BEVERLY HILLS, Calif.--(Entertainment Wire)—September 12, 2006--Imperia Entertainment Inc. (Pink Sheets:IPRE) announced today that it’s president, James Hergott, has issued the following letter to shareholders.

Dear Shareholders,

I felt it time to address you again regarding the latest developments with our company. I have heard much speculation and rumors, most of which are inaccurate. As I have often stated, we are always working behind the scenes, even if our efforts are not apparent until we release news. Of course people often fear the worst when they do not hear from you, which is why I believed this would be a good time to address our shareholders.

One of the concerns I have heard has been about “Say It In Russian” (SIIR) and shareholders questioning why there has not been an update on this project. I can tell you that the producers, the director and the editor have been in the editing room around the clock adding the finishing touches on this project. A lot of people doubted that this project was of quality until they saw our trailer. We don’t want to put something out there unless it is of great quality. This film has exceptional photography that requires a full musical score. Since it was shot on Super 35mm, extra care and handling is required. It is the type of film you would expect a studio to produce, so it is something we have to work very carefully on. We have spent the time on this project that it has required, and I assure you the finished product will be worth the extra effort. We are very close to being done and will release news when it is done.

Here are some actual questions that I have received. I will answer them for you all publicly:

Q: Why has SIIR not been entered in film festivals?

A: We cannot enter the movie until it’s complete. It will be completed soon. We will submit it to festivals in the near future when it is complete. Movies are art, not science, and it is always better to focus on having the best-finished product possible, then to try and rush it sacrificing quality in the process. You only have one chance to make a first impression in this business.

Q: What happened to the Muller Media (MUME) dividends? I thought you said they were in the mail.

A: No, I never said they were in the mail. We must conduct an audit on MUME and file a registration statement with the SEC. This will take several months. You will get a prospectus in the mail. There is paperwork that must be filed out by you and then sent to the transfer agent. You will then be issued your shares.

Q: I have owned another company where we got our share dividends instantly. Why is this not the case with Imperia?

A: Our dividend will be non-restricted free trading shares. At the time this was initiated in the state of California, not Nevada or Delaware. Every state has its own restrictions and guidelines, which we must follow.

Q: I heard a rumor that the reverse split is back on the table. What’s the deal?

A: The reverse split was never off the table. We simply stated that we would not be moving forward with it at that time, but reserved the right to do so in the future. We did this because of the delays we faced in California. We have since had a shareholder meeting for which all shareholders of record were notified by mail. At that meeting we voted that we would change our corporate domicile from California to the more corporate friendly state of Nevada. For the sake of simplicity, we put the both the change of corporate domicile and the split to a vote. Notice was given by our transfer agent to all shareholders of record. The merger documents have been filed in Nevada, but we are still waiting for them to be filed in California to terminate our corporate status there. Once that is done, we will effectuate the reverse split.

Q: Why would you even consider a reverse split?

A: Our stock has remained at the same levels without any movement for a long time. We need a higher price per share in order to conduct two important business operations: 1) We plan in the next year to get on a higher stock quotation medium and need to satisfy certain requirements to do so; and 2) We need a higher share price in order to close financing deals for our upcoming projects.

Q: Why would you need a higher share price to attract investors?

A: Our private placements are based on a certain number of convertible restricted shares in return for a certain amount of cash investment. If our price per share is higher, those shares become worth more and thus become more attractive

Q: Why not just buy back shares?

A: Funding for our film projects must be prioritized, and we have projects that need to move forward now. We cannot wait until SIIR is completed, taken to the film festivals and sold. We have operations and projects that I believe will be highly profitable that we need to move forward with now. If circumstances permit in the future we may consider a share buy back.

Q: Why do you sell shares in exchange for finances, why don’t you take out a loan or some other way to raise money?

A: We are a public company and raise funds as all public companies do, through sale of shares. If we didn’t need public investment to raise funds, we would be a private company.

Q: Why do you never finish the projects you start?

A: We have finished every project we have worked on. We finished a full season of episodes of “Autograph” which played for a long time on the Colours television network. The program has been licensed to broadcast over the OlypUSat satellite system, and reaches virtually every market in the US. It was also included with our mobile content phone deal and will be available on cell phones in multiple countries around the world in the very near future.

Not only was my first movie “All That I Need” finished, it was released in theatres, which is very rare for an independent movie of that budget. We have a sales agent who is now in the process of approaching several distributors for a wide DVD release of this movie, and the film has already seen play in different foreign television markets. Soon SIIR will be finished as well. Many companies on the pink sheets never finish or even start any projects. We always complete our projects and that is our track record. All of our projects have a long life of revenue producing potential.

Q: Why is so much attention being given to your “pet project” “Never Submit” when it should be going to SIIR? You just put out two “fluff” PR’s about “Never Submit” and nothing about SIIR.

A: First of all, we don’t put out PR’s to explain that something is still being worked on. We will put out a PR when SIIR is done. We haven’t started filming “Never Submit” yet so very little money is being put into that project at this time. By comparison a lot more money is being spent on completing the postproduction of SIIR. We always inform our investors when there is news to tell. So no matter what project the news is for, we will release it.

I do not believe last weeks PR’s were fluff. In fact they were major updates of significance. The clothing deal is a perfect example. TapouT clothing is the industry leader in mixed martial arts (MMA) gear and apparel. It pulls in millions of dollars per year in revenue. The number one best selling sport related DVD’s in the country are MMA DVD’s. The UFC’s latest Pay Per Views have exceeded $30 million. Pride, an event based in Japan that is coming to America in October, has sold out 70,000 plus seated arenas with their live events. Those live gate numbers rival the Super bowl. We have been getting front-page press about these deals on most of the biggest MMA websites. Several corporate sponsors have contacted me about getting involved in this project, as have several of the top fighters. Just because many shareholders may not be knowledgeable about this emerging sport does not mean that this is not a highly profitable venture. And I am convinced that it will be. Microsoft, Coke and Burger King are just some of the sponsors who are now getting involved in MMA. I believe Imperia Entertainment is on the cutting edge with this project and the response has been phenomenal.

TapouT Magazine is the top exclusive MMA magazine that is aimed at our target demographic for this project. I believe a partnership with them on this project is not “fluff”. I have a very specific vision for this project, and I am steadfast in my belief for it, even if others cannot see or understand that vision. Sometimes being a leader means being bold and sticking with your instincts even in the face of opposition. In my opinion some of the best companies are those run by bold visionaries who follow their instincts. I believe it is always best to do something you are passionate about. I am very passionate in my belief for this project, and you will see that passion continue over the coming months. I believe that passion is an asset, not a liability. I also believe that having passion for something, breads passion from those around you.

“Failure is the path of least persistence.”

I want to thank all Imperia shareholders for your continued support of this company.

All the best,

James Hergott

President, Imperia Entertainment