U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

[X]  QUARTERLY  REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934

     For quarterly period ended August 26, 2000
                                ---------------

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

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

                         Commission file number 0-21634

                            Metro Global Media, Inc.
                            ------------------------
        (Exact name of small business issuer as specified in its charter)

              Delaware                                    65-0025871
     ------------------------------                   -------------------
    (State or other jurisdiction of                  (IRS Employer
     incorporation or organization)                   Identification No.)

                 1060 Park Avenue, Cranston, Rhode Island 02910
                 ----------------------------------------------
                    (Address of principal executive offices)

                                 (401) 942-7876
                                 --------------
                           (Issuer's telephone number)

--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last year)

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

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by court. Yes   No

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 8,630,223 at October 6, 2000.







<PAGE>


PART I - FINANCIAL INFORMATION
------------------------------


Item 1. Consolidated Financial Statements
-----------------------------------------

        Balance Sheet                                                   F-1
        Statements of Income                                            F-3
        Statements of Cash Flows                                        F-4
        Notes to Financial Statements                           F-7 to F-12


Item 2.  Management's Discussion and Analysis or Plan of Operation
------------------------------------------------------------------

Results of  Continuing  Operations  for the three  months  ended August 26, 2000
versus three months ended August 28, 1999.

     Metro Global  Media,  Inc.'s  ("Metro  Global")  revenues  from  continuing
operations  decreased  $759,201 to $6,053,472  for the three months ended August
26, 2000.  This  represents a 11% decrease from  revenues of $6,812,673  for the
three months ended August 28, 1999.  Revenues  consist  principally  of sales of
prerecorded videocassettes,  magazines, electronic software products and related
items. The decrease in revenue is primarily  attributable to the decreased sales
of videos, DVDs,  magazines,  and cable and foreign film rights of approximately
$733,000. The decrease in sales is attributable to a slower summer season. Metro
Global  intends  on  increasing  production  on all  product  lines  during  the
remaining three-quarters, which is considered Metro Global's peak season.

     Costs  of  revenues  (including  amortization  of film  costs)  related  to
continuing operations for the three month period ended August 26, 2000 decreased
to $3,798,091  from $4,466,377 for the  corresponding  period in the prior year.
Costs of revenues  as a  percentage  of revenues in the first  quarter of fiscal
2001 were 63% as  compared  to 66% in the first  quarter  of  fiscal  2000.  The
improvement  in the gross margin  related to continuing  operations is primarily
due to the  reduction of costs  associated  with  producing and  duplicating  of
videos and DVD's.

     Selling,  general, and administrative  expenses, as a percentage of revenue
in the first quarter of 2001 were 41% as compared to 37% in the first quarter of
fiscal  2000.  The  primary  reasons for the  increase  in selling,  general and
administrative  expenses  as a  percent  of  revenues  is due to a  decrease  in
revenues for the quarter with expenses remaining relatively constant.

     Loss from continuing operations for the three month period ended August 26,
2000 was $297,643 as compared to a loss from  continuing  operations of $800,666
for the  corresponding  period in the prior  year.  The  primary  reason for the
decrease in the loss is due to the decrease in interest expense of approximately
$466,039 due to decreased  borrowings and a decrease in consulting expense.  Net
loss for the quarter  ended  August 26,  2000 was  $297,643 as compared to a net
loss of $716,965 for the quarter ended August 28, 1999,  resulting in a loss per
share of $0.03 for the quarter  ended August 26, 2000, as compared to a loss per
share of $0.11 for the quarter ended August 28, 1999.

Liquidity and Capital Resources at August 26, 2000

     Cash  amounted to $103,393 at  quarter-end.  Net cash provided by operating
activities  amounted to $372,274  for the three  months  ended  August 26, 2000,
whereas net cash of $1,557,503 was provided by operations for the same period in
the prior fiscal year. The primary uses of cash for the quarter ended August 26,
2000  consisted  of:  (1) net  payments  on  line of  credit  of  $375,576,  (2)
investments  in motion  pictures and other films of  $641,327,  (3) payment on a
note  payable of  $425,000,  and (4)  purchases  of property  and  equipment  of
$79,320.  Inventory  increased  $588,646 due to the increase in DVD and magazine
production.


                                       1
<PAGE>

     On July 31, 1998,  Metro Global  entered into an 8%  convertible  debenture
with an  unrelated  party in the  amount  of  $1,000,000,  which was used in the
purchase of Fanzine. In connection with this transaction,  Metro Global issued a
warrant for 75,000 shares at a price of $4.11 and a warrant for 25,000 shares at
a price of $3.29,  both  exercisable  over two years  which  expired on July 31,
2000.  Metro  Global  recorded a discount on the  debenture  of $157,700 for the
value of the  warrants.  Metro  Global  amortized  $13,142  and  $19,713  of the
discount to interest  expense for quarters ending August 26, 2000 and August 28,
1999, respectively.

     The  $1,000,000  debenture  was to mature on July 31,  2000.  Interest  was
payable on a  quarterly  basis.  The holder of the  debenture  was  entitled  to
convert the  principal  value into Metro  Global's  Common Stock at a discounted
market price as is defined in the debenture agreement. For fiscal 2000, $105,000
of  convertible  debentures  plus accrued  interest and penalties were converted
into 83,888  restricted  shares of Metro Global's  Common Stock. On February 25,
2000,  Metro Global entered into a Forbearance and  Modification  Agreement with
the lender.  Under the terms of the  agreement,  Metro  Global made a payment of
$150,000 upon execution of the agreement.  The remaining  balance of $850,000 is
due in two  installments  of $425,000  each,  due on July 1, 2000 and October 1,
2000. The restructured  note payable is secured by 200,000  restricted shares of
New Frontier common stock owned by Metro Global.  On June 30, 2000, Metro Global
made the first $425,000 payment and 125,000 shares of stock were returned by the
lender.  On October 2, 2000, Metro Global made the final payment of $425,000 and
the remaining 75,000 shares were returned by the lender.

     On October 28, 1998,  Metro Global entered into a note payable with a third
party for $1,100,000.  The note,  which bears no interest,  was due in quarterly
installments of $275,000  commencing  December 31, 1998. In consideration of the
loan and part of an investment banking consultant agreement, Metro Global issued
the lender  150,000  restricted  shares of Metro  Global's  Common Stock.  Metro
Global  used  $507,500  of the  proceeds  to  repurchase  198,242  shares of its
outstanding  Common  Stock  from  Metro  Plus,  a company  owned by a  principal
stockholder.  For fiscal 1999,  Metro  Global made one payment of  $275,000.  In
September 1999, Metro Global and lender agreed to a preliminary extension of the
note. In October 1999, Metro Global made a $275,000 payment. Effective August 8,
2000, Metro Global renegotiated the terms for the final $550,000 due on the note
payable.  Under the terms of the Forbearance and Modification  agreement,  Metro
Global must make  monthly  payments of $50,000.  As of September  30, 2000,  the
balance due on the note payable is $450,000.

     On December  9, 1998,  Metro  Global  entered  into a  six-month  term loan
agreement  with a third party.  Under the terms of the  agreement,  Metro Global
borrowed  $3,000,000 at an interest rate of 10% per year. The proceeds were used
toward the  acquisition  of Fanzine and to fund working  capital.  In connection
with this  transaction,  Metro Global issued  warrants to purchase up to 350,000
shares of Common Stock at a price of $3.00, expiring on December 31, 2001. Metro
Global recorded  interest expense of $577,000 for the valuation of the warrants.
Additionally,  Metro Global issued  100,000  shares of Common Stock and recorded
$187,500 of interest  expense.  In September 1999,  Metro Global and this lender
agreed to an extension,  under which Metro Global paid $1.3 million upon closing
a financing with Reservoir Capital  Corporation.  In November 1999, Metro Global
paid the lender an additional $600,000 from the proceeds of the sale of Fanzine.
The final payment of $1.2 million (which includes $100,000 of interest) was paid
directly from the proceeds of the final payment from the sale of Fanzine,  which
was received on September 13, 2000. In connection with the  restructuring of the
two notes payable,  Metro Global recognized $337,475 of extraordinary income for
the forgiveness of interest and penalties in fiscal 2000.

     In  September  1999,  Metro Global  signed a  $4,000,000  Loan and Security
Agreement with Reservoir Capital  Corporation.  Pursuant to the terms, Metro may
borrow up to 70% of  accounts  receivable  less  than  ninety  day old,  up to a
maximum of $3,000,000.  The accounts receivable  borrowing base excludes foreign
receivables  and  receivables  where more than 50% of the balance is over ninety


                                       2
<PAGE>

days old.  Also, the  borrowings on accounts  receivable  owned be Capital Video
Corporation  ("CVC")  are  limited  to  the  lesser  of 30%  of  total  accounts
receivable or $1,600,000. Additionally, Metro can borrow 40% of inventory, up to
a maximum of $1,000,000.  Borrowings under this loan bear interest at prime rate
plus 3.5% per  annum.  Additionally,  Metro  must pay a service  fee of .35% per
month on the average daily loan balance. Metro must pay an unused fee of .25% on
the amount of the borrowings under $2,000,000. The loan is secured by the assets
of Metro.  The CVC accounts  receivable are guaranteed a shareholder of CVC, who
is a significant shareholder of Metro Global.  Additionally,  CVC has executed a
put on the  inventory  of Metro  in case of  default.  As of  August  26,  2000,
borrowings under the line of credit totaled $2,747,306.

     On September 30, 1999, Metro Global sold Fanzine for $4,500,000, payable in
four  installments.  During the year ended May 27, 2000,  Metro Global  received
payments of $2,000,000. The remaining balance was paid in two installments,  one
on July 31, 2000 in the amount of  $1,000,000  and the second on  September  13,
2000 of $1,500,000.

     Of Metro's total accounts receivable at August 26, 2000,  $2,351,879 (47%),
as compared to  $2,723,875  (30%) at August 28, 1999, is owed by CVC, a chain of
retail  stores,  which is  partially-owned  by a principal  shareholder of Metro
Global.  This  percentage  has  increased  due  to  the  exclusion  of  accounts
receivable  from Fanzine due to the  disposition.  Because of the amount of this
receivable  and the  concentration  of business  with CVC,  this  receivable  is
monitored  very  closely.  All  amounts  due from CVC are within  terms given by
Metro, and are maintained  within 60 to 90 days.  Accordingly,  no allowance for
related  party  receivables  and no  related  party  bad debt  expense  has been
recorded in Metro Global's financial statements.

     In fiscal 2001,  Metro  invested  $641,327 in new feature films and videos.
Financing  for  these  activities  has been and will  continue  to be  generated
through operating cash flows as well as funds received from its line of credit.

Capital Expenditures

     Capital expenditures in the first quarter ended August 26, 2000 amounted to
$79,320 as compared to $96,532 for the quarter ended August 28, 1999.

     Management  believes that funds provided by operations and existing line of
credit are adequate to meet the  anticipated  short-term  and long-term  capital
needs.  Management  believes that inflation has not had a material effect on its
operations.

Forward Looking Statements

     This Form 10-QSB Report contains  "forward-looking  statements,"  including
statements in "Management's  Discussion and Analysis of Financial  Condition and
Results of  Operations,"  as to  expectations,  beliefs,  plans,  objectives and
future  financial  performance,  and  assumptions  underlying or concerning  the
foregoing.  Such  forward-looking  statements  involve risks and  uncertainties,
which could cause  actual  results or outcomes to differ  materially  from those
expressed in the  forward-looking  statements.  One such factor that could cause
actual  results or outcomes to differ  materially  from those  discussed  in the
forward-looking  statements would be government actions or initiatives,  such as
attempts to limit or otherwise  regulate the sale of  adult-oriented  materials,
including print, video and online materials.

Investment in securities

     On  July  21,  1999,  Metro  Global  entered  into a seven  year  Licensing
Agreement with New Frontier Media, Inc. ("New Frontier").  Metro Global received
500,000 restricted shares of New Frontier common stock plus warrants to purchase
an  additional  100,000  shares of New  Frontier  common stock per year for five
years.  Metro Global  valued the common stock and  warrants at  $4,787,474.  The
deferred  revenue is being  amortized  over seven years.  Metro accounts for the
stock received as securities available for sale, in accordance with SFAS 115. At
August 26, 2000,  Metro Global recorded a comprehensive  loss of $914,954 on the
investment.  Both the stock  and the  warrants  are  periodically  reviewed  for
permanent impairment.


                                       3
<PAGE>

     As part of the Licensing  Agreement,  in consideration of certain services,
Metro Global issued New Frontier 250,000  restricted  shares of its Common Stock
and warrants to purchase  50,000 shares of Common Stock per year for five years.
Metro Global  valued the Common  Stock and  warrants at  $716,752.  The deferred
expense is being amortized over five years.


                                        4
<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AUGUST 26, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                     Assets
                                     ------


Current Assets
--------------

<S>                                                                <C>
  Cash                                                             $    103,393
  Accounts receivable, less allowance for doubtful accounts
    of $182,991                                                       2,602,182
  Accounts receivable, related party                                  2,351,879
  Note Receivable                                                     1,500,000
  Inventory                                                           5,497,536
  Recoverable income tax                                                155,564
  Prepaid expenses and other current assets                             454,044
                                                                   ------------

Total Current Assets                                                 12,664,598
--------------------                                               ------------



  Motion pictures and other films at cost, less accumulated
    amortization of $11,603,255                                       5,519,154

  Property and equipment at cost, less accumulated
    depreciation of $3,023,850                                        2,031,105

  Investment in securities                                            3,577,474

  Deferred Taxes                                                        900,000

  Other assets                                                          176,624
                                                                   ------------

Total Assets                                                       $ 24,868,955
------------                                                       ============


</TABLE>







                 See Notes to Consolidated Financial Statements
                                       F-1


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AUGUST 26, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                      Liabilities and Shareholders' Equity
                      ------------------------------------


Current liabilities
-------------------

<S>                                                                <C>
  Current portion of capital lease obligations                     $    314,661
  Short-term borrowings                                               4,928,877
  Accounts payable and accrued expenses                               6,431,940
  Income taxes payable                                                  946,289
                                                                   ------------

Total current liabilities                                            12,621,767
-------------------------

  Deferred Revenue                                                    4,046,556
  Capital lease obligations, less current portion                       237,830
                                                                   ------------

Total liabilities                                                    16,906,153
-----------------                                                  ------------

  Minority interest                                                     (56,044)

Commitments and Contingencies


Shareholders' equity
--------------------


  Preferred Stock, no par value; authorized 2,000,000 shares;
    issued and outstanding, none
  Common stock, $.0001 par value; authorized 10,000,000
    shares; issued 8,828,465 shares and outstanding,
    8,630,223 shares                                                        883
  Additional paid in capital                                         16,701,540
  Accumulated deficit                                                (6,978,075)
  Accumulated other comprehensive loss                               (1,198,002)
                                                                   ------------
                                                                      8,526,346

  Less cost of Treasury Stock (198,242 common shares)                  (507,500)
                                                                   ------------

Total shareholders' equity                                            8,018,846
--------------------------                                         ------------

Total liabilities and shareholders' equity                         $ 24,868,955
------------------------------------------                         ============

</TABLE>



                 See Notes to Consolidated Financial Statements
                                       F-2


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED AUGUST 26, 2000 AND AUGUST 28, 1999 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                        1999
                                                      2000          as restated
                                                      ----          -----------

<S>                                               <C>               <C>
  Revenues                                        $ 6,053,472       $ 6,812,673
  Cost of revenues, including amortization of
    motion pictures and other films of
    $578,814 and $535,352, respectively             3,798,091         4,466,377
                                                  -----------       -----------
                                                    2,255,381         2,346,296

  Selling, general and administrative expenses      2,451,942         2,537,763
                                                  -----------       -----------

                                                     (196,561)         (191,467)
                                                  -----------       -----------
Other income and (expenses)

  Interest expense                                   (167,563)         (633,602)
  Interest income                                      57,904               -0-
  Other income                                          8,577            24,403
                                                  -----------       -----------

                                                     (101,082)         (609,199)
                                                  -----------       -----------

Loss from continuing operations                      (297,643)         (800,666)

Income from discontinued operations (net of taxes)      -0-              83,701
                                                  -----------       -----------

Net loss                                          $  (297,643)      $  (716,965)
                                                  ===========       ===========

Comprehensive Loss
------------------

Net loss                                          $  (297,643)      $  (716,965)

Other comprehensive loss                             (914,954)           (1,035)
                                                  -----------       -----------

Net other comprehensive loss                      $(1,212,597)      $  (718,000)
                                                  ============      ===========

Loss Per Share:

  Loss from continuing operations:
    Basic and Diluted                                 $ (0.03)          $ (0.12)
  Income from discontinued operations:
    Basic and Diluted                                 $  0.00           $  0.01
  Net loss:
    Basic and Diluted                                 $ (0.03)          $ (0.11)
  Weighted average number of shares:
    Basic and Diluted                               8,630,223         6,448,889

</TABLE>




                 See Notes to Consolidated Financial Statements
                                       F-3


<PAGE>



METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 26, 2000 AND AUGUST 28, 1999 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>




                                                        2000            1999
                                                        ----            ----

Cash flows from operating activities:
<S>                                                  <C>             <C>
   Net loss                                          $ (297,643)     $ (716,965)
                                                     ----------      ----------

Adjustments to reconcile net loss to net
 cash provided by operating activities:
  Depreciation Expense                                  173,639         160,841
  Amortization of motion pictures and other films       578,814         535,352
  Amortization of deferred rent                          (3,503)         (3,503)
  Amortization of unearned compensation                     500          77,512
  Amortization of goodwill                                -0-           109,222
  Amortization of discount on debenture                  13,142          19,712
  Amortization of deferred revenue                     (170,981)        (56,944)
  Amortization of deferred expense                       54,356          11,946
  Accrued interest and penalties added to note
    payable principal                                     -0-            68,000
  Allowance for doubtful accounts                        45,000         113,426
  Common Stock issued for consulting services             -0-            12,815
  Issuance of warrants                                    -0-           175,844
  Minority interest                                       -0-             8,133
  Foreign exchange                                       31,296           1,035
(Increase) decrease in assets:
  Accounts receivable                                   432,544      (1,393,039)
  Inventory                                            (588,646)       (263,672)
  Prepaid expenses and other current assets             (89,019)         56,832
  Other assets                                          (27,568)        (66,639)
  Recoverable income tax                                183,436           -0-
 Increase (decrease) in liabilities:
  Accounts payable and accrued expenses                  36,907       2,652,421
  Income taxes payable                                    -0-            55,174
                                                     ----------      ----------

Total adjustments                                       669,917       2,274,468
-----------------                                    ----------      ----------

Net cash provided by operating activities               372,274       1,557,503
-----------------------------------------            ----------      ----------

</TABLE>





                 See Notes to Consolidated Financial Statements
                                       F-4


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE THREE MONTHS ENDED AUGUST 26, 2000 AND AUGUST 28, 1999 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>



                                                        2000            1999
                                                        ----            ----

Cash flows from investing activities:

<S>                                                  <C>             <C>
  Notes Receivable                                      965,649           -0-
  Investments in motion pictures and other films       (641,327)       (643,364)
  Purchase of property and equipment                    (79,320)        (96,532)
                                                     ----------      ----------

Net cash provided by (used in) investing activities     245,002        (739,896)
---------------------------------------------------  ----------      ----------


Cash flows from financing activities:


  Payments on line of credit                           (375,576)       (142,254)
  Proceeds on notes payable                               -0-            30,000
  Principal payments on notes payable                  (425,000)          -0-
  Principal payments on capital lease obligations       (74,846)        (88,007)
                                                     ----------      ----------

Net cash used in financing activities                  (875,422)       (200,261)
-------------------------------------                ----------      ----------

Net increase (decrease) in cash                        (258,146)        617,346

Cash, beginning of period                               361,539         144,288
                                                     ----------      ----------

Cash, end of period                                  $  103,393      $  761,634
                                                     ==========      ==========


Supplemental disclosures of cash flow information:

    Cash paid during the year for:

        Interest                                     $  147,831      $   66,401
                                                     ==========      ==========

        Income taxes                                 $    -0-        $    -0-
                                                     ==========      ==========


</TABLE>






                 See Notes to Consolidated Financial Statements
                                       F-5


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE THREE MONTHS ENDED AUGUST 26, 2000 AND AUGUST 28, 1999 (UNAUDITED)
--------------------------------------------------------------------------------

Supplemental schedule of non-cash investing and financing activities:

     Capital lease obligations of $411,799 were incurred during the three months
ended August 28, 1999,  when Metro Global  entered into  capitalized  leases for
office equipment and machinery and equipment.

     On  July  21,  1999,  Metro  Global  entered  into a seven  year  Licensing
Agreement with New Frontier Media, Inc. Metro Global received 500,000 restricted
shares of New Frontier Common Stock plus warrants to purchase  100,000 shares of
Common Stock per year for five years.  Metro Global  valued the Common Stock and
warrants at  $4,787,474.  The  deferred  revenue is being  amortized  over seven
years.

     As part of the Licensing  Agreement,  in consideration of certain services,
Metro Global issued New Frontier 250,000  restricted  shares of its Common Stock
and warrants to purchase  50,000 shares of Common Stock per year for five years.
Metro Global  valued the Common  Stock and  warrants at  $716,752.  The deferred
expense is being amortized over five years.

     During the three  months  ended  August 28,  1999,  $60,000 of  convertible
debentures  and accrued  interest and penalties of $17,630 were  converted  into
43,962 restricted shares of Common Stock.








                 See notes to consolidated financial statements.
                                       F-6


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 26, 2000 AND AUGUST 28, 1999 (UNAUDITED)
--------------------------------------------------------------------------------


1.   Summary of Significant Accounting Policies

Consolidation

     The consolidated  financial statements include the accounts of Metro Global
and its majority owned and controlled  subsidiaries.  All intercompany  balances
and transactions have been eliminated in consolidation.

Financial Statements

     The interim financial  statements are prepared pursuant to the requirements
for reporting on Form 10-QSB. The interim financial  information included herein
is unaudited;  however,  such information  reflects all adjustments that are, in
the opinion of  management,  necessary to a fair  presentation  of the financial
position,  results of  operations,  and changes in  financial  position  for the
interim periods.  The interim  financial  statements and notes thereto should be
read in  conjunction  with the financial  statements and notes included in Metro
Global's  latest annual report.  Certain  information  and footnote  disclosures
normally included in financial  statements prepared in accordance with generally
accepted  accounting  principles  have been  condensed  or omitted.  The current
period results of operations are not  necessarily  indicative of results,  which
ultimately will be reported for the full year ending May 26, 2001.

Use of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted   accounting   principles  requires  the  use  of  estimates  based  on
management's  knowledge and experience.  Due to their prospective  nature, it is
reasonable to expect actual results to differ from those estimates.

2.   Dispositions

Fanzine International, Inc.

     On August 3, 1998, Metro Global acquired 100% of the stock of Fanzine for a
cash purchase price of $4,000,000, plus contingent consideration. Fanzine, which
began operations on August 1, 1997, publishes event driven, mainstream magazines
translated  into seven  languages  and  distributed  worldwide.  The  contingent
consideration  consisted of 1,000,000 restricted shares of Metro Global's Common
Stock with put option  rights at $8.00 per share to be  exercised by the selling
shareholder's  during the second year on a quarterly  basis,  if certain minimum
earnings, as defined, are met. During Fanzine's first year of operations,  Metro
Global had the right to call the shares at the greater of $6.00 per share or 75%
of the market  price.  Metro  Global did not call the  shares.  The  acquisition
agreement also provided for a reduction in purchase  price if Fanzine's  results
of operations did not meet certain minimum earnings.

     The acquisition was accounted for as a purchase. The excess of the purchase
price over the fair market values of net assets acquired,  which included, among
others, licenses, trademarks, and distribution rights, was allocated to goodwill
and amortized  over ten years.  The cash portion of $4,000,000 was financed by a
long-term  convertible debenture and other short-term  borrowings.  On September
29, 1999,  Metro Global sold  Fanzine's  stock back to the selling  shareholders
(see note 3).


                                       F-7

<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 26, 2000 AND AUGUST 28, 1999 (UNAUDITED)
--------------------------------------------------------------------------------


3.   Discontinued Operations

     In September 1999,  Metro Global adopted a plan of disposition for Fanzine,
which was sold on  September  29,  1999 for  approximately  $4,500,000  in notes
payable and the return of 1,000,000  shares of Metro Global's Common Stock.  The
following  table is a summary  of the  results  of  discontinued  operations  of
Fanzine and Maxstone Media Group, LLC for the period ended August 28, 1999:
<TABLE>
<CAPTION>

                                                                        1999
                                                                        ----

<S>                                                                  <C>
        Revenues                                                     $4,873,001
        Cost of revenues                                              4,242,603
                                                                     ----------
                                                                        630,398

        Other expenses                                                  491,523
                                                                     ----------

        Income before income taxes                                      138,875

        Income taxes                                                    (55,174)
                                                                     ----------

        Income from discontinued operations                          $   83,701
                                                                     ==========
</TABLE>

     Income from discontinued operations before income taxes does not include an
allocation of corporate interest expense or amortization of goodwill.

4.   Debt

     On October 28,  1998,  Metro  Global  entered  into a note  payable with an
unrelated third party for $1,100,000. The note, which bears no interest, was due
in  quarterly   installments  of  $275,000  commencing  December  31,  1998.  In
consideration  of  the  loan  and  part  of  an  investment  banking  consultant
agreement,  Metro Global issued the lender  150,000  restricted  shares of Metro
Global's  Common Stock.  Metro Global recorded  interest  expense of $243,412 in
1999 in connection with the issuance of the restricted stock.  Metro Global used
$507,500 of the proceeds to repurchase  198,242 shares of its outstanding Common
Stock from Metro Plus, a company  partially owned by a significant  shareholder.
For the year ended May 29, 1999, Metro Global made one payment of $275,000. As a
result,  default  interest  at 11% per annum has been  accrued on this note.  In
September 1999, Metro Global and the lender agreed to a preliminary extension of
the note.  Metro  Global made a payment of $275,000 in October  1999.  Effective
August 8, 2000, Metro Global,  renegotiated the terms for the final $550,000 due
on the note  payable.  Under  the  terms  of the  Forbearance  and  Modification
agreement,  Metro Global must make monthly payments of $50,000.  As of September
30, 2000, the balance due on the note payable is $450,000.

     On December  9, 1998,  Metro  Global  entered  into a  six-month  term loan
agreement with an unrelated third party. Under the terms of the agreement, Metro
Global  borrowed  $3,000,000 at an interest  rate of 10% per year.  The proceeds
were used toward the  acquisition  of Fanzine and to fund  working  capital.  In
connection with this transaction, Metro Global issued warrants to purchase up to
350,000  shares of Common  Stock at a price of $3.00,  expiring on December  31,
2001. Metro Global recorded interest expense of




                                       F-8


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 26, 2000 AND AUGUST 28, 1999 (UNAUDITED)
--------------------------------------------------------------------------------


4.   Debt (continued)

$577,000  in  connection   with  the  issuance  of  the  warrants  during  1999.
Additionally,  Metro Global issued  100,000  shares of Common Stock and recorded
$187,500 of interest  expense  relating to the issuance of these  shares  during
1999.  In September  1999,  Metro Global and the lender  agreed to an extension.
Under the terms of the  extension,  Metro  Global  paid  $1.3  million  upon the
closing of the financing with  Reservoir  Capital  Corporation,  a new unrelated
third party lender. In November 1999, Metro Global paid the lender an additional
$600,000  from the  proceeds of the sale of Fanzine.  The final  payment of $1.2
million  (which  includes  $100,000  of  interest)  was paid  directly  from the
proceeds of the final  payment  from the sale of Fanzine in September  2000.  In
connection  with  the  restructuring  of the two  notes  payable,  Metro  Global
recognized  $337,475 of extraordinary  income on the forgiveness of interest and
penalties in Fiscal 2000.

5.   Convertible Debentures

     On July 31, 1998,  Metro Global  entered into an 8%  convertible  debenture
with an  unrelated  party in the  amount  of  $1,000,000,  which was used in the
purchase of Fanzine. In connection with this transaction,  Metro Global issued a
warrant for 75,000 shares at a price of $4.11 and a warrant for 25,000 shares at
a price of $3.29, both exercisable over two years. Both warrants expired on July
31, 2000.  Metro Global recorded a discount on the debenture of $157,700 for the
value of the  warrants.  Metro  Global  amortized  $13,142  and  $19,713  of the
discount to interest  expense for quarters ending August 26, 2000 and August 28,
1999, respectively.

     The  $1,000,000  debenture  was to mature  on July 31,  2000.  Interest  is
payable on a quarterly basis. The holder of the debenture is entitled to convert
the  principal  value into Metro  Global's  Common Stock at a discounted  market
price as is defined in the debenture agreement.  During fiscal 2000, $105,000 of
convertible  debentures plus accrued  interest and penalties were converted into
83,888  restricted  shares of Metro Global's Common Stock. On February 25, 2000,
Metro Global  entered into a Forbearance  and  Modification  Agreement  with the
lender.  Under the  terms of the  agreement,  Metro  Global  made a  payment  of
$150,000 upon execution of the agreement.  The remaining  balance of $850,000 is
due in two  installments  of $425,000  each,  due on July 1, 2000 and October 1,
2000. The restructured  note payable is secured by 200,000  restricted shares of
New Frontier common stock owned by Metro Global.  On June 30, 2000, Metro Global
made the first $425,000  payment and 125,000 shares were returned by the lender.
On October 2, 2000,  Metro  Global made the final  payment of  $425,000  and the
remaining 75,000 shares were returned by the lender.

6.   Short-Term Borrowings

     In  September  1999,  Metro Global  signed a  $4,000,000  Loan and Security
Agreement with Reservoir Capital  Corporation.  Pursuant to the terms, Metro may
borrow up to 70% of  accounts  receivable  less than  ninety  days old,  up to a
maximum of $3,000,000.  The accounts receivable  borrowing base excludes foreign
receivables  and  receivables  where more than 50% of the balance is over ninety
days old. The borrowings on accounts  receivable from CVC, a related party,  are
limited  to the  lesser  of 30% of  total  accounts  receivable  or  $1,600,000.
Additionally,  Metro can borrow 40% of inventory, up to a maximum of $1,000,000.
Borrowings  under  this loan bear  interest  at prime  rate plus 3.5% per annum.
Additionally,  Metro  must pay a service  fee of .35% per  month on the  average
daily loan


                                       F-9


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED AUGUST 26, 2000 AND AUGUST 28, 1999 (UNAUDITED)
--------------------------------------------------------------------------------


6.   Short-Term Borrowings (continued)

balance.  Metro must pay an unused  fee of .25% on the amount of the  borrowings
under  $2,000,000.  The loan is secured by the assets of Metro. The CVC accounts
receivable  are  guaranteed  to  the  lender  a  shareholder  of  CVC,  who is a
significant shareholder of Metro Global. Additionally, CVC has executed a put on
the  inventory of Metro in case of default.  As of August 26,  2000,  borrowings
under the line of credit totaled $2,747,306.

7.   Investment in securities

     On  July  21,  1999,  Metro  Global  entered  into a seven  year  Licensing
Agreement with New Frontier Media, Inc. ("New Frontier").  Metro Global received
500,000 restricted shares of New Frontier common stock plus warrants to purchase
an  additional  100,000  shares of New  Frontier  common stock per year for five
years.  Metro Global  valued the common stock and  warrants at  $4,787,474.  The
deferred  revenue is being  amortized  over seven years.  Metro accounts for the
stock received as securities available for sale, in accordance with SFAS 115. At
August 26, 2000,  Metro Global recorded a comprehensive  loss of $914,954 on the
investment.  Both the stock  and the  warrants  are  periodically  reviewed  for
permanent impairment.

     As part of the Licensing  Agreement,  in consideration of certain services,
Metro Global issued New Frontier 250,000  restricted  shares of its Common Stock
and warrants to purchase  50,000 shares of Common Stock per year for five years.
Metro Global  valued the Common  Stock and  warrants at  $716,752.  The deferred
expense is being amortized over five years.



                                      F-10


<PAGE>


PART II - OTHER INFORMATION
---------------------------

Item 1. Legal Proceedings
-------------------------

        George  Kinney v. Metro Global  Media,  Inc.,  et al. C.A. No.  99-579
        (U.S.D.C.,D.R.I.)

             On November 22, 1999,  George Kinney,  on behalf of himself and all
        other  similarly  situated,  commenced  a putative  class  action in the
        United States  District  Court for the District of Rhode Island  against
        Metro  Global  and  certain  of  its  present  or  former  officers  and
        directors.  Plaintiff  seeks  to  represent  a class of all  person  who
        acquired  securities  of Metro  Global  between  September  13, 1996 and
        September  13,  1999.  The  Complaint  alleges  claim  based on  alleged
        violations  of section  10(b) of the  Securities  Exchange  Act of 1934.
        Plaintiff  alleges  that  the  defendants  made a series  of  false  and
        misleading  statements  concerning  Metro  Global's  reported  financial
        results  during  the  class  period  that  violated  generally  accepted
        accounting  principles  and  ultimately  caused  Metro Global to restate
        certain  financial  statements.  On March 15,  2000,  Metro  Global  and
        certain  defendants  filed  a  motion  to  dismiss  the  complaint.  The
        plaintiffs  filed an  amended  complaint  dated  May 15,  2000 and Metro
        Global  moved  to  dismiss  the  amended  complaint  on  July  5,  2000.
        Plaintiffs  filed an opposition to Metro  Global's  motion to dismiss on
        August 15, 2000.  Metro Global replied to the plaintiffs'  opposition on
        September 1, 2000. Metro Global believes it has meritorious defenses and
        intends to vigorously defend this action.


Item 2. Changes in Securities
-----------------------------

        None


Item 3. Defaults upon Senior Securities
---------------------------------------

        None


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

        None


Item 5. Other information
-------------------------

        None


Item 6. Exhibits and Reports on Form 8-K
----------------------------------------

        (a) Exhibits

            27.1 Financial Data Schedule filed herewith.

        (b) Reports on Form 8-K

            None


                                      F-11


<PAGE>



                                    SIGNATURE



In accordance with the requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                            METRO GLOBAL MEDIA, INC.



                            By: /s/ Gregory N. Alves
                            ------------------------
                                    Gregory N. Alves
                                    President


                            By: /s/ Janet M. Hoey
                            ---------------------
                                    Janet M. Hoey
                                    Treasurer (principal financial
                                    and accounting Officer), Secretary
                                    and Director








                                      F-12