Image Entertainment Announces Removal of ‘Going Concern’ Paragraph in Audit Report

Image Entertainment, Inc. (OTCQB: DISK) announced that its independent registered public accounting firm has reissued its audit report excluding the going concern explanatory paragraph which had previously been included in its original audit report dated June 29, 2010. This reissued report was included within the Form 10-K/A filed with the Securities and Exchange Commission on Thursday, July 29, 2010.

The auditors’ decision was based on the Company successfully extending the maturity date of the Company’s revolving credit facility with Wells Fargo Capital Finance, LLC (successor by merger to Wachovia Capital Finance Corporation) from October 25, 2010 to July 31, 2011 and the continuing effects of the Company’s recent recapitalization and improved liquidity.

"We are quite proud of what we have accomplished in only seven months and look forward to the additional opportunities available to us as we continue to move in this positive direction,” said Ted Green, Chairman and Chief Executive Officer.

"Our financial and corporate reorganizations have now positioned us to further build the Company organically and through acquisitions,” said John Avagliano, Chief Operating Officer and Chief Financial Officer.

About Image Entertainment:

Image Entertainment, Inc. (OTCQB: DISK) is a leading independent licensee and distributor of entertainment programming in North America, with approximately 3,000 exclusive DVD titles and approximately 340 exclusive CD titles in domestic release and more than 450 programs internationally via sublicense agreements. For many of its titles, the Company has exclusive audio and broadcast rights and has digital download rights to over 2,100 video programs and approximately 400 audio titles containing more than 5,600 individual tracks. The Company is headquartered in Chatsworth, California. For more information about Image Entertainment, Inc., please go to www.image-entertainment.com.

Forward-Looking Statements:

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to, among other things, the availability of the Company’s revolving credit facility and the Company’s goals and business strategy. All forward-looking statements are based on management’s current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations.

These factors include, but are not limited to, (a) the Company's ability to borrow against the its revolving line of credit, which may not have any or sufficient availability for the Company to acquire desirable programming and to operate its business, (b) the Company's history of losses and the potential of additional losses, (c) the Company's ability obtain replacement financing upon the expiration of its revolving line of credit on July 31, 2011 on acceptable terms or at all, (d) the Company's limited working capital and limited access to financing, (e) changing public and consumer taste and changes in customer spending patterns, which may among other things, affect the entertainment and consumer products business generally, (f) the effect of the ongoing current economic slowdown on the willingness of consumers and retailers to purchase the Company's products, (g) further sales or dilution of the Company’s equity, which may adversely affect the market price of the Company’s common stock, (h) the exertion of influence of the Company's largest stockholders over the Company's future direction, (i) increased competitive pressures, both domestically and internationally, which may, among other things, affect the performance of the Company's business operations and profit margins, (j) changes in U.S. and global financial and equity markets, including market disruptions and significant interest rate fluctuations, which may impede the Company's access to, or increase the cost of, external financing for its operations and investments and (k) risks associated with the Company's strategy of pursuing acquisitions, joint ventures and partnering arrangements.

For further details and a discussion of these and other risks and uncertainties, see "Risk Factors” in the Company’s Amendment No. 1 to Annual Report on Form 10-K/A for the year ended March 31, 2010. Many of the factors that will determine the outcome of the subject matter of this press release are beyond Image Entertainment’s ability to control or predict. Unless otherwise required by law, the Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.