UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-Q
 (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    March 31,
    2011ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number:
    001-33808
  IMPERIAL HOLDINGS,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Florida

30-0663473(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   701 Park
    of Commerce Boulevard  Suite 301
    Boca Raton, Florida 33487 (Address
    of principal executive offices, including zip code) (561) 995-4200 (Registrants
    telephone number, including area code)
  þ o
  Regulation S-T o o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller
    reporting
    company o   Rule 12b-2 o þ




---



##### 



IMPERIAL
    HOLDINGS, INC.
  FORM 10-Q
    REPORT FOR THE QUARTER ENDED MARCH 31, 2011
 TABLE OF
    CONTENTS
   
 Page No.PART I  FINANCIAL INFORMATIONItem 1.

Financial Statements (Unaudited)Consolidated and Combined Balance Sheets as of
    March 31, 2011 and December 31, 2010


1Consolidated and Combined Statements of
    Operations for the three months ended March 31, 2011 and
    2010


2Consolidated and Combined Statements of
    Stockholders/Members Equity for the three months
    ended March 31, 2011 and March 31, 2010


3Condensed Consolidated and Combined Statements of
    Cash Flows for the three months ended March 31, 2011 and
    2010


4Condensed Notes to Consolidated Financial
    Statements


5Item 2.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


29Item 3.

Quantitative and Qualitative Disclosures About
    Market Risk


48Item 4.

Controls and Procedures


50PART II  OTHER
    INFORMATIONItem 1.

Legal Proceedings


51Item 1A.

Risk Factors


51Item 2.

Unregistered Sales of Equity Securities and Use
    of Proceeds


51Item 6.

Exhibits


51




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  CONSOLIDATED AND COMBINED BALANCE
    SHEETS
  March 31


December 312011


2010(Unaudited)


(Audited)ASSETSAssetsCash and cash equivalents

$
165,847,742


$
14,224,014Restricted cash


690,739



690,727Certificate of deposit  restricted


882,710



879,974Agency fees receivable, net of allowance for doubtful accounts


1,824,896



561,456Deferred costs, net


6,030,795



10,706,022Prepaid expenses and other assets


2,196,836



1,867,928Deposits


660,438



692,285Interest receivable, net


9,927,005



13,140,180Loans receivable, net


73,246,954



90,026,383Structured settlements receivables, net


4,527,185



2,535,764Investment in life settlements (life insurance policies), at
    estimated fair value


33,066,365



17,137,601Fixed assets, net


802,154



876,337Investment in affiliate


515,216



77,973Total assets

$
300,219,035


$
153,416,644LIABILITIES AND STOCKHOLDERS/MEMBERS EQUITYLiabilitiesAccounts payable and accrued expenses

$
5,111,786


$
3,425,162Accrued expenses  related parties






70,833Payable for purchase of structured settlements


13,344



223,955Other liabilities


338,683



7,913,548Lender protection insurance claims received in advance


3,610,050



31,153,755Interest payable


14,848,367



13,764,613Interest payable  related parties






54,769Notes payable and debenture payable, net of discount


53,759,116



89,207,172Notes payable  related parties






2,401,727Income taxes payable


9,912,402



Deferred tax liability


4,378,293



Total liabilities


91,972,041



148,215,534Member units  preferred (zero and 500,000 authorized
    in the aggregate as of March 31, 2011 and December 31,
    2010, respectively)Member units  Series A preferred (zero and
    90,796 issued and outstanding as of March 31, 2011 and
    December 31, 2010, respectively)






4,035,000Member units  Series B preferred (zero and
    25,000 issued and outstanding as of March 31, 2011 and
    December 31, 2010, respectively)






2,500,000Member units  Series C preferred (zero and
    70,000 issued and outstanding as of March 31, 2011 and
    December 31, 2010, respectively)






7,000,000Member units  Series D preferred (zero and 7,000
    issued and outstanding as of March 31, 2011 and
    December 31, 2010, respectively)






700,000Member units  Series E preferred (zero and
    73,000 issued and outstanding as of March 31, 2011 and
    December 31, 2010, respectively)






7,300,000Member units  common (500,000 authorized; zero and
    337,500 issued and outstanding as of March 31, 2011 and
    December 31, 2010, respectively)






11,462,427Common stock (80,000,000 authorized; 21,202,614 and zero issued
    and outstanding as of March 31, 2011 and December 31,
    2010, respectively)


212,026



Additional
    paid-in-capital


236,401,878



Accumulated deficit


(28,366,910
)


(27,796,317
)Total stockholders/members equity


208,246,994



5,201,110Total liabilities and stockholders/members equity

$
300,219,035


$
153,416,644    1




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  CONSOLIDATED AND COMBINED STATEMENTS OF
    OPERATIONS (UNAUDITED)
  For the Three MonthsEnded March 31,2011


2010Agency fee income

$
4,061,019



5,278,622Interest income


2,020,359



5,582,673Origination fee income


2,281,257



7,298,895Realized gain on sale of structured settlements


1,168,542



Gain on forgiveness of debt


2,542,771



1,765,328Unrealized change in fair value of life settlements


11,198,036



(202,534
)Unrealized change in fair value of structured settlement
    receivables


842,300



Servicing fee income


518,003



Other income


229,769



23,425Total income


24,862,056



19,746,409Interest expense


2,939,543



6,981,803Interest expense  related parties


290,132



1,986,775Provision for losses on loans receivable


108,444



3,276,154Loss on loan payoffs and settlements, net


2,571,104



1,469,505Amortization of deferred costs


1,907,105



5,846,828Selling, general and administrative expenses


9,533,186



7,459,368Selling, general and administrative  related parties


87,180



212,500Total expenses


17,436,694



27,232,933Income (loss) before income taxes


7,425,362



(7,486,524
)Provision for income taxes


7,995,955



Net income (loss)

$
(570,593
)

$
(7,486,524
)Earnings (loss) per share:Basic

$
(0.04
)

$
(2.08
)Diluted

$
(0.04
)

$
(2.08
)Weighted average shares outstanding:Basic


13,697,603



3,600,000Diluted


13,697,603



3,600,000    2




---



##### 



Imperial
    Holdings, Inc.
  CONSOLIDATED AND COMBINED STATEMENTS OF
    STOCKHOLDERS/MEMBERS EQUITY (UNAUDITED)
 For
    the Three Months Ended March 31, 2011 and
    2010
  Member Units-


Member Units-


Member Units-


Member Units-


Member Units-


Member Units-Common


Preferred A


Preferred B


Preferred C


Preferred D


Preferred E


Common Stock


Additional


Retained EarningsUnits


Amount


Units


Amount


Units


Amount


Units


Amount


Units


Amount


Units


Amount


Shares


Amount


Paid-in-Capital


(Accumulated) Deficit


TotalBalance, December 31, 2009


450,000


$
19,923,709



90,796


$
4,035,000



50,000


$
5,000,000






$







$







$







$



$



$
(12,099,452
)

$
16,859,257Member contributions


























70,000



7,000,000



































7,000,000Net loss






























































(7,486,524
)


(7,486,524
)Balance, March 31, 2010


450,000


$
19,923,709



90,796


$
4,035,000



50,000


$
5,000,000



70,000


$
7,000,000






$







$







$



$



$
(19,585,976
)

$
16,372,733Balance, December 31, 2010


337,500


$
11,462,427



90,796


$
4,035,000



25,000


$
2,500,000



70,000


$
7,000,000



7,000


$
700,000



73,000


$
7,300,000






$



$



$
(27,796,317
)

$
5,201,110Conversion of Impex debt and membership units into common shares


(337,500
)


(11,462,427
)


(90,796
)


(4,035,000
)


(25,000
)


(2,500,000
)


(70,000
)


(7,000,000
)


(7,000
)


(700,000
)


(73,000
)


(7,300,000
)


2,300,273



23,003



38,132,225







5,157,801Conversion of Skarbonka debt into common shares, net of tax


















































1,272,727



12,727



23,692,532







23,705,259Phantom shares converted into common shares


















































27,000



270



289,980







290,250Issuance of common stock pursuant to IPO, net of offering costs


















































17,602,614



176,026



174,056,946







174,232,972Stock-based compensation post IPO


























































230,195







230,195Net income






























































(570,593
)


(570,593
)Balance, March 31, 2011





$







$







$







$







$







$




21,202,614


$
212,026


$
236,401,878


$
(28,366,910
)

$
208,246,994    3




---



##### 





Imperial
    Holdings, Inc. and Subsidiaries
  CONSOLIDATED AND COMBINED STATEMENTS OF CASH
    FLOWS (UNAUDITED)
  For the Three Months EndedMarch 31,2011


2010Cash flows from operating activitiesNet income (loss)

$
(570,593
)

$
(7,486,524
)Adjustments to reconcile net loss to net cash used in operating
    activities:Depreciation


159,714



196,103Provision for doubtful accounts


74,617



63,698Provision for losses on loans receivable


108,444



3,276,154Stock-based compensation


520,445



Loss of loan payoffs and settlements, net


2,571,104



1,469,505Origination fee income


(2,281,257
)


(7,298,895
)Unrealized change in fair value of life settlements


(11,198,036
)


202,534Unrealized change in fair value of structured settlements


(842,300
)


Gain on forgiveness of debt


(2,542,771
)


(1,765,328
)Interest income


(2,020,359
)


(5,582,673
)Amortization of deferred costs


1,907,105



5,846,828Change in assets and liabilities:Certificate of deposit






(200,000
)Deposits


31,835



296,340Agency fees receivable


(1,338,057
)


1,694,060Structured settlements receivables


(938,511
)


(2,367,274
)Prepaid expenses and other assets


1,785,958



(358,146
)Accounts payable and accrued expenses


(5,936,352
)


653,226Income tax liability


7,995,955



Interest payable


1,533,150



2,963,417Net cash used in operating activities


(10,979,909
)


(8,396,975
)Cash flows from investing activitiesPurchase of fixed assets, net of disposals


(82,864
)


(74,319
)Purchase of investment in life settlement fund






(727,333
)Premiums paid on investments in life settlements


(821,436
)


105,243Purchases of investments in life settlements


(3,642,383
)


Proceeds from sale of investments in life settlements






1,790,411Proceeds from loan payoffs


5,715,810



18,872,452Originations of loans receivable, net


(11,688,799
)


(15,026,999
)Net cash (used in) provided by investing activities


(10,519,672
)


4,939,455Cash flows from financing activitiesMember contributions






7,000,000Proceeds from initial public offering, net of offering costs


174,232,972



Payments of cash pledged as restricted deposits






(472,029
)Payment of financing fees






(3,200,967
)Repayment of borrowings under credit facilities


(3,970,712
)


(13,739,475
)Repayment of borrowings from affiliates






(10,490,499
)Borrowings under credit facilities


216,453



13,062,670Borrowings from affiliates


2,644,596



2,897,000Net cash provided by (used in) financing activities


173,123,309



(4,943,300
)Net increase in cash and cash equivalents


151,623,728



(8,400,820
)Cash and cash equivalents, at beginning of period


14,224,014



15,890,799Cash and cash equivalents, at end of period

$
165,847,742


$
7,489,979Supplemental disclosures of non-cash financing activities:Conversion of debt to common stock

$
35,157,801


$
Supplemental disclosures of cash flow information:Cash paid for interest during the period

$
1,237,877


$
5,141,496    4




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)
 March 31, 2011
  (1)
    Description
    of Business        Life
    Finance
    Structured
    Settlements
      (2)
    Principles
    of Consolidation and Basis of Presentation   5




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    Form 10-Q Form 10-K
  Use
    of Estimates
    Change
    in Accounting Estimate
  ASC 250-10-45-17 Change in Accounting Estimate
    Reclassifications
   6




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
  (3)
    Recent
    Accounting Pronouncements    (4)
    Earnings
    Per Share            For the Three MonthsEnded March 31,2011


2010Basic earnings (loss) per share:Numerator:Net income (loss) available to common stockholders

$
(570,593
)

$
(7,486,524
)Denominator:Weighted average common shares outstanding


13,697,603



3,600,000Basic earnings (loss) per share

$
(0.04
)

$
(2.08
)Diluted earnings per share:Numerator:Net income available to common stockholders

$
(570,593
)

$
(7,486,524
)Denominator:Diluted weighted average shares outstanding


13,697,603



3,600,000Diluted earnings (loss) per share(1)

$
(0.04
)

$
(2.08
)     (1)
    
    The computation of diluted EPS did not include 655,956 options,
    4,240,521 warrants and 3,507 shares of restricted stock for the
    three months ended March 31, 2011, as the effect of their
    inclusion would have been 7




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
  anti-dilutive. The options, warrants and restricted stock
    represent the Companys only dilutive securities
    outstanding.  Pro
    Forma Earnings Per Share
        For the Three MonthsEnded March 31,2011


2010Basic earnings (loss) per share:NumeratorNet income (loss) available to common stockholders(1)

$
(392,568
)

$
(6,491,475
)Denominator:Weighted average common shares outstanding


13,697,603



3,600,000Basic earnings (loss) per share

$
(0.03
)

$
(1.80
)Diluted earnings per share:Numerator:Net income (loss) available to common stockholders

$
(392,568
)

$
(6,491,475
)Denominator:Diluted weighted average shares outstanding


13,697,603



3,600,000Diluted earnings (loss) per share(2)

$
(0.03
)

$
(1.80
)  8




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    (1)
    
    Reflects a reduction of interest expense of $178,025, net of tax
    and $995,000 for the three months ended March 31, 2011 and
    2010, respectively, due to the conversion of our promissory note
    in favor of IMPEX Enterprises, Ltd. into shares of our common
    stock, which occurred prior to the closing of our recently
    completed initial public offering, and the conversion of our
    promissory note in favor of Branch Office of Skarbonka Sp. z o.o
    into a $30.0 million debenture, and the conversion of that
    $30.0 million debenture into shares of our common stock,
    which occurred immediately prior to the closing of our recently
    completed initial public offering.(2)
    
    The computation of diluted EPS did not include 655,956 options,
    4,240,521 warrants and 3,507 shares of restricted stock for the
    three months ended March 31, 2011, as the effect of their
    inclusion would have been anti-dilutive. The options, warrants
    and restricted stock represent the Companys only dilutive
    securities outstanding.(3)
    
    For the pro forma period for the three months ended
    March 31, 2010, the results of the Company being treated
    for the pro forma presentation as a C corporation
    resulted in no impact to the consolidated and combined balance
    sheet or statement of operations. The primary reasons for this
    are that the losses produce no current benefit and any net
    operating losses generated and other deferred assets (net of
    liabilities) would be fully reserved due to historical operating
    losses. The Company, therefore, has not recorded any pro forma
    tax provision.  (5)  Deferred
    Costs
  paid-in-capital.
  (6)
    Loans
    Receivable    March 31,


December 31,2011


2010Loan principal balance

$
63,806,723


$
76,939,236Loan origination fees, net


15,708,500



20,263,497Loan impairment valuation


(6,268,269
)


(7,176,350
)Loans receivable, net

$
73,246,954


$
90,026,383  9




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    March 31,


March 31,2011


2010Loan principal balance, beginning

$
76,939,235


$
167,691,534Loan originations


11,688,799



10,560,749Subsequent year premiums paid net of reimbursement


249,750



4,801,480Loan write-offs


(1,852,871
)


(1,222,408
)Loan payoffs


(22,588,792
)


(14,413,511
)Loans transferred to investments in life settlements


(629,398
)


Loan principal balance, ending

$
63,806,723


$
167,417,844   ASC 310-20, Receivables  Nonrefundable Fees and Other
    Costs
  Receivables
    Loans


InterestReceivable


Receivable


TotalBalance at beginning of period

$
7,176,350


$
1,340,237


$
8,516,587Provision for loan losses


84,366



24,078



108,444Charge-offs


(992,447
)


(84,368
)


(1,076,815
)Balance at end of period

$
6,268,269


$
1,279,947


$
7,548,216     Loans


InterestReceivable


Receivable


TotalBalance at beginning of period

$
11,598,765


$
1,788,544


$
13,387,309Provision for loan losses


2,716,081



560,073



3,276,154Charge-offs


(1,668,759
)


(261,835
)


(1,930,594
)Balance at end of period

$
12,646,087


$
2,086,782


$
14,732,869  10




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    Uninsured


InsuredLoans


Loans


TotalLoan Impairment Valuation:Balance at beginning of period

$
1,055,998


$
7,460,589


$
8,516,587Provision for loan losses


108,444







108,444Charge-offs


(670,060
)


(406,755
)


(1,076,815
)Ending balance

$
494,382


$
7,053,834


$
7,548,216Ending balance: individually evaluated for impairment


494,382



7,053,834



7,548,216Ending balance: collectively evaluated for impairment










Ending balance: loans acquired with deteriorated credit quality










Loans and interest receivablesEnding balance

$
15,558,567


$
67,615,392


$
83,173,959Ending balance: individually evaluated for impairment

$
15,558,567


$
67,615,392


$
83,173,959Ending balance: collectively evaluated for impairment










Ending balance: loans acquired with deteriorated credit quality










     Uninsured


Insured(1)Unpaid





UnpaidS&P

Principal





PrincipalDesignation

Balance


Percent


Balance


PercentAAA

$
693,884



4.94
%

$
571,090



1.15
%AA+






0.00
%


869,818



1.75
%AA






0.00
%






0.00
%AA−


8,453,039



60.24
%


23,916,475



48.04
%A+


2,554,116



18.20
%


6,906,235



13.88
%A1






0.00
%






0.00
%A


1,801,774



12.84
%


15,056,748



30.25
%BB−


529,806



3.78
%


2,453,738



4.93
%Total

$
14,032,619



100.00
%

$
49,774,104



100.00
%  11




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    (1)
    
    All of the Companys insured loans have lender protection
    coverage with Lexington Insurance Company. As of March 31,
    2011, Lexington had a financial strength rating of A
    with a stable outlook by Standard & Poors.    March 31,


December 31,2011


2010Loan receivable, net

$
31,458,289


$
32,372,062Interest receivable, net


3,193,386



4,479,527Investment in impaired loans

$
34,651,675


$
36,851,589     Unpaid





Average


InterestRecorded


Principal


Related


Recorded


IncomeInvestment


Balance


Allowance


Investment


RecognizedWith no related allowance recorded:Uninsured Loans

$



$



$



$



$
Insured Loans

$



$



$



$



$
With an allowance recorded:Uninsured Loans


3,875,707



3,953,984



494,382



3,626,052



226,083Insured Loans


30,775,968



25,642,366



7,053,834



33,199,251



4,247,250Total Impaired Loans

$
34,651,675


$
29,596,350


$
7,548,216


$
36,825,303


$
4,473,333       Greater Than30-59 Days


60-89 Days


90 Days


TotalPast Due


Past Due


Past Due


Past DueUninsured Loans

$



$
266,464


$
960,184


$
1,226,648Insured Loans


4,256,593







533,671



4,790,264Total

$
4,256,593


$
266,464


$
1,493,855


$
6,016,912    12




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
  (7)
    Origination
    Fees    March 31,


December 31,2011


2010Loan origination fees gross

$
23,831,834


$
30,182,958Un-accreted origination fees


(8,425,267
)


(10,189,349
)Amortized loan originations costs


301,933



269,888Total

$
15,708,500


$
20,263,497     (8)
    Agency
    Fees Receivable      Three Months EndedMarch 31,2011


2010Balance at beginning of period

$
204,617


$
119,886Bad debt expense


74,617



55,533Balance at end of period

$
279,234


$
175,419   (9)  Stock-Based
    Compensation
   13




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
  Options
      Three Months EndedMarch 31, 2011Expected volatility

54.18%  54.23%Expected dividend

0%Expected term in years

4.5Risk free rate

2.16%  2.29%       WeightedAverageWeighted


Remaining


AggregateNumber of


Average Price


Contractual


IntrinsicCommon Stock Options

Shares


per Share


Term


ValueOptions outstanding, December 31, 2010










Options granted


655,956


$
10.75



6.86Options exercised










Options forfeited










Options expired










Options outstanding, March 31, 2011


655,956


$
10.75



6.86


$
Exercisable at March 31, 2011













$
Unvested at March 31, 2011


655,956


$
10.75



6.86


$
    14




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    Three MonthsEndedMarch 31, 2011Grant date weighted average fair value per share of options
    granted during the period

$
4.98Total intrinsic value of options exercised

$
Cash received from options exercised

$
Actual tax benefit to be realized from option exercises

$
   Restricted
    Stock
      Number ofCommon Unvested Shares

Shares(In thousands)Outstanding December 31, 2010


Granted


3,507Vested


Forfeited


Outstanding March 31, 2011


3,507     (10)
    Structured
    Settlements  The balances of the Companys structured settlements are
    as follows:
  March 31,


December 31,2011


2010Structured settlements  at cost

$
1,242,784


$
1,090,090Structured settlements  at fair value


3,284,401



1,445,674Structured settlements receivable, net

$
4,527,185


$
2,535,764      15




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
          8.39%
    Fixed Rate Asset Backed Variable Funding Notes
       16




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    back-up
  (11)
    Investment
    in Life Settlements (Life Insurance Policies)      Number ofLife Settlement


Fair


FaceRemaining Life Expectancy (In Years)

Contracts


Value


Value0-1





$



$
1-2










2-3










3-4


1



942,064



2,000,0004-5


1



667,633



2,200,000Thereafter


57



31,456,668



275,582,000Total


59


$
33,066,365


$
279,782,000    17




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    Twelve Months Ended March 31,2011


5,788,5482012


6,097,2962013


6,932,0832014


6,026,3822015


6,231,819Thereafter


83,769,336$
114,845,464   (12)
    Fair
    Value Measurements  Financial Instruments
  Level 1
  Level 2
  Level 3
    TotalLevel 1


Level 2


Level 3


Fair ValueAssets:Investment in life settlements

$



$



$
33,066,365


$
33,066,365Structured settlement receivables

$



$



$
3,284,401


$
3,284,401$
36,350,766


$
36,350,766  18




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    TotalLevel 1


Level 2


Level 3


Fair ValueAssets:Investment in life settlements

$



$



$
17,137,601


$
17,137,601Structured settlement receivables

$



$



$
1,445,674


$
1,445,674$
18,583,275


$
18,583,275     Life Settlements:Balance, December 31, 2010

$
17,137,601Purchase of policies


3,642,382Acquired in foreclosure


266,910Unrealized change in fair value


11,198,036Premiums paid


821,436Balance, March 31, 2011

$
33,066,365Changes in fair value included in earnings for
    the period relating to assets held at March 31, 2011

$
11,198,036     Structured Settlements:Balance, December 31, 2010

$
1,445,674Purchase of contracts


10,168,607Unrealized change in fair value


842,300Sale of contracts


(9,139,291
)Collections


(32,889
)Balance, March 31, 2011

$
3,284,401Changes in fair value included in earnings for
    the period relating to assets held at March 31, 2011

$
842,300  19




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    Life Settlements:Balance, December 31, 2009

$
4,306,280Unrealized change in fair value


(202,534
)Sale of policies


(1,798,363
)Premiums paid


105,243Balance, March 31, 2010

$
2,410,626Changes in fair value included in earnings for the period
    relating to assets held at March 31, 2010

$
(202,534
)     (13)
    Lender
    Protection Insurance Claims Received in Advance       20




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
      (14)
    Notes and
    Debenture Payable    March 31,





December 31,2011





2010Cedar Lane

$
32,132,285






$
34,209,496Skarbonka debenture










29,766,667White Oak, Inc.


19,325,273







21,218,775Acorn Capital Group


2,277,213







3,987,889CTL Holdings, LLC


24,345







24,34553,759,116







89,207,172Related Party










2,401,727Total

$
53,759,116






$
91,608,899   Cedar
    Lane
   21




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
  Skarbonka
    Debenture
      White
    Oak,
    Inc.
      Acorn
    Capital Group
   22




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
        CTL
    Holdings LLC
    Related
    Party
   23




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    (15)
    Segment
    Information        Three Months EndedMarch 31,2011


2010Life financeIncomeAgency fee income

$
4,061,019


$
5,278,622Origination income


2,281,257



7,298,895Interest income


2,020,359



5,434,305Gain on forgiveness of debt


2,542,771



1,765,328Unrealized change in fair value life settlements


11,198,036



(202,534
)Servicing fee income


518,003



Other


145,088



8,00022,766,533



19,582,616Direct segment expensesInterest expense


2,937,184



7,766,328Provision for losses


108,444



3,367,069Loss on loans payoffs and settlements, net


2,571,104



1,378,590Amortization of deferred costs


1,907,105



5,846,828SG&A expense


2,585,481



2,643,36310,109,318



21,002,178Segment operating income

$
12,657,215


$
(1,419,562
) 24




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
  Three Months EndedMarch 31,2011


2010Structured settlementsIncomeRealized gain on sale of structured settlements

$
1,168,542


$
Interest income






148,368Unrealized change in fair value of investments


842,300



Other income


44,622



15,4252,055,464



163,793Direct segment expensesSG&A expense


4,000,352



2,628,284Segment operating loss

$
(1,944,888
)

$
(2,464,491
)ConsolidatedSegment operating (loss) income


10,712,327



(3,884,053
)Unallocated incomeOther income


37,700



Unallocated expensesSG&A expenses


3,034,533



2,400,221Interest expense


290,132



1,202,2503,324,665



3,602,471Income (loss) before income taxes


7,425,362



(7,486,524
)Provision for income taxes


7,995,955



Net loss

$
(570,593
)

$
(7,486,524
)     March 31


December 312011


2010Direct segment assetsLife finance

$
136,524,339


$
141,518,356Structured settlements


5,305,098



3,527,344141,829,437



145,045,700Other unallocated assets


158,389,598



8,370,944$
300,219,035


$
153,416,644   (16)
    Stockholders
    Equity     25




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
               26




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
    (17)
    Commitments
    and Contingencies  Employment
    Agreements
    Litigation
    (18)
    Income
    Taxes           27




---



##### 



Imperial
    Holdings, Inc. and Subsidiaries
  NOTES TO
    CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
    (UNAUDITED)  (Continued)
 March 31, 2011
        (19)
    Subsequent
    Events   28




---



##### 



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Forward-Looking
    Information
  Form 10-Q Form 10-Q
    
    our results of operations;
    our ability to continue to grow our businesses;
    our ability to obtain financing on favorable terms or at all;
    changes in laws and regulations applicable to premium finance
    transactions, life settlements or structured settlements;
    changes in mortality rates and the accuracy of our assumptions
    about life expectancies;
    increased competition for premium finance lending or for the
    acquisition of structured settlements;
    adverse developments in capital markets;
    loss of the services of any of our executive officers;
    the effects of United States involvement in hostilities with
    other countries and large-scale acts of terrorism, or the threat
    of hostilities or terrorist acts; and
    changes in general economic conditions, including inflation,
    changes in interest rates and other factors.  Form 10-K Form 10-Q
  Form 10-Q
 29




---



##### 



Business
    Overview
          Critical
    Accounting Policies
  Critical
    Accountings Estimates
    Life
    Finance Loans Receivable
  310-20, Receivables  Nonrefundable Fees and Other
    Costs
  Receivables
 30




---



##### 



Ownership
    of Life Insurance Policies
  ASC 325-30, Investments in Insurance Contracts instrument-by-instrument
        Valuation
    of Insurance Policies
     31




---



##### 



Fair
    Value Measurement Guidance
  Fair Value Measurements and
    Disclosures,
 32




---



##### 



Fair
    Value Option
  Financial
    Instruments instrument-by-instrument
  Revenue
    Recognition
    
    Agency Fees Agency fees are paid by the
    referring life insurance agents based on negotiations between
    the parties and are recognized at the time a life finance loan
    is funded. Because agency fees are not paid by the borrower,
    such fees do not accrue over the term of the loan. We typically
    charge and receive agency fees from the referring agent within
    approximately 47 days of our funding the loan. A separate
    origination fee is charged to the borrower which is amortized
    into income over the life of the loan.
    Interest Income Interest income on life
    finance loans is recognized when it is realizable and earned, in
    accordance with ASC 605, Revenue Recognition.
    Discounts on structured settlement receivables are accreted over
    the life of the settlement using the effective interest method.
    Origination Fee Income Loans often include
    origination fees which are fees payable to us on the date the
    loan matures. The fees are negotiated at the inception of the
    loan on a transaction by transaction basis. The fees are
    accreted into income over the term of the loan using the
    effective interest method.
    Realized Gains on Sales of Structured Settlements Realized gains on sales of structured
    settlements are recorded when the structured settlements have
    been transferred to a third party and we no longer have
    continuing involvement, in accordance with ASC 860,
    Transfers and Servicing.  Revenue Recognition
 33




---



##### 



Deferred
    Costs
    Loss
    in Loan Payoffs and Settlements, Net
    Income
    Taxes
  Income Taxes
    Stock-Based
    Compensation
  Compensation  Stock
    Compensation
  Recent
    Accounting Pronouncements
   34




---



##### 



Results
    of Operations
    Consolidated
    Results of Operations (in thousands)
  Three MonthsEndedMarch 31,2011


2010(Unaudited)IncomeAgency fee income

$
4,061


$
5,279Interest income


2,020



5,583Origination fee income


2,281



7,299Realized gain on sale of structured settlements


1,169



Gain on forgiveness of debt


2,543



1,765Unrealized change in fair value of life settlements


11,198



(203
)Unrealized change in fair value of structured receivables


842



Servicing fee


518



Other income


230



23Total income


24,862



19,746ExpensesInterest expense


3,230



8,968Provision for losses on loans receivable


108



3,276Loss on loan payoffs and settlements, net


2,571



1,470Amortization of deferred costs


1,907



5,847Selling, general and administrative expenses


9,621



7,672Total expenses


17,437



27,233Income (loss) before income taxes


7,425



(7,487
)Provision for income taxes


7,996



Net income (loss)

$
(571
)

$
(7,487
)   Life
    finance Segment Results (in thousands)
  Three MonthsEndedMarch 31,2011


2010(Unaudited)Income

$
22,766


$
19,582Expenses


10,109



21,002Segment operating income (loss)

$
12,657


$
(1,420
)  35




---



##### 



Structured
    Settlement Segment Results (in thousands)
  Three MonthsEndedMarch 31,2011


2010(Unaudited)Income

$
1,962


$
164Expenses


3,907



2,628Segment operating loss

$
(1,945
)

$
(2,464
)   Reconciliation
    of Segment Results to Consolidated Results (in
    thousands)
  Three MonthsEndedMarch 31,2011


2010(Unaudited)Segment operating income (loss)

$
10,712


$
(3,884
)Unallocated income:Interest income


37



Unallocated expenses:SG&A expenses


3,034



2,400Interest expense


290



1,2033,327



3,603Income (loss) before income taxes


7,425



(7,487
)Provision for income taxes


7,996



Net loss

$
(571
)

$
(7,487
)   Three
    Months Ended March 31, 2011 Compared to Three Months Ended
    March 31, 2010
         36




---



##### 



10-Q,
   37




---



##### 



ASC 250-10-45-17 Change in Accounting Estimate
        Segment
    Information
    Life
    finance Business
    Three MonthsEndedSeptember 30,2011


2010(Unaudited)IncomeAgency fee income

$
4,061


$
5,279Interest income


2,020



5,434Origination fee income


2,281



7,299Gain on forgiveness of debt


2,543



1,765Unrealized change in fair value of life settlements


11,198



(203
)Servicing fee income


504



Other


159



822,766



19,582Direct segment expensesInterest expense


2,937



7,766Provision for losses


108



3,367Loss (gain) on loan payoff and settlements, net


2,571



1,379Amortization of deferred costs


1,907



5,847SG&A expense


2,586



2,64310,109



21,002Segment operating income (loss)

$
12,657


$
(1,420
)  38




---



##### 



Three Months EndedMarch 31,2011


2010Period Originations:Number of loans originated (by type):Type 1*


26



51Type 2**


6



1Principal balance of loans originated

$
11,689


$
10,561Aggregate death benefit of policies underlying loans originated

$
195,350


$
252,400Selling general and administrative expenses

$
2,586


$
2,643Average Per Origination During Period:Age of insured at origination


75.2



73.8Life expectancy of insured (years)


15.2



14.3Monthly premium (year after origination)

$
11.9


$
13.4Death benefit of policies underlying loans originated

$
5,745.6


$
4,853.8Principal balance of the loan

$
365.3


$
203.1Interest rate charged


14.0
%


11.5
%Agency fee

$
126.9


$
101.5Agency fee as % of principal balance (by type):Type 1*


41.3
%


50.1
%Type 2**


20.8
%


18.5
%Origination fee

$
88.7


$
83.5Annualized origination fee as % of principal balance


25.6
%


19.5
%End of Period Loan PortfolioLoans receivable, net

$
73,247


$
191,331Number of policies underlying loans receivable


260



676Aggregate death benefit of policies underlying loans receivable

$
1,247,757


$
3,096,236Number of loans with insurance protection


214



632Loans receivable, net (insured loans only)

$
58,274


$
157,031Average Per Loan:Age of insured in loans receivable


75.3



75.4Life expectancy of insured (years)


14.4



14.7Monthly premium

$
8.5


$
6.6Loan receivable, net

$
281.7


$
283.0Interest rate


11.1
%


11.1
%End of Period  Policies OwnedNumber of policies owned


59



21Aggregate fair value

$
33,066


$
2,411Monthly premium  average per policy

$
8.3


$
3.7     *
    
    Type 1 loans are collateralized by life insurance policies that
    have been in force less than two years.**
    
    Type 2 loans are collateralized by life insurance policies that
    have been in force longer than two years. 39




---



##### 



Three
    Months Ended March 31, 2011 Compared to Three Months Ended
    March 31, 2010
  Agency Fee Income.
     Three MonthsEndedMarch 31,2011


2010Principal balance of loans originated

$
11,689


$
10,561Number of transactions originated


32



52Agency fees

$
4,061


$
5,279Agency fees as a percentage of the principal balance of loans
    originated


34.7
%


50.0
%   Interest Income.
  Origination Fee Income.
  Gain on Forgiveness of Debt.
  Unrealized Change in Fair Value of Life
    Settlements.
  Servicing fee income.
 40




---



##### 



Other.
  Expenses
  Interest Expense.
  Provision for Losses on Loans
    Receivable.
  Loss on Loan Payoffs and Settlements,
    Net.
  Amortization of Deferred Costs.
  Selling, General and Administrative
    Expenses.
    March 31,


December 31,2011


201030 days or less from loan funding

$
1,697


$
55931  60 days from loan funding


101



61  90 days from loan funding






91  120 days from loan funding


99



Over 120 days from loan funding


207



207Total

$
2,104


$
766Allowance for doubtful accounts


(279
)


(205
)Agency fees receivable, net

$
1,825


$
561  41




---



##### 



Three MonthsEndedMarch 31,2011


2010Balance at beginning of period

$
204


$
120Bad debt expense


75



55Write-offs






Recoveries






Balance at end of period

$
279


$
175     Structured
    Settlements
    Three MonthsEndedMarch 31,2011


2010(Unaudited)IncomeRealized gain on sale of structured settlements

$
1,169


$
Interest income






148Unrealized change in fair value of investments


842



Other income


44



162,055



164Direct segment expensesSG&A expenses


4,000



2,628Segment operating loss

$
(1,945
)

$
(2,464
)  42




---



##### 



Three Months EndedMarch 31,2011


2010Period Originations:Number of transactions


162



105Number of transactions from repeat customers


48



24Weighted average purchase discount rate


18.3
%


17.0
%Face value of undiscounted future payments purchased

$
16,536


$
7,297Amount paid for settlements purchased

$
3,212


$
2,574Marketing costs

$
1,258


$
1,048Selling, general and administrative (excluding marketing costs)

$
2,649


$
1,581Average Per Origination During Period:Face value of undiscounted future payments purchased

$
102.1


$
69.5Amount paid for settlement purchased

$
19.8


$
24.5Time from funding to maturity (months)


161.9



124.8Marketing cost per transaction

$
7.8


$
10.0Segment selling, general and administrative (excluding marketing
    costs) per transaction

$
16.3


$
15.1Period Sales:Number of transactions sold


209



Realized gain on sale of structured settlements

$
1,168.5


$
Average sale discount rate


8.7
%


   Three
    Months Ended March 31, 2011 Compared to Three Months Ended
    March 31, 2010
  Interest Income.
  Realized Gain on Sale of Structured
    Settlements.
  Unrealized Change in Fair Value of Structured Settlement
    Receivables. Financial Instruments
 43




---



##### 



Expenses
  Selling, General and Administrative
    Expenses.
  Liquidity
    and Capital Resources
        Debt
    Financings Summary
    Outstanding


Accrued


Total PrincipalPrincipal


Interest


and InterestCredit Facilities:Acorn

$
2,277


$
756


$
3,033CTL(*)


25



1



26White Oak


19,325



8,796



28,121Cedar Lane


32,132



5,295



37,427Total

$
53,759


$
14,848


$
68,607     *
    
    Represents the balance remaining under our $30 million grid
    promissory note in favor of CTL Holdings.   44




---



##### 



Weighted


Principal


Principal and Interest PayableAverage


and Interest


Nine Months


YearInterest


Outstanding


Ending


Ending


Year EndingCredit Facilities

Rate


at 3/31/2011


12/31/2011


12/31/2012


12/31/2013Acorn


14.5
%

$
3,033


$
3,033


$



$
CTL(*)


9.5
%


26



26







White Oak


19.7
%


28,121



28,121







Cedar Lane


16.7
%


37,427



19,660



17,682



85Totals





$
68,607


$
50,840


$
17,682


$
85Weighted average interest rate






17.9
%


18.3
%


14.5
%


14.5
%     *
    
    Represents the balance remaining under our $30 million grid
    promissory note in favor of CTL Holdings.      White Oak
    Global Advisors, LLC Facility
     45




---



##### 



Cedar
    Lane Capital LLC Facility
  1-year
    8.39%
    Fixed Rate Asset Backed Variable Funding Notes
     46




---



##### 



Class A
    Notes
    Life
    Finance Loan Maturities
    Principal and Origination Fee MaturityTotal at


Year Ending


Year Ending


Year Ending3/31/2011


12/31/2011


12/31/2012


12/31/2013Carrying value (loan principal balance, accreted origination
    fees, and accrued interest receivable)

$
90,371


$
61,666


$
27,308


$
1,397Weighted average per annum interest rate


11.3
%


11.3
%


11.5
%


13.5
%Per annum origination fee as a percentage of the principal
    balance of the loan at origination


23.5
%


20.5
%


18.1
%


11.7
%   Cash
    Flows
    Three MonthsEndedMarch 31,2011


2010Statement of Cash Flows Data:Total cash provided by (used in):Operating activities

$
(10,980
)

$
(8,397
)Investing activities


(10,520
)


4,939Financing activities


173,124



(4,943
)Increase (decrease) in cash and cash equivalents

$
151,624


$
(8,401
)   Operating
    Activities
   47




---



##### 



Investing
    Activities
    Financing
    Activities
    Contractual
    Obligations
    Contractual
    Obligations
  Due in Less


Due


Due


More thanTotal


than 1 Year


1-3 Years


3-5 Years


5 YearsCredit facilities(1)

$
53,759


$
38,290


$
15,469


$



$
Expected interest payments(2)


15,122



12,824



2,298







Operating leases


545



425



120







Estimated tax payments for uncertain tax positions


6,295







6,295







Total

$
75,721


$
51,539


$
24,182


$



$
     (1)
    
    Credit facilities include principal outstanding related to
    facilities that were used to fund life finance loans.(2)
    
    Expected interest payments are calculated based on outstanding
    balances of our credit facilities as of March 31, 2011 and
    assumes repayment of principal and interest at the maturity date
    of the related life finance loan, which may be prior to the
    final maturity of the credit facility.  Inflation
    Off-Balance
    Sheet Arrangements
    Item 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK    Credit
    Risk
   48




---



##### 



March 31,2011

2010Percentage of total number of loans outstanding with lender
    protection insurance


82.3
%


93.5
%Percentage of total loans receivable, net balance covered by
    lender protection insurance


79.6
%


82.1
%       Percentage of

Percentage ofTotal Outstanding

Total Death

Moodys

S&PCarrier

Loan Balance

Benefit

Rating

RatingLincoln National Life Insurance Company


23.1
%


22.2
%


A2



AA−ReliaStar Life Insurance Company


11.0
%


12.4
%


A2



A+AXA Equitable Life Insurance Company


10.1
%


12.6
%


Aa3



AAPrincipal Life Insurance Company


10.0
%


11.8
%


Aa3



A+       Interest
    Rate Risk
     49




---



##### 



Item 4.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rule 13a-15(e) Form 10-Q
  Limitations
    on Controls
    Changes
    in Internal Control Over Financial Reporting
   50




---



##### 



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings  Litigation
    Item 1A.
    Risk
    Factors  Form 10-K
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds  Form S-1 No. 333-168785)
    Item 6.
    Exhibits  Form 10-Q.
 51




---



##### 



SIGNATURES
    IMPERIAL HOLDINGS, INC.
  /s/  Richard
    S. OConnell, Jr.Richard
    S. OConnell, Jr.



Chief Financial Officer and 
    Chief Credit Officer 
    (Principal Financial Officer)/s/  Jerome
    A. ParsleyJerome
    A. Parsley



Director of Finance and Accounting 
    (Principal Accounting Officer)    52




---



##### 



EXHIBIT INDEX
  Exhibit 31
.1

Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 31
.2

Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.Exhibit 32
.1

Certification of Chief Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.Exhibit 32
.2

Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.  53