MagiCorp Entertainment Inc.

MagiCorp Entertainment Inc. is an owner and operator of multi-scale, indoor entertainment centres throughout Asia, Europe and North America. Originally incorporated in 1993, the company was established as a provider of specialized services to the entertainment and hospitality industry in Japan. In 2001, the company became publicly traded after completing a reverse takeover with Goldie Enterprises Inc., a development stage resource exploration company formed in 1979. Following this transaction, MagiCorp shifted its focus to owning, operating, financing, and constructing sports, music, and special event venues as well as family entertainment centres under the company’s primary brands, Lucid and Magic City.

MagiCorp opened its first Lucid music, sports, and special event venue in Manchester, England, on April 2, 2003. Lucid Manchester is located in Printworks, a retail and entertainment complex consisting of approximately 42,000 sq ft. To construct the venue, the company arranged a $7.7 million debenture loan with Virgin Entertainment Group in mid-2002. In addition, Ivanco No. 1 Ltd., an affiliate of Virgin, guaranteed the venue’s operating lease. Since 2002, MagiCorp has developed a strong partnership with Virgin whereby Virgin has made financial as well as other commitments to the company’s projects.

During April 2003, MagiCorp entered into an exclusive operational management agreement with W.POLS BV, a Dutch company, to develop and operate a Magic City family entertainment centre in Warsaw, Poland. The centre will encompass about 60,000 sq ft and be built in Blue City, a new retail mall that opened in April 2004. Management anticipates that the capital cost for the project will be approximately $13 million and expects Magic City Warsaw to commence operations in June 2004.

On November 7, 2003, management announced that the company had entered into an agreement with Rio-Can Real Estate Investment Trust (REI.UN:TSX) to launch a Lucid venue in downtown Toronto. Lucid Toronto will occupy almost 53,000 sq ft of Festival Hall, a retail and recreational complex in the entertainment district of the city. The venue is scheduled to open in July 2004.

In April 2004, MagiCorp completed three financings including a $5 million loan with Bank Zachodni WBK S.A., an $8 million private placement with Standard Securities Capital Corp., as well as a $1.575 million short-term bridge loan with Standard Mercantile LP. The company intends to use the $5 million Bank Zachodni loan to complete construction of its Magic City Warsaw project, the proceeds of the $8 million private placement for future corporate development and working capital, and the $1.575 million bridge financing to finalize the development of Lucid Toronto. In conjunction with the $8 million private placement, Class A and B warrants were issued which management expects will raise additional proceeds.

On May 19, 2004, MagiCorp released its financial results for the three months and year ended December 31, 2003. During the fourth quarter, the company achieved record revenues of approximately $6.3 million, an increase of 292% over the $1.6 million reported in the previous year. Furthermore, MagiCorp generated net earnings of about $785,000 or $0.006 per share, representing 204% in growth compared to a net loss of $757,000 or $0.010 per share in 2002. Management attributed the improvement in revenues and net earnings to the commencement of operations at Lucid Manchester. During the year, revenues at the venue totalled more than $8.99 million.

On May 28, 2004, MagiCorp posted its financial results for the three months ended March 31, 2004. During the first quarter, the company continued to experience dramatic growth in revenues due primarily to its Lucid Manchester venue which generated more than $2.1 million in the period. In addition, management issued approximately 2.3 million shares for a total of $776,634.84 to settle outstanding debt with one of its creditors.

On May 31, 2004, the company entered into a debt conversion agreement with Virgin to settle approximately £4.87 million in outstanding debt. Pursuant to the agreement, MagiCorp will pay £500,000 in cash, issue a £500,000 promissory note and about 28.4 million shares to Virgin, representing around 20% of the currently issued and outstanding shares. Management expects the deal to close upon the receipt of regulatory approval.

MagiCorp intends to continue pursuing its corporate strategy of becoming an international owner and operator of big box entertainment venues in 2004 and beyond. Management has recently signed lease agreements for two additional Lucid venues; one in Liverpool, England, and the other in Atlanta, Georgia. The company anticipates that the venues will commence operations in November 2004 and May 2005, respectively. Furthermore, management is currently in negotiations for future Lucid sites in Kansas City and New York which are expected to open in September and April 2005.