Imperia Entertainment Issues Letter to Shareholders.

BEVERLY HILLS, Calif. -- Imperia Entertainment, Inc. (Pink Sheets:IPRE) President James Hergott issued the following letter to shareholders, which is posted on the company's website, at www.imperiaentertainment.com:

Dear Shareholders:

I would like to introduce myself; James Hergott, the new president of
Imperia Entertainment Inc. I believe communication is very important
in any relationship, be it loved ones, friends, employees or
shareholders. So with that in mind, I felt that it would be beneficial
to all involved to write letters to the shareholders from time to time
to inform investors about the state of the company. Billionaire Warren
Buffett of Berkshire Hathaway is famous for his letters to
shareholders and also the President of the United States often gives
his State of the Union address as a way to communicate to the people
he serves.

Obviously the first thing I must address is the stock price, as many
are concerned about the recent drop in market price. In the opinion of
our management, the Company's stock is undervalued. In fact, our
projected revenue far exceeds the market value of the company at this
point. I am a filmmaker and as such I am focused on the business of
making movies. I feel that if the company is strong and when we start
receiving revenue from all of our assets, eventually the market will
follow. This will prove to be advantageous for those of you who have
bought stock at such low prices. I have noticed that many investors,
while understanding stocks, do not necessarily understand the
entertainment business. One of the advantages of creating content such
as a movie, is that it can keep being sold (as long as you retain the
rights) and it provides an income for many years, but only the initial
production cost needs to be incurred. I am simplifying the process of
course, but it will help illustrate the advantage of having movies in
the "can," so to speak. As our company develops, we will continue to
have new assets that will bring in revenue for many years to come. Our
revenue projections estimate the initial release of "All That I Need"
will result in earnings to the company of up to $9 million in revenue,
if the release is extended beyond its current one week run, and up to
$11 million in DVD, cable, pay per view, Internet and foreign sales in
the next six months.

I recently received a letter from a shareholder and I wanted to share
it with you, as well as my response, to give you some insight about
the state of the company and what my plans are for the future. I have
changed the shareholder's name for purposes of privacy.

"Dear Mr. Hergott:
As an investor in Imperia Entertainment, we have been watching the
continuous slide in IPRE stock price with dismay. Could you please
provide the following information: besides the November limited
release, what are the other significant milestones you see for the
company over the next 6-12 months? Have insiders sold any shares over
the past 6 months? I look forward to an expeditious response, as we
are considering further investment if warranted.
Regards, Robert Morgan

Dear Mr. Morgan,
This is James Hergott, I am the director of "All That I Need" and the
new President of IPRE. I will answer your questions as best I can. In
my opinion the stocks are very much undervalued. Not only because the
price of the stock is so low, but because of the number of milestones
on the horizon. I was put in this position because I'm a doer, not a
talker. The following is a list of upcoming milestones: -ATIN will be
released this November as you stated. Getting a movie released in
theaters is no easy matter. To give you some statistics, the Cannes
film festival gets approximately 6000 movies submitted in a year, of
that, they only choose approximately 150 films. Out of that, maybe
only 10 movies will actually get released into theaters. So from a
percentage point of view, we are in the top 1% of the top 1%. It is my
goal to release the movie in a way very similar to "March of the
Penguins." If we sell well the first week, then this is very
plausible. Here is the release schedule for "March of the Penguins":

$137,492 (USA) (26 June 2005) (4 Screens)
$525,391 (USA) (4 July 2005) (20 Screens)
$1,019,357 (USA) (10 July 2005) (64 Screens)
$1,515,059 (USA) (17 July 2005) (132 Screens)
$4,382,340 (USA) (24 July 2005) (695 Screens)
$4,030,894 (USA) (31 July 2005) (778 Screens)
$7,117,206 (USA) (7 August 2005) (1,867 Screens)
$6,848,205 (USA) (14 August 2005) (2,063 Screens)
$6,487,696 (USA) (21 August 2005) (2,102 Screens)

As you can see, March of the Penguins actually started on only 4
screens, which is less screens than our movie. The other important
thing about having a movie in theaters is that this drives everything
else. Since our movie is in theaters it greatly increases how it sells
on DVD, cable, both in the US and other countries. The majority of
this income will come in with in the first 2-3 years after the movie's
release in theaters. So the movie will be sold and distributed to
several locations after the movie's release in theaters. So over the
following three years, there will be several ways to profit from the
movie. -The movie "Worlds Apart" will be shot this fall, it will be
released and will generate an income over the next few years, much in
the same way that ATIN will. -Our Autograph show has sold really well
and is in several homes on the dish network. We will be getting
advertising dollars for the commercial breaks as per our individual
distribution deals. This will be another income, as well as we can
sell this show to other places, both here and in other countries. All
in all, Robert I am more focused on the future of the company than
hype. I believe that the biggest reason for the drop in stock is due
to shorters and the fact that we are putting deals together. As time
goes on, it is my opinion that the stocks will reflect all of the
things that are going on. To my knowledge, anyone connected with the
company or the movie has actually gone and bought more stock lately
because the price is so undervalued right now. Since it is smart to
buy when it is low, that's what the people close to the project have
been doing. I would say that there have been more purchases by those
close with the project, lately than at any other time. I hope this
answers your questions. All the best, James Hergott"

In closing, I would like to personally thank each and every
shareholder for his or her support. All plans must change slightly,
but I feel that the strategies we are pursuing will cause our
intrinsic value per share to climb over the long-term, creating
long-term shareholder value.

Very sincerely yours,

James Hergott, President, Imperia Entertainment, Inc.

About Imperia Entertainment, Inc.

Imperia Entertainment, Inc. (www.imperiaentertainment.com) is a diversified entertainment production company, primarily focused on driving shareholder value by investing in and producing highly original television series and producing and distributing full-length feature independent films. Along with its equity interest in the widely anticipated, "All That I Need", (www.allthatineed.net) to be released in theaters November 4th by the Company's wholly owned distribution company, Imperia International Distribution, Inc., and its feature film in pre production, "Worlds Apart," directed by Jeff Celentano ("Primary Suspect," "Gunshy") and edited by David Rawlins ("Saturday Night Fever,") the Company has amassed an impressive media library including the award winning "Autograph" television series (www.autograph.tv ), which airs on the Colours Television Network, and newly acquired "Faces and Names" television series.

Imperia Entertainment is located at 190 N. Cannon Drive, Beverly Hills, CA 90210 Suite 420

Phone: [phone]; Fax: [phone]; E-Mail - [e-mail], or visit Www.imperiaentertainment.com.

This press release contains statements, which may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of Imperia entertainment, Inc.., and members of its management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those in forward-statements include fluctuation of operating results, the ability to compete successfully and the ability to complete before-mentioned transactions. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. All financial projections have been prepared by management, and are based on assumptions as to future events and conditions which may or may not occur. Most of these assumptions are beyond the company's control and merely represent management's forecasts. To the extent actual experience varies from any one or more of the assumptions, actual financial results will differ. While the company makes these projections in good faith, investors are cautioned that they are based on the company's limited experience, represent goals and objectives, and are unreliable and of questionable value when making an investment decision.