| IMPERIA
ENTERTAINMENT ISSUES LETTER TO SHAREHOLDERS
BEVERLY HILLS, Calif.--(ENTERTAINMENT WIRE)—April 3, 2006 Imperia Entertainment, Inc. (Pink Sheets: IPRE) announced today that it has issued a new letter to shareholders from its President, James Hergott. The letter reads as follows: Dear Shareholders, It has been a while since I wrote. The last time was briefly after our first completed film, "All That I Need" was released in theaters. As I am sure you are aware, the price of the company’s common stock has fallen drastically since that time. I fully realize that as an investor, it is frustrating to see this happen. You have put your hard earned money into this company, and you wish to see it be successful. I appreciate and thank you for standing by us, in this difficult time. Now when I say difficult time, I am referring to the stock price, not the strength of the company. It is important to not confuse those two things. I am fully aware that I am accountable to you as the president of this company. As I stated in my first letter to shareholders (this is my third), I feel that communication is very important. Now it is more important than ever. I feel that if people do not know what is going on, they assume the worst. I have seen a lot of information on the Internet and received emails and phone calls from people about the company. Some of these communications have speculated that we are operating a "scam", or "pump and dump." I can understand that people are anxious, but there is simply no need for the name-calling, and these accusations are all untrue. I will assume that those statements are a result of people assuming the worst because there has not been enough communication. I apologize for this and will do a better job of keeping you (the shareholder) informed. For those of you who have stood by us, I very much appreciate your dedication. I know a lot of people have been let down by scams on the pink sheet and bulletin board stocks, and are quick to write off a company when the market starts to look bad. . With that in mind, I would like to give you a status update. Now keep in mind, I would rather tell you the truth, than have you speculate about the worst. I will do this even if you don't like everything I have to say. You may not like it, but at least it is the truth, warts and all. And believe me, it is far from all bad news. I do have a conscience, and I would resign from this company if I thought that it was a scam. I do believe in this company and its products. I will do everything I can to make it a success. I can't promise you that everything will go smoothly, but I can promise to do everything I can to bring awareness and value to the company. I will address the various investors concerns I have received in a Question and Answer format. These are the most frequent questions I have received as well as some other matters I wish to touch upon. Q: Why has there been such drastic selling of the stock recently? A: There are three reasons for this: 1) There has been an unusually high recent activity in common stock selling, which caused a sharp drop in stock price over the past several weeks. We are analyzing reports received from the Depository Trust Corporation and have ordered "NOBO" reports to help us conclude our investigation. 2) We had to sell a large amount of shares in order to raise extra money for our feature film, "Say It In Russian" This is a temporary situation as we are almost done filming. We went over budget in our foreign location shooting, but it has added great production value to the movie. The good news is that we have raised the necessary completion funds. Of course this is not something we did without much deliberation. It was completely necessary because an uncompleted film is not going to bring in the revenue needed to bring value to the company. The budget of “Say it in Russian” was over 20 times the budget of “All That I Need.” It has named actors and is shot on 35mm film, and is a completely different type of film that appeals to the mainstream market. We have been approached by several distributors already before the film has even been finished. I have been on set and watched the footage. It has a great cast and I think will do very well. It was worth it to make this investment at this time and in my opinion will pay off significantly. We simply had no choice, as it was essential to the long-term health of the company. Movie making is expensive, but the resulting product has a long term useful life. And, after all, the whole point of this company is to make movies. We are making movies, not just talking about it. Please look on the Internet movie database website, www.imdb.com, for more information and still photographs of the film. 3) Since many of us in the company have been on set, we have not been able to communicate with shareholders. As stated above, people fear the worst when there is no communication. While shareholders may not see what is going on, I assure you that the company has been very busy the past few weeks making “Say it in Russian” the best that it can be. I believe you will be impressed with the final result. I feel if every investor saw the hard work that is being done on set, they would feel very comfortable about the company. Q: Besides Say it in Russian, what else is on the horizon for the company? A: We have a number of other movies in development. I am very excited for the future of this company. Q: What is happening with the website? A: We have a brand new website. It is still be worked on, and the kinks being worked out, but it is up and running. I encourage you to check it out: http://www.imperiaentertainment.com Q: Where are the latest financials, shares outstanding, etc? A: This information will continue to be updated on www.stockinformationsystems.com. Just type in IPRE. Q: What is the current share structure of the company? A: The company has approximately 204,000,000 shares outstanding and 83,000,000 of those shares are restricted. Q: As company president, do you own shares? Have you sold any? A: Yes, I own over a million shares. I have not sold a single one. Q: Are you confident about the future of the company? A: Yes. I feel we are greatly underestimated. We have several projects coming up, and if even one of them is a big success it will have a huge impact on the company in my opinion. Sincerely yours, James Hergott
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