Dated:	May 23rd, 1997

From:	Carl H. Schulte
	Former President, Companion Games Inc.

To whom it may concern;

	It is with deep regret that I must announce the conversion of Companion Games Inc.
from Chapter 11 reorganization to Chapter 7 Bankruptcy.

	For the past 16 months Companion Games Inc. has been under a court supervised
reorganization due to the bankruptcy of several accounts (most significantly, a German
distributor owing over $70,000.00) and the damages (in excess of $400,000.00) caused by a
large quantity of flawed Primary Edition product (printed, paid for, but never replaced).
Support of the players and increasing sales (by expansion) has been the only thing allowing
us to remain operational for these 16 months.

	Last month, Companion Games Inc. petitioned the court with a 'buy out offer' from an
interested party, coinciding with the United States Trustee's Motion to Convert. While none
of the creditors backed the trustee's motion, it was approved by the court anyway and
Companion Games Inc. was converted to Chapter 7.

	The same party who attempted to buy Companion Games Inc. in Chapter 11 court is
attempting to buy it in Chapter 7 court. If successful, Companion Games will continue as
before. Regrettably, we cannot produce any further products, make payments or refunds of any
kind without court approval. This means those of you who have paid for future releases (promo
cards included) have been listed as creditors. If the party (now known as Component Game
Systems Inc.) who attempted to buy Companion Games Inc. in Chapter 11 court successfully buys
it now, they have offered to fulfill the orders of promo cards (paying for this at their own
expense).

	I truly regret anyone who is hurt by this situation. It most assuredly is not what
I expected would transpire when the buy out was proposed and I sincerely hope the buy out is
successful in Chapter 7 court.

	The first hearing in Chapter 7 court is on June 16th. Please wait patiently until then,
God willing we will be operating again under new ownership and fulfill the pending orders and
future releases. If you have any questions call me at home at [...] (before 7pm EST please)
and I will do my best to answer them. There is little else (than what is here) that I will be
able to provide before the first hearing (save the nitty gritty details) so if you can hold
off until then please do.

[closing deleted]

							Most regrettably,


							Carl H. Schulte