Dear Shareholders,

Each of us is eager to build on past achievement and reach new heights of success. Yet each of us is also keenly aware that we have a lot of work to do to grow Zuma into a profitable Company. We are driven by a vision of what Zuma can be in the years ahead. We are determined to succeed by producing results that earn the confidence of distributors, producers, consumers and shareholders in equal measure.

From the moment I was appointed to my new position, my management team and I began working to identify what needed to be done to strategically reposition Zuma in the market and to enable the Company to reclaim its integrity in the entertainment industry and investment community. We concluded that we must rethink the business strategy and collectively spearhead a change of approach across various aspects of our business.

We believe an opportunity still exists in the entertainment business sector for a well-capitalized competitor that promotes the creation and development of content, integrates components of production, actively finances projects, exceedingly promotes both foreign and domestic sales and distribution, seeks favorable licensing and merchandising opportunities and further mitigates risk.

We enter the second quarter of 2007 actively working to execute a plan to deliver greater value for shareholders, consumers, and distributors, and results that all of us at Zuma can take pride in. The plan includes building shareholder value through existing properties and the acquisition of additional entertainment content properties and/or libraries.

Zuma shall immediately seek shareholder approval to acquire World Arena Rugby Union LLC (W.A.R.).  Following the completion of the acquisition, W.A.R shall become a wholly owned subsidiary of Zuma. Zuma looks forward to building W.A.R. into a profitable sports entertainment product that generates strong profits from various revenue streams that will include ticket sales, licensing and merchandising and broadcast revenue.

Zuma also looks to further develop, produce, mass distribute and license and merchandise the Angel Babies animated property and its related products. Zuma currently owns 100% of the licensing and distribution rights and is currently exploring the option of obtaining a majority ownership percentage in the Company from Angel Babies LLC. Our management believes that Angel Babies has the potential to evolve into a hit property. 

The dedication and talent of our employees impresses me. It is because of these qualities that I have such confidence in our ability to deliver on our plan. I am also appreciative of the accumulated knowledge and experience of our management team and the continued guidance and support of our Board of Directors.
I am confident that you will agree that it is important to fully and boldly addresses the challenges we face. I pledge that you will see during the course of 2007 and beyond that we are committed to executing our plan.

We are in the process of preparing our financial statement for audit and announcing a record date and meeting date for our Annual and Special Meeting of Shareholders.

Please contact Michael Douglas, our investor liaison, in the Investor Relations department if you have any questions. Or, feel free to send me a direct e-mail by completing our investor contact form. We want to hear from you, our shareholders.

Thank You,

Mark Savoy
Chief Executive Officer
Zuma Beach Entertainment, Inc.