UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, DC 20549



                                FORM 10-QSB


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

      For the Quarterly Period Ended April 30, 2001


                       Commission file number: 0-21169

                    Imperial Petroleum Recovery Corporation
              (Exact name of registrant 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, TX 77032
              (Address of principal executive offices)(Zip Code)


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


Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the  registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:  YES X   NO ___

There were 16,967,419 shares of the Registrant's $0.001 par value  common
stock outstanding as of June 7, 2001.















<PAGE>


                              TABLE OF CONTENTS

                       PART I. FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements (Unaudited)

         Consolidated Balance Sheets as of April 30, 2001
         and October 31, 2000                                       3-4

         Consolidated Statements of Operations for the
         Three and Six Months Ended  April 30, 2001 and
         2000 and Cumulative Amounts Since Inception                5
         Consolidated Statements of Cash Flows for the Six
         Months Ended April 30, 2001 and 2000 and
         Cumulative Amounts Since Inception                         6-8

         Notes to Consolidated Financial Statements                 9-13

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                       14-20

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                         20

Item 2.  Changes in Securities and Use of Proceeds                 20

Item 3.  Defaults Upon Senior Securities                           20

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

Item 5.  Other Information                                         20

Item 6.  Exhibits and Reports on Form 8-K                          20

Signatures                                                         21

Exhibit Index                                                      22



















                                      2
<PAGE>

                      PART I.  FINANCIAL INFORMATION

ITEM I.   CONSOLIDATED FINANCIAL STATEMENTS

IMPERIAL PETROLEUM RECOVERY CORPORATION and SUBSIDIARY
(a development stage company)

CONSOLIDATED BALANCE SHEETS




                                          April 30, 2001      October 31, 2000
                                           (Unaudited)            (Audited)
                                          --------------      ----------------
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                 $   72,480            $  171,822
  Trade accounts receivable                     81,250                11,000
  Other receivables, related party               4,332                 5,082
  Inventory - net of reserve of
   $260,000 at April 30, 2001
   and October 31, 2000                              -                     -
  Prepaid expenses                              14,582                24,891
                                            ----------            ----------
     Total Current Assets                      172,644               212,795

PROPERTY AND EQUIPMENT, net of
  accumulated depreciation of $314,938
  at April 30, 2001 and $231,416 at
  October 31, 2000, respectively               898,418               921,147

OTHER ASSETS, net of accumulated
  amortization of $5,767 at April 30,
  2001 and $4,214 at October 31, 2000,
  respectively                                  66,136                74,244
                                            ----------            ----------
                                            $1,137,198            $1,208,186
                                            ==========            ==========















                                   (Continued)

                                        3
<PAGE>

<PAGE>
IMPERIAL PETROLEUM RECOVERY CORPORATION and SUBSIDIARY
(a development stage company)

CONSOLIDATED BALANCE SHEETS (Continued)


                                          April 30, 2001      October 31, 2000
                                           (Unaudited)            (Audited)
                                          --------------      ----------------

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Trade accounts payable                  $    582,495          $    427,211
  Payables to related parties                   15,112                17,796
  Accrued liabilities                          169,719               114,952
  Deferred revenue                              54,464                53,872
  Notes payable to related parties             575,000                     -
  Current maturities of long term
   obligations                                 371,424               153,117
  Current maturities of capital lease
   obligation                                    1,793                 1,552
                                          ------------          ------------
     Total Current Liabilities               1,770,007               768,500

LONG TERM OBILGATIONS
  Notes payable, less current maturities     1,268,822             1,137,224
  Capital lease obligation, less current
    maturities                                   7,395                 8,319
                                          ------------          ------------
     Total Liabilities                       3,046,224             1,914,043

COMMITMENTS AND CONTINGENCIES                        -                     -

STOCKHOLDERS' DEFICIT
  Common stock, par value $0.001;
   authorized 100,000,000 shares;
   issued and outstanding 16,947,419
   at April 30, 2001 and 16,700,943
   at October 31, 2000, respectively            16,947                16,701
  Additional paid in capital                11,389,931            11,241,837
  Deficit accumulated during the
   development stage                       (13,315,904)          (11,964,395)
                                          ------------          ------------
     Total Stockholders' Deficit            (1,909,026)             (705,857)
                                          ------------          ------------
                                          $  1,137,198          $  1,208,186
                                          ============          ============





The accompanying notes are an integral part of these financial statements.

                                    4
<PAGE>




IMPERIAL PETROLEUM RECOVERY CORPORATION and SUBSIDIARY
(a development stage company)

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

<TABLE>
<CAPTION>

                                   Cumulative
                                    Amounts           For the three               For the six
                                     Since         months ended April 30,     months ended April 30,
                                   Inception        2001         2000          2001           2000
                                  ------------    ---------    ---------    -----------    ---------
<S>                               <C>             <C>          <C>          <C>            <C>
Revenues                          $    697,699    $  80,050    $  52,678    $   242,815    $ 146,855
Cost of goods sold                   1,493,334      221,498       70,781        564,581      114,913
                                  ------------    ---------    ---------    -----------    ---------
   Gross profit (loss)                (795,635)    (141,448)     (18,103)      (321,766)      31,942

Operating expenses
  General and administrative         8,501,392      521,298      231,741        895,619      378,460
  Research and development-
   prototype                         3,424,414       31,605            -         45,738            -
  Acquired research and
   development-prototype               349,500            -            -              -            -
  Loss on abandonment of
   leased facility                     161,918            -            -              -            -
                                  ------------    ---------    ---------    -----------    ---------
                                    12,437,224      552,903      231,741        941,357      378,460
                                  ------------    ---------    ---------    -----------    ---------
     Loss from operations          (13,232,859)    (694,351)    (249,844)    (1,263,123)    (346,518)

Other
  Interest expense                    (288,821)     (49,505)      (8,513)       (87,063)     (16,823)
  Other income (expense), net         (152,475)      (1,336)      (3,090)        (1,323)      (1,753)
                                  ------------    ---------    ---------    -----------    ---------
                                      (441,296)     (50,841)     (11,603)       (88,386)     (18,576)

Loss before extraordinary
  item                             (13,674,155)    (745,192)    (261,447)    (1,351,509)    (365,094)
Extraordinary item - gain on
  extinguishment of debt               358,251            -       26,134              -       26,134
                                  ------------    ---------    ---------    -----------    ---------
     Net loss                     $(13,315,904)   $(745,192)   $(235,313)   $(1,351,509)   $(338,960)
                                  ============    =========    =========    ===========    =========

Net loss per common share -
basic and diluted
  Loss before extraordinary
   item                           $      (1.18)   $    (.04)   $    (.02)   $      (.08)   $    (.02)
  Extraordinary item                       .03            -            -              -            -
                                  ------------    ---------    ---------    -----------    ---------
     Net loss                     $      (1.15)   $    (.04)   $    (.02)   $      (.08)   $    (.02)
                                  =============   =========    =========    ===========    =========

</TABLE>





The accompanying notes are an integral part of these financial statements.




                                       5
<PAGE>



IMPERIAL PETROLEUM RECOVERY CORPORATION and SUBSIDIARY
(a development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
                                             Cumulative
                                              amounts
                                               since       Six months ended April 30
                                              inception        2001           2000
                                            ------------   -----------    ---------
<S>                                         <C>            <C>            <C>
Increase (decrease) in cash and
 cash equivalents
  Cash flows from operating
   activities
    Net loss                                $(13,315,904)  $(1,351,509)   $(338,960)
    Adjustments to reconcile net
     loss to net cash used in
     operating activities
      Contributed capital for
       services rendered and
       liabilities paid                          114,139        32,100       30,000
      Gain on extinguishment of debt            (358,251)            -      (26,134)
      Depreciation and amortizat                 321,415        85,455       53,533
      Non-cash charge associated with
       acquisition                               349,500             -            -
      Accrued loss on abandonment of
       leased facility                           161,918             -            -
      Charges associated with stock
       issuances to employees, vendors,
       related parties                         1,061,800        12,030            -
      Non-cash expenses incurred by
       affiliate                                 661,677             -            -
      Loss on disposal of property and
       equipment                                  14,499         1,322            -
      Changes in assets and liabilities
       Accounts receivable                       (81,250)      (70,250)     (29,322)
      Other receivables, related party            (4,332)          750            -
      Prepaid expenses                           (14,582)       10,309       (3,547)
      Other assets                               (77,845)        6,578      (26,167)
      Trade accounts payable                   1,520,698       177,095     (109,274)
      Payables to related parties                 15,112        (2,684)      (5,829)
      Accrued liabilities                        281,986        39,633      (26,215)
      Deferred revenue                            54,464           592       38,700
                                            ------------   -----------    ---------
        Total adjustments                      4,020,948       292,930     (104,255)
                                            ------------   -----------    ---------
        Net cash used in operating
         activities                           (9,294,956)   (1,058,579)    (443,215)
                                            ------------   -----------    ---------
Cash flows from investing activities
  Cash paid for acquisition                      (94,000)            -            -
  Purchases of property and equipment         (1,219,516)      (62,518)    (280,925)
                                            ------------   -----------    ---------
        Net cash used in investing
         activities                           (1,313,516)      (62,518)    (280,925)
                                            ------------   -----------    ---------
</TABLE>
                                       (Continued)

                                            6
<PAGE>


IMPERIAL PETROLEUM RECOVERY CORPORATION and SUBSIDIARY
( a development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - Continued

<TABLE>
<CAPTION>
                                             Cumulative
                                              amounts
                                               since       Six months ended April 30
                                              inception        2001           2000
                                            ------------   -----------    ---------
<S>                                         <C>            <C>            <C>

Cash flows from financing activities
  Proceeds from issuance of common stock
   and warrants                                6,657,983        47,500      875,500
  Proceeds from issuance of long term
   obligations                                 4,682,627     1,042,250       60,000
  Principal payments on long term
   obligations                                  (658,231)      (67,312)           -
  Principal payments on capital lease
   obligations                                    (1,427)         (683)           -
                                            ------------   -----------    ---------
     Net cash provided by financing
      activities                              10,680,952     1,021,755      935,500
                                            ------------   -----------    ---------
     Net increase (decrease) in cash and
      cash equivalents                            72,480       (99,342)     211,360

Cash and cash equivalents at beginning of
 period                                                -       171,822       17,774
                                            ------------   -----------    ---------
Cash and cash equivalents at end of period  $     72,480   $    72,480    $ 229,134
                                            ============   ===========    =========

Supplemental disclosure of cash flow
 information

Cash paid during the period for:

  Interest                                  $    118,315   $    14,176    $   5,000
                                            ============   ===========    =========
  Income Taxes                              $          -   $         -    $       -
                                            =============  ===========    =========

</TABLE>

Noncash investing and financing activities

The following noncash activities occurred during the six month period ended
April 30,

2001
----

In December, 2000, the Company issued 16,040 shares of its Common Stock to
various employees as bonuses for the fiscal year 2000.  The bonuses totaled
approximately $12,030.


                                  (Continued)

                                        7
<PAGE>


IMPERIAL PETROLEUM RECOVERY CORPORATION and SUBSIDIARY
(a development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOWS  (Unaudited) - Continued

Noncash investing and financing activities

2001 - Continued
----

In December, 2000, the Company issued 182,936 shares of Common Stock to a
related party and stockholder in satisfaction of a 10% note payable in the
amount of $50,033 plus accrued interest of $6,677.

During the six months ended April 30, 2001, the Company recorded $2,100 in
rental expense from a truck lease agreement with a related party.  The
agreement is considered an in-kind capital contribution.  Accordingly,
additional paid-in capital has been increased by $2,100.

During the six months ended April 30, 2001, a related party paid $30,000 to a
consultant on behalf of the Company. Accordingly, the Company recorded these
transactions as additional paid-in capital.

2000
----

In February, 2000, an extraordinary gain was recognized on the forgiveness of
an obligation to a vendor in the amount of $26,134.

On March 2, 2000, the Company issued 10,000 shares of Common Stock valued at
$23,000 to a vendor as a deposit for future services to be rendered.




























The accompanying notes are an integral part of these financial statements.

                                      8
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTNG POLICIES

1.   Basis of Presentation

     The consolidated financial statements have been prepared in conformity
with generally accepted accounting principles for interim financial
information and pursuant to the regulations of the Securities and Exchange
Commission; accordingly they do not include all of the information and notes
required by accounting principles generally accepted in the United States of
America for complete financial statements.  In the opinion of management, all
adjustments considered necessary for a fair presentation (consisting of normal
recurring accruals) have been included.  The results of operations for the six
month period ended April 30, 2001, are not necessarily indicative of the
results for the fiscal year ending October 31, 2001.  The accompanying
unaudited consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended October 31,
2000.

2.   Organization and business activity

     Imperial Petroleum Recovery Corporation and Subsidiary (a development
stage company incorporated in Nevada) (the "Company" or "IPRC") has been in
the development stage since commencement of operations in fiscal year 1995 and
is committed to developing and marketing a proprietary oil sludge remediation
process and equipment (MST units) that uses high energy microwaves to separate
water, oil and solids. Company operations take place in Texas.

3.   Principles of consolidation and financial statement presentation

     The consolidated financial statements include the accounts and operations
of the Company and its wholly owned subsidiary, Petrowave Corporation.
Significant intercompany transactions and balances have been eliminated in the
consolidation.

4.   Inventories

     Inventory is valued at lower of cost or market.  Cost is determined using
the first-in, first-out method.

Inventory consists of the following:

                                            April 30, 2001   October 31, 2000
                                            --------------   ----------------

     Raw materials                          $      260,000    $      260,000
     Less reserve for net realizable value        (260,000)         (260,000)
                                            --------------    --------------
     Total                                  $            -    $            -
                                            ==============    ==============





                                       9
<PAGE>


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTNG POLICIES (Continued)

4.   Inventories (Continued)

     The recoverability of inventory is dependent upon the Company entering
into agreements to lease the completed MST units.

5.   Certain reclassifications

     Certain reclassifications have been made to the 2000 financial statements
to conform to the 2001 presentation.

NOTE B - GOING CONCERN

     The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States of America
for interim financial information, which contemplates continuation of the
Company as a going concern.  However, the Company is a development stage
company, has generated limited revenue through April 30, 2001, and has
sustained substantial losses from operations since inception.  In addition, as
of April 30, 2001, its current liabilities exceeded its current assets by
$1,597,364.  In addition, the Company has used cash in, rather than provided
cash from, 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 consolidated balance sheets 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.

     The Company has taken the following steps to revise its operating and
financial requirements, which it believes are sufficient to provide the
Company with the ability to continue in existence:

      * The Company entered into a 24-month Worldwide Marketing Agreement with
        an oil company to provide the Company with marketing and sales
        assistance.  The two companies have agreed to share certain of the
        revenue related to this agreement


     *  During March, 2001, the Company received a short-term loan of $375,000
        from a major shareholder.

     *  On April 27 and June 6, 2001, the Company received advances of
        $150,000 and $40,000, respectively, from a member of the Board of
        Directors.

     *  During the third quarter 2001, the Company implemented cost cutting
        measures by reducing the size of its work force.



                                   10
<PAGE>


NOTE C - LOSS PER COMMON SHARE

The following data show the shares used in computing net loss per common
share:
<TABLE>
<CAPTION>
                                         Cumulative
                                          amounts         Three months               Six months
                                           since        ended April 30   Six months ended April 30
                                          inception       2001        2000         2001         2000
                                        ------------   ----------   ----------   ----------   ----------
<S>                                     <C>            <C>          C>           <C>          <C>
Common shares outstanding                          -   16,700,943   15,901,597   16,700,943   15,901,597
  during the entire period
Weighted average common shares
   issued during the period               11,543,289      238,559      263,757      169,024      165,465
                                        ------------   ----------   ----------   ----------   ----------
Weighted average number
   common shares used in
   basic EPS                              11,543,289   16,939,502   16,165,354   16,869,967   16,067,062

Dilutive effect of stock
   options and warrants                            -            -            -            -            -
                                        ------------   ----------   ----------   ----------   ----------
Weighted average number
   of common shares and
   dilutive potential common
   stock used in diluted EPS              11,543,289   16,939,502   16,165,354   16,869,967   16,067,062
                                        ============   =========    ==========   ==========   ==========
</TABLE>


     The shares relating to warrants granted and potentially convertible debt
instruments were not included in the computation of diluted loss per share
because their inclusion would have been antidilutive  for all periods.

NOTE D - RELATED PARTY TRANSACTIONS

     On December 6, 2000, an officer and a member of the Board of Directors
funded a short-term advance of  $50,000 to the Company.  The loan, which
matured on December 13, 2000, is to be repaid with accrued interest at 6%.  At
April 30, 2001, the balance is still outstanding.

     On January 19, 2001, the Company executed a $375,000 short-term loan
agreement with a controlling stockholder.  The loan was funded on March 6,
2001.  The loan is secured by the MST Unit located at Tar Sands Island, Fort
McMurray, Alberta, Canada; carries an interest rate of 12% per annum
compounded daily and matures on July 31, 2001.

     As part of this original loan agreement dated January 19, 2001, the
Company and the controlling stockholder agreed to negotiate a recapitalization
plan in good faith.  The proposed plan included a provision for the Company to
repurchase a certain portion of the stockholder's shares of common stock for
$1.10 per share. In addition to the repurchase provision, the agreement would
have allowed the stockholder to exchange warrants for shares of the Company's
common stock and would have provided the Company with an option to repurchase
a specified number of shares of common stock held by certain
officers/directors.




                                   11
<PAGE>

     At that time, the Company was considering alternatives to raise capital
by a private placement of securities through an investment group. The Company
planned to use a specified portion of the net proceeds of the private
placement to repurchase the stock of the controlling stockholder.

     However, after careful evaluation, the Board of Directors did not approve
the recapitalization plan as proposed.  In addition, the Board decided to not
go forward with the private placement of securities as the Company and the
investment group could not reach terms that were mutually satisfactory.

     On April 27 and June 6, 2001, the Company received advances of $150,000
and $40,000, respectively, from a shareholder and member of the Board of
Directors. The advances will be used to fund operations. At this time, the
Company and the director have not determined whether the $150,000 advance will
be characterized as a loan to be repaid in cash or if the director will redeem
the advance for shares of common stock in the Company.  The Company is
planning to repay the $40,000 advance during the third quarter 2001.

     The Company entered into a two year agreement to lease a truck from a
member of the Board of Directors and an officer of the Company for $1 per
year. The fair market value of the lease was determined to be $350 per month.
Accordingly, the Company recorded lease expense of  $2,100 for the six months
ended April 30, 2001, and increased additional paid-in capital by $2,100 to
recognize this contribution by a related party.

     During the six months ended April 30, 2001, a related party made payments
totaling $30,000 to a consultant on behalf of the Company. Accordingly, the
Company recorded these transactions as additional paid-in capital.

NOTE E - STOCK WARRANTS

     On the dates set forth in the table below, the Company issued warrants to
Maya LLC to purchase shares of its common stock.  The number of shares subject
to each warrant and the expiration dates of the warrants are also set forth.

         Date                   No. of Warrant Shares       Expiration Date

     Dec. 11, 1997                  3,500,000               Dec. 11, 2001
     Mar. 11, 1998                  3,500,000               Mar. 11, 2002
     July 11, 1998                  3,500,000               July 11, 2002
     Dec. 8, 1998                     875,000               Dec.  8, 2002

     The initial exercise price of all of the Maya warrants was $1.00 per
share.

     On October 6, 1999, the Company issued a warrant to The Howarth Family
Trust to purchase 1,116,071 shares of its common stock.  The initial exercise
price of the Howarth warrant was $3.00 per share.  The warrant expires on
October 6, 2003.

     Both the Maya and the Howarth warrants are transferable in accordance
with applicable securities laws.






                                   12
<PAGE>

     The warrants specify that the rights of the warrant holders are entitled
to "full ratchet" anti-dilution adjustments in the event the Company issues
shares of common stock or securities convertible into or exchangeable for
common stock at a price per share less than the warrant exercise price.  Upon
any such adjustment, the holder of a warrant would be entitled to exercise the
warrant at an exercise price per share equal to the price per share at which
the shares of common stock or securities convertible into or exchangeable for
common stock were issued.  The warrants also specify that any such adjustment
would trigger an additional adjustment in the number of shares for which the
warrant is exercisable.  The warrants specify that such number would be
adjusted by multiplying the number of shares subject to the warrant
immediately before the adjustment by a fraction, the numerator of which would
be the per share exercise price immediately before the adjustment and the
denominator of which would be the per share exercise price after the
adjustment.

     Following the issuance of the Maya and Howarth warrants, the Company has
issued shares of its common stock at prices that triggered or could be deemed
to trigger the above-described anti-dilution provisions on a number of
occasions.  The lowest price at which the Company has sold stock is $.50 per
share, although the Company has issued shares of restricted common stock to
employees as bonuses valued at as low as $0.30 per share.  The Company has not
interpreted employee stock bonuses as triggering the anti-dilution provisions
because the warrants contain customary exemptions for employee equity
incentive issuances, although the text of the warrants suggests that these
particular warrants may exempt employee stock option issuances only and not
employee restricted stock bonuses.

     In a "worst case" scenario, therefore, the Maya and Howarth warrants
would be exercisable for either $.50 or $.30 per share, depending on whether
the Company's interpretation of the employee equity incentive exemption is
accepted.  Also on a "worst case" basis, the anti-dilution clauses requiring
an adjustment in the number of shares for which the warrants are exercisable
simultaneously with each adjustment in the per share exercise price could be
interpreted to entitle Maya LLC to exercise warrants to purchase 37,916,667
shares of the Company's common stock (at an exercise price of $.30 per share)
and The Howarth Family Trust to purchase 11,160,710 shares of the Company's
common stock (at an exercise price of $.30 per share).  To acquire these
shares, Maya LLC and The Howarth Family Trust would need to invest $11,375,000
and $3,348,213, respectively.  Either warrant holder could also exercise a
warrant to purchase smaller numbers of shares in minimum 25,000 share
increments up to the total number of shares covered by the warrant.  The
warrants must be exercised before their respective expiration dates.  If not
exercised by their expiration dates, the warrants will expire worthless.

     Management believes it may have legal justification for refusing to honor
an attempt to exercise the Maya and Howarth warrants based on adjustments made
pursuant to the anti-dilution provisions discussed above.  The above
information is provided merely to reflect the dilutive effects on the other
shareholders of a successful attempt to exercise the warrants at the two
hypothetical exercise prices of $.50 and $.30 per share.







                                   13
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

     This portion of the Form 10-QSB 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 forward-looking statements in this portion of
the Form 10-QSB 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 such
forward-looking statements, which speak only as of the date hereof.  Readers
should also refer to the Company's Annual Report on Form 10-KSB for the fiscal
year ended October 31, 2000.

Overview

     The second quarter of fiscal year 2001 saw a continuation of the
activities discussed in our Form 10-KSB for fiscal year 2000 and the first
quarter 2001 Form 10-QSB.  IPRC continued to work on technology improvement,
marketing, and consolidation of operations.  At the same time, the Company
expanded its utilization of ExxonMobil Research and Engineering's  (EMRE)
expertise in the areas of technology improvement and marketing.  The Company
continued developing a strategy to improve our cash position and sources of
long-term capitalization to insure access to the resources necessary to move
the Company forward.

     This past quarter saw several successes, and two temporary setbacks.
Examining the setbacks first, our initial efforts to complete a private
placement of securities to raise $10,000,000 to provide interim financing were
delayed.  Senior Management devoted much of its effort toward negotiating the
details for the completion of the securities offering and the related capital
restructuring plan discussed above in Note D of the Company's financial
statements.  Discussions broke off as the investment group proposing to manage
the private placement continually changed the requirements to proceed and
demanded more concessions than the Board of Directors felt were either
reasonable or in the best interests of both the shareholders and the Company.
Currently, the Company is continuing discussions with several additional
sources of investment capital.  During this period of financial introspection,
the Board of Directors and the CEO/President, William Chalmers, Jr., met and
concluded that a change in management direction was necessary.  Mr. Chalmers
resigned from the Company on April 24, 2001.  The change in management went
smoothly and was well received by our partners and clients as news spread that
Henry Kartchner was resuming the role of CEO and Brent Kartchner would serve
as interim President pending the successful search to fill this position
permanently.

     On the positive side, IPRC's marketing and technology support has
benefited through the stepped up efforts of ExxonMobil Research and
Engineering.  EMRE recently assigned two additional Sales and Licensing
executives solely to help IPRC market its Microwave Separation Technology
(MST) both within and outside of ExxonMobil.  One has a chemical engineering
degree and an MBA and has spent over thirty-three years with Mobil, including
9 years spent in Sales and Licensing.  The second executive was formerly with


                                   14
<PAGE>

the Exxon side of the company for 37 years.  This individual has 15 years of
experience in Sales and Licensing.  The addition of these seasoned,
exceptionally qualified marketers will add needed expertise to IPRC's sales
efforts.  A strategic joint marketing plan is in place and is being
implemented.  EMRE designed and printed letterhead and business cards that
contain the logos of both EMRE and IPRC.  EMRE is also officially linking the
IPRC website to their newly designed website at
www.exxonmobil.com/refiningtechnologies.  Our MST can be found in the "Fuel
Technologies" section.

     During this quarter, IPRC was invited to be an integral part of EMRE's
Hospitality Suite at the National Petrochemical & Refiners Association 2001
Annual Meeting held March 18-20 in New Orleans.  Over two thousand attendees
from refineries all over the world attended this conference.  It was also
during this time that EMRE began full-page advertising on behalf of IPRC in
the Spring, 2001 issue of  Petroleum Technology Quarterly,  the March, 2001
issue of Hydrocarbon Engineering, and the March/April Issue of World Refining.
A feature article entitled "Eliminating Emulsions" appeared in the March, 2001
issue of Hydrocarbon Engineering.  A recent Hydrocarbon Processing Refinery
Processes Catalog (Gulf Publishing Co.) featured the MST under "Oily Waste
Treatment".  Trade magazines such as these have greatly increased IPRC's
exposure and generated leads to the Company.

     Further support and involvement on the technology front have been made by
EMRE as well.  A group of engineers has been assigned the task of helping to
move IPRC's MST through an internal "Gating Process", which is expected to be
complete this summer.  At that time, the MST will receive the designation of
EMRE's Approved Technology. This is a rigorous process that scrutinizes new
technology in the areas of design, engineering, function and reliability, and
assesses the environmental and economic benefits for the refineries within the
ExxonMobil global refinery system.  It is anticipated that when this "gating"
designation is received, it will be easier for IPRC to place its MST in
ExxonMobil plants.

     In addition, EMRE has assisted in expanding and improving IPRC's
laboratory in Houston.  IPRC received a substantial amount of sophisticated
laboratory equipment from EMRE for use in testing the emulsions that are sent
to us from prospective customers.  This equipment was provided to insure that
our in-house laboratory facility would be capable of performing the expanded
battery of stringent tests that are required to determine the impact of the
MST on a client's emulsions before conducting an on-site demonstration.   Both
IPRC and EMRE personnel have been working closely to enhance this evaluative
capability.  This equipment will enable IPRC to provide more thorough testing
and allow the Company to provide potential customers with more detail
regarding the separation of their emulsions.

     IPRC has been invited to participate in a conference sponsored by
Mexico's Chamber of Commerce. The conference is entitled: "NAFTA 2001: A year
of Transition for the U.S. and Mexico". It will be held in Washington, DC in
May, 2001. Our marketing delegates are planning to meet with representatives
from PEMEX, one of the largest oil companies in the world.  Mexico has the
second largest proven crude oil reserves in the Western Hemisphere at 28.3
billion barrels and in the year 2000, produced about 3.5 million barrels of
oil per day.




                                   15
<PAGE>

     The immediate focus of our marketing strategy continues to be directed
toward the domestic refining industry.  In April, 2001, the Energy Information
Administration (EIA) reported that the United States produced around 8.1
million barrels of oil per day during 2000.  With the price of oil just below
$30.00 a barrel, refiners are attempting to maximize their output capacities.
By implementing the MST in refineries, we believe we can help to de-bottleneck
refinery operations by helping to clean up the emulsions that are ever-present
in their systems, thus increasing the numbers of barrels per day that can be
realized at the refinery.

     IPRC's marketing efforts have been expanded to include
petroleum-engineering companies such as Kellogg Brown Root, Fluor Daniel and
Jacobs Engineering.  We are emphasizing to this audience the value of
including the MST in planned modifications and operational enhancements for
their major worldwide petroleum-engineering projects.  Most of these
engineering companies are head-quartered or have a strong presence in Houston,
a fact that is helpful in the marketing effort.

     We are still testing and evaluating the technology required by Suncor
Energy in Alberta, Canada.  The laboratory screening studies showed
significant MST activity for destabilizing the Suncor emulsions. However, the
initial field study was less conclusive.  Nevertheless, we believe the field
results are not counter to the laboratory results, as there are valid
technical factors to explain the differing observations.  The trial results
indicate Suncor's hard-to-treat emulsions can be successfully treated and
separated using the MST in conjunction with a combination of technologies.
The oil sands and related production of Alberta represent a tremendous
opportunity to place our technology in a market whose daily production is
forecast to grow from 782,300 bbl/day to over 2,455,000 bbl/day.  We have
identified over 18 companies with either current or planned operations in this
market.  The test at Suncor Energy is the first trial for the MST within this
market.  We have tested samples in our laboratory from three other companies
in Alberta Province and are discussing further tests with them at this time.
In addition to the North American market, we have discussed the MST process
with a major U.S. construction company and submitted a proposal for an
application in Chad, Africa.

     Technology improvement and expanded fields of use continue to be areas of
importance to IPRC.  Both of these issues are important to the successful
placement of MST Units within refinery operations.  Generating sufficient
working capital remains one of the most difficult aspects to successfully
transitioning from a research and development start-up company to an operating
company.  We continue to divide our energies between marketing, improving the
MST technology and obtaining the capital necessary to move the Company to the
next level.

Results of Operations

     Three and Six Months Ended April 30, 2001 Compared to Three and Six
Months Ended April 30, 2000








                                   16
<PAGE>

Revenue

    During the six month period ended April 30, 2001, the Company recognized
$242,815 in revenue compared to $146,855 in the same period of 2000. The
second quarter 2001 revenue was comprised of lease revenue earned from leases
of the MST-1000 and fees charged to reimburse set-up costs incurred by the
Company to demonstrate the MST-1000 at various locations. During the second
quarter 2000, the revenue represented revenue earned from leases of the MST-
1000.

     During the three month period ended April 30, 2001, the Company
recognized $80,050 revenue compared to $52,678 during the same period in 2000.
The revenue in both years was comprised of income earned from leases of the
MST-1000.

Cost of Goods Sold and Gross Profit (Loss)

     During the six month period ended April 30, 2001, the Company identified
$564,581 in costs that were specifically identified to contract revenue
compared to $114,913 for the same period in the prior year, an increase of
$449,668.

     Of this increase, $104,935 was attributed to an increase in personnel
costs.  This was a result of the Company utilizing additional, more highly
trained personnel at higher pay scales to support the existing MST leases and
to perform demonstrations at potential customers' facilities. During the first
two quarters of fiscal year 2001, the Company had five highly paid employees
who spent more than seventy percent of their time working on supporting lease
contracts and performing demonstrations of the MST, compared to only two
employees during the second quarter 2000.

     In addition to the increase in personnel costs, the Company had an
increase of $185,379 in repairs and maintenance costs to set-up and support
equipment leases and an increase of $151,253 in demonstration costs during the
six months ended April 30, 2001. This is a result of the Company actively
maintaining and demonstrating its technology in the marketplace.
Additionally, the Company recorded a charge of $36,847 against income for
depreciation of the leased equipment during the six months ended April 30,
2001, compared to $28,746 for the same period in the prior year.

     During the three month periods ended April 30, 2001 and 2000, the Company
identified $221,498 and $70,781, respectively, in costs that were specifically
identified to contract revenue. During the three month period ended April 30,
2001, the costs were primarily comprised of approximately $70,394 in personnel
costs, $117,988 for costs incurred to set-up and support equipment leases, and
$14,693 in costs to demonstrate the MST at various locations. During the same
period in the prior year, the Company incurred $21,239 in payroll and related
charges and $33,291 in costs to set up new leases.  Additionally, during the
three month periods ended April 30, 2001 and 2000, the Company recorded
charges of $18,423 and $16,251, respectively against income for depreciation
of the leased equipment.







                                   17
<PAGE>

General and Administrative

     General and administrative expenses for the six month period ended April
30, 2001 totaled $895,619 compared to $378,460 for same period in 2000 for a
net increase of $517,159. Of this increase, an increase of $191,862 in net
personnel costs was recorded as a result of the Company recruiting additional,
more highly trained employees at higher pay scales to support the laboratory
facility and marketing efforts.  Additionally, marketing consulting costs and
travel costs increased by $54,776 and $59,622, respectively, as the Company
stepped up its efforts to present the MST process to the marketplace.  The
Company also recorded an increase of $139,192 in legal and professional fees
that were incurred as a result of the Company seeking advice on alternative
methods of obtaining long-term  financing and capital. Also included in the
net increase was $25,333 in insurance expense and a net increase of $22,830 in
all other general expenses.  Additionally, during the six month periods ended
April 30, 2001 and 2000, the Company recorded a charge of $47,079 and $23,535,
respectively, against income for depreciation of equipment, an increase of
$23,544.

     General and administrative expenses for the three month period ended
April 30, 2001 totaled $521,298 compared to $231,741 for same period in 2000.
The net increase of $289,557 in general and administrative costs was primarily
comprised of an increase of $66,602 in personnel costs and an increase of
$60,776 and $18,600 in consulting and travel, respectively.  Legal fees and
insurance costs increased by $121,048 and $16,272, respectively. Other general
and administrative costs declined by a net amount of $5,535. Additionally,
during the three month period ended April 30, 2001, the Company recorded a
charge against income of $23,635 for depreciation compared to $11,841 for the
same period in the prior year, an increase of $11,794.

Research and Development Expenses

     For the period ended April 30, 2001, the Company incurred research and
development costs of $45,738 compared to no costs for the six month period
ended April 30, 2000. This increase was comprised of $24,696 in personnel
costs and $21,042 in consulting costs. This was due to the Company exploring
expanded fields of use in down hole technology and waste minimization

     The Company incurred research and development costs of $31,605 for the
three month period ended April 30, 2001 compared to no costs for the same
period in 2000.  This increase was comprised of $13,767 in personnel costs and
$17,838 in consulting costs.

Interest Expense

     During the six months ended April 30, 2001 and 2000, the Company incurred
interest expense of  $87,063 and $16,823, respectively, for an increase of
$70,240.  During the three month periods ended April 30, 2001 and 2000, the
Company recorded interest expense of  $49,505 and $8,513, respectively, for an
increase of  $40,992. The increase during fiscal year 2001 is a result of the
Company primarily funding operations through the issuance of debt rather than
the sale of its equity securities.




                                   18

<PAGE>


Liquidity and Capital Resources

     The Company has funded operations principally from the private placement
of equity securities, primarily common stock, and warrants exercisable for
common stock.  As of April 30, 2001, IPRC's aggregate current liabilities were
$1,770,007 compared to $768,500 at October 31, 2000. At the second quarter
ended April 30, 2001, the Company had negative working capital of $1,597,364
compared to negative working capital of $555,705 at October 31, 2000.

     Although the Company continues to use cash in, rather than supply cash
from, its operations, management is hopeful that it can identify sufficient
sources to fund operations in the near term.  There can be no assurance,
however, that sufficient funds can be raised to continue operations.  In
March, 2001, the Company received funding of a $375,000 short-term loan
agreement dated January 19, 2001, from a major shareholder. In addition, the
Company received advances of $150,000 and $40,000 from a member of the Board
of Directors. The Company also expects to generate revenue from fees charged
to demonstrate the MST-1000 to potential customers and from payments from
existing equipment leases. Additionally, the Company has the ability to raise
capital through the sale of shares of its common stock. In addition, the
Company is also considering seeking shareholder consent to issue shares of
preferred stock.  However, there can be no assurance that any sales of common
or preferred stock will occur, or if they occur, that they would be completed
on terms most favorable to the Company.  Unless registered for sale under the
Securities Act of 1933, as amended, any securities sold by the Company would
be offered or sold in the United States in private transactions.

     The presence of "full ratchet" anti-dilution provisions in certain
warrants issued by the Company in 1997, 1998, 1999, which are discussed in
Footnote E to the financial statements included in this report, has proven to
be a burden on the Company in seeking equity financing.  The Company has been
negotiating with the warrant holders to either waive or modify their
anti-dilution protections or to exercise their warrants, so far without
success.
























                                   19
<PAGE>

                      PART II.     OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     None.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

     The following are the changes in equity securities between October 31,
2000 and April 30, 2001:

     In December, 2000, the Company issued 16,040 shares of its Common Stock
to various employees as bonuses for the fiscal year 2000.  The value of the
bonuses was approximately $12,030.

     In December, 2000, the Company issued 182,936 shares of Common Stock to a
related party and stockholder in satisfaction of a 10% note payable in the
amount of $50,033 plus accrued interest of $6,677.

     On February 28, 2001, the Company issued 47,500 shares of Common Stock to
two investors for $47,500 in cash.

     The Company relied upon the exemption provided in Section 4(2) of the
Securities Act and/or Rule 506 thereunder, which cover "transactions by an
issuer not involving any public offering," in connection with sales of the
securities discussed above without registration under the Securities Act of
1933.  The Company made a determination in each case that the person to whom
the securities were sold did not need the protections that registration would
afford.  The certificates representing the securities sold were marked with a
legend indicating that transfer of the securities was restricted because they
had not been sold in a registered offering.  The Company believes that the
investors to whom securities were sold had such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of the prospective investment.  The Company also believes that the
investors had access to the same type of information as would be contained in
a registration statement.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

ITEM 5.  OTHER INFORMATION

     None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

     The exhibits to this report are listed in the Exhibit Index, which
appears immediately after the signature page.

     (b)  Reports on Form 8-K

     The Company did not file any reports on Form 8-K during the quarter ended
April 30, 2001.


                                   20
<PAGE>

                               SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized, on
June 14, 2001.

                                   IMPERIAL PETROLEUM RECOVERY CORPORATION


                                   By:/s/ Scott Jensen
Date: June 14, 2001                   Scott Jensen
                                      Chief Accounting Officer
                                      (Duly Authorized Officer)


                                   By:/s/ C. Brent Kartchner
Date: June 14, 2001                   C. Brent Kartchner
                                      President and Director
                                      (Duly Authorized Officer)










































                                       21
<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).

   9.1          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).

   9.2          Loan Agreement dated January 19, 2001 between Maya, LLC and
                the Company (incorporated by reference to Exhibit 10.2 to the
                Company's quarterly report on Form  9.3   10-QSB filed with
                the Commission on March 20, 2001).











                                      22

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