IMPERIAL PETROLEUM INC - FORM 10-Q

Attached files

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EX-32 - SECTION 906 CERTIFICATION BY CEO - IMPERIAL PETROLEUM INC	dex32.htm
EX-31.1 - SECTION 302 CERTIFICATION OF CEO - IMPERIAL PETROLEUM INC	dex311.htm

SECURITIES EXCHANGE COMMISSION

Washington D.C. 20549

(Mark One)

FORM 10-Q

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

For the Quarterly Period Ended October 31, 2010

¨	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.)

329 Main Street, Suite 801		47708
Evansville, Indiana		(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 ¨ 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.

Large accelerated filer ¨ Accelerated filer ¨ Non-Accelerated filer x Smaller reporting company ¨

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 October 31, 2010, there were 22,764,813 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.

— 2 —

IMPERIAL PETROLEUM, INC.

Index to Form 10-Q for the Quarterly Period

Ended October 31, 2010


PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.
	Page
Condensed Consolidated Balance Sheets as of July 31, 2010 and October 31, 2010		5

Condensed Consolidated Statements of Operations for the three months ended October 31, 2010 and 2009		6

Condensed Consolidated Statements of Cash Flows for the three months ended October 31, 2010 and 2009		7

Notes to Condensed Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		12

Item 3. Quantitative and Qualitative Disclosures about Market Risk		15

Item 4. Controls and Procedures		15

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. Removed and Reserved and Item 5. Other Information are not applicable		16-23

Item 6. Exhibits		23

SIGNATURES		24

— 3 —

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

We have prepared the 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 October 31, 2010, and its results of operations for the three month period ended October 31, 2010 and 2009 and its cash flows for the three month period ended October 31, 2010 and 2009. 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.

— 4 —

IMPERIAL PETROLEUM, INC.

CONDENSED CONSOLIDATED BALANCE SHEET


	31-Oct-10			31-Jul-10
	Unaudited			Audited
ASSETS

Current Assets
Cash and Cash Equivalents	$	341,071		$	28,525
Accounts Receivable		1,082,037			121,252
Inventory		121,855			139,350
Other Current Assets		666,387			418,186

Total current assets		2,211,350			707,313

Property, Plant and Equipment
Fixed Assets		11,648,146			10,983,569
Oil and gas properties (full cost method)		3,530,375			3,530,375
		15,218,521			14,513,944
Less: Accumulated DD&A		(2,505,943	)		(2,296,270	)

Net property, plant and equipment		12,672,578			12,217,674
Other Assets:
License Agreement, net of amortization of $4,667 and $1,167, respectively		205,333			208,833

TOTAL ASSETS	$	15,089,261		$	13,133,820


LIABILITIES AND STOCKHOLDER’S EQUITY

Current Liabilities
Accounts payable	$	3,122,588		$	2,896,376
Accrued expenses		5,814,755			5,539,283
Notes payable-current portion		2,156,867			1,633,849
Note payable-related parties		455,062			434,574
Term Loans		10,946,582			11,067,608
Other Senior Debt		586,066			670,643
Other current liabilities		618,563			283,023

Total current liabilities		23,700,483			22,480,356

Long Term Liabilities

Mortgage Note		1,503,464			1,533,464
Notes Payable, Other		574,400			649,031
Notes Payable, Related Parties		3,750,000			3,750,000
Asset Retirement Obligation		439,087			439,087

Total non-current liabilities		6,266,951			6,371,472

Stockholder’s Equity
Common stock of $.006 par value; authorized 150,000,000 shares; 22,764,813 and 21,364,813 issued and outstanding, respectively		136,590			128,190
Common Stock, owed but not issued (1,000,000 shares at 7/31/10, none at 10/31/10)		0			6,000
Additional paid-in capital		12,127,244			11,979,071
Retained earnings		(27,142,007	)		(27,831,379	)

Total stockholder’s equity		(14,878,173	)		(15,718,118	)

Total Liabilities and Stockholder’s Equity	$	15,089,261		$	13,133,820

See Notes to Condensed Consolidated Financial Statements

— 5 —

IMPERIAL PETROLEUM, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)


	Three Months Ending
	10/31/10			10/31/09
Revenue and other income
Biofuels Revenue	$	15,830,327		$	0
Oil and gas revenue		28,951			60,586
Other		62,827			0

Total operating income	$	15,922,105		$	60,586

Costs and Expenses:
Biofuels Cost of Production	$	13,578,168		$	0
Production costs and taxes		113,965			201,097
General and administrative		1,305,846			95,804
Depreciation, depletion and amort.		213,173			7,557

Total costs and expenses		15,211,152			304,458

Net gain/(loss) from operations		710,953			(243,872	)

Other income and (expense)
Interest expense		(331,580	)		(12,315	)
Interest income		0			396
Amortization of loan fees		0			0
Other income (expense)		310,000			2,391
Gain on sale of assets		0			0

Total other income/(expense)		(21,580	)		(9,528	)

Net gain/ loss before income taxes		689,372			(253,400	)

Provision for income taxes
Current		0			0
Deferred		0			0

Total benefit from income taxes		0			0

Net gain/loss	$	689,372		$	(253,400	)

Net gain/loss per share (basic)	$	0.030		$	(0.015	)

Weighted average shares outstanding		22,500,369			16,964,441
Net gain/loss per share (diluted)	$	0.029		$	N/A

Weighted average shares outstanding		23,965,823			N/A

See Notes to Condensed Consolidated Financial Statements

— 6 —

IMPERIAL PETROLEUM, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)


	Three Months Ending
	10/31/10			10/31/09
Operating activities:
Net income/(loss)	$	689,372		$	(253,400	)
Depreciation, depletion and amortization		213,173			7,557
Amortization of stock and options issued for services		37,643			—
Change in accounts receivable		(960,785	)		(4,960	)
Change in inventory		17,495			—
Change in other assets		(355,272	)		—
Change in accounts payable		226,212			187,993
Change in accrued expenses		580,473			59,935

Net cash provided by (used in) operating activities		448,311			(2,875	)


Investing activities:
Purchases and improvements to fixed assets		(225,153	)		(5,630	)
Reinvestment in certificates of deposit		—			(396	)

Net cash provided by (used in) investing activities		(225,153	)		(6,026	)


Financing activities:
Proceeds (payments) on notes payable		68,900			—
Proceeds (payments) on notes payable-related party		20,488			(2,000	)

Net cash provided by (used in) financing activities		89,388			(2,000	)

Net change in cash and cash equivalents		312,546			(10,901	)
Cash and cash equivalents, beginning of period		28,525			17,153

Cash and cash equivalents, end of period	$	341,071		$	6,252


Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest		145,939			—
Income taxes		—			—
Stock and options issued for services		150,572			—
Equipment acquired with notes payable		479,424			—

See Notes to Condensed Consolidated Financial Statements

— 7 —

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, 2011. 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, 2010.

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 biodiesel production and sales and oil and gas exploration and production in the United States. The Company, through its wholly owned subsidiary, Ridgepointe Mining Company is attempting to obtain capital, continue testing, defining and developing mineral reserves on mining claims it owns or operates in the southwestern and western United States. As of October 31, 2010, the Company had not begun mining activities. The Company is developing a newly formed subsidiary, Arrakis Oil Recovery, LLC for the recovery of heavy oil from mineable oil sands in the U.S. and internationally.

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 Rig Company, Hoosier Biodiesel Company (formerly Global-Imperial Joint Venture, Inc.), e-Biofuels, LLC. All significant inter-company accounts and transactions have been eliminated in consolidation.

GOING CONCERN

Financial Condition

The Company’s financial statements for the quarter ended October 31, 2010 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 incurred a net loss of $17,818,186 for the year ended July 31, 2010; a net gain of $10,785,443 for the year ended July 31, 2009 and net losses of $2,588,859 and $3,243,996 for the years ended July 31,2008 and 2007, respectively. As of July 31, 2010 the Company has an accumulated deficit of $27,831,379.

Management Plans to Continue as a Going Concern

With the acquisition of e-Biofuels, LLC in May 2010 and the rapid increase in sales volumes achieved by the Company, the Company believes that its e-Biofuels subsidiary will result in sufficient positive cash flow to maintain the Company’s operations and service its obligations.

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.

Description of Business and Basis of Presentation

Imperial Petroleum, Inc., a Nevada corporation (“the Company”), is a diversified energy, and mineral mining company headquartered in Evansville, Indiana. The Company is engaged in the production and exploration of crude oil and natural gas primarily in Louisiana and Texas and has diversified its business activities to include the development of a biofuels subsidiary.

At October 31, 2010, the Company operated 18 oil and gas wells in Louisiana. In addition, the Company owns an overriding royalty interest in Kentucky as well as the rights to several inactive gas wells as part of its New Albany Shale play. Net daily production from the Company’s oil and gas properties was approximately 4 Bopd and 34 Mmcfpd for the year ended July 31, 2010. The Company’s estimated net proven oil and gas reserves as of July 31, 2010 were 337 MBO and 3,284 Mmcfg, respectively. The Company is the operator and owner of the Duke Gold Mine in Utah, although no significant operations occurred during the fiscal year.

— 8 —

The Company formed Arrakis Oil Recovery, LLC in February 2010 to acquire a non-exclusive license for the development of a revolutionary new, eco-friendly process to recover oil (bitumen) from tar (oil) sands outside of Canada. The process is a non-thermal, mechanical and chemical process using a closed loop system to eliminate emissions. The process technology works equally well on oil-wet (US) tar sands or water-wet (Canadian) tar sands. The Company acquired an exclusive license to use the technology in Canada and signed a Term Sheet to access capital for the construction of a commercial scale demonstration facility. Upon successful demonstration of the commercial unit, the Company expects to complete a financing agreement with an international partner which will include rights to develop the technology in Canada, Russia, Venezuela, Mexico and Argentina in exchange for a license fee, an ongoing royalty interest in the facilities developed and a firm financing commitment of $6.6 million for installation of a facility in the US to be operated by the Company.

The Company acquired e-biofuels, LLC on May 24, 2010, a biodiesel producer located in Middletown, Indiana with a nameplate capacity of 15 million gallons per year. E-biofuels uses premium white grease (chicken fat) as its primary feedstock for the production of its product. Biodiesel sales for the period from May 24, 2010 through July 31, 2010 were approximately $5.54 million from approximately 1.8 million gallons. Biodiesel Sales for the first quarter were approximately 5.2 million gallons resulting in revenues of approximately $15.8 million. Since acquiring e-biofuels, the Company has increased biodiesel sales monthly up to 1.98 million gallons in the month of October 2010 with revenues for the month of $6.29 million.

Historical Background

The Company was incorporated on January 16, 1981 and is the surviving member of a merger between itself, Imperial Petroleum, Inc., a Utah corporation incorporated on June 4, 1979 (“Imperial-Utah”), and Calico Exploration Corp., a Utah corporation incorporated on September 27, 1979 (“Calico”). The Company was reorganized under a Reorganization Agreement and Plan and Article of Merger dated August 31, 1981 resulting in the Company being domiciled in Nevada.

On August 11, 1982, Petro Minerals Technology, Inc. (“Petro”), a 94% -owned subsidiary of Commercial Technology Inc. (“Comtec”) acquired 58% of the Company’s common stock. Petro assigned to the Company its interests in two producing oil and gas properties in consideration for 5,000,000 shares of previously authorized but unissued shares of common stock of the Company and for a $500,000 line of credit to develop these properties. Petro has since undergone a corporate reorganization and is now known as Petro Imperial Corporation. On August 1, 1988 in an assumption of assets and liabilities agreement, 58% of the Company’s common stock was acquired from Petro by Glauber Management Co., a Texas corporation, (“Glauber Management”), a 100% owned subsidiary of Glauber Valve Co., Inc., a Nebraska corporation (“Glauber Valve”).

Change of Control

Pursuant to an Agreement to Exchange Stock and Plan of Reorganization dated August 27, 1993 (the “Stock Exchange Agreement”), as amended by that certain First Amendment to Agreement to Exchange Stock and Plan of Reorganization dated as of August 27, 1993, (the “First Amendment”), between the Company, Glauber Management, Glauber Valve, Jeffrey T. Wilson (“Wilson”), James G. Borem (“Borem”) and those persons listed on Exhibit A attached to the Stock Exchange Agreement and First Amendment (the “Ridgepointe Stockholders”). The Ridgepointe Stockholders agreed to exchange (the “Ridgepointe Exchange Transaction”) a total of 12,560,730 shares of the common stock of Ridgepointe, representing 100% of the issued and outstanding common stock of Ridgepointe, for a total of 12,560,730 newly issued shares of the Company’s common stock, representing 59.59% of the Company’s resulting issued and outstanding common stock. Under the terms of the Stock Exchange Agreement, (i) Wilson exchanged 5,200,000 shares of Ridgepointe common stock for 5,200,000 shares of the Company’s common stock representing 24.67% of the Company’s issued and outstanding common stock, (ii) Borem exchanged 1,500,000 shares of Ridgepointe common stock for 1,500,000 shares of the Company’s common stock representing 7.12% of the Company’s issued and outstanding common stock, and (iii) the remaining Ridgepointe Stockholders in the aggregate exchanged 5,860,730 shares of Ridgepointe common stock for 5,860,730 of the Company’s issued and outstanding common stock, representing, in the aggregate, 27.81% of the Company’s issued and outstanding common stock. The one-for-one ratio of the number of shares of the Company’s common stock exchanged for each share of Ridgepointe common stock was determined through arms length negotiations between the Company, Wilson and Borem.

The Ridgepointe Exchange Transaction was closed on August 27, 1993. As a result, Ridgepointe is now a wholly, owned subsidiary of the Company. At the time of acquisition, Ridgepointe was engaged in the development of a copper ore mining operation in Yavapai County, Arizona and, through its wholly owned subsidiary, I.B. Energy, in the exploration for and production of oil and gas in the Mid-continent and Gulf Coast regions of the United States.

In connection with the closing of the Ridgepointe Exchange Transaction, each member of the Board of Directors of the Company resigned and Wilson, Borem and Dewitt C. Shreve (“Shreve”) were elected Directors of the Company. In addition, each officer of the Company resigned and the Company’s new Board of Directors elected Wilson as Chairman of the Board, President and Chief Executive Officer, Borem as Vice President and Cynthia A. Helms as Secretary of the Company. Ms. Helms subsequently resigned and Kathryn H. Shepherd was elected Secretary. Mr. Borem, Mr. Shreve and Ms. Shepherd subsequently resigned and Mr. Malcolm W. Henley and Mrs. Stacey D. Smethers were elected to the Board. The Board of Directors further authorized the move of the Company’s principal executive offices from Dallas, Texas to its current offices in Evansville, Indiana.

As a condition to closing the Ridgepointe Exchange Transaction, the Company received and canceled 7,232,500 shares of the Company’s common stock from the Company’s former partner, Glauber Management, and 100,000 shares of the common stock of Tech-Electro Technologies, Inc from an affiliate of Glauber Management and Glauber Valve. In addition, pursuant to the terms of the First Amendment, Glauber Management or Glauber Valve, or their affiliates, were to transfer to the Company 75,000 shares of common stock of Wexford Technology, Inc. (formerly Chelsea Street Financial Holding Corp.) no later than October 31, 1993, which such transfer subsequently occurred.

— 9 —

On August 15, 2001, Mr. Malcolm W. Henley and Mrs. Stacey D. Smethers resigned their positions as directors of the Company to pursue other interests. Their vacancies were filled with Mrs. Annalee C. Wilson and Mr. Aaron M. Wilson, both family members of the Company’s President and Chairman, each of whom was elected to the Board at the shareholder’s meeting held in August 2006.

The Company signed a Forbearance Agreement (and several amendments thereto) with its senior lender in connection with its plan to re-structure its senior debt. The Company incurred additional fees as a result of these amendments in the amount of $750,000 due to its senior lender as a result of these agreements. In April 2007, the Company re-structured its senior debt under a new debt facility with its lender in the form of a $15.0 million line of credit and $0.4 million in subordinated debt. The new facility provided the Company with additional workover capital to being workover operations on its properties as well as the completion of the Caltex acquisition. (See Capital Resources and Liquidity: Long Term Debt).

The Company completed a reverse split of its common stock in the ratio of four for one effective September 11, 2006 in connection with obtaining shareholder approval of the sale of assets discussed earlier. As a result of the reverse split the Company’s issued and outstanding common stock was reduced to 11,115,807 shares and the authorized capital was increased to 150,000,000 shares of common stock. (See Submission of Matters to Security Holders).

The Company signed a Purchase and Sales Agreement with Apollo Resources International, Inc. and subsidiaries (“Apollo”) on June 19, 2007 to acquire certain oil and gas assets located in New Mexico, Arizona and Utah for a total consideration of approximately $6.8 million, including 5 million shares of the Company’s restricted common stock. The Agreement was terminated by the Company after considerable due diligence due to Apollo’s inability to provide clear title to its assets.

In March 2008 the Company signed a Forbearance Agreement with its senior lender in connection with its failure to make certain payments due under its credit facility. Under the terms of the Agreement, the Company agreed to engage a broker or investment banker on or before April 15, 2008 to explore the sale of its assets to retire its debt. After several conversations with potential investment bankers, the Company and its Senior Lender agreed to postpone the retention of an investment banker and to allow management to pursue the sale of individual assets or a re-structuring of the Company’s senior debt with other parties. On October 10, 2008, the Company received notice that it was in default under the terms of the Forbearance Agreement and that its senior lender intended to pursue foreclosure beginning October 24, 2008. The Company reached a Settlement Agreement with its lenders effective April 30, 2009 that resulted in the sale of its North Louisiana and southeast Texas properties with the proceeds paid to its lenders in exchange for the retirement of its senior and subordinated debt facility. The Settlement Agreement closed effective April 30, 2009.

In November 2009, the Company agreed to purchase certain properties from Valley Falls Company, an affiliate owned by Mr. Greg Thagard, in exchange for 1.0 million shares of restricted common stock and a one year Promissory Note of $350,000. The Company anticipated the completion of financing which would allow development of the properties. Unfortunately the financing was not completed as planned and the Company and Valley Falls agreed to sell the majority of their interests to Cave Energy, Inc., a non-affiliated entity. As a result of the sale, the Company retained a 10% back-in after payout and Valley Falls canceled the promissory note.

The Company formed Arrakis Oil Recovery, LLC in February 2010 to acquire a non-exclusive license for the development of a revolutionary new, eco-friendly process to recover oil (bitumen) from tar (oil) sands outside of Canada. The process is a non-thermal, mechanical and chemical process using a closed loop system to eliminate emissions. The process technology works equally well on oil-wet (US) tar sands or water-wet (Canadian) tar sands. The Company acquired an exclusive license to use the technology in Canada from Proven Technology in exchange fr 1.0 million shares of its restricted common stock in July 2010. The Company, subsequent to year end, signed a Term Sheet to access capital for the construction of a commercial scale demonstration facility for the technology. Upon successful demonstration of the commercial unit, the Company expects to complete a financing agreement with an international partner which will include rights to develop the technology in Canada, Russia, Venezuela, Mexico and Argentina in exchange for a license fee, an ongoing royalty interest in the facilities developed and a firm financing commitment of $6.6 million for installation of a facility in the US to be operated by the Company.

The Company acquired e-biofuels, LLC on May 24, 2010, a biodiesel producer located in Middletown, Indiana with a nameplate capacity of 15 million gallons per year. The Company issued 2.0 million shares of its restricted common stock, $3.75 million in four-year term Promissory Notes with an interest rate of 10% and assumed approximately $15 million in debt as a result of the acquisition. E-biofuels uses premium white grease (chicken fat) as its primary feedstock for the production of its product. Biodiesel sales for the period from May 24, 2010 through July 31, 2010 were approximately $5.54 million from approximately 1.8 million gallons. Since acquiring e-biofuels, the Company has increased biodiesel sales up to 1.87 million gallons in the month of September 2010 with revenues for the month of $5.65 million. (See Form 8-K filed May 26, 2010 and incorporated herein by reference.)

The Company signed consulting agreements with two parties in August 2010 and issued 1.4 million shares of its restricted common stock as compensation under the agreements. The consultants services are to assist the Company in the development of the Duke Gold Mine in Utah and to assist the Company in website development and maintenance and in the recovery of trade accounts receivable from oil and gas operations.

In August 2010, the Company signed a best-efforts agreement with a capital provider to obtain loans for the Company in the amount of $30 million. In connection with the financing, the Company placed $220,000 in a refundable escrow account with the capital provider. Closing has been extended until December 20, 2010.

Mr. Malcolm Henley resigned as a director of the Company effective August 16, 2010 due to personal reasons. There were no disputes between Mr. Henley and management of the Company or with its auditors. Mr. John Ryer was approved by the Board to replace Mr. Henley until the next regular shareholders meeting.

— 10 —

On September 1, 2010 the Company signed a non-binding Term Sheet with an international partner in connection with the development of its oil sands technology. The Company completed a Financing Agreement on September 30, 2010 and borrowed $250,000 to construct a commercial scale demonstration unit in Houston, Texas. Upon satisfactory demonstration of the commercial unit, the Company expects to complete a License Agreement with the international partner which will provide for the payment to the Company of a license fee of $500,000; an on-going royalty paid to the Company associated with each installation and a firm financing commitment of $6.6 million to build the Company’s initial installation in the United States.

On September 8, 2010, the Company signed a purchase and sale agreement to acquire certain properties located in Knox county, Kentucky in connection with a court-ordered sale. Under the terms of the agreement, the Company is the “stalking horse” bidder in the sale of the assets from a bankruptcy proceeding. The sale is subject to approval of the Bankruptcy Court and District Court for the Western District of Kentucky.

(2)

ACCOUNTING POLICIES

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10 Q 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.

(3)

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.

In connection with the acquisition of e-biofuels, LLC as a wholly-owned subsidiary, the Company assumed senior debt under the following facilities: (1.) First Merchants Bank, N.A. Term Loans; (2.) Cienna Capital/Small Business Administration (“SBA”) Mortgage Note; (3.) SBA facilitated equipment loan and (4.) certain Capital Leases for vehicles. The following is a description of the terms and conditions of each facility as of October 31, 2010:

First Merchants Bank, N.A. Term Loans: The Company has three term loans with First Merchants Bank: Term Loan A has a balance due of $2,668,143 and an interest rate of 6%; Term Loan B has a balance due of $5,163,322 with an interest rate of 3%; and Term Loan C has a balance due of $3,115,116 with an interest rate of 10%. The Term loans expire on December 31, 2010 and are secured by all of the assets of e-biofuels; the personal guarantees of Craig Ducey and Chad Ducey and by a corporate guarantee of the Company. The Company is not in compliance with the terms of these notes.

Cienna Capital/ Small Business Administration Mortgage Note: The Company has a mortgage secured by the real estate and facility located in Middletown, Indiana. The balance due is $1,591,324 with a variable interest rate . The note is further secured by the personal guarantees of Mr. Craig Ducey and Mr. Chad Ducey. The term of the note is 25.5 years from December 2007.

SBA Equipment Loan: The Company obtained a loan for the purchase of equipment through the issuance of a Debenture in December 2007 in the original amount of $772,000. The balance due is $586,066 with an interest rate of 6.5%. The note is secured by certain equipment located at the Middletown, Indiana plant and further secured by the personal guarantees of Mr. Craig Ducey and Mr. Chad Ducey. The term of the note is 120 months.

Capital Leases: The Company has capital leases related to vehicles used in the operation of the facility at Middletown, Indiana which total $580,516 and have varying market based interest rates.

Other Debt: The Company has private notes and debt with various individuals, small companies and its Chairman that totals $6,111,929 as of October 31, 2010. Generally this debt is unsecured and bear market interest rates and flexible terms.

Clean Sands Loan: On September 30, 2010, the Company entered into a Financing Agreement with Clean Sands International, LLC to provide $250,000 in funds for the construction of a commercial scale demonstration unit for its oil sand recovery project. The term of the loan is 12 months with interest paid monthly at 12%. The loan is secured by the equipment and a warrant to purchase 2,000,000 shares of the Company’s common stock at $0.006/share. The warrants are only issueable in the event that the Company defaults on the loan on or before September 30, 2011. The loan is a part of the Term Sheet executed between the Company and Clean Sands that also provides for the negotiation of a License Agreement covering several territories outside the United States that, if completed, would be granted to Clean Sands for development of the technology.

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(4)

STOCK OPTIONS

There are 2,100,000 outstanding options as of October 31, 2010. See Note 5 for option issuances for the quarter.

(5)

STOCK ISSUED DURING THE QUARTER

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. The Company issued a total of 1,400,000 shares of restricted common stock and 100,000 warrants to purchase common stock during the quarter for services related to debt collection, website development and consulting services related to the Duke Mine. One million of the shares issued had been owed, but not issued as of July 31, 2010. The warrants have a term of 3 years and an exercise price of $0.25 per share.

(6)

SUBSEQUENT EVENTS

In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. The Company signed purchase agreements with two parties to acquire an additional 26% interest in the Coquille Bay field in Louisiana and 100% of the gas pipeline that services the field in exchange for 1,500,000 shares and the settlement of certain joint interest accounts owed to the Company.

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 biodiesel, biodiesel feedstocks, crude oil and natural gas, (ii) the level of biodiesel, 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 $78.85/Bbl for oil and $4.00 per Mmbtu for natural gas at October 31, 2009. Since that time oil prices have remained about the same and natural gas prices have declined. Diesel prices are impacted by crude oil prices and determine biodiesel prices to a large degree. Biodiesel prices have remained relatively stable at around $3.02 per gallon. The impact of high prices turning to lowered prices is uncertain and much volatility exists in world oil and gas pricing as oil producing countries are threatening an imposed drop in production to compensate for lower prices. 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 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 $1,300.00 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 $2.78 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 October 31, 2010 compared to Quarter ended October 31, 2009.

Revenues for the three months ending October 31, 2010 were $15,922,105 compared to revenues of $60,586 for the comparable quarter ended October 31, 2009. The significant increase is the result of the acquisition of e-Biofuels, LLC and its operations. Coquille Bay continues to suffer from a lack of available gas for gas lift and as a result the Company continues to conserve natural gas and limits sales. We presently expect that our biodiesel sales will account for the majority of our revenues during the current fiscal year. We expect revenues to increase dramatically compared to the prior fiscal year with a full year of biodiesel sales from our e-biofuels subsidiary.

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Total operating expenses for the quarter ended October 31, 2010 were $15,211,152 compared to $304,458 for the same quarter ended a year earlier. Direct operating expenses have increased due to the costs associated with e-biofuels. Our gross margin from the production of biodiesel is approximately 19% with feedstock costs of approximately $2.32 per gallon. We experienced limited activity in Coquille Bay field for the year. General and administrative costs (“G&A”) for the quarter ended October 31, 2010 were $1,305,846 compared to $95,804 for the quarter ended October 31, 2009. We expect significantly increased G&A costs as a result of a full year of inclusion of e-biofuels, however, we do not anticipate the addition of significant staff at e-biofuels despite increased production levels and as a result we anticipate increased overall margins. Interest costs increased to $331,955 for the quarter ended October 31, 2010 compared to $12,315 for the prior quarter as a result of the acquisition of e-Biofuels and its debt. On a full-year basis, interest rates are expected to increase substantially above 2009 levels.

The Company incurred a net after tax gain of $689,372 ($0.030 per share) for the quarter ended October 31, 2010 compared to an after tax loss of $253,400 ($0.015 per share) for the prior year quarter ended October 31, 2009. The net gain for the current quarter is primarily the result of the operations of e-Biofuels, LLC generated a net gain of $1,128,590 for the quarter.

FINANCIAL CONDITION

Capital Resources and Liquidity

The Company’s capital requirements in the past have related primarily to the remedial efforts to return wells to production and to workover and repair operations on various wells to increase production, including the repairs required at Coquille Bay after hurricane Katrina. Now that the repairs at Coquille Bay are completed and production has been re-established, the Company has a great deal of flexibility in the timing and amount of these expenditures. The Company did not make any capital expenditures for workovers in the most recent quarter due to limited production at Coquille Bay and due to a lack of capital. With the acquisition of e-biofuels, we do not expect significant capital improvements at the current levels of production, however, subject to available capital, we do anticipate expansion of the plant capacity by an additional 10 million gallons per year.

As a result of the inability of the Company to raise capital for its mining operations, the Company is active in only one mine that will require significant capital expenditures, the Duke Mine located in Utah. The Company has a wide degree of discretion in the level of capital expenditures it must devote to the mining project on an annual basis and the timing of its development. The Company has primarily been engaged, in its recent past, in the acquisition and testing of mineral properties to be inventoried for future development.

Hurricane Katrina had a significant impact to the Company’s south Louisiana operations and facilities that resulted in the Company becoming non-compliant with the terms of its original credit agreements that had been put in place in early 2004. The Company decided to pursue the sale of assets to reduce bank debt and negotiated a Forbearance Agreement with its senior lenders in February 2006 to allow it sufficient time to complete a sale of assets The Company signed a Definitive Purchase and Sales Agreement with Whittier Energy Company and Premier Natural Resources LLC that was closed on August 9, 2006. The proceeds of the initial closing (also referred to as Phase I) of approximately $12.0 million were used to reduce senior debt by $11.3 million and to pay vendor payables. A second closing (also referred to as Post-Closing or Phase II Closing) of the asset sale to Whittier and Premier occurred on November 9, 2006 and resulted in approximately $1.85 million in additional proceeds to the Company that were used to further retire senior debt ($1.7 million) and to reduce vendor payables ($0.15 million).

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In April 2007, the Company completed a re-financing of its senior and subordinated debt facility with its then current lenders consisting of a $15.0 million Revolving Loan facility and a $0.35 million subordinated debt facility. The total amount borrowed under the re-financing was approximately $10.2 million under the combined credit facility and included approximately $0.3 million for the acquisition of the Caltex properties and $0.85 million for workovers and working capital. The availability under the Revolving Loan was subject to semi-annual evaluations of the Company’s oil and gas reserve base as determined by the Lender and was reduced monthly based upon re-determinations by the Company after taking into effect price changes and net production. As of the closing date of April 2007, the Company had available borrowing capacity of approximately $10.5 million based upon the then current oil and gas properties evaluation. On March 26, 2008 as a result of a cash flow shortage created by the temporary loss of production at Coquille Bay, the Company negotiated a Forbearance Agreement and Amendment Number One to Credit Agreement with its senior lender in order to access additional borrowings under its credit facility. The Company received a notice from its senior lender on October 10, 2008, that it was in default of the Forbearance Agreement and that the lender intended to begin foreclosure proceedings after October 24, 2008. (see Form 8-K filed October 15, 2008, incorporated herein by reference) On November 13, 2008 the Company and its Lender executed a new Forbearance Agreement that deferred any further action by its Lender until December 29, 2008 and anticipated the Company and its Lender entering into a Settlement Agreement on or before December 15, 2008. The November Forbearance Agreement was amended on December 19, 2008 to provide for an extension of time until January 15, 2009 to enter into a settlement agreement and January 31, 2009 for the expiration of the amended Forbearance Agreement. Effective April 30, 2009, the Company completed the sale of certain of its oil and gas assets located in north Louisiana and southeast Texas to Valley Falls Company and assigned the proceeds of the sale to its lender group. In addition, as part of the agreement to retire its senior and subordinated debt, the lender group received an assignment of a 5% overriding royalty interest in Coquille Bay, proportionately reduced to the Company’s record title interest in the field. The Settlement Agreement resulted in the retirement of approximately $14.6 million in principal, accrued interest and fees. (See Form 8-K dated May 19, 2009 incorporated herein by reference) As a result of the Settlement Agreement, the Company retired its senior and subordinated debt facilities.

The timing of expenditures for the Company’s oil and natural gas and mining activities are generally distributed over several months, however, any cessation of production or catastrophe type expenditures create significant cash flow shortages for the Company. The Company anticipates its current working capital will not be sufficient to meet its required capital expenditures and that the Company will be required to either access additional borrowings from its lender or access outside capital. Currently the Company projects it will require non-discretionary capital expenditures of approximately $500,000 in the next fiscal year to re-establish and maintain economic levels of production at Coquille Bay. Without access to such capital for non-discretionary projects, the Company’s production may be significantly curtailed or shut in and jeopardize its leases.

Capital Leases: The Company has capital leases related to vehicles used in the operation of the facility at Middletown, Indiana which total $580,566 and have varying market based interest rates.

The level of the Company’s capital expenditures will vary in the future depending on commodity market conditions, upon the level of biodiesel production and oil and gas activity achieved by the Company, the success of its remedial workover operations and upon the availability of capital for discretionary and non-discretionary projects. The Company anticipates that its cash flow will be sufficient to fund its operations at their current levels however, additional funds or borrowings will be required for expansion. Because the timing of acquisitions of additional oil and gas properties is uncertain, additional borrowings will be required to fund new acquisitions and the timing of those borrowings is uncertain.

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The Company has also has obtained certain unsecured loans from various individuals and from its Chairman and President, Jeffrey T. Wilson, in the approximate amount of $455,062 as of October 31, 2010. These loans bear market rates of interest and flexible terms and are generally unsecured. These funds have been used to maintain the Company’s biodiesel, oil and gas and mining activities and fund its overhead requirements. In addition, as a result of the acquisition of e-biofuels, the Company issued notes payable to the principals of e-biofuels in the amount of $3.75 million with a 10% interest rate. Principal and interest under these notes is accrued and due and payable at the end of four years from May 2010. As of October 31, 2010, the Company has accrued salaries due its Chairman and President of $296,001 and accounts payable due to Werks Management, a company owned by Craig Ducey and Chad Ducey, in the amount of $143,570. 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 October 31, 2010, the Company had current assets of $2,211,350, including $341,071 in cash and cash equivalents, $1,082,037 in trade and oil and gas accounts receivable, $121,855 in inventories and current liabilities of $23,700,483, which resulted in negative working capital of $21,489,133. The negative working capital position is comprised of senior debt of $11,532,648; trade accounts payable of $3,122,588; of accrued expenses payable of $5,815,430 consisting primarily of settlements and contingent liabilities and of interest and accrued salaries payable to the Company’s President and oil and gas suspense accounts; notes payable to related parties of $455,062; and short-term third party notes payable of $2,156,867. As of October 31, 2010 the Company had cash of $341,071.

Item 3.

Quantitative and Qualitative Disclosures Regarding Market Risk.

Commodity Risk

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

Interest Rate Risk

We have 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 annual report on Form 10-K/A, our President and Chief Executive Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of October 31, 2010, pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our President and Chief Executive Officer concluded that as of October 31, 2010 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.

Changes in 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 July 31, 2010. 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 has identified one material weakness in internal control over financial reporting existing as of October 31, 2010. Our evaluation of the

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significance of each deficiency included both quantitative and qualitative factors. Based on that evaluation, the Company’s management concluded that as of October 31, 2010, 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 not effective, for the reason discussed below:

Segregation of Duties

As a result of lack of employees, we were unable to meet certain segregation of duties criteria during most of the past fiscal year and did not have existing resources for creating a compensating control mechanism. During our evaluation of our internal controls, Mr. Wilson, our combined Chief Executive Officer and Chief Financial Officer, identified the inability to include proper segregation of transaction authorization, transaction processing and custody within our accounting department, resulting in a material weakness in our internal controls over financial reporting. Despite our material weakness regarding our segregation of duties, we believe that our financial statements included in this report fairly present in all material respects the Company’s financial condition, results of operations and cash flows for the periods presented and that this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

Remediation Initiative

With the acquisition of e-biofuels, we have added additional accounting personnel. We have continued to engage an outside consulting firm to assist us in implementing additional controls to improve our overall control processes and provide checks and balances. In addition, it is our intention to hire a minimum of two qualified accounting individuals as soon as the necessary financial resources become available.

Other than the weakness identified above and our remediation of the weakness, there were no other changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permits the company to provide only management’s report in this annual report.

Changes in Internal Controls

No additional changes in internal controls were made during the quarter ended October 31, 2010.

PART II OTHER INFORMATION

Item 1.

Legal Proceedings.

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. While the outcome of lawsuits or other proceedings and claims against the Company cannot be predicted with certainty, management does not expect these matters to have a material adverse effect on the financial position of the Company.

The Company has accrued revenue payable, legal and petty suspense accounts in the amount of $173,907, $323,213 and $6,422, respectively, as of October 31, 2010. 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. The Company has a plugging liability for oil and gas operations in the various states in the amount of $439,087. The Company has plugging bonds posted with the state regulatory agencies in the amount of $1,208,500 to offset the cost of plugging wells in the future.

The Company has reserved as a contingent liability a total of $320,000 as of October 31, 2010 against future losses associated with the litigation listed below.

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Imperial Petroleum, Inc. versus Ravello Capital LLC

The Company filed suit in Federal District Court in Tulsa County, Oklahoma against Ravello Capital LLC (“Ravello”) on November 20, 2000. The suit alleged branch of contract and sought to have the contract declared partially performed in the amount of 474,900 and sought relief in the amount of $488,390 for the unpaid consideration and punitive damages and attorney fees. The Company received a judgment award against Ravello in the amount of $488,390 and subsequently collected and credited the judgment award against Ravello in the amount of $85,638 as a result of the re-issuance of certain of its shares in Warrior, held by Ravello in escrow and not released. The Company does not believe it will be successful in collecting the balance of the judgment against Ravello.

Gary Bolen, et al vs. Imperial Petroleum, Inc.: Wrongful Garnishment:

The case filed in Midland County, Texas No. CV 45671 on July 24, 2008 stems from a dispute in 2005 in which Pharoh Oil & Gas, a company owned by Mr. Bolen ceased accepting saltwater from the University BX lease despite a valid saltwater disposal agreement in place, owned by Imperial at the time, and resulted Imperial obtaining a monetary judgment against Pharoh and Bolen and executing garnishment procedures to allow the money to be escrowed pending final outcome of that trial. Imperial prevailed in that trial, through the Supreme Court of Texas, and received the judgment proceeds. Bolen contends that the procedures used by Imperial in garnishing the funds to be escrowed were improper and seeks unspecified damages. The Company is vigorously defending itself in this case.

Pearl River Navigation vs. Imperial Petroleum, Inc.

Pearl River conducted barge and crane operations after hurricane Katrina on the Coquille Bay field in Louisiana on behalf of the working interest owners. A dispute arose between the parties regarding the availability of Pearl River’s crane operator on weekends, despite the fact that Pearl River continued to bill for such operations. The Company refused to pay the disputed invoices and Pearl River filed a lien in the amount of approximately $789,000 despite approximately $225,000 in payments by the Company. . Pearl River filed a lawsuit dated August 1, 2007 in the 25th Judicial District Court for the Parish of Plaquemines, State of Louisiana. the case was moved to the United States District Court for the Eastern District of Louisiana, civil Action No. 07-9619, Section “I”(4). The Company and Pearl River have been settled the case and Pearl River has agreed to accept payment of $100,000 on monthly payment terms from production and an overriding royalty interest in the Coquille Bay field.

Aventine Renewable Energy Holdings v. e-biofuels, LLC and

e-biofuels, LLC v. Aventine Renewable Energy Holdings

This suit was filed in the United States Bankruptcy Court for the District of Delaware. e-biofuels and Aventine entered into a purchase agreement on April 4, 2008. Aventine was to purchase fuel at $3.815 per gallon for a total of six million gallons. Aventine failed to purchase six million gallons. e-biofuels claims that Aventine initially breached the agreement when it advised e-biofuels of an anticipatory repudiation of the agreement. e-biofuels and Aventine claim more than $2,500,000.00 in damages due to the other’s breach. This case will be tried in 2011 and management is confident that e-biofuels will prevail.

BASF Corporation v. e-biofuels, LLC

BASF filed suit in Henry Superior Court alleging that from April 2, 2009 until May 18, 2009 e-biofuels purchased products on credit from BASF totaling $113,510.60. BASF claims that e-biofuels failed to pay the amount due. A settlement was reached and the case will be dismissed.

Checkered Express, Inc. v. e-biofuels, LLC

Checkered Express filed suit in Henry Circuit Court alleging e-biofuels owed Checkered Express $106,354.80 for trucking services provided to e-biofuels. Checkered Express claims e-biofuels failed to pay the amount due. A settlement was reached and the case will be dismissed.

Diversified Ingredients, Inc. v. e-biofuels, LLC

Diversified filed suit in Henry Circuit Court seeking to domesticate a Judgment entered on January 28, 2010 in the Circuit Court of St. Louis County, State of Missouri, against e-biofuels and in favor of Diversified for $157,494.38. Diversified alleged that the parties contracted for Diversified to sell products to e-biofuels for a fee. Diversified claimed that, despite acceptance of delivery of the shipments of product, e-biofuels failed to tender payment to Diversified. A settlement was reached and the case will be dismissed.

Nationwide Insurance Co. as subrogee of Gas America Services, Inc. v. e-biofuels, LLC

Nationwide filed suit in Henry Superior Court alleging that sometime prior to January 1, 2008, e-biofuels purchased fuel from Gas America, who maintained a policy of insurance with Nationwide. After Gas America began selling the fuel, it received complaints from customers who had purchased the fuel, claiming that their vehicles had become damaged. Gas America claims to have discovered that the fuel was defective and caused the damage to customers’ vehicles. Gas America paid the cost to repair its customers’ vehicles, totaling $29,001.56. The lawsuit was settled and the case has been dismissed.

Global Fuels LLC v. e-biofuels, LLC

Global Fuels filed suit in the United States District Court for the Southern District of Indiana, Indianapolis Division, claiming that it is the owner of a Judgment obtained in the District Court of the United States for the Eastern District of Missouri, Eastern Division, on which there was a judgment amount of $203,792.02 plus interest. Global Fuels claimed that e-biofuels from August 1, 2009 through September 19, 2009 e-biofuels purchased biodiesel fuel from Global Fuels. The total sale price of the biodiesel was $536,295.29. Global Fuels claimed that e-biofuels failed to pay $197,793.20 of this total. A settlement was reached and the case will be dismissed.

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KA Bulk Transport, LLC, d/b/a/ Klemm Tank Lines v. e-biofuels, LLC

KA Bulk Transport brought suit in the United States District Court for the Southern District of Indiana, Indianapolis Division, claiming that it had an agreement with e-biofuels under which KA Bulk Transport would transport fuels and other liquids to and from e-biofuels’ location. KA Bulk Transport alleged that it provided substantial transportation services for e-biofuels in an amount of $90,192.90, which e-biofuels has failed to pay. A settlement was reached and the case will be dismissed.

Marshall Marketing, LLC v. e-biofuels, LLC

Marshall Marketing brought suit in Henry Circuit Court alleging that it had a contract with e-biofuels regarding a risk management program. Marshall Marketing claims that it provided services to e-biofuels pursuant to the contract, but that e-biofuels failed to pay the full amount owed. Marshall Marketing claims that e-biofuels failed to pay the total amount of the first invoice, resulting in an amount owed of $37,381.38, and that e-biofuels failed to pay the second invoice amount of $45,000.00. A settlement was reached and the case will be dismissed.

Norfolk Southern Railway Company v. e-biofuels, LLC

Norfolk Southern brought suit in the United States District Court for the Southern District of Indiana, asserting that it was entitled to payment of rail freight and switching charges incurred by e-biofuels in an amount of $109,244.40. Norfolk Southern claims e-biofuels failed to pay this amount. A settlement was reached and the case will be dismissed.

Settlemyre Industries, Inc. v. e-biofuels, LLC

Settlemyre brought suit in the United States District Court for the Southern District of Ohio, Western Division alleging that it contracted with e-biofuels to purchase 630,000 gallons of biodiesel from e-biofuels at $3.28 per gallon. The contract included a list of quality requirements and specifications that e-biofuels’ biodiesel must satisfy before Settlemyre would accept delivery. Settlemyre claims that e-biofuels was unable to provide a product to meet the specifications, which resulted in a breach of contract. As a result, Settlemyre had to purchase a similar product from other sellers at an increased price, for which Settlemyre seeks more than $630,000 in damages. e-biofuels claims the product met specifications and Settlemyre wrongfully rejected the product. Further, e-biofuels claims that Settlemyre did not properly cover or mitigate their damages, if any. A settlement was reached and the case will be dismissed.

Tombstone v. Aventine, e-biofuels, LLC

Tombstone filed a claim in the Aventine bankruptcy proceeding in the United States Bankruptcy Court for the District of Delaware. Tombstone claimed as a result of the dispute between Aventine and e-biofuels that Tombstone suffered damages and did not receive product. The parties in the bankruptcy court have resolved this claim and the claim will be dismissed.

Vinmar Overseas, LTD. v. e-biofuels, LLC

Vinmar filed suit in the United States District Court for the Southern District of Texas, Houston Division, claiming that Vinmar and e-biofuels entered into a contract under which e-biofuels agreed to supply 500,000 gallons of FAME B99 to Vinmar. Vinmar claimed that e-biofuels failed to deliver the required quantities of product and owed $2,000,000.00 plus as a result of the breach and lost profit. Vinmar lost its claim of lost profit. Vinmar filed suit in Henry Circuit Court domesticating the judgment in favor of Vinmar and against e-biofuels for $930,546.87. Payments are being made toward that judgment.

Item 1A.

Risk Factors.

In addition to the other information set forth elsewhere in this Form 10-K, 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.

We have a history of operating losses.

We have had a history of net operating losses for at least the past three years.

Natural gas, oil and biodiesel prices fluctuate widely, and low prices would have a material adverse effect on our revenues, profitability and growth.

The market price of all energy products remains enormously volatile and recent high prices have been replaced with relatively low prices and all within a few months. Our revenues, profitability and future growth will depend significantly on natural gas and crude oil prices. Prices received also will affect the amount of future cash flow available for capital expenditures and repayment of indebtedness and will affect our ability to raise additional capital. Lower prices may also affect the amount of natural gas, oil and biodiesel that we can economically produce. Factors that can cause price fluctuations include:

•

The domestic and foreign supply of natural gas and oil.

•

Overall economic conditions.

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•

The level of consumer product demand.

•

Adverse weather conditions and natural disasters.

•

The price and availability of competitive fuels such as heating oil and coal.

•

Political conditions in the Middle East and other natural gas and oil producing regions.

•

The level of LNG imports.

•

Domestic and foreign governmental regulations.

•

Potential price controls and special taxes.

Biodiesel feedstock prices fluctuate widely and high prices may affect our ability to economically produce biodiesel.

We rely on substantial price differentials between the cost of raw materials used as feedstocks for the manufacture of biodiesel and the finished biodiesel product in order to economically produce and sell our product. Recently, soy oil prices, a biodiesel feedstock, increased in price to levels that approximate the retail sales price of the finished biodiesel product, resulting in very slim margins for production facilities. Continued tightening of margins could result in the cost of producing biodiesel becoming prohibitive.

We depend on the services of our chairman, chief executive officer and chief financial officer, and implementation of our business plan could be seriously harmed if we lost his services.

We depend heavily on the services of Jeffrey T. Wilson, our chairman, chief executive officer, and chief financial officer. We do not have an employment agreement with Mr. Wilson, and we do not presently have a “key person” life insurance policy on Mr. Wilson to offset our losses in the event of Mr. Wilson’s death.

Our ability to successfully execute our business plan is dependent on our ability to obtain adequate financing.

Our business plan, which includes participation in 3-D seismic shoots, lease acquisitions, the drilling of exploration prospects and producing property acquisitions, has required and will require substantial capital expenditures. We also require additional financing to fund our planned growth and expansion plans for our biodiesel facility. Our ability to raise additional capital will depend on the results of our operations and the status of various capital and industry markets at the time we seek such capital. The current marketplace is subject to severe economic downturns and capital raising for activities of the type conducted by the Company is of a speculative type and very difficult to obtain. Accordingly, we cannot be certain that additional financing will be available to us on acceptable terms, if at all. In particular, our credit facility imposes limits on our ability to borrow under the facility and limits our ability to incur additional indebtedness. In the event additional capital resources are unavailable, we may be required to curtail our exploration and development activities or be forced to sell some of our assets in an untimely fashion or on less than favorable terms.

Natural gas and oil reserves are depleting assets and the failure to replace our reserves would adversely affect our production and cash flows.

Our future natural gas and oil production depends on continuing to make our current properties productive and our success in finding or acquiring new reserves. If we fail to replace reserves, our level of production and cash flows would be adversely impacted. Production from natural gas and oil properties decline as reserves are depleted, with the rate of decline depending on reservoir characteristics. Our total proved reserves will decline as reserves are produced unless we conduct other successful exploration and development activities or acquire properties containing proved reserves, or both. Further, the majority of our reserves are proved developed producing. Accordingly, we do not have significant opportunities to increase our production from our existing proved reserves. Our ability to make the necessary capital investment to maintain or expand our asset base of natural gas and oil reserves would be impaired to the extent cash flow from operations is reduced and external sources of capital become limited or unavailable. We may not be successful in exploring for, developing or acquiring additional reserves. If we are not successful, our future production and revenues will be adversely affected.

Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions could materially affect the quantities and present values of our reserves.

The process of estimating natural gas and oil reserves is complex and involves a degree of subjective interpretation of technical data and information. It requires analysis of available technical data and the application of various assumptions, including assumptions relating to economic factors. Any significant inaccuracies in these interpretations or assumptions could materially affect the estimated quantities and present value of reserves shown in this report.

In order to prepare these estimates, our independent third party petroleum engineer must project production rates and timing of development expenditures as well as analyze available geological, geophysical, production and engineering data, and the extent, quality and reliability of this data can vary. The process also requires economic assumptions relating to matters such as natural gas and oil prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. Therefore, estimates of natural gas and oil reserves are inherently imprecise.

Actual future production, natural gas and oil prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable natural gas and oil reserves most likely will vary from our estimates. Any significant variance could materially affect the estimated quantities and pre-tax net present value of reserves shown in this report. In addition, estimates of our proved reserves may be adjusted to reflect production history, results of exploration and development, prevailing natural gas and oil prices and other factors, many of which are beyond our

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control. Some of the producing wells included in our reserve report have produced for a relatively short period of time. Because some of our reserve estimates are not based on a lengthy production history and are calculated using volumetric analysis, these estimates are less reliable than estimates based on a more lengthy production history.

You should not assume that the pre-tax net present value of our proved reserves prepared in accordance with SEC guidelines referred to in this report is the current market value of our estimated natural gas and oil reserves. We base the pre-tax net present value of future net cash flows from our proved reserves on prices and costs on the date of the estimate. Actual future prices, costs, taxes and the volume of produced reserves may differ materially from those used in the pre-tax net present value estimate.

Exploration is a high risk activity, and our participation in drilling activities may not be successful.

Our future success will largely depend on the success of our exploration drilling program. Participation in exploration drilling activities involves numerous risks, including the risk that no commercially productive natural gas or oil reservoirs will be discovered. The cost of drilling, completing and operating wells is often uncertain, and drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including:

•

Unexpected drilling conditions.

•

Blowouts, fires or explosions with resultant injury, death or environmental damage.

•

Pressure or irregularities in formations.

•

Equipment failures or accidents.

•

Tropical storms, hurricanes and other adverse weather conditions.

•

Compliance with governmental requirements and laws, present and future.

•

Shortages or delays in the availability of drilling rigs and the delivery of equipment.

Even when properly used and interpreted, 3-D seismic data and visualization techniques are only tools used to assist geoscientists in identifying subsurface structures and hydrocarbon indicators. They do not allow the interpreter to know conclusively if hydrocarbons are present or economically producible. Poor results from our drilling activities would materially and adversely affect our future cash flows and results of operations.

In addition, as a “successful efforts” company, we choose to account for unsuccessful exploration efforts (the drilling of “dry holes”) and seismic costs as a current expense of operations, which immediately impacts our earnings. Significant expensed exploration charges in any period would materially adversely affect our earnings for that period and cause our earnings to be volatile from period to period.

The natural gas, oil and biodiesel business involves many operating risks that can cause substantial losses.

The natural gas, oil and biodiesel business involves a variety of operating risks, including:

•

Blowouts, fires and explosions.

•

Surface cratering.

•

Uncontrollable flows of underground natural gas, oil or formation water.

•

Natural disasters.

•

Pipe and cement failures.

•

Casing collapses.

•

Stuck drilling and service tools.

•

Abnormal pressure formations.

•

Environmental hazards such as natural gas leaks, oil spills, pipeline ruptures or discharges of toxic gases and liquids.

If any of these events occur, we could incur substantial losses as a result of:

•

Injury or loss of life.

•

Severe damage to and destruction of property, natural resources or equipment.

•

Pollution and other environmental damage.

•

Clean-up responsibilities.

•

Regulatory investigations and penalties.

•

Suspension of our operations or repairs necessary to resume operations.

Offshore operations are subject to a variety of operating risks peculiar to the marine environment, such as capsizing and collisions. In addition, offshore operations, and in some instances, operations along the Gulf Coast, are subject to damage or loss from hurricanes or other adverse weather conditions. These conditions can cause substantial damage to facilities and interrupt production. As a result, we could incur substantial liabilities that could reduce the funds available for exploration, development or leasehold acquisitions, or result in loss of properties.

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If we were to experience any of these problems, it could affect well bores, platforms, gathering systems and processing facilities, any one of which could adversely affect our ability to conduct operations. In accordance with customary industry practices, we maintain insurance against some, but not all, of these risks. Losses could occur for uninsurable or uninsured risks or in amounts in excess of existing insurance coverage. We may not be able to maintain adequate insurance in the future at rates we consider reasonable, and particular types of coverage may not be available. An event that is not fully covered by insurance could have a material adverse effect on our financial position and results of operations.

Not hedging our oil and gas production may result in losses.

Due to the significant volatility in natural gas and oil prices and the potential risk of significant hedging losses if NYMEX natural gas and oil prices spike on the date options settle, our oil and gas production is not currently hedged. By not hedging our production, we may be more adversely affected by declines in natural gas and oil prices than our competitors who engage in hedging arrangements. We do have short term hedges in place for our biodiesel production to cover the period of time from which we purchase the feedstock and produce the biodiesel product. Typically these hedges are in place for less than 30 days and do not provide any long-term protection from volatility.

Our ability to market our biodiesel may be impaired by capacity constraints, modifications to third party facilities and by weather issues.

We generally sell our biodiesel to large retail outlets such as Flying J, Pilot and others and much of that product is transported by truck. As such adverse weather conditions or modifications to facilities owned by others could limit our ability to sell our products and result in increased inventories or plant shut-downs.

Our ability to market our natural gas and oil may be impaired by capacity constraints on the gathering systems and pipelines that transport our natural gas and oil.

All of our natural gas and oil is transported through gathering systems and pipelines, which we do not own. Transportation capacity on gathering systems and pipelines is occasionally limited and at times unavailable due to repairs or improvements being made to these facilities or due to capacity being utilized by other natural gas or oil shippers that may have priority transportation agreements. If the gathering systems or our transportation capacity is materially restricted or is unavailable in the future, our ability to market our natural gas or oil could be impaired and cash flow from the affected properties could be reduced, which could have a material adverse effect on our financial condition and results of operations.

We have no conclusive assurance of title to our oil and gas leased interests.

Our practice in acquiring exploration leases or undivided interests in natural gas and oil leases is to not incur the expense of retaining title lawyers to examine the title to the mineral interest prior to executing the lease. Instead, we rely upon the judgment of third party landmen to perform the field work in examining records in the appropriate governmental, county or parish clerk’s office before leasing a specific mineral interest. This practice is widely followed in the industry. Prior to the drilling of an exploration well the operator of the well will typically obtain a preliminary title review of the drillsite lease and/or spacing unit within which the proposed well is to be drilled to identify any obvious deficiencies in title to the well and, if there are deficiencies, to identify measures necessary to cure those defects to the extent reasonably possible. We have no assurance, however, that any such deficiencies have been cured by the operator of any such wells. It does happen, from time to time, that the examination made by title lawyers reveals that the lease or leases are invalid, having been purchased in error from a person who is not the rightful owner of the mineral interest desired. In these circumstances, we may not be able to proceed with our exploration and development of the lease site or may incur costs to remedy a defect. It may also happen, from time to time, that the operator may elect to proceed with a well despite defects to the title identified in the preliminary title opinion.

Competition in the energy industry is intense, and we are smaller and have a more limited operating history than most of our competitors.

We compete with a broad range of energy companies in our activities. We also compete for the equipment and labor required to operate and to develop these properties. Most of our competitors have substantially greater financial resources than we do. These competitors may be able to pay more for exploratory prospects and productive natural gas and oil properties. Further, they may be able to evaluate, bid for and purchase a greater number of properties and prospects than we can. Our ability to explore for natural gas and oil and to acquire additional properties in the future will depend on our ability to evaluate and select suitable properties and to consummate transactions in this highly competitive environment. In addition, most of our competitors have been operating for a much longer time than we have and have substantially larger staffs. We may not be able to compete effectively with these companies or in such a highly competitive environment.

We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doing business.

Our operations are subject to numerous laws and regulations governing the operation and maintenance of our facilities and the discharge of materials into the environment. Failure to comply with such rules and regulations could result in substantial penalties and have an adverse effect on us. These laws and regulations may:

•

Require that we obtain permits before commencing drilling.

•

Restrict the substances that can be released into the environment in connection with drilling and production activities.

•

Limit or prohibit drilling activities on protected areas, such as wetlands or wilderness areas.

•

Require remedial measures to mitigate pollution from former operations, such as plugging abandoned wells.

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Under these laws and regulations, we could be liable for personal injury and clean-up costs and other environmental and property damages, as well as administrative, civil and criminal penalties. We maintain only limited insurance coverage for sudden and accidental environmental damages. Accordingly, we may be subject to liability, or we may be required to cease production from properties in the event of environmental damages. These laws and regulations have been changed frequently in the past. In general, these changes have imposed more stringent requirements that increase operating costs or require capital expenditures in order to remain in compliance. It is also possible that unanticipated factual developments could cause us to make environmental expenditures that are significantly different from those we currently expect. Existing laws and regulations could be changed and any such changes could have an adverse effect on our business and results of operations.

We cannot control the activities on properties we do not operate.

Other companies currently operate properties in which we have an interest. As a result, we have a limited ability to exercise influence over operations for these properties or their associated costs. Our dependence on the operator and other working interest owners for these projects and our limited ability to influence operations and associated costs could materially adversely affect the realization of our targeted returns on capital in drilling or acquisition activities. The success and timing of our drilling and development activities on properties operated by others therefore depend upon a number of factors that are outside of our control, including:

•

Timing and amount of capital expenditures.

•

The operator’s expertise and financial resources.

•

Approval of other participants in drilling wells.

•

Selection of technology.

Acquisition prospects are difficult to assess and may pose additional risks to our operations.

We expect to evaluate and, where appropriate, pursue acquisition opportunities on terms our management considers favorable. Acquisition of biodiesel facilities will depend on facility cost versus replacement value, proximity to feedstocks and to retail markets, rail access, operating systems and costs and potential environmental liabilities. We expect to pursue acquisitions that have the potential to increase our biodiesel production and our domestic natural gas and oil reserves. The successful acquisition of natural gas and oil properties requires an assessment of various of the following:

•

Recoverable reserves.

•

Exploration potential.

•

Future natural gas and oil prices.

•

Operating costs.

•

Potential environmental and other liabilities and other factors.

•

Permitting and other environmental authorizations required for our operations.

In connection with such an assessment, we would expect to perform a review of the subject properties that we believe to be generally consistent with industry practices. Nonetheless, the resulting conclusions are necessarily inexact and their accuracy inherently uncertain, and such an assessment may not reveal all existing or potential problems, nor will it necessarily permit a buyer to become sufficiently familiar with the properties to fully assess their merits and deficiencies. Inspections may not always be performed on every platform or well, and structural and environmental problems are not necessarily observable even when an inspection is undertaken.

Future acquisitions could pose additional risks to our operations and financial results, including:

•

Problems integrating the purchased operations, personnel or technologies.

•

Unanticipated costs.

•

Diversion of resources and management attention from our exploration business.

•

Entry into regions or markets in which we have limited or no prior experience.

•

Potential loss of key employees, particularly those of the acquired organizations.

We do not currently intend to pay dividends on our common stock.

We have never declared or paid a dividend on our common stock and do not expect to do so in the foreseeable future. Our current plan is to retain any future earnings for funding growth, and, therefore, holders of our common stock will not be able to receive a return on their investment unless they sell their shares.

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Anti-takeover provisions of our certificate of incorporation, bylaws and Nevada law could adversely affect a potential acquisition by third parties that may ultimately be in the financial interests of our stockholders.

Our certificate of incorporation, bylaws and the Nevada General Corporation Law contain provisions that may discourage unsolicited takeover proposals. These provisions could have the effect of inhibiting fluctuations in the market price of our common stock that could result from actual or rumored takeover attempts, preventing changes in our management or limiting the price that investors may be willing to pay for shares of common stock. These provisions, among other things, authorize the board of directors to:

•

Designate the terms of and issue new series of preferred stock.

•

Limit the personal liability of directors.

•

Limit the persons who may call special meetings of stockholders.

•

Prohibit stockholder action by written consent.

•

Establish advance notice requirements for nominations for election of the board of directors and for proposing matters to be acted on by stockholders at stockholder meetings.

•

Require us to indemnify directors and officers to the fullest extent permitted by applicable law.

•

Impose restrictions on business combinations with some interested parties.

Our common stock is thinly traded.

We have approximately 22.8 million shares of common stock outstanding, held by approximately 601 holders of record. Directors and officers own or have voting control over approximately 6.7 million shares. Since our common stock is thinly traded, the purchase or sale of relatively small common stock positions may result in disproportionately large increases or decreases in the price of our common stock.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable.

Item 3.

Defaults Upon Senior Securities.

Not applicable.

Item 4.

Removed and Reserved.

Item 5.

Other Information.

Not applicable.

Item 6.

Exhibits.


10.		Purchase and Sale Agreement, dated May 1, 2006 incorporated herein by reference to Form 8 K filed May 5, 2006

31.1		Section 302 Certification of CEO [Please note the Company does not presently have a CFO.]

32.		Section 906 Certification by CEO

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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: December 15, 2010

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