[ergogroup]Update #2

[Donny Epstein]

Dear Friends,

One of our family of investors suggested that the communication between us 
and our investors could be better.  Of course, we will do our very best to 
oblige.  To that end, below please find an update letter from our lead 
producers, Roy Gabay & Robyn Goodman, to the other producing partners on the 
status of "Steel Magnolias".

You have all been wonderfully supportive and optmisitic during these first 
few months and we have received so many emails expressing the positive 
energy that helps fuel us.

As happy as we are that audiences continue to give the show a standing 
ovation, we do not intend to rest on those laurels. We are absolutely 
committed to making this venture profitable for our investors.

We look forward to taking advantage of the summer months by wrangling in the 
tourists that have proven to be our strongest show-goers and by implementing 
ideas and suggestions that we receive from you. To that end, I would like to 
schedule a conference call on one of the Mondays in the upcoming weeks to 
discuss the show and any questions (financial or otherwise) that anyone 
might have.

Finally, we encourage you all to suggest to us casting suggestions so that 
we may convey those suggestions to the larger producing team.

Thank you for your continued support.

Best regards,
Donny, Yeeshai and Elie
_____________________________________________

Dear All,

Robyn & I wanted to let you know that we will be issuing a 10% return of 
capital on STEEL MAGNOLIAS.  The checks should go out early next week along 
with our first financial statement.

In terms of daily ticket sales and weekly box office grosses, we are pretty 
much holding our own and manage to gross above $200,000 each week.  Since 
our recent direct mail and other discount offers (Telecharge e-mail blast, 
etc.), we have seen our wraps pick up and our advance continue to stay above 
$1,000,000.

We were disappointed not to receive any Tony Award nominations but in the 
long run it actually saves us money by not having to pay for ads and award 
ceremonies that won't be reflected in ticket sales.

Audiences continue to love our play and we have high hopes that as we head 
into the summer we will attract a large share of the tourist market.

We have begun generating lists to begin the process of re-casting for the 
fall.  Obviously, we are doing our best to pursue the kinds of names who 
will generate ticket sales.

Robyn and I are very proud of our show and hope you are as well.

Best,

Roy Gabay