UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

--------------------------------------------------------------------------------

       [ X ] Quarterly Report Under Section 13 or 15(d) of The Securities
                              Exchange Act of 1934

                  For the quarterly period ended April 30, 2005

       [ _ ] Transition Report Under Section 13 or 15(d) of The Securities
                              Exchange Act of 1934

            For the transition period from ___________ to ___________

                         Commission file number: 0-21169

                     Imperial Petroleum Recovery Corporation
           (Name of small business issuer as specified in its charter)

              Nevada                                         76-0529110
  (State or other jurisdiction of                         (I.R.S. Employer
   incorporation or organization)                        Identification No.)

                           1970 South Starpoint Drive
                              Houston, Texas 77032
               (Address of principal executive offices) (Zip Code)

                                 (281) 821-1110
                (Issuer's telephone number, including area code)

         Securities Registered under Section 12 (b)of the Exchange Act:

                                      None

         Securities Registered under Section 12 (g) of the Exchange Act:

                    Common Stock, par value $0.001 per share
                                (Title of Class)

Check if the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
as the issuer was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes |_| No |X|

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

As of April 7, 2006, 40,898,180 shares of the Company's common stock were
outstanding.

Transitional small business disclosure format: Yes |_| No |X|


<PAGE>


                                      INDEX

PART I                                                                      PAGE

Item 1.  Financial Statements.

         Consolidated Balance Sheets as of April 30, 2005 and October 31,
         2004 (Unaudited)                                                      2

         Consolidated Statements of Operations of the Three Months Ended
         (Unaudited) April 30, 2005 and 2004 and the Six Months Ended
         April 30, 2005 and 2004                                               3

         Consolidated Statements of Cash Flows for the Six Months Ended
         (Unaudited) April 30, 2005 and 2004                                   4

         Notes to Consolidated Financial Statements                         5-13

Item 2.  Management's Discussion and Analysis or Plan of Operation         14-19

Item 3.  Controls and Procedures.                                             19

PART II

Item 1.  Legal Proceedings.                                                   20

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.         20

Item 3.  Defaults Upon Senior Securities.                                     20

Item 4.  Submission of Matters to Vote of Security Holders.                   20

Item 5.  Other Information.                                                   20

Item 6.  Exhibits and Reports on Form 8-K.                                 21-22

Signatures                                                                    23

Exhibit Index                                                              24-25

Certifications                                                             26-29


<PAGE>


     This  quarterly  report  contains  forward-looking  statements  within  the
meaning  of  the  federal  securities  laws,  including  statements   concerning
anticipated  revenues,  future  marketing  plans for the  MST-1000,  and similar
statements  concerning  anticipated  future events and expectations that are not
historical   facts.   The   statements   are  subject  to  numerous   risks  and
uncertainties, including the effects of economic conditions; the availability of
capital;  the  dependence  on key  customers;  competitive  conditions;  and the
various risks associated with developing and marketing a new  process/technology
which could cause actual results to differ materially from those expressed in or
implied by the statements herein.  Due to such uncertainties and risks,  readers
are cautioned not to place undue  reliance on such  forward-looking  statements,
which speak only as of the date hereof.

     In some cases, you can identify  forward-looking  statements by terminology
such as "may," "will," "should," "expects," "plans," "anticipates,"  "believes,"
"estimates,"  "predicts,"  "potential,"  or the negative of these terms or other
comparable terminology. These statements are only predictions.  Actual events or
results may differ materially.


<PAGE>


                     Imperial Petroleum Recovery Corporation

                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                     ASSETS
                                                                  April 30,         October 31,
                                                                     2005               2004
                                                                ---------------   ----------------
<S>                                                           <C>                <C>
CURRENT ASSETS
    Cash and cash equivalents                                 $        211,561   $        412,156
    Trade accounts receivable, net                                           -                200
    Other receivable - related party                                    13,944              2,500
    Inventory                                                           45,000                  -
    Prepaid expenses                                                         -              4,000
                                                                ---------------   ----------------
           Total current assets                                        270,505            418,856
PROPERTY AND EQUIPMENT, net                                            183,812            251,223
OTHER ASSETS, net of accumulated amortization of
       $23,221 and $20,831, respectively                                39,552             47,991
                                                                ---------------   ----------------
    Total assets                                              $        493,869   $        718,070
                                                                ===============   ================

                      LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
    Trade accounts payable                                    $        602,368   $        756,558
    Other payables - related parties                                   103,974            123,115
    Accrued liabilities                                                698,225          1,801,853
    Notes payable - related parties                                          -            375,000
    Bridge note payable                                                      -          1,725,417
    Current maturities of long-term obligations                      1,108,562          1,109,743
    Other                                                                  466              1,807
                                                                ---------------   ----------------
           Total current liabilities                                 2,513,595          5,893,493

   Long-term obligations, less current maturities                    1,495,481          1,186,403
   Guaranteed Investment Contract Liability,                                 -            394,132
                                                                ---------------   ----------------
           Total liabilities                                         4,009,076          7,474,028

STOCKHOLDERS' DEFICIT
    Common stock, par value $0.001; authorized 100,000,000
    shares; issued and outstanding 39,885,029 and 20,845,687
    shares respectively                                                 39,885             20,846
    Additional paid-in capital                                      13,667,373         11,762,008
    Accumulated deficit                                           (17,222,465)       (18,538,812)
                                                                ---------------   ----------------
           Total stockholders' deficit                             (3,515,207)        (6,755,958)
                                                                ---------------   ----------------
                                                              $        493,869    $       718,070
                                                                ===============   ================
</TABLE>


                                       2
<PAGE>


                     Imperial Petroleum Recovery Corporation

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                         For the periods ended April 30,


                                                         For the three                    For the six
                                                    months ended April 30,          months ended April 30,
                                                -------------------------------  -----------------------------
                                                     2005            2004            2005            2004
                                                ---------------  --------------  --------------  -------------
<S>                                            <C>              <C>             <C>             <C>
Revenues                                       $             -  $       15,000  $            -  $      30,000
Cost of goods sold                                           -               -               -              -
                                                ---------------  --------------  --------------  -------------
         Gross profit (loss)                                 -          15,000               -         30,000
Operating expenses
     Selling, general and administrative
      expenses                                         369,926         294,526         561,568        337,385
     Research and development                            5,107               -           9,442              -
     Depreciation and Amortization                      32,587          35,129          66,267         70,689
                                                ---------------  --------------  --------------  -------------
     Total operating expenses                          407,621         329,655         637,277        408,074
                                                ---------------  --------------  --------------  -------------
         Loss from operations                         (407,620)       (314,655)       (637,277)      (378,074)
Other income (expense)
     Interest Income                                       270               -             285              -
     Gain on extinguishment of debt                    574,226               -       2,190,586          4,476
     Gain on disposition of assets                           -               -          11,466              -
     Interest expense                                  (96,631)       (208,587)       (248,716)      (418,494)
     Other Income (expense)                                  -             500               -          3,500
                                                ---------------  --------------  --------------  -------------
Total other income (expense), net                      477,865        (208,087)      1,953,622       (410,518)
                                                ---------------  --------------  --------------  -------------
         Net Income (loss)                     $        70,245  $     (522,742) $    1,316,344  $    (788,592)
                                                ===============  ==============  ==============  =============

Net Income (loss) per common share - basic and
 diluted (Note J)

Net Income (loss) per common share             $          0.00  $        (0.03) $         0.04  $       (0.04)

Weighted average common shares outstanding -
 basic and diluted (Note J)                         37,501,601      18,867,419      30,989,918     18,867,419
</TABLE>


                                       3
<PAGE>


                     Imperial Petroleum Recovery Corporation
<TABLE>
<CAPTION>
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                          For the six
                                                                     months ended April 30,
                                                               --------------------------------
                                                                     2005             2004
                                                               ---------------  ---------------
<S>                                                           <C>               <C>
Increase (decrease) in cash and cash equivalents
    Cash flows from operating
    activities:
    Net Income (loss)                                         $     1,316,344   $    (788,592)
    Adjustments to reconcile net loss to net cash used in
    operating activities:
      Depreciation and amortization                                    66,267           70,689
      Non-cash charges associated with stock issuances                184,000          190,000
      Gain on settlement of debt for stock                        (2,103,808)                -
      Gain on write-off of accounts payable                          (86,778)          (4,476)
      (Gain)/loss on disposal of property and equipment              (11,466)                -
       Non-cash interest expense                                       73,197           61,965
    Changes in assets and liabilities:
      Trade accounts receivable                                           200                -
      Other receivables, related party                                (9,000)                -
      Employee Advances                                               (2,444)                -
      Inventory                                                      (45,000)                -
      Prepaid expenses                                                  4,000                -
      Other assets                                                      6,048         (18,000)
      Trade accounts payables                                        (65,462)         (34,643)
      Other payables, related party                                   (6,799)           80,395
      Accrued liabilities                                             170,892          372,558
      Deferred revenue                                                      -         (30,000)
                                                               ---------------  ---------------
         Total adjustments                                        (1,826,153)          688,488
                                                               ---------------  ---------------
         Net cash provided/(used) in operating activities           (509,809)        (100,104)
                                                               ---------------  ---------------

    Cash flows from investing activities:
     Proceeds from disposal of property and equipment                   2,658                -
                                                               ---------------  ---------------
         Net cash provided/(used) in investing activities               2,658                -
                                                               ---------------  ---------------

    Cash flows from financing activities:
        Proceeds from issuance of long-term obligations               325,000          200,000
        Principal payments on current portion of long-term
        obligations                                                  (18,444)          (3,267)
                                                                --------------  ---------------
           Net cash provided/(used) by financing activities           306,556          196,733
                                                                --------------  ---------------

        Net increase (decrease) in cash and cash equivalents        (200,595)           96,629
        Cash and cash equivalents at beginning of period              412,156              331
                                                                --------------  ---------------
        Cash and cash equivalents at end of period            $       211,561  $        96,960
                                                                ==============  ===============

    Supplemental disclosure of cash flow information
        Cash paid during the period for
           Interest                                           $         5,018  $         9,879
           Taxes                                              $             -  $             -
</TABLE>


                                       4
<PAGE>


                     Imperial Petroleum Recovery Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             April 30, 2005 and 2004


Interim Financial Information

In the opinion of the management of Imperial Petroleum Recovery Corporation, the
accompanying  unaudited  financial  statements  include  all normal  adjustments
considered  necessary to present  fairly the financial  position as of April 30,
2005 and the results of  operations  for the three  months and six months  ended
April 30, 2005 and 2004,  and cash flows for the six months ended April 30, 2005
and 2004.  Interim results are not necessarily  indicative of results for a full
year.

The  financial  statements  and notes are presented as permitted by Form 10-QSB,
and do not  contain  certain  information  included  in  the  Company's  audited
financial statements and notes for the fiscal year ended October 31, 2004.


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       1.   Inventories
            -----------

       Inventory  consists  of parts  and  labor or a  single  machine  that the
       company is building  for resale.  Inventory is valued at lower of cost or
       market. As of April 30, 2005 the Company had $45,000 inventory.

       2. Warrants, Stock options & Restricted stock program
          --------------------------------------------------

       We have  stock-based  employee  compensation  plans. As permitted by SFAS
       123,  "Accounting for Stock-Based  Compensation,"  we continue to account
       for our stock options in accordance  with APB 25,  "Accounting  for Stock
       Issued to Employees."  Employee stock options are granted at or above the
       market price at dates of grant which does not require us to recognize any
       compensation  expense.  These options expire in five years.  The proceeds
       from options exercised are credited to shareholders' equity.

       If we had elected to  recognize  compensation  expense  based on the fair
       value at the date of grant for awards in  quarters  and six months  ended
       April 30, 2005 and 2004  consistent  with the provisions of SFAS 123, our
       net  income  and  earnings  per  share  would  have been  reduced  to the
       following unaudited pro forma amounts:


                                       5
<PAGE>


                     Imperial Petroleum Recovery Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             April 30, 2005 and 2004

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

<TABLE>
<CAPTION>

                                             For the three months     For the six months
                                                      ended                   ended
                                                    April 30                April 30
                                               2005        2004        2005        2004
                                             ---------  -----------  ----------  ----------
<S>                                         <C>        <C>          <C>         <C>
Net Income (loss) as reported               $  70,245  $  (552,742) $1,316,344  $ (788,592)
Pro forma effect of expensing stock based
 compensation plans using fair value
 method                                     $(120,000) $         -  $ (120,000) $        -
                                             ---------  -----------  ----------  ----------
Net Income as adjusted                      $ (49,755) $  (552,742) $1,196,344  $ (788,592)

Basic earnings per common share:
Net income (loss) as reported               $    0.00  $     (0.03) $     0.04  $    (0.04)
   Pro forma effect of expensing stock
    based compensation plans using fair
    value method                            $   (0.00) $         -  $    (0.00) $        -
Basic earnings per common share, as
 adjusted                                   $   (0.00) $     (0.03) $     0.04  $    (0.04)

Diluted earnings per common share:
Net income (loss) as reported               $   (0.00) $     (0.03) $     0.04  $    (0.04)
   Pro forma effect of expensing stock
    based compensation plans using fair
    value method
Diluted earnings per common share, as
 adjusted                                   $   (0.00) $     (0.03) $     0.04  $    (0.04)
</TABLE>


       In  December  2004 the FASB  issued  Statement  of  Financial  Accounting
       Standards  No.  123R  (SFAS  No.  123R) is a  revision  of SFAS No.  123,
       "Accounting for Stock-Based  Compensation",  and supersedes APB 25. Among
       other items,  SFAS 123R  eliminates  the use of APB 25 and the  intrinsic
       value method of accounting,  and requires companies to recognize the cost
       of  employee   services   received  in  exchange  for  awards  of  equity
       instruments,  based on the grant date fair value of those awards,  in the
       financial statements.  The effective date of SFAS 123R for Small Business
       issuers is the first reporting  period beginning after December 15, 2005,
       which will be for our second quarter 2006. SFAS 123R permits companies to
       adopt its requirements using either a "modified prospective" method, or a
       "modified retrospective" method. Under the "modified prospective" method,
       compensation  cost is recognized in the  financial  statements  beginning
       with the effective date,  based on the  requirements of SFAS 123R for all
       share-based   payments   granted  after  that  date,  and  based  on  the
       requirements  of SFAS 123 for all unvested  awards  granted  prior to the
       effective date of SFAS 123R. Under the "modified  retrospective"  method,
       the requirements are the same as the "modified  prospective"  method, but
       also permits  entities to restate  financial  statements  of the previous
       periods based upon proforma disclosures made in accordance with SFAS123.


                                       6
<PAGE>


                     Imperial Petroleum Recovery Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             April 30, 2005 and 2004


NOTE B - GOING CONCERN

       The  accompanying  financial  statements have been prepared in conformity
       with  accounting  principles  generally  accepted in the United States of
       America,  which  contemplate  continuation  of  the  Company  as a  going
       concern.  The Company has  generated  limited  revenue  through April 30,
       2005,  and  has  sustained   substantial  losses  from  operations  since
       inception.  In addition,  as of April 30,  2005,  the  Company's  current
       liabilities exceeded its current assets by $2,243,090,  it had $1,075,442
       of debt  obligations  that were past due,  and a deficit  accumulated  of
       $17,222,465. During the six months ended April 30, 2005, the Company used
       $509,809  of cash in  operating  activities,  which was funded  primarily
       through the issuance of debt, rather than provided by its operations.

       In  view  of  the  matters   described   in  the   preceding   paragraph,
       recoverability  of a major portion of the recorded asset amounts shown in
       the accompanying  balance sheet is dependent upon continued operations of
       the Company,  which in turn is dependent  upon the  Company's  ability to
       meet its  financing  requirements  on a  continuing  basis,  to  maintain
       present financing and to succeed in its future operations.  The financial
       statements do not include any adjustments  relating to the recoverability
       and   classification   of   recorded   asset   amounts  or  amounts   and
       classification  of liabilities that might be necessary should the Company
       be unable to continue in existence.

       During the  quarter  and six months  ended  April 30,  2005,  the Company
       raised $325,000 of capital through best efforts financing.

       Management will be required to, and expects to, raise additional  capital
       through  the  issuance  of  debt   securities  and  offerings  of  equity
       securities to fund the Company's operations, and will attempt to continue
       raising  capital  resources  until  such  time as the  Company  generates
       revenues sufficient to maintain itself as a viable entity. However, there
       is no assurance that such financing will be obtained.


                                       7
<PAGE>


                     Imperial Petroleum Recovery Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             April 30, 2005 and 2004

NOTE B - GOING CONCERN - CONTINUED

       During January 2005, the Company filed for a provisional patent using MST
       in the  production of biodiesel.  Also  beginning in February  2005,  the
       Company entered into  discussions  regarding the lease of the MST for the
       production of biodiesel fuel to enhance production throughput.  IPRC also
       intends to participate in a research initiative with several universities
       and research centers to examine the MST technology in this application.

       During  fiscal year 2001,  the Company  entered  into an  agreement  with
       Kellogg Brown & Root  /ExxonMobil  to sell a MST-1000 to Esso's oil field
       gathering  facility  located in Africa.  The Company  shipped the unit in
       December of 2002.  The equipment  arrived in Chad in 2003 and was heavily
       damaged  during  shipment.  During  2004 the  Company  had the  equipment
       repaired. Upon initial attempts to commission the unit, it was discovered
       that the  centrifuge  pumps  were  inadequate  for site  conditions.  The
       centrifuge  subcontractor  began production of the new pump skid in early
       2005 and the new pump  skid was  shipped  to Chad  during  fiscal  fourth
       quarter  of 2005.  The  Company  is in  discussion  with  Exxon  Mobil to
       schedule the MST-1000 unit  commissioning,  so that it can be turned over
       to them.


NOTE C - NOTES PAYABLE - RELATED PARTIES

       12% note payable, interest compounded daily, to Maya, LLC a related party
       and  stockholder,  was due in  full  July  31,  2001,  collateralized  by
       demonstration  unit.  Subsequent to the maturity date,  interest is being
       charged at the loan default rate of 18%, compounded daily. During January
       of 2005, the Company issued  2,953,205 shares of stock in full settlement
       of $375,000 in outstanding  debt and $339,429 in accrued  interest.  As a
       result of this settlement,  the Company recorded a gain on extinguishment
       of debt of $419,109.


                                       8
<PAGE>


                     Imperial Petroleum Recovery Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             April 30, 2005 and 2004

NOTE D - LONG-TERM OBLIGATIONS

       During  fiscal  years 2004 and 2005 the  Company  raised cash for working
       capital under a private placement by issuing 12% note payable convertible
       into the Company Stock at $0.15,  principal and interest due at maturity.
       These notes are  collateralized  by a lien on the  Company's  patents and
       trademarks.  In  accordance  with  the  term  sheet  the  notes  were not
       convertible nor were the associated  warrants issued until the definitive
       agreements  were signed.  The definitive  agreements were executed during
       the third quarter of 2005. The notes mature at different  dates in fiscal
       2007. The Company raised $325,000 under the private  placement during the
       quarter and six months ended April 30, 2005.


NOTE E - STOCKHOLDERS' DEFICIT

       Common stock
       ------------

       In April 2005 this GIC agreement was terminated and settled.  The Company
       issued an additional 682,301 share of common stock.

       During  March of 2005,  the  Company  agreed to pay $19,987 and agreed to
       issue 461,936 shares in full settlement of $194,028 of deferred  salaries
       owed to current  and former  employees.  This  resulted in a gain on debt
       extinguishment of $127,847.


NOTE F- GUARANTEED INVESTMENT CONTRACT

       In April 2005 this GIC agreement was terminated and settled.  The Company
       issued an additional  682,301 share of common stock. The holder agreed to
       terminate the GIC and release his lien position. The transaction resulted
       in a gain on forgiveness of debt totaling $378,630.


NOTE G - OPTIONS AND RESTRICTED STOCK PROGRAM

       Options
       -------

       During 2003,  the Company  established  a stock option plan for employees
       with the initial grant of options. Approved by the Board, the plan was to
       be put forth in front of  shareholders  in order for it to be a qualified
       plan under IRS rules, however due to the Company's financial condition, a
       stockholder  meeting was never held.  Under the terms of the plan, if the
       stockholders  fail to approve the plan within a year after the  effective
       date any awards  made  became  null and void.  The stock  options  had an
       exercise  price of $.20 and  expired  in ten  years  some of the  options
       vested immediately and others vested over the period of employment. Since
       all of the employees  were  terminated on or before June 6, 2003 only the
       initial  grant of 1,650,000  shares were made. As it was the intention of
       the Company to recognize  certain  employees under the stock option plan,
       the Company issued new options in March of 2005 to the employees who were
       not executive  officers totaling  1,225,000 shares with an exercise price
       $.20.  No  compensation  expense was  recognized  on the grant date.  The
       Company  intends to submit  the plan and new  options  for  stockholder's
       approval at its 2006 stockholders meeting.


                                       9
<PAGE>


                     Imperial Petroleum Recovery Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             April 30, 2005 and 2004

NOTE G - OPTIONS AND RESTRICTED STOCK PROGRAM (CONTINUED)

       Restricted Stock Program
       ------------------------

       The Company  issues shares of IPRC common stock in the form of restricted
       stock to  participating  officers and  employees.  The  restricted  stock
       generally has a vesting  period before  issuance  during which time it is
       subject to forfeiture if the participants' employment is terminated. Once
       issued the stock sale is restricted under rule 144. Unearned compensation
       expense  associated  with restricted  stock grants  represents the market
       value of IPRC common stock at the dated of grant and is  recognized  as a
       charge to income  ratably  over the  vesting  period.  During the quarter
       ended April 30, 2005 the Company agreed to issue 1,840,000  shares with a
       weighted  average fair market value of $0.10 per share.  The compensation
       charge was $184,000 for the quarter ended April 30, 2005. In addition the
       previously 2,000,000 shares which were granted in 2004 were issued during
       the quarter ended April 30, 2005.

NOTE H - RELATED PARTY TRANSACTIONS

       The Company has at various times entered into  transactions  with related
       parties,  including officers,  directors and major shareholders,  wherein
       these  parties  have  advanced or loaned  funds to the Company  needed to
       support its daily operations.

       In addition to matters in Notes C, E, and G the Company had related party
       transactions relating to the following:

       1.  Food Development Corporation
           ----------------------------

       Food Development Corporation (FDC), an entity controlled by a stockholder
       and officer of the Company,  has on occasion  loaned the Company funds to
       support daily operations.  During 2003, FDC loaned $80,000 of which funds
       were used to pay certain  employees and consultants.  FDC agreed to write
       off said amounts in December 2003. During 2003 and 2004 FDC made loans to
       the  Company in support of the daily  operation.  During June of 2003 the
       Company entered into an office sharing-agreement with FDC.

       The amount of reimbursement  accrued and offset against loans made by FDC
       for the  quarters  ended  April 30, 2005 and 2004 were $9,799 and $13,472
       respectively.  The amount of  reimbursement  accrued  and offset  against
       loans made by FDC for the six months  ended  April 30, 2005 and 2004 were
       $18,799 and $23,105 respectively

2.       Employee Benefits
         -----------------

       During the  quarter  ended  April 30,  2005,  an entity  owned by the Mr.
       Springer,  the chief executive officer of the Company,  and Mr. Gaiennie,
       the chief financial officer of the Company,  provided benefits to certain
       employees  utilizing  a  professional  employment  organization  ("PEO").
       During the  quarter  and the six months  ended April 30, 2005 the Company
       paid $12,000 and $24,000  respectively  for this service  compared to the
       quarter and the six months ended April 30, 2004 of $2,530 and $2,530.


                                       10
<PAGE>


                     Imperial Petroleum Recovery Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             April 30, 2005 and 2004

NOTE H - RELATED PARTY TRANSACTIONS (CONTINUED)

       The employees covered were paid a portion of their salaries  amounting to
       $3,000 and $6,000 for the quarter and the six months ended April 30, 2005
       compared  to $0 and $0 for the  quarter  and six months  ended  April 30,
       2004.  The  entity  owned by the Mr.  Springer  and Mr.  Gaiennie  had an
       existing  contract with the PEO as the Company's credit made it difficult
       to purchase insurance for its employees.

3.       Employee deferred Salaries
         --------------------------

       During  March of 2005,  the  Company  agreed to pay $19,987 and agreed to
       issue 461,936 shares in full settlement of $194,028 of deferred  salaries
       owed to current  and former  employees.  This  resulted in a gain on debt
       extinguishment of $127,847.

NOTE I - INCOME (LOSS) PER COMMON SHARE

       For the periods ended April 30,
<TABLE>
<CAPTION>

                                         For the three months ended    For the six months ended
                                                  April 30                     April 30
                                            2005           2004           2005         2004
                                         -----------   -------------   -----------  ------------
<S>                                     <C>           <C>             <C>          <C>
Net Income loss per common share -
 basic and diluted
Net Income (loss) available to common
 shareholders                           $    70,245   $    (522,742)  $ 1,316,345  $   (788,592)
                                         -----------   -------------   -----------  ------------
Net Income (loss) available to common
 shareholders                           $    70,245   $    (522,742)  $ 1,316,345  $   (788,592)
                                         ===========   =============   ===========  ============

Common shares outstanding during the
 entire period                           34,900,792      18,867,419    20,845,687    18,867,419
Weighted average common shares issued
 during the period                        2,600,809               -    10,144,231             -
                                         -----------   -------------   -----------  ------------
Weighted average number of common
 shares used in basic EPS                37,501,601      18,867,419    30,989,918    18,867,419
Dilutive effect of stock options and
 warrants                                         -               -             -             -
                                         -----------   -------------   -----------  ------------
Weighted average number of common
 shares and dilutive potential common
 stock used in diluted EPS               37,501,601      18,867,419    30,989,918    18,867,419
                                         ===========   =============   ===========  ============
  Net loss per share - basic and
   diluted                              $      0.00   $       (0.03)  $      0.04  $      (0.04)
                                         ===========   =============   ===========  ============
</TABLE>


       The  average  number of shares  relating to all  outstanding  options and
       warrants  ("out  of the  money")  and  to  potentially  convertible  debt
       instruments  have been omitted from the  computation  of diluted loss per
       share  because  their  inclusion  would  have been  antidilutive  for all
       periods in which they were outstanding (Notes D and H).


                                       11
<PAGE>


                     Imperial Petroleum Recovery Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             April 30, 2005 and 2004

NOTE J- COMMITMENTS AND CONTINGENCIES

       In March 2005, the Company signed a one year lease for office space along
       with manufacturing and lab facilities at a rate of $5,950 per month.


NOTE K - SUBSEQUENT EVENTS

       In June 2005, accrued management fees of $73,413 owed to Maya, LLC by the
       Company was converted into a $100,000 12%  convertible  note,  also Maya,
       LLC  invested  an  additional   $100,000  cash  into  the  Company's  12%
       convertible notes.

       In the third  quarter  ended July 31,  2005,  the  Company  issued  final
       agreements for the 12% convertible notes totaling $1,975,000.  $1,125,000
       of  proceeds  for  the  notes  was  received  in  fiscal  2004  for  note
       subscriptions.  Proceeds  received for the second  quarter  ended and six
       months  ended  April 30, 2005 from the  issuance  of the 12%  convertible
       notes was $325,000.  Warrants  associated with the convertible notes were
       also issued in the fiscal third quarter 2005.

       Agribiofuels,  LLC.,  ("Agribiofuels")  is an entity in which the Company
       owns a portion of the members' equity, a board member serves as a manager
       and the major  stockholder of the Company owns a majority  portion of the
       members'  equity.  In August 2005,  Agribiofuels and the Company signed a
       management  agreement  to provide  certain  general  business,  financial
       consultation  and advice  and  management  services  to  Agribiofuels  in
       connection  with the operation of its business and to provide  technology
       and training in operating Microwave Separation  Technology ("MST") in the
       manufacture  of  biodiesel   product.   Per  the  management   agreement,
       Agribiofuels agreed to pay $75,000 per month from August through December
       31, 2005 and $120,000 per month during the  construction  and development
       period.  In  addition,   once  the  biodiesel  facility  is  operational,
       Agribiofuels  will pay IPRC a  technology  and  licensing  fee based upon
       throughput.

       In  August  2005,  the  Company   granted  Stone  &  Webster   Management
       Consultants  the right to fabricate  and  integrate all MST systems to be
       delivered to  customers in and outside the United  States in exchange for
       marketing and sales  contributions in the fields of crude oil production,
       refining and transport, biodiesel and alternative fuels production, bilge
       water  treatment  and  environmental  clean up projects.  In addition the
       Company granted  Agribiofuels,  LLC, a company  partially owned by IPRC a
       license to use the MST technology in the production of biodiesel.

       In December, 2005 the Company executed an assignable contract to purchase
       land  and   improvements  and  Agribiofuels  has  paid  the  monthly  non
       refundable option fee due hereunder.  The monthly option payments will be
       applied toward the purchase price, if applicable.  A feasibility study is
       being  conducted  regarding  the  operation  of a  high-efficiency,  cost
       effective 36 million  gallon/year  biodiesel  production facility on this
       property.  On March 21,  2006 the Company  closed on the  purchase of the
       land.


                                       12
<PAGE>


                     Imperial Petroleum Recovery Corporation

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             April 30, 2005 and 2004

NOTE K - SUBSEQUENT EVENTS - CONTINUED

       In December 2005 the Company settled  $216,840 of deferred  salaries with
       the former  Officers  of the  Company by  issuing  813,151  shares of the
       Company stock.

       Agribiofuels has sold ninety two $50,000 Class A membership interests for
       $4,600,000 between October 27, 2005 and January 24, 2006.

       In February  2006 the Company  executed a new  forbearance  agreement and
       agreed to pay the  successor  in  interest  of MTC a total of $500,000 by
       December 31, 2006. The agreement calls for the Company to pay $200,000 on
       or before March 1, 2006,  $75,000 on or before March 31, 2006, $75,000 on
       or before  June 30,  2006,  $75,000 on or before  September  30, 2006 and
       $75,000 on or before  December 31, 2006.  As long as the agreement is not
       in default the successor shall waive the remaining  principal  balance as
       well as any accrued interest that may have been owed under the agreement.


                                       13
<PAGE>


Item 2. Management's Discussion and Analysis or Plan of Operation

         The following  discussions  of our results of operations  and financial
position should be read in conjunction  with the financial  statements and notes
pertaining to them that appear  elsewhere in this Form 10-QSB.  Management is of
the opinion that  inflation  and changing  prices,  including  foreign  exchange
fluctuations,  will have little,  if any,  effect on our  financial  position or
results of the Company's operations.  But, this report contains  forward-looking
statements  within the meaning of Section 27A of the  Securities Act of 1933 and
Section 21E of the Securities  Exchange Act of 1934.  All statements  other than
statements  of  historical  or current  facts,  including,  without  limitation,
statements about our business strategy,  plans, objectives and future prospects,
are forward-looking  statements.  Such forward-looking statements are subject to
risks and  uncertainties  that could cause actual  results to differ  materially
from these  expectations,  which  could have a  material  adverse  effect on our
business and thereby cause our stock price to decline.

Critical Accounting Policies

         Our  consolidated  financial  statements are based on the selection and
application of accounting  principles generally accepted in the United States of
America,  which require us to make estimates and assumptions about future events
that  affect  the  amounts   reported  in  our  financial   statements  and  the
accompanying  notes.  Future events and their effects cannot be determined  with
absolute  certainty.  Therefore,  the  determination  of estimates  requires the
exercise of judgment.  Actual results could differ from those estimates, and any
such  differences may be material to the financial  statements.  We believe that
the  policies,  described  in Note A of our annual  report on Form  10-KSB,  may
involve a higher  degree of judgment and  complexity  in their  application  and
represent  the  critical  accounting  policies  used in the  preparation  of our
financial  statements.  If different  assumptions or conditions were to prevail,
the results could be materially different from our reported results.

Overview

         Imperial Petroleum Recovery Corporation (the "Company" or "IPRC"), with
its wholly owned  subsidiary  Petrowave  Corporation,  is a Houston based public
company  that  has  patented  microwave  technology  for  use in  petroleum  and
alternative energy applications, called Microwave Separation Technology ("MST").
IPRC's  goal is to  become a  leader  in  developing  and  marketing  innovative
commercial  radio frequency ("RF") energy  applications  that can be used within
the petroleum and other industries to treat emulsions containing oil, water, and
solids or in the production  process to enhance  process  efficiency and improve
our customers' end product.


         The  Company  currently  offers  MST to the oil field  industry  and is
developing  the  use of MST in the  marine  industry  and in the  production  of
biodiesel.  MST technology uses commercial  radio  frequencies to separate water
and oil emulsions. Emulsions are homogenous mixtures of oil and water components
(or other normally immiscible components).

         During  the  second   quarter  ended  April  30,  2005,  the  Company's
management  continued its focus on  implementing a business model  consisting of
five (5) critical areas:

    1.   Raising Additional Capital
    2.   Settle Prior Obligations
    3.   Bring SEC Filings Up-To-Date
    4.   Establish Strategic Relationships
    5.   Develop New MST Applications


                                       14
<PAGE>


         Raising  Additional  Capital.  During the quarter and six months  ended
April 30,  2005,  the Company  raised  $325,000 of capital  through best efforts
financing.

         Settle  Prior  Obligations.  In  April  2005  this  GIC  agreement  was
terminated  and settled.  The Company  issued an  additional  682,301  shares of
common  stock.  The holder  agreed to  terminate  the GIC and  release  his lien
position.  In addition  during the first  quarter  ended  January 31, 2005,  the
Company  converted  the  principal  and  accrued  but unpaid  interest  totaling
$2,309,008  of that  certain  bridge loan  executed in May 2002 in favor of IPRC
Bridge, L.P. for 11,101,900 shares of the Company's common stock.  Additionally,
in January  2005,  the Company was able to convert the principal and accrued but
unpaid interest totaling $742,538 of that certain note executed in February 2001
in favor of Maya, LLC for 2,953,2058 shares of the Company's common stock.

         Establish Strategic Relationships.  The Company continued looking for a
strategic  partner  who  could be the  Company's  global  provider  of  turnkey,
value-added  engineering design,  procurement,  construction,  maintenance,  and
operations  services  supporting the petrochemical,  refining and gas processing
industries. Subsequent to January 31, 2005, the Company entered into a Strategic
Marketing, Manufacturing and Technology Licensing Agreement with a subsidiary of
a Fortune 500  organization  with over 18,000  employees  strategically  located
around the world,  to fabricate and integrate all MST systems to be delivered to
customers in and outside the United  States in exchange for  marketing and sales
contributions  in the fields of crude oil  production,  refining and  transport,
biodiesel  and  alternative   fuels   production,   bilge  water  treatment  and
environmental clean up projects,

         This  relationship  is  continuing  to expand and the Company  hopes to
receive  significant  support  from the  involvement  of our  strategic  partner
members on its business development team.

         Develop New MST  Applications.  The Company has  identified  additional
technical  opportunities for its MST in applications involving biodiesel,  bilge
water, and environmental hydrocarbon clean-up. In January 2005 the Company began
testing to validate the impact of the MST on increasing the biodiesel production
process, thus adding production capacity to existing operations.  In addition to
biodiesel,   the  Company  has  continued  to  evaluate  the  opportunities  for
introducing the MST into the marine  industry's  bilge water treatment  process.
Furthermore,  in January 2005,  the Company  filed a  provisional  patent on the
application of MST in biodiesel production.


                                       15
<PAGE>


Subsequent Events

         In the third fiscal  quarter of 2005,  the Company  executed  notes and
issued warrants for the  subscription  agreements the Company had been receiving
since April 2004.  The total  principal  amount of the notes is  $2,175,000,  of
which $325,000 was  attributable  to note  subscriptions  received in the fiscal
quarter and six months  ended April 30, 2005.  The notes accrue  interest at 12%
per annum and the total  principal plus interest is due and payable in 2007. The
notes are secured by a majority of the Company's  assets,  including the Company
patents and pending patents.  The investors may convert the outstanding  balance
and any accrued but unpaid  interest on the notes at an exercise  price of $0.15
per share.  In addition,  the Company  granted the investors  certain  piggyback
registration  rights for the shares  issuable upon the  conversion of the notes.
Lastly,  in connection  with the notes,  the Company issued warrants to purchase
7,250,000 shares of the Company's common stock at an exercise price of $0.15 per
share and expire on a staggered basis in fiscal year 2008.

         In  August  2005  the  Company  signed  a  management   agreement  with
Agribiofuels,  LLC  ("Agribiofuels")  a related party to provide certain general
business,   financial   consultation  and  advice  and  management  services  to
Agribiofuels  in  connection  with the  operation of its business and to provide
technology and training in operating  Microwave  Separation  Technology (MST) in
the manufacture of biodiesel  product.  Commencing August 1, 2005,  Agribiofuels
shall pay IPRC,  in  consideration  of the  services  rendered  by IPRC equal to
$75,000 per month  through  Dec. 31, 2005,  and $120,000  thereafter  during the
construction and development period. In addition, once the biodiesel facility is
operational,  Agribiofuels  will pay IPRC a technology  and  licensing fee based
upon throughput.

         In  August  2005,  the  Company  granted  Stone  &  Webster  Management
Consultants the right to fabricate and integrate all MST systems to be delivered
to customers  in and outside the United  States in exchange  for  marketing  and
sales  contributions  in the  fields  of  crude  oil  production,  refining  and
transport, biodiesel and alternative fuels production, bilge water treatment and
environmental clean up projects.  In addition the Company granted  Agribiofuels,
LLC, a company  partially  owned by IPRC a license to use the MST  technology in
the production of biodiesel.

         In  December,  2005 the  Company  executed  an  assignable  contract to
purchase  land and  improvements  and  Agribiofuels  has paid  the  monthly  non
refundable option fee due hereunder. The monthly option payments will be applied
toward the purchase price, if applicable. A feasibility study is being conducted
regarding  the  operation  of  a  high-efficiency,  cost  effective  36  million
gallon/year  biodiesel  production facility on this property.  On March 21, 2006
the Company closed on the purchase of the land.

         In December 2005 the Company settled $216,840 of deferred salaries with
the former  Officers  of the  Company by issuing  813,151  shares of the Company
stock.

         Agribiofuels  has sold ninety two $50,000 Class A membership  interests
for $4,600,000  between  October 27, 2005 and January 24, 2006. In February 2006
the Company executed a new forbearance agreement and agreed to pay the successor
in interest of MTC a total of $500,000 by December 31, 2006. The agreement calls
for the Company to pay $200,000 on or before March 1, 2006, $75,000 on or before
March  31,  2006,  $75,000  on or before  June 30,  2006,  $75,000  on or before
September  30, 2006 and $75,000 on or before  December 31, 2006.  As long as the
agreement is not in default the successor  shall waive the  remaining  principal
balance  as well as any  accrued  interest  that may have  been  owed  under the
agreement.


                                       16
<PAGE>


Results of Operations

         For the Quarter  Ended April 30,  2005,  Compared to the Quarter  Ended
April 30,  2004 and the six months  ended  April 30,  2005,  Compared to the six
months ended April 30, 2004

Revenue

         During the quarter ended April 30, 2005,  the Company  recognized $0 in
revenue  compared to $15,000  during the same quarter ended in 2004.  During the
quarter  ended April 30, 2004,  the Company  reported  $15,000 in revenues  from
license fees for distribution throughout Indonesia and Singapore.

         During the six months ended April 30, 2005,  the Company  recognized $0
in revenue  compared to $30,000 during the period ended in 2004.  During the six
months  ended April 30,  2004,  the Company  reported  $30,000 in revenues  from
license fees for distribution throughout Indonesia and Singapore.

Selling, General and Administrative

         General and  administrative  expenses  for the quarter  ended April 30,
2005  totaled  $369,926  compared to $294,526  for same period in 2004 for a net
increase of $75,400.  This  increase  was  primarily  comprised of a increase in
Salaries and Wages as the Company had 4 full-time and 2 part-time  employees for
the entire quarter ended 2005 vs. 4 full-time and 2 part-time employees for only
two months of the quarter ended 2004. In addition  equipment repair cost for the
MST 1000 skid  unit  increased  $13,018  as the unit was  being  prepared  for a
potential new customer.

         General and administrative  expenses for the six months ended April 30,
2005  totaled  $561,568  compared to $337,385  for same period in 2004 for a net
increase of $224,183.  This increase was  primarily  comprised of an increase in
Salaries and Wages as the Company had 4 full-time and 2 part-time  employees for
the entire six months ended 2005 vs. 4 full-time  and 2 part-time  employees for
only two of the six months ended 2004. In addition equipment repair cost for the
MST 1000 skid  unit  increased  $43,018  as the unit was  being  prepared  for a
potential new customer.


Interest Expense

         During  the  quarter  ended in April  30,  2005 and 2004,  the  Company
recorded  interest expense of $96,631 and $208,587  respectively,  a decrease of
$111,956.  The  decrease  for the  quarter in 2005 was the result of the Company
settling past due notes beginning in August,  2004 and continuing in the 1st and
2nd quarter of 2005,  as well as the  guaranteed  investment  contract in during
April, 2005.

         During the six months  ended in April 30,  2005 and 2004,  the  Company
recorded interest expense of $248,716 and $418,494  respectively,  a decrease of
$169,778.  The  decrease  for the  quarter in 2005 was the result of the Company
settling past due notes beginning in August,  2004 and continuing in the 1st and
2nd quarter of 2005,  as well as the  guaranteed  investment  contract in during
April, 2005.

Gain on Extinguishment of Debt

         During the  quarter  ended in April 30,  2005,  and 2004,  the  Company
recorded  gain on  extinguishment  of debt of $574,226 and $0  respectively,  an
increase of $574,226.  The increase  during the quarter ended April 30, 2005 was
the result of the Company settling the guaranteed investment contract as well as
deferred salary amounts owed to employees both current and former.


                                       17
<PAGE>


         During the six months  ended in April 30, 2005,  and 2004,  the Company
recorded gain on extinguishment  of debt of $2,190,586 and $4,476  respectively,
an increase of  $2,186,110.  The increase  during the six months ended April 30,
2005 was the  result  of the  Company  settling  past  due  notes  payable,  the
guaranteed investment contract, deferred salary amounts and accounts payable for
discounts.

Going Concern

         For  the  years  ended  October  31,  2004  and  2005,   the  Company's
independent  auditors  stated  that the  Company's  financial  condition  raises
substantial doubts about its ability to continue as a going concern. The Company
has  generated  limited  revenue  through  April  30,  2005,  and has  sustained
substantial losses from operations since inception. In addition, as of April 30,
2005,  the  Company's  current  liabilities   exceeded  its  current  assets  by
$2,243,090,  it had  $1,075,442  of debt  obligations  that were past due, and a
deficit accumulated of $17,222,465.  During the six months ended April 30, 2005,
the Company  used  $509,809 of cash in  operating  activities,  which was funded
through the  issuance of debt,  rather than  provided by its  operations.  These
conditions raise  substantial doubt as to the ability of the Company to continue
as a going  concern.  Management  will be required  to, and  expects  to,  raise
additional  capital  through the issuance of debt  securities  and  offerings of
equity securities to fund the Company's operations, and will attempt to continue
raising  capital  resources  until such time as the Company  generates  revenues
sufficient to maintain itself as a viable entity. However, there is no assurance
that such financing will be obtained.

Liquidity and Capital Resources

         The Company currently uses cash generated  primarily from its financing
activities  and  expects  to  continue  to do so  until  it is able to  generate
sufficient  capital  from its  operating  activities.  The  Company  expects  to
continue to experience substantial working capital requirements. As of April 30,
2005,  IPRC's  aggregate  current   liabilities  were  $2,513,595   compared  to
$5,893,493  at October 31,  2004.  On April 30,  2005,  the Company had negative
working capital of $2,243,090 compared to negative working capital of $5,474,637
at October 31, 2004.  During the six months  ended April 30,  2005,  the Company
obtained subscription agreements for notes totaling $325,000.

         As of April 30, 2005,  the Company had cash of $211,561.  Giving effect
to the closing of the sale of the notes in August 2005 and the  execution of the
management agreement with Agribiofuels,  LLC, we believe we have sufficient cash
to fund current  operations through August 2006. The Company's current burn rate
in is $70,000 per month. As the operations of the Company ramp up, our burn rate
is expected to increase to $110,000 per month.  The Company  used  approximately
$500,000  to fund its  operations  and settle  existing  debt for the six months
ended April 30, 2005.  This money was used for research and  development and for
general and  administrative  expenses.  The Company  funded its first and second
quarter  2005  expenditures,  commitments  and  capital  requirements  primarily
through cash flows from financing  activities,  with an increasing amount of the
Company's  working  capital  requirements   provided  through  cash  flows  from
operations. There can be no assurance that the Company's operations will be able
to  generate  sufficient  capital  from  operations.  Further,  there  can be no
assurance  that  the  Company  will be  able  to  raise  sufficient  funds  from
financings to fund its working  capital  requirements,  or if financings  occur,
that they would be  completed on terms  favorable  to the  Company.  The Company
anticipates  that it will need to engage in best efforts sales of its securities
to raise needed working capital. Failure to raise necessary working capital will
cause us to curtail operations.

         Operating Activities.  Cash used in operating activities during the six
months ended April 30, 2005, amounted to $509,809, an increase of $409,705, over
the  $100,104  of net cash used in  operating  activities  during the six months
ended  in April  30,  2004.  The  increase  is  primarily  due to the loss  from
operations  of  $637,277  in the six months  ended  April 30,  2005  compared to
$378,074  loss from  operations  in the six  months  ended  April 30,  2004,  an
increase of  $259,203.  The Company had an increase in  inventory of $45,000 for
the six months ended April 30, 2005  compared to no change in inventory  for the
six months


                                       18
<PAGE>


ended  April 30,  2004.  In  addition,  the  Company  had a decrease  in accrued
liabilities  of $29,109 in the six months  ended April 30,  2005  compared to an
increase  of  $372,558  in the six months  ended  April 30,  2004 a decrease  of
$401,667.

         Investing Activities.  Cash provided by investing activities during the
six months ended April 30, 2005, amounted to $2,658, an increase of $2,658, over
the $0 of net cash  provided by in  investing  activities  during the six months
ended April 30, 2004.  The Company sold two vehicles to related party with a net
book value of $3,534 for cash proceeds of $2,658 and the related party forgiving
a related party payable of $12,343. This resulted in a gain on sale of assets of
$6,466 and $5,000 in other income.

         Financing  Activities.  The  Company has  financed  its  operating  and
financing activities primarily from the proceeds of private placements of common
stock and  through  debt.  During  the six  months  ended  April 30,  2005,  the
Company's  financing  activities  amounted to net  provided in of  $306,556,  an
increase  of  109,823,  over the  $196,733  of net cash  provided  by  financing
activities during the six months ended April 30, 2004.


Item 3. Controls and Procedures

         The Company  maintains  disclosure  controls  and  procedures  that are
designed to ensure that information required to be disclosed in its Exchange Act
reports is recorded, processed,  summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to its management,  including its Chief Executive Officer/Chief
Financial Officer, as appropriate,  to allow timely decisions regarding required
disclosure  based  closely  on  the  definition  of  "disclosure   controls  and
procedures"  in Rule  13a-15(e).  In designing  and  evaluating  the  disclosure
controls and procedures, management recognized that any controls and procedures,
no matter how well designed and operated,  can provide only reasonable assurance
of achieving the desired  control  objectives,  and management  necessarily  was
required to apply its judgment in evaluating the  cost-benefit  relationship  of
possible controls and procedures.

         At the end of the  period  covered  by this Form  10-QSB,  the  Company
carried out an evaluation,  under the supervision and with the  participation of
its management,  including its Chief Financial Officer,  of the effectiveness of
the design and operation of Company's disclosure controls and procedures.  Based
upon the foregoing,  the Company's Chief  Executive  Officer and Chief Financial
Officer  concluded  that,  as of April 30,  2005,  the  disclosure  controls and
procedures  of the Company  were not  effective  to ensure that the  information
required to be disclosed  in the  Company's  Exchange Act reports was  recorded,
processed, summarized and reported on a timely basis.

         In connection  with the completion of its audit of, and the issuance of
its report on the financial statements of the Company for the year ended October
31, 2004,  Malone & Bailey,  PC identified  deficiencies  in Company's  internal
controls  related  to  the  accrual  of  liabilities  and  the  related  expense
recognition, gain on extinguishment of debt recognition, and disclosure controls
relating  to such  transactions.  The  adjustments  to  these  accounts  and the
footnote  disclosure  deficiencies  were  detected in the audit process and have
been  appropriately  recorded and  disclosed  in its Form 10-KSB.  We are in the
process of  improving  our  internal  controls in an effort to  remediate  these
deficiencies. Additional effort is needed to fully remedy these deficiencies and
we are continuing  our efforts to improve and  strengthen our control  processes
and  procedures.  Our  management  and directors  will continue to work with our
auditors and other outside  advisors to ensure that our controls and  procedures
are adequate and effective.

         There were no changes in internal  controls  over  financial  reporting
that  occurred  during the quarter  ended April 30, 2005,  that have  materially
affected,  or are reasonably likely to materially  affect,  our internal control
over financial reporting.


                                       19
<PAGE>


                           Part II- Other Information


Item 1.  Legal Proceedings.

         The Company is subject to litigation from time to time arising from its
normal  course  of  operations.  Management  does  not  believe  that  any  such
litigation  and  claims  that have  arisen  have  merit or that they will have a
material effect on the Company's financial position or results of operations.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

         During  January 2005,  the Company  converted the principal and accrued
but unpaid interest totaling  $2,309,008 of that certain bridge loan executed in
May 2002 in favor of IPRC Bridge,  L.P. for  11,101,900  shares of the Company's
common stock.

         In January  2005,  the Company was able to convert  the  principal  and
accrued but unpaid interest  totaling  $742,538 of that certain note executed in
February  2001 in favor of Maya,  LLC for  2,953,2058  shares  of the  Company's
common stock.

         In April 2005 the GIC agreement was terminated and settled. The Company
issued an additional 682,301 share of common stock in the settlement of the GIC.


Item 3. Defaults Upon Senior Securities.

         In June 2004, IPRC entered into a security deposit payment  forbearance
agreement  with the  successor  in  interest  to  Mobil  Technology  Company  in
connection with the marketing  agreement entered into in October 1999 with Mobil
Technology Company ("MTC").  Pursuant to the 1999 agreement, MTC provided IPRC a
$1,000,000  security  deposit,  which  IPRC  was to repay on  August  10,  2003.
Pursuant to the  forbearance  agreement,  if the Company entered into a contract
for the sale,  or  license  of one or more MST units by October  31,  2004,  the
Company  was  obligated  to payoff the  security  deposit  in six (6)  quarterly
installments. If IPRC fails to enter into a contract for the sale, or license of
one or more MST  units by  October  31,  2005 or fails to  payoff  the  security
deposit by December  31,  2005,  then IPRC shall  accrue  interest on the unpaid
security deposit plus any accrued interest, at a rate equal to the prime rate of
Citibank  (New York) at the close of  business on the last  business  day of the
calendar year  immediately  preceding each  respective year plus 4%. In February
2006 the  Company  executed a new  forbearance  agreement  and agreed to pay the
successor  in interest of MTC a total of $500,000  by  December  31,  2006.  The
agreement  calls for the  Company to pay  $200,000  on or before  March 1, 2006,
$75,000 on or before March 31, 2006, $75,000 on or before June 30, 2006, $75,000
on or before  September 30, 2006 and $75,000 on or before  December 31, 2006. As
long as the agreement is not in default the successor  shall waive the remaining
principal  balance as well as any accrued interest that may have been owed under
the agreement.


Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of the Company's security holders during the
six months ended April 30, 2005.


Item 5. Other Information.

None.


                                       20
<PAGE>


Item 6. Exhibits and Reports on Form 8-K

(a)     The following  exhibits are to be filed as part of the of the 10-KSB and
        10-QSB


        3.1     Articles  of  Incorporation  of  the  Company  (incorporated  by
                reference  to Exhibits 2 and 2.1 to the  Company's  Registration
                Statement on Form 10-KSB filed with the Commission with a filing
                date of August 8, 1996, Commission file No. 0-21169).


        3.2     Bylaws of the Company  (incorporated by reference to Exhibit 3.2
                to the  Company's  Annual  Report on Form  10-KSB for the fiscal
                year end  October  31,  1996  filed with the  Commission  with a
                filing date of November 26, 1997, Commission File No. 0-21169).

        10.1    Marketing  Agreement dated October 6, 1999 with Mobil Technology
                Company and the Company  (incorporated  by  reference to Exhibit
                10.1 to the Company's  current report on Form 8-K filed with the
                Commission on February 26, 2001).

        10.2    Loan Agreement  dated January 19, 2001 between Maya, LLC and the
                Company  (incorporated  by  reference  to  Exhibit  10.2  to the
                Company's annual report on Form 10-QSB filed with the Commission
                on March 20, 2001).

        10.3    Purchase  of  Shares  of  Common   Stock   issued  to  Maya  LLC
                (incorporated  by  reference to Exhibit 1 to the Schedule 13D of
                Maya LLC filed with the Commission on September 25, 1997).

        10.4    Warrant  for the  Purchase  of  Shares  of  Common  Stock  dated
                December 11, 1997 issued to Maya LLC  (incorporated by reference
                to  Exhibit 1 to the  Schedule  13D/A of Maya LLC filed with the
                Commission on December 22, 1997).

        10.5    Warrant for the  Purchase of Shares of Common  Stock dated March
                11,  1998  issued by the  Company to Maya LLC  (incorporated  by
                reference to Exhibit 1 to the  Schedule  13D/A of Maya LLC filed
                with the Commission on March 23, 1998).

        10.6    Warrant for the Purchase of Shares of Common  Stock  exercisable
                as  of  July  11,  1998  issued  by  the  Company  to  Maya  LLC
                (incorporated by reference to Exhibit 1 to the Schedule 13D/A of
                Maya LLC filed with the Commission of June 22, 1998).

        10.7    Warrant  for the  Purchase  of  Shares  of  Common  Stock  dated
                December 8, 1998 issued by the Company to Maya LLC (incorporated
                by  reference  to  Exhibit 1 to the  Schedule  13D/A of Maya LLC
                filed with the Commission on December 18, 1998).

        10.8    Warrant for the Purchase of Shares of Common Stock dated October
                6, 1999  issued  by the  Company  to the  Howarth  Family  Trust
                (incorporated  by  reference to Exhibit 4 to the Schedule 13D of
                the Howarth Family Trust dated 10/1/87 filed with the Commission
                on June 13, 2001).

        10.9    Loan Agreement between the Company and Treeview Investments Inc.
                dated as of July 27, 2001  (incorporated by reference to Exhibit
                5  to  the  Schedule  13D/A  of  Paul  Howarth  filed  with  the
                Commission on August 13, 2001).

        10.10   Amendment  No. 1 dated  July  27,  2001 to the  Warrant  for the
                Purchase  of Shares of Common  Stock  dated  December  11,  1997
                issued by the Company to the Howarth Family Trust  (incorporated
                by reference  to Exhibit 6 to the Schedule  13D/A of the Howarth
                Family Trust dated 10/1/87  filed with the  Commission on August
                13, 2001).


                                       21
<PAGE>


        10.11   License  Agreement  between IPRC and Tradewinds Oil and Gas Inc.
                (incorporated by reference to Exhibit 10.11 to the Company's 10K
                filed with the Commission of December 1, 2005).

        10.12   Security  Deposit  Forbearance  Agreement,  dated  June 8, 2004,
                between IPRC and successor in interest to Mobil (incorporated by
                reference to Exhibit  10.12 to the  Company's 10K filed with the
                Commission of December 1, 2005).

        10.13   Management Agreement, effective August 1, 2005, between IPRC and
                Agribiofuels,  LLC(incorporated by reference to Exhibit 10.13 to
                the  Company's  10K filed with the  Commission  of  December  1,
                2005).

        10.14   Form of Note  Agreement,  executed  in  2005,  between  IPRC and
                investors  (incorporated  by reference  to Exhibit  10.15 to the
                Company's 10K filed with the Commission of December 1, 2005).

        10.15   Form of Registration Right Agreement,  executed in 2005, between
                IPRC and investors  (incorporated  by reference to Exhibit 10.16
                to the  Company's  10K filed with the  Commission of December 1,
                2005).

        10.16   Form of Warrant  Agreement,  executed in 2005,  between IPRC and
                investors  (incorporated  by reference  to Exhibit  10.17 to the
                Company's 10K filed with the Commission of December 1, 2005).

        10.17   Strategic  Marketing   Manufacturing  and  Technology  Licensing
                Agreement  (incorporated  by reference  to Exhibit  10.18 to the
                Company's 10K filed with the Commission of December 1, 2005).

        10.18   Commercial  Contract,   between  the  Company  and  Dayton  Rice
                Milling, Inc., dated December 9, 2005.(incorporated by reference
                to the  Company's  10K filed  with the  Commission  on March 21,
                2006)

        10.19   Second  Forbearance  Agreement,  dated January 1, 2006,  between
                IPRC and the successor in interest to Mobil.  .(incorporated  by
                reference  to the  Company's  10K filed with the  Commission  on
                March 21, 2006)

        21.1    Subsidiaries of Registrant (incorporated by reference to Exhibit
                21.1 to the Company's 10K filed with the Commission of March 21,
                2006).

        31.1    Certification of Alan Springer.

        31.2    Certification of Edward Gaiennie.

        32.1    Certification for Sarbanes-Oxley Act of Alan Springer.

        32.2    Certification for Sarbanes-Oxley Act of Edward Gaiennie.


                                       22
<PAGE>


SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                               IMPERIAL PETROLEUM RECOVERY CORPORATION


Date: May 16, 2006             By: /s/ Alan B. Springer
      ------------                --------------------------------------------
                                   Alan B. Springer, Chairman
                                   and Chief Executive Officer


Date: May 16, 2006             By: /s/ Edward C. Gaiennie
      ------------                --------------------------------------------
                                   Edward C. Gaiennie, Chief Financial Officer
                                   and Principal Accounting Officer


                                       23
<PAGE>


                     IMPERIAL PETROLEUM RECOVERY CORPORATION

                          Exhibit Index to Form 10-QSB

Exhibit No.                 Identification of Exhibit


        3.1     Articles  of  Incorporation  of  the  Company  (incorporated  by
                reference  to Exhibits 2 and 2.1 to the  Company's  Registration
                Statement on Form 10-KSB filed with the Commission with a filing
                date of August 8, 1996, Commission file No. 0-21169).


        3.2     Bylaws of the Company  (incorporated by reference to Exhibit 3.2
                to the  Company's  Annual  Report on Form  10-KSB for the fiscal
                year end  October  31,  1996  filed with the  Commission  with a
                filing date of November 26, 1997, Commission File No. 0-21169).


        10.1    Marketing  Agreement dated October 6, 1999 with Mobil Technology
                Company and the Company  (incorporated  by  reference to Exhibit
                10.1 to the Company's  current report on Form 8-K filed with the
                Commission on February 26, 2001).


        10.2    Loan Agreement  dated January 19, 2001 between Maya, LLC and the
                Company  (incorporated  by  reference  to  Exhibit  10.2  to the
                Company's annual report on Form 10-QSB filed with the Commission
                on March 20, 2001).


        10.3    Purchase  of  Shares  of  Common   Stock   issued  to  Maya  LLC
                (incorporated  by  reference to Exhibit 1 to the Schedule 13D of
                Maya LLC filed with the Commission on September 25, 1997).


        10.4    Warrant  for the  Purchase  of  Shares  of  Common  Stock  dated
                December 11, 1997 issued to Maya LLC  (incorporated by reference
                to  Exhibit 1 to the  Schedule  13D/A of Maya LLC filed with the
                Commission on December 22, 1997).


        10.5    Warrant for the  Purchase of Shares of Common  Stock dated March
                11,  1998  issued by the  Company to Maya LLC  (incorporated  by
                reference to Exhibit 1 to the  Schedule  13D/A of Maya LLC filed
                with the Commission on March 23, 1998).


        10.6    Warrant for the Purchase of Shares of Common  Stock  exercisable
                as  of  July  11,  1998  issued  by  the  Company  to  Maya  LLC
                (incorporated by reference to Exhibit 1 to the Schedule 13D/A of
                Maya LLC filed with the Commission of June 22, 1998).


        10.7    Warrant  for the  Purchase  of  Shares  of  Common  Stock  dated
                December 8, 1998 issued by the Company to Maya LLC (incorporated
                by  reference  to  Exhibit 1 to the  Schedule  13D/A of Maya LLC
                filed with the Commission on December 18, 1998).


        10.8    Warrant for the Purchase of Shares of Common Stock dated October
                6, 1999  issued  by the  Company  to the  Howarth  Family  Trust
                (incorporated  by  reference to Exhibit 4 to the Schedule 13D of
                the Howarth Family Trust dated 10/1/87 filed with the Commission
                on June 13, 2001).


        10.9    Loan Agreement between the Company and Treeview Investments Inc.
                dated as of July 27, 2001  (incorporated by reference to Exhibit
                5  to  the  Schedule  13D/A  of  Paul  Howarth  filed  with  the
                Commission on August 13, 2001).


                                       24
<PAGE>


        10.10   Amendment  No. 1 dated  July  27,  2001 to the  Warrant  for the
                Purchase  of Shares of Common  Stock  dated  December  11,  1997
                issued by the Company to the Howarth Family Trust  (incorporated
                by reference  to Exhibit 6 to the Schedule  13D/A of the Howarth
                Family Trust dated 10/1/87  filed with the  Commission on August
                13, 2001).


        10.11   License  Agreement  between IPRC and Tradewinds Oil and Gas Inc.
                (incorporated by reference to Exhibit 10.11 to the Company's 10K
                filed with the Commission of December 1, 2005).


        10.12   Security  Deposit  Forbearance  Agreement,  dated  June 8, 2004,
                between IPRC and  successor in interest to Mobil.  (Incorporated
                by reference to Exhibit  10.12 to the  Company's  10K filed with
                the Commission of December 1, 2005).


        10.13   Management Agreement, effective August 1, 2005, between IPRC and
                Agribiofuels, LLC (incorporated by reference to Exhibit 10.13 to
                the Company's 10K filed with the Commission of December1, 2005).


        10.14   Form of Note  Agreement,  executed  in  2005,  between  IPRC and
                investors  (incorporated  by reference  to Exhibit  10.15 to the
                Company's 10K filed with the Commission of December 1, 2005).


        10.15   Form of Registration Right Agreement,  executed in 2005, between
                IPRC and investors(incorporated by reference to Exhibit 10.16 to
                the  Company's  10K filed with the  Commission  of  December  1,
                2005)..


        10.16   Form of Warrant  Agreement,  executed in 2005,  between IPRC and
                investors  (incorporated  by reference  to Exhibit  10.17 to the
                Company's 10K filed with the Commission of December 1, 2005)..


        10.17   Strategic  Marketing   Manufacturing  and  Technology  Licensing
                Agreement(  incorporated  by reference  to Exhibit  10.18 to the
                Company's 10K filed with the Commission of December 1, 2005).


        10.18   Commercial  Contract,   between  the  Company  and  Dayton  Rice
                Milling, Inc., dated December 9, 2005 (incorporated by reference
                to the  Company's  10K filed  with the  Commission  on March 21,
                2006)

        10.19   Second  Forbearance  Agreement,  dated January 1, 2006,  between
                IPRC and the  successor in interest to Mobil.  (Incorporated  by
                reference  to the  Company's  10K filed with the  Commission  on
                March 21, 2006)

        21.1    Subsidiaries  of  Registrant  Articles of  Incorporation  of the
                Company.  (Incorporated  by reference to the Company's 10K filed
                with the Commission on March 21, 2006)

        31.1    Certification of Alan Springer.


        31.2    Certification of Edward Gaiennie.


        32.1    Certification for Sarbanes-Oxley Act of Alan Springer.


        32.2    Certification for Sarbanes-Oxley Act of Edward Gaiennie.


                                       25