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SECURITIES EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended April 30, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-09923

IMPERIAL PETROLEUM, INC.

(Exact name of registrant as specified in its charter)


Nevada		95-3386019
(State or other jurisdiction of incorporation or organization)		(IRS Employer identification No.)

101 NW 1^st Street, Suite 213 Evansville, Indiana		47708
		(Zip Code)

Registrant’s telephone number, including area code (812) 867-1433

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ¨ No x

On June 11, 2012, there were 61,338,501 shares of the Registrant’s common stock issued and outstanding.

Cautionary Note Regarding Forward-Looking Statements

As used herein, unless we otherwise specify, the terms the “Company,” “we,” “us” and “our” means Imperial Petroleum, Inc.

This Report contains forward-looking statements concerning our financial condition, results of operations and business, including, without limitation, statements pertaining to:

•

The development of our existing oil and gas properties and leases;

•

Implementing aspects of our business plans;

•

Financing goals and plans;

•

Our existing cash and whether and how long these funds will be sufficient to fund our operations; and

•

Our raising of additional capital through future equity financings.

These and other forward-looking statements are primarily in the section entitled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations.” Generally, you can identify these statements because they include phrases such as “anticipates,” “believes,” “expects,” “future,” “intends,” “plans,” and similar terms. These statements are only predictions. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy, and actual results may differ materially from those we anticipated due to a number of uncertainties, many of which are unforeseen. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Report on Form 10-Q. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including those stated in this Report. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

We believe it is important to communicate our expectations to our investors. There may be events in the future, however, that we are unable to predict accurately or over which we have no control. Cautionary language in this Report provides examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements.

Explanatory Note (1.):

Explanatory Note (2.):

On May 25, 2012, the Company received a subpoena for the period of January 1, 2010 to the present, as part of a fact-finding inquiry from the Division of Enforcement of the Securities and Exchange Commission (“SEC”). The subpoena requires us to produce numerous documents related to the Company and our wholly-owned subsidiary, E-Biofuels, LLC. The subpoena demands the production of documents related to the operations, accounting, business practices, purchase and sales of biodiesel, tax credits and incentives from any state, federal or agency, the production process of the biodiesel, including, the purchase of any products related to the manufacturing of biodiesel, financing, stock issuances, executives and employees. The purpose of the subpoena is to determine whether any federal laws have been violated.

In addition, on May 24, 2012, the Company and E-Biofuels, LLC, received subpoenas in connection with a Grand Jury investigation into the activities of the Company and E-Biofuels, LLC, for the period of January 1, 2006 to the present. In conjunction with the Grand Jury investigation, on May 24, 2012, the United States District Court of the Southern District of Indiana authorized search warrants to obtain records, documents and evidence related to the ongoing investigation. The search warrants were executed on May 24, 2012.

The Company intends to fully cooperate with the investigations. Currently, the Company cannot estimate the ultimate financial impact, if any, resulting from the investigations. In the event that violations of state or federal are determined, such determination could have a material negative impact on the operations of the Company. In addition, if it is determined that the Company’s subsidiary, E-biofuels, LLC, received improper tax credits for the sale of biodiesel, then the results could have a material impact on the Company. (See Form 8-K dated May 25, 2012 incorporated herein by reference).

Investors are cautioned that the events described above are material to the operations of the Company and that the Company cannot, with any degree of certainty, estimate or predict the impact that these events may have on the future of the Company, its operations or its share price.

IMPERIAL PETROLEUM, INC.

Index to Form 10-Q for the Quarterly Period

Ended April 30, 2012


		Page

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.		5

Condensed Consolidated Balance Sheets as of July 31, 2011 and April 30, 2012			6

Condensed Consolidated Statements of Operations for the three months and nine months ended April 30, 2012 and 2011			8

Condensed Consolidated Statements of Cash Flows for the nine months ended April 30, 2012 and 2011			9

Notes to Condensed Consolidated Financial Statements			10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		26

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		28

Item 4.	Controls and Procedures		28

PART II – OTHER INFORMATION

The information called for by Item 1. Legal Proceedings, Item 1A. Risk Factors, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, Item 3. Defaults Upon Senior Securities, Item 4. Submission of Matters to a Vote of Security Holders and Item 5. Other Information are not applicable			29-32

Item 6.	Exhibits		32

SIGNATURES			33

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

We have prepared the condensed consolidated financial statements included herein without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such SEC rules and regulations. In our opinion, the accompanying statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position of our company as of April 30, 2012, and its results of operations for the three and nine month periods ended April 30, 2012 and 2011 and its cash flows for the nine month period ended April 30, 2012 and 2011. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and the notes thereto filed as a part of our annual report on Form 10-K.

Explanatory Note (1.):

Explanatory Note (2.):

IMPERIAL PETROLEUM, INC.

CONDENSED CONSOLIDATED BALANCE SHEET


	April 30, 2012			July 31, 2011
ASSETS
Current Assets:
Cash	$	20,190		$	900,883
Accounts Receivable		4,157			1,549,154
Accounts Receivable (Government Incentives)		0			3,344,919
Inventory		0			1,293,171
Non-compete Agreement, net of accumulated amortization of $235,750		825,125			—
Prepaid expenses (current portion)		28,106			910,407
Loan Receivable (related party)		0			6,440
Other Current Assets		10,316			157,166

Total current assets		887,894			8,162,140
Property, plant and equipment:
Mining claims, options, and development costs		0			74,500
Fixed Assets		700,990			11,969,451
Land		242,000			515,900
Oil and gas properties (full cost method)		0			4,690,765

		942,990			17,250,616
Less: accumulated depreciation, depletion and amortization		(0	)		(3,092,503	)

Net property, plant and equipment		942,990			14,158,113
Other assets:
License agreements, net of accumulated amortization.		246,876			442,756
Loan Receivable (related party)		0			332,989
Deposits		10,850			—
Prepaid expenses		0			1,438,722

Total Other Assets		257,726			2,214,467

Total assets	$	2,088,610		$	24,534,720


	April 30, 2012			July 31, 2011
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	981,225		$	1,307,654
Accrued expenses		1,913,181			5,183,849
Customer Deposit Liability		120,820			2,901,054
Notes payable – current portion		8,318,334			11,162,479
Notes payable – related parties		587,061			540,286

Total current liabilities		11,920,621			21,095,322
Long-term liabilities:
Mortgage Note		0			1,525,641
Notes Payable, Other		0			1,009,602
Asset retirement obligation		0			472,855

Total long-term liabilities		0			3,008,098
STOCKHOLDERS’ EQUITY:
Common stock of $.006 par value; authorized 150,000,000 shares; 42,068,923 and 34,905,136 issued and outstanding at April 30, 2012 and July 31,2011, respectively		252,415			209,431
Common stock, owed but not issued – 19,217,340 and 100,000 shares at April 30, 2012 and July 31, 2011, respectively		115,304			600
Paid-in capital		20,638,860			21,977,786
Retained deficit		(28,838,590	)		(21,756,517	)
Treasury Stock, 2,000,000 shares at April 30, 2012		(2,000,000	)		—

Total stockholders’ equity		(9,832,011	)		431,300

Total liabilities and stockholders’ equity		2,088,610			24,534,720

See Notes to Condensed Consolidated Financial Statements

IMPERIAL PETROLEUM, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)


	Three Months Ending						Nine Months Ending
	04/30/12			04/30/11			04/30/12			04/30/11
Revenue
Oil and gas revenue	$	1,515			64,684			135,290			168,863
Other revenue		500			0			14,250			0

Total operating income	$	2,015			64,684			149,540			168,863

Costs and Expenses:
Oil and Gas expenses	$	0			310,191			424,314			664,234
General and administrative		609,313			567,194			4,102,162			989,718
Impairment		267,255			0			267,255			0
Depreciation, depletion and amort.		3,124			7,622			8,720			28,027

Total costs and expenses	$	879,692			885,007			4,802,451			1,681,979

Net (loss) from continuing operations	$	(877,677	)		(820,323	)		(4,652,911	)		(1,513,116	)

Other income and (expense)
Interest expense		(2,268,300	)		(119,068	)		(2,470,641	)		(356,320	)
Gain on sale of assets		0			0			(3,767,827	)		0
Gain on Bankruptcy		5,369,281			0			5,369,281			0
Other Income/expense		0			0			306,837			500,000

Other
Total other income/(expense)		3,100,981			(119,068	)		(562,350	)		143,680

Net gain/ loss before income taxes	$	2,223,304			(939,391	)		(5,215,261	)		(1,369,436	)
Provision for income taxes

Current		0			0			0			0
Deferred		0			0			0			0

Total benefit from income taxes		0			0			0			0

Net income/loss from continuing operations	$	2,223,304			(939,391	)		(5,215,261	)		(1,369,436	)

Net income/loss from discontinued operations	$	(1,142,692	)		3,307,559			(1,866,812	)		4,171,156

Net Income (loss)		1,080,612			2,368,168			(7,082,073	)		2,801,720

Net Income(loss) per share from continuing operations	$	0.054			(0.035	)		(0.132	)		(0.056	)

Net Income(loss) per share from discontinued operations	$	(0.028	)		0.125			(0.047	)		0.172

Weighted Average Shares – basic and diluted		40,937,616			26,365,777			39,466,518			24,222,486

See Notes to Condensed Consolidated Financial Statements

IMPERIAL PETROLEUM, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)


	Nine Months Ending
	4/30/12			4/30/11
Operating activities:
Net income/(loss)	$	(7,082,073	)		2,801,720
Net income/(loss) discontinued operations		1,866,812			(4,171,156	)
Adjustments to reconcile net income (loss) to net cash (used) in operating activities
Depreciation, depletion and amortization		8,720			28,027
Loss on sale of fixed assets		3,767,827			0
Gain on bankruptcy of subsidiary		(5,369,281	)		0
Gain on valuation of derivative liability		(306,932	)		0
Gain on sale of licensing rights		0			(500,000	)
Stock and options issued for compensation		0			363,328
Stock and warrants issued for services		60,900			196,572
Stock and warrants issued for finance changes		2,722,753			0
Amortization of stock and options issued for services		2,470,035			131,980
Impairment expense		267,255			0
Changes in operating assets and liabilities:
Change in accounts receivable		451,115			(33,520	)
Change in prepaid expenses		1,097,432			0
Change in other assets		(10,666	)		30,287
Change in accounts payable		(111,258	)		494,768
Change in accrued expense		(28,381	)		748,488
Changes in customer deposits		0			(162,031	)

Net cash provided by (used in) operating activities-continued		(195,741	)		(71,537	)
Net cash provided by (used in) operating activities-discontinued		2,210,112			2,069,767

Cash provided (used by) operating activities		2,014,371			1,998,230

Cash flow from Investing activities:
Purchases and improvements to fixed assets		(352,752	)		0
Proceeds from sale of fixed assets		100			275,000

Net cash provided by (used in) investing activities-continuing		(352,652	)		275,000
Net cash provided by (used in) investing activities-discontinued		240,438			(413,027	)

Cash provided by (used in) investing activities		(112,214	)		(138,027	)

Financing activities:
Purchase of treasury stock		(2,000,000	)		0
Sale of common stock, net of expenses		2,921,576			0
Proceeds (payments) on notes payable-net		(274,881	)		(161,204	)

Net cash provided by (used in) financing activities-continuing		646,695			(161,204	)
Net cash provided by (used in) financing activities-discontinued		(3,429,545	)		(660,240	)

Net cash provided by (used in) financing activities		(2,782,850	)		(821,444	)

Net (decrease) increase in cash		(880,693	)		1,038,759
Cash and cash equivalents, beginning of period		900,883			28,525

Cash and cash equivalents, end of period	$	20,190			1,067,284

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	1,446,640			558,441

Income taxes	$	0			0

Non-cash financing activities:
Stock and warrants issued for prepaid expenses	$	1,066,817			0
Stock and options issued for compensation	$	0			363,328

Stock and warrants issued for services	$	60,900			196,572

Stock and warrants issued for financing charges	$	2,722,753			0

Options issued for notes and accounts payable	$	0			60,000

Equipment acquired with notes payable	$	0			479,424

Equipment acquired with stock	$	0			1,244,168

Note payable issued for pre-paid non-compete agreement	$	1,200,000			0

See Notes to Condensed Consolidated Financial Statements

IMPERIAL PETROLEUM, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(1) GENERAL

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included. Operating results for the periods presented are not necessarily indicative of the results, which may be expected for the year ending July 31, 2012. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended July 31, 2011.

Explanatory Note (1.):

Explanatory Note (2.):

Organization

Imperial Petroleum, Inc. (the “Company”), a publicly held corporation, was organized under the laws of the state of Nevada.

The Company’s principal business consists of oil and gas exploration and production in the United States. The Company is developing a newly formed wholly-owned subsidiary, Arrakis Oil Recovery, LLC for the recovery of heavy oil from mineable oil sands in the U.S. and has completed a Joint Venture arrangement with Peak Oil Sands, LLC to begin a project in Kentucky. The Company owns a royalty interest in the use of the oil sands technology in Canada and certain other foreign countries. From May 24, 2010 through April 4, 2012, the Company operated a biodiesel facility located in Middletown, Indiana under its wholly-owned subsidiary, e-Biofuels, LLC. E-Biofuels filed for protection from creditors under Chapter 7 of the U.S. Bankruptcy Code on April 4, 2012 and as a result has discontinued its operations.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Ridgepointe Mining Company, Phoenix Metals, Inc., dba the Imperial Chemical Company, Hoosier Biodiesel Company (formerly Global-Imperial Joint Venture, Inc.) and Arrakis Oil Recovery, LLC. All significant inter-company accounts and transactions have been eliminated in consolidation. The historical operations of e-Biofuels, LLC are reflected as discontinued operations.

Use of Estimates

The presentation of financial statements in conformity with generally accepted U.S. accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are carried on a gross basis, with no discounting, less the allowance for doubtful accounts. We estimate the allowance for doubtful accounts based on existing economic conditions, the financial conditions of the customers, and the amount and the age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted. There is no collateral held for accounts receivable. The allowance for doubtful accounts was $0 and $0 as of April 30, 2012 and July 31, 2011, respectively after elimination of e-Biofuels operations. Bad debt expense for the nine months ended April 30, 2012 was $0. Bad debt expense for the year ended July 31, 2012, 2011, and 2010 was $0, $0 and $0, respectively, after the elimination of e-Biofuels operations. (For the discontinued biofuels operations, the allowance for doubtful accounts was $44,430 as of July 31, 2011. Bad debt expense for the year ended July 31, 2011, 2010, and 2009 was $44,430, $25,001 and $0, respectively.)

Fair Value of Financial Instruments

Fair values of cash and cash equivalents, investments and short-term debt approximate their carrying values due to the short period of time to maturity. Fair values of long-term debt are based on quoted market prices or pricing models using current market rates, which approximate carrying values. See Note 12 for further details.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and accounts receivable.

The Company’s cash is deposited in one financial institution. Cash and certificates of deposit at banks are insured by the FDIC up to $250,000. At times, the balances in these accounts may be in excess of federally insured limits. As of April 30, 2012, the Company had no deposits in excess of federally insured limits.

The Company currently operates in the oil and natural gas industry. The concentration of credit risk in a single industry affects the Company’s overall exposure to credit risk because customers may be similarly affected by changes in economic and other conditions. During the quarter ended April 30, 2012, the Company had sales of oil and gas from non-operated properties only. The Company’s major purchasers of its discontinued biodiesel operations were 39% to Element Renewable Energy; 33% to Fusion Renewable and 19% to Ultra Green Energy Services. As of April 30, 2012, the Company’s accounts receivable for oil and gas operations were $4,157. During the year ended July 31, 2011, the Company’s major purchasers of its biodiesel from its discontinued biodiesel operations were 36.3% to Fusion, 24.5% to Element, and 17.1% to Pilot.

Revenue Recognition

The Company derives revenue from sales of oil and natural gas and previously from biodiesel products. The Company recognizes revenue when a formal arrangement exists, the price is fixed or determinable, all obligations have been performed pursuant to the terms of the formal arrangement, and collectability is reasonably assured. The Company also derives revenues from government incentive programs relating to biodiesel production. These revenues are recognized when the amount of the incentive is reasonably determinable and collection is reasonably assured.

Oil and Gas Properties

The Company follows the full cost method of accounting for oil and gas properties. Accordingly, all costs associated with acquisition, exploration, and development of oil and gas reserves, including directly related overhead costs, are capitalized. All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit-of-production method using estimates of proved reserves. Investments in unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined or until impairment occurs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized.

In addition, the capitalized costs are subject to a “ceiling test,” which basically limits such costs to the aggregate of the “estimated present value,” discounted at a 10-percent interest rate of future net revenues from proved reserves, based on current economic and operating conditions, plus the lower of cost or fair market value of unproved properties.

Sales of proved and unproved properties are accounted for as adjustments of capitalized costs with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in income.

See Note 13 for additional information on Oil and Gas Properties.

Other Property and Equipment

Property and equipment are stated at cost. Depreciation is computed by the straight-line method over the estimated useful lives of assets. Expenditures that significantly increase values or extend useful lives are capitalized. Expenditures for maintenance and repairs are charged to expenses as incurred. Upon sale or retirement of property and equipment, the cost and related accumulated depreciation and depletion are eliminated from the respective accounts and the resulting gain or loss is included in current earnings. The property and equipment owned by the Company as of April 30, 2012 has not been depreciated because it has not been placed in service yet.

Mining exploration costs are expensed as incurred. Development costs are capitalized. Depletion of capitalized mining costs will be calculated on the units of production method based upon current production and reserve estimates when placed in service. During the nine months ended April 30, 2012, management determined that $74,500 of mining claims, options, and development costs had experienced a significant decline in valuation. The full amount of $74,500 was impaired and taken as impairment expense during the quarter ended April 30, 2012.

Inventories

Inventories are stated at the lower of cost or market. The inventory associated with the discontinued biodiesel business as of April 30, 2012 and July 31, 2011 was $0 and $1,293,171, respectively. All inventory pertains to our discontinued operations at e-biofuels. The balance of the inventory as of July 31, 2011 was made up of $641,331 in raw materials and $651,840 in finished goods. There is no allowance for obsolete inventory as of April 30, 2012 or July 31, 2011.

Long-Lived Assets

Long-lived assets to be held and used or disposed of other than by sale are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When required, impairment losses on assets to be held and used or disposed of other than by sale are recognized based on the fair value of the asset. Long-lived assets to be disposed of by sale are reported at the lower of its carrying amount of fair value less cost to sell.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of change in tax rates is recognized in income in the period that includes the enactment date.

Earnings and Loss Per Common Share

Earnings (Loss) per common share-basic are computed by dividing reported net income (loss) by the weighted average common shares outstanding. Except where the result would be anti-dilutive, net income (loss) per common share-diluted has been computed assuming the exercise of stock warrants and stock options that are in-the-money as of period-end.

Reclassification

Certain reclassifications have been made to prior periods to conform to the current presentation.

Change of Control

In November 2011, the Company accepted the resignation of Jeffrey T. Wilson and Aaron M. Wilson from its Board of Directors. Mr. Jeffrey Wilson was the Chairman and President of the Company and resigned due to health issues. The original intent of the Company was to retain Mr. Wilson’s services as a technical consultant; however, the Company and Mr. Wilson were unable to reach a consulting agreement and Mr. Wilson was terminated as a consultant effective December 15, 2012.

In November, 2011, Mr. Aaron Wilson resigned to allow for the appointment of Mr. Tim Jones, who was also promoted to Chief Financial Officer and President of the Company’s e-biofuels, LLC subsidiary, to the Board. Mr. Aaron Wilson retained his title as President of the Company’s Arrakis Oil Recovery, LLC subsidiary.

In November, 2011, the Board appointed Mr. John Ryer, a director of the Company, as its new Chief Executive Officer and President. In January 2011, Mr. Ryer resigned from the Board of Directors and as the Chief Executive Officer due to personal reasons. There were no disputes between Mr. Ryer and management of the Company or with its auditors. Mr. Robert Willmann was approved by the Board to replace Mr. Ryer as a Director until the next regular shareholders meeting.

In December 2011, Mr. Ben Campbell resigned as a director of the Company.

In December 2011, Mr. Greg Thagard was appointed to the position of Chairman of the Board.

In January 2012, Mr. Tim Jones was approved as interim CEO and President of the Company.

In February 2012, the Company accepted the resignation of Mr. Robert Willmann from its Board of Directors. Mr. Willmann resigned due to time constraints and had no disagreements with the Management of the Company or with its independent accountants.

In February 2012, Mr. Aaron Wilson was terminated from his position as President of Arrakis Oil Recovery, LLC due to cash constraints.

On April 4, 2012, Mr. Tim Jones resigned as Managing Member of e-Biofuels and as President and a member of the Board of Imperial and all of its subsidiaries.

On April 5, 2012, Mr. Jeffrey T. Wilson was appointed as President of Imperial and all of its subsidiaries and as Chief Financial Officer of the Company and as a member of the Board of Directors.

On May 8, 2012, Mr. Sam Wernli was appointed to the Board of Directors of the Company and as the Executive Vice President of Imperial Chemical Company, a wholly-owned subsidiary of the Company.

Recent Accounting Pronouncements

The FASB issued ASC subtopic 855-10 (formerly SFAS 165 “ Subsequent Events ”), incorporating guidance on subsequent events into authoritative accounting literature and clarifying the time following the balance sheet date which management reviewed for events and transactions that may require disclosure in the financial statements. The Company has adopted this standard. The standard increased our disclosure by requiring disclosure reviewing subsequent events. ASC 855-10 is included in the “Subsequent Events” accounting guidance.

In June 2011, the FASB issued ASU 2011-05 Comprehensive Income (Topic 220 - Presentation of Comprehensive Income). Under this amendment, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This Update eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments in this Update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. For public entities, the amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. We are evaluating the provisions of ASU 2011-05 and do not believe it will have a material impact on the Company’s consolidated financial statements.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU represents the converged guidance of the FASB and the IASB

(the Boards) on fair value measurement. The collective efforts of the Boards and their staffs, reflected in ASU 2011-04, have resulted in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term “fair value.” The Boards have concluded the common requirements will result in greater comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and IFRSs. The amendments to the FASB Accounting Standards Codification ™ (Codification) in this ASU are to be applied prospectively. For public entities, the amendments are effective during interim and annual periods beginning after December 15, 2011. Early application is not permitted. We are evaluating the provisions of ASU 2011-04 and do not believe it will have a material impact on the Company’s consolidated financial statements.

In June 2011, the FASB issued Presentation of Comprehensive Income under ASU 2011-05 or ASU 2011-05. ASU 2011-05 requires the presentation of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. ASU 2011-05 will be effective for the Company’s first quarter of fiscal year 2013. The adoption of ASU 2011-05 may require a change in the presentation of the Company’s comprehensive income from the statement of capital shares and equities to the presentation of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The amendments in ASU 2011-05 are to be applied retrospectively. The adoption of ASU 2011-05 is not expected to have a material effect on the Company’s condensed financial statements.

In September 2011, the FASB issued Testing Goodwill for Impairment under ASU 2011-08, which is intended to reduce the cost and complexity of the annual goodwill impairment test by providing entities with the option of performing a qualitative assessment to determine whether impairment testing is necessary. The revised standard will be effective for annual and interim goodwill impairment tests performed beginning in the first quarter of fiscal year 2012, with early adoption permitted under certain circumstances. The Company is currently evaluating options related to early adoption.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future financial statements

International Financial Reporting Standards

In November 2008, the Securities and Exchange Commission (“SEC”) issued for comment a proposed roadmap regarding potential use of financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Under the proposed roadmap, the Company would be required to prepare financial statements in accordance with IFRS in fiscal year 2014, including comparative information also prepared under IFRS for fiscal 2013 and 2012. The Company is currently assessing the potential impact of IFRS on its financial statements and will continue to follow the proposed roadmap for future developments.

(2.) GOING CONCERN

Financial Condition

The Company’s financial statements for the three months and nine months ended April 30, 2012 have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company had a net loss for the nine months ended April 30, 2012 of $7,082,073 compared to net income for the nine months ended April 30, 2011 of $2,801,720. As of April 30, 2012, the Company has $20,190 of cash on hand and a working capital deficit of $11,032,727. On April 4, 2012, the Company’s wholly-owned subsidiary, e-Biofuels, LLC filed a voluntary petition for protection from creditors under Chapter 7 of Title 11 of the Bankruptcy Code with the United States Bankruptcy Court for the Southern District of Indiana The Company’s e-Biofuels subsidiary had $7,365,167 of debt mature on January 31, 2012 as discussed in Note 5 for which the Company is a guarantor. The Company’s working capital deficiency in conjunction with the Company’s history of operating losses raises doubt regarding the Company’s ability to continue as a going concern.

Management Plans to Continue as a Going Concern

The Company’s ability to continue as a going concern is highly dependent upon (i) management’s ability to establish operating cash flows through its joint venture with Peak Oil Sands LLC (ii) the ability to obtain the capital for working capital (iii.) the ability of the Company to settle litigation with the bank as a result of the bankruptcy filing of e-Biofuels and (iv.) the outcome of certain investigations being conducted into the activities of e-Biofuels. Management believes that its oil sand joint venture will begin operations during the first quarter of fiscal 2013 and will provide sufficient cash flow when operational to support the Company’s immediate needs. Until the sale of the assets of e-Biofuels, LLC, it is impossible to know the extent of the possible liabilities associated with the claims of First Merchants Bank against the Company and to ascertain the ability of the Company to defend such claims. The Company does not know the time-frame for completion of the current investigations into the activities of e-Biofuels or any impacts those investigations may have upon the Company.

3. ACCOUNTING POLICIES

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring items) considered necessary for a fair presentation have been included.

4. NON-COMPETE AGREEMENT

In June of 2011, the Company issued 300,000 shares and 500,000 warrants for consulting services. The shares were valued at market price of $1.49 for $447,000. The warrants had a term of five years and a strike price of $1.00 per share. The warrants were valued at $704,706 using the Black Scholes valuation method using the following factors; risk free interest rate of .85%, strike prices of $1.00, market price of $1.49, volatility of 163% , and no yield. The total value of the stock and warrants, $1,151,706, was capitalized as a prepaid expense and will be amortized over the five-year period of the consulting agreement. As of July 31, 2011, $28,793 has been expensed and $1,122,914 remained in prepaid expenses. During the quarter ended October 31, 2011, this consulting agreement was terminated and the remaining $1,122,914 was expensed. As of October 31, 2011, $0 remained in prepaid expenses related to this agreement.

Soon after termination of the consulting agreement, the consultant began to demand payment of promised salaries and unpaid commissions. As the consultant had significant relationships with multiple customers and vendors of the Company and as a major supplier of the Company on the biodiesel side began to demand that the consultant be paid what was owed, the Company agreed to a 1-year Severance, Confidentiality and Nondisclosure Agreement with the former consultant. In order to get the 1-year agreement in place, the major supplier agreed to loan the money required to finalize the Agreement to the Company (see next paragraph). On December 2, 2011, the Company finalized the Severance, Confidentiality and Nondisclosure agreement with the former consultant for $1,237,500 in cash and 300,000 shares of common stock. The shares of common stock were valued at $0.59, the market price on the day the agreement was made for total value of $177,000. The total amount associated with the agreement, $1,414,500, was set up as a Non-compete Agreement asset and is currently being amortized over the 12 month term of the agreement. As of April 30, 2012, $589,375of the costs associated with the Agreement have been expensed and $825,125 remain as a current asset.

In December 2011, the Company entered into a $1,200,000 unsecured promissory note with JAK Financial LLC to fund the payment of a Severance, Confidentiality and Nondisclosure Agreement with a former consultant. The original amount of the note was $1,200,000 and the effective interest rate on the note was 96.5%. The note was to be paid with 60 daily payments of $23,000 beginning on December 20, 2011 and continuing for the next 60 business days. The Company made 16 such payments before it was no longer able to do so. The balance due as of April 30, 2012 was $933,167 with accrued interest of $94,534. The Company is currently in default on this note.

5. NOTES PAYABLE

The Company in the course of funding its oil and gas and other activities, from time to time, enters into private notes primarily from its major shareholders.


	April 30, 2012		July 31, 2011
John Ryer, secured promissory note, dated December 8, 2010, due July 25, 2011, interest at 10%	$	0	$	20,000
William Stratton, secured by 10% of proceeds at Coquille Bay, dated June 6, 2011 due July 31, 2012, interest at 8%		0		50,000
JAK Financial LLC, unsecured promissory note, dated December 7, 2011 due in 60 equal daily installments of $23,000, currently in default.		933,167		0
Various short-term working capital loans		20,000		0
Guarantee of Term Notes Payable to a Bank, debt due 1/31/12 (currently in default), monthly interest due monthly at 8,9 and 12%. Collateralized by the assets of e-biofuels and subject to recovery under the e-Biofuels Chapter 7 bankruptcy filing.		7,365,167		9,923,335

Total		8,318,334		9,993,335

Less: current portion		8,318,334		9,993,335

Long-term notes payable		0		0

Current maturities of notes payable are as follows:


7/31/12		8,318,334
7/31/13		0
7/31/14		0
7/31/15		0
7/31/16		0
Thereafter		0

Total	$	8,318,334

Notes Payable – Related Party


	April 30, 2012		July 31, 2011
Officer—9.0% demand note		587,061		540,286
Employee—8% demand note		0		0

Total		587,061		540,286

Less Current		587,061		540,286

Long Term		0		0

DEBT

As of April 30, 2012, the Company currently has no debt facilities in place other than as noted in the tables above.

In connection with the acquisition of e-biofuels, LLC as a wholly-owned subsidiary, the Company guaranteed senior debt under the First Merchants Bank, N.A. Term Loans. The following is a description of the terms and conditions of each facility as of January 31, 2012:

First Merchants Bank, N.A. Term Loans: The Company, through its e-Biofuels subsidiary, had three term loans with First Merchants Bank: Term Loan A has a balance due of $1,535,283 and an interest rate of 8%; Term Loan B has a balance due of $2,764,842 with an interest rate of 9%; and Term Loan C has a balance due of $3,065,042 with an interest rate of 12%. The Term loans expired on January 31, 2012, are currently in default, and are secured by all of the assets of e-biofuels; the personal guarantees of Craig Ducey, Chad Ducey, Brian Carmichael and Bruce Carmichael and by a corporate guarantee of the Company. As a result of the bankruptcy filing of e-Biofuels, the bank has filed suit against the Company and the other guarantors in connection with defaults on the notes. (See Litigation). Due to the guarantee, the Company has moved the debt from its bankrupt subsidiary’s books to the books of the parent company. A resulting reduction in the paid in capital account was taken in the amount of the payable balance.

JAK Financial: In December 2011, the Company entered into an unsecured promissory note with JAK Financial LLC to fund the payment of a Severance, Confidentiality and Nondisclosure Agreement with a former consultant (See Note 4 for further details). The original amount of the note was $1,200,000 and the effective interest rate on the note was 96.5%. The note was to be paid with 60 daily payments of $23,000 beginning on December 20, 2011 and continuing for the next 60 business days. The Company made 16 such payments before it was no longer able to do so. The balance due as of April 30, 2012 was $933,167 with accrued interest of $94,534. The Company is currently in default on this note.

Other Debt: The Company has private notes and debt with its President that totals $587,061 as of April 30, 2012. Generally this debt is unsecured and bear market interest rates and flexible terms. The Company also has one short-term working capital loan in the amount of $20,000 as of April 30, 2012.

Interest expense and financing charges relating to the above notes was $2,470,641 and $356,320 for the nine months ended April 30, 2012 and 2011, respectively. See Note 9 for additional information on financing charges included in interest expense.

6. RELATED PARTY TRANSACTIONS

The Company has entered into transactions with its chief executive officer, Jeffrey T. Wilson and a Company owned and controlled by Mr. Wilson, H.N. Corporation. The amount outstanding as of April 30, 2012 owed to HN Corporation was $90,000 and such amounts are included in the totals due Mr. Wilson. The Company had accrued salaries payable to Mr. Wilson of $371,537 as of April 30, 2012 and July 31, 2011.

The Company owes its Chief Executive Officer, Jeffrey T. Wilson, as a result of loans to the Company, a total of $587,061 in principal as of April 30, 2012 (including $90,000 owed to HN Corporation as discussed above). Interest rates on the loans are fixed at 9%. Accrued interest as of April 30, 2012 relating to these loans is $131,287.

Mr. Thagard, a director of the Company and Chairman of the Board, has received compensation as a consultant to the Company and its subsidiaries in the fiscal year ending July 31, 2011 in the amounts of $84,000. In November of 2010, Mr. Thagard used $4,000 of notes payable and $56,000 of accounts payable due him to exercise options that he held. See note 9 for further details. Mr. Thagard settled his accounts payable due him in the amount of $154,500 in exchange for restricted common stock in an amount of 259,542 shares and $20,000 in cash on June 21, 2011.

Mr. Craig Ducey, former president of e-biofuels, is part owner along with Mr. Chad Ducey of Werks Management, a company that provided management services to e-biofuels. Prior to February 2012, Werks Management received a contracted amount per month in consulting

fees for such services. The contracted amount was $70,000 per month through October of 2010, $60,000 per month from November of 2010 to April of 2011, and $62,833 per month from May of 2011 to January of 2012. Mr. Craig Ducey and Mr. Chad Ducey provided management services for e-biofuels through January 31, 2012. The Company recorded expenses to Werks Management in the total of $758,500 for the year ended July 31, 2011 and $377,000 for the nine months ended April 20, 2012. The Company owed Werks Management $0 and $90,238 as of April 30, 2012 and July 31, 2011, respectively. In February 2012, the Company terminated the Werks Management Agreement.

During July of 2011, the Company entered into a loan agreement loaning Mr. Chad Ducey $340,000 at an interest rate of 5%. The loan had a term of 25 years, was unsecured, and matured in July of 2036. The loan was paid off in October 2011. The balance of the note was $0 as of October 31, 2011.

In September of 2011, Mr. Brian Carmichael, a former owner of Werks Management and Sales Manager for e-Biofuels, signed a new consulting agreement with e-biofuels and will receive a commission of $0.015 per gallon of biodiesel sold through the Middletown, Indiana plant. The agreement was subsequently modified and the amount reduced as the Company began selling larger volumes of biodiesel to Mr. Carmichael’s company, Element Renewable Energy. The agreement has a term of one year and automatically renews in one year increments. Mr. Carmichael no longer owns an interest in Werks Management as a result of this agreement. The Company instituted sales controls during fiscal 2011 to provide additional management oversight of sales contracts to Element, wherein the CFO is required to approve any sales contracts by the Company to Element to insure the contracts are arms-length. The total paid to Mr. Carmichael and his company in relation to this agreement was $294,799 for the year ended July 31, 2011. The contract with Mr. Carmichael was subsequently terminated in October 2011 by mutual consent of both parties.

In April 2011 the company issued 975,000 warrants to purchase 975,000 shares of common stock to its directors and key employees for their services. The warrants had a term of two years and a strike price of $0.50 per share. The warrants were valued at $363,328 using the Black Scholes valuation method using the following factors; risk free interest rate of .85%, strike prices of $0.50, market price of $0.495, volatility of 163% , and no yield. The value of the warrants was expensed as compensation expense in the year ended July 31, 2011. See Note 8 for further information pertaining to the warrants.

In June 2011 the company issued 100,000 warrants to purchase 100,000 shares of common stock to a director for his services. The warrants had a term of two years and a strike price of $0.50 per share. The warrants were valued at $115,865 using the Black Scholes valuation method using the following factors; risk free interest rate of .85%, strike prices of $0.50, market price of $1.35, volatility of 163% , and no yield. The value of the warrants was expensed as compensation expense in the year ended July 31, 2011.

In October 2011, the Company agreed to purchase out of cash flow over 3 weeks, 2,000,000 shares of Imperial common stock from Craig and Chad Ducey for a total purchase price of $2,000,000. The stock purchase was necessitated by tax liabilities incurred by the Ducey’s in the conversion of their notes receivable from the Company to restricted common stock in June 2011 and due to the fact that the Ducey’s personally guarantee the Company’s senior debt and were unable to obtain credit elsewhere to pay their tax liabilities. As part of the share purchase, the Company retired the note receivable from Mr. Chad Ducey in exchange for common stock. As of April 30, 2012, the 2,000,000 shares are being held as treasury stock.

In January 2012, the Company entered into an agreement to assign capital leases to a company controlled by Craig Ducey. Fixed assets with a net book value of $337,453 were assigned along with capital lease payable in the amount of $228,358. The Company recognized a net loss on the assignment transaction of $109,095.

7. LITIGATION, COMMITMENTS AND CONTINGENCIES

The Company is a named defendant in lawsuits, is a party in governmental proceedings, and is subject to claims of third parties from time to time arising in the ordinary course of business. The outcome of lawsuits or other proceedings and claims against the Company cannot be predicted with certainty and at the present time management cannot estimate or predict the impact that any such claims may have on the financial position of the Company.

Investigations and Subpoenas to Produce Documents by the Securities and Exchange Commission and others:

First Merchants Bank, National Association, v. Craig D. Ducey, Chad D. Ducey, Brian Carmichael, R. Bruce Carmichael and Imperial Petroleum, Inc.; Marion Superior Court; Cause : 49D14-1204-PL-017213. First Merchants Bank, the senior lender to e-Biofuels, LLC has filed suit to recover $7,365,167 plus accrued interest, etc. from the Guarantors of the debt of e-Biofuels, LLC as a result of its bankruptcy filing on April 4, 2012. The Company executed an Indemnity Agreement with the other co-guarantors of the e-Biofuels debt at the time of the acquisition of e-Biofuels and has received demands from the co-guarantors under the agreement. The Company intends to vigorously defend itself in this lawsuit.

E-Biofuels, LLC Bankruptcy:

On April 4, 2012, the Company’s wholly-owned subsidiary, e-Biofuels, LLC filed a voluntary petition for protection from creditors under Chapter 7 of Title 11 of the Bankruptcy Code with the United States Bankruptcy Court for the Southern District of Indiana under Case Number 12-03816-FJO-7A. The Court appointed Richard E. Boston, 27 North 5th St., Richmond, IN 47374 as U.S Trustee on that date. The e-Biofuels subsidiary represented approximately 99.6% of the Company’s revenues. In the filing, e-Biofuels listed total assets of $11,354,800.51 and total liabilities of $17,321,036.88. (See Form 8-K dated April 4, 2012 incorporated herein by reference). Intercompany accounts receivable due to e-Biofuels from the Company and its subsidiaries were listed as follows in the bankruptcy petition: Imperial Petroleum, Inc.: $46,542.67; Arrakis Oil Recovery, LLC: $271,311.71; and Imperial Chemical Company: $60,934.75 for a total of $378,788.93.

Other Potential Claims

In December 2011, the Company, as co-borrower with e-Biofuels, entered into an unsecured promissory note with JAK Financial LLC to fund the payment of a Severance, Confidentiality and Nondisclosure Agreement with a former consultant (See Note 4 for further details). The original amount of the note was $1,200,000 and the effective interest rate on the note was 96.5%. The note was to be paid with 60 daily payments of $23,000 beginning on December 20, 2011 and continuing for the next 60 business days. The Company made 16 such payments before it was no longer able to do so. The balance due as of April 30, 2012 was $933,167 with accrued interest of $94,534. The Company is currently in default on this note. No demands have been made by JAK Financial at this time as a result of the default.

The Company has accrued revenue payable, legal and petty suspense accounts in the amount of $173,907, $409,671 and $8,948, respectively, as of April 30, 2012. The Company has accrued revenue payable, legal and petty suspense accounts in the amount of $173,907, $409,671 and $8,948, respectively, as of July 31, 2011. The Company has continued to research owner account information in order to properly distribute legal suspense accounts in the normal course of business. Suspense accounts are cleared out annually and paid to the owners.

We are subject to a variety of laws and regulations in all jurisdictions in which we operate. We also are involved in legal proceedings, claims or investigations that are incidental to the conduct of our business and cannot be avoided. Some of these proceedings allege damages against us relating to property damage claims (including injuries due to product failure and other product liability related matters), employment matters, and commercial or contractual disputes. We vigorously defend ourselves against all claims which require such action. In future periods, we could be subjected to cash costs or non-cash charges to earnings if any of these matters is resolved on unfavorable terms.

8. STOCK WARRANTS AND OPTIONS

During the year ended July 31, 2011, the Company issued 1,300,000 warrants to purchase 1,300,000 shares of common stock for services. The warrants have terms ranging from 2 to 5 years and strike prices ranging from $0.25 to $1.35.

During the year ended July 31, 2011, a total of 1,225,000 warrants were exercised. 400,000 warrants (200,000 at $0.10 and 200,000 at $0.20) were exercised in return for the forgiveness of $56,000 of accounts payable and $4,000 of notes payable. 825,000 warrants were exercised in a cashless exercise for 609,744 shares of common stock.

During the quarter ended October 31, 2011, the Company issued 500,000 shares of common stock and 500,000 warrants with a term of two years and at an exercise price of $1.00/share to Caravan Trading LLC as part of the Feedstock Supply Agreement for e-biofuels, The common stock was valued at fair market value on the day of the agreement of $0.85 for a total of $425,000. The warrants were valued at $313,135 using the Black Scholes valuation method using the following factors; risk free interest rate of .30%, strike prices of $1.00, market price of $0.85, volatility of 164.86% , and no yield. The total of $738,135 was capitalized as prepaid expense on E-biofuel’s books and was to be amortized over the two-year agreement. See Note 9 for further details.

During the quarter ended October 31, 2011, the Company issued 50,000 warrants with a term of five years and an exercise price of $1.05/share for consulting services, The warrants were valued at $51,682 using the Black Scholes valuation method using the following factors; risk free interest rate of .99%, strike prices of $1.05, market price of $1.10, volatility of 166.10%, and no yield. The $51,682 was capitalized as prepaid expense and will be amortized over the six-month period of the agreement. As of April 30, 2012, $37,326 has been expensed and $14,356 is in prepaid expenses.

During the quarter ended October 31, 2011, the Company issued 2,542,001 warrants in relation to the September stock financing. The warrants have a term of five years and the strike price has been reduced from the original issuance of $1.00 to $0.14/shares as a result of the Settlement and Release Agreement dated April 30, 2012. (See note 9 for further details.)

During the nine months ended April 30, 2012, 800,000 warrants (400,000 at $0.10 and 400,000 at $0.20) were exercised in a cash-less exercise into 611,764 shares of common stock. Also during the nine months ended April 30, 2012, 400,000 options with a strike price of $0.20 expired.

In May 2012, subsequent to quarter-end, the Company issued 600,000 warrants to its Board members at a strike price of $0.15/share.

The following schedule summarizes pertinent information with regard to the stock warrants for the nine months ended April 30, 2012 and the year ended July 31, 2011:


	April 30,2012				July 31, 2011
	Weighted Average Shares-Exercise Outstanding-Price				Weighted Average Shares-Exercise Outstanding-Price
Beginning of period		3,325,000	$	0.558		2,200,000	$	0.154
Granted		3,092,001		1.00		2,350,000		0.74
Exercised		800,000		0.15		1,225,000		0.186
Forfeited		—		—		—		—
Expired		400,000		0.20		—		—

End of period		5,217,001		0.49		3,325,000	$	0.558

Exercisable		5,217,001		—		3,325,000		—

9. SHAREHOLDER EQUITY TRANSACTIONS

As of July 31, 2010, the Company had 21,364,813 shares issued and outstanding. The Company also had 1,000,000 shares owed but not issued.

In August 2010, the Company issued 400,000 shares and 100,000 warrants for consulting services. The shares were valued at market price of $0.32 for $128,000. The warrants had a term of two years and a strike price of $0.25 per share. The warrants were valued at $22,572 using the Black Scholes valuation method using the following factors; risk free interest rate of .47%, strike prices of $0.25, market price of $0.32, volatility of 173% , and no yield. The total value of the stock and warrants, $150,572, was capitalized as a prepaid expense and amortized over the one year period of the consulting agreement. As of July 31, 2011 all $150,572 has been expensed and nothing remains in prepaid expenses.

In August of 2010, 1,000,000 shares that were owed but not issued as of July 31, 2010 were issued.

In November 2010 the Company issued 400,000 shares to Greg Thagard in connection with the exercise of 400,000 warrants. 200,000 warrants were exercised at $0.10 and 200,000 warrants were exercised at $0.20 for a total of $60,000. In exchange for the exercise, Mr. Thagard forgave $56,000 of accounts payable and $4,000 of notes payable due him from the Company.

In November 2010 the Company issued 310,581 shares to Malcolm Henley in connection with the cashless exercise of warrants. Mr. Henley exercised 200,000 warrants at $0.10 and 200,000 warrants at $0.20.

In December 2010 the Company issued 250,000 shares to Coquille Bay Production Company in connection with the purchase of its interest in the Coquille Bay field and pipeline. The shares were valued at market value of $0.51 per share for a total purchase price of $127,500.

In January 2011 the Company issued 200,000 shares to John Heskett in connection with the purchase of Heskett Holding II and its interest in Arrakis. The shares were valued at market value of $0.50 per share for a total value of $100,000.

In January 2011 the Company issued 1,500,000 shares to Metro Energy in connection with the purchase of certain oil and gas assets. The shares were valued at market value of $0.40 per share for a total purchase price of $600,000.

In January 2011 the Company issued 1,041,669 shares to Chrisjo Energy and others in connection with the purchase of their interest in the Coquille Bay pipeline. The shares were valued at market value of $0.40 per share for a total purchase price of $416,668.

In April 2011 the Company issued 400,000 shares to certain individuals for a consulting services agreement rendered to the Company. 200,000 of the shares are for services rendered and 200,000 are for services to be rendered over the six-month period of the agreement. The shares were valued at market value of $0.50 per share on the date of the agreement for a total amount of $200,000. $100,000 was expensed and $100,000 was capitalized as a prepaid expense to be amortized over the six-month life of the agreement. As of July 31, 2011, $66,668 has been expensed and $33,332 remains in prepaid expenses. As of October 31, 2011, the remaining $33,332 has been expensed and $0 remains in prepaid expenses.

In April 2011 the Company issued 219,943 shares to various individuals in connection with the conversion of certain notes payable and related accrued interest totaling $74,781 to common stock. The shares were converted at $0.34 per share.

In April 2011 the Company issued 40,000 shares to various individuals in connection with service rendered to the Company. The shares were valued at market value of $0.90 per share for a total expense of $36.000.

In May 2011 the Company issued 450,000 shares to Terry Louviere in connection with the settlement of certain outstanding accounts payable related to Coquille Bay. Accounts payable of $288,310 was converted to common stock at a conversion price of $0.64 per share.

In May of 2011, $3,750,000 of notes payable – related parties were converted to common stock along with the related accrued interest. A total of $4,037,969 ($3,750,000 of principal and $287,969 of accrued interest) was converted into 5,047,461 shares of common stock at a negotiated price of $0.80 per share.

In May 2011 the Company issued 250,000 shares to Vinmar in connection with the settlement of a lawsuit. The shares were valued at $0.87 per share which was the market value on the date of the settlement.

In June 2011 the Company issued 425,000 shares to Aventine in connection with the settlement of a lawsuit. The shares were valued at $0.90 per share which was the market value on the date of the settlement.

In June of 2011, the Company issued 50,000 warrants for services. The warrants had a term of two years and a strike price of $0.70 per share. The warrants were valued at $38,883 using the Black Scholes valuation method using the following factors; risk free interest rate of .85%, strike prices of $0.70, market price of $0.98, volatility of 163% , and no yield. The total value of the warrants has been expensed during the year ended July 31, 2011.

In June of 2011, the Company issued 535,714 shares to Ron Frank and Barbara Lyons in connection with the conversion of notes payable. A $500,000 loan and a $25,000 loan were borrowed in June of 2011. Both of these loans were converted to common stock immediately. The loans converted at the average closing price of the Company’s common stock for the thirty business days immediately preceding the conversion date. The loans were converted at $0.98 per share. No beneficial conversion feature was recorded on the transactions because the loan was converted immediately and was effectively treated as a stock sale. There was no interest expense related to these notes. No balance remains on these loans as of July 31, 2011.

In June 2011 the Company issued 30,000 shares to various individuals in connection with services rendered. The shares were valued at market value of $0.90 per share for a total expense of $27,000.

In June 2011 the Company issued 259,542 shares to Greg Thagard in connection with the settlement of certain outstanding accounts payable. Accounts payable of $154,500 was converted at $0.60 per share.

In June of 2011, the Company issued 300,000 shares and 500,000 warrants for consulting services. The shares were valued at market price of $1.49 for $447,000. The warrants had a term of five years and a strike price of $1.00 per share. The warrants were valued at $704,706 using the Black Scholes valuation method using the following factors; risk free interest rate of .85%, strike prices of $1.00, market price of $1.49, volatility of 163% , and no yield. The total value of the stock and warrants, $1,151,706, was capitalized as a prepaid expense and will be amortized over the five-year period of the consulting agreement. As of July 31, 2011, $28,793 has been expensed and $1,122,914 remains in prepaid expenses. During the quarter ended October 31, 2011, this consulting agreement was terminated and the remaining $1,122,914 was expensed. As of April 01, 2012, $0 remains in prepaid expenses related to this agreement.

In June of 2011, the Company issued 500,000 warrants for consulting services. The warrants had a term of five years and a strike price of $1.00 per share. The warrants were valued at $704,706 using the Black Scholes valuation method using the following factors; risk free interest rate of .85%, strike prices of $1.00, market price of $1.49, volatility of 163% , and no yield. The total value of the warrants, $704,706, was capitalized as a prepaid expense and will be amortized over the five-year period of the consulting agreement. As of July 31, 2011, $17,618 has been expensed and $687,088 remains in prepaid expenses. During the six months ended January 31, 2012, the Company felt that the consulting services under the contract were not being performed and management made the decision to expense the remainder of the prepaid asset. $687,088 was expensed and $0 remains in prepaid expenses as of April 30, 2012, relating to this agreement.

In June 2011 the Company issued 100,000 shares and $150,000 to MDEChem Inc. in connection with the execution of a license agreement related to SANDKLENE 950. The cost of the licensing agreement was $250,000 so the shares were valued at $1.00 per share.

In June 2011 the Company issued 50,000 shares to Ben Campbell in connection with the purchase of certain mining claims in Utah. The shares were valued at market value of $1.49 per share for a total purchase price of $74,500.

In June of 2011, the Company issued 100,000 warrants to purchase 100,000 shares of common stock to as a signing bonus to a new employee. The warrants had a term of two years and a strike price of $1.35 per share. The warrants were valued at $114,143 using the Black Scholes valuation method using the following factors; risk free interest rate of .85%, strike prices of $1.35, market price of $1.49, volatility of 163% , and no yield. The value of the warrants was expensed as compensation expense in the year ended July 31, 2011.

In July 2011 the Company issued 99,163 shares to certain individuals in connection with their cashless exercise of warrants. 100,000 warrants were exercised at $0.25and 25,000 were exercised at $0.50.

In July of 2011, the Company issued 200,000 shares in connection with the exercise of 200,000 warrants at $0.10. A note payable in the amount of $20,000 was forgiven in exchange for the conversion. The Company also issued 31,250 shares for the accrued interest on the note of $3,125.

As of July 31, 2011, the Company has 34,905,136 shares of common stock issued and outstanding and 100,000 shares shown as owed but not issued.

In August of 2011, the Company issued 100,000 shares of common stock that were shown as owed but not issued as of July 31, 2011.

In September of 2011, the Company issued 10,000 shares for services. The shares were valued at the market price on the date of issuance for a total of $10,900.

In September of 2011, the Company issued 100,000 shares in connection with the extension of its senior bank debt to the parties that executed the personal guarantees of the debt. The shares were valued at the market price on the date of issuance for a total of $100,000. This amount has been capitalized in prepaid expenses and will be amortized over the six months of the loan extension. As of April 30, 2012, $100,000 has been expensed and $0 remains in prepaid expenses.

During the quarter ended October 31, 2011, the Company issued 500,000 shares of common stock and 500,000 warrants with a term of two years and at an exercise price of $1.00/share to Caravan Trading LLC as part of the Feedstock Supply Agreement for e-biofuels, The common stock was valued at fair market value on the day of the agreement of $0.85 for a total of $425,000. The warrants were valued at $313,135 using the Black Scholes valuation method using the following factors; risk free interest rate of .30%, strike prices of $1.00, market price of $0.85, volatility of 164.86% , and no yield. The total of $738,135 was capitalized as prepaid expense on E-biofuels books and was tol be amortized over the two-year agreement. As of January 31, 2012, $99,345 has been expensed and $638,790 remains in prepaid expenses. On April 4, 2012, E-biofuels filed for bankruptcy. See Note 14 for further details.

During the quarter ended January 31, 2012, the Company issued 300,000 shares of common stock in relation to a non-compete agreement. The shares were valued at market value on the date of the agreement and valued at $177,000. See Note 4 for further details.

During the nine months ended April 30, 2012, 800,000 warrants (400,000 at $0.10 and 400,000 at $0.20) were exercised in a cash-less exercise into 611,764 shares of common stock.

During the nine months ended April 30, 2012, the Company issued 156,427 shares to a management consultant of the Company. The shares were valued at $0.59, market value on the date of the grant, and expensed.

September 2011 Stock Financing and Derivative Liability

On June 9, 2011, Imperial Petroleum, Inc. (hereinafter referred to as the “Company”, “we,” “us” or “our”) entered into an engagement agreement (the “Engagement Agreement”) with Rodman & Renshaw, LLC to act as our exclusive placement agent (the “Placement Agent”) in connection with an offering of the Company’s securities (the “Offering”). On September 21, 2011 (the “Closing Date”), pursuant to a securities purchase agreement (the “Securities Purchase Agreement”), the Company completed the closing of the Offering for total subscription proceeds of $3,177,501.50 through the issuance of (i) 4,236,669 shares of our common stock at a price of $0.75 per share (the “Purchased Shares”) and (ii) five-year warrants (the “Warrants”) exercisable into 2,118,334 shares of common stock (the “Warrants Shares”) equal to 50% of the Purchased Shares at an exercise price of $1.00 per share to certain accredited investors (the “Investors”). The number of shares of common stock to be received upon the exercise of the Warrants and the exercise price of the Warrants are subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the common stock that occur after the Closing Date.

In connection with the Offering, we granted the Investors registration rights pursuant to a registration rights agreement dated as of the Closing Date (the “Registration Rights Agreement”), in which we agreed to register (1) 100% of the Purchased Shares; (2) all Warrant Shares then issuable upon exercise of the Warrants (assuming on such date the Warrants are exercised in full without regard to any exercise limitations therein) and (3) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing (the “Registrable Securities”) on a registration statement or registration statements (the “Registration Statements”) to be initially filed with the Securities and Exchange Commission (the “SEC”) within seventy five (75) calendar days after the Closing Date (the “Filing Date”) and use our best efforts to have it declared effective within 120 calendar days after the Closing Date or within such other applicable Effectiveness Date as provided in the Registration Rights Agreement.

Subject to the terms of the Registration Rights Agreement, upon the occurrence of any event that shall incur liquidated damages, including, but not limited to, that the initial Registration Statement is not filed on or prior to the Filing Date, or we fail to file a pre-effective amendment and otherwise respond in writing to SEC comments on the Registration Statement within twenty (20) calendar days upon receipt of such comments, or the Registration Statement including the Registrable Securities is not declared effective by the applicable Effectiveness Date, we shall pay to each Investor an amount in cash, on monthly anniversary of each such Event Date as defined in the Registration Rights Agreement (the “Event Date”), equal to the product of (1) the product of (A) 1.0% multiplied by (B) the quotient of (I) the number of such Investor’s Registrable Securities that are not then covered by a Registration Statement that is then effective and available for use by such Investor divided by (II) the total number of such Investor’s Registrable Securities multiplied by (2) the aggregate purchase price paid by such Investor pursuant to the Securities Purchase Agreement; provided , however , that, in the event that none of such Investor’s Registrable Securities are then covered by a Registration Statement that is effective and available for use by such Investor, the quotient of (I) divided by (II) in clause (1)(B) herein shall be deemed to equal 1. Under the Registration Rights Agreement, the maximum aggregate liquidated damages payable to an Investor shall be 8% of the aggregate subscription amount paid by such Investor pursuant to the Securities Purchase Agreement. As of January 31, 2012, the company has incurred $95,325 in late fees and $976 in interest expense related to the failure to file the Registration Statement.

Pursuant to the terms of the Engagement Agreement, for the Placement Agent’s service we paid a cash placement fee equal to 7% of the aggregate purchase price paid by Investors that were placed in the Offering, and we agreed to pay a cash fee equal to 7% of the aggregate cash exercise price to be received by the Company upon the exercise of the Warrants, payable only in the event of the receipt by the Company of any proceeds of such cash exercise. We also agreed to issue the placement agent 423,667 warrants in relation to the offering. The warrants have a term of 5 years and a strike price of $1.00.

Total cash received from the financing was $2,921,576 which is the total proceeds of $3,177,501 less $222,425 in broker fees and $33,500 in closing fees.

Pursuant to the terms of the stock purchase agreement, the purchasers have per share purchase price protection. Under this protection, until the three year anniversary of the closing date, if the Company, directly or indirectly, issues or sells any shares of common stock or common stock equivalents for a consideration per share that is less than $0.75, then immediately after such Dilutive Issuance, the Company shall issue to each purchaser, without the payment of additional consideration, a number of additional shares of common stock equal to the product of (i) the fraction obtained by dividing (A) the sum of the number of Initial Shares (as defined below) and Additional Shares (as defined below) then held by such Purchaser on the date of the Dilutive Issuance by (B) the sum of the number of Initial Shares issued to such Purchaser on the Closing Date and all Additional Shares issued to such Purchaser after the Closing Date, multiplied by (ii) the difference between (A) the aggregate number of shares of Common Stock that would have been issued to such Purchaser at the Closing if the applicable portion of the Subscription Amount was divided by the Discounted Per Share Purchase Price minus (B) the aggregate number of shares of Common Stock equal to the sum of the Initial Shares, plus, to the extent there has been a previous issuance of Additional Shares to such Purchaser, the number of Additional Shares previously issued to such Purchaser.

This purchase price protection creates a derivative liability. The Company initially valued and recorded this derivative liability at $588,116 upon the closing of the financing on September 21, 2011. The Company used historical trends to make an estimate of how many shares might have to be issued in the future under the price protection provision. That estimate was then valued using the black schools method. As of January 31, 2012, the value of the derivative was revalued, based on information at January 31, 2012, at $281,184 and a resulting gain on valuation of derivative liability of $306,932 was recorded for the nine months ended April 30, 2012. In April of 2012, a settlement agreement was reached ( see details below ) that rescinded the purchase price protection, therefore, there is no derivative liability as of April 30, 2012.

In April 2012, the Company issued an additional 1,148,927 shares to the PIPE participants in connection with the adjustment of the original issuance price under the terms of the stock purchase agreement from $0.75/share to $0.59/share. The strike price on 2,542,001 warrants held by the PIPE participants and placement agent was also adjusted from $1.00 to $0.59.

As a result of the completion of a series of Settlement and Release Agreements effective April 30, 2012, with accredited investors (“Purchasers”) from the Company’s Private Placement previously completed on September 21, 2011, the Company agreed to issue a total of 19,217,340 shares of its restricted common stock and to reset the strike price on 2,542,001 warrants from $0.59 to $0.14. The Purchasers had alleged various claims against the Company in connection with the Securities Purchase Agreement executed in connection with the Private Placement, including breach of the agreement, the right to rescind their investment and failure to file the required Registration Statement in connection with the issuance of the shares. As a result of the failure of the Company to file the Registration Statement, the Purchasers were entitled to monetary damages payable in cash of up to 8% of their initial investment as well as the continuing right to rescind their investment and receive a return of those funds. As a result of the execution of the confidential Settlement and Release Agreements, the Company (i.) agreed to issue a total of 19,217,340 shares of its restricted common stock in full settlement of all claims from those Purchasers; (ii.) amended the warrant exercise price to $0.14/share for warrants previously issued to the Purchasers and (iii.) amended the Securities Purchase Agreement to remove any requirements to register any of the Purchasers’ shares, except as a “piggyback” registration and eliminated any future rights previously granted to the Purchasers to participate in subsequent equity or debt financings of the Company. All of the shares issued in connection with the Settlement and Release Agreements are restricted and are subject to the holding period requirements and sales volume limitations under Rule 144 of the Securities Act of 1934 as amended. All of the Purchasers executed the Settlement and Releae Agreements. The shares are shown as owed but not issued as of April 30, 2012. The shares were issued subsequent to April 30, 2012.

The value of the additional 20,366,267shares and repricing of the warrants from $1.00 to $0.59 to $0.14 was $2,722,753. That amount was offset by the $281,184 derivative liability and the $196,631 accrued for registration rights penalties and the difference of $2,244,938 was expensed to financing charges during the quarter ended April 30, 2012.

10. LEASE OBLIGATIONS

The Company maintains office space at 101 NW 1st Street, Suite 213, Evansville, IN 47708. The Company maintains its current office space under a 3 year lease, ending March of 2014, at the rate of $2,583.33 per month. This lease agreement is currently in default.

Our wholly-owned subsidiary, Imperial Chemical Company’s principal executive offices are located at 4533 Brittmoore Road, Houston, TX under a 5 year lease, ending August of 2016, at the rate of $10,500 per month beginning in August 2011. This lease agreement is currently in default.

Total future lease payments for the years ended July 31, under all of the above operating leases are:


	2012		2013		2014		2015		2016		Thereafter		Total
Total operating lease obligations	$	70,750	$	157,000	$	149,250	$	126,000	$	126,000		0	$	0

11. ACCRUED EXPENSES

The Company has accrued expenses as follows:


	April 30, 2012		July 31, 2011
Revenue in suspense		592,525		592,525
Accrued officer salary—CEO		371,537		377,678
Accrued settlements		0		250,574
Accrued feedstock purchase liabilities		0		2,945,135
Accrued interest on notes		202,563		221,584
Accrued income taxes		355,000		355,000
Other		391,556		441,353

	$	1,913,181	$	5,183,849

12. FAIR VALUE MEASUREMENTS

We adopted ASC Topic 820-10, “Fair Value Measurements” at the beginning of fiscal year 2010 to measure the fair value of certain of its financial assets required to be measured on a recurring basis. The adoption of ASC Topic 820-10 did not impact our combined financial position or results of operations. ASC Topic 820-10 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). ASC Topic 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability. The three levels of the fair value hierarchy under ASC Topic 820-10 are described below:

Level 1. Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.

Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We have no level 3 assets or liabilities.

The tables below present reconciliation for all assets and liabilities measured at fair value on a recurring basis as of April 30, 2012 and July 31, 2011.


	April 30, 2012
	Fair Value Measurements
	Level 1 Quoted Prices in Active Markets Identical Assets		Level 2 Significant Other Observable Inputs		Level 3 Significant Unobservable Inputs		Assets/ Liabilities At Fair Value
Assets:
Cash	$	20,190		—		—	$	20,190
Accounts receivable		—	$	4,157		—	$	4,157
Liabilities
Accounts payable, accrued and other liabilities		—	$	3,015,226		—	$	3,015,226
Notes payable		—	$	8,905,395		—	$	8,905,395

	July 31, 2011
	Fair Value Measurements
	Level 1 Quoted Prices in Active Markets Identical Assets		Level 2 Significant Other Observable Inputs		Level 3 Significant Unobservable Inputs		Assets/ Liabilities At Fair Value
Assets:
Cash	$	900,883		—		—	$	900,883
Accounts receivable		—	$	4,894,073		—	$	4,894,073
Note receivable		—	$	339,429		—	$	339,429
Liabilities
Accounts payable, accrued and other liabilities		—	$	9,392,557		—	$	9,392,557
Notes payable		—	$	14,238,008		—	$	14,238,008

13. Sale of Oil and Gas Properties

In February 2012, Imperial Petroleum, Inc. closed an Asset Sales Agreement (the “Agreement”) with Eleven Energy Corporation finalizing the sale of the Company’s share, effective January 31, 2012, in the ownership of the Coquille Bay Field located in Plaquemines Parish, Louisiana. Per the terms of the Agreement, the Company received consideration of $100 cash, was relieved of plugging liabilities associated with the wells, and was relieved of the requirement to provide a plugging bond with the State of Louisiana Department of Natural Resources in the amount of $1,400,000.

Included in the terms of the Agreement was the sale of 100% of the equity of Hillside Oil and Gas, an Approved Operator which had been operating the Coquille Bay facility as a contract operator for the Company. Prior to the Agreement, Hillside Oil and Gas was owned by Greg Thagard, Chairman of the Company’s Board of Directors. In consideration for the sale of Hillside Oil and Gas, Mr. Thagard received $100.

In determining the amount of consideration to accept, the Company reviewed the current operating costs of maintaining the assets and the estimated costs associated with returning the assets to an acceptable, operational status. The monthly cost of maintaining the assets totaled approximately $60,000. An independent third party estimated the costs of restoring the assets to a level necessary to continue production at approximately $750,000 to $1,000,000.

The fixed assets of the Coquille Bay Field had a net book value of $4,240,783 and had a related asset retirement obligation of $472,855. Cash proceeds from the sale were $100. During the nine months ended April 30, 2012, the Company recognized a loss of $3,767,827 relating to this transaction.

14. DISCONTINUED OPERATIONS

On April 4, 2012, the Registrant’s wholly-owned subsidiary, e-Biofuels, LLC filed a voluntary petition for protection from creditors under Chapter 7 of Title 11 of the Bankruptcy Code with the United States Bankruptcy Court for the Southern District of Indiana under Case Number 12-03816-FJO-7A. The Court appointed Richard E. Boston, 27 North 5th St., Richmond, IN 47374 as U.S Trustee on that date. The e-Biofuels subsidiary represented approximately 99.6% of the Company’s revenues. In the filing, e-Biofuels listed total assets of $11,354,800.51 and total liabilities of $17,321,036.88. Intercompany accounts receivable due to e-Biofuels from the Company and its subsidiaries were listed as follows in

the bankruptcy petition: Imperial Petroleum, Inc.: $46,542.67; Arrakis Oil Recovery, LLC: $271,311.71; and Imperial Chemical Company: $60,934.75 for a total of $378,788.93. The Company guaranteed the debt of e-Biofuels to First Merchants Bank in conjunction with the acquisition.

The table below shows the portion of the balance sheet attributable to e-Biofuels at 7-31-2011.


	e-Biofuels			Total Company
	July 31, 2011			July 31, 2011
Assets
Cash	$	626,325		$	1,307,654
Total Current Assets		6,634,718			8,162,140
Net Property, Plant and Equipment		9,246,996			14,158,113
Other Assets		950,535			2,214,468

Total Assets		16,832,249			24,534,720

Liabilities and Stockholder’s Equity
Total Current Liabilities		17,799,475			21,095,322
Long Term Liabilities		2,535,243			3,008,098
Total Stockholder’s Equity		(3,502,470	)		431,300
Total Liabilities and Stockholder’s Equity		16,832,249			24,534,720

As a result of the bankruptcy filing of e-Biofuels, the Company recorded a gain of $5,369,281 in the quarter ended April 30, 2012.

15. SUBSEQUENT EVENTS

The Company has evaluated events and transactions for potential recognition or disclosure through the date these financial statements were issued. There were no subsequent events requiring recognition or disclosure in these financial statements other then as noted below.

In April of 2012, the Company issued 600,000 warrants with a strike price of $0.15 to its board members.

Subsequent to April 30, 2012, the Company issued 19,217,340 shares in connection with the Settlement and Release Agreement with the Purchasers of the company’s private placement completed September 21, 2011. (See Note 9). The shares were owed but not issued as of April 30, 2012.

The Company entered into a Settlement and Release Agreement with a consultant to the Company under which the Company agreed to issue a Note Payable in the amount of $470,000 secured by the Company’s interest in its oil sands project in Kentucky and payable monthly over 3 years beginning October 1, 2012.

The Company issued 52,238 shares in connection with a Settlement and Release Agreement to a former private note holder of the Company in connection with a default notice received by the Company.

The Company entered into an investor awareness campaign for a period of two years beginning in early May 2012 valued at $300,000 to assist the Company in providing public relations and media support. In connection with that agreement, the Company issued 2,000,000 shares of its restricted common stock and 400,000 warrants exercisable for a period of two years at $0.25/share.

First Merchants Bank, National Association, v. Craig D. Ducey, Chad D. Ducey, Brian Carmichael, R. Bruce Carmichael and Imperial Petroleum, Inc.; Marion Superior Court; Cause : 49D14-1204-PL-017213. First Merchants Bank, the senior lender to e-Biofuels, LLC filed suit to recover $7,365,167 plus accrued interest, etc. from the Guarantors of the debt of e-Biofuels, LLC as a result of its bankruptcy filing on April 4, 2012. The Company executed an Indemnity Agreement with the other co-guarantors of the e-Biofuels debt at the time of the acquisition of e-Biofuels and has received demands from the co-guarantors under the agreement. The Company intends to vigorously defend itself in this lawsuit.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

RESULTS OF OPERATIONS

The factors which most significantly affect the Company’s results of operations are (i) the sale prices of crude oil and natural gas, (ii) the level of crude oil and natural gas sales, (iii) the level of direct and lease operating expenses, and (iv) the level of and interest rates on borrowings. The same factors listed above will apply to the sale of minerals and metals mined by the Company. As the Company initiates production on its mining properties, results of operations will be affected by: (i) commodity prices for copper and gold, (ii) the quantity and quality of the ores recovered and processed, and (iii) the level of operating expenses associated with the mining operations.

As a result of the collapse of the world economies into recession, crude oil and natural gas prices decreased significantly during fiscal 2009 from 2008. Commodity prices rebounded in fiscal 2010 with West Texas Intermediate (“WTI”) prices quoted at approximately $95/Bbl for oil and $3.25 per Mmbtu for natural gas at April 30, 2011. Since that time oil prices have increased as a result of unrest in the Middle East and natural gas prices have declined slightly due to over-supply in the last few years. Much volatility exists in world oil and gas pricing due to factors in the Middle East and uncertainties with stability. If pricing remains high, by demand or artificial methods employed by the oil producing countries, the impact will be positive on cash flow and the exploitation of existing properties owned by the Company, however, continued high prices will reduce the availability of quality acquisitions and could change the Company’s future growth strategy. At the present time the Company believes it has a substantial inventory of quality development opportunities, particularly related to its oil sands business, to sustain its growth strategy without additional acquisitions. The Company expects oil and gas prices to continue to widely fluctuate and to be influenced by global economic turmoil, Asian economies and potential disruptions in supplies, in particular events in the Middle East and North Korea.

Prices for gold had remained relatively stable and has edged significantly higher during the past several years and had generally reflected the relatively low inflation rates predominate in the economies of the industrialized nations. Recently, gold prices began a significant upward price adjustment, which may reflect a shift from the traditional dependence upon gold as a financial hedge against inflation and most likely reflects a “flight to gold” in the face of global economic turmoil. Current spot prices for gold are approximately $1,590.00 per ounce and are expected to continue to remain at or near those levels. The Company does not expect to realize any substantial increase in the price of gold in the future.

Copper prices have fluctuated dramatically since the Company’s acquisition of its copper property with prices ranging from a low of about $0.65 per pound in August 1993 to about $4.00 per pound today. Currently, copper prices have edged significantly downward. Wide variations in copper prices have resulted from the increased demand for electrical wire and copper related products as a result of the continued high growth rate of the economies of the industrialized nations and as a result of periodic reductions in the availability of scrap copper for recycling. Continued fluctuations in the spot price for copper are expected to result from variations in the availability of scrap copper and the continued strong demand from emerging nations.

Three months ended April 30, 2012 compared to the three months ended April 30, 2011.

Revenues for the three months ending April 30, 2012 were $2,015 compared to revenues of $64,684 for the comparable quarter ended April 30, 2011, excluding revenues from the discontinued biofuels operations. We have only limited interests in oil and gas properties, all operated by others, and as a result we do not expect the Company to have significant revenues until such time as our oil sand operations are commenced later this summer.

Total direct expenses for the quarter ended April 30, 2012 were $0 compared to $310,191 for the same quarter ended a year earlier. Direct operating expenses have decreased due to the sale of Coquille Bay. We expect direct costs to increase significantly once oil sand operations commence. General and administrative costs (“G&A”) for the quarter ended April 30, 2012 were $609,313 compared to $567,194 for the quarter ended April 30, 2011. We expect G&A costs to increase once oil sand operations are commenced. Interest costs were $2,268,300 for the quarter ended April 30, 2012 compared to $119,068 for the prior quarter. Interest costs associated with the guarantee of the First Merchants debt of e-Biofuels is included in the current quarter as well as the financing expenses associated with the PIPE deal’s re-pricing of the shares and warrants.

The Company incurred a net after tax income of $1,080,612 ($0.026 per share) ($2,223,304 from continuing activities and ($1,142,692) from discontinued activities) for the quarter ended April 30, 2012 compared to an after tax net income of $2,368,168 ($0.09 per share) (($939,391) from continuing activities and $3,307,559 from discontinued activities) for the prior year quarter ended April 30, 2011. The net gain for the current quarter is primarily the result of the gain as a result of the bankruptcy filing of e-Biofuels, LLC of $5,369,281.

Nine months ended April 30, 2012 compared to the Nine months ended April 30, 2011.

Revenues for the nine months ending April 30, 2012 were $149,540 compared to revenues of $168,863 for the comparable period ended April 30, 2011, excluding revenues from the discontinued biofuels operations. We have only limited interests in oil and gas properties, all operated by others, and as a result we do not expect the Company to have significant revenues until such time as our oil sand operations are commenced later this summer.

Direct expenses were $424,314 for the nine months ended April 30, 2012 compared to $664,234 for the same period ended April 30, 2011. Operating expenses are expected to increase as oil sand operations commence later this summer.

General and administrative costs were $4,102,162 for the nine months ending April 30, 2012 compared to $989,718 for the same period a year earlier. G&A expenses are expected to continue to increase in subsequent quarters as the Company’s oil sand operations commence. Interest expense for the nine months was $2,470,641 in 2012 compared to $356,320 for the same period in 2011.

The Company had an after-tax net loss of $7,082,083 ($0.18 per share) (($5,215,261) from continuing activities and ($1,866,812) from discontinued activities) for the nine months ended April 30, 2012 compared to a net income of $2,801,720 ($0.12 per share)(($1,369,436) from continuing activities and $4,171,156 from discontinued activities) for the comparable nine months ended April 30, 2011. The net loss for the nine months ending April 30, 2012 is primarily the result of the loss due to the sale of Coquille Bay and the write down and settlement entered into with respect to the non-compete agreement and offset somewhat by the gain as a result of the bankruptcy filing of e-Biofuels, LLC.

FINANCIAL CONDITION

Capital Resources and Liquidity

In connection with the acquisition of e-biofuels, LLC as a wholly-owned subsidiary, the Company executed a guarantee and indemnity agreement with respect to senior debt under the First Merchants Bank, N.A. Term Loans. The outstanding amount due under those notes payable is $7,365,167 as of April 30, 2012. See Note 5 for further information pertaining to the debt.

The Company has also has obtained certain unsecured loans from various individuals, companies and from its former Chairman and current President, Jeffrey T. Wilson, in the approximate amounts of $933,167 and $587,061 as of April 30, 2012. With the exception of a loan from JAK Financial, these loans bear market rates of interest and flexible terms and are generally unsecured. With the exception of the loan from JAK Financial, which was used to fund the Severance, Confidentiality and Nondisclosure Agreement described in Note 4, these funds have been used to maintain the Company’s activities and fund its overhead requirements. As of April 30, 2012, the Company has accrued salaries due its former Chairman and current President of $371,537. Management believes that the Company may need to borrow additional funds from these sources in the future, however there is no assurance such funding sources will continue to make advances to the Company.

At April 30, 2012, the Company had current assets of $887,894, including $20,190 in cash and cash equivalents, $4,157 in trade and oil and gas accounts receivable, $825,125 in non-compete agreements, and $28,106 in prepaid expenses. The Company had current liabilities of $11,920,621, which resulted in negative working capital of $11,032,727. The negative working capital position is comprised of senior debt under the First Merchants guarantee of $7,365,167; trade accounts payable of $981,225; of accrued expenses payable of $1,913,181 consisting primarily of accrued liabilities for accrued salaries payable to the Company’s President of $371,537, accrued income taxes of $355,000, and oil and gas suspense accounts; notes payable to the Company’s President of $587,061; and short-term unsecured third party notes payable of $933,167.

Seasonality

The results of operations of the Company are seasonal due to seasonal fluctuations in the market prices for crude oil and natural gas. Due to these seasonal fluctuations, results of operations for individual quarterly periods may not be indicative of results, which may be realized on an annual basis. Because of regional issues with cold weather, oil sales may be impacted in the future due to delays in mining activity associated with the oil sands project.

Inflation and Prices

The Company’s revenues and the value of its oil and natural gas and mining properties have been and will be affected by changes in the prices for crude oil, natural gas and gold prices. The Company’s ability to obtain additional capital on attractive terms is also substantially dependent on the price of these commodities. Prices for these commodities are subject to significant fluctuations that are beyond the Company’s ability to control or predict.

Off Balance Sheet Arrangements

None.

Contractual Obligations

See above, Capital Resources and Liquidity.

Item 3.

Quantitative and Qualitative Disclosures Regarding Market Risk.

Commodity Risk

Our major commodity price risk exposure is to the prices received for our natural gas and oil production. Realized prices for our production are the spot prices applicable to natural gas and crude oil. Prices received for natural gas and oil are volatile and unpredictable and are beyond our control.

Interest Rate Risk

We have no long-term debt subject to risk of loss associated with movements in interest rates.

Item 4.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this quarterly report on Form 10-K/A, our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of April 30, 2012, pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation , our Chief Financial Officer concluded that as of April 30, 2012 our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the Security and Exchange Commission’s rules and forms; and to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to management, including our certifying officers, as appropriate, to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting.

Our Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(c) and (d) of the Exchange Act. Our internal controls are designed to provide reasonable assurance that the reported financial information is presented fairly, financial disclosures are adequate and that the judgments inherent in the preparation of financial statements are reasonable and in accordance with generally accepted accounting principles of the United States of America (GAAP).

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Further, because of changes in conditions, effectiveness of internal control over financial reporting may vary over time.

A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the company’s ability to initiate, authorize, record, process, or report external financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the company’s annual or interim financial statements that is more than inconsequential will not be prevented or detected. An internal control material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

As part of our compliance efforts relative to Section 404 of the Sarbanes-Oxley Act of 2002, our management assessed the effectiveness of our internal control over financial reporting as of April 30, 2012. In making this assessment, management used the criteria set forth in the Internal Control – Integrated Framework by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). We evaluated control deficiencies identified through our test of the design and operating effectiveness of controls over financial reporting to determine whether the deficiencies, individually or in combination, are significant deficiencies or material weaknesses. In performing the assessment, our management had identified two material weaknesses in internal control over financial reporting existing as of July 31, 2011 which included (i.) a segregation of duties issue related to a lack of accounting personnel and (ii.) the inability of the Company’s prior accounting system to adequately track real-time purchases of feedstock and sales of biodiesel on a contract-by-contract basis. In connection with the remediation of these issues, the Company took the following steps: (i.) we added additional accounting personnel, including a Chief Financial Officer, a Controller and a logistics individual at e-biofuels, and (ii.) we implemented a new accounting system at e-biofuels to allow our accounting staff to more effectively track sales and inventory and to improve the overall accuracy of our reporting and we consolidated our overall accounting functions under the control of our accounting staff at e-biofuels and under the direction of our new CFO. Our evaluation of the significance of each deficiency and their remediation included both quantitative and qualitative factors.

With the bankruptcy filing of e-Biofuels and the resignation of our Chief Financial Officer on April 4, 2012, and the loss of the balance of our accounting staff associated with that operation, the Company’s management has concluded that as of April 30, 2012, and as of the date that the evaluation of the effectiveness of our internal controls and procedures was completed, the Company’s internal controls are again defective in the area of a segregation of duties issue related to a lack of accounting personnel. Until the company can afford to hire adequate accounting staff, the Company intends to rely on third party accounting consultants to assist in the compilation of its financial accounting records.

Changes in Internal Controls

No changes were made during the quarter ended April 30, 2012, except with respect to the resignation of Timothy A. Jones as Chief Financial Officer and the appointment of Jeffrey T. Wilson to that position.

PART II OTHER INFORMATION

Item 1.

Legal Proceedings.

See Note 7 above.

Item 1A.

Risk Factors.

In addition to the other information set forth elsewhere in this Form 10-Q, you should carefully consider the following factors when evaluating the Company. An investment in the Company is subject to risks inherent in our business. The trading price of the shares of the Company is affected by the performance of our business relative to, among other things, competition, market conditions and general economic and industry conditions. The value of an investment in the Company may decrease, resulting in a loss. The risk factors listed below are not all inclusive.

An investment in us involves a high degree of risk and may result in the loss of all or part of your investment. You should consider carefully all of the information set out in this document and the risks attaching to an investment in us, including, in particular, the risks described below. The information below does not purport to be an exhaustive list and should be considered in conjunction with the contents of the rest of this document.

We are under investigation by the Securities and Exchange Commission and others.

The Company’s major revenue generating subsidiary is in bankruptcy.

We have been sued by First Merchants Bank to enforce the guarantee of e-Biofuels’ debt.

The Company executed a guarantee and indemnity agreement pertaining to the debt of e-Biofuels owed to First Merchants Bank in conjunction with the acquisition of e-Biofuels in May 2010. The Company is defending itself with respect to this action, however, at the present time the Company has very limited resources to sustain its legal defense and if the bank is able to obtain a judgment in the matter against the Company, we may not be able to complete our planned joint venture oil sand project and re-establish revenues in any meaningful manner.

Our ability to raise capital and retain and attract new partners may be impacted by the issues facing the Company.

Uncertainty related to the outcome of the investigations, the bank’s lawsuit or any action taken by the Trustee in relation to the e-Biofuels bankruptcy may impinge upon our ability to raise capital or attract or retain financial partners for our oil sand and oil and gas projects.

We have a history of operating losses.

We have had a history of net operating losses.

Our oil sands technology is new and has not been operated under field conditions.

While we have extensively tested the viability of our oil sands technology under controlled conditions, our technology is new and has not been field tested. Delays or issues in operating the technology under normal and continuous operating conditions may impact our ability to generate revenues and obtain profitability.

The current volatility in global economic conditions and the financial markets may adversely affect our industry, business and results of operations.

The volatility and disruption to the capital and credit markets since mid-2008 have affected global economic conditions, resulting in significant recessionary pressures and declines in consumer confidence and economic growth. These conditions have led to economic contractions in the developed economies and reduced growth rates in the emerging markets. Despite fiscal and monetary intervention, it is possible that further declines in consumer spending and global growth rates may occur in the foreseeable future. Reduced consumer spending may cause changes in customer order patterns including order cancellations, and changes in the level of inventory held by our customers, which may adversely affect our industry, business and results of operations. The impact of the credit crisis and economic slowdown will vary by region and country. The diversity of our geographic customer and operating footprint limits our reliance and exposure to any single economy.

These conditions have also resulted in a substantial tightening of the credit markets, including lending by financial institutions and other sources of credit and liquidity. This tightening of the credit markets has increased the cost of capital and reduced the availability of credit. We cannot predict how long the current economic and capital and credit market conditions will continue, whether they will deteriorate and which aspects of our products or business could be adversely affected. However, if current levels of economic and capital and credit market disruption and volatility continue or worsen, there can be no assurance that we will not experience an adverse impact, which may be material, on our business, the cost of and access to capital and credit markets, and our results of operations. In addition, we monitor the financial condition of our customers on a regular basis based on public information or data provided directly to us. If the financial condition of one of our major customers was negatively impacted by market conditions or liquidity, we could be adversely impacted in terms of accounts receivable and/or inventory specifically attributable to them.

The industries in which we compete are highly competitive.

The oil and gas business is highly competitive. There is competition within these industries and also with other industries in supplying the energy, fuel and chemical needs of industry and individual consumers. We will compete with other firms in the sale or purchase of various goods or services in many national and international markets. We will compete with large national and multi-national companies that have longer operating histories, greater financial, technical and other resources and greater name recognition than we do. In addition, we will compete with several smaller companies capable of competing effectively on a regional or local basis, and the number of these smaller companies is increasing. Our competitors may be able to respond more quickly to new or emerging technologies and services and changes in customer requirements. As a result of competition, we may lose market share or be unable to maintain or increase prices for our products and/or services or to acquire additional business opportunities, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. Although we will employ all methods of competition which are lawful and appropriate for such purposes, no assurances can be made that they will be successful. A key component of our competitive position, particularly given the expected commodity-based nature of many of our products, will be our ability to manage expenses successfully, which requires continuous management focus on reducing unit costs and improving efficiency. No assurances can be given that we will be able to successfully manage such expenses.

Our competitive position in the markets in which we participate is, in part, subject to external factors in addition to those that we can impact. Natural disasters, changes in laws or regulations, war or other outbreak of hostilities, or other political factors in any of the countries or regions in which we operate or do business, or in countries or regions that are key suppliers of strategic raw materials, could negatively impact our competitive position and our ability to maintain market share.

Fluctuations in commodity prices may cause a reduction in the demand or profitability of the products or services we produce.

Prices for oil and natural gas tend to fluctuate widely based on a variety of political and economic factors. These price fluctuations heavily influence the oil and gas industry. Lower energy prices for existing products tend to limit the demand for all forms of energy services and related products and infrastructure. Historically, the markets for crude oil have been volatile, and they are likely to continue to be volatile. Wide fluctuations in commodity prices may result from relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty and other factors that are beyond our control, including:

•

worldwide and domestic supplies of oil and gas;

•

weather conditions;

•

the level of consumer demand;

•

the availability of pipeline and refining capacity;

•

the price and level of foreign imports;

•

domestic and foreign governmental regulations and taxes;

•

the ability of the members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls;

•

political instability or armed conflict in oil-producing regions; and

•

the overall global economic environment.

These factors and the volatility of the commodity markets make it extremely difficult to predict future commodity price movements with any certainty. There may be a decrease in the demand for our products or services and our profitability could be adversely affected.

Changes in technology may render our products or services obsolete.

The alternative fuel industry may be substantially affected by rapid and significant changes in technology. Examples include competitive product technologies, such as green gasoline and renewable diesel produced from catalytic hydroforming of renewable feedstock oils and competitive process technologies such as advanced biodiesel continuous reactor and washing designs that increase throughput. These changes may render obsolete certain existing products, energy sources, services and technologies currently used by us. We cannot assure you that the technologies used by or relied upon by us will not be subject to such obsolescence. While we may attempt to adapt and apply the services provided by us to newer technologies, we cannot assure you that we will have sufficient resources to fund these changes or that these changes will ultimately prove successful and that alternatives to fossil energy may become more abundant and significantly impact our operations.

Failure to comply with governmental regulations could result in the imposition of penalties, fines or restrictions on operations and remedial liabilities.

The oil and natural gas industry is subject to extensive federal, state, local and foreign laws and regulations related to the general population’s health and safety and those associated with compliance and permitting obligations (including those related to the use, storage, handling, discharge, emission and disposal of municipal solid waste and other waste, pollutants or hazardous substances or waste, or discharges and air and other emissions) as well as land use and development. Existing laws also impose obligations to clean up contaminated properties or to pay for the cost of such remediation, often upon parties that did not actually cause the contamination. Compliance with these laws, regulations and obligations could require substantial capital expenditures. Failure to comply could result in the imposition of penalties, fines or restrictions on operations and remedial liabilities. These costs and liabilities could adversely affect our operations.

Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly waste handling, storage, transport, disposal or cleanup requirements could require us to make significant expenditures to attain and maintain compliance and may otherwise have a material adverse effect on our business segments in general and on our results of operations, competitive position or financial condition. We are unable to predict the effect of additional environmental laws and regulations which may be adopted in the future, including whether any such laws or regulations would materially adversely increase our cost of doing business or affect our operations in any area.

Under certain environmental laws and regulations, we could be held strictly liable for the removal or remediation of previously released materials or property contamination regardless of whether we were responsible for the release or contamination, or if current or prior operations were conducted consistent with accepted standards of practice. Such liabilities can be significant and, if imposed, could have a material adverse effect on our financial condition or results of operations.

Our insurance may not protect us against our business and operating risks.

We maintain insurance for some, but not all, of the potential risks and liabilities associated with our business. For some risks, we may not obtain insurance if we believe the cost of available insurance is excessive relative to the risks presented. As a result of market conditions, premiums and deductibles for certain insurance policies can increase substantially and, in some instances, certain insurance policies may become unavailable or available only for reduced amounts of coverage. As a result, we may not be able to renew our existing insurance policies or procure other desirable insurance on commercially reasonable terms, if at all. Although we will maintain insurance at levels we believe are appropriate for our business and consistent with industry practice, we will not be fully insured against all risks which cannot be sourced on economic terms. In addition, pollution and environmental risks generally are not fully insurable. Losses and liabilities from uninsured and underinsured events and delay in the payment of insurance proceeds could have a material adverse effect on our financial condition and results of operations.

If a significant accident or other event resulting in damage to our operations (including severe weather, terrorist acts, war, civil disturbances, pollution, or environmental damage) occurs and is not fully covered by insurance or a recoverable indemnity from a customer, it could adversely affect our financial condition and results of operations.

We depend on key personnel, the loss of any of whom could materially adversely affect our future operations.

Our success will depend to a significant extent upon the efforts and abilities of our executive officers. The loss of the services of one or more of these key employees could have a material adverse effect on us. Our business will also be dependent upon our ability to attract and retain qualified personnel. Acquiring or retaining these personnel could prove more difficult to hire or cost substantially more than estimated. This could cause us to incur greater costs, or prevent us from pursuing our expansion strategy as quickly as we would otherwise wish to do.

We depend heavily on the services of Jeffrey T. Wilson, our Chief Executive Officer, chief financial officer, and President. We do not have an employment agreement with Mr. Wilson. We do not presently have a “key person” life insurance policy on the lives of any of these individuals to offset our losses in the event of their death.

If we are unable to effectively manage the commodity price risk of our finished goods, we may have unexpected losses.

We do not presently hedge our finished products. If we do not or are not capable of managing the commodity price risk of our finished products, we may incur losses as a result of price fluctuations with respect to these finished products.

If we are unable to acquire or renew permits and approvals required for our operations, we may be forced to suspend or cease operations altogether.

The operation of our oil sands plant requires numerous permits and approvals from governmental agencies. We may not be able to obtain all necessary permits (or modifications thereto) and approvals and, as a result, our operations may be adversely affected. In addition, obtaining all necessary renewal permits (or modifications to existing permits) and approvals for future expansions may necessitate substantial expenditures and may create a significant risk of expensive delays or loss of value if a project is unable to function as planned due to changing requirements.

The lack of business diversification may adversely affect our results of operations.

Unlike other entities which may have the resources to complete several business combinations of entities operating in multiple industries or multiple areas of a single industry, it is possible that we will not have the resources to diversify effectively our operations or benefit from the possible spreading of risks or offsetting of losses.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable.

Item 3.

Defaults Upon Senior Securities.

Not applicable.

Item 4.

Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 5.

Other Information.

Not applicable.

Item 6.

Exhibits.



10.		Purchase and Sale Agreement, dated January 31, 2012 incorporated herein by reference to Form 8-K filed February 16, 2012.

31.1		Section 302 Certification of CEO

32.		Section 906 Certification by CEO

101		The following materials from Imperial Petroleum, Inc.’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Income; (iii) Condensed Consolidated Statements of Cash Flows; (iv) Condensed Consolidated Statements of Shareholders’ Equity; and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned there unto duly authorized.


Imperial Petroleum, Inc.

By:		/s/ Jeffrey T. Wilson
		Jeffrey T. Wilson, President and Chief Executive Officer

Dated: June 14, 2012

Large accelerated filer

Accelerated filer

Non-Accelerated filer

Smaller reporting company

IMPERIAL PETROLEUM INC 10-Q