Imperia Entertainment Issues Shareholder Letter.

BEVERLY HILLS, Calif. -- Imperia Entertainment, Inc. (Pink Sheets:IPRE) announced today that it has released a Letter to Shareholders from its President, James Hergott. The text of the letter appears below.

Dear Shareholders,

Yesterday was a historic day for the company. As many of you know, we announced that we had completed our Regulation D Rule 504 offering.

The company is no longer selling shares. There is a legal cap of $1 million that can be sold within a year. We reached that limit, thus the announcement yesterday.

We have FOUR great movies coming up, and I am really excited about those, and focusing on the future. I feel like today is a new day and that a dark cloud has been lifted. I am very excited for the future.

As many of you know, the stock went up 120% by the close yesterday, and the volume reached a company high of over 603,000,000 shares traded. This is very impressive since two days ago the stock reached an all time low of 0.0003 cents.

Many shareholders are extremely relieved that the selling has concluded but want to know how I intend to increase shareholder value.

If you look at our nine-month chart, we went up to 20 cents per share around Nov/Dec of last year. What was going on around that time was the build up to the theatrical release for our first movie "All That I Need."

While there are no guarantees of the future of what the stock will do, I believe it is in the best interest of building value in the company to focus on our future film releases. I believe if any of our future movies succeed, that it will be a fantastic thing for our company. I believe our company is very undervalued.

With so many new eyes on the company, I think it is time to recap our assets and present situation.

So here is a break down of our present properties:

ALL THAT I NEED (ATIN)

This was our first movie. A modest independent movie with no stars and budget under $400,000.00 that went on to be released in theatres. This allowed us to start a distribution wing for the company, so that we can release movies directly ourselves.

Around Dec 12th of 2005 I issued a shareholder letter for ATIN and how it did at the box office.

We plan to market the movie for further distribution opportunities at this year's Cannes Film Market, which is from May 17th-28th. Last year this movie got a standing ovation in screenings at the Cannes Film Market.

We are also working on a DVD that will contain bonus features such as deleted scenes, director's commentary and other bonuses. I am excited to release this special edition DVD when it is ready.

Website: www.allthatineed.net

We also just announced that IPRE has signed a distribution deal with ReelTime TV to Distribute Growing Library of Films and TV: http://www.pinksheets.com/quote/news.jsp?url=fis_story.asp%3Ftextpath% 3DCOMTEX%5Cbw%5C2006%5C04%5C20%5C77865763.html%26clientid%3D168%26 provider%3DBUSINESS_WIRE&symbol=IPRE

SAY IT IN RUSSIAN (SIIR)

We just finished shooting this movie on Super 35mm. It stars Faye Dunaway, Steven Brand and Rade Serbedzija, amongst many others, and was shot in Paris, Moscow and Los Angeles.

"Say it in Russian" is about a young American who meets a Russian girl in Paris and falls in love with her. He follows her to Moscow, where both of them become entwined in her father's dangerous situation.

We will have a trailer and promotional materials ready for Cannes, and we intend to negotiate distribution deals for the movie at that time. Distributors have already approached us. This movie is currently valued at between $10-20 million.

We have set a temporary release date for this movie of December 2006.

Pictures: http://www.allthatineed.net/siirpics.html

WHISKERS

"Whiskers" is a family film about an intelligent seal, in danger of being euthanized for scientific study, who is released by a researcher's young daughter. As he is pursued by the "bad guys," Whiskers has various adventures with a family, and the young girl, who finds her first love through Whiskers. Whiskers is produced by Academy Award Winner Jordan Klein ("Flipper," "Jaws," "Splash").

According to a study made by the Dove Foundation of films made in the years 1989 through 2003, family films are 11 times more profitable than their R-rated counterparts. "Whiskers" is produced by Jordan Klein ("Flipper," "Jaws," "Cocoon") and follows the adventures of an intelligent sea lion and the family he befriends.

On May 3rd we announced that Imperia Entertainment Acquires Subsidiary; Creates Family Film Division to assist with the production and release of "Whiskers": http://www.pinksheets.com/quote/news.jsp?url=fis_story.asp%3Ftextpath% 3DCOMTEX%5Cbw%5C2006%5C05%5C03%5C78319046.html%26clientid%3D168%26 provider%3DBUSINESS_WIRE&symbol=IPRE

We are looking to start shooting "Whiskers" this fall.

AUTOGRAPH

The long running and award-winning "Autograph" interview series, which currently airs on the Colours Television Network.

It won a Bronze Medal at the New York festivals in 2003 and a Gold Globe Award from the World Media Festival in Hamburg, in 2003.

"Autograph" is the celebrity interview show that sits viewers down with the A-list of Hollywood. In 26 one half hour episodes, featuring intimate interviews of notable stars, this series will remain a classic for centuries to come. Each episode digs deep and reveals who they are and what they think.

Here are some trailers for "Autograph": http://progressive.estelle.tv/Autograph/

NEVER SUBMIT

We announced this film on April 20 after closing a partnership deal with a top MMA organization: http://www.allthatineed.net/pressrelease042006.html

An MMA movie aimed at the hard to reach, but big spending male demographic of 18-34.

Because of tax incentives for shooting in Canada, the Canadian government will cover a big percentage of the budget. Also, sponsors who are interested in the project have already approached us and expressed interest.

We will be shooting this movie Fall/Summer of this year.

Here is some more information about MMA and how it is exploding with young adult males:

MMA is an emerging sport, which has already gained huge acceptance in Asia and looks poised to explode into the mainstream in North America. Indeed, several landmarks have recently occurred within the sport of MMA. For example, Marc Ratner, who served with the Nevada State Athletic Commission since 1984, and as its Executive Director for the last 13 years, recently left his job to join the UFC. In his new position he will seek to attain sanctioning of the sport in additional states.

The UFC held its first event in California at the Arrowhead Pond of Anaheim on April 15th. The event quickly sold out all 18,000 seats in two days and was the fastest sell-out event in UFC history and brought in a $9 million US gate. A similar event is scheduled for May 27th at the Staples Center in Los Angeles, CA.

The sport is also gaining exposure on television. The IFL recently signed a distribution deal with Fox Sports Net for their first event in April, and the UFC just extended its content deal with Spike TV. The UFC's MMA-based reality show "The Ultimate Fighter" is the top rated-series for Spike TV, formerly called "the network for guys." Season #1 (13 weeks) of "The Ultimate Fighter" averaged a 1.7 HH rating (1.5 million) with a 2.0 (1,015,000) in M18-49, a 2.4 (604,000) in M18-34, and an average audience of 2.1 million viewers.

The 3rd "Ultimate Fighter" season premiered April 6th, 2006 as the most-watched original series premiere in Spike TV History. It drew record ratings for the network and out-delivered anything else in television in its timeslot in the hard-to-reach demographic of Men 18-34. The 90-minute premiere also out-delivered major competition on cable including the NBA on TNT (Pistons vs. Heat and Lakers vs. Nuggets) and USA Networks' coverage of The Masters.

On the popular search engine yahoo.com, MMA fighters and events routinely are at the top of the list of most-often-searched sports, often beating out huge mainstream sports such as football and basketball. This is further proof that MMA is a huge underground hit with young adult males. Earlier this week it was even more searched on yahoo.com than popular reality TV show "American Idol."

With several debuts occurring in the great state of California over the next few months, all signs point to this being just the beginning.

BROTHERS

A comedy in the vein of "Brokeback Mountain." Here is a synopsis:

Simon, a teenage obsessive-compulsive joke teller is an embarrassment to Jason, his older jock brother, especially after he decides he is gay and in love with Gary, one of his brother's teammates on the school football team. Despite no interest or even real contact with the object of his affection, Simon will not be deterred from proclaiming his new gay love to the world and trying to woo Gary. Gary and Jason both become the laughing stock of the school. Gary's homophobic father and school football coach finally has Simon arrested for stalking and in an emotional trial, Simon's mother and brother both have to testify for the prosecution.

"Brothers" is produced by Tarquin Gotch, the Executive Producer of "Home Alone," the most successful comedy film of all time, which made over $500 million at the Box Office.

"Brothers" is scheduled to begin filming by the end of the year.

As you can see, we have a number of projects coming over the next few months. I truly believe that the following year will be a great time for our company. I could not be more optimistic about the future.

All the best,

James Hergott
    President Imperia Entertainment

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.