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

                                   FORM 10-KSB

(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934

    For the fiscal year ended June 30, 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: 0-28879

                            COOL ENTERTAINMENT, INC.
                 (Name of small business issuer in its charter)

          COLORADO                                           APPLIED FOR
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)

          10900 N.E. 8TH STREET, SUITE 900, BELLEVUE, WASHINGTON 98004
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (888) 603-8833

       Securities registered under Section 12(b) of the Exchange Act: NONE

         Securities registered under Section 12(g) of the Exchange Act:

                           COMMON STOCK, NO PAR VALUE
                                (Title of class)

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 reports),  and (2) has been
subject to such filing requirements for the past 90 days.  Yes [x]    No [ ]

Check  if 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  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.    [ ]

State issuer's revenues for its most recent fiscal year:  $3,178

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified date within the past 60 days: $2,211,888 AS OF SEPTEMBER 19, 2000

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 37,752,401 AS OF SEPTEMBER 19, 2000

Transitional Small Business Disclosure Format (Check one):   Yes [ ]; No [X]

Exhibit index on page 12                                      Page 1 of 29 pages


<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

         Cool Entertainment,  Inc. (the "Company") was incorporated in the State
of Colorado on June 17, 1996,  under the name Minas Novas Gold Corp.,  to engage
in mining  operations.  From  inception to January  1999,  the Company  obtained
options to acquire various mining properties.  On January 29, 1999, the Board of
Directors  elected to abandon all mining  operations and proceed to acquire 100%
of the issued and  outstanding  capital  stock of Cool  Entertainment,  Inc.,  a
Washington  corporation ("Cool  Washington"),  in exchange solely for 65% of the
Company's then outstanding Common Stock (the "Share Exchange").  The acquisition
of Cool Washington was completed March 1, 1999, and effective February 22, 1999,
the Company changed its name to Cool Entertainment, Inc.

         Under the terms of the Share Exchange,  75% of the shares issued to the
four  shareholders  of Cool  Washington  (the  "Vendors") were initially held in
escrow with Pacific Corporate Trust Company of Vancouver,  British Columbia,  as
the escrow  agent.  Chelsea  Pacific  Financial  Corp.,  of  Vancouver,  British
Columbia  firm,  was given a right of first refusal to arrange for all financing
for the Company through March 1, 2000, and had agreed to use its best efforts to
arrange financing for the Company as follows: $500,000 by July 1, 1999; $500,000
by  September  1, 1999;  $500,000 by December 1, 1999;  and $500,000 by March 1,
2000.

         Escrowed shares were to be released upon reaching the various financing
milestones and upon Cool  Washington  certifying that it had fully developed the
website with the  following  features:  on-line  magazines,  on-line chat rooms,
email  services,  and on-line games.  As of April 7, 2000, all of the shares had
been released from escrow.

BUSINESS

         Since February 2000, the Company has offered a variety of entertainment
products  on  the  Internet  through  its  website,   WWW.COOLENTERTAINMENT.COM.
Customers can make purchases through their personal computers. The Company ships
to  customers  in the United  States and  Canada  via the U.S.  Parcel  Service,
Federal Express,  and UPS  International  Express  Services,  depending upon the
customer's  wishes.  The Company has entered into  distribution  agreements with
distributors  in the music,  film,  video  game,  and  literary  segments of the
entertainment  industry in order to offer the latest and most widely  advertised
entertainment  products available.  In addition,  the Company offers value-added
services such as celebrity interviews,  book reviews,  online chat rooms, online
games, and free e-mail accounts on its website to attract users to the website.

         The Company  also offers  digital  downloading  and  advertising  as an
additional revenue sources.  Digital  downloading refers to the digital delivery
of music over the Internet.  Customers have the option of  downloading  songs in
the formats of MP3 and Liquid Audio.

         CONTENT  PROVIDERS.  The  Company  obtains the content for its web site
from various third party providers  pursuant to license  agreements.  Currently,
the Company has agreements  with Muze Inc. and Screaming Media Inc. which allows
the Company to use, on a non-exclusive  basis,  data and editorial content about
music,  books, and videos;  news about film,  music,  games, and  entertainment;
horoscopes; and other features.  Management believes that providing this type of
information  on the  Company's  web site attracts more user traffic and promotes
the sales of products to customers.

         ORDER FULFILLMENT.  Currently,  the Company has fulfillment  agreements
with  iFiLL,  a division  of Valley  Media,  Inc.,  and with MSI Music Inc.  The
Company is responsible for all marketing and merchandising  efforts,  collecting
orders,  and  sending  the  orders to i.FiLL or MSI  Music,  as the case may be.
i.FiLL and MSI Music are  responsible  for  picking,  packing,  and shipping the
orders directly to the Company's customers.  i.FiLL is the exclusive supplier of
product and order fulfillment  services for the Company within the United States
and Canada for domestic products.  However, the Company may use third parties as
sources for products not available through Valley Media if the Company has given
Valley Media 30 days' notice of its intention to do so and Valley Media fails to
make the specified product available by the end of that 30-day period. MSI Music
provides imported products not available through Valley Media.

                                       2
<PAGE>
         In addition to the cost of the products purchased, i.FiLL and MSI Music
charge the Company  packing  and  handling  fees on a per unit  basis,  shipping
costs,  return  fees,  fees for  optional  services,  and fees for  credit  card
processing.  The initial term of the iFiLL agreement  expires May 4, 2001, while
the initial term of the MSI agreement  expires March 20, 2001.  Both  agreements
are renewable.

         DIGITAL  DOWNLOADING.  The Company has an agreement with amplified.com,
which has  developed an Internet  service  that allows  customers to order music
selected by them on a song-by-song basis and to have that music delivered either
via direct  digital  transmission  (a  download)  or via the  creation of custom
compilation   discs  (custom  CDs).  The  Company  pays  a  wholesale  price  to
amplified.com for the service.

         ADVERTISING  REVENUE.  The Company has an exclusive agreement with Wise
Ads New Media,  Inc. to provide the Company  with  assistance  and  expertise in
advertising, placement of banner ads, and sponsorships on its web site.

MARKETING

         The  Company's  first  objective  will be to pursue the North  American
market with a targeted sales and marketing  effort.  If a North American  market
presence is established, the Company will pursue international markets.

         Management  believes  that market for its products and services will be
individuals  within  the age  range of 18 to 49.  Because  this  market  segment
contains a large number of  entry-level  income  earners whose single  purchases
will likely be of relatively small dollar value, the Company intends to position
its  product  line  accordingly.  The  Company  intends  to offer the  following
advantages over other forms of purchasing media product:

         o   ONE-STOP  SHOPPING  CONCEPT  enabling  the customer to purchase all
             forms of product in a consistent format

         o   QUICK DELIVERY SERVICE by offering three-day delivery

         o   PRE-ORDERING SYSTEM enabling the customer to pre-order products and
             have  them  delivered  on the  day of  general  release

         o   EASE OF  PURCHASING  enabling  customers  to  search  for and order
             particular items in a few keystrokes

         o   COMPETITIVE PRICING

         The  Company  plans to attract  customers  to its  website  through the
following methods:
o Targeted advertising and marketing throughout North America

         o   High visibility promotional campaigns

         o   Website   offering   high   degree  of   functionality   through  a
             comprehensive  and current  database,  as well as  interesting  and
             informative content

         o   Services which will bring new visitors to the website

         o   Business  relationships and alliances with high profile advertisers
             and merchandisers

         o   Special marketing  involving  reciprocal  agreements with recording
             artists

         The  Company  plans  to  conduct  significant   advertising   campaigns
throughout  North  America at the time the  website is  launched,  as well as at
strategic times throughout the year, such as holidays. Advertising forms will be
focused  through trade  magazines,  radio,  television,  and  billboard  type of
advertising targeted at the Company's key demographic groups.

         The Company  also plans to initiate a number of  promotional  offers in
conjunction  with its website launch.  The Company plans to advertise and sell a
number of items in order to attract  heavy web  traffic,  stimulate  the initial
demand for orders, and prompt customers who patronize competing retailers to try
the Company's website. The Company plans to use a discount pricing structure for
institutional  clients in order to induce heavier  volumes of purchase and to be
competitive with the large traditional retail outlets or distribution channels.

         Management  believes that it will need to demonstrate the following for
a customer's online shopping experience to be successful:

                                       3
<PAGE>
         o   Consumers must be able to save time and money

         o   Consumers  must be see a wide  variety  of  selection  of all media
             categories in one place

         o   Consumers must be comfortable with security of their credit cards

         There  is no  assurance  that the  Company  will be able to  attract  a
sufficient  number  of users  to its  website  or  generate  enough  sales to be
profitable.  The business of selling  products on a retail basis on the Internet
is highly  competitive.  There are a large number of  companies  engaged in this
business. Given the Company's present size, it can be assumed that virtually all
of these other companies have greater financial and personnel resources than the
Company.

         In addition, the Company faces risks pertaining to e-commerce security,
system capacity-related challenges, and growth management. As explained below in
Item 6. Management's  Discussion and Analysis or Plan of Operation,  the Company
has only a limited operating history, has generated losses since inception,  and
requires a  significant  amount of funding to  sustain  operations  through  the
current fiscal year. There is also substantial doubt about the Company's ability
to continue as a going concern.

TRADEMARKS

         The Company  proposes to register  its name and logo as a trademark  in
the United States and Canada once it has adequate funds to do so.

COMPLIANCE WITH LAWS AND REGULATIONS

         As of the date of this  report,  there are no laws  directly  affecting
commerce over the Internet,  other than those generally  pertaining to fraud and
fair  trade.  No  governmental  approval is  required  for any of the  Company's
proposed products or services.  There is no assurance that laws will not develop
concerning use of the Internet as a retail  medium.  The Company does not expect
that environmental laws will impact its activities.

EMPLOYEES

         As of September 15, 2000, the Company had 6 full-time  employees,  2 of
which were the Company's officers.


ITEM 2.  DESCRIPTION OF PROPERTY.

         The  Company  does  not  own  real  property.  Since  the  Company  has
contracted  with Cool  Management  Ltd.  (now known as Fictional  Media Inc.) in
Vancouver  for the  management  of the  Company,  it is  using  the  offices  of
Fictional  Media Inc.  at Suite 303,  343  Railway  Street,  Vancouver,  British
Columbia.  The offices,  approximately  2,700  square feet,  are leased from the
third party. The Company does not invest in real estate.


ITEM 3.  LEGAL PROCEEDINGS.

         None.


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

         None.

                                       4
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         The  Company's  Common Stock is not traded on a  registered  securities
exchange, or on NASDAQ. The Company's Common Stock is quoted on the OTC Bulletin
Board,  and was first  listed on June 18,  1998 under the symbol  "MNGD."  Since
March 2, 1999, the stock has been trading under the symbol "CULE." The following
table  sets  forth  the  range of high and low bid  quotations  for each  fiscal
quarter since the stock began trading.  These  quotations  reflect  inter-dealer
prices without retail mark-up, mark-down, or commissions and may not necessarily
represent actual transactions.
<TABLE>
<CAPTION>
<S>       <C>                                <C>             <C>
          FISCAL QUARTER ENDING              HIGH BID        LOW BID

          June 30, 1998                       $0.875         $0.625
          September 30, 1998                  $1.375         $0.250
          December 31, 1998                   $1.500         $1.000
          March 31, 1999                      $1.563         $0.290
          June 30, 1999                       $1.563         $0.813
          September 30, 1999                  $1.000         $0.438
          December 31, 1999                   $0.700         $0.230
          March 31, 2000                      $1.000         $0.290
          June 30, 2000                       $0.625         $0.180
</TABLE>

         On  September  19,  2000,  the closing  price for the common  stock was
$0.12.

         As of  September  19,  2000,  there  were  197  record  holders  of the
Company's Common Stock.  Since the Company's  inception,  no cash dividends have
been declared on the Company's Common Stock.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

         The  acquisition of Cool Washington on March 1, 1999 has been accounted
for as a reverse  takeover with Cool  Washington  being the deemed  acquiror for
accounting  purposes.  The transaction has been accounted for as the issuance of
shares by Cool  Washington for the net assets of the Company.  Accordingly,  the
financial  statements  included  with this  registration  statement  reflect the
financial  position,  results of operations,  and cash flows of Cool  Washington
from the date of its incorporation on November 3, 1998,  consolidated with those
of the Company from March 1, 1999.

RESULTS OF OPERATIONS

         The Company is considered to be in the  development  stage since it has
generated only minimal  revenues and is continuing to develop its business.  The
Company has generated only $3,178 of revenues through June 30, 2000.

         For the fiscal year ended June 30,  2000,  the  Company  incurred a net
loss of $13,305,193.  It generated  revenue of $3,718,  but incurred expenses of
$13,305,606.  Approximately  95% of the  expenses  ($12,612,461)  were  for site
development  and  maintenance.  Of this amount  $12,345,500  was recognized as a
result of the release of  17,388,033  shares of Common  Stock from  escrow.  The
amount of $12,345,500  is the difference  between the market value of the Common
Stock on the date of release and the original cost of these shares. See Part I -
Item 1. Description of Business.

         Other operating  expenses  increased  substantially for the fiscal year
ended June 30, 2000,  as compared to the previous  fiscal year.  This was due to
the Company being in operation for the full twelve  months,  as compared to only
four months during fiscal 1999;  the Company  registering  under the  Securities
Exchange  Act of 1934 in  January  2000;  the  Company  becoming  subject to the
reporting  requirements  of the Securities  and Exchange  Commission in

                                       5
<PAGE>

February  2000;  and  the  Company  launching  its  website  in  February  2000.
Accordingly,  the  statement  of  operations  for the year ended  June 30,  2000
reflects a much higher level of activity.

         Management  fees for the 2000 fiscal year increased by $235,256 or 881%
over the 1999 amount. The increase was due primarily to the fact that management
fees were paid for only a few months  during the 1999  period,  as  compared  to
being paid for the entire  twelve months in fiscal 2000.  Professional  fees for
fiscal 2000 increased by $243,125 or 616% over the 1999 amount. $151,480 of this
amount was for financial  public  relations  and  consulting  services,  paid in
shares  of  the  Company's  Common  Stock.  Travel,  advertising  and  promotion
increased by $82,388 or 557% over the 1999 amount due to the  Company's  efforts
in fiscal 2000 to promote the new website.  Office and  administrative  expenses
increased  $33,126  or 629%  over the 1999  amount  due to the  higher  level of
activity.

         From  inception to June 30, 1999,  the Company  generated a net loss of
$117,297. Approximately 34% of the operating expenses were professional fees. Of
this  amount,  59% or $23,367  were costs  related  to the  acquisition  of Cool
Washington.  Of the remaining operating expenses,  $29,878 was incurred for site
development and maintenance and $26,689 were management fees.

LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2000 and 1999, the Company had a working capital deficiency
of $46,914 and a positive  balance of  $58,951,  respectively.  The  decrease in
working capital is due primarily to the loss generated for the 2000 fiscal year.

         Virtually all of the Company's  liquidity has been provided through the
sale of its Common  Stock.  For the year ended June 30,  2000 and for the period
from  November 3, 1998 to June 30,  1999,  the  Company  received  $651,226  and
$210,353,  respectively  in net proceeds  from the issuance of its Common Stock.
Additional funding will be needed from sales of the Company's securities to keep
the Company in operation.

         Current sales of product are not sufficient to sustain operations.  The
Company needs substantial amounts of cash to fund a marketing program to attract
potential customers to its web site. As of this date, the Company has no sources
of funds for a marketing effort.

PLAN OF OPERATION

         As of June 30, 2000,  the Company did not have any cash. The Company is
dependent upon external sources of funds and there is no assurance that any such
funding will be available to the Company. The Company does not anticipate making
any expenditures for plant or equipment, or increasing the number of employees.

         Due to the losses  generated to date and the fact that  operations have
been financed through the issuance of Common Stock,  there is substantial  doubt
about the Company's ability to continue as a going concern. As stated above, the
Company does not have sufficient working capital to sustain operations until the
end of its current  fiscal year,  which ends June 30, 2001.  Additional  debt or
equity  financing  will  be  required  and may  not be  available  or may not be
available  on  reasonable  terms.  The  auditors'  report  on  the  consolidated
financial  statements  contains an explanatory  paragraph that states that these
factors raise  substantial  doubt about the  Company's  ability to continue as a
going  concern.  The financial  statements do not include any  adjustments  that
might result from the outcome of this uncertainty.

         Management is currently assessing the future viability of the Company.


ITEM 7.  FINANCIAL STATEMENTS.

         See pages beginning with page F-1.

                                       6
<PAGE>


ITEM 8.  CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING  AND
         FINANCIAL DISCLOSURE.

         None.



                                       7
<PAGE>


                                    PART III

ITEM 9.  DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.


<TABLE>
<CAPTION>
<S>                              <C>       <C>
NAME                             AGE       POSITIONS

Clement K.M. Lau                  27        President, CEO and Director
William J. Hadcock                42        Vice President of Marketing and
                                            Distribution and Director
Marc Belcourt                     34        Vice President of Technology and
                                            Director
Len Voth                          52        Director
</TABLE>

         The term of office of each  director  of the  Company  ends at the next
annual meeting of the Company's  stockholders or when such director's  successor
is elected and qualifies. No date for the next annual meeting of stockholders is
specified in the  Company's  bylaws or has been fixed by the Board of Directors.
The term of  office  of each  officer  of the  Company  ends at the next  annual
meeting of the Company's Board of Directors,  expected to take place immediately
after the next annual meeting of stockholders,  or when such officer's successor
is elected and qualifies.

         CLEMENT LAU,  has been the  President,  CEO and a director  since March
1999. He was the president and a partner in Tilde  Multimedia  Inc.,  Vancouver,
British Columbia, from March 1997 to March 1999, an Internet development company
that specialized in website and CD-ROM  development.  He attended Vancouver Film
School,  receiving a  certificate  in multimedia  program in 1997;  and Columbia
Academy of Radio,  Television & Recording Arts,  receiving a certificate in film
and video  production in 1996.  From May 1994 to June 1995, he was the owner and
operator of a restaurant in Vancouver.  As the operator,  he managed all aspects
of  the  business:   starting  up  operations,   leasing,  design,   decorating,
advertising,  public relations,  personnel,  entertainment,  menu creation,  and
inventory control

         WILLIAM  J.  HADCOCK  has been  the Vice  President  of  Marketing  and
Distribution  and a  director  since  March  1999.  He worked  for  Astral  Home
Entertainment, a Canadian company which distributes software, CDs and DVDs, from
1990 to August 1999 as a district sales  representative in Scarborough,  Ontario
(1990-92),  corporate account manager in Toronto,  Ontario (1992-94), and branch
manager in Vancouver,  British  Columbia  (1994-99).  As the branch manager,  he
supervised 21 employees and was responsible for key account  management,  studio
relations, budget implementation, and warehouse/showroom operations.

         MARC BELCOURT has been the Vice  President of Technology and a director
since March 1999.  He was the lead  programmer  and  production  manager for CRM
Training  Inc.,  a  multimedia  firm  located in  Vancouver,  British  Columbia,
specializing in interactive  training  software for the marine safety  industry,
from May 1997 to August 1999.  Mr.  Belcourt has also provided  website  design,
development,  and  programming  services as an  independent  contractor to other
companies.  He attended the Vancouver  Film School,  receiving a certificate  in
multimedia program in 1997. From February 1995 to May 1996, he was the owner and
operator of a convenience store in downtown  Vancouver.  Mr. Belcourt received a
bachelor's degree in fine arts from the University of Saskatchewan in 1994.

         LEN VOTH has been a director since March 1999. Since February 1989, Mr.
Voth has worked for Westech Information Systems in Vancouver,  British Columbia.
He has been a managing consultant since January 1996,  providing  consulting and
advisory  services  for  technology  selection,   contract  services,  financial
services,  marketing,  and  operations.  He served as a marketing  manager  from
February 1989 to January 1996.  Prior to his employment with Westech,  he worked
as a computer programmer in Vancouver and Calgary,  Alberta. Mr. Voth received a
bachelor's degree in mathematics in 1970 from the University of British Columbia
and a diploma in computer programming from McKay Technical Institute in 1968. He
is a member of the Canadian Information  Processing Society and has professional
certification as a content development provider,  Internet service provider, and
content service provider.

                                       8
<PAGE>

         Messrs. Lau, Belcourt,  Voth, and Hadcock may be deemed to be "parents"
of the Company within the meaning of the rules and regulations of the Securities
and Exchange Commission.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         During the fiscal  year ended June 30,  2000,  Messrs.  Lau,  Belcourt,
Voth, and Hadcock  failed to file their reports on Form 3 (Initial  Statement of
Beneficial  Ownership  of  Securities)  and  Form 4  (Statement  of  Changes  in
Beneficial Ownership) on a timely basis.

ITEM 10. EXECUTIVE COMPENSATION.

         Cool  Washington  entered  into a Management  Agreement  dated March 1,
1999,  with Cool  Management Inc. (now known as Fictional Media Inc.), a British
Columbia corporation.  Pursuant to the terms of that Agreement,  Cool Management
provided  management  services to Cool Washington  which included  management of
Cool  Entertainment's  business  of  Internet  distribution  of audio and visual
products,  design and  maintenance of the website,  provision of operational and
strategic leadership to Cool Entertainment, keeping the directors informed about
major policy issues, reporting results of operating activities to the directors,
provision of recommendations for financial budgeting, and provision of advice to
the  directors  concerning  possible   acquisitions  and  divestitures  by  Cool
Entertainment. The Agreement has been terminated.

         Cool  Management in turn had entered into  employment  agreements  with
Clement Lau, William Hadcock, and Marc Belcourt, and a consulting agreement with
Len Voth. Cool Entertainment was obligated to pay Cool Management a fee equal to
the amounts payable under these employment or consulting  agreements plus 10% of
such amount.  All of the employment and consulting  agreements had the same term
as the Management Agreement described above. In addition,  all of the employment
and  consulting  agreements  provided for  confidentiality  of  information  and
contain a covenant not to compete for a period of one year after the termination
of employment. The initial terms of the employment and consulting agreements are
summarized as follows:


<TABLE>
<CAPTION>
<S>                 <C>                                                                   <C>
Employee/           Duties to be Performed                                                Base Salary/
Consultant                                                                                Consulting Fees

Clement Lau         o  Oversight of management of Company's business;                     $50,000 per year
                    o  Provision of operational and strategic leadership to Company;
                    o  Keeping the directors informed about major strategic issues;
                    o  Monitoring and maintaining Company's relationship with
                       Chelsea Pacific
                    o  Oversight and development of business alliances for the
                       Company; and
                    o  Provision of advice to directors concerning possibility
                       and desirability of acquisitions and divestitures by the
                       Company

William Hadcock     o  Management and supervision of Company sales program;               $50,000 per year
                    o  Establishment and development of distribution links for
                       markets outside of North America
                    o  Establishment, maintenance, and monitoring of
                       distribution links within North America
                    o  Establishment and maintenance of Company's relations with
                       record companies and movie studios
                    o  Management and supervision of efforts to sell
                       advertising on Company's website; and
                    o  Management and supervision of Company's efforts to obtain
                       marketing and co-operative advertising funds from record
                       companies and movie studios


                                       9
<PAGE>
<S>                 <C>                                                                   <C>
Employee/           Duties to be Performed                                                Base Salary/
Consultant                                                                                Consulting Fees

Marc Belcourt       o  Development of website;                                            $50,000 per year
                    o  recruitment and supervision of technical and development
                       staff;
                    o  Equipment procurement;
                    o  Software procurement;
                    o  Database development; and
                    o  Project development and management

Len Voth            o  Consulting services as requested by the Company                    $25,000 per year
</TABLE>

In addition to their base salaries,  Messrs. Lau, Hadcock,  and Belcourt receive
employee  benefits such as health,  accident,  life,  and  long-term  disability
insurance coverage.

         For the fiscal year ended June 30, 2000 and the period from November 3,
1998 to June 30 1999, the Company incurred cash compensation expense of $nil and
$56,567, respectively.

         In the fall of 1999,  the  agreements  were  amended  to  decrease  the
compensation to Cdn.$60,000 for Messrs.  Lau, Hadcock,  and Belcourt and Cdn.$30
per hour for Mr.  Voth.  As of  September  1, 2000,  Mr. Lau is no longer paid a
salary.

         The  following  table sets forth  information  for all persons who have
served as the chief  executive  officer  of the  Company  during  the last three
fiscal years:
<TABLE>
<CAPTION>

                                            SUMMARY COMPENSATION TABLE
                                                                     LONG TERM COMPENSATION
                                  ANNUAL COMPENSATION                  AWARDS             PAYOUTS
                                                 OTHER
                                                ANNUAL       RESTRICT-    SECURITIES
NAME AND                                        COMPEN       ED STOCK     UNDERLYING        LTIP        ALL OTHER
PRINCIPAL                    SALARY     BONUS   SATION       AWARD(S)       OPTIONS/       PAYOUTS       COMPEN-
POSITION            YEAR      ($)        ($)      ($)          ($)         SARs (#)          ($)        SATION ($)
<S>                 <C>      <C>         <C>       <C>           <C>         <C>            <C>           <C>
Clement Lau,        2000     $38,850     -0-       $2,535        -0-         300,000        -0-           -0-
President and       1999     $17,000     -0-         -0-         -0-           -0-          -0-           -0-
CEO                  (1)<F1>   (2)<F2>

Leroy Halterman,    1999       -0-       -0-        -0-          -0-           -0-          -0-           -0-
President            (3)<F3>

Reg Handford,       1999       -0-       -0-        -0-          -0-           -0-          -0-           -0-
President            (4)<F4>

Wolfdietrich F.     1999       -0-       -0-        -0-          -0-           -0-          -0-           -0-
Bruehl,             1998
President            (5)<F5>

Charles F.          1998       -0-       -0-        -0-          -0-           -0-          -0-           -0-
Stetler,             (6)<F6>
President
----------------
<FN>

(1)<F1>  Mr. Lau has been the  President  since March 1, 1999.  The amount shown
         reflects  compensation paid through the Management  Agreement described
         above.

(2)<F2>  The  actual  amounts  paid  for  2000  and  1999  were  Cdn$57,500  and
         Cdn$25,000,   respectively,   which  are  approximately  US$38,850  and
         US$17,000, respectively,  depending upon the exchange rate in effect at
         the time.

(3)<F3>  Mr.  Halterman  was the President  from  September 25, 1998 to March 1,
         1999.

(4)<F4>  Mr.  Handford was the  President  from August 14, 1998 to September 25,
         1998.

                                       10
<PAGE>

(5)<F5>  Mr. Bruehl was the President from June 24, 1998 to August 13, 1998.

(6)<F6>  Mr. Stetler was the President from inception to June 23, 1998.
</FN>
</TABLE>

<TABLE>
<CAPTION>

                                       OPTION/SAR GRANTS IN LAST FISCAL YEAR


                                NUMBER OF           PERCENT OF TOTAL
                               SECURITIES             OPTIONS/SARs
                               UNDERLYING              GRANTED TO
                              OPTIONS/SARs        EMPLOYEES IN FISCAL     EXERCISE OR BASE
NAME                           GRANTED (#)               YEAR               PRICE ($/SH)          EXPIRATION DATE
<S>                              <C>                      <C>                   <C>                   <C>
Clement Lau                      300,000                  25%                   $0.625                02/04/03
</TABLE>




<TABLE>
<CAPTION>
                 AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES


                                                                               NUMBER OF                VALUE OF
                                                                              UNEXERCISED         UNEXERCISED IN-THE-
                                                                            OPTIONS/SARs AT          MONEY OPTIONS/
                                                                              FY-END(#)            SARs AT FY-END ($)
                            SHARES ACQUIRED ON                               EXERCISABLE/             EXERCISABLE/
NAME                           EXERCISE (#)        VALUE REALIZED ($)       UNEXERCISABLE            UNEXERCISABLE
<S>                                <C>                    <C>                  <C>                        <C>
Clement Lau                        -0-                    -0-                  300,000/0                  0/0
</TABLE>


         The Company does not pay monetary  compensation  to its directors,  nor
does the Company  compensate  its  directors  for  attendance  at meetings.  The
Company does reimburse the directors for reasonable expenses incurred during the
course of their performance.

         On February 4, 2000,  the  Company  granted  options to each of Clement
Lau, Marc Belcourt,  William Hadcock, and Len Voth to purchase 300,000 shares of
Common Stock at $0.625 per share through  February 4, 2003.  The options  expire
three years from the grant date.


ITEM 11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The following table provides certain information as to the officers and
directors  individually  and as a group,  and the holders of more than 5% of the
Common Stock of the Company, as of September 19, 2000:

<TABLE>
<CAPTION>

NAME AND ADDRESS OF BENEFICIAL OWNER     AMOUNT AND NATURE OF      PERCENT OF CLASS (1)<F1>
                                         BENEFICIAL OWNERSHIP
<S>                                          <C>                           <C>
Marc G. Belcourt                             5,736,011 (2)<F2>             15.07%
9139 Carver Crescent
North Delta, British Columbia
V4C 6N1 Canada

Leonard Wayne Voth                           5,736,011 (2)<F2>             15.07%
4422 Stone Crescent
West Vancouver, British Columbia
V7V 1B7 Canada

Clement K.M. Lau                             5,720,011 (2)<F2>             15.03%
5484 Rugby Avenue
Burnaby, British Columbia
V5E 2N1 Canada

                                       11
<PAGE>
NAME AND ADDRESS OF BENEFICIAL OWNER     AMOUNT AND NATURE OF      PERCENT OF CLASS (1)<F1>
                                         BENEFICIAL OWNERSHIP
<S>                                          <C>                           <C>

William J. Hadcock                           5,376,011 (2)<F2>             14.13%
Apt. 1301 -- 238 Alvin Narod Mews
Vancouver, British Columbia
V6B 5Z3 Canada

All officers and directors as               22,568,044 (3)<F3>             57.94%
a group (4 persons)
-------------------
<FN>

(1)<F1>  This table is based on 37,752,401 shares of Common Stock outstanding on
         September  19, 2000.  If a person listed on this table has the right to
         obtain  additional  shares of Common  Stock within sixty (60) days from
         September 19, 2000, the additional  shares are deemed to be outstanding
         for the  purpose of  computing  the  percentage  of class owned by such
         person,  but are not  deemed  to be  outstanding  for  the  purpose  of
         computing the percentage of any other person.

(2)<F2>  Includes  shares  issuable upon exercise of an option to purchase up to
         300,000 shares.

(3)<F3>  Includes  shares  issuable upon exercise of an option to purchase up to
         1,200,000 shares.
</FN>
</TABLE>

         Messrs. Lau, Belcourt,  Voth, and Hadcock may be deemed to be "parents"
of the Company within the meaning of the rules and regulations of the Securities
and Exchange Commission.

CHANGES IN CONTROL

         Other than the Escrow  Agreement  described in Item 1. Business,  there
are no agreements  known to management that may result in a change of control of
the Company.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Mr.  Lau may be deemed to be a  "promoter"  of the  Company  within the
meaning of the Rules and Regulations  promulgated by the Securities and Exchange
Commission.

         At June 30, 1999,  $45,297 was reflected as a receivable on the balance
sheet.  This amount had been  advanced to Fictional  Media Inc.  (formerly  Cool
Management) to fund development of the Company's website.  This amount was later
billed to the Company in accordance with the Company's Management Agreement with
Fictional  Media Inc. At June 30, 2000,  $2,836 was due to Fictional  Media Inc.
for  services  rendered  under  the  Management   Agreement.   This  payable  is
non-interest bearing, unsecured, and due on demand.

         In February  1999,  Advantage  Investment  Holding Ltd., a shareholder,
advanced $15,000 to the Company to fund development of its website.  At June 30,
1999,  this amount was reflected on the balance  sheet as a loan  payable.  This
amount was repaid  through  the  issuance  of 28,300  shares of Common  Stock in
December 1999.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

<TABLE>
<CAPTION>

    REGULATION                                                                                        SEQUENTIAL
    S-B NUMBER                                       EXHIBIT                                         PAGE NUMBER
       <S>          <C>                                                                                  <C>
       2.1          Chelsea Pacific Financial Corp. Agreement dated February 25, 1999(1)<F1>             N/A
       3.1          Articles of Incorporation, as amended(1)<F1>                                         N/A
       3.2          Bylaws(1)<F1>                                                                        N/A

                                       12
<PAGE>
    REGULATION                                                                                        SEQUENTIAL
    S-B NUMBER                                       EXHIBIT                                         PAGE NUMBER
       <S>          <C>                                                                                  <C>
       10.1         Management  Agreement between Cool  Entertainment,  Inc., and Cool Management
                    Inc. dated March 1, 1999 (1)<F1>                                                     N/A
       10.2         Employment  Agreement between Cool Management Inc. and Marc G. Belcourt dated
                    March 1, 1999 (1)<F1>                                                                N/A
       10.3         Consulting  Agreement  between Cool  Management  Inc. and Leonard  Wayne Voth
                    dated March 1, 1999 (1)<F1>                                                          N/A
       10.4         Employment  Agreement  between  Cool  Management  Inc. and William J. Hadcock
                    dated March 1, 1999 (1)<F1>                                                          N/A
       10.5         Employment Agreement between Cool Management Inc. and Clement K.M. Lau dated
                    March 1, 1999 (1)<F1>                                                                N/A
       10.6         Escrow Agreement between Pacific Corporate Trust Company, Cool
                    Entertainment, Inc. (Washington), Chelsea Pacific Financial Corp.,
                    Entertainment, Inc. (Colorado), Clement kar Man Lau, William James Hadcock,
                    Leonard Wayne Voth, and Marc Gregory Belcourt dated March 1, 1999,
                    as amended (1)<F1>                                                                   N/A
       10.7         Form of Registration Rights Agreement between Cool Entertainment, Inc. and
                    each of Clement Kar Man Lau, William James Hadcock, Leonard Wayne Voth, and
                    Marc Gregory Belcourt dated March 1, 1999 (1)<F1>                                    N/A
        21          Subsidiaries of the registrant(1)<F1>                                                N/A
        27          Financial Data Schedule                                                               30
-------------------
<FN>
(1)<F1>  Incorporated   by  reference  to  the  exhibits  to  the   registrant's
         registration statement on Form 10-SB, file number 0-28879.
</FN>
</TABLE>

          No  reports  on Form 8-K were  filed  during  the last  quarter of the
period covered by this report.


                                       13
<PAGE>




                                                    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.

                                       COOL ENTERTAINMENT, INC.



Date:  September 27, 2000              By:/s/ William J. Hadcock
                                          --------------------------------------
                                          William J. Hadcock, Vice President of
                                          Marketing and Distribution

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

                   SIGNATURE                                 TITLE                               DATE
<S>     <C>    <C>    <C>    <C>    <C>    <C>
/S/ CLEMENT K.M. LAU
-----------------------------------------         President, CEO and Director             September 27, 2000
Clement K.M. Lau



/S/WILLIAM J. HADCOCK
-----------------------------------------         Vice President of Marketing and         September 27, 2000
William J. Hadcock                                Distribution and Director (Principal
                                                  Executive, Financial, and Accounting
                                                  Officer)

/S/MARC BELCOURT
-----------------------------------------         Vice President of Technology and        September 27, 2000
Marc Belcourt                                     Director


/s/ LEN VOTH
-----------------------------------------         Director                                September 27, 2000
</TABLE>



                                       14
<PAGE>









                    Consolidated Financial Statements of

                    COOL  ENTERTAINMENT  INC.
                    (A Development Stage Enterprise)
                    (Expressed in U.S. Dollars)

                    Year ended June 30, 2000
                    Period from November 3, 1998 (inception) to June 30, 1999




                                      F-1
<PAGE>












INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Cool Entertainment, Inc.

We have audited the consolidated  balance sheets of Cool  Entertainment  Inc. (a
Development  Stage  Enterprise)  as of June 30,  2000  and 1999 and the  related
consolidated  statements of operations,  stockholders' equity and cash flows for
the year ended June 30, 2000,  the period from November 3, 1998  (inception)  to
June 30, 1999 and the  cumulative  period from November 3, 1998  (inception)  to
June 30, 2000. These consolidated financial statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with accepted auditing standards generally
accepted 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  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  these consolidated  financial statements present fairly, in all
material respects, the financial position of Cool Entertainment, Inc. as at June
30, 2000 and 1999 and the results of its  operations  and its cash flows for the
year ended June 30, 2000,  the period from November 3, 1998  (inception) to June
30, 1999 and the cumulative period from November 3, 1998 (inception) to June 30,
2000 in conformity with accounting  principles  generally accepted in the United
States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in note 1 to the
consolidated  financial  statements,   the  Company  has  suffered  losses  from
operations and has negative cash flows from  operations  that raise  substantial
doubt about its ability to continue as a going  concern.  Management's  plans in
regard to these matters are also  described in note 1. The financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.




/S/KMPG, LLP


Chartered Accountants


Vancouver, Canada

September 15, 2000




                                      F-2
<PAGE>


COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Consolidated Balance Sheets
(Expressed in U.S. Dollars)

June 30, 2000 and 1999
<TABLE>
<CAPTION>
<S>                                                                            <C>                <C>
                                                                                    2000               1999
Assets                                                                         -------------      -------------

Current assets:
     Cash and cash equivalents                                                 $        -         $     89,058
     Accounts receivable                                                                 84                -
                                                                               -------------      -------------
                                                                                         84             89,058
Receivable from related party (note 3)                                                  -               45,297

Property and equipment (note 4)                                                      24,300                -
                                                                               -------------      -------------
                                                                               $     24,384       $    134,355
                                                                               =============      =============
Liabilities and Stockholders' Equity (Deficiency)

Current liabilities:
     Bank indebtedness                                                         $        157       $        -
     Accounts payable and accrued liabilities                                        44,005             15,107
     Payable to related party (note 3)                                                2,836                -
     Loan payable (note 3)                                                              -               15,000
                                                                               -------------      -------------
                                                                                     46,998             30,107

Stockholders' equity (deficiency) (note 6):
     Common stock, no par value, authorized 100,000,000 shares;
       issued 37,619,401 shares at June 30, 2000 and
       35,928,688 shares at June 30, 1999                                        13,320,355            217,158
     Additional paid-in capital                                                      79,521              4,387
     Deficit accumulated during the development stage                           (13,422,490)          (117,297)
                                                                               -------------      -------------
                                                                                    (22,614)           104,248
Subsequent events (note 9)
                                                                               $     24,384       $    134,355
                                                                               =============      =============
</TABLE>
See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>


COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Consolidated Statement of Operations
(Expressed in U.S. Dollars)

<TABLE>
<CAPTION>
                                                                                  Period from           Period from
                                                                     Year         November 3,           November 3,
                                                                    ended    1998 (inception)      1998 (inception)
                                                                 June 30,         to June 30,           to June 30,
                                                                     2000                1999                  2000
                                                             -------------   -----------------     -----------------
<S>                                                          <C>                <C>                    <C>
Operating income:
     Sales                                                   $      3,178       $         -            $      3,178
     Cost of goods sold                                             2,765                 -                   2,765
                                                             -------------      --------------         -------------
Gross profit                                                          413                 -                     413

Operating expenses:
     Site development and maintenance (note 7)                 12,612,461              29,878            12,642,339
     Management fees (note 3)                                     261,945              26,689               288,634
     Professional fees (note 9)                                   282,572              39,447               322,019
     Travel, advertising and promotion                             97,168              14,780               111,948
     Office and administrative                                     38,411               5,285                43,696
     Depreciation                                                  13,049                 -                  13,049
     Organization costs                                               -                 1,218                 1,218
                                                             -------------      --------------         -------------
                                                               13,305,606             117,297            13,422,903
                                                             -------------      --------------         -------------
Loss for the period                                          $(13,305,193)      $    (117,297)         $(13,422,490)
                                                             =============      ==============         =============
Net loss per common share, basic and diluted                 $      (0.52)      $       (0.01)         $      (0.63)
                                                             =============      ==============         =============

Weighted average common shares outstanding,
   basic and diluted                                           25,383,924          15,346,241            21,406,776
                                                             =============      ==============         =============

See accompanying notes to consolidated financial statements.



</TABLE>
                                      F-4
<PAGE>


COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Consolidated Statement of Stockholders' Equity
(Expressed in U.S. Dollars)

Year ended June 30, 2000
Period from November 3, 1998 (inception) to June 30, 1999
<TABLE>
<CAPTION>
                                                                                                     Deficit
                                                                                                 accumulated
                                                                 Additional                           during            Total
                                          COMMON STOCK              paid-in    Subscriptions     development    stockholders'
                                         Shares       Amount        capital       receivable           stage           equity
<S>                                  <C>          <C>             <C>             <C>           <C>               <C>
Balance, November 3, 1998
   (Minas Novas Gold Corp.
   common stock)                     12,483,533   $    180,958    $     -         $    -        $        -        $    180,958

Adjustment to comply with
   reverse takeover accounting:
     o elimination of Minas
       Novas common stock                   -         (180,958)         -              -                 -            (180,958)
     o Cool Washington
       common stock                         -              400          -              -                 -                 400

Common stock issued to
   purchase all issued and
   outstanding shares of
   Cool Washington, March 1,
   1999 (note 2(a))                  23,184,044         11,192          -              -                 -              11,192

Common stock issued for cash,
   April 12, 1999 at $0.75 per
   share, net of issuance costs
   of $2,849                             40,000         27,151          -              -                 -              27,151

Common stock issued for cash,
   April 23, 1999 at $0.90 per
   share, net of issuance costs
   of $2,736                            121,111        106,264          -              -                 -             106,264

Fully paid stock subscriptions
   April 23, 1999, at $0.90 per
   share, net of issuance costs
   of $113                                  -              -          4,387            -                 -               4,387

Common stock issued for cash,
   May 28, 1999 at $0.75 per
   share, net of issuance costs
   of $2,849                            100,000         72,151          -              -                 -              72,151

Net loss                                    -              -            -              -            (117,297)         (117,297)

                                     -----------  -------------   ----------      ---------     -------------     -------------
Balance, June 30, 1999               35,928,688   $    217,158    $   4,387       $    -        $   (117,297)     $    104,248
                                     ===========  =============   ==========      =========     =============     =============
</TABLE>





                                      F-5
<PAGE>


COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Consolidated Statement of Stockholders' Equity, page 2
(Expressed in U.S. Dollars)

Year ended June 30, 2000
Period from November 3, 1998 (inception) to June 30, 1999

<TABLE>
<CAPTION>
                                                                                                     Deficit
                                                                                                 accumulated
                                                                 Additional                           during            Total
                                          COMMON STOCK              paid-in    Subscriptions     development    stockholders'
                                         Shares       Amount        capital       receivable           stage           equity
<S>                                  <C>          <C>             <C>             <C>           <C>               <C>
Fully paid stock subscriptions
   July 20, 1999, at $0.65 per
   share, net of issuance
   costs of $nil                            -     $        -      $  75,000       $    -        $        -        $     75,000

Fully paid stock subscriptions
   August 6, 1999, at $0.53 per
   share, net of issuance
   costs of $nil                            -              -         55,985            -                 -              55,985

Unpaid stock subscriptions
   August 6, 1999, at $0.53 per
   share, net of issuance costs
   of $nil                                  -              -         19,015            -                 -              19,015

Fully paid stock subscriptions
   September 10, 1999, at $0.53
   per share, net of issuance
   costs of $nil                            -              -         70,087            -                 -              70,087

Unpaid stock subscriptions
   September 10, 1999, at $0.53 per
   share, net of issuance costs
   of $nil                                  -              -          5,079            -                 -               5,079

Common stock issued October 1,
   1999 for fully paid stock
   subscriptions at $0.53
   per share, net of issuance costs
   of $nil                              105,625         55,985      (55,985)           -                 -                 -

Common stock issued October 1,
   1999 for fully paid stock
   subscriptions at $0.53
   per share, net of issuance costs
   of $nil                               35,875         19,015      (19,015)           -                 -                 -

Common stock issued October 1,
   1999 to satisfy loan at $0.53
   per share                             28,300         15,000          -              -                 -              15,000

Common stock issued October 1,
   1999 for fully paid stock
   subscriptions at $0.65
   per share, net of issuance costs
   of $nil                              115,375         75,000      (75,000)           -                 -                 -

Common stock issued October 1,
   1999 for fully paid stock
   subscriptions at $0.90
   per share, net of issuance costs
   of $nil                                5,000          4,387       (4,387)           -                 -                 -

</TABLE>



                                      F-6
<PAGE>


COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Consolidated Statement of Stockholders' Equity, page 3
(Expressed in U.S. Dollars)

Year ended June 30, 2000
Period from November 3, 1998 (inception) to June 30, 1999


<TABLE>
<CAPTION>
                                                                                                     Deficit
                                                                                                 accumulated
                                                                 Additional                           during            Total
                                          COMMON STOCK              paid-in    Subscriptions     development    stockholders'
                                         Shares       Amount        capital       receivable           stage           equity
<S>                                  <C>          <C>             <C>             <C>           <C>               <C>
Fully paid stock subscriptions
   December 15, 1999, at $0.25
   per share, net of issuance costs
   of $nil                                  -     $        -      $ 123,000       $    -        $        -        $    123,000

Unpaid stock subscriptions
   December 15, 1999, at $0.25
   per share, net of issuance costs
   of $nil                                  -              -          8,000         (8,000)              -                 -

Common stock issued
   January 3, 2000 for fully
   paid stock subscriptions at
   $0.53 per share, net of
   issuance costs of $nil               141,500         75,000      (75,000)           -                 -                 -

Common stock issued for cash,
   January 13, 2000, at $0.61
   per share, net of issuance
   costs of $nil                         46,722         28,500          -              -                 -              28,500

Common stock issued January 3,
   2000 for fully paid stock
   subscriptions at $0.25, net
   of issuance costs of $nil            524,000        131,000     (131,000)         7,000               -               7,000

Common stock issued for cash,
   January 27, 2000 at $0.80
   per share, net of issuance
   costs of $nil                         72,500         58,000          -              -                 -              58,000

Common stock issued for cash,
   February 1, 2000, at $0.80
   per share, net of issuance
   costs of $14,440                     477,816        209,560          -              -                 -             209,560

Warrants issued for services
   (note 6)                                 -              -         12,000            -                 -              12,000

Site development (note 7)                   -       12,345,500          -              -                 -          12,345,500

Common stock issued for
   services March 3, 2000               138,000         86,250          -              -                 -              86,250

Write-off of stock subscription
   receivable                               -              -         (1,000)         1,000               -                 -

Common stock issued for
   services (note 9)                        -              -         68,355            -                 -              68,355

Net loss                                    -              -            -              -         (13,305,193)      (13,305,193)
                                     -----------  -------------   ----------      ---------     -------------     -------------
Balance, June 30, 2000               37,619,401   $ 13,320,355    $  79,521       $    -        $(13,422,490)     $    (22,614)
                                     ===========  =============   ==========      =========     =============     =============
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-7

<PAGE>


COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Consolidated Statement of Cash Flows
(Expressed in U.S. Dollars)
<TABLE>
<CAPTION>
                                                                               Period from         Period from
                                                                               November 3,         November 3,
                                                                                      1998                1998
                                                             Year ended     (inception) to      (inception) to
                                                          June 30, 2000      June 30, 1999       June 30, 2000
<S>                                                        <C>                   <C>              <C>
Cash flows from operating activities:
     Loss for the year                                     $(13,305,193)         $(117,297)       $(13,422,490)
     Items not involving cash:
         Depreciation                                            13,049                -                13,049
         Amortization of organization costs                         -                1,218               1,218
         Common stock issued for services                       154,605                -               154,605
         Warrants issued for financial services                  12,000                -                12,000
         Site development and maintenance                    12,345,500                -            12,345,500
     Changes in operating asset and liabilities:
         Accounts receivable                                        (84)               -                   (84)
         Payable to related party                                 2,836                -                 2,836
         Receivable from related party                           45,297            (21,930)             23,367
         Accounts payable and accrued liabilities                28,898             13,754              42,652
                                                           -------------         ----------       -------------
     Net cash used in operating activities                     (703,092)          (124,255)           (827,347)

Cash flows from investing activity:
     Purchase of property and equipment                         (37,349)               -               (37,349)
     Cash acquired on acquisition                                   -                2,960               2,960
                                                           -------------         ----------       -------------
     Net cash provided by (used in) investing activity          (37,349)             2,960             (34,389)

Cash flows from financing activities:
     Net proceeds from issuances of and
       subscriptions for common stock                           651,226            210,353             861,579
     Bank indebtedness                                              157                -                   157
                                                           -------------         ----------       -------------
     Net cash provided by financing activities                  651,383            210,353             861,736
                                                           -------------         ----------       -------------
Increase (decrease) in cash and cash equivalents                (89,058)            89,058                 -

Cash and cash equivalents, beginning of period                   89,058                -                   -
                                                           -------------         ----------       -------------
Cash and cash equivalents, end of period                   $        -            $  89,058        $        -
                                                           =============         ==========       =============

Supplementary disclosure:
     Non-cash transactions:
         Stock issued to acquire Cool Entertainment,
           Inc. (note 2(a))                                $        -            $   8,232        $      8,232
         Stock issued to settle loan payable                     15,000                -                15,000
     Interest paid                                                  -                  -                   -
     Taxes paid                                                     -                  -                   -
                                                           =============         ==========       =============
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-8
<PAGE>


COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 6
(Expressed in U.S. Dollars)

Year ended June 30, 2000
Period from November 3, 1998 (inception) to June 30, 1999

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

1.   GENERAL AND FUTURE OPERATIONS

     Cool  Entertainment Inc. (the "Company") was incorporated under the laws of
     the State of Colorado on June 17, 1996,  under the name of Minas Novas Gold
     Corp.  On  February  15,  1999,  the  Company  changed  its  name  to  Cool
     Entertainment Inc. Prior to its acquisition of Cool Washington (note 2(a)),
     the Company was a holding company with no substantive operations.

     The Company is currently in the business of retailing entertainment related
     products such as CDs, DVDs and videos through its website.

     These  consolidated  financial  statements  have been  prepared  on a going
     concern  basis  in  accordance  with  United  States   generally   accepted
     accounting principles.  The going concern basis of presentation assumes the
     Company will continue in operation for the  foreseeable  future and will be
     able to realize its assets and discharge its liabilities and commitments in
     the  normal  course  of  business.  Certain  conditions,  discussed  below,
     currently  exist which raise  substantial  doubt upon the  validity of this
     assumption.  The financial  statements do not include any adjustments  that
     might result from the outcome of this uncertainty.

     The Company's future operations are dependent upon the market's  acceptance
     of its services and the Company's ability to secure strategic  partnerships
     There can be no assurance  that the Company  will be able to secure  market
     acceptance or strategic  partnerships.  As of June 30, 2000, the Company is
     considered to be in the development  stage as the Company has not generated
     any significant revenues and is continuing to develop its business, and has
     experienced negative cash flows from operations.  Operations have primarily
     been financed  through the issuance of common  stock.  The Company does not
     have sufficient  working capital to sustain operations until the end of the
     year ended  June 30,  2001.  Additional  debt or equity  financing  will be
     required and may not be  available  or may not be  available on  reasonable
     terms. Subsequent to June 30, 2000 additional common shares were issued for
     cash to finance the  operations of the Company  (note 9(a)).  If sufficient
     financing  cannot  be  obtained,  the  Company  may be  required  to reduce
     operating activities.


2.   SIGNIFICANT ACCOUNTING POLICIES:

     (a) Basis of presentation:

         On March 1, 1999, the Company issued  23,184,044  common shares for all
         of the issued and outstanding shares of Cool Entertainment, Inc. ("Cool
         Washington"),  a company  incorporated  in the State of  Washington  on
         November   3,  1998.   The   acquisition   was   accounted   for  as  a
         recapitalization of Cool Washington  effectively  representing an issue
         of shares by Cool Washington for the net assets of the Company.


                                      F-9
<PAGE>
COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 6
(Expressed in U.S. Dollars)

Year ended June 30, 2000
Period from November 3, 1998 (inception) to June 30, 1999

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


2.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     (a) Basis of presentation (continued):

         The net assets acquired as follows:

<TABLE>
<CAPTION>
         <S>                                                      <C>
         Cash                                                     $      2,960
         Other working capital, net                                     22,015
         Organizational costs                                            1,217
         Loan payable                                                  (15,000)
                                                                  -------------
                                                                  $     11,192
                                                                  =============
</TABLE>

         Acquisition   related   costs  of  $23,367   were   incurred   on  this
         recapitalization and have been recorded in professional fees.

         The historical  financial  statements reflect the financial position of
         Cool Washington from the date of its incorporation on November 3, 1998,
         consolidated with those of the Company from March 1, 1999.

     (b) Basis of consolidation:

         These  consolidated  financial  statements  have  been  prepared  using
         generally  accepted  accounting  principles in the United  States.  The
         financial  statements  include  the  accounts  of the  Company  and its
         wholly-owned subsidiary,  Cool Washington. All significant intercompany
         balances and  transactions  have been  eliminated  in the  consolidated
         financial statements.

     (c) Use of estimates:

         The preparation of consolidated financial statements in accordance with
         generally accepted  accounting  principles  requires management to make
         estimates and  assumptions  that affect the recorded  amounts of assets
         and liabilities and the disclosure of contingent assets and liabilities
         at the  date of the  consolidated  financial  statements  and  reported
         revenues and  expenses for the  reporting  period.  Actual  results may
         significantly differ from those estimates.

     (d) Property and equipment

         Property and equipment is stated at cost and is  depreciated  using the
         straight line method over their estimated useful lives determined to be
         two years.

     (e) Income taxes:

         The Company  follows the asset and liability  method of accounting  for
         income taxes.  Under this method,  current taxes are recognized for the
         estimated income taxes payable for the current period.


                                      F-10
<PAGE>
COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 6
(Expressed in U.S. Dollars)

Year ended June 30, 2000
Period from November 3, 1998 (inception) to June 30, 1999
--------------------------------------------------------------------------------


2.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     (e) Income taxes (continued):

         Deferred  income taxes are provided  based on the estimated  future tax
         effects of temporary  differences  between financial statement carrying
         amounts of assets and  liabilities  and their  respective  tax basis as
         well as the benefit of losses available to be carried forward to future
         years for tax purposes.

         Deferred  tax assets and  liabilities  are measured  using  enacted tax
         rates  that are  expected  to apply to  taxable  income in the years in
         which those  temporary  differences  are  expected to be  recovered  or
         settled.  The effect on deferred tax assets and liabilities of a change
         in tax rates is  recognized  in  operations in the period that includes
         the substantive  enactment date. A valuation  allowance is recorded for
         deferred tax assets when it is more likely than not that such  deferred
         tax assets will not be realized.

     (f) Research and development:

         Research and  development  costs are expensed when incurred.  Equipment
         used in  research  and  development  is  capitalized  only if it has an
         alternative future use.

     (g) Cash and cash equivalents:

         Cash equivalents includes highly liquid debt investments with remaining
         maturities at the date of purchase of three months or less.

     (h) Net loss per share:

         Basic loss per share is computed  using the weighted  average number of
         common shares outstanding during the period.  Diluted loss per share is
         computed using the weighted  average  number of common and  potentially
         dilutive common stock outstanding during the period. As the Company has
         a net loss in the  period  presented,  basic and  diluted  net loss per
         share are the same.

         Excluded from the  computation of diluted loss per share for the period
         ended  June 30,  1999 are  17,388,033  shares of common  stock  held in
         escrow.  The release of these  escrowed  shares is contingent  upon the
         Company's achievement of contractually  specified financing and website
         development  milestones.  These escrowed  shares were released in 2000.
         See note 7.


                                      F-11
<PAGE>

COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 6
(Expressed in U.S. Dollars)

Year ended June 30, 2000
Period from November 3, 1998 (inception) to June 30, 1999
--------------------------------------------------------------------------------


2.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

     (i) Stock based compensation:

         The Company  accounts for its stock-based  compensation  arrangement in
         accordance with provisions of Acounting  Principles Board (APB) Opinion
         No.  25,  Accounting  for  Stock  Issued  to  Employees,   and  related
         interpretations.  As such, compensation expense under fixed plans would
         be  recorded  on the  date of  grant  only if the  market  value of the
         underlying  stock at the date of grant exceeded the exercise price. The
         Company recognizes compensation expense for stock options, common stock
         and other  equity  instruments  issued to  non-employees  for  services
         received   based  upon  the  fair  value  of  the  services  or  equity
         instruments issued, whichever is more reliably determined.

         SFAS  No.  123,  Accounting  for  Stock  Based  Compensation,  requires
         entities  that  continue to apply the  provisions of APB Opinion No. 25
         for transactions with employees to provide pro forma net income and pro
         forma earnings per share  disclosures  for employee stock option grants
         made in 1995 and future years as if the fair-value-based method defined
         in SFAS No. 123 had been applied to these transactions.


3. RELATED PARTY BALANCES AND TRANSACTIONS:

     In March,  1999,  the  Company  entered  into a  contract  with a  company,
     Fictional Media Inc.  (formerly known as Cool  Management  Inc.),  which is
     controlled  by the  stockholders  of the  Company,  to  provide  management
     services,  site development and other professional  services to the Company
     at cost plus  10%.  For the year  ended  June 30,  2000,  the  Company  has
     incurred $256,334 (1999 - $26,689) as management fees under this contract.

     The Company incurred cash compensation expense of $56,567 during the period
     from November 3, 1998 (inception) to June 30, 1999 (2000 - $Nil).

     The payable to related party is non-interest bearing,  unsecured and due on
     demand. The balance relates to services rendered by Fictional Media Inc. to
     the Company under the contract discussed above.

     The  receivable  from  related  party  at  June  30,  1999  of  $45,297  is
     non-interest bearing,  unsecured and due on demand. The funds were advanced
     to Fictional Media Inc. to fund development of the Company's website.  This
     receivable was repaid to the Company during the year ended June 30, 2000.

     The  loan  payable  balance  at June  30,  1999  of  $15,000  arose  from a
     transaction between a shareholder and the Company. The loan is non-interest
     bearing, unsecured and due on demand. This loan was settled during the year
     ended June 30, 2000 through the issuance of shares.


                                      F-12
<PAGE>

COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 6
(Expressed in U.S. Dollars)

Year ended June 30, 2000
Period from November 3, 1998 (inception) to June 30, 1999
--------------------------------------------------------------------------------

4.       PROPERTY AND EQUIPMENT:

     Property and equipment consists of the following:

<TABLE>
<CAPTION>
<S>                                            <C>                  <C>
                                                    2000                 1999

     Computer equipment                        $     27,577         $         -
     Computer software                                9,772                   -
                                               -------------        ------------
                                                     37,349                   -
     Less accumulated depreciation                  (13,049)                  -
                                               -------------        ------------
                                               $     24,300         $         -
                                               =============        ============
</TABLE>


5. DEFERRED TAX ASSETS AND LIABILITIES:


<TABLE>
<CAPTION>
<S>                                            <C>                  <C>
                                                    2000                 1999
     Deferred tax asset:
         Operating loss carryforward           $    335,920         $     43,700
     Valuation allowance                           (335,920)             (43,700)
                                               -------------        ------------
                                               $        -           $         -
                                               =============        ============
</TABLE>

     Management believes that it is not more likely than not that it will create
     sufficient taxable income sufficient to realize its deferred tax assets. It
     is reasonably  possible these  estimates  could change due to future income
     and the timing and manner of the reversal of deferred tax liabilities.  Due
     to its losses, the Company has no income tax expense.

     The Company has  operating  loss carry  forwards for income tax purposes at
     June 30, 2000 of approximately $884,000 (1999 - $115,000). Operating losses
     begin to expire in fiscal year 2012.


6.   WARRANTS:

     On February 4, 2000 the Company  granted  warrants to four directors of the
     Company to purchase  1,200,000 common shares at $0.625 per share, being the
     market  price per  common  share at the date of the grant.  These  warrants
     expire in three years from their grant date.  The Company  also  elected to
     grant on February 4, 2000,  warrants  to certain  shareholders  to purchase
     1,200,000  common  shares at $0.625 per share,  being the market  price per
     common  share at the date of the  grant.  These  warrants  were  valued  at
     $12,000  and were  recorded  as a direct  financing  cost  related to prior
     equity financings in which these shareholders participated.  These warrants
     expire in three  years from  their  grant  date.  All of the  warrants  are
     exercisable immediately but are subject to a one year hold period.

     In  conjunction  with the issue of 477,816  common shares in February 2000,
     the Company  issued 477,816  warrants to purchase  477,816 common shares at
     $1.25 per share. These warrants are exercisable immediately and expire five
     years from the issue date.

                                      F-13
<PAGE>

COOL ENTERTAINMENT, INC.
(A Development Stage Enterprise)

Notes to Consolidated Financial Statements, page 6
(Expressed in U.S. Dollars)

Year ended June 30, 2000
Period from November 3, 1998 (inception) to June 30, 1999
--------------------------------------------------------------------------------


7.   SITE DEVELOPMENT AND MAINTENANCE:

     Effective  February  25,  2000,  the Company  reached  certain  performance
     milestones  relating to the  development  of the  Company's  website.  As a
     result,  17,388,033  common shares previously held in escrow were released.
     Site   development  and   maintenance   expense  of  $12,345,500  has  been
     recognized,  representing  the  difference  between the market value of the
     common  shares on the date of their  release and the original cost of these
     common shares.



8.   FINANCIAL INSTRUMENTS:

     Fair value:

     The carrying values of cash and cash equivalents, accounts receivable, bank
     indebtedness and accounts payable and accrued liabilities  approximate fair
     value due to the short-term maturities of these instruments.

     It is not practicable to determine the fair value of the loan payable,  the
     receivable from related party and the payable to related party due to their
     related  party  nature  and the  absence  of a  secondary  market  for such
     instruments.



9.   SUBSEQUENT EVENTS:

     (a) On  July  24,  2000,   588,235  common  shares  were  issued  for  cash
         consideration  of $0.17  per share to  finance  the  operations  of the
         Company.

     (b) On August 24, 2000,  133,000 common shares were issued to Charterbridge
         Financial Group, Inc. as final compensation for its services from March
         1, 2000  (initiation  of  agreement) to July 18, 2000  (termination  of
         agreement).  Expenses of $68,355  relating to the services  provided to
         the Company for the year ended June 30, 2000 have been  accrued for and
         are included with professional fees expense.






                                      F-14