**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**Form 10-KSB**

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

(Mark One)

[X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange  Act of 1934

For the fiscal year ended December 31, 2000

[ ] Transition report under section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ______ to ________

Commission File Number **33-33263-NY**

**GTM HOLDINGS, INC.**

(Name of small business issuer in its charter)

|**Nevada                                                                                                    62-1407521**

(State or other jurisdiction of incorporation or organization)              (I.R.S. Employer I.D. No.)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**Suite 12/F Nam Kwong Building, Avenida Rodrigo Rodriques, Macau S.A.R., China**

(Address of principal executive offices)                                                                                                     

Issuer's telephone number, including area code: **011 (853) 711-128**

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

Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $0.001.

Check whether the Issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was required to file such report(s), and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is contained in this form, and
no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this form 10-KSB or any amendment to this Form 10-KSB. [ ]

The issuer's revenue for its most recent fiscal year was: $ -0-

The aggregate market value of the issuer's voting stock held as of April 17, 2002, by non-affiliates of the issuer was
$193,453.

As of April 17, 2002, the issuer had 7,560,189 shares of its $.001 par value common stock outstanding.

Transitional Small Business Format: Yes [ ] No [ X ]

Documents incorporated by reference: None

**PART I**

**Item 1. Description of Business.**

History

GTM Holdings, Inc. ("GTM" or the "Company")  was incorporated in the state of Nevada on September 21, 1989 under the
name Fulton Ventures, Inc. On July 18, 1990, the Company changed its name to Triad Warranty Corporation, Inc., and on
May 22, 2000, the Company changed its name to GTM Holdings, Inc.  From 1993 through June 2001, the Company did
not engage in any business operations.

Current operations

On June 12, 2001, the Company effected the issuance of 9,000,000 shares of its common stock to acquire American
Overseas Investment Co., Ltd., a corporation formed under the laws of Macau, China  ("AOI"), as a wholly owned
subsidiary.   GTM is an integrated direct marketing company, which markets its products directly to consumers through
various television broadcasting contracts, cable distribution agreements and the Company's own twenty-four hour, seven
day a week dedicated television channel. GTM is a holding company with its operations being carried out through AOI.  As
part of its acquisition of AOI, the Company acquired an extensive film library of infomercial and television home shopping
programs in three principle categories: collectibles, jewelry and health and fitness.

The Company acquired certain contractual rights purchased from American Overseas Real Estate Investment Co., Ltd.,  for
the exclusive use of various television transmission channels and landing rights in China, Taiwan and Hong Kong.  The
Company has additionally contracted with Sun Television and Cyberworks (Hong Kong Listed) for broadcast air time,
production facilities and additional film libraries for its future and ongoing operations.

The Company began broadcasting, on a limited basis, on November 15, 2001, performing test product valuations and
fulfillment service evaluations on its home shopping and general entertainment programs, through satellite transmissions
on G TELEVISION, the Company's own dedicated channel, for distribution into the People's Republic of China under its
contract with AOI. This channel broadcasts general entertainment in addition to the Company's principal electronic media
activity, television home shopping, 24 hours daily.

Since February 18, 2002, the Company has had nightly broadcasts, using the transmission and distribution facilities of Sun
Television into the markets of Hong Kong, Taiwan and Hong Kong. This new distribution of the Company's home
shopping business has created sales volume for the first quarter of 2002. This revenue marks the beginning of Company's
second stage of  development, and additional merchandise developmental plans have been completed for the use of the
Macao Satellite Channel (MSTV), with six hours of daily airtime to begin May 1, 2002. MSTV has recently signed a
distribution agreement with Tech TV for its program base, and the Company intends to add additional merchandise related
to the Tech TV format.

The Company is currently positioned for a combined channel total of 31 hours of daily programming through its various
contractual agreements. The Company expects to reach in excess of 60 million households by the end of the first quarter
2002.

**Employees**

The Company does not currently have any employees but relies upon the efforts of its officers and directors to conduct the
business of the Company.

**Item 2. Description of Property.**

The Company does not own any property. The Company leases offices in Macau, China, pursuant to a lease agreement
expiring August 31, 2002.  The Company paid rental expenses of $10,644 for the year ended December 31, 2001.

**Item 3. Legal Proceedings.**

None.

**Item 4. Submission of Matters to a Vote of Securities Holders.**

No matters were submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders.

**PART II**

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

The Company's common stock is listed on the Over the Counter Bulletin Board ("OTCBB"), under the symbol "GTMM".
As of April 17, 2002, the Company had 49 shareholders holding 7,560,189 shares of common stock.

The following quotations, as provided by the National Quotation Bureau, represent prices between dealers and do not
include retail markup, markdown or commission. In addition, these quotations do not represent actual transactions.

|               | **CLOSING BID** |         | **CLOSING ASK** |        
|-------------- | --------------- | ------- | --------------- | -------
|               | **HIGH**        | **LOW** | **HIGH**        | **LOW**
|**2000**       |                 |         |                 |        
|First Quarter  | None            | None    | 1.00            | 1.00   
|Second Quarter | 0.0300          | 0.0200  | 1.00            | 1.00   
|Third Quarter  | 0.1250          | 0.0300  | 1.00            | 1.00   
|Fourth Quarter | 0.1250          | 0.0625  | 1.00            | 1.00   
|**2001**       |                 |         |                 |        
|First Quarter  | 0.25            | 0.0625  | 1.00            | 1.00   
|Second Quarter | 20.00           | 0.025   | 97.00           | 0.025  
|Third Quarter  | 3.88            | 0.14    | 3.89            | 0.14   
|Fourth Quarter | 0.38            | 0.14    | 0.40            | 0.15   

The Company has never declared a dividend on its Common Stock. The Company has not paid, nor declared, any
dividends since its inception and does not intend to declare any such dividends in the foreseeable future. The Company's
ability to pay dividends is subject to limitations imposed by Nevada law. Under Nevada law, dividends may be paid to the
extent that the corporation's assets exceed its liabilities and it is able to pay its debts as they become due in the usual course
of business.

**Changes in Securities and Use of Proceeds:**

The Company reported issuances of shares on Forms 10-QSB for the quarters ended June 30, 2001 and September 30,
2001, and on Form S-8, filed September 21, 2001.  In addition,  on October 4, 2001, the Company issued 175,000 shares of
common stock to an independent third party in full payment of an outstanding debt of $10,000,  in reliance on Section 4(2)
of the Securities Act of 1933.

**Item 6. Management's Discussion and Analysis or Plan of Operation.**

The Company generated no revenue for the years ended December 31, 2001 and 2000.

General and administrative expenses for the years ended December 31, 2001 and 2000 were $339,279 and $43,894,
respectively.

The Company realized a net operating loss of $754,176 for the year ended December 31, 2001, compared to $43,894 for
the year ended December 31, 2000.

At December 31, 2001, the Company had $300 in cash, $24,811 in inventories, $42,342 in receivables and prepayments,
and $6,118 in deposits.

The Company is a development stage company and had no sales for the twelve months ended December 30, 2001. The
Company acquired AOI on  June 12, 2001 and during 2001 was in the process of developing its business by first obtaining
the necessary contracts and government permissions to operate within the Peoples Republic of China and its Special
Administration Regions, and second by testing its merchandise and fulfillment services while broadcasting on a limited
scale.

The Company, within the first quarter 2002, has reported sales from its test programming and expects sales to continue to
expand.

Management believes that current cash flows are insufficient to meet the present growth strategies and related working
capital and capital expenditure requirements. Management currently anticipates the need to raise additional capital. The
Company cannot be certain that additional funds will be available on satisfactory terms when needed, if at all. If the
Company is unable to raise additional capital in the future, the Company may be required to curtail its operations
significantly. Raising additional equity capital, conceivably, could have a dilutive effect on the existing shareholders, if
alternative solutions can not be found.

**Item 7. Financial Statements.**

The financial statements of the Company appear at the end of this report beginning with the Index to Financial Statements
on page F-1.

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

None.

**PART III**

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

The following table sets forth as of April 17, 2002, the name, age, position and term of office for each executive officer and
director of the Company.

|**Name**          | **Age** | **Position**                | **Officer and Director Since**
|----------------- | ------- | --------------------------- | ------------------------------
|William A. Fisher | 60      | President, CEO and Director | August 2001 - March 2002      
|Marian Yu Fisher  | 50      | VP, Secretary and Director  | June 2001 - March 2002        
|Stanley Roy Gross | 59      | CFO                         | August 2001                   
|Peter Saltz       | 57      | President                   | March 2002                    
|Tam Mei I         | 31      | Secretary                   | March 2002                    

All Directors hold their positions for one year or until their successors are duly elected and qualified. Officers hold their
positions at the discretion of the Board of Directors.

Set forth below is certain biographical information regarding each of the Company's executive officers and directors:

**William A. Fisher, CEO**

Mr.****Fisher has approximately 25 years of professional experience in television sales, music merchandising, advertising,
marketing, sales and celebrity promotions and endorsements, and 18 years of experience working in Asia. Much of Mr.
Fisher's experience has involved the television retail and home shopping industry. In 1970, Mr. Fisher helped launch the
U.S. operation of Mary Quant, a fashion and cosmetics company owned by London-based Smith & Nephew. In 1974, he
established a wholesale merchandising and brand development consultancy, whose clientele included international retailers
and fashion houses, as well as several celebrities in the music (KISS, GRATEFUL DEAD, JEFFERSON AIRPLANE) and
fashion business (SEARS, GAY GIBSON, ESPRIT and CATHAY ACCESSORIES) for whom he developed and managed
merchandising programs.  One of Mr. Fisher's clients was the Home Shopping Network, which at the time was a start-up
company. Ultimately Mr. Fisher became the exclusive product-sourcing agent and investor for the Home Shopping
Network, and was key in developing its original merchandising, product inception, operations, and brand strategy.

Following his association with the Home Shopping Network, Mr. Fisher continued to consult, merchandise for such
premium-related businesses as The Franklin Mint, Bradford Exchange, QVC and VVTV and television marketing
companies. Mr. Fisher has lived and worked in Asia for the past 20 years and is married with one child.

**Peter Saltz, President**

Mr. Satlz has rich experience in managing and offering strategic plans for the home-shopping companies. He has been a
President and Chief Operating Officer in the Shopping American, SA, a start-up ventures to launch American style home
shopping in the Italian market. International President of Guthy-Renker Corporation. A****200+ Million privately owned
(News Corp. is a 35% shareholder) direct response company that markets its own and third party products through short
and long form television commercials. Mr. Saltz was responsible for building the company  international business.
Negotiated with outside third party firms to form new television direct response joint ventures; provided initial
management and operational consulting to get this venture up and running. Set-up and helped operate joint ventures in
China (partner was Nissho Iwai), Japan, New Zealand, Australia, Philippines as well as investigated potential ventures in
other areas of Asia and the Middle East. HSN Direct, $40 Million television direct response company started by Home
Shopping Network (majority was subsequently acquired by Flextech, plc.). VP International developed the company
international business through creation of strategic alliances and joint ventures. Provide support to these international
affiliates throughout the Middle East, Europe, Japan and South American. Provided consulting to affiliates on start-up, on
ongoing operations, strategic planning and financial management. Launched and managed the company entry into the
European market via an owned in the UK. He has Ph.D. (Mathematics), University of Rochester.

**Stanley Roy Gross, CFO**

Mr. Goss is a Chartered Accountant who has lived in Macau for over fourteen years and is well known in the business
community.

He has over seventeen years experience in the telecommunications industry at a senior level. He served as Finance Director
of the Macau Telecommunications Company for eight years and prior to that for ten years with Cable and Wireless
companies in the Middle East. His experience embraces creation and management of data processing installations, financial
and investment planning, corporate re-engineering, procurement and project management.

Since leaving the Cable and Wireless Group Mr. Goss has remained in Macau operating as a management consultant as
well as entering into the retail business, both shop and internet based, and TV home shopping. In 1997 he formed a trading
company which also undertook marketing and promotional activities.

**Tam Mei I, Secretary**

Tam Mei I earned a Bacharelato of Tourism Management in Instituto Polit nico de Macau and Instituto de Forma o Tur tica
1995, Academic English Course, Level of Upper Intermediate in Edith Cowan University, Perth, Western Australia 1997,
Diploma of Business in Perth Institute of Business and Technology, Perth, Western Australia in 1998. She has more than
eight years experience at a secretary and administration manager position.

**Marian Yu Fisher, VP Merchandising**

Ms. Fisher comes from a background of import and export of general merchandise on behalf of the Chinese Government in
its effort to penetrate the American market. Ms. Fisher additionally designed products for various retailers and has an
established brand of designer dolls in America for HSN, Bradford Exchange and Franklin Mint. Ms. Fisher resides in
Macau and is married with one child.

**Section 16(a) Beneficial Owner Reporting Compliance.**

William A. Fisher, an officer and director, was delinquent in filing his Form 3 with the SEC, and did not file his Form 4 for
the month of September or a Form 5.

Marian Yu Fisher, an officer and director, was delinquent in filing her Form 3 with the SEC, and did not file her Form 4 for
the month of September or a Form 5.

American Overseas Real Estate Company, Ltd., which is wholly owned by William A. Fisher and Marian Yu Fisher,  did
not file its Form 3 or Form 5.

**Item 10. Executive Compensation.**

During the year 2000, the Company paid $22,500 to a former president of the Company, Darrell Scott, for consulting
services rendered on behalf of the Company. In addition, the Company issued a total of 35,000 shares of common stock
valued at $786 to John Chymboryk, an officer and director of the Company, for services rendered on behalf of the
Company.

During the year 2001, no wages were paid to any executives, officers or directors.  The Company issued 270,000 shares to
William A. Fisher, registered on Form S-8, filed with the SEC on September 18, 2001, for Mr. Fisher's compensation for
2001.  No compensation was received by Marian Yu Fisher or any other executives, officers or directors in 2001, no
compensation has been paid to any executives, officers or directors in 2002, and the Company has no employment or
compensation agreements with any of its executives, officers or directors.

**Item 11. Security Ownership of Certain Beneficial Owners and Management.**

The following table sets forth as of April 17, 2002, the number and percentage of the 7,622,689 outstanding shares of
common stock which, according to the information supplied to the Company, were beneficially owned by (i) each person
who is currently a director of the Company, (ii) each executive officer, (iii) all current directors and executive officers of
the Company as a group and (iv) each person who, to the knowledge of the Company, is the beneficial owner of more than
5% of the outstanding common stock. Except as otherwise indicated, the persons named in the table have sole voting and
dispositive power with respect to all shares beneficially owned, subject to community property laws where applicable.

|**Title of Class** | **Beneficial Owner**                                                          | **Beneficial Ownership** | **Percentage of Class**
|------------------ | ----------------------------------------------------------------------------- | ------------------------ | -----------------------
|Common             | William A. Fisher (1) (2)                                                     | 6,270,500                | 82.94                  
|                   | Suite 12/F Nam Kwong
Building, Avenida Rodrigo
Rodriques, Macau S.A.R.,
China |                          |                        
|Common             | Marian Yu Fisher (1) (2)                                                      | 6,270,500                | 82.94                  
|                   | Suite 12/F Nam Kwong
Building, Avenida Rodrigo
Rodriques, Macau S.A.R.,
China |                          |                        
|Common             | American Overseas Real
Estate Company, Ltd.(3)                                | 6,270,500                | 82.94                  
|                   | Suite 12/F Nam Kwong
Building, Avenida Rodrigo
Rodriques, Macau S.A.R.,
China |                          |                        
|Common             | Officers and Directors as a
Group: 2 Persons                                  | 6,270,500                | 82.94                  

(1) Officer and director of the Company.

(2) William A. Fisher and Marian Yu Fisher are husband and wife and thus their share holdings are aggregated with their
wholly owned company, American Overseas Real Estate  Company, Ltd.  William A. Fisher individually directly holds
495,000 shares; Marian Yu Fisher directly  holds 225,000 shares; and American Overseas Real Estate  Company, Ltd.
directly holds 5,550,000 shares**.**

(3) American Overseas Real Estate  Company, Ltd****is wholly owned by****William A. Fisher and Marian Yu Fisher and thus
its share holdings are aggregated with the Fishers.  William A. Fisher individually directly holds 495,000 shares; Marian
Yu Fisher directly  holds 225,000 shares; and American Overseas Real Estate Company, Ltd. directly holds 5,550,000
shares.

**Item 12. Certain Relationships and Related Transactions.**

William A. Fisher and Marian Yu Fisher are husband and wife.

During the period from January 1, 2001 to December 31, 2001, the Company had the following related party transactions:

(a) In March, a related company had advanced $4,370 to cover the operating expenses included in general administrative
expenses.

(b) In May, the Company purchased a film library comprising Informericals, Color and B. Roll and Primetime Series at a
total cost of $4,048,000 from Mr. William A. Fisher who is a director and stockholder.  The cost of $4,048,000 has been
included in the film library cost (note 8) and for an account payable of $918,000 as well as for shares issued valued at
$3,130,000.  This represented the approximate purchase price paid by Mr. Fisher for this film library.

(c) In September, the Company issued 288,750 shares of common stock at $0.10 reported each to four staff of its subsidiary
for payment of outstanding wages for the amount of $28,875 included in general administrative expenses and prepayment.
This was in an S-8 filing on September 21, 2001 when the market price was $0.125 per share.

(d) In September, the Company issued 270,000 shares of common stock at $0.10 each to Mr. William A. Fisher who is a
director and stockholder for payment of outstanding wages for the amount $27,000 included in general administrative
expenses.  This was reported in an S-8 filing on September 21, 2001 when the market price was $0.125 per share.

(e) In September, the Company issued 25,000 shares of common stock at $0.1 each to Michael L. Labertew in
compensation for his services to be rendered to the Company.  Mr. Labertew acts as legal representative to the company for
the amount of $27,000 included in prepayment.  This was reported in an S-8 filing on September 21, 2001 when the market
price was $0.125 per share.

(f) In September, the Company issued 400,000 shares of common stock at par value of $0.001 each to Capital Holdings
LLC, in compensation for its services to be rendered to the Company.  Capital Holdings LLC and/or its principals are part
of the group that are the original shareholders of GTM Holdings, Inc.

(g) In September, the Company issued 5,550,000 of common stock at par value of $0.001 each to American Overseas Real
Estate Company Limited in exchange for assignment to the Company of a license to broadcasting rights and usage of a
dedicated cable channel and uplink service from the Earth Station located on Coloane Island, Macau ("Telesat
Agreement"). The initial period is for six months, at the end of which the contract is renewable on terms and conditions to
be agreed between the parties concerned.  The shareholders and directors of American Overseas Real Estate Company
Limited are Mr. William A. Fisher and Mr. Marian Yu Fisher.  The amount of $5,550 recorded as an asset represents an
approximation of the amount spent by Mr. Fisher in negotiating this agreement. The Company has entered into a
preliminary agreement to extend the Telesat Agreement for a period of five years from April 15, 2002 on payment terms
and other conditions yet to be finalized.

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

**Reports on Form 8-K**

On February 9, 2001, the Company filed with the SEC a Form 8- K under Item 1. Change in Control of Registrant.

On July 3, 2001, the Company filed with the SEC a Form 8- K under Item 1. Change in Control of Registrant; Item 2.
Acquisition or Disposition of Assets; and Item 7. Financial Statements and Exhibits, all relating to the acquisition of AOI.

On August 27, 2001, the Company filed with the SEC a Form 8- K/A under Item 4. Changes in Registrant's Certifying
Accountant; Item 6. Resignations and Appointments of Registrant's Officers and Directors; and Item 7. Financial
Statements and Exhibits, all relating to the acquisition of AOI.

**Exhibits**

None.

**SIGNATURES**

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

**GTM HOLDINGS, INC.**

|Date: April 17, 2002                By:/s/William A. Fisher 

CEO

Date: April 17, 2002                By:/s/ Stanley Roy Gross

CFO

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

Date: April 17, 2002                By:/s/William A. Fisher

Director

Date: April 17, 2002                By:/s/Marian Yu Fisher

Director
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

**PART F/S**

**GTM HOLDINGS, INC.**

**REPORT AND FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED DECEMBER 31, 2000 AND 2001**

**GTM HOLDINGS, INC.**

**FOR THE YEARS ENDED DECEMBER 31, 2000 AND 2001**

**CONTENTS**



|                                                          | Pages   
|--------------------------------------------------------- | --------
|Report of Independent Public Accountants                  | 1       
|Consolidated Balance Sheets                               | 2       
|Consolidated Statement of Operations                      | 3       
|Consolidated Statements of Cash Flows                     | 4 to 6  
|Consolidated Statements of Changes in Stockholders Equity | 7 to 13 
|Notes to Consolidated Financial Statements                | 14 to 28

**ARESON** **& COMPANY**

CERTIFIED PUBLIC ACCOUNTANTS

**4/F., Galuxe Building, 8-10 On Lan Street, Central, Hong Kong**

**Tel. (852) 2523 2167  Fax. (852) 2810 1957**

Email. aac@netvigator.com  whajr@netvigator.com

Principal: William H. Areson, Jr. CPA

New York, USA

GTM HOLDINGS, INC.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and the Board of Directors of GTM Holdings, Inc.:

We have audited the accompanying consolidated balance sheet of GTM Holdings, Inc., (a development stage company) a
company incorporated in the State of Nevada, United States of America ("the Company") and Subsidiary ("the Group") as
of December 31, 2001 and the related consolidated statements of operations, cash flows and changes in stockholders' equity
for the year ended December 31, 2001.  The financial statements for the year ended December 31, 2000 were audited by
another firm of independent public accountants and were not qualified.  These financial statements give retroactive effect,
for the year ended December 31, 2001, to the acquisition of American Overseas Investment Company Limited as a pooling
of interests as described in Note 2 to the accompanying financial statements.  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 generally accepted auditing standards in the United 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 statements 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 GTM Holdings, Inc. (a development stage company) and Subsidiary as of December 31, 2001 and the results of
their operations and cash flows for the year ended December 31, 2001 after giving retroactive effect to the acquisition of
American Overseas Investment Company Limited as described in Note 2 to the accompanying financial statements, in
conformity with generally accepted accounting principles in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As
discussed in Note 18 to the financial statements, the company has incurred substantial losses since its inception.   As at
December 31, 2001, current liabilities exceed current assets by a substantial amount and the Company had a negative cash
flow from operations during the period ended December 31, 2001.   This factor raises substantial doubts about its ability to
continue as a going concern.  Management's plans in regards to these matters are also described in Note 18.  The financial
statements do not include any adjustments that might result from the outcome of these uncertainties.

ARESON & COMPANY

CERTIFIED PUBLIC ACCOUNTANTS

DATED  MARCH 30, 2002   HONG KONG

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED BALANCE SHEETS AS AT**

**DECEMBER 31, 2000 AND 2001**

(Amounts expressed in United States dollars)

|                                                                                                                                                                    | **Notes**        | **2001**    | **2000**   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------- | ----------- | -----------
|**ASSETS**                                                                                                                                                          |                  |             |            
|Current assets:                                                                                                                                                     |                  |             |            
|Cash and bank deposits                                                                                                                                              |                  | $300        | $-         
|Inventories                                                                                                                                                         | 5                | 24,811      | -          
|Other receivable and
prepayments                                                                                                                                    |                  | 42,342      | -          
|Deposits                                                                                                                                                            | 6                | 6,118       | -          
|                                                                                                                                                                    |                  | ___________ | ___________
|Total current assets                                                                                                                                                |                  | 73,571      | -          
|Furniture, fixtures, equipment
and capital lease, net                                                                                                               | 7                | 60,124      | -          
|Film library                                                                                                                                                        | 8                | 7,048,000   | -          
|Production and broadcast
purchase                                                                                                                                   | 9                | 1,000,000   | -          
|Broadcasting rights and
airtime                                                                                                                                     | 10               | 5,550       | -          
|                                                                                                                                                                    |                  | ___________ | ___________
|Total assets                                                                                                                                                        |                  | $8,187,245  | $-         
|                                                                                                                                                                    |                  | ==========  | ========== 
|**LIABILITIES AND
STOCKHOLDERS'
EQUITY**                                                                                                                            |                  |             |            
|Current liabilities:                                                                                                                                                |                  |             |            
|Convertible notes                                                                                                                                                   | 8 & 9            | $4,000,000  | $-         
|Capital lease obligations,
current portion                                                                                                                          | 11               | 9,874       | -          
|Other payable and accrued
liabilities                                                                                                                               |                  | 723,867     | 5,718      
|                                                                                                                                                                    |                  | ___________ | ___________
|Total current liabilities                                                                                                                                           |                  | 4,733,741   | 5,718      
|Capital lease obligations,
non-current portion                                                                                                                      | 11               | 14,159      | -          
|Due to stockholders                                                                                                                                                 | 12               | 928,609     | -          
|                                                                                                                                                                    |                  | ___________ | ___________
|Total liabilities                                                                                                                                                   |                  | 5,676,509   | 5,718      
|**Commitments and
Contingencies**                                                                                                                                   | 9,10,11,15,16,18 |             |            
|Stockholders' equity:                                                                                                                                               |                  |             |            
|Common stock, $0.001 par
value, 25,000,000 shares
authorized, 7,622,689 shares
issued and outstanding;
(December 31, 2000,
2,299,886 shares issued and
outstanding) |                  | 7,623       | 2,300      
|Additional paid-in capital                                                                                                                                          |                  | 3,359,849   | 120,847    
|Retained deficit                                                                                                                                                    |                  | (76,353)    | (76,353)   
|Deficit accumulated during
the development stage                                                                                                                    |                  | (780,383)   | (52,512)   
|                                                                                                                                                                    |                  | ___________ | ___________
|Total stockholders' equity                                                                                                                                          |                  | 2,510,736   | (5,718)    
|                                                                                                                                                                    |                  | ___________ | ___________
|Total liabilities and
stockholders' equity                                                                                                                          |                  | $8,187,245  | $-         
|                                                                                                                                                                    |                  | ==========  | ========== 

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Amounts expressed in United States dollars)**

|                                                                                                     | **Notes** | **Year ended December
31, 2001** | **Year ended December
31, 2000** | **Cumulative from the
Re-entering  of
Development Stage on
December 27, 1993
through December 31,
2001**
|---------------------------------------------------------------------------------------------------- | --------- | -------------------------------- | -------------------------------- | --------------------------------------------------------------------------------------------------------
|Revenue                                                                                              |           | $-                               | $-                               | $-                                                                                                      
|                                                                                                     |           | **___________**                  | **___________**                  | **___________**                                                                                         
|Organizational cost
written off                                                                      |           | (350,000)                        | -                                | (350,000)                                                                                               
|Production cost                                                                                      |           | (54,887)                         | -                                | (54,887)                                                                                                
|General and
administrative
expenses                                                                  |           | (339,279)                        | (43,894)                         | (384,291)                                                                                               
|Depreciation                                                                                         | **7**     | (10,010)                         | -                                | (10,010)                                                                                                
|                                                                                                     |           | ___________                      | ___________                      | ___________                                                                                             
|Operating loss                                                                                       |           | (754,176)                        | (43,894)                         | (799,188)                                                                                               
|                                                                                                     |           | ___________                      | ___________                      | ___________                                                                                             
|Other income                                                                                         |           | 30,364                           | -                                | 30,364                                                                                                  
|Interest expense                                                                                     |           | (4,059)                          | -                                | (4,059)                                                                                                 
|                                                                                                     |           | ___________                      | ___________                      | ___________                                                                                             
|Loss from continuing
operations                                                                      |           | (727,871)                        | (43,894)                         | (772,883)                                                                                               
|                                                                                                     |           | ___________                      | ___________                      | ___________                                                                                             
|Discontinued
operations                                                                              |           | -                                | -                                | -                                                                                                       
|                                                                                                     |           | ___________                      | ___________                      | ___________                                                                                             
|Gain on settlement of
liabilities from
operations of warranty
services business of
former subsidiary |           | -                                | 48,880                           | (7,500)                                                                                                 
|                                                                                                     |           | ___________                      | ___________                      | ___________                                                                                             
|Net Income (Loss)                                                                                    |           | $(727,871)                       | $4,986                           | $(780,383)                                                                                              
|                                                                                                     |           | ==========                       | ==========                       | ==========                                                                                              
|Earnings (Loss) per
common share                                                                     |           |                                  |                                  |                                                                                                         
|From continuing
operations                                                                           | 13        | (0.25)                           | (0.04)                           | (1.24)                                                                                                  
|From discontinued
operations of former
subsidiary                                                    | 13        | N/A                              | 0.05                             | (0.01)                                                                                                  
|                                                                                                     |           | ___________                      | ___________                      | ___________                                                                                             
|Total Earnings(Loss)
per common share                                                                |           | $(0.25)                          | $0.01                            | $(1.25)                                                                                                 
|                                                                                                     |           | ==========                       | ==========                       | ==========                                                                                              
|Weighted average
number of common
shares outstanding                                                 | 13        | 2,953,690                        | 1,018,215                        | 622,925                                                                                                 

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CASH FLOW**

**(Amounts expressed in United States dollars)**

|                                                                                      | **Notes** | **Year ended December
31, 2001** | **Year ended December
31, 2000** | **Cumulative from the
Re-entering of
Development Stage on
December 27, 1993
through December 31,
2001**
|------------------------------------------------------------------------------------- | --------- | -------------------------------- | -------------------------------- | -------------------------------------------------------------------------------------------------------
|**CASH FLOW
FROMOPERATING
ACTIVITIES**                                                |           |                                  |                                  |                                                                                                        
|Net income (loss)                                                                     |           | $(727,871)                       | $4,986                           | $(780,383)                                                                                             
|Adjustments to
reconcile net income
(loss) to net cash paid
for operating activities: |           |                                  |                                  |                                                                                                        
|Depreciation                                                                          |           | 10,010                           | -                                | 10,010                                                                                                 
|Non-cash expenses                                                                     |           | -                                | 44,890                           | 45,958                                                                                                 
|Stock issued for
services                                                             |           | 49,625                           | 786                              | 50,461                                                                                                 
|Decrease/(increase) in
operating assets:                                              |           |                                  |                                  |                                                                                                        
|Deposits                                                                              |           | 474                              | -                                | 474                                                                                                    
|Other receivable and
prepayments                                                      |           | (4,897)                          | -                                | (4,897)                                                                                                
|Increase/(decrease) in
operating liabilities:                                         |           |                                  |                                  |                                                                                                        
|Other payable and
accruals                                                            |           | 641,025                          | (50,662)                         | 646,743                                                                                                
|                                                                                      |           | ___________                      | ___________                      | ___________                                                                                            
|Net cash provided
by(paid for) operating
activities                                   |           | (31,634)                         | -                                | (31,634)                                                                                               
|                                                                                      |           | ___________                      | ___________                      | ___________                                                                                            
|**CASH FLOW
FROMINVESTING
ACTIVITIES**                                                |           |                                  |                                  |                                                                                                        
|Purchase of film library                                                              |           | (918,000)                        | -                                | (918,000)                                                                                              
|Cash inflow on
acquisition of
subsidiary                                              | 17(c)     | 456                              | -                                | 456                                                                                                    
|                                                                                      |           | ___________                      | ___________                      | ___________                                                                                            
|Net cash provided
by(paid for) investing
activities                                   |           | (917,544)                        | -                                | (917,544)                                                                                              
|                                                                                      |           | ___________                      | ___________                      | ___________                                                                                            
|**CASH FLOW FROM
FINANCING
ACTIVITIES**                                               |           |                                  |                                  |                                                                                                        
|Repayment of capital
element of finance
lease obligations                             |           | (1,631)                          | -                                | (1,631)                                                                                                
|Due to stockholders                                                                   |           | 951,109                          | -                                | 951,109                                                                                                
|                                                                                      |           | ___________                      | ___________                      | ___________                                                                                            
|Net cash provided by
(used in) financing
activities                                   |           | 949,478                          | -                                | 949,478                                                                                                
|                                                                                      |           | ___________                      | ___________                      | ___________                                                                                            
|Net increase in cash
and bank deposits                                                |           | 300                              | -                                | 300                                                                                                    
|Cash and bank deposits
as of beginning of year                                        |           | -                                | -                                | -                                                                                                      
|                                                                                      |           | ___________                      | ___________                      | ___________                                                                                            
|Cash and bank deposits
as of end of year                                              |           | $300                             | $-                               | $300                                                                                                   
|                                                                                      |           | ==========                       | ==========                       | ==========                                                                                             

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CASH FLOW**

**(Amounts expressed in United States dollars)**

|                                                                                                                                                                                                                                                            | **Year ended December 31, 2001** | **Year ended December 31, 2000**
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------- | --------------------------------
|**MAJOR NON-CASH FINANCING
& INVESTING** **ACTIVITIES**                                                                                                                                                                                                     |                                  |                                 
|                                                                                                                                                                                                                                                            |                                  |                                 
|Common stock issued to Mr. William A
Fisher who is a director and stockholder
for purchasing the film library
comprising Informercials, Color and B
Roll and Primetime Series [see notes 8
and 16(b)] on June 12, 2001                                      | 3,130,000                        | -                               
|                                                                                                                                                                                                                                                            |                                  |                                 
|Common stock issued to Mr. William A
Fisher and Mrs. Mrian Yu Fisher for
acquisition of subsidiary, less cash
inflow on subsidiary on June 12, 2001                                                                                                         | 12,044                           | -                               
|                                                                                                                                                                                                                                                            |                                  |                                 
|Common stock issued to four staff of its
subsidiary for payment of outstanding
wages on September 21, 2001                                                                                                                                                  | 28,875                           | -                               
|                                                                                                                                                                                                                                                            |                                  |                                 
|Common stock issued to Mr. William
A. Fisher who is a director and
stockholder for payment of outstanding
wages on September 21, 2001                                                                                                                       | 27,000                           | -                               
|                                                                                                                                                                                                                                                            |                                  |                                 
|Common stock issued to Capital
Holdings, LLC as a result of
anti-dilution clause concerning the
company's reverse stock split on
September 21, 2001                                                                                                         | 400                              | -                               
|                                                                                                                                                                                                                                                            |                                  |                                 
|Common stock issued to American
Overseas Real Estate Company Limited
in exchange for assignment to the
company of a licence to broadcasting
rights and usage of a dedicated cable
channel and uplink services [see note
10 and 16(g)] on September 21, 2001 | 5,550                            | -                               
|                                                                                                                                                                                                                                                            |                                  |                                 
|First convertible note issued to Sun
Television Cybernetworks Holdings
Limited for the grant of a licence to the
Film Rights (see note 8) on September
26, 2001                                                                                             | 3,000,000                        | -                               
|                                                                                                                                                                                                                                                            |                                  |                                 
|Common stock issued to various
consultants in compensation for their
services to be rendered to the Company
on September 21, 2001, less
termination of consulting agreement on
October 4, 2001                                                              | 30,000                           | -                               

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CASH FLOW**

**(Amounts expressed in United States dollars)**

|                                                                                                                                                                                                                                                                                  | **Year ended December 31, 2001** | **Year ended December 31, 2000**
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------- | --------------------------------
|**MAJOR NON-CASH FINANCING
& INVESTING ACTIVITIES
(Cont'd)**                                                                                                                                                                                                                      |                                  |                                 
|                                                                                                                                                                                                                                                                                  |                                  |                                 
|Common stock issued to an
independent third party in full payment
of a loan made to Mr. William A Fisher
who then loaned the money to the
Company. Mr Fisher is a director and
shareholder and repayment of this loan
reduced the amount of his directors loan
on October 4, 2001 | 10,000                           | -                               
|                                                                                                                                                                                                                                                                                  |                                  |                                 
|Convertible note issued to Sun
Television Cybernetworks Holdings
Limited for the provision of Production
Facilities and production Equipment
and the grant broadcast airtime (see
note 9) on October 12, 2001                                                                     | 1,000,000                        | -                               

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**FROM THE RE-ENTERING OF DEVELOPMENT STAGE ON**

**DECEMBER 27, 1993 THROUGH DECEMBER 31, 2001**

**(Amounts expressed in United States dollars)**

|                                                         | **Common stock**     |             | **Treasury stock** | **Capital in
excess of par
value** | **Retained deficit** | **Deficit
accumulated
during the
development
stage**
|-------------------------------------------------------- | -------------------- | ----------- | ------------------ | ---------------------------------- | -------------------- | ----------------------------------------------------
|                                                         | **Number of
shares** | **Amount**  |                    |                                    |                      |                                                     
|Balance as at
December 27,
1993                          | 2,679,715            | $2,680      | $(8,597)           | $83,338                            | $(76,353)            | $-                                                  
|Net income for
the period ended
December 31,
1993        | -                    | -           | -                  | -                                  | -                    | -                                                   
|                                                         | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance as at
December 31,
1993                          | 2,679,715            | 2,680       | (8,597)            | 83,338                             | (76,353)             | -                                                   
|50,000 shares
common stock
issued for
services at
$0.001 | 50,000               | 50          | -                  | -                                  | -                    | -                                                   
|Net income for
the year ended
December 31,
1994          | -                    | -           | -                  | -                                  | -                    | (57,498)                                            
|                                                         | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance as at
December 31,
1994                          | 2,729,715            | 2,730       | (8,597)            | 83,338                             | (76,353)             | (57,498)                                            
|Net income for
the year ended
December 31,
1995          | -                    | -           | -                  | -                                  | -                    | -                                                   
|                                                         | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance as at
December 31,
1995 & c/f                    | 2,729,715            | 2,730       | (8,597)            | 83,338                             | (76,353)             | (57,498)                                            

(Continued)

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**FROM THE RE-ENTERING OF DEVELOPMENT STAGE ON**

**DECEMBER 27, 1993 THROUGH DECEMBER 31, 2001**

**(Amounts expressed in United States dollars)**

|                                                | **Common stock**     |             | **Treasury stock** | **Capital in
excess of par
value** | **Retained deficit** | **Deficit
accumulated
during the
development
stage**
|----------------------------------------------- | -------------------- | ----------- | ------------------ | ---------------------------------- | -------------------- | ----------------------------------------------------
|                                                | **Number of
shares** | **Amount**  |                    |                                    |                      |                                                     
|Balance as at
December 31,
1995 & b/f           | 2,729,715            | $2,730      | $(8,597)           | $83,338                            | $(76,353)            | $(57,498)                                           
|Net income for
the year ended
December 31,
1996 | -                    | -           | -                  | -                                  | -                    | -                                                   
|                                                | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance as at
December 31,
1996                 | 2,729,715            | 2,730       | (8,597)            | 83,338                             | (76,353)             | (57,498)                                            
|Net income for
the year ended
December 31,
1997 | -                    | -           | -                  | -                                  | -                    | -                                                   
|                                                | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance as at
December 31,
1997                 | 2,729,715            | 2,730       | (8,597)            | 83,338                             | (76,353)             | (57,498)                                            
|Net income for
the year ended
December 31,
1998 | -                    | -           | -                  | -                                  | -                    | -                                                   
|                                                | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance as at
December 31,
1998 & c/f           | 2,729,715            | 2,730       | (8,597)            | 83,338                             | (76,353)             | (57,498)                                            

(Continued)

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**FROM THE RE-ENTERING OF DEVELOPMENT STAGE ON**

**DECEMBER 27, 1993 THROUGH DECEMBER 31, 2001**

**(Amounts expressed in United States dollars)**

|                                                                                          | **Common stock**     |             | **Treasury stock** | **Capital in
excess of par
value** | **Retained deficit** | **Deficit
accumulated
during the
development
stage**
|----------------------------------------------------------------------------------------- | -------------------- | ----------- | ------------------ | ---------------------------------- | -------------------- | ----------------------------------------------------
|                                                                                          | **Number of
shares** | **Amount**  |                    |                                    |                      |                                                     
|Balance as at
December 31,
1998 & b/f                                                     | 2,729,715            | $2,730      | $(8,597)           | $83,338                            | $(76,353)            | $(57,498)                                           
|Cancellation of
Treasury Stock                                                            | (2,464,829)          | (2,465)     | 8,597              | (6,132)                            | -                    | -                                                   
|Net income for
the year ended
December 31,
1999                                           | -                    | -           | -                  | -                                  | -                    | -                                                   
|                                                                                          | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance as at
December 31,
1999                                                           | 264,886              | 265         | -                  | 77,206                             | (76,353)             | (57,498)                                            
|2,000,000
shares of
common stock
issued for debt
relief at $0.023
per share, May
2000     | 2,000,000            | 2,000       | -                  | 42,890                             | -                    | -                                                   
|25,000 shares of
common stock
issued for
services
rendered at
$0.023 per
share, June 2000 | 25,000               | 25          | -                  | 537                                | -                    | -                                                   
|10,000 shares of
common stock
issued for
services
rendered at
$0.023 per
share, July 2000 | 10,000               | 10          | -                  | 214                                | -                    | -                                                   
|Net income for
the year ended
December 31,
2000                                           | -                    | -           | -                  | -                                  | -                    | 4,986                                               
|                                                                                          | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance as at
December 31,
2000 & c/f                                                     | 2,299,886            | 2,300       | -                  | 120,847                            | (76,353)             | (52,512)                                            

(Continued)

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**FROM THE RE-ENTERING OF DEVELOPMENT STAGE ON**

**DECEMBER 27, 1993 THROUGH DECEMBER 31, 2001**

**(Amounts expressed in United States dollars)**

|                                                                                                                                                                                                       | **Common stock**     |             | **Treasury stock** | **Capital in
excess of par
value** | **Retained deficit** | **Deficit
accumulated
during the
development
stage**
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------- | ----------- | ------------------ | ---------------------------------- | -------------------- | ----------------------------------------------------
|                                                                                                                                                                                                       | **Number of
shares** | **Amount**  |                    |                                    |                      |                                                     
|Balance as at
December 31,
2000 & b/f                                                                                                                                                                  | 2,299,886            | $2,300      | $-                 | $120,847                           | $(76,353)            | $(52,512)                                           
|As part of the
acquisition of
AOI, these
shares were
cancelled by the
previous owners
of the Company
upon payment
of $50,000 on
June 12, 2001                                                          | (2,009,219)          | (2,009)     | (50,000)           | 52,009                             | -                    | -                                                   
|As part of the
acquisition of
AOI, the
Company
entered into a
13-for-1 stock
split such that
each
shareholder
received an
additional 12
shares of
common stock
for each share
held as at June
12, 2001 | 3,488,004            | 3,488       | 50,000             | (53,488)                           | -                    | -                                                   
|                                                                                                                                                                                                       | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance c/f                                                                                                                                                                                            | 3,778,671            | 3,779       | -                  | 119,368                            | (76,353)             | (52,512)                                            

(Continued)

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**FROM THE RE-ENTERING OF DEVELOPMENT STAGE ON**

**DECEMBER 27, 1993 THROUGH DECEMBER 31, 2001**

**(Amounts expressed in United States dollars)**

|                                                                                                                                                                                                                    | **Common stock**     |             | **Treasury stock** | **Capital in
excess of par
value** | **Retained deficit** | **Deficit
accumulated
during the
development
stage**
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ----------- | ------------------ | ---------------------------------- | -------------------- | ----------------------------------------------------
|                                                                                                                                                                                                                    | **Number of
shares** | **Amount**  |                    |                                    |                      |                                                     
|Balance b/f                                                                                                                                                                                                         | 3,778,671            | $3,779      | $-                 | $119,368                           | $(76,353)            | $(52,512)                                           
|                                                                                                                                                                                                                    |                      |             |                    |                                    |                      |                                                     
|Cost of
acquiring AOI
on June 12,
2001 from Mr.
William A.
Fisher and Mrs.
Marian Yu
Fisher at net
asset value
(primarily the
film library
purchased from
Mr. William A.
Fisher on 25
May 2001) at
$0.349 per share | 9,000,004            | 9,000       | -                  | 3,133,500                          | -                    | -                                                   
|The Company
through
shareholders'
consent effected
a 20 to 1 reverse
split of its
common stock
on September
19, 2001                                                                                                | (12,139,736)         | (12,140)    | -                  | 12,140                             | -                    | -                                                   
|Issued at $0.10
per share on
September 21,
2001 per S-8
filed when
quoted price
was $0.125 per
share:288,750
shares of
common stock
to four staff of
subsidiary for
payment of
outstanding
wages                    | 288,750              | 289         | -                  | 28,586                             | -                    | -                                                   
|270,000 shares
of common
stock to Mr.
William A.
Fisher for
payment of
outstanding
wages                                                                                                                            | 270,000              | 270         | -                  | 26,730                             | -                    | -                                                   
|                                                                                                                                                                                                                    | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance c/f                                                                                                                                                                                                         | 1,197,689            | 1,198       | -                  | 3,320,324                          | (76,353)             | (52,512)                                            

(Continued)

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**FROM THE RE-ENTERING OF DEVELOPMENT STAGE ON**

**DECEMBER 27, 1993 THROUGH DECEMBER 31, 2001**

**(Amounts expressed in United States dollars)**

|                                                                                                                                                                                                                                                                      | **Common stock**     |             | **Treasury stock** | **Capital in
excess of par
value** | **Retained deficit** | **Deficit
accumulated
during the
development
stage**
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ----------- | ------------------ | ---------------------------------- | -------------------- | ----------------------------------------------------
|                                                                                                                                                                                                                                                                      | **Number of
shares** | **Amount**  |                    |                                    |                      |                                                     
|Balance b/f                                                                                                                                                                                                                                                           | 1,197,689            | $1,198      | $-                 | $3,320,324                         | $(76,353)            | $(52,512)                                           
|475,000 shares
of common
stock to various
Consultants as
compensation
for their
services to be
rendered                                                                                                                                                               | 475,000              | 475         | -                  | 47,025                             | -                    | -                                                   
|An anti-dilution
clause was
involved by
Capital
Holdings, LLC
as a result of
Company's
reverse stock
split on
September 21,
2001 of $0.001
per share                                                                                                                  | 400,000              | 400         | -                  | -                                  | -                    | -                                                   
|Shares were
issued to
American
Overseas Real
Estate Company
Ltd. which is
wholly owned
by Mr. William
A. Fisher and
Mrs. Marian Yu
Fisher in
exchange for a
license ("Telesat
Agreement")
which was
assigned to the
Company on
September 21,
2001 at $0.001
per share | 5,550,000            | 5,550       | -                  | -                                  | -                    | -                                                   
|                                                                                                                                                                                                                                                                      | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance c/f                                                                                                                                                                                                                                                           | 7,622,689            | 7,623       | -                  | 3,367,349                          | (76,353)             | (52,512)                                            

(Continued)

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**FROM THE RE-ENTERING OF DEVELOPMENT STAGE ON**

**DECEMBER 27, 1993 THROUGH DECEMBER 31, 2001**

**(Amounts expressed in United States dollars)**

|                                                                                                                                                   | **Common stock**     |             | **Treasury stock** | **Capital in
excess of par
value** | **Retained deficit** | **Deficit
accumulated
during the
development
stage**
|-------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | ----------- | ------------------ | ---------------------------------- | -------------------- | ----------------------------------------------------
|                                                                                                                                                   | **Number of
shares** | **Amount**  |                    |                                    |                      |                                                     
|Balance b/f                                                                                                                                        | 7,622,689            | 7,623       | -                  | 3,367,349                          | (76,353)             | (52,512)                                            
|On October 4,
2001 the
Company
terminated
consulting
agreements
referenced in the
S-8 filing on
September 21,
2001                                 | (175,000)            | (175)       | -                  | (17,325)                           | -                    | -                                                   
|On October 4,
2001 the
Company issued
shares to an
independent
third party in
full payment of
an outstanding
debt of $10,000
at $0.05715 per
share | 175,000              | 175         | -                  | 9,825                              | -                    | -                                                   
|Net loss for the
year ended
December 31,
2001                                                                                                      | -                    | -           | -                  | -                                  | -                    | (727,871)                                           
|                                                                                                                                                   | ___________          | ___________ | ___________        | ___________                        | ___________          | ___________                                         
|Balance as at
December 31,
2001                                                                                                                    | 7,622,689            | $7,623      | $-                 | $3,359,849                         | $(76,353)            | $(780,383)                                          
|                                                                                                                                                   | ==========           | ==========  | ==========         | ==========                         | ==========           | ==========                                          

The notes on pages 7 through 28 are an integral part of these consolidated financial statements.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**1.** **ORGANIZATION AND PRINCIPAL ACTIVITIES**

Organization - GTM Holdings, Inc. (formerly Triad Warranty Corporation) (formerly "Fulton Ventures, Inc.") was
organized under the laws of the State of Nevada on September 21, 1989.  On May 22, 2000 Triad Warranty corporation
changed their name to GTM Holdings, Inc. GTM Holdings, Inc. (the Company) was formed to purchase, merge with or
acquire any business or assets which management believed had potential for being profitable.  On June 14, 1990, the
Company exchanged 2,464,829 of its common shares for all the outstanding shares of Triad Warranty Corporation.

Triad Warranty Corporation was organized under the laws of the state of Texas on November 21, 1988.  The purpose of
this Company was to provide extended warranty service coverage for heating and air conditioning units and their
component parts and various other consumer products.  This Company began operations in January 1989, in Dallas Texas.
The Board of Directors met on December 27, 1993, and determined it was in the best interest of Triad Warranty
Corporation, Inc. (Nevada) and its sole operating subsidiary, Triad Warranty Corporation, to separate ownership.  To effect
this transaction, selected shareholders in the Company were issued their pro rata shares in Triad Warranty Corporation, and
the original 2,464,829 shares of common stock were returned to the Company for cancellation.  This transaction was
accounted for in the financial statement of the Company as a discontinued operation as of December 27, 1993.  The
Company is considered to have re-entered into a new development stage on December 27, 1993.

Development Stage - The Company is considered a development stage company as defined in SFAS no. 7.  During 2000,
the Company underwent a change in ownership control which has resulted in a change in the officers and Board of
Director's of the Company.

On May 25, 2001, GTM Holdings, Inc ("the Company") signed an agreement which became effective on June 12, 2001 to
acquire 100% of the issued and outstanding shares of American Overseas Investment Company Limited ("AOI"), a Macau
company incorporated on May 23, 2001.   This acquisition has been accounted for by the pooling of interests method.  It
was a combination of entities under common control.  As part of that agreement AOI has given an affidavit to the Company
that it has a net worth in excess of $3,000,000.  On May 23, 2001, AOI purchased all the assets of China Communications
Network for an Account Payable of $77,124, a company with complimentary business activities.  On May 25, 2001, AOI
also purchased a film library from Mr. William A. Fisher for account payable of $918,000 and for shares already issued
valued at $3,130,000.  This represented the approximate purchase price paid by Mr. Fisher for this film library.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**1. ORGANIZATION AND PRINCIPAL ACTIVITIES**

In connection therewith, the Company effected the issuance of 9,000,004 shares of its common stock equally to the former
shareholders of AOI, Mr. William A. Fisher and Mrs. Marian Yu Fisher which represent approximately 70.4% of the issued
and outstanding stock of the Company immediately following the acquisition, after giving effect to the Company's share
distribution pursuant to which the stockholders of the Company received 12 shares of common stock for each share
outstanding on June 12, 2001.

GTM Holdings, Inc. is a development stage company which has its headquarters in Macau and has representative offices in
Hong Kong and the People's Republic of China.

**2 .** **BASIS OF PRESENTATION**

The acquisition of AOI, by the Company on June 12, 2001, has been treated as a pooling of interests.  It was a combination
of entities under common control. AOI is the continuing operating entity as a result of the stock-for-stock merger
transaction as described in Note 1 above.  On this basis, the financial statements of AOI from May 23, 2001 (date of
incorporation) to June 12, 2001 are incorporated in these consolidated financial statements.

**3. SUBSIDIARY**

Details of the Company's subsidiary as of December 31, 2001 were as follows:

|**Name**                                     | **Place of incorporation** | **Percentage of equity
interest held** | **Principal activities**                                            
|-------------------------------------------- | -------------------------- | -------------------------------------- | --------------------------------------------------------------------
|American Overseas
Investment Company
Limited | Macau                      | 100%                                   | In the beginning stage of
producing and airing home
shopping program

**4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis of consolidation**

The consolidated financial statements include the accounts of the Company and its subsidiary.  All material intercompany
transactions and balances within the Group have been eliminated on consolidation.

**Inventories**

Inventories are stated at the lower of cost, on a first-in and first-out basis, or market value.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**4.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)**

**Furniture, Fixtures, Equipment and Capital Leases**

Furniture, fixtures, equipment and capital leases are recorded at cost.  Gains or losses on disposals are reflected in current
operations.  Depreciation for financial reporting purposes is provided using the straight-line method over the estimated
useful lives of the assets from three to five years.  All ordinary repair and maintenance costs are expenses as incurred.

**Film Library**

The film library is stated at cost less accumulated depreciation.  To date there has been no depreciation as the company has
not yet begun business.  The film library will be depreciated on a straight line basis at rates determined by the directors to
write off their costs over their estimated useful lives at the following annual rates:

|Infomercials        | 331/3%
|------------------- | ------
|Color and B Roll    | 50%   
|Primetime Series    | 331/3%
|Sun TV Film Library | 331/3%

**Production and Broadcast Purchase**

The production and broadcast purchase rights are stated at cost less accumulated amortization.  To date there has been no
amortization as the Company has not begun business.  The production and broadcast purchase price will be amortized on a
straight line basis at rates determined by the director to write off their costs over their estimated useful lives at an annual
rate of 331/3%.

**Broadcasting Rights and Airtime**

The broadcasting rights and airtime are stated at cost less accumulated amortization.  To date, there has been no
amortization as the Company has not yet begun business.

**Income Taxes**

The group accounts for income tax under the provisions of Statement of Financial Accounting Standards No.109, which
requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been
included in the financial statements or tax returns.  Deferred income taxes are provided using the liability method.  Under
the liability method, deferred income taxes are recognized for all significant temporary differences between the tax and
financial statements bases of assets and liabilities.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**4.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)**

**Capital Leases**

Leases that transfer substantially all the rewards and risks of ownership of assets to the Group are accounted for as capital
leases. Capital leases are capitalized at the Inception of the leases at the lower of the fair value of the leased assets or the
present value of the minimum lease payments.  Each lease payment is allocated between the capital and finance charges so
as to achieve a constant rate on the capital balances outstanding.  The corresponding rental obligations, net of finance
charges, are included in long term liabilities.  The finance charges are charged to the consolidated profit and loss account
over the lease periods.

Assets held under finance leases are included in fixed assets and amortized over the shorter of the lease terms or the useful
lives of the assets.

During the year ended December 31, 2001, the Group entered into capital lease arrangements to purchase a motor vehicle
with a capital value of $25,664.

**Operating Leases**

Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted
for as operating leases.  Rentals applicable to such operating leases are charged to the profit and loss account on the
straight-line basis over the lease terms.

**Foreign Currency Transactions**

Transactions in foreign currencies are recorded at the applicable exchange rates ruling at the transaction dates.  Monetary
assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable exchange
rates ruling at that date. Exchange differences (if any) are included in the stockholders' equity section of the balance sheet.

The translation of the financial statements of subsidiary into United States dollars is performed for the balance sheet
accounts using the closing exchange rate in effect at the balance sheet dates and for revenue and expenses accounts using
an average exchange rate during each reporting period.  The gains or losses resulting from translation are included in
stockholders' equity separately as cumulative transaction adjustments.

**Earnings (Loss) per Common Share**

Earning (Loss) per common share is computed in accordance with Statement of Financial Accounting Standards No.128 by
dividing net income (loss) for each year/period by the weighted average number of shares of common stock outstanding
during the years.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**4.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd)**

**Use of Estimates**

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of
America requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  For
a detailed description of the significant estimates used in these statements refer to notes 1, 4, 8, 9, 10 and 15.  Accordingly,
actual results could differ from those estimates.

|       |                                                      | **December 31,** | **December 31,**
|------ | ---------------------------------------------------- | ---------------- | ----------------
|       |                                                      | **2001**         | **2000**        
|       |                                                      |                  |                 
|**5.** | **INVENTORIES**                                      |                  |                 
|       |                                                      |                  |                 
|       | Finished goods, at cost                              | $24,811          | $-              
|       |                                                      | =========        | =========       
|       |                                                      |                  |                 
|**6.** | **DEPOSITS**                                         |                  |                 
|       |                                                      |                  |                 
|       | Rental deposits                                      | $6,118           | $-              
|       |                                                      | ==========       | =========       
|       |                                                      |                  |                 
|**7.** | **FURNITURE, FIXTURES,
EQUIPMENT AND
CAPITAL LEASE** |                  |                 
|       |                                                      |                  |                 
|       | Furniture, fixtures and
equipment:                   |                  |                 
|       | Furniture and fixtures                               | $19,399          | $-              
|       | Office equipment                                     | 10,462           | -               
|       | Leasehold improvements                               | 5,519            | -               
|       |                                                      |                  |                 
|       | Capital leases:                                      |                  |                 
|       | Motor vehicle                                        | 34,754           | -               
|       |                                                      | ___________      | ___________     
|       | Total cost                                           | 70,134           | -               
|       | Less: Accumulated
depreciation:                      |                  |                 
|       | Furniture, fixtures and
equipment                    | (4,942)          | -               
|       | Capital lease                                        | (5,068)          | -               
|       |                                                      | ___________      | ___________     
|       |                                                      | (10,010)         |                 
|       |                                                      | ___________      | ___________     
|       |                                                      | 60,124           | -               
|       |                                                      | ==========       | ==========      

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**8.** **FILM LIBRARY**

|                        | **December 31,** | **December 31,**
|----------------------- | ---------------- | ----------------
|                        | **2001**         | **2000**        
|                        |                  |                 
|Film library comprised: |                  |                 
|Informercials           | $2,698,000       | $-              
|Color and B Roll        | 100,000          | -               
|Primetime Series        | 1,250,000        | -               
|Sun TV Film Library     | 3,000,000        | -               
|                        | ___________      | ___________     
|                        | $7,048,000       | $-              
|                        | ==========       | ==========      

The Informercials, Color and B Roll and Primetime Series were wholly purchased from Mr. William A. Fisher who is a
director and stockholder of the company.  This represented the approximate purchase price paid by Mr. Fisher.

The Company entered into an agreement with Sun Television Cybernetworks Holdings Limited, an unrelated company
incorporated in the Bermuda and listed on the Hong Kong Stock Exchange, on September 26, 2001 for the grant of a
license to the Film Rights at a consideration of $3,000,000 which will be satisfied by delivery of the First Convertible Note
in the principal amount of $3,000,000.

The Note is non interest bearing and has no fixed repayment terms.  It is not secured nor subordinated.  Any time within
five (5) years of the date of the note, the Noteholder may by notice in writing demand repayment or conversion into shares.
Unless the Company and Noteholder agree in their absolute discretion to repayment of the Note within 10 business days of
receipts of a duly signed Notice, the company shall issue conversion shares to the Noteholder.   Conversion shall be by one
single conversion of the entire Note.  Number of shares to be issued upon conversion shall be 261,838 at the issue price of
US$11.575 per conversion share (Agreed price), subject to adjustment.  Any change in capital stock as the result of (a) a
dividend payable in shares, (b) subdivision of outstanding shares, (c) combination of outstanding shares into a smaller
number of shares or (d) issuing shares in a reclassification of the shares (excluding in connection with a consolidation or
merger in which the issuer is the continuing issuer), the number of conversion shares shall be proportionately adjusted.  In
each case where an adjustment is made, the Agreed Price shall be adjusted accordingly.  Upon conversion, the conversion
shares shall be held by an escrow agent and released to the Noteholder one year after the date of the note.  If the shares
issued upon conversion are sold by the Noteholder in a bona fide sale within 5 years of the date of the Note at a price which
is less than the Agreed Price, the Noteholder is entitled to be issued Adjustment Shares based on the market price of the
shares at the time of sale.

The Conversion Shares and Adjusted Shares will be restricted stock for the purposes of the U.S.  Securities Act of 1933.
No application will be made for a  listing of the Note on my stock or securities exchange.  The Note is neither transferable
nor assignable.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**9. PRODUCTION AND BROADCAST PURCHASE**

|                                  | **December 31,** | **December 31,**
|--------------------------------- | ---------------- | ----------------
|                                  | **2001**         | **2000**        
|                                  |                  |                 
|Production and broadcast purchase | $1,000,000       | $-              

The Company entered into an agreement with Sun Television Cybernetworks Holdings Limited, an unrelated company
incorporated in the Bermuda and listed on the Hong Kong Stock Exchange on October 12, 2001, for the provision of
Production Facilities and Production Equipment for a period of 3 years from October 12, 2001, and the grant of broadcast
airtime on Sun TV Channel a Macau TV Channel for a period of 3 years from the date of commencement of broadcasting
which shall begin no later than November 30, 2001 at a consideration of $1,000,000 which will be satisfied by delivery of
the Convertible Note in the principal amount of $1,000,000.  In addition to the note, the Company shall pay to Sun TV a
royalty of 10% of the volume of home shopping sales relating to such broadcasts less returns and postage.

The Note is non interest bearing and has no fixed repayment terms.  It is not secured nor subordinated.  Any time within
five (5) years of the date of the note, the Noteholder may by notice in writing demand repayment or conversion into shares.
Unless the Company and Noteholder agree in their absolute discretion to repayment of the Note within 10 business days of
receipts of a duly signed Notice, the company shall issue conversion shares to the Noteholder.  Conversion shall be by one
single conversion of the entire Note.  Number of shares to be issued upon conversion shall be 87,217 at the issue price of
US$11.466 per conversion share (Agreed price), subject to adjustment.  Any change in capital stock as the result of (a) a
dividend payable in shares, (b) subdivision of outstanding shares, (c) combination of outstanding shares into a smaller
number of shares or (d) issuing shares in a reclassification of the shares (excluding in connection with a consolidation or
merger in which the issuer is the continuing issuer), the number of conversion shares shall be proportionately adjusted.  In
each case where an adjustment is made, the Agreed Price shall be adjusted accordingly.  Upon conversion, the conversion
shares shall be held by an escrow agent and released to the Noteholder one year after the date of the note.  If the shares
issued upon conversion are sold by the Noteholder in a bona fide sale within 5 years of the date of the Note at a price which
is less than the Agreed Price, the Noteholder is entitled to be issued Adjustment Shares based on the market price of the
shares at the time of sale.

The Conversion Shares and Adjusted Shares will be restricted stock for the purposes of the U.S.  Securities Act of 1933.
No application will be made for a  listing of the Note on any stock or securities exchange.  The Note is neither transferable
nor assignable.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**10. BROADCASTING RIGHTS AND AIRTIME**

|                                | **December 31,** | **December 31,**
|------------------------------- | ---------------- | ----------------
|                                | **2001**         | **2000**        
|                                |                  |                 
|Broadcasting rights and airtime | $5,550           | $-              

The Company issued 5,550,000 of common stock at par value of $0.001 each to American Overseas Real Estate Company
Limited in exchange for assignment to the Company of a license to broadcasting rights and usage of a dedicated cable
channel and uplink service from the Earth station located on Coloane Island, Macau. The shareholders and directors of
American Overseas Real Estate Company Limited are Mr. William A. Fisher and Mr. Marian Yu Fisher.  The amount of
$5,550 recorded as an asset represents an approximation of the amount spent by Mr. Fisher in negotiating this agreement.
("Telesat Agreement") The initial period is for six months beginning October 15, 2001. The Company has entered into a
preliminary agreement to extend the Telesat Agreement for a period of five years from April 15, 2002 on payment terms
and other conditions yet to be finalized.

**11.** **CAPITAL LEASE OBLIGATIONS**

Future minimum lease payments under capital lease, together with the present value of the minimum lease payments, are as
follows:

|                                        | **December 31,** | **December 31,**
|--------------------------------------- | ---------------- | ----------------
|                                        | **2001**         | **2000**        
|                                        |                  |                 
|Payable:                                |                  |                 
|Within one year                         | $12,401          | $-              
|In the second year                      | 10,133           | -               
|In the third to fourth years, inclusive | 5,910            | -               
|                                        | ___________      | ___________     
|                                        | 28,444           | -               
|Less: Imputed interest                  | (4,411)          | -               
|                                        | ___________      | ___________     
|                                        | 24,033           | -               
|Less: Current portion                   | (9,874)          | -               
|                                        | ___________      | ___________     
|Non-current portion                     | $14,159          | $-              
|                                        | ==========       | ==========      

**12.** **DUE TO STOCKHOLDERS**

The amounts due to the stockholders are unsecured, non-interest bearing and without predetermined repayment terms.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**13. EARNINGS (LOSS) PER COMMON SHARE**

The calculation of the basic earning (loss) per common share is as follows:

|                                                                                                                                                       | **Year ended December 31,
2001** | **Year ended December 31,
2000** | **Cumulative from the
Re-entering of Development
Stage on December 27, 1993
through December 31, 2001**
|------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------- | -------------------------------- | -------------------------------------------------------------------------------------------------------
|Loss from continuing
operations available to
common stockholders
(numerator)                                                                           | ($727,871)                       | ($43,894)                        | ($772,883)                                                                                             
|Gain on extinguishment of
debt (numerator)                                                                                                             | -                                | $48,880                          | $48,880                                                                                                
|Loss from discontinued
operations available to
common stockholders
(numerator)                                                                         | -                                | -                                | ($56,380)                                                                                              
|Weighted average number of
common shares outstanding
used in calculation of basic
earning (loss) per common
share during the year/period
(denominator) | 2,953,690 (i)                    | 1,018,215 (iii)                  | 622,925 (vi)                                                                                           
|Earning (Loss) per common
share:                                                                                                                       |                                  |                                  |                                                                                                        
|From continuing operations                                                                                                                             | ($0.25)(ii)                      | (0.04)(iv)                       | (1.24)(vii)                                                                                            
|From discontinued operations
of former subsidiary                                                                                                      | N/A                              | 0.05 (v)                         | (0.01)(viii)                                                                                           
|                                                                                                                                                       | ___________                      | ___________                      | ___________                                                                                            
|Total Earning (Loss) per
common share                                                                                                                  | ($0.25)                          | 0.01                             | (1.25)                                                                                                 
|                                                                                                                                                       | ==========                       | ==========                       | ==========                                                                                             

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**13.  EARNINGS (LOSS) PER COMMON SHARE (Cont'd)**

(i) The computation of the weighted average number of common stock outstanding for the year ended December 31, 2001:

|**Date**                                      | **Shares
outstanding** | **Stock split** | **Reverse split** | **Weight(in days)** | **Weighted average**
|--------------------------------------------- | ---------------------- | --------------- | ----------------- | ------------------- | --------------------
|December 31, 2000
to June 12, 2001            | 2,299,886              | x 13            | x 1/20            | x 163/365           | = 667,597           
|June 12, 2001 to
September 19,
2001           | 12,778,675             | -               | x 1/20            | x 99/365            | = 173,300           
|September 19,
2001 to September
21, 2001      | 638,939                | -               | -                 | x 2/365             | = 3,501             
|September 21,
2001 to December
31, 2001       | 7,622,689              | -               | -                 | x 101/365           | = 2,109,292         
|                                              |                        |                 |                   |                     | ___________         
|Weighted average
number of shares
outstanding |                        |                 |                   |                     | = 2,953,690         
|                                              |                        |                 |                   |                     | ==========          

(ii) The computation of the loss per common share from continuing operations for the year ended December 31, 2001:

|($727,871)/2,953,690 | = ($0.25)
|-------------------- | ---------
|                     | =======  

(iii) The computation of the weighted average number of common stock outstanding for the year ended December 31, 2000:

|**Date**                                      | **Shares
outstanding** | **Stock split** | **Reverse split** | **Weight(in days)** | **Weighted average**
|--------------------------------------------- | ---------------------- | --------------- | ----------------- | ------------------- | --------------------
|December 31, 1999
to May 10, 2000             | 264,886                | x 13            | x 1/20            | x 131/366           | = 61,626            
|May 10, 2000 to
June 27, 2000                 | 2,264,886              | x 13            | x 1/20            | x 48/366            | = 193,072           
|June 27, 2000 to
July 13, 2000                | 2,289,886              | x 13            | x 1/20            | x 16/366            | = 65,068            
|July 13, 2000 to
December 31, 2000            | 2,299,886              | x 13            | x 1/20            | x 171/366           | = 698,449           
|                                              |                        |                 |                   |                     | ___________         
|Weighted average
number of shares
outstanding |                        |                 |                   |                     | = 1,018,215         
|                                              |                        |                 |                   |                     | ==========          

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**13.  EARNINGS (LOSS) PER COMMON SHARE (Cont'd)**

(iv) The computation of the loss per common share from continuing operations for the year ended December 31, 2000:

|($43,894)/1,018,215 | = ($0.04)
|------------------- | ---------
|                    | =========

(v) The computation of the earning per common share for discontinued operation for the year ended December 31, 2000:

|$48,880/1,018,215 | = $0.05  
|----------------- | ---------
|                  | =========

(vi) The computation of weighted average number of outstanding shares for cumulative from the Re-entering of
Development stage on December 27, 1993 through December 31, 2001

|**Date**                                      | **Shares
outstanding** | **Stock split** | **Reverse split** | **Weight(in days)** | **Weighted average**
|--------------------------------------------- | ---------------------- | --------------- | ----------------- | ------------------- | --------------------
|December 27, 1993
to June 30, 1994            | 214,886 (Note)         | x 13            | x 1/20            | x 185/2926          | = 8,831             
|June 30, 1994 to
May 10, 2000                 | 264,886                | x 13            | x 1/20            | x 2141/2926         | = 125,984           
|May 10, 2000 to
June 27, 2000                 | 2,264,886              | x 13            | x 1/20            | x 48/2926           | = 24,151            
|June 27, 2000 to
July 13, 2000                | 2,289,886              | x 13            | x 1/20            | x 16/2926           | = 8,139             
|July 13, 2000 to
June 12, 2001                | 2,299,886              | x 13            | x 1/20            | x 334/2926          | = 170,644           
|June 12, 2001 to
September 19,
2001           | 12,778,675             | -               | x 1/20            | x 99/2926           | = 21,618            
|September 19,
2001 to September
21, 2001      | 638,939                | -               | -                 | x 2/2926            | 437                 
|September 21,
2001 to December
31, 2001       | 7,622,689              | -               | -                 | x 101/2926          | = 263,121           
|                                              |                        |                 |                   |                     | __________          
|Weighted average
number of shares
outstanding |                        |                 |                   |                     | = 622,925           
|                                              |                        |                 |                   |                     | =========           

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**13. EARNINGS (LOSS) PER COMMON SHARE (Cont'd)**

(vii) The computation of the loss per common stock from continuing operations for the cumulative from the Re-entering of
Development Stage on December 27, 1993 through December 2001:

|($772,883)/622,925 | = ($1.24) 
|------------------ | ----------
|                   | ==========

(viii) The computation of the loss per common share from discontinued operations for the cumulative from the Re-entering
of Development Stage on December 27, 1993 through December 2001.

|($56,380) - $48,880 / 622,925 | = ($0.01) 
|----------------------------- | ----------
|                              | ==========

Note: Shares outstanding for the period from December 27, 1993 through December 31, 1999 has been reduced by
2,464,829 shares of treasury stock.  This transaction was accounted for in the financial statements of the company as a
discontinued operation as of December 27, 1993.

**14.** **INCOME TAXES**

The Company and its subsidiary are subject to income taxes on income arising in or derived from the tax jurisdiction in
which they operate.

No provision for income taxes has been made as the Group had no assessable income subjected to income taxes for the
relevant year.

No deferred income taxes has been provided for as there was no timing differences for the relevant year.

**15.** **OPERATING LEASE COMMITMENTS**

Future minimum rental payments under non-cancelable operating lease in respect of land and buildings are as follows:

|                | **December 31,** | **December 31,**
|--------------- | ---------------- | ----------------
|                | **2001**         | **2000**        
|                |                  |                 
|Payable:        |                  |                 
|Within one year | $17,031          | $__________-    

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**15. OPERATING LEASE COMMITMENTS (Cont'd)**

The Company paid rental expenses of $10,644 for the year.

The company leases office at Macau pursuant to a lease agreement expiring August 31, 2002.

**16.** **RELATED PARTY TRANSACTIONS**

During the period from January 1, 2001 to December 31, 2001, the Company had the following related party transactions:

(a) In March, a related company had advanced $4,370 to cover the operating expenses included in general administrative
expenses.

(b) In May, the Company purchased a film library comprising Informericals, Color and B. Roll and Primetime Series at a
total cost of $4,048,000 from Mr. William A. Fisher who is a director and stockholder.  The cost of $4,048,000 has been
included in the film library cost (note 8) and for an account payable of $918,000 as well as for shares issued valued at
$3,130,000.  This represented the approximate purchase price paid by Mr. Fisher for this film library.

(c) In September, the Company issued 288,750 shares of common stock at $0.10 reported each to four staff of its subsidiary
for payment of outstanding wages for the amount of $28,875 included in general administrative expenses and prepayment.
This was in an S-8 filing on September 21, 2001 when the market price was $0.125 per share.

(d) In September, the Company issued 270,000 shares of common stock at $0.10 each to Mr. William A. Fisher who is a
director and stockholder for payment of outstanding wages for the amount $27,000 included in general administrative
expenses.  This was reported in an S-8 filing on September 21, 2001 when the market price was $0.125 per share.

(e) In September, the Company issued 25,000 shares of common stock at $0.1 each to Michael L. Labertew in
compensation for his services to be rendered to the Company.  Mr. Labertew acts as legal representative to the company for
the amount of $27,000 included in prepayment. This was reported in an S-8 filing on September 21, 2001 when the market
price was $0.125 per share.

(f) In September, the Company issued 400,000 shares of common stock at par value of $0.001 each to Capital Holdings
LLC, in compensation for its services to be rendered to the Company.  Capital Holdings LLC and/or its principals are part
of the group that are the original shareholders of GTM Holdings, Inc.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**16.** **RELATED PARTY TRANSACTIONS (Cont'd)**

(g) In September, the Company issued 5,550,000 of common stock at par value of $0.001 each to American Overseas Real
Estate Company Limited in exchange for assignment to the Company of a license to broadcasting rights and usage of a
dedicated cable channel and uplink service from the Earth Station located on Coloane Island, Macau.  ("Telesat
Agreement") The initial period is for six months, at the end of which the contract is renewable on terms and conditions to
be agreed between the parties concerned.  The shareholders and directors of American Overseas Real Estate Company
Limited are Mr. William A. Fisher and Mr. Marian Yu Fisher.  The amount of $5,550 recorded as an asset represents an
approximation of the amount spent by Mr. Fisher in negotiating this agreement.  The Company has entered into a
preliminary agreement to extend the Telesat Agreement for a period of five years from April 15, 2002 on payment terms
and other conditions yet to be finalized.

**17.** **SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION**

(a) Film Library

The company purchased from Mr. William A. Fisher who is a director and stockholder of the company, the infomercials,
Color and B Roll and Primetime Series at a total cost of $4,048,000 for account payable of $918,000 and for shares already
issued valued at $3,130,000.

The Company entered into an agreement with Sun Television Cybernetworks Holdings Limited, a company incorporated in
the Bermuda and listed on the Hong Kong Stock Exchange, on September 26, 2001 for the grant of a license to the Film
Rights at a consideration of $3,000,000 which was satisfied by the delivery of a Convertible Note in the principal amount
of $3,000,000. (See Note 8)

(b) Production and broadcast purchase

The Company entered into an agreement with Sun Television Cybernetworks Holdings Limited, a company incorporated in
the Bermuda and listed on the Hong Kong Stock Exchange on October 12, 2001, for the provision of Production Facilities
and Production Equipment for a period of 3 years from October 21, 2001, and the grant of broadcast airtime on Sun TV
Channel a Macau TV Channel for a period of 3 years from the date of commencement of broadcasting which shall begin no
later than November 30, 2001 at a consideration of $1,000,000 which was satisfied by the delivery of a Convertible Note in
the principal amount of $1,000,000. (See Note 9)  In addition to the note, the Company shall pay to Sun TV a royalty of
10% of the volume of home shopping sales relating to such broadcasts less returns and postage.

**GTM HOLDINGS, INC. AND SUBSIDIARY**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Amounts expressed in United States dollars)**

**17.** **SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (Cont'd)**

(c) Acquisition of subsidiary:

|                                                              | **2001**   | **2000**  
|------------------------------------------------------------- | ---------- | ----------
|                                                              | **HK$**    | **HK$**   
|Net assets acquired:                                          |            |           
|Cash and bank deposits                                        | 456        | -         
|Inventories                                                   | 24,811     | -         
|Other receivable and prepayments                              | 795        | -         
|Deposits                                                      | 6,592      | -         
|Furniture, fixtures, equipment and
capital lease              | 70,134     | -         
|Film library                                                  | 4,048,000  | -         
|Capital lease obligations                                     | (25,664)   | -         
|Other payable and accrued liabilities                         | (77,124)   | -         
|Due to stockholders                                           | (905,500)  | -         
|                                                              | __________ | __________
|                                                              | 3,142,500  | -         
|Satisfied by:                                                 |            |           
|Common stock issued                                           | 9,000      | -         
|Additional paid in capital                                    | 3,133,500  | -         
|                                                              | __________ | __________
|                                                              | 3,142,500  | -         
|Analysis of the net cash inflow on
acquisition of subsidiary: |            |           
|Cash and bank deposits                                        | 456        | -         

**18**. **GOING CONCERN**

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles,
which contemplate continuation of the Company as a going concern.  However, the Company has incurred losses since its
inception and has not yet been successful in establishing profitable operations. As at December 31, 2001, current liabilities
exceed current assets by a substantial amount and the Company had a negative cash flow from operations during the period
ended December 31, 2001. This factor raises substantial doubts about the ability of the Company to continue as a going
concern.  In this regards, management is proposing to raise any necessary additional funds not provided by operations
through loans or through sales of its common stock or through a possible business combination with another company.
There is no assurance that the Company will be successful in raising this additional capital or achieving profitable
operations.  The financial statements do not include any adjustments that might result from the outcome of these
uncertainties.