all of it assets
(recognized and  unrecognized) and liabilities in a manner similar to a purchase
price allocation in accordance with Statement 141, to its carrying amount,  both
of which  would be  measured  as of the date of  adoption.  This  second step is
required to be completed  as soon as possible,  but no later than the end of the
year of adoption.  Any  transitional  impairment  loss will be recognized as the
cumulative effect of a change in accounting principle in the Company's statement
of earnings.

      Due to the extensive effort needed to comply with adopting  Statements 141
and 142, it is not  practicable  to  reasonably  estimate the impact of adopting
these  Statements  on the  Company's  financial  statements  at the date of this
report,  including  whether it will be required to  recognize  any  transitional
impairment losses as the cumulative effect of a change in accounting principle.

Reclassifications

      Certain  reclassifications  have been made to the  prior  years  financial
statements in order to conform to the current year presentation.


(2) Acquisitions and Mergers

      During 2000,  the Company  formed Greg  Manning  Direct,  Inc.  ("GMD") to
produce and market collectibles for the mass merchandising market. In connection
with this  transaction,  the Company signed a management  agreement with Tristar
Products,  Inc.("Tristar"),  a privately owned company, to manage the operations
of GMD.  Terms of the  agreement  include the  collaboration  of the Company and
Tristar to develop and market  collectibles for the mass  merchandising  market.
Effective May 2000, GMD purchased certain assets of Tristar for an amount not to
exceed $12,000 payable in the Company's  common stock over a specified period of
time.  In  conjunction  with the  acquisition,  Tristar  was issued  warrants to
purchase 49% of GMD,  exercisable  for nominal cash  consideration  plus certain
remaining collectibles-related assets of Tristar, including computers and rights
under employment agreements and other matters as specified in the agreement. The
acquisition  has been accounted for under the purchase  method of accounting and
accordingly,  the assets acquired and liabilities  assumed have been recorded at
their  estimated  fair  values.  The excess of aggregate  cost of  approximately
$2,800 which represents common stock issued over the estimated fair value of net
assets acquired was allocated  exclusively to goodwill,  which will be amortized
over a five-year period.


                                       40
<PAGE>


                           Greg Manning Auctions, Inc.
                   Notes to Consolidated Financial Statements
            ($ in Thousands Except for Per Share Amounts or as noted)


      Effective February 18, 2000, the Company acquired all of the capital stock
of Spectrum Numismatics  International,  Inc., ("Spectrum") a wholesaler of rare
coins  based in Santa  Ana,  California,  in  exchange  for $25  million  in the
Company's  common  stock.  The  acquisition  was  recorded  using the pooling of
interests  method of  accounting.  Accordingly,  all prior  financial  statement
information reflect the historical balances of Spectrum.

      Separate  results of  operations  for  periods  prior to the  merger  with
Spectrum are as follows:

                                     Company      Spectrum      Combined
                                  -----------------------------------------
 Year ended June 30, 2000
      Total Revenue                   $ 36,930     $ 25,448*      $ 62,379
      Net Loss
                                       (3,230)        (438)*       (3,668)

 Year ended June 30, 1999
      Total Revenue                   $ 14,799      $ 62,684      $ 77,484
      Net Income                           580           242           822

* Historical  results for the period July 1, 1999 through February 18, 2000, the
acquisition date.

      On October 29, 1998, the Company  completed the  acquisition of all of the
common  stock of  Teletrade,  Inc. The purchase  price for the  acquisition  was
approximately  $5,895 consisting of $1,875 in securities of the Company,  $3,000
in cash,  $675 in  promissory  notes,  $75 in options to purchase the  Company's
common stock and $270 in  acquisition  related  expenses.  The  acquisition  was
recorded  using the  purchase  method of  accounting.  Substantially  all of the
purchase  price was allocated to goodwill and other acquired  intangibles  which
are being amortized over the estimated  useful lives.  The results of operations
of Teletrade are included from October 30, 1998.

      On November  17,  2000,  the  Company,  through  Spectrum,  completed  the
acquisition  of all of the  capital  stock of an ongoing  coin  company in which
Spectrum  previously  owned a  minority  interest.  The  purchase  price for the
acquisition  was  approximately  $1,038,  consisting  of  cash  and  contributed
intangibles.

      Acquisition  and  merger  costs of  approximately  $205,  $926 and $0 were
incurred and charged to expense  during the years ended June 30, 2001,  2000 and
1999, respectively,  for services rendered to facilitate the completion of these
transactions.


(3) Receivables

      Advances  to  consignors  represent  advance  payments,  or loans,  to the
consignor  prior to the auction sale,  collateralized  by the items received and
held by the  Company  for the  auction  sale and the  proceeds  from such  sale.
Interest on such  amounts is  generally  charged at an annual rate of 12%.  Such
advances generally are not outstanding for more than six months from the date of
the note.

           As of June 30, 2001 and 2000,  the  allowance  for doubtful  accounts
included in auction receivables was approximately $845 and $826, respectively.


(4) Marketable Securities

        Investments in available for sale  marketable  securities as of June 30,
2001 and 2000 is as follows:


                                       41
<PAGE>


                           Greg Manning Auctions, Inc.
                   Notes to Consolidated Financial Statements
            ($ in Thousands Except for Per Share Amounts or as noted)


                                              Market        Unrealized
                              Cost            Value         Gain (Loss)
                           ----------       ---------      ------------
Common Stock - 2001        $     385        $    147       $   (238)
                           ==========       =========      ==========
Common Stock - 2000        $     385        $    231       $   (154)
                           ==========       =========      ==========

The  unrealized  loss is  classified  as a separate  component of  stockholder's
equity,  net of tax, as of June 30, 2001 and 2000,  respectively.  In connection
with its ownership of this common  stock,  the Company was granted stock options
for 21,000 shares of common stock under the terms of a nonqualified stock option
agreement. The options are exercisable on April 1, 2006 at $5 per share.

During the year ended June 30, 1999,  the Company  sold 2.3 million  shares of a
stock,  resulting  in a pre-tax  gain on the sale of  marketable  securities  of
approximately $ 2,028.


5) Inventories

                                             June 30, 2001
                                             -------------

                                    ---------   ----------    --------
                                     Current    Non-Current     Total
                                    ---------   ----------    --------
        Stamps                      $   1,151      $   500    $ 1,651
        Sports Collectibles               957          350      1,307
        Coins                           7,971          500      8,471
        Art                               312            -        312
        Other                           2,475          350      2,825
                                    ---------      -------    --------
                                    $  12,866      $ 1,700    $ 14,566
                                    =========      =======    ========


                                              June 30, 2000
                                              -------------

                                    ---------   ----------    --------
                                     Current    Non-Current     Total
                                    ---------   ----------    --------
       Stamps                       $   3,609      $  500     $ 4,109
       Sports Collectibles              4,004                   4,004
       Coins                            8,882       1,000       9,882
       Art                                315                     315
       Other                            3,791         900       4,691
                                    ---------      -------    --------
                                       20,601       2,400      23,001
                                    =========      =======    ========


The non-current  inventory  represents an estimate of total inventory,  which is
not  expected to be sold within one year.  At June 30, 2001 and 2000,  the above
inventory  amounts  reflect  net  realizable  allowances  of  $2,902  and  $514,
respectively.



                                       42
<PAGE>


                           Greg Manning Auctions, Inc.
                   Notes to Consolidated Financial Statements
            ($ in Thousands Except for Per Share Amounts or as noted)


(6) Property and Equipment, net at June 30,

                                              2001          2000
                                            --------       ------
 Equipment                                    $3,029       $2,030
 Furniture and fixtures                          270          307
 Vehicles                                         67           67
 Property under capital leases (computers
  and office equipment)                          186          186
 Leasehold improvements                          503          491
                                            --------       ------
                                               4,055        3,081
 Less accumulated depreciation  and
  amortization                                 2,633        2,153
                                            --------       ------
 Net property and equipment                  $ 1,422       $  928
                                            ========       ======


Depreciation  and  amortization  expense for the years ended June 30, 2001, 2000
and 1999 was  approximately  $480,  $464 and $397  respectively.  These  amounts
include  amortization of assets under capitalized  leases of approximately  $23,
$17 and $11, respectively for the years then ended.

(7) Goodwill and Other Purchased Intangibles, net


                                       Accumulated
    Intangible Asset         Gross     Amortization     Net
-------------------------  ----------  ------------  ----------

June 30, 2001
-------------
 Goodwill                    $ 8,452       $ 3,330     $ 5,122
 Other intangible assets       4,105         1,083       3,022

June 30, 2000
-------------
 Goodwill                    $ 7,457         $ 857     $ 6,601
 Other intangible assets       3,400           378       3,022


           Amortization expense,  including intangible impairment, for the years
ended June 30,  2001,  2000 and 1999 was  approximately  $3,178,  $548 and $342,
respectively.  Based on the projected  profitability  and future discounted cash
flows  associated  with the Company's  current  product lines, it was determined
that the goodwill  relating the these product lines were impaired.  As a result,
the Company recorded a charge of approximately $2.2 million. (See Note 18.)

(8) Investment in Equity-Method Investees

      On  February  15,  2000,  GMAI-Asia.com  acquired  from  China  Everbright
Technology  Limited a 65%  interest  in China  Everbright  Telecom-Land  Network
Limited (a British Virgin Islands  company) for  consideration of 30,000 Chinese
Renmimbi  (approximately  US$3,624,  using a  conversion  rate of RMB  8.2788 to
US$1.00),  payable in the Company's  common  stock,  and  GMAI-Asia.com,  Inc.'s
guarantee of 40,000 Chinese Renmimbi  (approximately  US $4,832) of indebtedness
of  China  Everbright   Telecom-Land's  Shanghai  subsidiary;   entered  into  a
shareholders'   agreement   governing  the   management   of  China   Everbright
Telecom-Land  and its  Shanghai  subsidiary  and  provided  GMAI-Asia.com,  Inc.
certain  rights to  acquire  the  remaining  35%  interest  in China  Everbright
Telecom-Land;   entered  into  a  management  agreement  with  China  Everbright
Telecommunication  Products Limited (an unconsolidated  affiliate); and received
an  option to  acquire  a 65%  interest  in China  Everbright  Telecommunication
Products  for  nominal  consideration  and certain  rights  with  respect to the
remaining 35% interest in China Everbright Telecommunication Products.

      In addition, the Company has guaranteed performance by GMAI-Asia.com, Inc.
of certain obligations in these various transactions,  and registered the shares
of the Company's stock that were issued to China Everbright  Technology Limited.
China Everbright  Telecom-Land and its Shanghai subsidiary are currently engaged
in the wholesale and retail sale


                                       43
<PAGE>


of consumer  telecommunication  and electronic products in China. These entities
sell their products through China Everbright Telecommunication Products' network
of  retail  stores.  GMAI-Asia.com  pledged  its  interest  in China  Everbright
Telecom-Land  and its  rights  under the  management  agreement  and the  option
referred  to  above to China  Everbright  Group,  Inc.,  an  affiliate  of China
Everbright Technology Limited.

      At  June  30,  2000,  the  Company's   investment  in  this  investee  was
approximately  $5,329 and the Company maintained an equity ownership  percentage
(on an undiluted basis) in GMAI-Asia of 48%. Accumulated losses for GMAI-Asia at
June 30, 2001 were approximately  $11,229. The Company's portion of that loss is
approximately  $5,390. The investment in this investee has been reduced to $0 at
June 30, 2001. During May 2001, the Company sold 500,000 shares of its GMAI-Asia
common shares,  which reduced the Company's investment from 48% to 45% (See Note
14).

      The Company  maintained a 20% ownership interest in a coin company through
its 100% ownership of Kensington Associates,  L.L.C. (a holding company) through
August 2000. During the year ended June 30, 1999,  Kensington Associates sold an
investment  in a coin company in exchange for $300 in cash and 57,000  shares of
common stock of another  corporation  valued at $285 which resulted in a gain of
approximately $532.

Summarized balance sheet information of the Company's equity method investees as
of June 30, 2001 and 2000 is approximately as follows:

                                  2001              2000
                              (unaudited)       (unaudited)
                            ------------------------------
Current Assets                $   5,203          $ 29,111
Non Current Assets               24,626             1,975
Current Liabilities              19,898            13,081
Non Current Liabilities           6,624             5,188

           Summarized  statements  of  operations  information  of the Company's
equity-method investees, calculated for the periods during which the Company had
investments in such investees, is approximately as follows:

                                                For the years ended June 30,
                                                          (unaudited)
                                                  2001       2000        1999
                                               ---------   --------    -------
 Net Sales                                     $    992    $ 24,648    $ 25,132
 Gross Profit                                        18       5,167       4,221
Selling, General and
Administrative expense                             (280)     (6,481)     (3,683)
Goodwill amortization                            (2,294)          -           -
Write-off relating to Advances to Affiliates     (4,347)          -           -
                                               ---------   --------    --------
 Net Income (Loss)                             $ (6,903)   $ (1,314)   $    538
                                               =========   ========    ========


(9) Income Taxes

           Deferred tax attributes  resulting from differences between financial
accounting  amounts and tax basis of assets and liabilities at June 30, 2001 and
2000 are as follows:

        Current assets and liabilities
                                                           2001       2000
                                                         -------     -----
             Allowance for doubtful accounts             $   364     $ 328
             Inventory uniform capitalization                223       357
             Accrued Expenses                                183         -
             Inventory valuation reserve                   1,248       206
                                                         -------     -----
        Sub-total                                          2,018       891
             Valuation allowance, provision
               for income taxes                             (428)      (67)
                                                         -------     -----
        Net current deferred tax asset                   $ 1,590     $ 824
                                                         =======     =====



                                       44
<PAGE>


        Noncurrent assets and liabilities
            Intangible Impairment                        $   472   $     -
            Goodwill                                           7       (42)
            Depreciation                                     322       179
            Organizational costs                               -        42
            Net federal and state operating loss
            carryforward                                   4,279     1,813
          Investments in equity-method investees           2,425       354
                Investments in marketable securities         102        62
                Other                                         20        20
                                                         -------   -------
        Sub-total                                          7,627     2,428
            Valuation allowance, provision for
              income taxes                                (5,034)     (469)
            Valuation allowance, equity                      (39)      (39)
                                                         -------   -------
        Net noncurrent deferred tax asset                $ 2,554   $1,920
                                                         =======   =======

The Company believes  uncertainty  exists  regarding the  realizability of these
items,  and  accordingly,  has  established  a  valuation  allowance,  based  on
management's  estimates,  against  certain  deferred tax assets.  The  valuation
allowance primarily consists of net operating loss carryforwards. The portion of
the valuation allowance which will affect equity and which will not be available
to offset future  provisions  of income tax is stated as  "Valuation  allowance,
equity".  The valuation allowance increased by $4,908 and $253 in 2001 and 2000.
The change in  valuation  allowance  in 2001  compared  to 2000,  resulted  from
management's  evaluation  of the  utilization  of state  and  federal  operating
carryforward  tax losses.  The  realization  of the above deferred tax assets is
dependent on generating  sufficient  taxable  income in the future to offset the
deductibility of temporary  differences  generating the deferred tax assets. The
amount  of the  deferred  tax asset  considered  realizable,  however,  could be
reduced if the estimates of future taxable income are reduced.

The  provision  for  (benefit  from)  income  taxes for the years ending June 30
consist of the following:

                                                 Years ended June 30,
                                      --------------------------------------
                                         2001           2000           1999
                                      --------         ------         ------
   Current tax expense benefit        $     13         $ (425)        $  764
   Deferred tax benefit                 (6,325)          (983)          (278)
   Net Change in valuation allowance     4,908           (253)           (25)
                                      --------        -------         ------
                                      $ (1,404)       $(1,661)        $  461
                                      ========        =======         ======


The current  tax  expense  for the year ended June 30, 1999 has been  reduced by
approximately $25 due to the utilization of state net operating losses.

Prior to February 18, 2000, Spectrum was taxed under the Subchapter S provisions
of the  Internal  Revenue  Code  ("IRC")  whereby its profits and losses  flowed
directly to its former  shareholder for U.S.  federal income tax purposes.  Upon
acquisition of Spectrum by the Company,  Spectrum no longer  qualified under the
Subchapter S provisions  of the IRC and became a taxable  entity for federal and
state purposes. In connection with Spectrum's change in tax status , the Company
reduced its income tax benefit by approximately  $59 for the year ended June 30,
2000.

The effective tax rate (benefit) varied from the statutory rate as follows:

                                                       Years ended June 30,
                                                ------------------------------
                                                  2001        2000       1999
                                                --------    --------    ------
   Statutory Federal income tax rate              (34%)      (34%)        34%
   State income taxes, net of federal benefit     (6%)        (6%)        6%
   Certain non-deductible expenses                 5%          2%         7%
   Non deductible acquisition costs                 -          8%          -
   Change in valuation allowance                   28%         5%          -
   Other                                          (1%)        (6%)       (3%)
                                                --------    --------    ------
                                                  (8%)       (31%)        44%
                                                  ====       =====        ===

The Company has a federal  net  operating  loss  carryforward  of  approximately
$10,100 expiring at various times beginning the fiscal years ending 2019 through
fiscal  year  ended  2021.   The   utilization   of  these  net  operating  loss
carryforwards may be


                                       45
<PAGE>


significantly  limited  in  under  the  Internal  Revenue  Code as a  result  of
ownership changes due to the Company's stock and other equity offerings.

The Company  has net  operating  loss  carryforwards  for state tax  purposes of
approximately  $16,600  expiring at various times  beginning in the fiscal years
ending 2002 through 2008.


(10) Debt

Demand Notes Payable
                                                                   June 30,
                                                                2001     2000
                                                              -------   -------
The Company has a credit  agreement with Brown Brothers
Harriman & Co.  ("Brown  Brothers")  pursuant  to which
Brown  Brothers  agreed to provide the  Company  with a
credit  facility of up to $2,400.  The Company plans to
repay all outstanding balances by October 31, 2001. The
Company  pays an annual fee for the  facility  equal to
one quarter of one percent of the total  amount of such
facility.  Borrowings under this facility bear interest
at the rate of 2% above Brown Brothers base rate, which
was  7.75 % and  8.25%  at  June  30,  2001  and  2000,
respectively, and are repayable on demand.                    $ 2,400    $1,600

Spectrum has a revolving  credit agreement with Bank of
America  pursuant  to which Bank of  America  agreed to
provide  Spectrum  with  a  credit  facility  of  up to
$10,000,  subject  to  adjustments  as  defined  in the
agreement.  The Company plans to repay all  outstanding
balances  under this facility by October 31, 2001.  The
loan  agreement  allows  for  borrowings  based  on the
lesser  of  $10,000  or  a   percentage   of   eligible
inventories  and  accounts  receivable  or  50%  of the
market value of GMAI stock pledged as  collateral.  The
Company  pays an annual fee for the  facility  equal to
one quarter of one percent of the total  amount of such
facility.  Borrowings under this facility bear interest
at Bank of  America  base  rate,  which  was 8.25 % and
7.25% at June  30,  2000 and  2001,  respectively.  The
credit  facility  is  personally   guaranteed  by  Greg
Manning who has pledged  700,000  shares of the Company
owned personally by Mr. Manning. Additionally, the line
is  collateralized by all of the assets of Spectrum and
is  guaranteed   by  GMAI.  In  connection   with  this
agreement,  the  Company  pays Mr.  Manning a guarantee
debt fee which is based on 3% per annum of the  average
loan balance outstanding each month.                            5,200     6,350

Advance from a consignor  which was,  upon  settlement,
converted to a demand loan bearing an interest  rate of
15% per annum.                                                    440         -
                                                              -------   -------
                Total Demand Notes Payable                    $ 8,040   $ 7,950
                                                              =======   =======



                                       46
<PAGE>


Other borrowings:
                                                                   June 30,
                                                                 2001     2000
                                                           ---------------------
               Notes payable to current shareholder
               related to
               Indebtedness of Teletrade prior to its              $-      $ 75
               acquisition

               Notes payable to former shareholders of
               Teletrade
               Related to indebtedness prior to its                19        88
               acquisition

               Various capital lease obligations, various
               monthly
               payments through  2006                             224       130
                                                           ---------------------
               Less current                                       243       296
               portion                                             75       182
                                                           ---------------------
               Notes payable - long-term                        $ 168      $111
               portion                                          =====      ====


The  aggregate  amount of all  maturities  for the years  ending  June 30 are as
follows:
                                               2002              $ 75
                                               2003                60
                                               2004                72
                                               2005                26
                                               2006                10
                                                    ------------------
                                                                 $243

            The Company's  obligations  to Brown Brothers under the above credit
loan facility is collateralized by the Company's accounts  receivable,  advances
to consignors,  and inventory. For the year ended June 30, 2001, the Company was
not in compliance with guidelines in the loan agreement  relating to the formula
of earnings  before  interest,  depreciation  and taxes to interest  expense and
increases  in  tangible  net worth (as defined in the  agreement).  As a result,
Brown  Brothers  has the right under the credit  agreement  to demand  immediate
repayment of all amounts  outstanding  without the otherwise  applicable 120-day
notice  period.  As of the date of this report,  Brown Brothers had not demanded
such repayment.

         The Company is  currently  seeking new sources of  financing to replace
its current credit facilities.

(11) Leases
           The Company  conducts  its  business  on  premises  leased in various
locations  under leases that expire through the year 2006. The Company  utilizes
property and equipment under both operating and capital  leases.  Future minimum
lease  payments  under  noncancelable  leases in effect at June 30, 2001 are set
forth below:

                                       Operating  Capital    Total
                                ----------------------------------
           2002                           $537     $58       $595
           2003                            494      67        561
           2004                            435      72        507
           2005                            381      35        416
           2006                            196      10        206
                                ----------------------------------
           Total future minimum lease   $2,043   $ 242    $ 2,285
                                        ======   =====    ========
           payments

           Rent expense was approximately $439, $339 and $206 for 2001, 2000 and
1999, respectively.

           Interest   expense   associated   with  these   capital   leases  was
approximately   $33,  $24  and  $17  for  fiscal  years  2001,  2000  and  1999,
respectively.


                                       47
<PAGE>


(12) Related-party Transactions

      The Company accepts rare stamps and other collectibles for sale at auction
on a consignment basis from Collectibles  Realty Management,  Inc. ("CRM") which
is owned by Greg Manning.  Such stamps and  collectibles  have been auctioned by
the Company or sold at private treaty under  substantially the same terms as for
third party  customers.  The Company charges CRM a seller's  commission.  In the
case of auction, the hammer price of the sale, less the seller's commission (for
lots valued at under $100; no seller's  commission is payable for lots valued at
over  $100),  is paid to CRM upon  successful  sale,  and in the case of private
treaty,  the net price after selling  commissions  is paid to CRM. For the years
ended June 30, 2001 and 2000,  such  auction and  private  treaty  sales (net of
commission) were not material.  Included in Accounts Receivable at June 30, 2001
and 2000 is approximately $41 and $31,  respectively,  which is due from CRM and
will be collected in the ordinary course of business.

           Scott Rosenblum,  a director of the Company,  is a partner of the law
firm Kramer,  Levin,  Naftalis & Frankel,  LLP, which provides legal services to
the Company.  Anthony L.  Bongiovanni,  Jr., also a director of the Company,  is
president of Micro Strategies, Incorporated, which provides computer services to
the Company. Richard Cohen, also a director of the Company,  provided consulting
services for the Company. In relation to Kramer, Levin, Naftalis & Frankel, LLP,
expenditures  for  services  rendered  were  approximately  $326,  $424 and $324
respectively  of which,  approximately  $247,  $371 and  $129,  was  charged  to
operations  in fiscal  2001,  2000 and 1999.  In relation  to Micro  Strategies,
Incorporated,  expenditures for services rendered were approximately  $769, $464
and $154, respectively,  of which, approximately $175, $310 and $113 was charged
to  operations  in fiscal  2001,  2000 and 1999.  In relation to Richard  Cohen,
expenditures for services  rendered were  approximately  $33, $40 and $0, all of
which was charged to operations.

           For  the  years  ended  June  30,  2001,   2000  and  1999  sales  of
approximately $353 (1% of revenues), $5,995 (9% of revenues) and $18,900 (24% of
revenues)  were  made  to an  equity  method  investee  of the  Company,  former
stockholders  of  Spectrum  and/or  entities  in  which  they  had an  ownership
interest,  who are current  stockholders of the Company.  Payments made to these
entities  approximated  $6,302,  $2,300 and $2,700 for the years  ended June 30,
2001, 2000 and 1999, respectively.

           Prior to the  Spectrum  acquisition,  Spectrum was indebted to one of
their  stockholders  (a current  stockholder  of the Company) under the terms of
three secured notes which were due on demand and allowed for maximum  borrowings
of  approximately  $5,000.  These  notes were paid in full during  fiscal  2000.
Interest expense  associated with these notes were  approximately  $242 and $498
for the years ended June 30, 2000 and 1999, respectively. Additionally, Spectrum
paid  this  individual  approximately  $95 and  $746  for  consulting  and  debt
guarantee fees for the years ended June 30, 2000 and 1999, respectively.

           In the normal course of business,  Afinsa  consigned  material to the
Company,  which was  auctioned  during the fiscal year ended June 30, 1999 for a
total hammer price of $316 and purchased  artwork  totaling  $850. In the normal
course of business,  the Company sold to Afinsa  consigned  goods for a total of
$1,000. As of June 30, 2001 and June 30, 2000,  Afinsa has outstanding  accounts
receivable balances of approximately $71 and $614,  respectively.  During fiscal
2000, Afinsa purchased other product totaling approximately $254.

           The  Company  acts  as an  agent  of  Afinsa  regarding  their  stock
subscription  agreement  with  GMAI-Asia.com,  Inc.  Under this  agreement,  the
Company  receives  funds from Afinsa and advances  such funds to  GMAI-Asia.com,
Inc. on an as-needed basis.  There is no segregation of these funds. Such amount
liable to be paid to GMAI-Asia.com, Inc. is $90 and $2,421, respectively at June
30, 2001 and 2000 and is included in Advance from related party.

           During the years ended June 30, 2001 and 2000,  the Company  paid Mr.
Manning  approximately $188 and $68,  respectively,  of debt guarantee fees (see
Note 10).


                                       48
<PAGE>


(13) Commitments and Contingencies

           As part of the purchase of the Ivy & Mader Philatelic Auctions,  Inc.
(Ivy") in 1993, the Company is required to pay  additional  amounts for a period
of time through 2009 based on the financial performance of Ivy. These additional
amounts  totaled  approximately  $54,  $42 and $66 for the years  ended June 30,
2001,  2000 and 1999,  respectively,  and are  accounted  for as an  increase to
goodwill and amortized over the goodwill's remaining life.


(14)  Stockholders' Equity

Common Stock

   On February 18, 2000, the Company's shareholders approved an amendment to the
Company's  restated  Certificate  of  Incorporation  to  increase  the number of
authorized shares of common stock from 20 million to 40 million.

Private Placement Equity Transactions

      On May 14, 2001, the Company  entered into an agreement with The Tail Wind
Fund  Ltd.,  LBI Group  Inc.,  and  Lombard  Odier & Cie which  amended  certain
provisions  of the  original  purchase  agreement  between  the Company and such
investors,  dated January 25, 2000.  Under the amendment,  the investors  waived
rights to receive  additional  stock of the Company pursuant to the terms of the
original  agreement,  (which  they  received  as  anti-dilution  protection)  in
exchange for the issuance to the investors of an aggregate of 627,500  shares of
the  Company's  common stock,  par value $.01 per share,  and subject to certain
other conditions. In addition, on that date, the Company entered into a purchase
agreement  with The Tail Wind Fund Ltd.  pursuant to which the  Company  sold an
aggregate of 500,000  shares of common stock of  GMAI-Asia.com,  Inc., par value
$1.00 per share, owned by it to such investor.

      In addition,  during the fourth quarter the Company entered into two stock
purchase  agreements  with  Auctentia,   S.A.  ("Auctentia"),   a  wholly  owned
subsidiary  of  Afinsa  Bienes  Tangibles,  S.A.  ("Afinsa").  Under  the  first
agreement,  dated as of May 16, 2001, the Company issued to Auctentia  1,000,000
shares of the Company's  common  stock,  for an aggregate  purchase  price of $2
million.  Under the second  agreement,  dated as of May 23,  2001,  the  Company
agreed to issue an additional  1,000,000 shares of the Company' common stock for
an aggregate purchase of $2 million, in five installments (which vary in amount)
commencing  June 15, 2001 and ending  October 15, 2001.  Subsequent  to June 30,
2001, Afinsa has paid $1,400 for 700,000 shares.

      In late  January  and  early  February  2000,  GMAI  issued  in a  private
placement to certain  investors an aggregate of 750,000  shares of the Company's
common stock for approximately $ 11,273,000, net of expenses, In connection with
this  transaction,  warrants to acquire  142,500 shares of the Company's  common
stock were  issued to these  investors  and their  advisors.  The  warrants  are
immediately exercisable at prices ranging from $18.85 to $24.52 per share.

      On  January  31,  2000,  the  Company  issued  in a private  placement  to
Amazon.com,  Inc. 285,551 shares of the Company's common stock,  together with a
warrant to acquire  25,000 shares of the  Company's  common stock at an exercise
price per share of $20.19. The warrant is immediately exercisable.

      During the year ended June 30,  1999,  the  Company  entered  into a stock
purchase  agreement with Afinsa whereby Afinsa agreed to purchase 475,624 shares
of the  Company's  Common Stock for an aggregate  purchase  price of $5 million.
During the year ended June 30, 1999, the Company received $2 million from Afinsa
and issued  172,251  shares of common  stock , the Company had  recorded a stock
subscription  receivable  for the  remaining  285,373  shares with an  aggregate
purchase  price of $3 million.  This amount was received  from Afinsa on July 9,
1999.

Common Stock Repurchases

          During April 2000,  the  Company's  Board of Directors  ("the  Board")
authorized a plan to buy back in the open market up to 500,000  shares of common
stock based upon the Board's  discretion.  The shares will be  purchased  on the
open market and will pay an amount not to exceed the highest  independent bid or
independent  sales price on the Nasdaq  National  market,  whichever  is higher.
However,  on any given day, the Company will not repurchase more than 25% of the
average  daily  trading  volume for the  Company's  common  stock the four weeks
preceding  the week in which the  purchase  was made,  excluding  block  trades.
During the year ended June 30, 2000 the Company  repurchased  99,900  shares for
$1,333.  The Company  repurchased an additional 268,100 shares for approximately
$1,215  during the period July 1, 2000 to June 30,  2001.  A  brokerage  firm is
holding the repurchased shares.


                                       49
<PAGE>


Stock Option Plan

          The Company's  1993 Stock Option Plan (the "1993 Plan") and 1997 Stock
Option Plan, (the "1997 Plan"),  are administered by the Board of Directors or a
Stock Option Committee thereof  (hereinafter,  the "Committee") and provides for
the grant of  options  to  purchase  shares of  common  stock to such  officers,
directors and employees of the Company,  consultants  to the Company,  and other
persons or entities as the Committee may select.  A total of 1,750,000 shares of
common stock has been reserved for issuance  pursuant to the plans as amended by
the  stockholders  on February  18,  2000.  In  addition,  the February 18, 2000
amendment  increased from 100,000 to 200,000 the total number of shares that the
Company may issue to an  individual in any given year.  The  Committee  does not
intend to make any further awards under the 1993 plan. The option exercise price
is determined by the Committee in its sole discretion;  provided,  however, that
generally,  the  exercise  price of an option shall be not be less than the fair
market  value  (as  defined)  of a share  of  common  stock on the date of grant
Options  granted  have a maximum ten year term and vest over  periods up to four
years. All options granted through June 30, 2001 have been granted with exercise
price equal to market value on the date of grant.

The  following  table  summarizes  information  about  options  outstanding  and
exercisable as of June 30, 1999, 2000 and 2001:

<TABLE>
<CAPTION>
                                                       1999                     2000                     2001
                                            -------------------------    ------------------     ----------------------
                                                             Weighted              Weighted                   Weighted
                                                             Average               Average                    Average
                                                             Exercise              Exercise                   Exercise
                                              Options         Price      Options    Price        Options       Price
                                            -----------      --------    -------   --------     ---------     --------
<S>                                         <C>             <C>         <C>        <C>          <C>           <C>
Outstanding - beginning of year                 601,500       1.43       658,125     5.08       1,340,625      11.68
   Granted through stock option plan            277,000       4.28       684,500    14.16         371,500       3.34
   Granted outside of stock option plan         175,000       8.82       167,500    20.07              --         --
   Repurchased                                  (60,000)      3.00            --       --              --         --
   Exercised                                   (335,375)      1.42      (122,875)    1.92         (25,500)      1.58
   Forfeited                                         --                  (46,625)    9.50        (138,625)      8.08
                                            -----------                 --------                ---------
Outstanding - end of year                       658,125       5.08     1,340,625    11.68       1,548,000      10.19

Exercisable - end of year                       280,000       5.24       481,625    10.77         656,625      11.40
                                            ===========                =========                =========
</TABLE>

The weighted  average fair value of options  granted during 1999,  2000 and 2001
was $4.28 and $14.16 and $3.34, respectively.

          Following is a summary of the status of stock options  outstanding  at
June 30, 2001:

<TABLE>
<CAPTION>
                     Options Outstanding                        Options Exercisable
-----------------------------------------------------------    ------------------------
                                    Weighted
                                     Average      Weighted                     Weighted
     Ranges           Number of     Remaining     Average       Number of      Average
-----------------       Shares     Contractual    Exercise       Shares        Exercise
 From        To      Outstanding     Life(1)       Price       Exercisable      Price
-----------------------------------------------------------    ------------------------
<S>         <C>      <C>            <C>           <C>          <C>             <C>
 $1.00      $5.00      522,625        7.39         $2.50         190,625        1.74

  5.01      10.00      128,375        8.48          7.76          27,375        6.72

 10.01      15.00      709,500        7.33         13.72         266,125       13.21

 15.01      20.00      132,500        8.61         18.79         117,500       18.83

 20.01      25.00       55,000        8.60         22.55          55,000       22.55
                     ---------                                   -------
                     1,548,000                                   656,625
                     =========                                   =======
</TABLE>

----------
(1)  in remaining years


Pro Forma Disclosure

   The Company  follows the intrinsic  value method  relating to its  accounting
treatment for its stock options.  Proforma information  regarding net income and
earnings  per share is required by SFAS 123, and has been  determined  as if the
Company


                                       50
<PAGE>


had accounted for its employee stock options under the fair value method of that
statement.  Had compensation cost been recognized based on the fair value at the
date of grant for all options granted during 2001, 2000 and 1999 would have been
as follows:

                                           2001              2000         1999
                                        ---------         ---------      ------
Proforma net income (loss)              $ (18,001)        $  (4,222)     $  752

Proforma earnings (loss) per share
   Basic                                   (1.57)              (.42)        .10
   Diluted                                 (1.57)              (.42)        .10

          The fair value for these  options was  estimated  at the date of grant
using a Black-Scholes  option pricing model with the following  weighted-average
assumptions for 2001, 2000 and 1999,  respectively;  risk-free interest rates of
5.8%, 5.7% and 5.1%;  dividend yields of 0%; volatility  factors of the expected
market price of the Company's common stock of 82%; and weighted-average expected
life of the option of five years for 2001, 2000 and 1999.

          There was no compensation  expense recorded from stock options for the
years ended June 30, 2001, 2000 and 1999.

           During the year ended June 30, 1999, the Company issued stock options
to vendors in  exchange  for  services.  These  options  were valued at the fair
market  value in the  amount of $150  which was  amortized  over the life of the
contracts,  one year.  These options are fully amortized as of June 30, 2001. As
of June 30, 2000,  the Company  granted stock options to consultants in exchange
for  services.  The value of these options is  approximately  $245 and are being
amortized  over their  respective  period of  service.  These  options are fully
amortized as of June 30, 2001.

Certain Anti-Takeover Provisions

           The  Company's  Certificate  of  Incorporation  and  by-laws  contain
certain  anti-takeover  provisions  that could have the effect of making it more
difficult for a third party to acquire,  or of  discouraging  a third party from
attempting to acquire, control of the Company without negotiating with its Board
of Directors. Such provisions could limit the price that certain investors might
be willing to pay in the future for the  Company's  securities.  Certain of such
provisions  provide for a Board of Directors  with  staggered  terms,  allow the
Company  to issue  preferred  stock  with  rights  senior to those of the common
stock, or impose various  procedural and other  requirements which could make it
more difficult for stockholders to effect certain corporate actions.

Earnings (loss) per share

The following  table sets forth the  computations  of basic earnings  (loss) per
share and diluted earnings (loss) per share:



                                       51
<PAGE>


                                                2001         2000        1999
                                             ----------    --------    ---------
Years ended June 30,
 Numerator:
  Net Income (Loss)                          $ (16,323)    $ (3,669)    $   823
                                             ---------     --------     -------
 Denominator:
 Weighted average common
 shares outstanding                             10,299        9,710       7,355
                                             ---------     --------     -------
 Basic Earnings (loss) per share             $   (1.58)    $  (0.38)    $  0.11
                                             =========     ========     =======

 Denominator:
 Weighted average common
 shares outstanding                             10,299        9,710       7,355
 Common share equivalents of
 outstanding stock options and
 warrants.                                           -            -         444
                                             ---------     --------     -------
 Total Shares                                   10,299        9,710       7,799

 Diluted Earnings (loss) per share           $   (1.58)    $  (0.38)    $  0.11
                                             =========     ========     =======


(15) Significant Agreements

Employment Agreements

           The Company has entered into an  employment  agreement  with Mr. Greg
Manning, Chief Executive Officer of the Company through June 2002. The agreement
with Mr. Manning,  as amended,  provides for Mr. Manning's services as President
and Chief Executive Officer of the Company, with an annual salary of $350 and an
annual bonus of no less than $50.

           The Company also maintains  employment  agreements with various other
key management personnel.

           The Company currently  maintains term life insurance  policies on the
lives of certain key employees of the Company. These policies allow for coverage
of up to an aggregate amount of $7,000 with the benefits payable to the Company.


(16) Retirement Plans

           The Company  maintains  an employee  savings  plan under the Internal
Revenue Code Section  401(k).  Employees are eligible to participate in the plan
after six months of service and become fully vested after five years of service.
Employee  contributions  are  discretionary to a maximum of 15% of compensation.
For all plan  members,  the Company  contributed  10% of all eligible  employees
contributions  to a  maximum  annual  contribution  of $500  per  employee.  The
Company's total  contribution  was  approximately  $14, $10 and $6 for the years
ended June 30, 2001, 2000 and 1999, respectively.




                                       52
<PAGE>


(17) Supplementary Cash Flow Information

Following is a summary of supplementary cash flow information:

<TABLE>
<CAPTION>
                                                                              Years Ended
                                                                                June 30,
                                                                             (In Thousands)
                                                                       2001        2000       1999
                                                                     --------    -------     -------
<S>                                                                  <C>          <C>          <C>
 Interest paid                                                       $  1,437    $ 1,539     $ 1,645
 Income taxes paid                                                          1          1           2

 Summary of significant non-cash transactions:

 Issuance of shares related to the acquisition of GMD.                    532      2,278           -

 Issuance of shares related to the acquisition of Subsidiaries              -     25,000       1,875

 Issuance of shares related to GMAI-Asia purchase of
   Everbright Technologies                                                  -      3,614           -

 Issuance of 200,000 options relating to the financing of
   the acquisition of Teletrade                                             -          -         200

 Issuance of notes payable to former shareholders of Teletrade
   as part of the acquisition                                               -          -         675

 Contribution to GMAI-Asia committed but not yet paid                       -          -         159


 Stock Subscription Receivable from Afinsa for 285,373 shares
    of the Company's Common Stock                                           -          -       3,000

 Common stock received from sale of investment                              -          -         285

 Options issued relating to professional services                          90        245         150
</TABLE>


(18) Fourth Quarter Adjustments - Special Charges and Asset Impairments

      As a  result  of  unfavorable  economic  conditions  and  changes  in  the
collectibles  marketplace/industry,  in the last fiscal year the Company's Board
of  Directors  approved a plan  designed  to improve the  infrastructure  of the
Company,  reduce operating expenses,  optimize profitability and align resources
with long-term business growth  strategies.  This plan is likely to include work
force realignment, consolidation of facilities and restructuring of product line
focus.

      Among the  actions  relating  to this  plan,  the  Company  has  performed
impairment assessments of identifiable goodwill and other purchased intangibles.
Based on the projected profitability and future discounted cash flows associated
with the Company's  current  product lines,  it was determined that the goodwill
relating  the these  product  lines  were  impaired.  As a result,  the  Company
recorded a pre-tax  charge of  approximately  $2.2  million or $0.20 per share -
diluted  for the year  ended  June 30,  2001  which is  reflected  in  operating
expenses in the accompanying consolidated statement of operations.

      Furthermore, as part of the plan, the Company has implemented an inventory
reduction  program  to  generate  working  capital.  The  Company  adjusted  the
inventory cost value to reflect  management's  estimate of net realizable  value
recorded a pre-tax  charge of $2.4 million or $0.23 per share for the year ended
June 30, 2001 which is  reflected  in cost of  merchandise  in the  accompanying
consolidated statement of operations.


                                       53
<PAGE>


      Deferred tax asset  utilization was also  re-evaluated,  specifically  the
ability  to utilize  net  operating  loss  carryforwards  resulting  in a charge
relating the valuation allowance of $600 or $0.06 per share which is recorded in
the Benefit from  provision  for income taxes in the  consolidated  statement of
operations.


(19) Subsequent Events

      During  September,  2001, the Company was considering an offer to purchase
substantially  all of the  assets  comprising  its  comics  division,  including
comics, comic books, certain Hollywood and "rock `n' roll" memorabilia and movie
posters.  This  proposal is still being  discussed and there can be no assurance
that the transaction will be consummated.


(20) Selected Quarterly Financial Data (unaudited)

<TABLE>
<CAPTION>
                                         (in thousands except for per share data)
                                       --------------------------------------------
                                                          2001                                               2000
                                       ---------------------------------------------    ------------------------------------------
                                          1st         2nd         3rd         4th          1st        2nd         3rd        4th
                                        Quarter     Quarter     Quarter      Quarter     Quarter    Quarter     Quarter    Quarter
                                       ---------------------------------------------   -------------------------------------------
<S>                                    <C>         <C>         <C>         <C>         <C>         <C>         <C>        <C>
Net Revenues                           $ 14,407    $ 13,527    $ 17,836    $ 21,626    $ 15,208    $ 12,981    $ 18,050   $ 16,140
Gross profit                              2,462       2,239       1,153        (812)      2,345       2,063       4,715      2,697

Income (Loss) from operations              (873)     (1,342)     (2,542)     (6,883)       (674)     (2,039)      1,194     (1,884)

Net income (loss) attributable to
  common stockholders                      (900)     (1,435)     (2,154)    (11,834)       (488)     (1,533)        502     (2,150)
Net income (loss) per share,
  basic and diluted                       (0.09)      (0.14)      (0.21)      (1.07)      (0.06)      (0.18)       0.05      (0.19)
</TABLE>





                                       54
<PAGE>



Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

Not applicable.


                                    PART III.


Item 10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

          The following persons are all of the directors and executive  officers
of the Company:

Greg  Manning,  age 56, has been  Chairman of the Board of the Company since its
inception  in 1981 and Chief  Executive  Officer  since  December  8, 1992.  Mr.
Manning was the  Company's  President  from 1981 until  August 12, 1993 and from
March 8, 1995 to the present.  Mr.  Manning also has been  Chairman of the Board
and  President  of CRM since its  inception,  which he founded as "Greg  Manning
Company, Inc." in 1961.

Thomas A.  Davanzo,  age 50, is Chief  Operating  Officer  of the  Company.  Mr.
Davanzo  joined the Company in March 2000 as head of Marketing.  He is currently
responsible for the Company's  operations and marketing & sales strategies.  Mr.
Davanzo has developed sales  strategies for catalog and direct sales  companies,
and managed multi  location  retail sales forces.  Prior to joining the Company,
Mr.  Davanzo  was  head  of  marketing  and  sales  for  Pinnacle  Services,  an
international software development company.

Larry Crawford,  age 53, has been Chief Financial  Officer since April 23, 2001.
Mr. Crawford served as Chief Financial Officer of Arzee Holdings, Inc. from 1996
to 2001 and as Vice President of Finance and Chief  Financial  Officer of Talon,
Inc., a subsidiary  of Coats  Viyella plc from 1987 to 1996.  Mr.  Crawford is a
certified  public  accountant  and received  his B.A.  from  Pennsylvania  State
University and his M.B.A. from the Lubin School of Business of Pace University.

James A.  Reiman,  age 47,  has  served  as  GMAI's  Executive  Vice  President,
Strategic   Development/Investor  Relations  since  May  2000.  Mr.  Reiman  was
appointed as Executive Vice President of e-Commerce Business Development of GMAI
in April 1999. Prior thereto, Mr. Reiman founded and operating TOB Consulting, a
firm providing direct marketing and eCommerce consulting  services.  Since 1980,
Mr. Reiman also has been engaged in the practice of law, both  independently and
with the firm of  Barnes &  Thurnberg,  where he  headed  the  Direct  Marketing
practice group.

Scott S. Rosenblum, age 53, has been a director of the Company since December 8,
1992.  Mr.  Rosenblum has been a partner  (since 1991) in the law firm of Kramer
Levin Naftalis & Frankel LLP, and  previously  (from 1984 to 1991) was a partner
in the law firm of Stroock & Stroock & Lavan.  Mr.  Rosenblum  received his J.D.
degree from the University of Pennsylvania.

Anthony  L.  Bongiovanni,  Jr.,  age  43,  is  President  of  Micro  Strategies,
Incorporated,  a leading developer and supplier of microcomputer  based business
applications  throughout the New York, New Jersey and Pennsylvania  areas, which
he founded in 1983. Mr.  Bongiovanni has a B.S. in mechanical  engineering  from
Rensellaer Polytechnical Institute.

Albertino de  Figueiredo,  age 71, was appointed as a director of the Company on
September 10, 1997. In 1980, Mr. De Figueiredo  founded  AFINSA,  S.A, a company
engaged  in the  business  of  Philatelics  and  numismatics,  and is  currently
Chairman of the Board of AFINSA, S.A. and its subsidiaries. Mr. De Figueiredo is
also  Vice-Chairman of the Board of Directors of FINARTE ESPANA,  an art auction
house,  and a  member  of  the  Executive  Board  of  ASCAT,  the  International
Association of the Stamp Catalog and Philatelic Publishers.

Richard Cohen,  age 51, a director since  December,  1999, has been the managing
principal  of Richard M. Cohen  Consultants  since 1996.  From 1992 to 1995,  he
served as President of General  Media,  Inc., a public company with interests in
magazines,  cable, licensing and the Internet. He holds a BS from the University
of  Pennsylvania  and an MBA from  Stanford  University.  He is also a Certified
Public  Accountant  in the State of New York.  Mr.  Cohen is also a director  of
National Auto Credit, Deyco Acquisition Corp.,  Symposium Telecom and Directrix,
Inc.

Greg Roberts, age 39, a director since February, 2000, has been the President of
Spectrum  Numismatics  since the early  1990s,  following  9 years  with  Hannes
Tulving in Newport  Beach,  CA. He has spent the last 24 years honing his skills
to such an



                                       55
<PAGE>


extent that he was able to successfully  purchase such rare coins as the King of
Siam  proof  set,  the  1861   Pacquet   Liberty   Gold   Coins-$1MM,   and  the
Eliasberg-Stickney  1804 Silver  Dollar-$1.8MM.  He is also a lifetime member of
the Professional Numismatics Guild.

James M. Davin,  age 55, a director  since  February,  2000, has since 1993 been
President of Davin Capital  Corporation,  a private investment company and Davin
Capital, L.P., a private investment partnership. Mr. Davin is also a trustee and
a member of the Finance  Committee of Blair Academy,  an  independent  school in
Blairstown,  New  Jersey  and a  former  member  of the  Advisory  Board  of the
Georgetown  University School of Business,  from which he graduated in 1967. Mr.
Davin's  investment  career  started  in 1969 at  First  Boston,  from  which he
departed in 1988 as Managing Director to join Drexel Burnham Lambert Group, Inc.
in 1990.  Mr.  Davin left Drexel as Executive  Vice  President,  Senior  Trading
Official,  a position mandated by the SEC under the company's agreement with the
US District Attorney's office, after which he joined Lehman Brothers.  Mr. Davin
departed Lehman Brothers in 1993 as Managing  Director to serve as Vice Chairman
of Craig Drill  Capital,  a private  investment  fund in New York. Mr. Davin has
been an active member of the National  Association  of Securities  Dealers,  for
which he was Chairman and Vice President of Governors in 1987 as well as a board
member from 1985 until 1988.

Mark B. Segall, age 40, a director since December, 1999, was a partner at Kramer
Levin  Naftalis &  Frankel,  a New York law firm,  from 1995  through  1999.  In
October,  1999,  he became a Senior  Vice  President  and  General  Counsel  for
Investec Ernst & Company.

Esteban Perez, age 59, has been a director of GMAI since January 2001. Mr. Perez
was Chairman of Tubacex S.A., a listed  company in the Spanish  Stock  Exchange,
from which he departed in 1993, and now is Chairman of Auctentia, S.A. Mr. Perez
is also Director of the Board of Finarte Espana, an art auction house in Madrid,
and also Director of  Brohan-Design,  an art and design  service  company in New
York.  Mr.  Perez  represents  Afinsa  S.A.  in the  Board  of  Trustees  of the
Guggenheim  Bilbao  Museum.  Mr. Perez is graduated in Economics and Laws by the
Deusto University.

The Company's  directors are elected at the annual meeting of stockholders.  The
Certificate of Incorporation provides that the members of the Board of Directors
be divided into three  classes,  as nearly  equal in size as possible,  with the
term of  office  of one  class  expiring  each  year.  Accordingly,  only  those
directors  of a single  class can be  changed  in any one year and it would take
elections in three  consecutive  years to change the entire  Board.  Messrs.  De
Figueiredo and Manning have been elected,  and Mr. Davin has been appointed,  to
serve until the 2001 annual meeting of  stockholders.  Messrs.  Segall and Cohen
have been elected,  and Mr. Roberts has been appointed,  to serve until the 2002
annual  meeting of  stockholders.  Messrs.  Bongiovanni  and Rosenblum have been
elected to serve until the 2003 annual meeting of stockholders.  The Certificate
of Incorporation  also provides that directors may be removed only for cause and
that any such  removal  must be approved by the  affirmative  vote of at least a
majority of the outstanding  shares of capital stock of the Company  entitled to
vote generally in the election of directors. While the Company believes that the
foregoing  provisions  are  in  the  best  interests  of  the  Company  and  its
stockholders,  such  requirements  may have the effect of protecting  management
against outside interests and in retaining its position.

Each of the  directors  and  executive  officers of the Company is delinquent in
filing the forms required by Section 16(a) of the Exchange Act.

There  are no  family  relationships  among any of the  directors  or  executive
officers of the Company.

Advisory Committee

          The Company has an advisory committee (the "Advisory  Committee") that
includes prominent  collectors and other individuals  involved in the philatelic
and  collectibles  business,  with whom Mr. Manning has developed  relationships
over the years.  The members of the Advisory  Committee  individually  meet from
time to time with the Company's  Chairman and Chief Executive Officer to discuss
current  trends or  developments  in the  collectibles  market.  Members  of the
Advisory  Committee  receive  no  compensation  for  their  services,  and their
availability is subject to their personal  schedules and other time commitments.
The Company  reimburses members for their reasonable  out-of-pocket  expenses in
serving on the Advisory Committee.

          The Company  believes that the members of the Advisory  Committee have
no fiduciary or other duties,  obligations or responsibilities to the Company or
its  stockholders,  and they  will not  acquire  any such  duty,  obligation  or
responsibility  as a result of any  meeting or  consultation  they may have with
management  of the Company.  Each member of the Advisory  Committee  has entered
into an agreement with the Company which, among other things,  confirms that the
member has no such duty,



                                       56
<PAGE>


obligation or  responsibility,  but also commits the member to keep confidential
and not disclose (or in any manner use for personal benefit or attempt to profit
from)  any  non-public  information  relating  to the  Company  that the  member
receives in such capacity,  except to the extent that  disclosure is required by
applicable law or legal process or to the extent the information  becomes public
other than as a result of a breach of any  member's  confidentiality  agreement.
The  members  serve at will and may  resign,  or be asked to  discontinue  their
services, at any time.

          The  members of the current  Advisory  Committee  and their  principal
occupations are as follows:

Sir Ronald  Brierley,  age 64, is  Founder/President  of  Brierley  Investments,
Limited,  a publicly  held New Zealand  investment  company.  Sir Ronald is also
Chairman of GPG P/C, an investment company based in London,  England. Sir Ronald
serves on the boards of Advance Bank, Australia,  Ltd., Adriadne Australia Ltd.,
Australia Oil & Gas Corporation,  Ltd., and the Australian Gaslight Company, and
he is also a trustee of Sydney  Cricket and Sports Ground Trust.  Sir Ronald has
had a life-long  interest in stamps,  beginning as a  schoolboy,  when he formed
Kiwi Stamp  Company  and  acquired a dealer's  certificate  from the New Zealand
Stamp  Dealers  Federation.  Sir Ronald has been selling and  collecting  stamps
since that time.

Robert G.  Driscoll,  age 70, has been Chief  Executive  Officer (since 1981) of
Barrett  &  Worthen,  Inc.  and the  Brookman  Stamp  Company  of  Bedford,  New
Hampshire,  both of which are  engaged in the  business  of buying  and  selling
stamps.  Mr.  Driscoll  served  as Vice  President  of H.E.  Harris  Company,  a
subsidiary  of General Mills from 1978 to 1981,  after having  founded R&R Stamp
Company  in 1958  and  serving  as its  President  until  it was sold in 1978 to
General  Mills.  Mr.  Driscoll is a past President of the American Stamp Dealers
Association  (from 1977 to 1978) and is a lifetime  member of the American First
Day Cover Society.  He has been a member of the American  Philatelic Society for
over 45 years.

Herbert LaTuchie,  age 83, was Chairman of the Board and Chief Executive Officer
(from  1954 to  1986)  of  Modern  Builders  Supply  Company,  Inc.  and  Modern
Manufacturing,  Inc., the latter of which is one of the ten leading distributors
of building  products in the United  States.  Mr.  LaTuchie has been a life-long
collector  of rare  stamps,  and he also  collects  sheet  music and other paper
collectibles.

Joseph Levy, Jr., age 76, is president of Levy Venture Management,  Inc., a real
estate  development  company  specializing in automotive  retailing real estate.
Prior to forming  Levy  Venture  Management,  Mr. Levy was  President  of Walton
Chrysler-Plymouth  (from 1953 to 1960), the world's largest Chrysler  dealership
during his tenure as  president  of the  company,  and Carol Buick (from 1961 to
1984), the world's largest Buick dealership during his tenure as president.  Mr.
Levy currently  serves on the board of directors of CDW Computer  Centers,  Inc.
(NASDAQ:  CDWC),  and has served as a director of several  banks,  including NBD
Evanston. He currently sits on the boards of directors/trustees of the following
charitable  and not for profit  corporations:  the Chicago  Historical  Society,
Culver Educational  Foundation,  Evanston Hospital, and the Levy Senior Centers.
Mr. Levy is a collector of stamps, coins, watches and other collectibles.

Hector D.  Wiltshire,  age 60, is President  and CEO of Wiltshire  Technologies,
Inc.,  a  high  technology  venture  capital  and  consulting  group,  and is an
experienced  collector  of  rare  stamps.  Mr.  Wiltshire  is a  member  of  the
Association  of Certified  and Corporate  Accountants  (A.C.C.A) and the British
Computer Society  (M.B.C.S.).  Mr. Wiltshire holds degrees in Executive Business
Administration and marketing.


Item 11.  EXECUTIVE COMPENSATION

          Information regarding Executive Compensation will be in the definitive
proxy  statement of the Company to be filed within 120 days of June 30, 2001 and
is incorporated by reference.


Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          Information  regarding Security Ownership of Certain Beneficial Owners
and Management  will be in the definitive  proxy  statement of the Company to be
filed within 120 days of June 30, 2001 and is incorporated by reference.


Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          Information  regarding Certain  Relationships and Transactions will be
in the definitive  proxy statement of the Company to be filed within 120 days of
June 30, 2001 and is incorporated by reference.


                                       57
<PAGE>


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


          Exhibit No.                                  Description
-------------------------------------------------------------------------------

   (a)      (1)         All  Financial  Statements  of the Company for the years
                        ended June 30, 2001,  2000 and 1999 are filed  herewith.
                        See Item 8 of this  Report for a list of such  financial
                        statements.

            (2)         Financial Statement Schedules:

                        Report of Independent Accountants

                        Schedule:
                        II - Valuation and Qualifying Accounts

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

            (3)         Exhibits -- See response to paragraph (c) below.

   (b)      Reports on Form 8-K


   (1)      Report on Form 8-K  filed on  February  27,  2001,  relating  to the
            reincorporation of the Company from New York to Delaware.

   (2)      Report  on Form 8-K  filed on June 25,  2001,  relating  to  certain
            issuances of stock by the Company.

   (c)      Exhibits

   3.1      Restated  Certificate of  Incorporation  of Registrant,  as amended.
            Incorporated  by  reference to Exhibit  3(a) to the  Company's  Form
            SB-2, Registration Number 33-55792-NY, dated May 14, 1993 (the "1993
            Form SB-2");  as amended by the  Certificate of Amendment filed with
            the Secretary of State of New York on March 3, 2000.*

   3.2      By-laws,  as amended,  of Registrant.  Incorporated  by reference to
            Exhibit 3(b)to the 1993 Form SB-2.

   10.1     1993 Stock Option Plan.  Incorporated  by reference to Exhibit 10(a)
            to the 1993 Form SB-2 and  incorporated by reference to Exhibit A to
            the Proxy Statement of the Company dated January 31, 1994.

   10.2     Employment Agreement between Greg Manning and Registrant dated as of
            May 14, 1993. Incorporated by reference to Exhibit 10(b) to the Form
            SB-2 and  incorporated by reference to Exhibit 4.1 to Form 10-QSB of
            the Company for the period ended  December  31,1995,  dated February
            13, 1996, as amended.

   10.3     Second  Amendment to Employment  Agreement  between Greg Manning and
            Registrant,   dated  as  of  September  11,  1997.  Incorporated  by
            reference  to Exhibit  10.3 to Form  10-KSB of the  Company  for the
            period ended June 30, 1997.

   10.4     Third  Amendment to  Employment  Agreement  between Greg Manning and
            Company, effective as of July 1, 1999.*

   10.5     Fourth  Amendment to Employment  Agreement  between Greg Manning and
            Company, effective as of July 1, 2000.*

   10.6     Employment  Agreement  between  the  Company,  Spectrum  Numismatics
            International,   Inc.  and  Gregory  N.  Roberts.   Incorporated  by
            reference to the Company's Proxy Statement dated January 14, 2000.

   10.7     1997 Stock Option  Plan,  as amended.  Incorporated  by reference to
            Exhibit A to the Proxy  Statement of the Company  dated  October 28,
            1997 and to the Proxy  Statement  of the Company  dated  January 14,
            2000.


                                       58
<PAGE>


   10.8     Merger  Agreement  dated  December  8, 1999,  between  the  Company,
            Spectrum  Acquisition,  Inc.,  Spectrum  Numismatics  International,
            Inc., Warren Trepp, as trustee,  Gregory Roberts, Sharon Roberts and
            Elaine  Dinges.  Incorporated  by  reference to Annex B of the Proxy
            Statement of the Company dated January 14, 2000.

   10.13    Amended and Restated  Secured  Business Loan  Agreement  dated as of
            February  18,  2000  between  Bank  of  America,   NA  and  Spectrum
            Numismatics International, Inc.

   10.14    Continuing Guaranty dated February 18, 2000 between Bank of America,
            NA and Greg Manning.

   10.15    Pledge Agreement dated February 18, 2000 between Bank of America, NA
            and Greg Manning.

   23.1     Consent of Independent Accountants.*



                          * Filed herewith


*************************************************************************



                                       59
<PAGE>



SIGNATURES

In accordance  with Section 13 or 15(d) of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                    GREG MANNING AUCTIONS, INC.


Date: September 27, 2001


                                    /s/  Greg Manning
                                    ---------------------------------
                                    Greg Manning
                                    Chairman of the Board
                                    Chief Executive Officer & Director


In accordance  with the  Securities  Exchange Act of 1934,  this report has been
signed below by the  following  persons on behalf of the  Registrant  and in the
capacities and on the dates indicated below.

Date:  September 27, 2001

                                    /s/  Greg Manning                 .
                                    ---------------------------------
                                    Greg Manning
                                    Chairman of the Board
                                    Chief Executive Officer & Director


                                    /s/  Larry Crawford               .
                                    ---------------------------------
                                    Larry Crawford
                                    Chief  Financial Officer
                                    (Principal Financial Officer and
                                    Principal Accounting Officer)


                                    /s/  Anthony Bongiovanni          .
                                    ---------------------------------
                                    Anthony Bongiovanni
                                    Director


                                    /s/  Scott Rosenblum              ,
                                    ---------------------------------
                                    Scott Rosenblum
                                    Director



                                    /s/  Richard Cohen                ,
                                    ---------------------------------
                                    Richard Cohen
                                    Director


                                    /s/  Greg Roberts                 ,
                                    ---------------------------------
                                    Greg Roberts
                                    Director


                                    /s/  James Davin                  ,
                                    ---------------------------------
                                    James Davin
                                    Director


                                                                     ,
                                    ---------------------------------
                                    Mark Segall
                                    Director

                                       60
<PAGE>



                                                                     ,
                                    ---------------------------------
                                    Albertino de Figueiredo
                                    Director


                                                                     ,
                                    ---------------------------------
                                    Esteban Perez
                                    Director






                                       61
<PAGE>



                        Report of Independent Accountants



To the Board of Directors and
Stockholders of Greg Manning Auctions, Inc.


We have audited the consolidated  financial statements of Greg Manning Auctions,
Inc., and  subsidiaries  as of June 30, 2001 and 2000, and for each of the three
years in the period ended June 30, 2001 and have issued our report thereon dated
September  14,  2001;  such  consolidated  financial  statements  and report are
included  elsewhere in this Form 10-K. Our audits also included the consolidated
financial  statement  schedule of Greg Manning  Auctions,  Inc. and subsidiaries
listed in Item 14 (a) 2. This consolidated  financial  statement schedule is the
responsibility of the Company's management.  Our responsibility is to express an
opinion  based  on our  audits.  In our  opinion,  such  consolidated  financial
statement  schedule,  when  considered  in  relation  to the basic  consolidated
financial statements taken as a whole,  presents fairly in all material respects
the information set forth therein.


/s/ Amper, Politziner & Mattia P.A.
-----------------------------------

September 14, 2001
Edison, New Jersey




                                       62
<PAGE>


                                                                     SCHEDULE II

                           Greg Manning Auctions, Inc.
                        Valuation and Qualifying Accounts
                                 (in thousands)

<TABLE>
<CAPTION>
                                                         Balance at                           Balance
                                                         Beginning                            at End
                                                          of Year     Additions  Write-offs   of Year
                                                         ---------    ---------  ----------   -------
<S>                                             <C>       <C>          <C>        <C>         <C>
Allowance for sales returns and
doubtful accounts
  Years Ended June 30,                          1999      $   150      $   12     $   -       $  162
                                                2000          162         664         -          826
                                                2001          826          19         -          845

Valuation allowance for deferred tax asset
  Years Ended June 30,                          1999           76         155        15          216
                                                2000          216         359         -          575
                                                2001          575       4,926         -        5,501

Realizable value allowance for inventory
  Years Ended June 30,                          1999           68         296         -          364
                                                2000          364         150         -          514
                                                2001          514       2,388         -        2,902


</TABLE>




                                       63
<PAGE>


                                  EXHIBIT INDEX


          Exhibit No.                     Description
-------------------------------------------------------------------------------
   (a)      (1)         All  Financial  Statements  of the Company for the years
                        ended June 30, 2001,  2000 and 1999 are filed  herewith.
                        See Item 8 of this  Report for a list of such  financial
                        statements.

            (2)         Financial Statement Schedules:

                        Report of Independent Accountants

                        Schedule:
                        II - Valuation and Qualifying Accounts

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

            (3)         Exhibits -- See response to paragraph (c) below.

   (b)      Reports on Form 8-K


   (3)      Report on Form 8-K  filed on  February  27,  2001,  relating  to the
            reincorporation of the Company from New York to Delaware.

   (4)      Report  on Form 8-K  filed on June 25,  2001,  relating  to  certain
            issuances of stock by the Company.

   (c)      Exhibits

   3.1      Restated  Certificate of  Incorporation  of Registrant,  as amended.
            Incorporated  by  reference to Exhibit  3(a) to the  Company's  Form
            SB-2, Registration Number 33-55792-NY, dated May 14, 1993 (the "1993
            Form SB-2");  as amended by the  Certificate of Amendment filed with
            the Secretary of State of New York on March 3, 2000.*

   3.2
            By-laws,  as amended,  of Registrant.  Incorporated  by reference to
            Exhibit 3(b)to the 1993 Form SB-2.

   10.1     1993 Stock Option Plan.  Incorporated  by reference to Exhibit 10(a)
            to the 1993 Form SB-2 and  incorporated by reference to Exhibit A to
            the Proxy Statement of the Company dated January 31, 1994.

   10.2     Employment Agreement between Greg Manning and Registrant dated as of
            May 14, 1993. Incorporated by reference to Exhibit 10(b) to the Form
            SB-2 and  incorporated by reference to Exhibit 4.1 to Form 10-QSB of
            the Company for the period ended  December  31,1995,  dated February
            13, 1996, as amended.

   10.3     Second  Amendment to Employment  Agreement  between Greg Manning and
            Registrant,   dated  as  of  September  11,  1997.  Incorporated  by
            reference  to Exhibit  10.3 to Form  10-KSB of the  Company  for the
            period ended June 30, 1997.

   10.4     Third  Amendment to  Employment  Agreement  between Greg Manning and
            Company, effective as of July 1, 1999.*

   10.5     Fourth  Amendment to Employment  Agreement  between Greg Manning and
            Company, effective as of July 1, 2000.*

   10.7     Employment  Agreement  between  the  Company,  Spectrum  Numismatics
            International,   Inc.  and  Gregory  N.  Roberts.   Incorporated  by
            reference to the Company's Proxy Statement dated January 14, 2000.


                                       64
<PAGE>


   10.9     1997 Stock Option  Plan,  as amended.  Incorporated  by reference to
            Exhibit A to the Proxy  Statement of the Company  dated  October 28,
            1997 and to the Proxy  Statement  of the Company  dated  January 14,
            2000.

   10.10    Merger  Agreement  dated  December  8, 1999,  between  the  Company,
            Spectrum  Acquisition,  Inc.,  Spectrum  Numismatics  International,
            Inc., Warren Trepp, as trustee,  Gregory Roberts, Sharon Roberts and
            Elaine  Dinges.  Incorporated  by  reference to Annex B of the Proxy
            Statement of the Company dated January 14, 2000.

   10.16    Amended and Restated  Secured  Business Loan  Agreement  dated as of
            February  18,  2000  between  Bank  of  America,   NA  and  Spectrum
            Numismatics International, Inc.

   10.17    Continuing Guaranty dated February 18, 2000 between Bank of America,
            NA and Greg Manning.

   10.18    Pledge Agreement dated February 18, 2000 between Bank of America, NA
            and Greg Manning.

   23.1     Consent of Independent Accountants.*



                          * Filed herewith

*************************************************************************




                                       65