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 November 27, 1999
                               -----------------

[ ] 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: 6,692,069 at December 31, 1999.



<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-15


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

Results of Continuing  Operations  for the three months ended  November 27, 1999
versus the three months ended November 28, 1998.

     Metro Global  Media,  Inc.'s  ("Metro  Global")  revenues  from  continuing
operations  were  $5,997,803  for the three months ended  November 27, 1999,  as
compared to $5,994,140  for the three months ended  November 28, 1998.  Revenues
consist   principally  of  sales  of  prerecorded   videocassettes,   magazines,
electronic software products and related items.  Revenues remained constant with
the prior corresponding  period due to the relocation of Metro, Inc.'s ("Metro")
west coast  operation  into new facilities in September  1999,  which involved a
shutdown for a period of approximately  four weeks.  Metro Global estimates lost
revenues from this shutdown to approximate $1,000,000.

     Costs  of  revenues  (including  amortization  of film  costs)  related  to
continuing  operations  for the three  month  period  ended  November  27,  1999
increased to $4,173,732  from  $4,044,447  for the  corresponding  period in the
prior year.  Costs of revenues as a percentage of revenues in the second quarter
of fiscal 1999 were 70% as compared to 67% in the second quarter of fiscal 1998.
The primary reason for this increase is an increase in  amortization  expense of
approximately $110,000.

     Selling,   general  and  administrative   expenses  related  to  continuing
operations  for the three  months  ended  November  27,  1999  increased  13% to
$2,509,324  from  $2,223,132  for the three  months  ended  November  28,  1998.
Selling,  general,  and  administrative  expenses,  as a  percentage  of revenue
increased to 42% for the period  ended  November 27, 1999 as compared to 37% for
the period  ended  November 28,  1998.  The primary  reasons for the increase in
selling,  general  and  administrative  expenses  are an  increase in payroll of
approximately  $200,000  and  an  increase  in  Internet  development  costs  of
approximately $70,000.

     Loss from  continuing  operations for the three month period ended November
27,  1999 was  $778,929  as compared  to a loss from  continuing  operations  of
$510,384 for the corresponding  period in the prior year. The primary reason for
the increase in the loss is due to the increase in cost of revenues and selling,
general and administrative  expenses as mentioned above. This increased loss was
partially offset by an increase in other income of approximately  $68,000 due to
interest  income  from the sale of  Fanzine.  Net  loss  for the  quarter  ended
November  27, 1999 was  $377,324  as compared to a net loss of $531,608  for the
quarter ended  November 28, 1998,  resulting in a loss per share of $.06 for the
quarter ended November 27, 1999, as compared to a loss per share of $.10 for the
quarter ended November 28, 1998.

Results of  Continuing  Operations  for the six months  ended  November 27, 1999
versus the six months ended November 28, 1998.

     Metro Global's  revenues from continuing  operations  increased  $1,984,501
from  $11,077,472  for the six months ended November 28, 1998 to $13,061,973 for
the six months ended  November 27, 1999.  This  represents  an 18% increase from
revenues for the six months


                                        1


<PAGE>


ended November 28, 1998.  Revenues  consist  principally of sales of prerecorded
videocassettes,  magazines,  electronic software products and related items. The
increase in revenue is primarily  attributable  to the increased sales of videos
and  DVDs  of  approximately  $1,000,000,  an  increase  in  magazine  sales  of
approximately   $450,000,  an  increase  in  sales  by  Metro  International  of
approximately  $200,000  and an  increase  in cable  revenues  of  approximately
$210,000 over the same period of the prior year.

     Costs  of  revenues  (including  amortization  of film  costs)  related  to
continuing operations for the six month period ended November 27, 1999 increased
to $8,852,278  from $7,575,577 for the  corresponding  period in the prior year.
Costs of revenues as a percentage  of revenues in the first six months of fiscal
1999 remained constant at 68% with the first six months of fiscal 1998.

     Selling,   general  and  administrative   expenses  related  to  continuing
operations  for  the  six  months  ended  November  27,  1999  increased  24% to
$5,070,149  from  $4,091,068  for the six months ended  November  28, 1998.  The
primary reasons for the increase in selling, general and administrative expenses
are an increase in payroll,  increase in advertising and  promotional  expenses,
and an increase in Internet development costs.

     Loss from continuing operations for the six-month period ended November 27,
1999 was $1,563,329,  as compared to loss from continuing operations of $986,129
for the  corresponding  period in the prior  year.  The  primary  reason for the
increase  in the loss are an  increase  in  interest  expense  of  approximately
$390,000 due to increased  borrowings  and the  relocation of Metro's west coast
facility,  which involved a shutdown of  approximately  four weeks. Net loss for
the six months ended  November 27, 1999 was $1,094,289 as compared to a net loss
of $709,067 for the six months ended November 28, 1998,  resulting in a loss per
share of $.17 for the six months ended  November 27, 1999, as compared to a loss
per share of $.14 for the six months ended November 28, 1998.

Liquidity and Capital Resources at November 27, 1999

     Cash  amounted to $803,719 at  quarter-end.  Net cash provided by operating
activities amounted to $2,134,884 for the six months ended November 27, 1999, as
compared to $865,884 for the same period in the prior  fiscal year.  The primary
sources of cash were cash provided by operating activities of $2,134,884 and net
proceeds from a line of credit of  $1,957,614.  The primary uses of cash for the
quarter ended  November 27, 1999 consisted of: (1) net payments on notes payable
of $2,175,000, (2) investments in motion pictures and other films of $1,059,370,
(3) payments on capital  leases of $259,531,  and (4)  purchases of property and
equipment of $207,418.

     Accounts payable and accrued expenses increased $1,544,351 due to increased
purchasing,  increase  in video and DVD  duplication  and an increase in accrued
interest expense.

     On July 1, 1998,  Metro  Global  entered into a 12%  convertible  debenture
totaling  $200,000  with a related  party.  The note was due on July 1, 1999, in
either cash or Common  Stock,  at a  conversion  rate of $2.25 per share.  Metro
Global recorded $60,248 of interest expense relating to the embedded  beneficial
conversion  feature.  Proceeds from the debenture were used for working capital.
On July 1, 1999,  the  debenture's  due date was extended until July 1, 2001. In
conjunction with the extension,  warrants were granted to purchase 50,000 shares
of Metro  Global's  Common  Stock for $2.58 per  share.  Metro  Global  recorded
interest expense of $52,000 in connection with the issuance of the warrants.

     On August 1,  1998,  Metro  Global  entered  into  notes  payable  totaling
$1,000,000 with related parties.  The notes, which bear interest at 8%, were due
August 1, 1999.  Proceeds from the notes were used in the acquisition of Fanzine
International, Inc. ("Fanzine").


                                        2


<PAGE>


In  October  1998,  the notes were  reduced  by  $600,000  for the  exercise  of
warrants.  On August 1, 1999, the notes due dates were extended for one year. In
consideration  of the extension,  the interest rate increased from 8% to 10% and
warrants were issued to purchase up to 115,000 shares of Common Stock at a price
of $2.58, exercisable for a term of five years. Metro Global recognized interest
expense of $100,050 in connection with the issuance of the warrants.

     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.  Metro  Global  recorded a
discount on the  debenture  of  $157,700  for the value of the  warrants.  Metro
Global amortized  $39,424 and $26,283 of the discount to interest expense during
the six months ended November 27, 1999 and November 28, 1998, 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.  Metro  Global  has  recorded
$35,461 of interest  expense  relating  to the  embedded  beneficial  conversion
feature in the quarter  ended  August 29,  1998.  Metro  Global is in  technical
default under the terms of the debenture due to the suspension of trading of its
Common Stock on September  14,  1999.  During the six months ended  November 27,
1999,  $105,000 of convertible  debentures  plus accrued  interest and penalties
were converted into 83,888 restricted shares of Metro Global's Common Stock.

     Beginning in April 1998,  Metro  offered 5%  convertible  Preferred  Shares
pursuant  to  regulation  S of the U.S.  Securities  Act of 1933.  Metro  Global
received approximately $846,500 and $1,317,000 in net proceeds from the offering
in fiscal 1998 and 1999, respectively.  Proceeds from such offering were used to
fund working capital.

     The Series A Shares are  convertible  at a rate of 100 shares plus  accrued
dividends per week at 80% of the 15 day average closing bid price.  These shares
are subject to a twenty-four month mandatory  conversion feature.  Dividends are
payable in Common Stock and Metro Global recognized dividends of $146,513 during
the  quarter  ended  August  29,  1998 for the  embedded  beneficial  conversion
feature. For the six months ended November 28, 1998, 1400 shares of the Series A
shares  and  accrued  dividends  were  converted  into  610,481  shares of Metro
Global's Common Stock.  In addition to the Series A Shares,  Metro Global issued
400,000  warrants  to  purchase  Metro  Global  Common  Stock at $1.50 per share
commencing April 20, 1998 exercisable  over 5 years.  Metro Global  recognized a
dividend  of  $1,212,000  for the year  ended  May 30,  1998 for the  beneficial
conversion feature. In October 1998, all 400,000 warrants were exercised.

     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  majority
stockholder.  For the year ended May 29, 1999,  Metro Global made one payment of
$275,000.  In September  1999,  Metro Global and lender  agreed to a preliminary
extension  of the  note.  Under the terms of the  extension,  payments  totaling
$550,000 are due by September  30, 1999 and the final payment of $275,000 is due
on December  31, 1999.  If all  payments are not made by January 1, 2000,  Metro
Global must issue the lender 100,000 shares of restricted stock as a penalty. In
October 1999,  Metro Global made a $275,000  payment.  Metro Global is currently
renegotiating the payments for the final $550,000 due on the note payable.

     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


                                        3


<PAGE>


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 financing with Reservoir
Capital  Corporation.  The  balance of the note of  $1,800,000,  which  includes
$100,000 penalty, was exchanged for an 8% convertible  debenture.  The debenture
is convertible  at a rate of not more than 10% of the total  debenture per week,
at a price of 80% of the average  closing bids for the five days  preceding  the
conversion.  In consideration of the extension,  Metro Global issued warrants to
purchase up to 100,000 shares of Common Stock at a price of $1.75 per share with
a two-year  expiration.  In November 1999, Metro Global paid the lender $600,000
against the  convertible  debenture from the proceeds of a payment from the sale
of Fanzine. As of November 27, 1999, the balance of the convertible debenture is
$1,100,000.

     On June 30, 1999,  Metro Global  entered into a one-year note payable at an
interest  rate of 10% with a related  party for $30,000.  Proceeds from the note
were used for working capital.

     During  June 1997,  Metro,  Inc.  ("Metro")  entered  into a line of credit
agreement with Finova Capital. Under the agreement,  Metro was able to borrow up
to 75% of assigned accounts receivable less than 90 days old, up to a maximum of
$1,000,000.  The balance due under the line of credit  incurred  interest at the
prime rate plus 5% per annum plus a collateral  management  fee. The outstanding
balance  under  the  line was  secured  by  accounts  receivable  of  Metro  and
guaranties of Metro Global and certain officers/shareholders. The line of credit
expired during June 1999. On November 11, 1999, the  outstanding  balance on the
line of credit was repaid with proceeds  from the line of credit with  Reservoir
Capital Corporation described below.

     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
days old. The borrowings on 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 by the sole shareholder of CVC. Additionally, CVC will
execute a put on the  inventory of Metro in case of default.  As of November 27,
1999, borrowings under the line of credit totaled $2,899,912.

     Of Metro's total  accounts  receivable at November 27, 1999,  $2,351,916 is
owed by CVC,  a chain of retail  stores,  which is wholly  owned by a  principal
shareholder  of Metro Global.  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 predominantly maintained within 60 to 90 day terms.
Accordingly, no allowance for related party receivables and no related party bad
debt expense has been recorded in Metro Global's financial statements.

     For the six months ended November 27, 1999,  Metro  invested  $1,059,370 in
new feature films and video.  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.


                                        4


<PAGE>


Capital Expenditures

     Capital  expenditures in the six months ended November 27, 1999 amounted to
$207,418 as compared to $236,374  for the six months  ended  November  28, 1998.
Metro Global incurred  capital lease  obligations of $259,531 for the six months
ended  November 27, 1999  primarily  for  computer  equipment,  duplicating  and
editing equipment.

     Management  believes that funds  provided by operations and the new 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.

Restatement

     Metro Global has restated the  financial  statements  for the three and six
months ended November 28, 1998. The financial statements were restated to record
dividends  on  the  embedded  beneficial  conversion  feature  of the  Series  A
Preferred  Stock,  interest on the  embedded  beneficial  conversion  feature on
convertible  debentures,   and  changes  in  estimates.   The  effect  of  these
adjustments  was a decrease in net income of $768,032 a net loss of $531,608 and
a decrease  in  earnings of $0.14 per share to a loss of $0.10 per share for the
three months ended  November 28, 1998;  and a decrease in earnings of $1,522,999
to a net loss of  $709,067  and a decrease  in  earnings of $0.19 per share to a
loss of $0.14 per share for the six months ended November 28, 1998.

Licensing Agreement

     On July 21,  1999,  Metro Global  entered  into an  agreement  with certain
subsidiaries of New Frontier  Media,  Inc. ("New  Frontier"),  a publicly traded
company involved in distribution of adult entertainment via cable television and
the internet.  New Frontier  will receive  access to Metro  Global's  3,200-plus
library of videos and pictures for internet and cable television  exhibition for
a period  of seven  years.  In  consideration,  Metro  Global  received  500,000
restricted  shares of New  Frontier's  Common  Stock plus  warrants  to purchase
100,000 additional shares of New Frontier's Common Stock per year for five years
at market price, as defined in the agreement. Metro Global recorded the value of
the Common  Stock and  warrants as an  investment  and  deferred  revenue in the
amount of $4,787,474.  The deferred revenue is being amortized over seven years.
Metro  Global  recognized  $227,975  of income  from the  relationship  with New
Frontier during the six months ended November 27, 1999. As of November 27, 1999,
Metro  Global  recorded a reserve  of  $782,500  against  the  investment  for a
decrease in the market value of the stock.








                                        5


<PAGE>


     As part of the  agreement,  a subsidiary of New Frontier will provide Metro
Global with advertising on its websites,  as well as technical support for Metro
Global's  websites,  including credit card processing.  In consideration,  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 at
market price,  as defined in the agreement.  Metro Global  recorded the value of
the  Common  Stock and  warrants  at  $716,752.  The  deferred  expense is being
amortized over five years.  The unamortized  portion of the deferred  expense is
recorded  as a  reduction  of  additional  paid-in-capital  in the  accompanying
financial statements.


















































                                        6


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
NOVEMBER 27, 1999 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                     Assets
                                     ------


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

<S>                                                               <C>
  Cash                                                             $  803,719
  Accounts receivable, less allowance for doubtful
    accounts of $165,602                                            3,684,568
  Accounts receivable, related party                                2,351,916
  Inventory                                                         4,208,468
  Recoverable income tax                                              339,000
  Prepaid expenses and other current assets                           312,972
  Notes Receivable                                                  3,350,072
                                                                   ----------


Total Current Assets                                               15,050,715
--------------------                                               ----------




  Motion pictures and other films at cost, less accumulated
    amortization of $9,768,181                                      4,880,332

  Property and equipment at cost, less accumulated
    depreciation of $2,525,322                                      2,315,751


  Investment in securities                                          4,004,974

  Other assets                                                        173,525
                                                                  -----------

Total Assets                                                      $26,425,297
------------                                                      -----------

</TABLE>













                 See Notes to Consolidated Financial Statements
                                       F-1


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
NOVEMBER 27, 1999 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

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


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


<S>                                                              <C>
  Current portion of capital lease obligations                    $   305,781
  Short-term borrowings                                             4,549,912
  Related party convertible debentures                                784,000
  Notes payable to related parties                                    474,000
  Convertible debentures                                              842,433
  Accounts payable and accrued expenses                             6,713,413
  Income taxes payable                                                154,443
                                                                  -----------

Total current liabilities                                          13,823,982
-------------------------                                         -----------

  Deferred Revenue                                                  4,559,499
  Capital lease obligations, less current portion                     435,859
                                                                  -----------

Total liabilities                                                  18,819,340
-----------------                                                 -----------


  Minority interest                                                    26,121
  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 6,890,311 shares and outstanding,
    6,692,069 shares                                                      688
  Additional paid in capital                                       15,817,585
  Accumulated deficit                                              (6,853,798)
  Accumulated other comprehensive loss - foreign exchange              (9,835)
  Comprehensive loss - market valuation equity securities            (782,500)
                                                                  -----------
                                                                    8,172,140

  Unearned compensation                                               (84,804)
  Less cost of Treasury Stock (198,242 common shares)                (507,500)
                                                                  -----------

Total shareholders' equity                                          7,579,836
--------------------------                                        -----------

Total liabilities and shareholders' equity                        $26,425,297
------------------------------------------                        -----------

</TABLE>




                 See Notes to Consolidated Financial Statements
                                       F-2


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS  ENDED  NOVEMBER  27,  1999 AND  NOVEMBER  28, 1998
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                            Three Months      Six Months
                                             Three Months     Six Months    Nov 28, 1998     Nov 28, 1998
                                             Nov 28, 1999    Nov 27, 1999   As restated      As restated
                                             (Unaudited)     (Unaudited)    (Unaudited)      (Unaudited)
                                             -----------------------------------------------------------

<S>                                           <C>            <C>             <C>             <C>
  Revenues                                    $5,997,803     $13,061,973     $5,994,140      $11,077,472
  Cost of revenues, including
    amortization of motion pictures
    and other films                            4,173,732       8,852,278      4,044,447        7,575,577
                                              ----------     -----------     ----------      -----------

                                               1,824,071       4,209,695      1,949,693        3,501,895
  Selling, general and
    administrative expenses                    2,509,324       5,070,149      2,223,132        4,091,068
                                              ----------     -----------     ----------      -----------

                                                (685,253)       (860,454)      (273,439)        (589,173)
                                              ----------     -----------     ----------      -----------

Other income and (expenses)

  Interest expense                              (227,675)       (861,277)      (298,761)        (481,444)
  Royalty income                                  32,536          65,072         55,189           87,715
  Miscellaneous income(expense)                   65,984          65,984         (1,809)             693
  Minority interest                               35,479          27,346          8,436           (3,928)
                                              ----------     -----------     ----------      -----------

                                                 (93,676)       (702,875)      (236,945)        (396,956)
                                              ----------     -----------     ----------      -----------

Loss from continuing operations                 (778,929)     (1,563,329)      (510,384)        (986,129)

  Benefit for income taxes                         -0-             -0-          (19,280)        (113,202)
                                              ----------     -----------     ----------      -----------

Loss from continuing operations                 (778,929)     (1,563,329)      (491,104)        (872,927)

Gain on sale of discontinued
  operations (net of tax)                        372,324         372,324          -0-              -0-

Income (Loss) from discontinued
  operations (net of tax)                         29,281          96,716        (40,504)         163,860
                                              ----------     -----------     ----------      -----------

Net Loss                                      $ (377,324)    $(1,094,289)    $ (531,608)     $  (709,067)
                                              ==========     ===========     ==========      ===========

Loss Per Share:

Loss from continuing operations:
    Basic and Diluted                            $ (0.12)        $ (0.24)       $ (0.09)         $ (0.17)
Gain on sale of discontinued
  operations:
    Basic and Diluted                            $  0.06         $  0.06        $  0.00          $  0.00
Income (Loss) from discontinued
  operations:
    Basic and Diluted                            $  0.00         $  0.01        $ (0.01)         $  0.03
Net loss:
    Basic and Diluted                            $ (0.06)        $ (0.17)       $ (0.10)         $ (0.14)
Weighted average number of shares:
    Basic and Diluted                          6,570,479       6,570,479      5,297,850        5,068,876

</TABLE>



                 See Notes to Consolidated Financial Statements
                                       F-3


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED NOVEMBER 27, 1999 AND NOVEMBER 28, 1998 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>



                                                                                   1998
                                                                  1999          as restated
                                                                  ----          -----------

<S>                                                            <C>               <C>
Cash flows from operating activities:
  Net loss                                                     $ (1,094,289)     $  (709,067)
                                                               ------------      -----------

Adjustments to reconcile net loss to net cash
 provided by operating activities:
  Depreciation Expense                                              287,646          224,464
  Amortization of motion pictures and other films                 1,032,565          919,803
  Amortization of deferred rent                                      (7,005)          (7,005)
  Amortization of unearned compensation                             275,413           62,500
  Amortization of goodwill                                          200,000          133,333
  Amortization of deferred revenue                                 (227,975)           -0-
  Amortization of deferred expense                                   47,784            -0-
  Amortization of discount on debenture                              39,425           26,283
  Accrued interest added to note payable principal                   68,000            -0-
  Discount on issuance of convertible debenture                       -0-           (157,700)
  Allowance for doubtful accounts                                   161,498           60,000
  Embedded interest on convertible debentures                         -0-            202,092
  Common Stock issued for consulting services                        12,815          499,716
  Common Stock issued for compensation                                -0-              6,850
  Common Stock issued for interest expense                            -0-             51,818
  Issuance of warrants                                              175,844          142,298
  Minority interest                                                 (27,346)          22,149
  Foreign exchange                                                   (3,070)           1,557
(Increase) decrease in assets:
  Accounts receivable                                              (168,240)      (1,878,450)
  Inventory                                                        (104,388)        (586,367)
  Prepaid expenses and other current assets                         122,317         (340,595)
  Other assets                                                      (30,635)          16,520
Increase (decrease) in liabilities:
  Accounts payable and accrued expenses                           1,544,351        2,235,300
  Income taxes payable                                             (169,826)         (59,615)
                                                               ------------      -----------

Total adjustments                                                 3,229,173        1,574,951
-----------------                                              ------------      -----------

Net cash provided by operating activities                      $  2,134,884      $   865,884
--------------------------------------------------             ------------      -----------


</TABLE>








                 See Notes to Consolidated Financial Statements
                                       F-4


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE SIX MONTHS ENDED NOVEMBER 27, 1999 AND NOVEMBER 28, 1998 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>



                                                                                   1998
                                                                  1999          as restated
                                                                  ----          -----------

Cash flows from investing activities:

<S>                                                            <C>               <C>
  Acquisition of Fanzine                                       $      -0-        $(2,000,000)
  Gain on sale of Fanzine                                           372,324            -0-
  Acquisition costs                                                   -0-           (160,418)
  Investments in motion pictures and other films                 (1,059,370)      (1,594,884)
  Purchase of property and equipment                               (207,418)        (236,374)
  Purchase of treasury stock                                          -0-           (507,500)
                                                               ------------      -----------

Net cash used in investing activities                              (894,464)      (4,499,176)
-------------------------------------                          ------------      -----------


Cash flows from financing activities:

  Proceeds from the issuance of Series A
    convertible Preferred Stock                                       -0-        $ 1,317,000
  Proceeds from issuance of common stock                              -0-              8,734
  Proceeds from issuance of convertible debentures                    -0-          1,000,000
  Proceeds from exercise of warrants                                  -0-            600,000
  Net proceeds from (payments on) line of credit                  1,957,614          248,431
  Proceeds on notes payable                                          30,000        1,700,000
  Payments on notes payable                                      (2,175,000)           -0-
  Principal payments on capital lease obligations                  (259,531)        (178,728)
  Payments on note payable - selling shareholders                     -0-           (333,333)
  Contribution from joint venture partner                             -0-             30,000
                                                               ------------      -----------

Net cash provided by (used in) financing activities                (446,917)       4,392,104
---------------------------------------------------            ------------      -----------

Net increase in cash                                                793,503          758,812

Cash, beginning of period                                            10,216          184,995

Cash, end of period                                            $    803,719      $   943,807
                                                               ============      ===========


Supplemental disclosures of cash flow information:

    Cash paid during the period for:

        Interest                                               $    152,670      $   147,002
                                                               ============      ===========

        Income taxes                                           $    120,000      $     -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 SIX MONTHS ENDED NOVEMBER 27, 1999 AND NOVEMBER 28, 1998 (UNAUDITED)
--------------------------------------------------------------------------------

Supplemental schedule of non-cash investing and financing activities:

     During the six months  ended  November  28, 1998, a payable of $300,000 was
converted into 250,000  restricted  shares of Metro  Global's  Common Stock by a
related party.

     During the six months  ended  November  28,  1998,  1400 shares of Series A
Preferred  Stock plus accrued  dividends of $19,934 were  converted into 610,481
shares of Metro Global's Common Stock.  Metro Global  recognized total dividends
of $309,248 relating to the beneficial  conversion  feature of this stock during
the six months ended November 28, 1998.

     Capital lease obligations of $259,531 and $178,728 were incurred during the
six months ended  November 27, 1999 and  November 28, 1998,  respectively,  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 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.

     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 six months  ended  November 27,  1999,  $105,000 of  convertible
debentures  and accrued  interest and penalties of $31,045 were  converted  into
83,888 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 SIX MONTHS ENDED NOVEMBER 27, 1999 AND NOVEMBER 28, 1998 (UNAUDITED)
--------------------------------------------------------------------------------


1.   Summary of Significant Accounting Policies and Plan of Operation

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  (consisting
solely of normal recurring  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 27, 2000.

Plan of Operation

     On September 14, 1999,  the NASDAQ Stock Market halted the trading of Metro
Global's  Common  Stock due to Metro  Global's  late  filing of its fiscal  1999
Annual Report on Form 10-KSB.

     On December 7, 1999,  Metro  Global's  Common Stock was  delisted  from the
NASDAQ  Small Cap Market.  On December  22,  1999,  Metro  Global  appealed  the
decision to delist the Common Stock.  Metro  Global's  Common Stock is currently
being traded through the facilities of the pink sheets.

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.

Reclassification

     Certain items in the financial  statements  for the quarter ended  November
28, 1998 have been reclassified to conform with the current presentation.




                                       F-7


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 27, 1999 AND NOVEMBER 28, 1998 (UNAUDITED)
--------------------------------------------------------------------------------


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).

3.   Discontinued Operations

     On September  29,  1999,  Metro  Global  signed a  Rescission  and Purchase
Agreement with the selling  shareholders of Fanzine and a company  controlled by
them.  In  consideration  of this sale of  Fanzine's  stock,  Metro  Global will
receive  payments  totaling  $4,500,000 and the 1,000,000  contingent  shares of
Common  Stock  originally  given to the  selling  shareholders.  Payment  of the
$4,500,000  is  secured  by the  assets of  Fanzine  and  partly  secured by the
personal  guarantees  of the former  Fanzine  shareholders.  Metro  Global  will
receive  payments of $1,000,000 by October 31, 1999,  $1,000,000 by November 30,
1999,  $1,000,000  by May 31,  2000 and  $1,500,000  by  August  31,  2000.  The
operations  of Fanzine have been  classified as  discontinued  operations in the
accompanying financial statements.

     The following table is a summary of the results of discontinued  operations
for the six months ended  November  27, 1999 and four months ended  November 28,
1998, respectively:

<TABLE>
<CAPTION>

                                              Nov. 27, 1999   Nov. 28, 1998
                                              -------------   -------------

<S>                                            <C>            <C>
      Revenues                                 $ 6,111,545    $ 3,946,381
      Cost of revenues                           5,400,953      3,244,784
                                               -----------    -----------
                                                   710,592        701,597

      Other expenses                               535,524        450,252
                                               -----------    -----------

      Income before income taxes                   175,068        251,345

      Income taxes                                  78,352         87,485
                                               -----------    -----------

      Income from discontinued operations      $    96,716    $   163,860
                                               ===========    ===========

</TABLE>


                                       F-8


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 27, 1999 AND NOVEMBER 28, 1998 (UNAUDITED)
--------------------------------------------------------------------------------


3.   Discontinued Operations (continued)

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

4.   Debt

     On August 1,  1998,  Metro  Global  entered  into  notes  payable  totaling
$1,000,000 with related parties.  The notes, which bear interest at 8%, were due
August 1, 1999. Proceeds from the notes were used in the acquisition of Fanzine.
In October  1998,  $600,000 of debt was converted  into 400,000  shares of Metro
Global's  Common  Stock.  On August 1, 1999,  the balance of the notes due dates
were extended for one year. In consideration of the extension, the interest rate
increased  from 8% to 10% and  warrants  were  issued to  purchase up to 115,000
shares  of  Common  Stock at a price of  $2.58,  exercisable  for a term of five
years. Metro Global recorded interest expense of $100,050 in connection with the
issuance of the warrants.

     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. Under the terms of the extension,  payments totaling $550,000 were due
by September  30, 1999 and the final  payment of $275,000 is due on December 31,
1999.  The September  30, 1999  payments are currently in default.  Metro Global
made a payment of  $275,000 in October  1999.  If all  payments  are not made by
January 1, 2000, Metro Global must issue the lender 100,000 shares of restricted
stock as a penalty. Metro Global is currently renegotiating the payments for the
final $550,000 due on the note payable.

     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 $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
this 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. The balance of the note
of  $1,800,000,  which  includes a $100,000  penalty,  was  exchanged  for an 8%
convertible  debenture.  The debenture is convertible at a rate of not more than
10% of the total  debenture per week,  at a price of 80% of the average  closing
bids for the  five  days  preceding  the  conversion.  In  consideration  of the
extension, Metro Global issued warrants to purchase up to 100,000


                                       F-9


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 27, 1999 AND NOVEMBER 28, 1998 (UNAUDITED)
--------------------------------------------------------------------------------


4.   Debt (continued)

shares of Common Stock at a price of $1.75 per share with a two-year expiration.
In November 1999,  Metro Global paid the lender $600,000 against the convertible
debenture  from the  proceeds  of a  payment  from the  sale of  Fanzine.  As of
November 27, 1999, the balance of the convertible debenture is $1,100,000.

     On June 30, 1999,  Metro Global  entered into a one-year note payable at an
interest  rate of 10% with a related  party for $30,000.  Proceeds from the note
were used for working capital.

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.  Metro  Global  recorded a
discount on the  debenture  of  $157,700  for the value of the  warrants.  Metro
Global amortized  $39,424 and $26,283 of the discount to interest expense during
the six months ended November 27, 1999 and November 28, 1998, 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.  Metro  Global  has  recorded
$35,461 of interest  expense  relating  to the  embedded  beneficial  conversion
feature in the quarter  ended  August 29,  1998.  Metro  Global is in  technical
default under the terms of the debenture due to the suspension of trading of its
Common Stock on September  14,  1999.  During the six months ended  November 27,
1999,  $105,000 of convertible  debentures  plus accrued  interest and penalties
were converted into 83,888 restricted shares of Metro Global's Common Stock.

     On March 23, 1998, Metro Global entered into two 12% convertible debentures
totaling  $500,000 with related parties.  Both notes were due on March 23, 1999,
in either  cash or  Common  Stock,  at a  conversion  rate of $2.25  per  share.
Proceeds from the debentures were used for working  capital.  In March 1999, the
debentures,  including  accrued interest of $60,000 (which was added to the note
principal), were extended until March 23, 2000.

     On July 1, 1998,  Metro  Global  entered into a 12%  convertible  debenture
totaling  $200,000  with a related  party.  The note was due on July 1, 1999, in
either cash or Common  Stock,  at a  conversion  rate of $2.25 per share.  Metro
Global recorded $60,248 of interest expense relating to the embedded  beneficial
conversion  feature.  Proceeds from the debenture were used for working capital.
On July 1, 1999,  the  debenture's  due date  extended  until  July 1, 2001.  In
conjunction with the extension,  warrants were granted to purchase 50,000 shares
of Metro  Global's  Common  Stock for $2.58 per  share.  Metro  Global  recorded
interest expense of $52,000 in connection with the issuance of the warrants.







                                      F-10


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 27, 1999 AND NOVEMBER 28, 1998 (UNAUDITED)
--------------------------------------------------------------------------------


6.   Short-Term Borrowings

     Pursuant to a line of credit agreement with Finova Capital,  Metro Global's
subsidiary,  Metro, was able to borrow up to 75% of assigned accounts receivable
less than 90 days old, up to a maximum of $1,000,000.  The balance due under the
line of credit  incurred  interest  at the  prime  rate  plus 5% per  annum.  In
addition,  Metro pays the finance company a management fee equal to 3/4 of 1% of
sales  submitted  for  inclusion  in the  net  security  value  of the  accounts
receivable,  but not more than $7,500 per month.  The outstanding  balance under
the line was secured by the accounts  receivable of Metro,  and the guarantee of
Metro  Global.  On November 11,  1999,  the  outstanding  balance on the line of
credit was repaid with proceeds from the line of credit with  Reservoir  Capital
Corporation described below.

     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
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  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 by the sole shareholder of CVC.
Additionally,  CVC  will  execute  a put on the  inventory  of  Metro in case of
default.  As of November 27, 1999,  borrowings  under the line of credit totaled
$2,899,912.

7.   Shareholders' Equity

Series A Convertible Preferred Stock

     During  April  1998,  Metro  Global  entered  into an  Offshore  Securities
Subscription Agreement for convertible Preferred Shares pursuant to Regulation S
of the U.S.  Securities  Act of 1933.  Under the terms of the  agreement,  Metro
Global issued 2,175 shares of 1998 Series A Convertible Preferred Stock ('Series
A Shares') at a price of $1,000 per share with a 5% cumulative  dividend payable
in Common Stock at conversion.  At May 30, 1998, Metro Global received  proceeds
of $846,500, net of offering costs representing 855 shares. Substantially all of
the proceeds for the remaining 1320 shares were received in fiscal 1999.

     The Series A Shares are  convertible  at a rate of 100 shares plus  accrued
dividends per week at 80% of the 15 day average closing bid price.  These Shares
are subject to a twenty-four month mandatory  conversion  feature.  Metro Global
recognized  dividends of $146,513 at August 29, 1998 for the embedded beneficial
conversion  feature.  For the six months ended November 28, 1998, 1400 shares of
the Series A shares and accrued  dividends were converted into 610,481 shares of
Metro Global's  Common Stock.  In addition to the Series A Shares,  Metro Global
issued 400,000  detachable  warrants to purchase Metro Global's  Common Stock at
$1.50 per share  commencing  April 20, 1998 exercisable over 5 years. In October
1998, all 400,000  warrants were  transferred to a related party of Metro Global
and exercised.


                                      F-11


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 27, 1999 AND NOVEMBER 28, 1998 (UNAUDITED)
--------------------------------------------------------------------------------


8.   Licensing Agreement

     On July 21,  1999,  Metro Global  entered  into an  agreement  with certain
subsidiaries of New Frontier, a publicly traded company involved in distribution
of adult entertainment via cable television and the internet.  New Frontier will
receive access to Metro Global's  3,200-plus  library of videos and pictures for
internet  and  cable  television  exhibition  for a period  of seven  years.  In
consideration, Metro Global received 500,000 restricted shares of New Frontier's
Common Stock plus warrants to purchase 100,000 additional shares of New Frontier
Common  Stock  per year for  five  years at  market  price,  as  defined  in the
agreement.  Metro Global  recorded the value of the Common Stock and warrants as
an investment  and deferred  revenue in the amount of  $4,787,474.  The deferred
revenue is being amortized over seven years. Metro Global recognized $227,975 of
income  from the  relationship  with New  Frontier  during the six months  ended
November 27, 1999. As of November 27, 1999,  Metro Global  recorded a reserve of
$782,500 against the investment for a decrease in the market value of the stock.

     As part of the  agreement,  a subsidiary of New Frontier will provide Metro
Global with advertising on its websites,  as well as technical support for Metro
Global's  websites,  including credit card processing.  In consideration,  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 at
market price,  as defined in the agreement.  Metro Global  recorded the value of
the  Common  Stock and  warrants  at  $716,752.  The  deferred  expense is being
amortized over five years.  The unamortized  portion of the deferred  expense is
recorded  as a  reduction  of  additional  paid-in-capital  in the  accompanying
financial statements.

9.   Restatement

     Metro Global has restated the  financial  statements  for the three and six
months ended November 28, 1998. The financial statements were restated to record
dividends  on  the  embedded  beneficial  conversion  feature  of the  Series  A
Preferred  Stock,  interest on the  embedded  beneficial  conversion  feature on
convertible  debentures,   and  changes  in  estimates.   The  effect  of  these
adjustments  was a decrease in net income of $768,032 a net loss of $531,608 and
a decrease  in  earnings of $0.14 per share to a loss of $0.10 per share for the
three months ended  November 28, 1998;  and a decrease in earnings of $1,522,999
to a net loss of  $709,067  and a decrease  in  earnings of $0.19 per share to a
loss of $0.14 per share for the six months ended November 28, 1998.


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

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

          None

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

          None




                                      F-12


<PAGE>


METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 27, 1999 AND NOVEMBER 28, 1998 (UNAUDITED
--------------------------------------------------------------------------------


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

          None

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

          None

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

          On December 7, 1999, the NASDAQ Listing  Qualifications Panel informed
          Metro Global that Metro  Global's  securities  would be delisted  from
          NASDAQ's  SmallCap  Market  effective  at the  close  of  business  on
          December  7, 1999.  Trading of Metro  Global's  common  stock had been
          halted by the NASDAQ Stock Market since September 14, 1999,  following
          Metro  Global's  announcement  that it did not  timely  file  its 1999
          Annual Report on Form 10-KSB. The NASDAQ Listing  Qualifications Panel
          took this action  despite its  acknowledgement,  "that [Metro  Global]
          currently appears to be in compliance with the filing, audit committee
          and independent  director  requirements" for continued listing.  Metro
          Global has requested a review by the NASDAQ Listing and Hearing Review
          Council of the NASDAQ Panel's  decision.  Metro Global's  common stock
          has commenced trading with the National  Quotations Bureau through its
          publication known as the pink sheets.

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

     (a)  Exhibits

          2.1 Rescission and Purchase Agreement by and among Metro Global Media,
          Inc., Metro, Inc., Fanzine  International,  Inc., Goldtree Publishing,
          Inc.,  Robert Maiello,  Philip P.  Salvatore,  Bart Senior and Michael
          Levine, as filed with the Commission on October 4, 1999 as Exhibit 2.1
          to the Report on Form 8-K and incorporated herein by reference.

          2.2 Security Agreement between Fanzine  International,  Inc. and Metro
          Global Media, Inc., as filed with the Commission on October 4, 1999 as
          Exhibit  2.2 to the  Report  on Form 8-K and  incorporated  herein  by
          reference.

          2.3 Security Agreement between Fanzine  International,  Inc. and Metro
          Global Media, Inc., as filed with the Commission on October 4, 1999 as
          Exhibit  2.3 to the  Report  on Form 8-K and  incorporated  herein  by
          reference.

          2.4 Promissory Note from Robert Maiello,  Michael Levine,  Bart Senior
          and Philip P. Salvatore to Metro Global Media, Inc., as filed with the
          Commission on October 4, 1999 as Exhibit 2.4 to the Report on Form 8-K
          and incorporated herein by reference.

          2.5  Promissory  Note from Goldtree  Publishing,  Inc. to Metro Global
          Media,  Inc.,  as filed  with the  Commission  on  October  4, 1999 as
          Exhibit  2.5 to the  Report  on Form 8-K and  incorporated  herein  by
          reference.


                                      F-13

<PAGE>

METRO GLOBAL MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED NOVEMBER 27, 1999 AND NOVEMBER 28, 1998 (UNAUDITED
--------------------------------------------------------------------------------

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

          2.6 Personal Guarantee of Michael Levine, as filed with the Commission
          on  October  4,  1999 as  Exhibit  2.6 to the  Report  on Form 8-K and
          incorporated herein by reference.

          2.7 Personal Guarantee of Robert Maiello, as filed with the Commission
          on  October  4,  1999 as  Exhibit  2.7 to the  Report  on Form 8-K and
          incorporated herein by reference.

          2.8  Personal  Guarantee  of  Philip  Salvatore,  as  filed  with  the
          Commission on October 4, 1999 as Exhibit 2.8 to the Report on Form 8-K
          and incorporated herein by reference.

          2.9 Personal Guarantee of Bart Senior, as filed with the Commission on
          October  4,  1999  as  Exhibit  2.9 to the  Report  on  Form  8-K  and
          incorporated herein by reference.

          10.1 License Agreement dated July 21, 1999 between Colorado  Satellite
          Broadcasting,  Inc. and Metro Global  Media,  Inc. on behalf of itself
          and its  wholly  owned  subsidiary,  Metro,  Inc.,  as filed  with the
          Commission on October 7, 1999 as Exhibit 10.21 to the Annual Report on
          Form 10-KSB and incorporated herein by reference.

          10.2 Loan and  Security  Agreement  dated  September  30,  1999 by and
          between Metro Global Media,  Inc.,  Metro,  Inc. and Reservoir Capital
          Corporation,  as filed  with the  Commission  on  October  7,  1999 as
          Exhibit  10.23 to the Annual  Report on Form  10-KSB and  incorporated
          herein by reference.

          27.1 Financial Data Schedule filed herewith

     (b)  Reports on Form 8-K

          1.  Report on Form 8-K,  filed June 28,  1999,  as amended on July 13,
          1999,  August 23,  1999 and October 7, 1999,  reporting  under Item 4.
          Change in  Registrant's  Certifying  Accountants,  the  resignation of
          Grant Thornton, LLP as Metro Global's certifying accountants.

          2. Report on Form 8-K, filed September 15, 1999,  reporting under Item
          5. Other Events, that Metro Global did not timely file its 1999 Annual
          Report on Form 10-KSB and that on September 14, 1999, the NASDAQ Stock
          Market halted the trading of Metro Global Media, Inc.'s Common Stock.

          3. Report on Form 8-K, filed October 4, 1999,  reporting under Item 2.
          Acquisition  and  Disposition  of Assets,  that on September 29, 1999,
          Metro Global Media, Inc. sold Fanzine back to its former  stockholders
          and a company controlled by them.

          4. Report on Form 8-K, filed October 29, 1999, reporting under Item 5.
          Other Events, that on October 25, 1999, A. Daniel Geribo resigned as a
          member of Metro  Global's  Board of Directors,  as well as a member of
          the Compensation and Audit Committees.






                                      F-14


<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.

                            Date: January 11, 2000


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







































                                      F-15