Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended May 31, 2007

o	TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE EXCHANGE ACT

Imperiali Inc.

(Exact Name Registrant as Specified in Its Charter)

Florida		65-0574887
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

777 South Flagler Drive, Suite 800W

West Palm Beach, Florida 33401

(Address of Principal Executive Offices)

(561)805-9494

(Issuer’s Telephone Number, including Area Code)

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 such shorter periods as 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 o

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

o Large Accelerated Filer o Accelerated Filer x Non-Accelerated Filer

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

On May 31, 2007 there were 38,188,486 shares outstanding of the registrant’s common stock, $.001 par value.

PART I.

Item 1. Financial Statements and Supplementary Data (Unaudited).

IMPERIALI, INC.

Balance Sheets

May 31, 2007 and August 31, 2006

ASSETS
	As of May 31,			As of August
	2007			31, 2006
Portfolio At Value:
Private Finance
Companies more than 25% owned (cost: 2006 - $33,500,000;	$	70,000,000		$	3,500,000
2005 - $3,500,000)

Current assets:
Cash	$	183,320		$	609,541
Prepaid Expenses	$	17,773		$	-

Total current assets	$	201,093		$	609,541

Total assets	$	70,201,093		$	4,109,541



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and other current liabilities	$	17,916		$	-

Total current liabilities	$	17,916		$	-

Stockholders' equity:

Common stock; $.001 par value; authorized -
500,000,000 shares; 38,188,486 and 25,358,486
shares issued and outstanding at May 31,
2007 and August 31, 2006 respectively	$	38,188		$	25,358
Additional paid in capital	$	45,988,812		$	15,255,605
Accumulated deficit	$	(11,171,422	)	$	(11,171,422	)
Undistributed Earnings	$	35,327,599		$	-
Total shareholders' equity	$	70,183,177		$	4,109,541

Total liabilities and shareholders' equity	$	70,201,093		$	4,109,541

Net Asset Value per Common Share	$	1.84		$	0.16

IMPERIALI, INC.

Statement of Operations

	For the Three Months						For the Nine Months
	Ended May 31,						Ended May 31,
	2007			2006			2007			2006

Interest and Related Portfolio Income:							$	-		$	-
Interest and dividends	$	1,187		$	-		$	6,692		$	-

Expenses:
Employees and Consulting	$	(268,924	)	$	(298,000	)	$	(1,022,630	)	$	(520,496	)
General and administrative	$	(34,199	)	$	(44,197	)	$	(166,463	)	$	(99,624	)
Total Expenses	$	(303,123	)	$	(342,197	)	$	(1,189,093	)	$	(620,120	)

Net investment income before income taxes	$	(301,936	)	$	(342,197	)	$	(1,182,401	)	$	(620,120	)
Income tax expense	$	-		$	-		$	-		$	-
Net investment income	$	(301,936	)	$	(342,197	)	$	(1,182,401	)	$	(620,120	)

Net Realized Gains(losses)	$	-		$	-		$	-		$	-

Net Change in unrealized appreciation	$	36,500,000		$	-		$	36,500,000		$	-

Net increase in net assets resulting from	$	36,198,064		$	(342,197	)	$	35,317,599		$	(620,120	)
operations (loss)

Earnings (loss) per common share - basic	$	1.381		$	(0.014	)	$	1.364		$	(0.031	)
Earnings (loss) per common share - diluted	$	1.381		$	(0.014	)	$	1.364		$	(0.031	)
Weighted avg common shares out. - basic		26,210,653			23,792,836			25,888,375			20,030,369
Weighted avg common shares out. - diluted		26,210,653			23,792,836			25,888,375			20,030,369

IMPERIALI, INC.

Statement of Change in Net Assets

	For the Nine Months Ended May 31, 2007			For the Nine Months Ended May 31, 2006
Operations:
Net Investment Income	$	(1,182,401	)	$	(620,120	)
Net Realized Gains (losses)	$	-		$	-
Net Change in unrealized appreciation	$	36,500,000		$	-

Shareholder Distributions:
Common Stock Dividends	$	-		$	-

Capital share transactions:
Sales of Common Stock	$	30,756,037		$	951,896

Total Increase in Net Assets	$	66,073,636		$	331,776
Net assets at beginning of period	$	4,109,541		$	-
Net assets at end of period	$	70,183,177		$	331,776
Net asset value per common share	$	1.84		$	0.01
Common shares outstanding at the end of period		38,188,486			24,007,486

IMPERIALI, INC.

Statement of Investments

Private Finance Portfolio Company	Investment		Cost				Value
Imperiali Organization	Common Stock		$	33,500,000			$	70,000,000

IMPERIALI, INC.

Statement of Cash Flows

	For the Nine Months Ended May 31, 2007			For the Nine Months Ended May 31, 2006

Cash flow from operating activities:
Net income (loss)	$	(1,182,401	)	$	(620,120	)
Adjustments to reconcile net income (loss) to
net cash provided by operation activities:	$	144		$	(304	)

Net cash used by operating activities	$	(1,182,257	)	$	(620,424	)

Cash flows from investing activities:
Net cash used in investing activities	$	-		$	-

Cash flows from finanancing activities
Proceeds from common stock	$	756,036		$	952,200

Net cash provided by financing activities	$	756,036		$	952,200

Net increase in cash	$	(426,221	)	$	331,776

Cash at beginning of period	$	609,541		$	-

Cash at end of period	$	183,320		$	331,776

ITEM 2. NOTES TO FINANCIAL STATEMENTS

Basis of presentation:

The accompanying unaudited financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the nine months ended May 31, 2007 are not necessarily indicative of the results that may be expected for the year ending August 31, 2007.

Note 1. Organiztion: General Development of the Business

We were incorporated in Florida on September 27, 1994 under the name Automated Energy Security Inc.

From September 1994 through March 1999, the Company provided energy management services and intelligent security for residential dwellings, commercial buildings and government facilities. In 1994, the Company purchased all of the patented technology, software and patents pending on the Wide Area Energy Savings System known as “TESS” (Total Energy Security System) from Associated Data Consultants, Inc. In 1998, after Bell Atlantic (one of our strategic partners) withdrew from the development of TESS and engaged in litigation with Associated Data, the Company abandoned our business operations related to TESS.

In March 1999, we changed our name to New Millennium Development Group, Inc. and our business operations to media and telecommunications, focusing on connectivity solutions, storage, fiber optic cable systems, security and the international long distance market. Our plan was to spearhead a sub sea fiber optic cable system connecting 70 countries around the globe. In furtherance of the plan the Company entered into Memoranda of Understanding with 30 countries, completed landing party site and ocean surveys, arranged long-term financing and selected vendors and subcontractors for fiber optic cable and equipment. During the process, however, the price of cable systems skyrocketed, forcing us to reconsider our business plans and projections. The Company retained the services of an independent consultant who concluded that not only would increasing cable prices decrease long-term gains, the rapid development of the internet and Intellectual Property systems would render obsolete the market for fiber optic cable. Accordingly, in mid 2001 we shifted our focus away from fiber optic cable systems and concentrated on Voice over Internet Protocol (VOIP) and related services including high-speed wireless standard ISP and broadband services; international calling cards; video conferencing and related IP products.

Failed corporate history, management infighting, the tragedy of September 11, 2001 and the general economic downturn especially related to technology, led us to cease business operations in mid-2002 until mid-2005. However, during this time, Mr. Imperato, the Company’s Chairman, at the time, and majority shareholder, worked to maintain management relationships with previous businesses, associates and professionals for the eventual resurrection of business operations.

In November 2005, we changed our name to Imperiali, Inc. and commenced operations as an investment company. To date, the activities of our principals have largely been limited to organizational matters and fund raising. We have commenced the private placement of up to 10 million of the Company's common shares in an offering (the "Offering") exempt from the registration requirements of the Securities Act of 1933 ("1933 Act") pursuant to Section 4(2) thereof and Regulation D ("Regulation D") thereunder. At August 31, 2006, the Company’s total assets were $4,104,541 and its net asset value per share (“NAV”) was $0.16. Upon the closing of the Offering, the Company's common shares will be owned by numerous persons that are both "accredited investors," as that term is defined in Regulation D, and "qualified clients" within the meaning of the Investment Advisers Act of 1940 (the "1940 Act"),

Note 2. Summary of Significant Accounting Policies:

Background

Imperiali, Inc. (the Company) was formed in Florida on September 27, 1994 as Automated Energy Security, Inc. On March 22, 1999 the Company’s name was changed to New Millennium Development Group, Inc. On August 24, 2004 the Company’s name was changed to Hercules Global Interests, Inc.

The Company has been dormant since 2002 and was started up again in the fall of 2005 by Christ Investment Group, LLC, the Company’s business manager and a related company, which is controlled by the Company’s major shareholder Mr. Daniel Imperato. On November 18, 2005 the name of the company was changed to Imperiali, Inc.

Nature of Business

Imperiali, Inc. is a team of global expansion and business development experts that are strategically positioned around the globe to identify emerging companies that wish to align with strategic partners to grow their businesses, and raise capital for business development and telecommunications infrastructure.

Imperiali revenues will come from sales of products and services rendered to telecommunications companies worldwide. Infrastructure, equipment and consulting services will be supplied on a contract basis.

Inventory

Inventories are stated at lower of cost or market, with cost generally determined on a first-in, first-out basis. Currently the Company carries no inventory.

Depreciation

Depreciation is calculated using straight-line methods over the estimated useful life of the equipment, furniture and fixtures.

Income Taxes

The Company is recognized as a corporation under the Internal Revenue Code. As such, the corporation must report income and expenses properly on their tax return and pay all the related income taxes. As of August 31, 2006 the Company has an approximately $7,200,000 net operating loss carryover which can be used against future income through 2018. No provisions for income taxes are provided in these financial statements since the Company was dormant for the years ending August 31, 2006 and 2005.

Concentration of Credit Risk

The Company maintains cash accounts in commercial banks. Total cash deposits are secured by the

Federal Deposit Insurance Corporation

(FDIC) up to a limit of $100,000 per company. At August 31, 2006, the Company’s cash balances exceeded insured amounts by approximately $510,000.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Cash and Cash Equivalents

The Organization considers all highly liquid investments with a maturity of three months or less when acquired to be cash equivalents.

Recently Issued Accounting Pronouncements

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error - an amendment of APB Opinion No. 29." This Statement applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the usual instance that the pronouncement does not include specific transition provisions. When a pronouncement includes specific transition provisions, those provisions should be followed. Opinion 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. This Statement requires retrospective application to prior period’s financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects of the cumulative effect of the change. This Statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not expect application of SFAS No. 154 to have a material affect on its financial statements.

In February 2006, the FASB issued SFAS No. 155. This Statement amends FASB Statements No. 133, Accounting for Derivative Instruments and Hedging Activities, and No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This Statement resolves issues addressed in Statement 133 Implementation Issue No. D1, “Application of Statement 133 to Beneficial Interests in Securitized Financial Assets.” The Company does not expect application of SFAS No. 155 to have a material affect on its financial statements.

In March 2006, the FASB issued SFAS No. 156. This Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of

Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. This Statement is effective as of the beginning of its first fiscal year that begins after September 15, 2006. An entity should apply the requirements for recognition and initial measurement of servicing assets and servicing liabilities prospectively to all transactions after the effective date of this Statement. The Company does not expect application of SFAS No. 156 to have a material affect on its financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This Statement is effective as of the beginning of its first fiscal year that begins after November 15, 2007. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies

under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice.

The Company does not expect application of SFAS No. 157 to have a material affect on its financial statements.

In September 2006, the FASB issued SFAS No. 158 Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans. This Statement amends FASB Statements No. 87, 88, 106, and 132(R). This Statement is effective as of the beginning of its first fiscal year that begins after December 15, 2006, but before June 16, 2007. This Statement improves financial reporting by requiring an employer to recognize the over funded or under funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. The Company does not expect application of SFAS No. 158 to have a material affect on its financial statements.

3. Investments:

Investments are carried at Fair Market Value.

Valuation Policies

Valuation of Portfolio Investments

As a Business Development Company, our business plan calls for us to invest primarily in illiquid securities issued by private companies (“Private Investments”) (we are required to invest at least an aggregate of 70% of our assets Private Investments and in companies listed on the OTCBB). Private Investments are generally subject to restrictions on resale and generally have no established trading market. The Company values our Private Investments at fair value as determined in good faith by our Board of Directors in accordance with our valuation policy. That policy calls for the determination of fair value at “the amount for which an investment could be sold in an orderly disposition over a reasonable period of time between willing parties other than in a forced or liquidation sale.” Our valuation policy may require subjective judgments. Our determination of fair value may possibly differ materially from the value realized on an actual sale. Our valuation policy is intended to provide a consistent basis for establishing the fair value of the portfolio. The Company will record unrealized depreciation on investments when we believe that an asset has been impaired and full collection for the loan or realization of an equity security is doubtful. Conversely, the Company will record unrealized appreciation if we have a clear indication that the underlying portfolio company appreciates and, therefore, our security has appreciated. Under this valuation policy, the Company sets valuations based on policies consistent with Section 2(a) of the 1940 Act. The value of investments in public securities is determined using quoted market prices discounted for restrictions on resale.

Equity Securities

Equity interests in portfolio companies for which there is no liquid public market are valued based on the enterprise value of the portfolio company, which is determined using accepted accounting factors, including net cash flow from operations of the portfolio company, and other pertinent factors such as recent offers to purchase a portfolio company’s securities or other liquidation events. The determined fair values are generally discounted to account for restrictions on resale and minority control positions.

The value of our equity interests in public companies for which market quotations are readily available is based upon the closing public market price for the last day up to and including the balance sheet date. Securities that carry certain restrictions on sale are typically valued at a discount from the public market value of the security.

Dividend income, if any, is recorded on cumulative preferred equity securities on an accrual basis to the extent that such amounts are expected to be collected and on common equity, securities on the record date for private companies or on the ex-dividend date for publicly traded companies.

Loans and Debt Securities

It is our loan policy to only invest in secured and properly collateralized loans.

For loans and debt securities, to the extent that the Company invests in them, fair value generally approximates cost unless the borrower’s condition or external factors lead to a determination of fair value at a lower amount. When the Company receives nominal cost warrants or free equity securities (“nominal cost equity”), we allocate our cost basis in our investment between the debt securities and the nominal cost equity at the time of origination. At that time, the original issue discount basis of the nominal cost equity is recorded by increasing the cost basis in the equity and decreasing the cost basis in the related debt securities.

Interest income is recorded on an accrual basis to the extent that such amounts are expected to be collected. For loans and debt securities with contractual payment-in-kind interest, which represents contractual interest accrued and added to the loan balance that generally becomes due at maturity, we will not accrue payment-in-kind interest if the portfolio company valuation indicates that the payment-in-kind interest is not collectible. Loan origination fees, original issue discount, and market discount are capitalized and then amortized into interest income using the effective interest method.

The weighted average yield on loans and debt securities is computed as the (a) annual stated interest rate earned plus the annual amortization of loan origination fees, original issue discount and market discount earned on accruing loans and debt securities, divided by (b) total loans and debt securities at value. The weighted average yield is computed as of the balance sheet date. Prepayment premiums are recorded on loans when received.

Portfolio Valuation Process

Our methodology includes the examination of, among other things, the underlying investment performance, financial condition, and market-changing events that affect valuation. Because of the type of investments that the Company makes and the nature of our business, this valuation process requires an analysis of various factors consistent with the provisions of section (2) of the 1940 Act.

Our process for determining the fair value for a private finance investment is applied consistently across our portfolio. The process is as follows.

First, the Company determines the portfolio company’s enterprise value as if the Company were to sell it in a “current sale.” In our valuation process, the Company uses the AICPA’s definition of “current sale,” which means an “orderly disposition over a reasonable period of time between willing parties other than in a forced or liquidation sale.”

·	The Company then evaluates the amount of our debt and the position of our debt in the portfolio company’s capital structure.

If the enterprise value of the portfolio company is in excess of the amount of our last dollar of investment capital given our priority in the capital structure, the fair value of our investment will be considered to be our cost or perhaps, given the structure of our particular security, greater than cost if we are to share in equity appreciation.

If the enterprise value of the portfolio company is less than our last dollar of investment capital in the capital structure, then our investment has declined in value and the Company needs to reduce the fair value of our investment and incur a charge to our earnings by recognizing unrealized depreciation.

Determining the enterprise value of a portfolio company, as if that portfolio company were to be sold in a “current sale,” is a very complex process, where we must analyze the historical and projected financial results of the portfolio company and analyze the public trading market and private merger and acquisition market to determine appropriate purchase price multiples. In addition, a reasonable discount to the value of our securities must also be reflected when the Company may have restrictions such as vesting periods for warrants or other factors. We also take into account the collectibility of non-cash interest to determine if the Company will continue to accrue such interest.

Specific Considerations

The valuation of illiquid private securities is inherently subjective, and as a result, the Company intends to exercise good judgment in our valuation process. Specifically, we will exercise care to assure that the Company has considered the position of the portfolio company today and the position of our security today given the data we have available. We will also exercise care to assure that the process is not too mechanical; however, there are some specific considerations to be addressed in our valuation process. The ultimate goal is a reasonable estimate of fair value determined in good faith.

Typically, in the private equity business, companies are bought and sold based upon multiples of EBITDA, cash flow, revenues and in limited instances book value. In determining a multiple to use for valuation purposes, we will look to private M&A statistics, reported public trading multiples and industry practices. In determining the right multiple, we intend to consider not only the fact that our portfolio company may be private relative to a peer group, but also the size and scope of our portfolio company and its specific strengths and weaknesses. In some cases, when a portfolio company is at EBITDA breakeven or slightly below but has excellent future prospects, we believe the best valuation methodology may be a discounted cash flow analysis based upon future projections. If a portfolio company is distressed, we believe a liquidation analysis may provide the best indication of enterprise value.

Discounts on common equity securities.

When determining the value of common equity securities or warrants to purchase such securities, we intend to consider what type of discount to apply to the value of the security if the Company is in a minority position, has restrictions on resale, has specific concerns about the receptivity of the M&A market to a specific portfolio company at a certain time and other factors. Generally, we find that the Company should apply larger discounts when we are new to an investment, and therefore, we have not yet developed an exit strategy. As an investment in the portfolio matures, we intend to consider whether or not the Company should begin to reduce discounts, especially if we are generally aware that either we or a controlling shareholder group has begun to develop an exit strategy.

When we have begun to develop an exit strategy of the Company is the controlling shareholder, the discount imposed should generally be less than in the case of a minority position. We may still contemplate the need to discount for the current state of the M&A market or restrictions imposed on us due to our relationship with management of the portfolio company or other capital providers.

4. Porfolio

i1search – Search Engine and Internet Portal - (i1search.com)

i1search.com utilizes the vast telecommunications capabilities of the Imperiali Organization to provide a global search engine that is unparalleled in features and content. The search engine will first look to strategically partner with local search engines around the world, to provide i1search users with localized results, and global capability. i1search.com will also be linked to the Imperiali Organization portal, to allow its users easy access to business information, and the power to crawl the web for specialized information.

i1connect – Online Media and Public Relations - (i1connect.com)

i1connect.com allows companies to connect to media in their community, state, country, and around the globe. With global media relations, spanning six continents, and over 50 countries, i1connect facilitates ‘going global’ for many companies by establishing international presence through targeted media coverage and public relations in domestic and foreign markets around the globe. In addition, i1connect can help with investor relations and email marketing. Through its diverse email list server, which features personal contacts, consumers, global media, and venture capitalists.

Note 5.

Debt

As of May 31, 2007 the company has no debt.

Note 6

Guaranteed Commitments:

The Company leases approximately 688 square feet of space at 777 S Flagler Drive, Suite 800W, West Palm Beach, Florida USA 33401. The office space is used for sales, administrative offices, and customer support.

Note 7

Employee Compensation Plans

The Company has no Defined Benefit or Defined Contribution PensionPlans.

Note 8

Stock Option Plans

The Company has no Stock Option Plans.

Note 9

Financial Highlights –

		Nine Months			Year
		Ended			Ended
		May 31,			Aug. 31,
		2007			2006

Per share information

Net asset value, beginning of period			0.03			0.00

	Net investment income (loss) (1)		(0.05	)		(0.05	)
	Net realized and unrealized gain (loss) (1)		1.41

Net increase (decrease) in net assets
	resulting from operations (1)		1.36			(0.05	)
Issuance of common stock, warrants
	and other new equity (1)		0.45			0.08

Net asset (deficit) value, end of period			1.84			0.03

Per share market value, end of period (2)		N/A			N/A

Total Return Based Upon Net Asset Value			4533	%	NC

Ratios and Supplemental Data
Net assets, end of period			70,183,17			609,541
Common shares outstanding at end of period			38,188,46			20,358,46

Diluted weighted average number of shares
	outstanding during the year		25,888,35			19,177,00

Ratio of expenses to average net assets (3)			6	%		334	%
Ratio of net increase (decrease) in net assets from
	operations to average net assets (3)		-6	%		-331	%

Average Debt Outstanding			0			0
Average Debt per Share

(1)	Calculated based on diluted weighted average number of shares outstanding
	during the year.

(2)	Not applicable - prior to public trading of shares

(3)	Annualized for interim period

LAST QUARTER 2007 - During the quarter ended May 31, 2007, our Net Investment Income incurred a net loss of $301,936. Total expenses incurred were $303,123 of which $268,924 were for Employees and Consulting and $34,199 were for General and Administrative Expense. General and administrative expenses related primarily to rent, salaries, telephone, other office costs and costs associated with being a reporting company. Imperiali, Inc. also saw a substantial increase in the value of our portfolio companies. The company had $36,500,000 in unrealized appreciation for the quarter.

Liquidity and Capital Resources

We had cash on hand of $183,320 at May 31, 2007 and had no other assets to meet ongoing expenses or debts that may accumulate. As of such date, we have accumulated a deficit of $11,171,422.28. For the nine months ended May 31, 2007 we had expenses totaling $ 1,182,401.

We have no commitment for any capital expenditure and foresee none. However, we will incur routine fees and expenses incident to our reporting duties as a reporting company, and we will incur expenses in finding and investigating possible acquisitions and other fees and expenses in the event we make an acquisition or attempt but are unable to complete an acquisition. Our cash requirements for the next twelve months are relatively modest, principally operational accounting expenses and other expenses relating to making filings required under the Securities Exchange Act of 1934 (the "Exchange Act"), which should not exceed $2,500,000 in the fiscal year ending August 31, 2007. Any travel, lodging or other expenses which may arise related to finding, investigating and attempting to complete a combination with one or more potential acquisitions could also amount to thousands of dollars.

Note 10

Hedging Activities:

The Company did not engage in Hedging Activity.

Note 11

Litigation:

The Company has no lawsuits pending.

ITEM 3. MANAGEMENT'S DISCUSSION and ANALYSIS or PLAN of OPERATIONS.

The following discussion should be read in conjunction with our unaudited financial statements and notes thereto.

Forward-Looking Statements

This quarterly report contains forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this report, the words "anticipate", "believe", "estimate", "expect", "intend", "plan" and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management's current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: a general economic downturn; a downturn in the securities markets; federal or state laws or regulations having an adverse effect on proposed transactions that we desire to effect; Securities and Exchange Commission regulations which affect trading in the securities of "penny stocks,"; and other risks and uncertainties. Should any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this report as anticipated, estimated or expected. All forward-looking statements attributable to us are expressly qualified in their entirety by the forgoing cautionary statement.

Overview

Our investment objective is to generate both current income and capital appreciation to deliver superior, risk adjusted returns to investors through investment in the debt and equity securities of privately and publicly held micro-cap companies (market capitalization below $50 million) that are based in the U.S. and that offer products and services that can be successfully expanded, marketed and sold in commercially viable international markets. Our principals’ experience combines economic and financial analysis with expertise in business strategy and planning, market and demand forecasting, policy analysis, and technology development strategy. They have worked on a variety of matters, such as mergers and acquisitions, new product introductions, strategy and capital investment decisions, the outcomes of which often have significant implications or consequences for the parties involved. We will offer our portfolio companies a wide array of services such as strategy development, performance improvement, corporate portfolio analysis, market demand and new product strategies, evaluation of intellectual property and other assets and competition analysis. Matters such as these often require independent analysis, and as a result, companies (such as our portfolio companies) must outsource this work to outside experts. We expect that our portfolio companies will turn to us because we can provide qualified economic and financial experts to address a wide variety of matters.

Plan of Operation

In addition to our internal Company resources, we believe that we will be able to provide such advice and assistance by using our extensive international network of agents and affiliates, located in many countries and regions and spanning more than five continents. This network, which we refer to as Imperiali Inc.’s Global Advisory Team, is able to monitor and in some cases influence events, prudently utilizing the tools and leverage that the portfolio company’s business model affords, endeavoring to mitigate risks and safeguard investments, with the idea of protecting the Company’s shareholders’ interest.

We are regulated as a business development company under the 1940 Act. As a business development company, we intend to focus primarily on micro-cap companies with sales of $25-$50 million and a strong domestic presence, with a key product or service that is globally marketable. Micro-cap companies (market capitalization below $50 million) are more likely than larger companies to focus on innovative products and services. Due to the high cost of competition on a global scale, these micro-caps are losing market share. They may not have the advertising dollars to compete, may lack access to long-term debt financing for expansion and manufacturing and, more generally, they lack the experience and contacts to access new global markets.

We view this problem for micro-cap companies to be an opportunity for us to assist them with the competitive edge they require, to expand and to grow top-line revenues. Extending the assistance of Company management personnel by the use of our Global Advisory Team, we can assist our portfolio companies expand globally, identify capital and political resources, adapt to local customs and operating requirements in international markets, access new consumers, new sources of materials and remote manufacturing options, and generally make the best possible business decisions.

We favor companies that present opportunities for superior performance through internal growth, product or geographic expansion, the completion of complementary add-on acquisitions, or industry consolidations. We would prefer to be a majority investor, without a fixed time horizon for the liquidation of our investments. We may continue to provide capital for add-on acquisitions that help build value after the initial closing.

Once we have identified a target portfolio company, we will conduct our due diligence, and, as appropriate, determine whether to either (i) invest and advise or (ii) merely advise the portfolio company for a fee. Once we have decided to advise the portfolio company, we can distribute the portfolio company’s business plan or other corporate literature to our agents and affiliates in over 70 countries. Based upon the feedback from the various local agents and their local markets, we will determine how to proceed to assist the portfolio company in pursuing and executing viable growth opportunities and strategies in the countries where our business contacts have indicated clear business interest and market viability. Methods of expansion we may recommend to our portfolio companies include, but are not limited to, strategic partnering, joint venture, licensing with royalty agreement, regional distribution networks, regionalized manufacturing, and entry into the public markets.

In addition to investing in and assisting portfolio companies, we will have opportunities created through our relationship with the Imperiali Organization, which has contractually agreed to serve as the development team for Imperiali Inc. The Imperiali Organization has an ongoing series of projects which have (or may have) application to the global marketplace. Through an agreement between Imperiali Organization and the Company, we will have the first right of refusal on any and all projects created and developed by the Imperiali Organization.

In summary, as a business development company Imperiali Inc. looks to globalize and grow viable micro-cap companies by investing in them and/or advising them by utilizing our international teams, residing in many international markets and who have the intellectual, cultural, financial, political and operational capabilities, combined with a global vision, to connect growing companies to the world’s markets.

This plan of operation has been adopted in order to attempt to create value for our shareholders. For further information on our plan of operation and business, see Form 10 filed January 18, 2007.

Results of Operations

LAST QUARTER 2007 - During the quarter ended May 31, 2007, our Net Investment Income incurred a net loss of $301,936. Total expenses incurred were $303,123 of which $268,924 were for Employees and Consulting and $34,199 were for General and Administrative Expense. General and administrative expenses related primarily to rent, salaries, telephone, other office costs and costs associated with being a reporting company. Imperiali, Inc. also saw a substantial increase in the value of our portfolio companies. The company had $36,500,000 in unrealized appreciation for the quarter.

Liquidity and Capital Resources

We will only be able to pay our future debts and meet operating expenses by raising additional funds, acquiring a profitable company or otherwise generating positive cash flow. As a practical matter, we are unlikely to generate positive cash flow by any means other than acquiring a company with such cash flow. We believe that management members or shareholders will loan funds to us as needed for operations prior to completion of an acquisition. Management and the shareholders are not obligated to provide funds to us, however, and it is not certain they will always want or be financially able to do so. Our shareholders and management members who advance money to us to cover operating expenses will expect to be reimbursed, either by us or by the company acquired, prior to or at the time of completing a combination. We have no intention of borrowing money to reimburse or pay salaries to any of our officers, directors or shareholders or their affiliates.

Should existing management or shareholders refuse to advance needed funds, however, we would be forced to turn to outside parties to either loan money to us or buy our securities. There is no assurance whatsoever that we will be able to raise necessary funds from outside sources. Such a lack of funds could result in severe consequences to us, including among others:

·	failure to make timely filings with the SEC as required by the Exchange Act, which also probably would result in suspension of trading or quotation in our stock and could result in fines and penalties to us under the Exchange Act;

·	curtailing or eliminating our ability to locate and perform suitable investigations of potential acquisitions; or

·	inability to complete a desirable acquisition due to lack of funds to pay legal and accounting fees and acquisition-related expenses.

We hope to require potential candidate companies to deposit funds with us that we can use to defray professional fees and travel, lodging and other due diligence expenses incurred by our management related to finding and investigating a candidate company and negotiating and consummating a business combination. There is no assurance that any potential candidate will agree to make such a deposit.

Critical Accounting Policies

Financial Reporting Release No. 60 of the SEC encourages all companies to include a discussion of critical accounting policies or methods used in the preparation of the financial statements. There are no current business operations or revenue generating activities that give rise to significant assumptions or estimates. Our most critical accounting policies relate to the accounting and disclosure of related party transactions. Our financial statements filed as part of this report include a summary of the significant accounting policies and methods used in the preparation of our financial statements.

Risk Factors that May Affect Future Operating Results

You should carefully consider the risks described below before making an investment decision. The risks and uncertainties described below are not the only ones facing our Company. Additional risks and uncertainties not presently known to us or what we currently deem immaterial may also impair our business operations. If any of the following risks actually occur, our business, financial condition, or results of operations could be materially adversely affected. In such case, the trading price of our common stock could decline and you could lose all or part of your investment. You should also refer to the other information about us contained in our Form 10, including our financial statements and related notes.

We have only a minimal operating history.

Our operations are subject to all the risks inherent in any new business, including the risk that the Company will not achieve its investment objective and that its net asset value could decline substantially. Although we have identified, on a preliminary basis, certain micro-cap companies in which we may be interested in investing, the Company anticipates that it will take up to 90 days after the completion of the Offering to invest substantially all of the net proceeds received by the Company from the Offering due to the time necessary to complete our due diligence, evaluate, structure, negotiate, and close suitable investments. In the interim, the Company will invest in temporary investments, such as cash and cash equivalents, U.S. government securities and other high quality debt investments that mature in one year or less from the date of investment, which will earn yields substantially lower than the interest income anticipated from investments in portfolio companies. If the expenses of the Company exceed the return on the temporary investments, the equity capital of the Company will be eroded. Additionally, the Company may not be able to pay any dividends during this period or such dividends may be substantially lower than the dividends the Company expects to pay when its portfolio is fully invested.

Competition could hurt our business.

Many entities, including public and private funds, commercial and investment banks, commercial financing companies, business development companies and insurance companies will compete with the Company to make the types of investments that it plans to make in micro-cap companies. Many of these competitors are substantially larger, have considerably greater financial, technical and marketing resources than the Company will have and offer a wider array of financial services. For example, some competitors may have a lower cost of funds and access to funding sources that are not available to the Company. In addition, some competitors may have higher risk tolerances or different risk assessments, which could allow them to consider a wider variety of investments and establish more relationships. Many competitors are not subject to the regulatory restrictions that the 1940 Act will impose on the Company as a business development company or the restrictions that the Code will impose on the Company as a regulated investment company. Some competitors may make loans with interest rates that are lower than the rates the Company wishes to offer. The competitive pressures the Company faces may have a material adverse effect on our business, financial condition and results of operations. Also, as a result of this competition, the Company may not be able to take advantage of attractive investment opportunities from time to time, and can offer no assurance that it will be able to identify and make investments that are consistent with our investment objective. We have not finally determined any potential investments for the Company's portfolio, although the Company's competitors are likely to have identified and begun to pursue potential investments in which the Company may be interested.

We are dependent on a key person.

Daniel J. Imperato has principally conducted the development stage activities of the Company. Although he is not an employee of the Company, the loss of his services as an advisor could negatively affect the Company. The Company has purchased “key man” life insurance on the life of Mr. Imperato.

We anticipate future capital needs but have no certain source of additional financing.

Our capital requirements will be significant. Management believes that the net proceeds of the Offering should suffice to fund operations and our business plan for a period of 12 months if the maximum number of shares is sold. However, no assurance can be given that such proceeds will in fact be sufficient to fund operations for such period. The Company has no commitments for long-term financing. There can be no assurance that such financing will be available on favorable terms or at all.

We may face leverage risk.

The Company may borrow money or issue debt securities to leverage its capital structure. If the Company does so:

·	The Company's common shares will be exposed to incremental risk of loss. In these circumstances, a decrease in the value of the Company's investments would have a greater negative impact on the value of its common shares than if it did not use leverage.

·	Adverse changes in interest rates could reduce or eliminate the incremental income the Company expects to make with the proceeds of any leverage.

·	The Company's ability to pay dividends on its common shares will be restricted if its asset coverage ratio is not at least 200% and any amounts used to service indebtedness would not be available for such dividends.

·	It is likely that such securities will be governed by an indenture or other instrument containing covenants restricting the Company's operating flexibility.

·	The Company, and indirectly its shareholders, will bear the cost of issuing and paying interest on such securities.

We depend upon key employees to generate revenue.

We are an economic and business development firm that will apply analytic techniques and industry knowledge to various investments in a broad range of portfolio companies. Accordingly, our success depends heavily on the efforts, abilities, business generation capabilities, and project execution capabilities of our employees. In particular, our employees’ personal relationships with our portfolio companies are a critical element in obtaining and maintaining portfolio companies’ investments. If the Company loses the services of any employee or if our employees fail to generate business or otherwise fail to perform effectively, that loss or failure could adversely affect our revenues and results of operations.

Much of our business plan depends on our non-employee experts.

The Company depends on our relationships with members of our Global Advisory Teams and our non-employee consultants to execute our business plan. We believe that these people are highly regarded in their fields and locales and that each offers a combination of knowledge, experience, and expertise that would be very difficult to replace. We also believe that the Company will be able to secure some investments in portfolio companies and attract other professionals to join our team in part because the Company can offer the services of these experts. Most of these experts can limit their relationships with us at any time for any or no reason.

Our failure to manage growth successfully could adversely affect our revenues and results of operations

We anticipate that providing global services will require that we open additional offices. Opening and managing new offices often requires extensive management supervision and increases our overall selling, general, and administrative expenses. Expansion creates new and increased management, investment, and training responsibilities for our employees. Expansion also increases the demands on our internal systems, procedures, and controls, and on our managerial, administrative, financial, marketing, and other resources. Any failure on our part to manage growth successfully could adversely affect our revenues and results of operations.

Maintaining our professional reputation is crucial to our future success

Our ability to secure new investments and hire qualified persons as employees depends heavily on our overall reputation as well as the individual reputations of our employees, the members of our Global Advisory Teams and our non-employee consultants. Because we expect that in the future the Company will obtain a majority of our new investments from existing portfolio companies or from referrals by those portfolio companies, any portfolio company that is dissatisfied with our performance on a single matter could seriously impair our ability to secure new investments. Given the frequently high-profile nature of the matters on which the Company will work, any factor that diminishes our reputation or the reputations of any of our employees, the members of our Global Advisory Teams and our non-employee consultants could make it substantially more difficult for us to compete successfully for both new investments and qualified persons to hire as employees.

Our investments may result in professional liability

Our services will typically involve difficult analytical assignments and carry risks of professional and other liability. Many of our investments will involve matters that could have a severe impact on a portfolio company’s business, cause the portfolio company to lose significant amounts of money, or prevent the portfolio company from pursuing desirable business opportunities. Accordingly, if a portfolio company is dissatisfied with our performance, that company could threaten or bring litigation in order to recover damages or to contest its obligation to pay our fees. Litigation alleging that we performed negligently or otherwise breached our obligations to a portfolio company could expose us to significant liabilities and tarnish our reputation.

Our common stock has no prior trading market or liquidity, and the Company cannot assure you that any trading market will develop.

Prior to the date of this Registration Statement, there has not been any established trading market for our common stock. If the Company can qualify, we will attempt to register our shares for trading on the American Stock Exchange, although the Company cannot assure you as to the timing of that application or the likelihood of it being accepted. If the application is accepted, we cannot predict the extent to which investor interest will lead to the development of an active, liquid trading market. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.

The Company has filed a notice of intent to elect business development company status that, once effective, will require us to comply with significant regulatory requirements.

The Company filed notice with the Securities and Exchange Commissio elected to be regulated as a Business Development Company under the 1940 Act and be subject to Sections 54 through 65 of said Act. Being subject to the business development company provisions requires us to meet significant numbers of regulatory and financial requirements as discussed in Item 1(c) -- Regulation of the Company. Compliance with these regulations is expensive and may create financial problems for us in the future. These laws and regulations, as well as their interpretation, may be changed from time to time. Accordingly, any change in these laws or regulations could have a material adverse effect on our business.

If the Company does not remain a business development company, the Company might be regulated as a closed-end investment company under the 1940 Act, which would decrease our operating flexibility. The Company cannot assure you that the Company will successfully retain our business development company status.

The Company’s election to be and qualification to be treated as a regulated investment company presents tax risks.

To maintain its qualification as a regulated investment company under the Code, which is required in order for the Company to distribute its income without tax at the Company level, the Company must meet certain income source, asset diversification and annual distribution requirements. Satisfying these requirements may require the Company to take actions it would not otherwise take, such as selling investments at unattractive prices to satisfy diversification, distribution or source of income requirements. In addition, while the Company is authorized to borrow funds in order to make distributions, under the 1940 Act it is not permitted to make distributions to shareholders while its debt obligations and other senior securities are outstanding unless certain "asset coverage" tests are met. If the Company fails to qualify as a regulated investment company for any reason and becomes or remains subject to corporate income tax, the resulting corporate taxes could substantially reduce its net assets, the amount of income available for distribution and the amount of its distributions. Such a failure would have a material adverse effect on the Company and its shareholders.

For U.S. federal income tax purposes, the Company will include in income certain amounts that it has not yet received in cash, such as original issue discount, which may arise if the Company invests in zero coupon securities, deferred interest securities or certain other securities, or if the Company receives warrants in connection with the making of a loan or possibly in other circumstances. Such original issue discount, which could but is not expected to be significant relative to the Company's overall investment activities, generally will be included in income before the Company receives any corresponding cash payments. The Company also may be required to include in income certain other amounts that the Company will not receive in cash.

Since in certain cases the Company may recognize income before or without receiving cash representing such income, it may have difficulty making distributions in the amounts necessary to satisfy the requirements for maintaining regulated investment company status and for avoiding income and excise taxes. Accordingly, the Company may have to sell some of its investments at times we would not consider advantageous, raise additional debt or equity capital or reduce new investment originations to meet these distribution requirements. If the Company is not able to obtain cash from other sources, the Company may fail to qualify as a regulated investment company and thus be subject to corporate-level income tax. Such a failure would have a material adverse effect on the Company and its shareholders.

BUSINESS DEVELOPMENT COMPANY RISKS

Investing in small and growth stage companies is inherently risky.

Investments in micro-cap companies and growth stage companies offer the opportunity for significant gains. However, each investment involves a high degree of business and financial risk that can result in substantial losses, including:

·	These companies may have limited financial resources and may be unable to meet their obligations under their securities that the Company holds, which may be accompanied by a deterioration in the value of any collateral.

·	They typically have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors' actions and market conditions, as well as general economic downturns.

·	They are more likely to depend on the management talents and efforts of a small group of persons; therefore, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on the portfolio company and, in turn, on the Company.

They generally have less predictable operating results, may from time to time be parties to litigation, may be engaged in rapidly changing businesses with products subject to a substantial risk of obsolescence, and may require substantial additional capital to support their operations, finance expansion or maintain their competitive position.

·	They may cease to be treated as private companies for purposes of the regulatory restrictions applicable to the Company, in which case the Company may not be able to invest additional amounts in them.

·	Little public information exists about these companies. The greater difficulty in making a fully informed investment decision raises the risk of misjudging the credit quality of the company, and the Company may lose money on its investments.

Investing in small and growth stage companies presents valuation difficulties.

A large percentage of the Company's portfolio investments will be in the form of securities that are not publicly traded. The fair value of securities and other investments that are not publicly traded may not be readily determinable. The Company will value these securities at least quarterly at fair value as determined in good faith by the Board of Directors, possibly with the assistance of an independent valuation firm. However, because fair valuations, and particularly fair valuations of private securities and private companies, are inherently uncertain, may fluctuate over short periods of time and are often based to a large extent on estimates, comparisons and qualitative evaluations of private information, the Company's determinations of fair value may differ materially from the values that would have been determined if a ready market for these securities existed. This could make it more difficult for investors to accurately value the Company's portfolio investments and could lead to under-valuation or over-valuation of its common shares.

Portfolio companies are likely to need additional funding.

The Company expects that many portfolio companies will require additional financing to satisfy their working capital requirements. The amount of additional financing needed will depend upon the maturity and objectives of the particular company. Each round of venture financing, whether from us or other investors, is typically intended to provide a portfolio company with enough capital to reach the next major valuation milestone. If the funds provided are not sufficient, a portfolio company may have to raise additional capital at a price unfavorable to the existing investors. The availability of capital is generally a function of capital market conditions that are beyond the control of any portfolio company. The Company cannot assure you that our management or the managements of portfolio companies will be able to predict accurately the future capital requirements necessary for success or those additional funds will be available to portfolio companies from any source. If funding is not available, some portfolio companies may be forced to cease operations.

Business development companies’ investments are generally illiquid.

The Company expects to make the majority of our investments in micro-cap companies and growth stage companies. Substantially all of the securities of such portfolio companies will be subject to legal and other restrictions on resale or will otherwise be less liquid than publicly traded securities. The illiquidity of these investments may make it difficult for the Company to sell such investments if the need arises. In addition, if the Company is required to liquidate all or a portion of its portfolio quickly, it may realize significantly less than the value at which it has previously recorded such investments. In addition, the Company may face other restrictions on its ability to liquidate an investment in a portfolio company to the extent that it has material non-public information regarding such portfolio company.

Business development companies generally require substantial amounts of time to realize the benefits from investments.

The Company anticipates that there will be a significant period of time ranging from one to three years before the Company has obtained funding and completed the initial selection of portfolio companies for our first round of equity investments. Venture capital investments typically take from four to eight years from the date of initial investment to reach a state of maturity at which liquidation can be considered practical. In light of the foregoing, it is unlikely that any significant distributions of the proceeds from the liquidation of equity investments will be made for several years after inception, if at all.

The Company has not made any commitments toany prospective portfolio companies.

Because the Company has not made any commitments to any prospective portfolio company, investors will not have an opportunity to carefully evaluate any of the portfolio companies that the Company may eventually invest in and such evaluation will be entirely dependent upon our management for selecting and negotiating with these portfolio companies. The Company cannot assure you that we will successfully negotiate a transaction with a portfolio company.

Portfolio companies may be more sensitive to economic recessions or downturns.

Many of the Company's portfolio companies may be susceptible to economic slowdowns or recessions and may be unable to repay loans or pay dividends during these periods. Therefore, the Company's non-performing assets are likely to increase and the value of its portfolio is likely to decrease during these periods. Adverse economic conditions also may decrease the value of collateral securing some of the Company's loans and the value of its equity investments. Economic slowdowns or recessions could lead to financial losses in its portfolio and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase funding costs, limit access to the capital markets or result in a decision by lenders not to extend credit to the Company. These events could prevent the Company from increasing investments and harm its operating results.

A portfolio company's failure to satisfy financial or operating covenants could lead to defaults and, potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements and jeopardize the portfolio company's ability to meet its obligations under the debt or equity securities that the Company holds. The Company may need to incur additional expenses to seek recovery upon default or to negotiate new terms with a defaulting portfolio company. In addition, if one of the Company's portfolio companies were to go bankrupt, even though the Company may have structured its interest as senior debt, depending on the facts and circumstances, including the extent to which the Company actually provided significant managerial assistance to that portfolio company, a bankruptcy court might re-characterize the Company's debt holding and subordinate all or a portion of our claim to that of other creditors.

Our investment decisions may present industry, sector and issuer risk.

The Company may, from time to time, invest a substantial portion of its assets in the securities of issuers in any single industry or sector of the economy or in only a few issuers. The Company cannot predict the industries or sectors in which its investment strategy may cause it to concentrate and cannot predict the level of its diversification among issuers, although over time the Company anticipates investing in a minimum of 15 to 20 issuers to ensure it satisfies diversification requirements for qualification as a regulated investment company for U.S. federal income tax purposes. Concentration of the Company's assets in an industry or sector may present more risks than if it were broadly diversified over numerous industries and sectors of the economy. A downturn in an industry or sector in which the Company is concentrated would have a larger impact on us than on a company that does not concentrate in industry or sector. As a result of investing a greater portion of the Company's assets in the securities of a smaller number of issuers, the Company would be classified as a non-diversified company under the 1940 Act. The Company may be more vulnerable to events affecting a single issuer or industry and therefore subject to greater volatility than a company whose investments are more broadly diversified. Accordingly, an investment in the Company may present greater risk than an investment in a diversified company. Furthermore, we have not made and do not intend to make any determination as to the allocation of assets among different classes of securities. Consequently, at any point in time the Company may be highly concentrated in a single type of asset and events which affect a particular asset class disproportionately could have an equally disproportionate effect on the Company.

There may be changes in laws or regulations governing portfolio companies.

The Company's portfolio companies will be subject to regulation by laws at the local, state and federal level and, to the extent that we are successful in expanding our portfolio companies’ operations globally, the laws of foreign countries as well. These laws and regulations, as well as their interpretation, may be changed from time to time. Any change in these laws or regulations, or any failure to comply with them by the Company's portfolio companies, could have a material adverse affect on the Company's business.

ITEM 4. CONTROLS and PROCEDURES.

Within 90 days of the filing of this Form 10-Q, an evaluation was carried out by Charles A. Fiscina, our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Disclosure controls and procedures are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-Q, is recorded, processed, summarized and reported within the time period specified in the Securities and Exchange Commission's rules and forms. Based on that evaluation, Mr. Fiscina concluded that as of May 31, 2007, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were effective to satisfy the objectives for which they are intended.

There were no changes in our internal control over financial reporting identified in connection with the evaluation performed that occurred during the fiscal quarter covered by this report that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 5.	EXHIBITS and REPORTS on FORM 8-K.

(a)	EXHIBITS. The following exhibits are filed as part of this report.

	31	Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32	Certification of Chief Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)	REPORTS ON FORM 8-K. None

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant caused this Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

DATE: July 9, 2007

Imperiali Inc

By:	/s/	Charles A. Fiscina
		Charles A. Fiscina, Chief Financial Officer

	/s	Charles A. Fiscina
		CFO
		(Principal Executive and Financial Officer)