Dear Shareholders,

I believe this is my sixth letter to you. I realize that because of the low stock price, morale is low. I understand that it is frustrating for investors to see their stock price dwindle. And I appreciate those who have stuck with us through these hard times.

The price has only been lower once in the company history. At that time, people were very frustrated. I told shareholders that we were selling shares to pay for going over budget on our feature film “Say It in Russian”, and I told them how long it would continue for (2-3 weeks). Even though I explained this many did not believe me. Then, when the selling was complete (2-3 weeks later) we announced the selling had concluded. The stock price skyrocketed up 2000% within a week or two. I remember the day before that release went out. Investors wrote me derogatory letters. They were pessimistic. What a difference a couple of days made. People who had swore to me they would never touch the stock again, were suddenly buying. People who had hurled accusations at me two days earlier were suddenly calling me the best president on the pink sheets. It seems people’s opinions about the company and management are directly linked to if they are making or losing money on the stock.

It always amazes me how even though the experts say that the smart thing to do with stock is to buy low when no one wants the stock and sell high when everyone wants it, very few shareholders actually do this. The instinct inside us is to not touch something that no one else wants, and to buy something when there is great demand. These natural instincts are very difficult to overcome. The result is that when a stock price drops very low, investors see it as a situation of impending doom.

Obviously I can never predict the market price of our stock. I do think at this time that the company’s value is underestimated and that the stock price is greatly undervalued. The fact is that nothing has changed with the company through all of these wild price swings other than the announcing of the upcoming reverse split. Our projects are still moving forward. You would not believe that by what most say on the message boards or in emails to me. If you read those, you would think the company is three days away from folding.

Even though the stock price is very low, the company could not be stronger. Lets look at what is not going to happen in the next year, and then look at what will happen. I hope this will dispel all of the doom and gloom theories. I will also include some new updates for shareholders. The simple fact is, that Rome is not burning. I stake my reputation on the following:

What will NOT be happening for at least the next year with Imperia:

-The company will NOT be going out of business

-The company will NOT be changing its name or ticker symbol

-The company will NOT be doing any more reverse splits

-The company will NOT be and CANNOT sell free trading shares for at least the next year

-The company will NOT be paying any bills with company stock

-The company will sell only convertible restricted shares that CANNOT be sold for at least a year

-The company will NOT be increasing its authorized shares

-The company will NOT be increasing its float OR it’s outstanding common shares

-The company will NOT be paying a PR firm or any other vendor with stock

-The company will NOT be merging with another company

-The company will NOT be engaging in any kind of hidden methods to dilute the stock

Since the company will not be selling free trading shares, it stands to reason that the only way that the stock price will drop is if current shareholders sell their shares. By contrast, the only way for the stock price to go up is for shareholders to buy the stock. What will attract shareholders to the stock? We believe the best way to do this is by increasing shareholder value and by bringing greater attention to the company through the production and distribution of our upcoming releases. With that in mind, here are the latest updates with some of our projects:

“Say It In Russian”

We had a great reaction by distributors and sales representatives in Cannes to the trailer and have been approached by several top studios that are interested in seeing the finished product. We are only ten weeks away from having a finished movie to take to film festivals and to market to buyers.

“Whiskers” and Imperia subsidiary MLMD

We just hired the director. We will begin casting in a week or so. Funding is being raised through sales of units of restricted stock and equity in the film through our subsidiary, Muller Media, Inc. The new website is now up:

http://whiskersmovie.com

“Never Submit”

I have an upcoming meeting with one of the top, if not the top MMA organizations in the world. Casting will begin shortly. I recently did an interview regarding this movie:

http://www.yousendit.com/transfer.php?action=download&ufid=160CAEB374223A2E

And don’t forget our other deals including the upcoming movie “Brothers”, our last movie, which was theatrically released, “All That I Need” and our upcoming mobile phone deal for “All That I Need” and our television series.

Never before in Imperia’s history have we had so many irons in the fire and yet have we been so undervalued by the market at the same time. Never before have we had such a bright future ahead.

As you can see, our company has been greatly underestimated. While others have been spending their time predicting our doom, we have been spending our time building a bigger and stronger company. I look forward to a very prosperous year and future for this company.

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.