Imperiali 10Q/A 2008 Q2 Quarterly report (amended)

	February 29, 2008		August 31, 2007

ASSETS
Portfolio At Value:
Private Finance
Companies more than 25% owned (cost: 2007 - $3,500,000; 2008 - $3,500,000)	$	-	$	-
Companies less than 5% owned		-		-
Current assets:
Cash	$	15,965	$	189,368
Prepaid Expenses		-		9,765
Total current assets	$	15,965	$	199,133

Note receivable		15,000		-
Fixed Assets		1,000		-
Loan receivable- Kaiser Himmel		580,000		-
Total assets	$	611,965	$	199,133

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and other current liabilities	$	1,500	$	26,614
Note payable-related party		300,000		—
Total current liabilities	$	301,500	$	26,614

Stockholders' equity:

Common stock; $.001 par value; authorized - 500,000,000 shares; 48,200,986 and 38,200,986 shares issued and outstanding at February 29, 2008 and August 31, 2007 respectively	$	48,241	$	38,389
Additional paid in capital		16,122,258		16,117,963
Accumulated deficit		(15,881,619		(11,171,422	)
Undistributed Earnings		21,585		(4,812,411
Total shareholders' equity	$	310,465	$	172,519

Total liabilities and shareholders' equity	$	611.965	$	199,133

KAISER HIMMEL IMPERIALI, INC.

Statement of Operations

Three and Six Months Ended February 29, 2008

	For the Three months Ended February 29						For the Six Months Ended February 29
	2008			2007			2008			2007
							Restated			Restated
Interest and Related Portfolio Income:
Interest and dividends	$	36		$	699		$	22,725		$	5,505
Consulting Income		70,000			-0-			286,000			-0-
Total revenue	$	70,036		$	699		$	308,725		$	5,505
Expenses:
Employees and Consulting	$	(9,000	)	$	-0-		$	(243,564	)	$	(413,300	)
General and administrative		(19,363	)		(438,251	)		(343,576	)		(472,670	)
Total Expenses	$	(28,363	)	$	( 438,251	)	$	(587,140	)	$	(885,970	)
Net income (loss) before income taxes	$	41,673		$	(437,552	)	$	(278,415	)	$	(880,465	)
Income tax expense		-0-			-0-			-0-			-0-
Net investment income	$	41,673		$	(437,552	)	$	(278,415	)	$	(880,465	)
Net Realized Gains(losses)		-0-			-0-			-0-			(3,500,000	)

Net Change in unrealized appreciation		-0-			-0-			-0-			-0-

Net increase in net assets resulting from operations (loss)	$	41,673		$	(437,552	)	$	(278,415	)	$	(4,380,465	)

Earnings (loss) per common share - basic	$	.001		$	(.017	)	$	(.006	)	$	(.0.171	)
Earnings (loss) per common share - diluted	$	.001		$	(.017	)	$	(.006	)	$	(0.171	)
Weighted avg. common shares out. - basic		48,200,986			25,809,569			48,200,986			25,683,778
Weighted avg. common shares out. - diluted		48,200,986			25,809,569			48,200,986			25,683,778

KAISER HIMMEL IMPERIALI, INC.

Statement of Change in Net Assets

For the Six Months Ended

February 29, 2008 and 2007

	2008			2007
Operations:
Net Investment Income	$	(278,415	)	$	(880,465	)
Net Realized Gains (losses)		-			-
Net Change in unrealized appreciation		-			(3,500,000	)
Change in assets		(294,500	)		26,996
Shareholder Distributions:
Common Stock Dividends		-			-

Capital share transactions:
Sales of Common Stock		1,066,023			491,036
Common stock issued for investments		-			3,500,000
Total Increase in Net Assets	$	493,108		$	(362,433	)
Net assets at beginning of period	$	118,857		$	609,541
Net assets at end of period	$	611,965		$	247,108
Net asset value per common share	$	0.013		$	0.10
Common shares outstanding at the end of period		48,200,986			25,879,986

KAISER HIMMEL IMPERIALI, INC.

Statement of Investments

February 29, 2008

Private Finance Portfolio Company	Investment			Cost		Value

Imperiali Organization Inc.		Common Stock	5,000,000 Shares	$	-	$	-
I1Telecom Services Inc		Common Stock	30,000,000 Shares	$	-	$	-
I1Connect Inc		Common Stock	40,000,000 Shares	$	3,500,000	$	-
I1Films Inc		Common Stock	5,000,000 Shares	$	-	$	-
I1TV		Common Stock	10,000,000 Shares	$	-	$	-
I1Publishing		Common Stock	5,000,000 Shares	$	-	$	-
I1Political Advisory		Common Stock	5,000,000 Shares	$	-	$	-
I1Educatopm		Common Stock	5,000,000 Shares	$	-	$	-
Total				$	3,500,000	$	-

See Footnotes for Explanation of Valuation

Full value of investments is not recognized on the Balance Sheet.

KAISER HIMMEL IMPERIALI, INC.

Statement of Cash Flows

For the Six Months Ended

February 29, 2008 and 2007

	2008			2007
	Restated			Restated
Cash flow from operating activities:
Net increase (decrease) in net assets from operations	$	(278,415	)	$	(4,380,465	)
Adjustments to reconcile net income (loss) to net cash provided by operation activities:		(13,500	)		26,996
Change in net unrealized (increase) decrease of investments		-			-

Net cash used by operating activities	$	(291,915	)	$	$ (853,469	)

Cash flows from investing activities:
Net cash used in investing activities		(1,000	)		-

Cash flows from financing activities
Proceeds from related party	$	300,000		$	-
Investment in subsidiary		(580,000	)		-
Proceeds from common stock		399,512			491,036
Net cash provided by financing activities	$	119,512		$	491,036

Net increase in cash	$	(173,403	)	$	(362,433	)

Cash at beginning of period	$	189,368		$	609,541

Cash at end of period	$	15,965		$	247,108

NOTES TO FINANCIAL STATEMENTS

Note 1-Basis of presentation

The accompanying audited financial statements for February 29, 2008 and unaudited financial statements for February 28, 2007 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-QSB and Item 310 of Regulation S-B. 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 three and six months ended February 29, 2008 are not necessarily indicative of the results that may be expected for the year ending August 31, 2008.

Note 1. Organization:

General Development of the Business

We were incorporated in Florida on September 27, 1994 by Daniel J. Imperato 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") there under. At August 31, 2007, the Company’s total assets were $3,699,133 and its net asset value per share (“NAV”) was $.10. 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"),

Pursuant to two agreements between the Company and Kaiser Himmel, Inc., the two parties consisting of Kaiser Himmel Corporation and Imperiali, Inc., are to provide for, among other things, the following:

Consideration thereof for the agreement 80,000,000 shares of Imperiali Inc. common stock shall be issue to KHC in exchange the Company receipt shall consist of: 13.4 million (thirteen million four hundred thousand) shares of Sprint Nextel Corp. Common Stock (NYSE:S) which is held in the name of KHC at Bank of America of which has a restriction until October 2008. Based upon the purchase of these shares of the Company, KHC et al. will advise Bank of America that upon the expiration of the Restriction Legend on the securities, these 13.4 million shares will be directly transferred to Imperiali Inc.’s Stock Brokerage Account. Furthermore, KHC agrees to notify Bank of America to incorporate this subscription agreement within its custodial agreement with Bank of America for its equity holdings in Sprint Nextel Corp (NYSE:S). This payment is non-cancellable, and Bank of America will be noticed that said transfer is to occur on October 2008. Account numbers and legal documents will be completed pertaining to proof of funds.

Upon signing the subscription agreement, the Company will loan a total of $380,000 (three hundred and eighty thousand dollars) to KHC at the current prime interest rate plus 1% (one percent) due and payable October 2008. $150,000 (one hundred fifty thousand dollars) will be transferred upon both parties signing this agreement and the balance within 30 days.

In addition as part of the agreement the Company agrees to loan $3,000,000 to KHC at the current prime interest rate plus 1% (one percent) due and payable.

Upon closing of both of these transactions KHC will control 62.5% of the Company.

Effective with the agreement the Company has appointed Eric Skys as Chief Executive Officer and Chairman of the board.

Mr. Skys is currently the Chairman of Kaiser Himmel Corporation, overseeing the investments in and/or purchase of companies in the technology arena. Mr. Skys has experience with Artificial Intelligence and created the worlds first artificial intelligence powered anti virus in early 2004, Aedan Anti Virus through Backspace2 Corporation. Mr. Skys has served with the United State Marine Corp as a First Lieutenant with specialized training in tactical coordination and weapons development. He has also been trained in special operations and tactics. He has designed weapons for the United States government that include ‘smart weapons’, or weapons that use artificial intelligence. He has worked with Bulltek LTD as Head Software Developer, CTO, CIO, Director of Security Intelligence, and their Anti-Hacker Countermeasure Event Coordinator. He also created his own video game company at age 16, Virtual Active Systems.

Mr. Skys is qualified to write software in most program languages and has developed his own language as well.

Also effective with the agreement with Kaiser Himmel the Company has changed it’s name to Kaiser Himmel Imperiali, Inc.

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

Kaiser Himmel Imperiali, Inc. is a team of global expansion and business development company 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 Inc. is a privately held Business Development Company (BDC) with over 475 shareholders (meets the minimum requirements to enter the public markets). A BDC is a special type of Investment Company designated by the Securities and Exchange Commission (SEC). This network comprises Imperiali Inc.’s Global Advisory Team. By being able to invest and/or loan capital and advise, Imperiali Inc. is able to monitor and, in most cases, influence events utilizing the tools and leverage that this business model affords; thus endeavoring to mitigate risk and safeguard investments, with the idea of creating shareholder value.

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 February 29, 2008 the Company has an approximately $8,200,000 net operating loss carryover which can be used against future income through 2018. No provisions for income taxes are provided in these financial.

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. As of February 29, 2008, some of the Company’s cash equivalent balances were deposited in accounts with a stock brokerage firm.

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.

Note 3 - Recently Issued Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R),“Business Combinations,” which replaces SFAS No. 141,“ Business Combinations,” which, among other things, establishes principles and requirements for how an acquirer entity recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed (including intangibles) and any non-controlling interests in the acquired entity. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We are currently evaluating what impact our adoption of SFAS No. 141(R) will have on our financial statements.

In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements, an amendment of ARB No. 51.” SFAS No. 160 amends ARB 51 to establish accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. It also amends certain of ARB 51’s consolidation procedures for consistency with the requirements of SFAS No. 141(R). SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. We are currently evaluating what impact our adoption of SFAS No. 160 will have on our financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Note 4. 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 collectability 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.

Note 5. Portfolio -

The Board of Directors at a meeting on May 15, 2006 adopted a resolution creating a series of Five Million (5,000,000) shares of voting Preferred Stock designated as Series B Preferred Stock issued to Daniel J. Imperato for past management services. Each share of Series B preferred stock shall be convertible into (3) shares of Common Stock at the sole discretion of Daniel J. Imperato. This agreement was executed May 30, 2006 and was effective June 26, 2006 the shares were issued September 11, 2006.

As part of the past management services, Kaiser Himmel Imperiali, Inc. acquired Imperiali Organization LLC as of February 15, 2006. Imperiali Organization has one unit in the LLC, which represents 100% ownership. Through the ownership of Imperiali Organization, LLC, Imperiali Inc. acquired all the assets of Imperiali Organization, LLC, including an internet search engine project and all the telecom projects associated with the previous New Millennium Development Group projects.

On the September 11, 2006 management valued one project within Imperiali Organization LLC - an internet search engine project called I1Connect for $3.5 million dollars. Due to the uncertainty of the realization of this project, an unrealized loss has been recognized as of August 31, 2007.

On the May 31, 2007 management revalued the I1Connect project. The internet search engine was fully operational. Based on comparison of other comparable companies, management revalued the I1Connect project at $40,000,000.

Management devised a plan to combine I1Connect and a global media public relations firm which was acquired by Kaiser Himmel Imperiali, Inc. The combined subsidiary was set up in July 2007 as I1Connect, Inc. Kaiser Himmel Imperiali, Inc. owns 40,000,000 shares of I1Connect, Inc. The company has issued a Private Placement Memorandum. The last share of I1connect sold at $1 per share under the private placement or a $40,000,000 valuation.

Additionally, Imperiali, Inc reentered the telecommunications business. The telecommunications project is now a going concern. Kaiser Himmel Imperiali, Inc. valued the telecom project at $30,000,000 as of May 31, 2007. The asset included the previous New Millennium Development Group assets that Bank of America had valued, on a global basis, at approximately 5 billion dollars.

Kaiser Himmel Imperiali, Inc. subsequently set up a company I1Telecommunications, Inc. for the purpose of acquiring some of the telecom projects of Imperiali Organization, LLC. Kaiser Himmel Imperiali, Inc. owns 30 million shares of I1Telecommunications, Inc. Management has entered into a partnership agreement with a South American telecommunications company and has entered into Memorandums of Understanding with other telecommunications partners. Management now believes that the combined future potential of Imperiali Telecom, Inc is at least 5% of the total value of the original projects or $250,000,000. The projects must be funded to proceed forward with the business plan to realize the $250,000,000 valuation.

Management has subsequently formed a subsidiary company from the film project, entitled I1Films, Inc. Kaiser Himmel Imperiali, Inc. owns 5,000,000 shares of I1Films. Management is in the process of obtaining an independent valuation and has not established a value of I1Films, Inc.

The Company is also in the process of searching for a third party independent valuation for both I1Connect and I1Telecom. As of the date of this audit, the Company has not done a complete independent valuation.

Imperiali Organization LLC has also been invited to participate in $70 billion of infrastructure projects around the world. Imperiali management realized that the management portion did not fit the structure of the Business Development Company, so the management portion of the agreement was sold for $220 million to a London company. This transaction was not booked because there is a high degree of uncertainty if the note would be paid or converted to equity or if the projects would be successful. The value of the contract was based on a percentage of the projects anticipated to be constructed and a standard supply management agreement.

Note 6 - Kaiser Himmel Stock Issuance

Pursuant to two agreements between the Company and Kaiser Himmel, Inc., the two parties consisting of Kaiser Himmel Corporation and Imperiali, Inc. are to provide for, among other things, the following:

Based upon the purchase of these shares of the Company, KHC et al. will advise Bank of America that upon the expiration of the Restriction Legend on the securities, these 13.4 million shares will be directly transferred to Imperiali Inc.’s Stock Brokerage Account. Furthermore, KHC agrees to notify Bank of America to incorporate this subscription agreement within its custodial agreement with Bank of America for its equity holdings in Sprint Nextel Corp (NYSE:S). This payment is non-cancellable, and Bank of America will be noticed that said transfer is to occur on October 2008. Account numbers and legal documents will be completed pertaining to proof of funds. As of February 29, 2008 the Company has not carried the value of the shares on the financial statements. The stock will be valued upon the deliverance of a power of attorney to the company to manage KHC brokerage account.

In addition as part of the agreement the Company agrees to loan $3,000,000 to KHC at the current prime interest rate plus 1% (one percent) due and payable.

Upon closing of both of these transactions KHC will control 62.5% of the Company.

As described above the Company determined that the transaction with Kaiser Himmel Corporation described below (KHC) needs to be reevaluated. As stated in the prior 8K filed November 15, 2007 and subsequent 10QSB for six

months ended February 29, 2008 the conditions of the transaction require the delivery of restricted Sprint Nextel common stock along with power of attorney by October 2008. As previously discussed recent events have raised the possibility that those restrictions may not be able to be met.

On May 29, 2008 at meeting of the Company’s Board of Directors, the board approved in exchange for the forgiveness of debt owed to the Company by Kaiser Himmel, Kaiser Himmel will relinquish all assets of Kaiser Himmel including accounts receivable, software, hardware, and work in process for all software projects. Prototypes, websites, trademarks, vehicles and source code to Imperiali Organization. The debt is to be assumed by Imperiali Organization and any prior liens will be release.

Note 6. Debt– As of February 29, 2008 the company has debt due of $300,000 to Daniel Imperato a member of the Board of Directors.

Note 7: 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 8. Employee Compensation Plans–

The Company has no Defined Benefit or Defined Contribution Pension Plans.

Note 9. Stock Option Plans–

The Company has no Stock Option Plans.

Note 10 Hedging Activities:

The Company did not engage in Hedging Activity.

Note 11 Litigation:

The Company has no lawsuits pending

ITEM 2.

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

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

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 have filed an election with the Securities and Exchange Commission to be regulated as a business development company under the 1940 Act and expect that election to become effective after the effective date of this Registration Statement. 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

Three Months Ended February 29, 2008 as compared to three months ended February 28, 2007, we incurred a net loss of $90,508,827 for the current period as compared to a loss of $437,552. The difference mainly is due to the realized losses of $90,550,500 from the decrease in value of the Sprint/Nextel stock acquired in the Kaiser Himmel transaction

Six Months Ended February 29, 2008 as compared to six months ended February 28, 2007, we incurred a net loss of $90,528,915 for the current period as compared to a loss of $880,465. The difference mainly is due to the realized losses of $90,550,500 form the decrease in value of the Sprint/Nextel stock acquired in the Kaiser Himmel transaction

General and administrative expenses related primarily to rent, salaries, telephone, other office costs and costs associated with being a reporting company

Liquidity and Capital Resources

We had cash on hand of $15,965 at February 29, 2008 and had no other assets to meet ongoing expenses or debts that may accumulate. On October 2008 when the Sprint stock becomes available to the Company then the Company will be able to further implement its business plan. Until such time the company to raise capital will continue to rely on funding from its officers and private placement for sale of its stock. As of such date, we have accumulated a deficit of $90,528,915.

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, 2008. 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.

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 this 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.

Voting control is centralized in our Board of Directors and Officers.

Nearly 68% of the Company’s Common Stock is owned directly by our officers and directors. However upon the closing of the Kaiser Himmel transactions as discussed in Note 6 Kaiser Himmel will own approximately 63% of the company. In addition, Mr. Imperato’s friends and family own nearly an additional 4%.

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 Chairman 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 Commission of our intent to elect in good faith, within 90 days from the date of such filing but after the effective date of this Registration Statement, 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 to any 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 3.

CONTROLS and PROCEDURES.

Within 45 days of the filing of this Form 10-QSB, an evaluation was carried out by Daniel Imperato, our Chief Executive 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-QSB, 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. Imperato concluded that as of February 29, 2008, 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 6.

EXHIBITS and REPORTS on FORM 8-K.

(a)

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

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

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: September 19, 2008

	Imperiali Inc

	By:	/s/ Daniel Imperato
		Daniel Imperato-Interim CEO
		(Principal Executive Officer)

Imperiali Inactive 10-Q/A2008 Q2 Quarterly report (amended)