MESSAGE FROM EXECUTIVE MANAGEMENT

Dear Shareholders,

Over the past 24 months, Zuma Beach Entertainment, Inc (“Zuma” or the “Company”) has acquired the exclusive rights to license and distribute the Angel Babies animated property and all its related products for up to 20 years, purchased all of the assets of World Arena Rugby Union, LLC, and acquired a 5% participating ownership interest in a slate of films from Deco Entertainment, LLC (“Deco) and C. Julian Productions, Inc. (“Julian”).

Looking forward to 2010, we endeavor to have Zuma evolve into an entertainment Company that will actively develop, license and distribute its Angel Babies animated property to capitalize on the multi-billion dollar licensing and merchandising market that exists in the children’s entertainment niche. The Company will actively execute its vision and launch the inaugural season of WAR, the first professional indoor rugby league, striving to become a global sports organization leader by investing in cutting edge marketing and promotional strategies designed to capitalize on the expanding depth of interest in edgy sports entertainment, by building WAR into a profitable sports entertainment product that generates revenue streams from ticket sales, licensing, merchandising and broadcast revenue. Furthermore, the Company anticipates the realization of revenues from the perpetual ownership interest in a slate of projects acquired from Deco and Julian.

As you are aware, in September 2008 a global financial crisis emerged, whereby a series of bank and insurance company failures triggered a financial crisis that halted global credit. As a direct result of this economic downturn, Zuma has not able to secure sufficient injections of capital, at least not to the extent required to successfully execute our business plan.  Due to this lack of access to capital over the past 8 months, Zuma’s efforts to launch the inaugural 2009 season of WAR and acquire additional film and animation properties was effectively stalled.

Moreover, in a cost reducing effort, the Company decided to delay the filing of its 15C2-11 and chose to hold a meeting of Board of Directors and Majority Shareholders to pass an action of unanimous written consent in lieu of an Annual and Special Meeting of Shareholders. An Information Statement detailing the action taken is enclosed herein.

 
Pursuant to Regulation D, Rule 506 of the Securities Act, the Company will undertake to raise additional capital through a private offering (the “Offering”) of our securities over the next 90 to 120 days. Our ability to execute our business plan will be solely dependent upon the proceeds from the sale of our securities, at least until such time that our revenues are sufficient to produce a positive cash flow and satisfy the cash requirement to facilitate our business. The financing of the Company’s production and distribution plans and the acquisition of any further film and animation projects is directly dependant on our ability to raise additional capital.

If the Offering is fully subscribed, the gross proceeds to the Company from the sale of the securities will be $5,000,000. The Company will use the net proceeds received from the sale of the securities offered hereby for the following purposes: 

• To execute the filing of the Company’s 15C2-11 to allow Zuma to trade and be quoted on a solicited basis. The 15C2-11 will need to be filed by a licensed securities broker, dealer and member of the Financial Industry Regulatory Authority (FINRA) specializing in the over-the-counter securities market.
• To retain an auditor to conduct a financial audit of the Company. Once the Company’s audited financials are available Zuma will proceed with the filing of its Form 10 to attain eligibility for a quotation of the Company’s security on the Over The Counter Bulletin Board (“OTCBB”). Eligibility for a quotation of the Company’s security on the OTCBB requires i) the completion of the necessary filing with the Securities and Exchange Commission (SEC) or applicable regulatory authority and ii) the sponsorship of its security on the OTCBB from an authorized OTCBB Market Maker who may apply to quote the security on the OTCBB.
   
• To commence the operations of WAR, including the launch of a promotional event in Las Vegas during the first quarter of 2010 and kicking off the inaugural season in June 2010.
   
• To develop, license and distribute the Angel Babies property.
   
• To acquire ownership interest in additional film and animation properties that meet our strategic objective to continue to build our entertainment library asset base and provide the Company with a source of recurring revenue and stable, reliable cash flow

The Company appreciates the support you have provided to date and looks for your continued support to ensure the execution of our business plan. The Company and/or its representatives may be contacting you with respect to subscribing to the Offering.

In addition to raising capital through an Offering, Zuma has been exploring alternate options to achieve immediate revenue generation. The Company formally expressed its intent to purchase the assets of the wholly owned subsidiaries of Exchangemall.com, Inc. (“Exchangemall”), a private company, specifically the assets of First National Information Network (“FNIN”), SalesRide.com (“SalesRide.com”) and Investor Concepts (“Investor Concepts”), in exchange for publicly traded common shares of Zuma.

The sale of assets to Zuma by Exchangemall is subject to certain conditions including:(i) completion of due diligence and (ii) the affirmative vote of at least 66 2/3 of the votes cast in person or by proxy at the Annual and Special Meeting of Exchangemall shareholders. The asset purchase by Zuma will be an all-stock transaction.  The number of common shares of Zuma stock to be issued in exchange for the assets of Exchangemall’s subsidiaries will be based on numerous valuation factors, including but not limited to, the trading price of Zuma’s common stock, and the ERISA valuation of Exchangemall.  Exchangemall, through its various subsidiaries, has generated $3M in revenue, year over year from 2006 to 2008 inclusive. Upon finalizing the asset purchase, the addition of such revenue will certainly complement Zuma’s current portfolio of non-revenue generating assets.

Founded in 1992, FNIN has helped thousands of companies generate new business and raise hundreds of millions of dollars through their accredited and pre-qualified sales leads. Throughout nearly two decades of service, FNIN has developed experience in procuring leads for entrepreneurs, commodity brokers, stockbrokers, oil-drilling companies, movie producers, and thousands of ambitious sales teams.

Through state-of-the-art data generation and quality control facilities, SalesRide.com manages a data warehouse with an availability of over 700,000 high quality sales records that have been qualified and appended for data accuracy to service B2B and B2C needs of a wide range industry. The advanced technology available through SalesRide.com will allow FNIN to expand its customer base, increase revenue, and cut overhead costs.

Investor Concepts is a financial and investing publication designed for the active investor. Investor Concepts magazine is published 6 times per year, and provides subscribers with market-timed investing alerts, coverage of investing opportunities in such areas as Commodities, Currencies and Forex, Private Placements, Over-The-Counter (OTC) and Bulletin Board equities, and articles on emerging global market trends in Asia, Europe and The Middle East, as well as Real Estate. Investor Concepts is currently a free publication while it is in the process of building a subscription base. Revenues are derived through advertising sales, which in turn enhance the products and services offered through FNIN.

We have given careful consideration to the asset purchase transaction and feel it will deliver significant value for both companies. The transaction will provide increased liquidity for Exchangemall shareholders and the opportunity for its private shareholders to become an active shareholder of a publicly traded entertainment company. More importantly, it will deliver superior value to our respective combined shareholder bases, creating a more competitive company that will benefit from a greater opportunity to raise capital and achieve sustained revenue growth.
 
In an economic period where investment dollars are increasingly difficult to attain, we believe that the infrastructure and particularly the sales leads that Zuma will be acquiring directly from FNIN, will be highly sought after in today’s environment, more than any other economic period. Although not a true entertainment property or product, the asset purchases will have a positive impact on our balance sheet, strengthen our market position to allow for greater access to capital, increase our participation rate in entertainment related transactions and our ability to negotiate more favorable terms, as well as the advantage of FNIN’s database of a million plus verified sales leads.

Overall, Zuma will continue to aim to build a Company, with a comprehensive entertainment library that exceeds consumer demand for high quality, captivating entertainment, with an objective of creating maximum shareholder value. However, the Company will be relying directly on the subscription proceeds of the 506 Offering, an Offering that requires the support and commitment of new and current shareholders to propel Zuma into the growth stage of its business life cycle.

   
Please visit our website at www.zumabeachentertainment.com to obtain information updates, view our 2008 consolidated financial statements, read the WAR business plan and to download a copy of the 506 Private Offering Memorandum (the “Memorandum”). 

Thank you for your consideration.              
Sincerely,
                                   
                                                           
Mark Savoy
Chairman and Chief Executive Officer