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Imperia Entertainment Issues Shareholder Letter

BEVERLY HILLS, Calif., Apr 19, 2006 (BUSINESS WIRE) -- Imperia Entertainment, Inc. (Pink Sheets:IPRE) announced today that it has issued the following letter to shareholders.
Dear Shareholders,

This is my fourth letter to you as president of Imperia. As I stated in my first letter, I use these opportunities to express myself to you and give you full disclosure about the company. I stated in my last shareholder letter that I would:

A) Always inform you about what is going on with the company, to the best of my knowledge.

B) Give it to you straight without trying to sugar-coat things.

That is just the way I do business. Like I have said before, I have a conscience and would never deliberately mislead anyone. I also believe communication is very important.

Just to give you some quick background on the company structure, I have been in the entertainment business for several years. I produced and directed "All That I Need" and got it into theatres prior to being hired as president of Imperia. I handle the development and the overseeing of entertainment projects for the company.

Kenneth Eade is the former president, and still serves as chairman for the company. Both of our bios are listed on the Imperia website: http://www.allthatineed.net/impaboutus.html.

I have owned and operated other businesses prior to getting involved in the entertainment business but Mr. Eade is infinitely more experienced when it comes to fundraising for the company, and he is currently handling those duties.

In my last shareholder letter, released April 3rd, I stated the following:

"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."

I also stated the current share structure as:

"The company has approximately 204,000,000 shares outstanding and 83,000,000 of those shares are restricted."

At the time, to my knowledge, this was the absolute truth. As some of you may or may not know, I often take the time to respond directly to shareholders. A few days ago, a shareholder wrote me and asked if the company was selling shares. I responded by saying the following, and the reply was subsequently posted on the Internet:

"To my knowledge there are no shares being sold by the company, and I don't know of any plans to sell shares in the near future." At the time, I was not aware that the company's Regulation D offering had not yet been closed, because of the need to pay expenses on our latest film, "Say it in Russian."

When I learned that the company has continued to sell shares in its Regulation D offering, I became very concerned by this information as I am close with many shareholders and my reputation is very important to me. When this new information came to light, I immediately shared this information with shareholders who contacted me. Unfortunately this resulted in them calling me a liar, which I am not.

The reason why the company has continued to sell shares is that our latest feature film, "Say it in Russian," which Mr. Eade produces, went over budget. The cost of the movie went from the estimate of $1.8 million that we had on April 3rd to $2.7 million, which was disclosed by the production accountant in a cost report yesterday. We believe that this expense was necessary, not only to complete the film, but to maintain a high quality. To put things in perspective, my movie, which was released in theatres, cost less than $100,000 to make. "Say It In Russian" is a much more elaborate and polished movie, shot on 35-millimeter film. It has a recognizable cast and was shot in three different countries including France, Russia and the U.S. It is only worth it to us to have a product that is attractive to film buyers, so it was decided to make the project look as great as possible and to add value to it. At this point, all of the costs for the actual filming and production of the movie have been incurred and must be paid in full. This will take approximately two to three weeks to complete, and then the only recurring costs will be promotional.

It is my belief that there are people out there who are out to make a quick buck. There are a lot of ways to do that. The only way to make a living long term is to focus on longevity and to building a reputation. No matter what, it is important for me to maintain my integrity. I have a long-term plan for this company and I want to see it through.

"Say It In Russian" was largely overseen by Mr. Eade, as it was his project, and it was put into development prior to me even coming aboard Imperia last year. I will personally be much more involved in the upcoming projects.

A finished movie has a value, so now that "Say It In Russian" is added to our library, it is a big plus for us. I am very excited that the day is fast approaching that more money will not need to be raised for it. And I would like to point out that the majority of the budget for the movie was not raised through the Regulation D offering. The offering became necessary as a result of going over budget and the costs having to be paid. The current outstanding common shares of the company now stand at 528,528,467.

Investors have asked me about why we would sell the stock with the price so low and why we haven't let it breathe more. The reality of the situation is that the bills need to be paid now. Another reason is that a market developed for the stock at these prices that is much more robust than it was when it was being traded at higher prices. I believe that the market that is being developed will be of benefit to shareholders and the company. I should caution you however, that I never know where the stock price will go. I spend most of my time focused on building value for the company. The market sets the stock price, and dictates the volume.

I want to assure you that I will do the best I can to build value in this company. There are projects currently being worked on in addition to "Say It In Russian" that are very exciting for our future. We are also making some aggressive moves getting involved with online and other distribution.

And, don't forget that Cannes is just around the corner. Now that "Say It In Russian" is complete we can start selling to distributors. We have already gotten several offers. I intend to use those sales to put more value into the company.

I thank you for standing by me, and I greatly apologize for any confusion or frustration you have been experiencing. I will do my best to keep you accurately informed in the future.

Thanks again for your patience.

All the best,

James Hergott

President of Imperia Entertainment