CSMG Technologies Issues Letter to Shareholders.

CORPUS CHRISTI, Texas -- CSMG Technologies, Inc. (OTCBB: CTUM) President and CEO Donald S. Robbins issued the following letter to shareholders:

Dear Fellow Shareholders:

We are very pleased to report to you that since our last update of just a few months ago, we have made excellent progress towards realizing several important operating strategies to fund and grow CSMG, especially our Live Tissue Connect subsidiary. We believe these very significant developments will greatly benefit the Company and all our shareholders.

Live Tissue Connect

Important near term developments were announced in a July 18, 2006 press release concerning funding of our medical equipment subsidiary, Live Tissue Connect, Inc. (LTC), via an initial public offering. We have engaged the investment banking firm Empire Financial Group, Inc., a qualified and experienced underwriter, for a firm commitment underwriting, to raise a minimum of $5 million in an IPO, and to immediately raise for CSMG up to $3 million in a privately placed bridge funding. Neither the offering price of the shares of the IPO, nor the amount of shares has yet been determined.

It is the intent of management and Empire Financial Group to qualify Live Tissue Connect, upon going public, for listing on a major board, either NASDAQ or the American Stock Exchange. This would infer a price of $5 per share for the IPO, and if we sold a total of two million shares, for a total of $10 million, this would result in approximately 17 million shares of LTC outstanding, or a market valuation at about $85 million. At that point, CSMG would own 12.9 million of the 17 million shares outstanding in LTC, or almost 76%. At a market price of $5 per share, this would immediately add about $64.5 million of shareholder value to CSMG. Assuming CSMG has approximately 35 million shares outstanding at the time of the IPO, this would boost CSMG shareholder book value to approximately $2 per share. If CSMG stock were to sell at book value, which is a very conservative valuation, this would reflect an increase of over 500% from the current market price for our stock.

It is important to note that we plan to sell shares in LTC, with only a warrant transaction in the parent company, or CSMG as described below.

Importantly, in preparation for the IPO of LTC, the underwriter has agreed to raise, on a best efforts basis, at least $3 million in a bridge financing for CSMG. The offer consists of a note that will convert, at a discount to the initial offering price, into shares of LTC, and significantly, have no dilution to CSMG shareholders. The proceeds from this financing will give the Company needed working capital in the interim, fund the LTC FDA filings and allow CSMG to pay off some debt obligations in the process. Additionally, note holders receive three (3) year warrants for up to 50% of the amount of his note, and interest that is convertible to CSMG common stock, with an exercise price that is to equal to 120% of CSMG's common stock price upon the Maturity Date of the Note. There is a 5% underwriter's warrant attached to the note offering that allows the placement agent to purchase shares of both CSMG and the IPO, priced at the market price on the date of closing of the transaction.

Sincerely,

Donald S. Robbins