Interactive Motorsports' Perfect Line Subsidiary Reports First Positive Cash Flow from Operations

INDIANAPOLIS--May 1, 20047, 2004--Interactive Motorsports and Entertainment Corporation reported today in its 10-QSB SEC filing that its wholly owned subsidiary, Perfect Line, Inc., showed a positive cash flow from operations for the first time since the company was formed in August of 2002. The announcement came from William R. Donaldson, Chairman and CEO of Interactive Motorsports and Entertainment Corp. (OTCBB:IMTS).

For the three months ended March 31, 2004, the Company showed a net loss of $520,377, a reduction of $236,059 from losses reported during the same period one year ago, and net cash provided by operations of $23,109 as compared to a net cash loss of $654,179 for the same period one year ago. Log on to www.sec.gov for the full report.

"Our improved first quarter financials are due primarily to the restructuring of the company's business model from company owned and operated, mall-based racing centers to revenue share racing centers, mobile leases and simulator equipment sales," said Donaldson. "We are expecting continued financial improvement as we execute the revised business plan."

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Forward-looking statements

Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, and the business prospects of Interactive Motorsports and Entertainment Corporation, are subject to a number of risks and uncertainties that may cause the Company's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, the outlook of the economy and the effect on future revenues, access to and cost of capital, uncertainty of new product development, competition, and dependence on updated technology and licenses and leases.