UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB

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

     [X]  Annual Report under Section 13 or 15(d) of the Securities Exchange Act
          of 1934

                     For fiscal year ended October 31, 2005.

     [ ]  Transition  Report  Pursuant to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934 Commission file number: 0-21169


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


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


                           1970 South Starpoint Drive

                              Houston, Texas 77032

               (Address of principal executive offices) (Zip Code)

                                 (281) 821-1110

                (Issuer's telephone number, including area code)

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

                                      None

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

                    Common Stock, par value $0.001 per share

                                (Title of Class)


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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B  contained  in  this  report  and no  such  disclosure  will  be
contained,  to the  best of the  issuer's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

Indicate by checkmark  whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)

 Yes:___  No:_X_

The issuer's revenues for the fiscal year ended October 31, 2005 was $5,000.

Based on the last sale price of $0.43 on March 7,  2006,  the  aggregate  market
value of  shares  of  Common  Stock  held by  non-affiliates  was  approximately
$10,460,140.

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

Transitional small business disclosure format: ____Yes _X_  No___


<PAGE>


Part I.........................................................................1

Item 1     Description Of Business.............................................1

Item 2     Description Of Property.............................................6

Item 3     Legal Proceedings...................................................6

Item 4     Submission Of Matters To A Vote Of Security Holders.................6

Part II........................................................................7

Item 5     Market For Common Equity And Related Stockholder Matters............7

Item 6     Management's Discussion And Analysis Of Financial Condition
           And Results Of Operations..........................................10

Item 7     Financial Statements...............................................15

Item 8     Changes In And Disagreements With Accountants On Accounting
           And Financial Disclosure ..........................................34

Item 8a    Controls And Procedures............................................34

Item 8b    Other Information..................................................35

Part III......................................................................36

Item 9     Directors, Executive Officers, Promoters And Control Persons;
           Compliance With Section 16(A) Of The Exchange Act .................36

Item 10    Executive Compensation.............................................38

Item 11    Security Ownership Of Certain Beneficial Owners And Management.....39

Item 12    Certain Relationships And Related Transactions.....................40

Item 13    Exhibits And Reports On Form 8-K...................................41

Item 14    Principal Accountant Fees And Services.............................43

Signatures....................................................................44

<PAGE>


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

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


                                     PART I


ITEM 1   DESCRIPTION OF BUSINESS


General


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

       IPRC was founded in 1990 as a Nevada corporation.  Since 1995 our primary
business has been the  development,  marketing and  distribution  of MST. During
2005, we began to focus on the use of MST in the production of biodiesel fuel by
acquiring a 20% interest in Argibiofuels, LLC. The Company's offices are located
at 1970 South Starpoint  Drive,  Houston,  Texas,  and our phone number is (281)
821-1110.  Our common stock currently  trades  Over-The-Counter  (OTC) as a Pink
Sheet stock under the symbol "IREC".

       Additional  information about Imperial Petroleum Recovery Corporation can
be found on our website,  www.iprc.com.  Reports filed with the  Securities  and
Exchange  Commission  ("SEC")  may be  viewed  or  obtained  at the  SEC  Public
Reference Room in Washington D.C., or at the SEC's web site, www.sec.gov.

Products and Potential Products


       We currently  offer MST to the oil field  industry and are developing the
use of MST in the  marine  industry  and in the  production  of  biodiesel.  MST
technology uses RF to separate water and oil emulsions. Emulsions are homogenous
mixtures of oil and water components (or other normally immiscible components).


                                       1
<PAGE>


       Oil and Gas Industry


       We  have  created  four  (4)  MST  systems  to be used in the oil and gas
industry,  MST-1000,  MST-2000,  MST-4000 and MST-150, our self-contained mobile
system.  Produced oil contains water that is costly to transport and damaging to
infrastructure.  MST applies RF energy to separate the water and oil  emulsions,
allowing  the  removal  of the water and  production  of the oil.  The RF energy
breaks the emulsion by  preferentially  heating the water inside the oil matrix,
which creates  differences in surface tension and viscosity.  After RF energy is
applied,  the  materials  are  pumped  into  a  separation  tank.  If  immediate
separation is required, a centrifuge can be utilized.

       The  separated  oil is then pumped  into  holding  tanks for  shipment to
customers.  The separated  water and sediments can be handled in accordance with
the customer's environmental regulations.

       Each MST system is  computer-controlled  and  contains  all the  elements
needed to  reclaim  oil from oil  emulsion  and "rag  layer"  water  located  in
refineries,  tank storage and waste pits. In its initial  refinery  application,
the MST system has been used to improve the  efficiency of desalter  operations.
MST  systems  are  modular  and  can be  conjoined  to  handle  larger  capacity
requirements as required by the customer. The MST 150 is a self-contained mobile
unit that can be moved to a client's site to demonstrate  the  effectiveness  of
the large  scale MST 1000  series  in  resolving  various  emulsion  or  process
applications.

       Each MST system includes the following components:

       o    A patented microwave applicator;
       o    A microwave transmitter;
       o    Waveguides and auto tuner;
       o    Instrumentation and computer automation;
       o    Pumps and drives;
       o    If required, a separation unit; and
       o    Safety monitors and failsafe interlocking system.

       The Company  offers its products for sale or lease directly to end-users.
The  products  may be offered to existing  oil  emulsion  and sludge  processors
through geographically specific marketing partnerships.


         Marine Industry

         We  currently  have a patent  pending  for the use of MST in  marine on
board  systems.  The Marine  Industry  MST is under  development  to improve the
efficiency of bilge water handling aboard large ships.  Bilge water is a mixture
of water and a very  small  percentage  of oil that  probably  is  inadvertently
diverted  from the  engine.  Companies  that have  ships  typically  try to have
systems  on-board  to capture  this small  percentage  of oil (<1%) so that they
avert  the  risk of heavy  fines  should  the  bilge  with  oil be  accidentally
discharged since it causes huge environmental problems.

         Testing has been  conducted  employing the existing  laboratory  MST to
treat bilge samples taken from several cruise ships ported in Galveston,  Texas.
Initial tests have been extremely successful in demonstrating the application of
the MST to enhance the separation of existing  on-board  bilge water  processing
systems.  While the Company intends to develop and/or refine  marketing plans to
penetrate the marine  industry,  MST use in the marine  industry is in its early
stages of development and there is no guarantee that it will be successful.


         Production of Bio-Diesel

         We currently have a patent pending for the use of MST in the production
of  biodiesel.  In 2005, we began  laboratory  and field trials to determine the
value of employing MST  technology to enhance the  throughput and settling times
for  existing  biodiesel  production  processes,  in  response  to  the  Federal
Directives  outlined in the US Energy Policy Act of 2005 and related legislation
in the United States and the European Union.

                                       2
<PAGE>


       In August 2005, we licensed the use of MST in the production of biodiesel
to Agribiofuels. Agribiofuels plans to build and operate a high-efficiency, cost
effective 36 million gallon/year  biodiesel production  facility.  In connection
with the license,  IPRC entered into a management  agreement with  Agribiofuels.
Pursuant to the management  agreement,  IPRC agreed to provide  certain  general
business,   financial   consultation  and  advice  and  management  services  to
Agribiofuels  in  connection  with the  operation of its business and to provide
technology  and  training  in  operating  MST in the  manufacture  of  biodiesel
products.  In addition Agribiofuels agreed to pay IPRC a management fee equal to
$75,000 per month  through  Dec. 31, 2005,  and $120,000  thereafter  during the
development and construction period. In addition, once the biodiesel facility is
operational,  Agribiofuels  will pay IPRC a technology  and  licensing fee based
upon the greater of a throughput  fee of $0.15 per gallon of biodiesel  produced
or all personal cost.

       Pure biodiesel contains no petroleum,  is derived from many kinds of seed
and  vegetable  oils  produced  in the U.S.,  and can be directly  blended  with
petroleum diesel.  When blended with petroleum  diesel,  the fuel can be readily
used in diesel powered  vehicles with no mechanical  alterations to the engines.
The exhaust from a vehicle that is switched to a biodiesel  mixture  immediately
produces cleaner,  healthier emissions, and biodiesel is the only alternative to
fuel  certified  by  the  Environmental  Protection  Agency  that  fulfills  the
requirements of Section 211 (B) of the Clean Air Act.

       The 2005 Energy Policy Act, specifically its Renewable Fuels Standard has
created a domestic renewable fuels utilization  requirement of 8 billion gallons
per year by 2012  with an  intermediate  goal of 4 billion  gallons  per year by
2008.  The 2005 Energy Policy Act  identifies  specific  groups of consumers who
must comply with the Federal  guidelines or face economic  penalties in the form
of lost or reduced tax credits,  diverted  budget  appropriations,  and possible
fines, including, with certain exceptions:

       o    State, federal and local government agencies,
       o    Large trucking companies,
       o    School districts with bus fleets,
       o    Mass transit companies and contractors doing business with the
            Federal Government.

         In addition to the potential  penalties for  non-compliance,  there are
incentives to producers, blenders and consumers who use alternative fuels.

         The U.S.  consumes over 170 billion gallons of petroleum fuel annually.
Of this amount,  petroleum diesel accounts for about 40%, or 65 billion gallons.
The  Energy  Policy Act of 2005  mandates  that each of these  potential  diesel
customers must use a B20 blend (BXX - where the XX represents the % of biodiesel
in the blended product formulation; the difference being the amount of petroleum
diesel  found in the  blend).  The most  common  biodiesel  blend  used today is
referred to as B20,  indicating a  formulation  of 20 percent  biodiesel  and 80
percent petroleum diesel. The B20 blend is the minimum blend percentage required
to comply with all legislative mandates currently in effect.

         The  Company  believes  its MST can be  added  to  existing  bio-diesel
production processes which can enable plants to increase its throughput rates by
turning a batch or  semi-batch  process  into a  continuous  process.  While the
Company  intends to develop  and/or  refine  marketing  plans to  penetrate  the
biodiesel  field,  MST use in the production of biodiesel is in its early stages
of development and there is no guarantee that it will be successful.

Research and Development

         In fiscal year 2005 we incurred  $30,633 in  research  and  development
costs  compared  to minimal  costs in 2004.  IPRC  restarted  its  research  and
development  efforts as of January 2005 to identify other  applications  for the
use of MST, which includes the use of MST in both the marine industry and in the
production of biodiesel fuel. In addition,  we continue to broaden our petroleum
industry focus to both the private and governmental sectors of others industries
that we have identified.

                                       3
<PAGE>


Customers


         We  intend  to  market  our   technology  by  entering  into  strategic
partnerships with third parties who can market and sale our products world wide.
In August 2005,  Stone & Webster  Management  Consultants,  Inc., a wholly-owned
subsidiary  of The Shaw  Group,  agreed to market and sell our MST  systems  and
technology  in the  fields  of crude oil  production,  refining  and  transport,
biodiesel  and  alternative   fuels   production,   bilge  water  treatment  and
environmental  clean  up  projects.  In  exchange  we  granted  Stone &  Webster
Management  Consultants  the right to fabricate and integrate all MST systems to
be delivered to customers in and outside the United States.


         Currently, we have only leased one MST and sold one MST. However, there
are more than 700 oil  refineries  worldwide  with 149 of these  located  in the
United  States.  Each is a potential  customer  of the  Company.  The  Company's
marketing strategy is to:

         o    Focus on commercialization of microwave technology

         o    Concentrate initially on the 45 refineries in Texas and Louisiana

         o    Execute existing pipeline of contacts and leads.

         Additionally,  we have  licensed the use of our MST  technology  in the
production of bio-fuels to Agribiofuel, a company which we own an interest.

Competition

         Oil and Gas Industry

         The  Company's  competitors  are  firms  that  employ  heat,  pressure,
chemical and centrifuge processes to dispose of solid and oily non-hazardous oil
field  wastes.  We believe  that our products  will compete with these  products
principally  on the basis of improved  and extended  efficacy  and  reduction in
environmental  risks. The efficacy of applying microwaves to sludge problems has
been well  documented  in a series of reports  prepared for the  Electric  Power
Research  Institute/Center  for  Materials  Production  between 1992 and 1994 by
Carnegie  Mellon  Research  Institute,   (Reports  CR-103872,   CR-105736,   and
CR-109994, all focusing on Application of Microwave to Oil Water Sludge).

         We believe that our most  significant  competitors are fully integrated
oil and gas  processing  companies.  Smaller  companies may also be  significant
competitors,  particularly through  collaborative  arrangements with oil and gas
industry companies. The Company's competitors are national,  regional and local,
including  recognizable  companies such as BJ Services,  Baker Hughes and Nalco.
The  Company  anticipates  that it will  face  additional  competition  from new
entrants  that  provide  significant  performance,   price,  creative  or  other
advantages  over those offered by the Company.  Many of these  competitors  have
greater name recognition and resources than the Company.

         Marine Industry

         Currently,   the  marine  industry  uses  systems  that  are  on  board
consisting of water/oil  separators;  centrifuge systems;  chemical systems that
add specific  chemical  compounds to help separate the oil from the bilge water.
Almost without  exception  these on-board  systems do not collect all the oil in
the bilge which  results in the ships having to pump out the bilge when they get
to port and have the bilge  transported to a facility that  specializes in these
processes using heat,  chemicals and  centrifuges.  We believe that our products
will  compete  with these  products  principally  on the basis of  improved  and
extended efficacy and reduction in environmental risks.

                                       4
<PAGE>


         The  Company  believes  that  some  of  its  current  competitors  have
significantly  greater  resources,   experience  and  research  and  development
capabilities.

         Production of Bio-diesel

         Competition   related  to  the   development  of   alternative   fuels,
specifically hydrogen and biodiesel, is difficult to determine due to the nature
of the areas of hydrogen and biodiesel  fuel  generation.  According to National
Biodiesel  Board,  as of January  13,  2006 there were 53  biodiesel  production
plants with stated  capacity  of 354  million  gallons per year in the U.S.,  of
which 11 are in Texas.  The Company believes the requirements of the 2005 Energy
Policy Act will  cause a spike in demand  that will far  outpace  supply for the
next ten years and beyond.  Already,  biodiesel is the fastest growing renewable
fuel in the U.S. The  National  Biodeisel  Board's  estimates of US sales volume
growth  have  exceeded  100% over the last five  years  and we  believe  it will
accelerate  while  the full  implications  of the  2005  Energy  Policy  Act are
understood

         The  Company  believes  that  some  of  its  current  competitors  have
significantly  greater  resources,   experience  and  research  and  development
capabilities.

Protection of Intellectual Property

         The technology used in the MST process is proprietary.  The Company has
been issued  three  United  States  patents to protect its design,  has 2 patent
applications  pending  for  the  use of MST in the  marine  industry  and in the
production of biodiesel and may seek additional patents in the future. There can
be no assurance that any future patent applications will result in patents being
issued.  Likewise,  there can be no assurance  that the  Company's  patents will
afford  protection  against  competitors with similar  technology.  In addition,
there can be no guarantee that the patents will not be infringed upon,  designed
around  by  others,  or  challenged  and held to be  invalid  or  unenforceable.
Proprietary  rights relating to the Company's  products and processes  generally
will be protected from unauthorized use by third parties only to the extent that
they  are  covered  by  valid  and  enforceable  patents  or are  maintained  in
confidence as trade secrets.  In the absence of patent  protection,  competitors
who  independently  develop  substantially  equivalent  technology may adversely
affect the Company's business.

         Third-party  patents relating to technology utilized by the Company may
now  exist or may be issued  in the  future.  The  Company  may need to  acquire
licenses or to contest the validity of any such patents.  Significant  funds may
be required to defend  against  third party claims of patent  infringement.  Any
such claim  could  adversely  affect the  Company  until the claim is  resolved.
Furthermore,  any  such  dispute  could  result  in a  rejection  of any  patent
applications or the  invalidation of any patents the Company owns.  There can be
no assurance that any license  required under any such patent would be available
to the Company or, if  available,  available on acceptable  terms.  In addition,
there is no guarantee that the Company would prevail in any litigation involving
such patent.  Any of the foregoing  could have a material  adverse effect on the
Company and its results of operations.

         The Company seeks to protect the technology  used in the MST process in
part by confidentiality  agreements with its advisors,  employees,  consultants,
suppliers  and vendors.  The Company also  protects its  technology  by building
interlocking  security  measures into its  products.  There can be no assurance,
however,  that these  agreements  and security  measures will not be breached or
that  competitors  will not discover the Company's  trade secrets.  In addition,
there can be no assurance that persons or institutions providing research to the
Company  will not assert  rights to  intellectual  property  arising out of such
research.

                                       5
<PAGE>


Suppliers

         The Company primarily uses standard parts and components from a variety
of suppliers to produce the hardware for its products.  Certain  components  are
currently  available only from a few limited  sources.  To date, the Company has
not had difficulty  obtaining  parts and components in sufficient  quantity in a
timely manner. Several Houston-based  fabrication companies have been identified
to  manufacture  MST  systems as  required.  These  firms  meet the  fabrication
standards required by petroleum companies worldwide. The Company does not expect
to have  difficulty  fabricating,  testing and  delivering  machines if and when
sales of MST systems accelerate.

Government Regulation

         The Company's products are subject to various federal, local, state and
international   laws  and  regulations  as  well  as  regulations   relating  to
occupational  health and safety and the environment  including  regulations from
the  U.S.  Environmental   Protection  Agency.  Failure  to  comply  with  these
occupational  health  and  safety  and  environmental  laws and  regulations  or
associated  permits may result in the  assessment of fines and penalties and the
imposition of investigatory and remedial obligations.  The Company believes that
its products meet or exceed all applicable safety and environmental regulations.
All units will be  manufactured  to meet United  States,  Canadian  and European
standards for construction and safety.

Employees

       As March 6, 2006, the Company had five full-time employees, one part-time
employee and two part-time consultants.


ITEM 2   DESCRIPTION OF PROPERTY

       The  Company  leases  a 10,000  square  foot  facility  that  houses  the
Company's  corporate  offices,  test  facility  and  manufacturing  divisions in
Houston,  Texas under a lease that expires in March of 2006.  The lease  payment
for this space was $5,950 per month.

       In December 2005 the Company executed an assignable  contract to purchase
land and  improvements.  The monthly  option  payments of $4,000 for four months
will be applied toward the total purchase price of $855,000. A feasibility study
is being conducted regarding the operation of a high-efficiency,  cost effective
36 million  gallon/year  biodiesel  production  facility on this  property.  The
property consists of eighteen acres in Dayton, Texas.



ITEM 3   LEGAL PROCEEDINGS


       The  Company  is not a party to any  pending  legal  proceeding  and,  to
management's  knowledge;  no  federal,  state or local  governmental  agency  is
presently contemplating any proceeding against the Company.


ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


       No matters were  submitted to a vote of the  Company's  security  holders
during the fiscal year ended October 31, 2005.

                                       6
<PAGE>


                                     PART II


ITEM 5   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The  Company's  common stock  is traded on the OTC Bulletin  Board Pink
Sheet market under the symbol  "IREC." The following  table sets forth the range
of high and low bid  quotations  for the Company's  Common Stock for each of the
quarters within the last three fiscal years:

         Fiscal Year 2005                   Low               High
         ----------------                   ---               ----

         First Quarter (11/1/04-1/31/05)    $ 0.06            $ 0.12
         Second Quarter (2/1/05-4/30/05)    $ 0.09            $ 0.20
         Third Quarter (5/1/05-7/31/05)     $ 0.15            $ 0.35
         Fourth Quarter (8/1/05-10/31/05)   $ 0.25            $ 0.87

         Fiscal Year 2004                   Low               High
         ----------------                   ---               ----

         First Quarter (11/1/03-1/31/04)    $ 0.06            $ 0.12
         Second Quarter (2/1/04-4/30/04)    $ 0.04            $ 0.13
         Third Quarter (5/1/04-7/31/04)     $ 0.10            $ 0.15
         Fourth Quarter (8/1/04-10/31/04)   $ 0.09            $ 0.12

         Fiscal Year 2003                   Low               High
         ----------------                   ---               ----

         First Quarter (11/1/02-1/31/03)    $ 0.13            $ 0.35
         Second Quarter (2/1/03-4/30/03)    $ 0.18            $ 0.20
         Third Quarter (5/1/03-7/31/03)     $ 0.05            $ 0.20
         Fourth Quarter (8/1/03-10/31/03)   $ 0.05            $ 0.11


         The quotations in the table above reflect inter-dealer prices,  without
retail  mark-up,  mark-down  or  commissions,   and  may  not  represent  actual
transactions.  The market for  Company  common  stock is limited,  sporadic  and
highly volatile.

Holders

         As  of  March  6,  2006,  there  were   approximately   700  registered
shareholders of the Company's common stock.

Dividends

         The Company has not paid cash dividends to date, and does not expect to
pay any cash dividends in the foreseeable  future. The Company intends to retain
any earnings to finance its future growth.

Equity Compensation Plan Information


         The following  tables set forth the Company's  common stock issuable to
employees  pursuant  to the above  plans for the fiscal  year ended  October 31,
2005.

                                       7
<PAGE>


<TABLE>
<CAPTION>
<S>                                    <C>                            <C>                     <C>
                                                                                      Number of Securities
                                                                                    Remaining Available for
                             Number of Securities                                    Future Issuance Under
                               To be Issued Upon            Weighted Average          Equity Compensation
                            Exercise of Outstanding        Exercise Price of            Plans (Excluding
                             Options, Warrants and        Outstanding Options,             Securities
   Plan Category                    Rights                Warrants and Rights        Reflected in Column A)

                                      (A)                         (B)                         (C)
                                      ---                         ---                         ---
Equity Compensation
Plans Approved by
Security Holders                               -                           -                          -

Equity Compensation                    5,265,000                      $0.047                  3,714,120
Plans Not Approved by
Security Holders
                          -----------------------------------------------------------------------------
    Total                              5,265,000                      $0.047                  3,714,120
                          =============================================================================
</TABLE>


         In April 2004,  the board of directors  authorized  a Restricted  Stock
Program to provide up to 7,754,120  shares of the Company's  common stock to the
Company's employees,  officers and directors.  Awards under the Restricted Stock
Program  are granted as  determined  by the  Company's  board of  directors.  In
October 2005, the Company awarded and issued  2,040,000  shares of the Company's
common stock to certain  employees,  officers and  directors.  In addition,  the
Company issued 2,000,000 shares previously  awarded during fiscal year 2004 that
vested in May 2005.

         In March 2005, we issued options to purchase 1,225,000 shares of common
stock to employees  whose previous  options under the Company's 2002 Option Plan
had become null and void because the  shareholders of the Company never approved
the 2002 Option Plan.

                                       8
<PAGE>


Recent Sales of Unregistered Securities


         In October 2005,  we issued  2,040,000  shares of  restricted  stock to
participating  directors,   officers  and  employees.  In  addition,  we  issued
2,000,000  shares of  restricted  stock that were  granted in fiscal  2004,  but
vested in 2005..

         During  fiscal  year  2005 and 2004 the  Company  issued  to  investors
secured  convertible note  subscription  agreements that generated cash flows of
$950,000  and  $1,125,000,  respectively.  Beginning  in May 2005 and  ending in
August 2005 the Company issued  $2,175,000 of 12% convertible  notes in exchange
for all subscription agreements, $2,075,000 were issued for cash and $100,000 in
settlement of a trade  payable.  The notes bear interest at a rate of 12 percent
per annum,  are convertible  into the Company's  common stock at $0.15 per share
and mature on various  dates in fiscal 2007. In  connection  with the notes,  we
issued warrants to purchase  7,250,000 shares of the Company's common stock at a
exercise price of $0.15 per share that expire in fiscal 2007.

         In April  2005,  the  Company  issued  682,301  shares of stock in full
settlement of a Guaranteed Investment Contract with a balance of $467,329.

         During March 2005,  the Company agreed to pay $19,987 and issue 461,936
shares of stock in full  settlement  of $194,028 of  deferred  salaries  owed to
current and former employees.

         Also in March 2005,  the Company  issued new options to  employees  who
were not executive  officers  totaling  1,225,000  shares with an exercise price
$0.20.  The Company issued these new options  because the employees held options
under the 2002  Option  Plan which  became  null and void as of November 1, 2003
because the Company failed to receive stockholder approval for the plan.

         In January of 2005,  the Company  issued  2,953,205  shares of stock in
full  settlement  of  $375,000  in  outstanding  debt and  $339,429  in  accrued
interest.

         Effective  January 1, 2005, we issued  11,101,900  shares of stock upon
the  conversion of notes with an aggregate  outstanding  balance of  $1,724,417.
These notes,  as amended,  were issued  during fiscal years 2002 and 2003, to an
investor,  bore  interest  at a rate of 12  percent  per  annum and  matured  on
December 31, 2004.

         In October  2004,  the  Company  issued a 3 year 7.5% note  payable for
$96,315 and issued  330,879  shares of stock in settlement of $193,095  accounts
payable balance with a vendor.

         Also in October  2004 the  Company  issued  1,397,389  shares of common
stock and paid $50,000 in  settlement  of a note  payable to a related  party in
which the Company retired $239,500 of debt and accrued interest of $254,574.

         In September,  2004,  the Company  issued  250,000  shares of stock and
agreed to pay  $15,000  in cash over six  months in  settlement  of an  accounts
payable balance of $91,236.

         Each  issuance  was exempt from  registration  pursuant to Section 4(2)
under the Securities Act of 1933, as amended,  as a transaction by an issuer not
involving any public offering.

                                       9
<PAGE>



ITEM 6   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

         The following  discussions  of our results of operations  and financial
position should be read in conjunction  with the financial  statements and notes
pertaining to them that appear elsewhere in this Form 10-KSB.

Critical Accounting Policies

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

Overview

         The  Company  currently  offers  MST to the oil field  industry  and is
developing  the  use of MST in the  marine  industry  and in the  production  of
bio-diesel.  MST technology uses commercial radio  frequencies to separate water
and oil emulsions.

         In  January  2004,  the  Company's  internal  management  team  changed
significantly.  Henry  Kartchner  resigned  as  Chairman  and CEO  and C.  Brent
Kartchner resigned as President.  The Board of Directors appointed Alan Springer
as Chairman and CEO and Edward Gaiennie as the Chief Financial Officer.  The new
management  of the  Company  created  and began  implementing  a business  model
consisting of five (5) critical areas:

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

         Raising  Additional  Capital.  Finding and securing working capital was
the first step in the business model.  The Company was able to raise  $2,075,000
in cash during the fiscal years ended  October 31, 2005 and 2004.  These dollars
were utilized to keep the company operational.

         Settle  Prior  Obligations.  During  fiscal  year 2005 the  Company has
settled, among other obligations, (1) a Guaranteed Investment Contract liability
and associated  accrued interest in exchange for 682,301 shares of the Company's
common  stock,  (2)  $194,028  of deferred  salaries  owed to current and former
employees in exchange  for $19,987 and 461,936  shares of the  Company's  common
stock,  (3) $375,000 in  outstanding  debt and  $339,429 in accrued  interest in
exchange for 2,953,205  shares of stock,  and (4) $1,725,417 in outstanding debt
and $561,048 in accrued interest in exchange for 11,109,900 shares of stock.

         During  fiscal  2004,  the  Company was able to settle  $498,494 of the
outstanding notes payable for $250,000 and 1,397,389 shares of restricted common
stock of the  Company.  The Company was able to settle  $284,331 of  outstanding
accounts  payable for $15,000 in cash,  a 3 year 7.5% notes  payable for $96,315
and 330,879 shares of the Company's  common stock.  Lastly,  in fiscal 2004, the
Company  was  able to pay off a  $22,475  note  payable  to a  related  party by
assigning the note holder $18,000 of our notes receivable.

                                       10
<PAGE>


         Bring SEC Filings  Up-To-Date.  In December 2005, the Company filed its
annual Form 10-KSB for the years ended  October  31,  2002,  2003 and 2004.  The
Company had  previously  filed its annual Form 10-KSB for the year ended October
31, 2001. The Company continues its efforts to bring all SEC filings up-to-date.

         Establish  Strategic   Relationships.   In  2005,  we  entered  into  a
management agreement with Agribiofuels, a company we acquired an equity interest
in. we have agreed to provide certain general business,  financial  consultation
and advice and  management  services  to  Agribiofuels  in  connection  with the
operation of its business  and to provide  technology  and training in operating
MST in the manufacture of biodiesel  products.  Agribiofuels  plans to build and
operate a  high-efficiency,  cost  effective  36 million  gallon/year  biodiesel
production facility.

         During fiscal year 2004,  we began looking for a strategic  partner who
could be the  Company's  global  provider  of turnkey,  value-added  engineering
design,  procurement,   construction,   maintenance,   and  operations  services
supporting the petrochemical,  refining and gas processing industries. In fiscal
2005,  the  Company  entered  into  a  Strategic  Marketing,  Manufacturing  and
Technology  Licensing  Agreement with a subsidiary of a Fortune 500 organization
with over 18,000 employees  strategically located around the world, to fabricate
and  integrate  all MST systems to be  delivered to customers in and outside the
United States in exchange for marketing and sales contributions in the fields of
crude oil production,  refining and transport,  biodiesel and alternative  fuels
production,  bilge water  treatment and  environmental  clean up projects.  This
relationship   is  continuing  to  expand  and  the  Company  hopes  to  receive
significant support from the involvement of our strategic partner members on its
business development team.

         Develop New MST Applications.  We have identified  additional technical
opportunities for its MST in applications involving biodiesel,  bilge water, and
environmental  hydrocarbon clean-up.  Currently a test continues to be conducted
to  validate  the  impact  of the MST on  increasing  the  biodiesel  production
process, thus adding production capacity to existing operations.  In addition to
biodiesel,   the  Company  has  continued  to  evaluate  the  opportunities  for
introducing the MST into the marine industry's bilge water treatment process.

Recent Developments
         In  December  2005 the  Company  executed  an  assignable  contract  to
purchase  land and  improvements.  The monthly  option  payments will be applied
toward the purchase price, if applicable. A feasibility study is being conducted
regarding  the  operation  of  a  high-efficiency,  cost  effective  36  million
gallon/year biodiesel production facility on this property.

         Agribiofuels  has sold sixty two $50,000  Class A membership  interests
for $3,100,000 between October 31, 2005 and January 31, 2006.


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

         Effective as of January 1, 2006,  we entered into a second  forbearance
agreement  in  connection  with a marketing  agreement,  dated  October 6, 1999,
between the Company and Mobil Technology  Company ("MTC"),  pursuant to which we
owe the  successor  in  interest  to MTC a  principal  amount of  $1,000,000.  .
Pursuant to the 1999 agreement, MTC provided IPRC a $1,000,000 security deposit,
which IPRC was to repay on August 10,  2003.  Pursuant to the first  forbearance
agreement,  dated June 8, 2004,  if the Company  entered into a contract for the
sale,  or license of one or more MST units by October 31, 2004,  the Company was
obligated to payoff the security deposit in six (6) quarterly  installments.  If

                                       11
<PAGE>


IPRC failed to enter into a contract for the sale, or license of one or more MST
units by October 31, 2005 or failed to payoff the  security  deposit by December
31, 2005, then IPRC would accrue  interest on the unpaid  security  deposit plus
any accrued  interest,  at a rate equal to the prime rate of Citibank (New York)
at the  close  of  business  on the  last  business  day  of the  calendar  year
immediately preceding each respective year plus 4%. Under the second forbearance
agreement, we agreed to pay the successor in interest of MTC a total of $500,000
by December  31,  2006,  of which  $200,000  shall be paid on or before March 1,
2006,  $75,000 on or before March 31, 2006,  $75,000 on or before June 30, 2006,
$75,000 on or before  September  30, 2006 and $75,000 on or before  December 31,
2006.  As  long as this  second  forbearance  agreement  is not in  default  the
successor  shall waive the  remaining  principal  balance as well as any accrued
interest that may have been owed under the agreement.


Results of Operations

Comparison of fiscal years ended October 31, 2005 and 2004
----------------------------------------------------------

         Revenue.  Revenue  decreased  83%, or  $25,200,  to $5,000 for the year
ended October 31, 2005, compared to $30,200 for the year ended October 31, 2004.
Our revenue  during fiscal year 2005 was generated from  laboratory  testing and
consulting services, while fiscal year 2004 revenue was primarily generated from
a license  agreement that expired in 2004.  The Company  received no revenues in
fiscal year 2005 or 2004 for the sale or use of an MST system.

         Selling,    General   and   Administrative.    Selling,   general   and
administrative  expenses increased 85%, or $491,210,  to $1,064,659 for the year
ended  October 31,  2005,  compared to $573,498  for the year ended  October 31,
2004.  This  increase was  comprised of (1)  approximate  increases of $290,000,
$18,000 and  $14,000 in employee  related  expenses,  sales and other  expenses,
respectively,  resulting from the Company's increased business activity,  (2) an
approximate  $64,000  increase in  professional  fees primarily  incurred in the
process  of making  the  Company  compliant  with the  Securities  and  Exchange
Commission,  (3) an approximate  $15,000 increase  representing stock awarded to
the Board of  Directors in exchange for their  service,  and (4) an  approximate
$13,000 decrease in reimbursement receipts of the Company resulting from offsets
to and the  ending  of an office  sharing-agreement  with a  related  party.  In
addition,  the Company also settled a management  agreement with a related party
that  resulted  in a charge of $26,587.  Employee  related  expenses  consist of
salaries and wages, payroll taxes,  employee insurance,  sign-on and performance
bonuses.

         Research and Development.  Research and development  expenses increased
to  $30,633  for the year  ended  October  31,  2005 from $0 for the year  ended
October  31,  2004.   During  fiscal  2005,  IPRC  restarted  its  research  and
development efforts to identify other applications for MST.

         Interest  Expense.  Interest  expense  decreased  20%, or $169,924,  to
$684,153 for the year ended October 31, 2005,  compared to $854,077 for the year
ended  October 31, 2004.  This  decrease  was the result of the Company  issuing
14,737,406  shares of its common stock to settle past due notes and  contractual
liabilities  beginning in August,  2004 and  continuing  throughout  fiscal year
2005;  net of a $449,079  increase  related  to  Company's  issuance  of the 12%
convertible notes and related discount amortization.

         Gain on Settlement of Debt. Gain  on settlement of debt increased 241%,
or $1,631,079,  to $2,309,128  for the year ended October 31, 2005,  compared to
$678,049 for the year ended October 31, 2004.  During  fiscal 2005,  the Company
issued  14,517,041 shares of the Company's common stock and paid $31,687 in full
settlement of $2,353,092 in outstanding  debt and $900,477 of accrued  interest.
In addition, the guaranteed investment contract, with a balance of $467,329, was
terminated  and settled in exchange for the Company  issuing  682,301  shares of
common stock.

         Loss of  Non-Controlling  Interests  in  Consolidated  Subsidiary.  The
entire  amount,  $179,223  shown in the year ended October 31, 2005,  represents
Agribiofuel's loss attributed to other members and not the Company.  This amount
has been added to the Consolidated Statements of Operations and thereby excluded
from Net Income for the year ended October 31, 2005.

                                       12
<PAGE>


         The Company obtained 20% of the member interests of Agribiofuels during
the year  ended  October  31,  2005.  In the  Company's  judgment  it can  exert
significant  influence over the policies and decisions of Agribiofuels  although
the Company does not have a majority ownership. In accordance with the Financial
Accounting  Standards  Board  ("FASB")  directive;  FIN 46(R) the  accounts  and
operations  of  Agribiofuels  are  included  in  these  consolidated   financial
statements based upon our analysis of FIN 46(R).

Going Concern

         For the year ended October 31, 2005, the Company's independent auditors
stated that the Company's financial condition raises substantial doubt about its
ability to  continue as a going  concern.  The  Company  has  generated  limited
revenue  through  October 31, 2005,  and has sustained  substantial  losses from
operations since inception.  In addition,  as of October 31, 2005, the Company's
current liabilities  exceeded its current assets by $594,380;  it had $1,075,422
of  debt  obligations  that  were  past  due,  and  an  accumulated  deficit  of
$17,936,112.  During  fiscal year 2005,  the Company used  $1,314,551 of cash in
operating  activities,  which was funded primarily through the issuance of debt,
rather than provided by its operations. These conditions raise substantial doubt
as to the ability of the Company to continue as a going concern. Management will
be required to, and expects to, raise  additional  capital through the offerings
of equity  securities  to fund the  Company's  operations,  and will  attempt to
continue  raising  capital  resources  until such time as the Company  generates
revenues sufficient to maintain itself as a viable entity.  However, there is no
assurance that such financing will be obtained.

Liquidity and Capital Resources

         The Company currently uses cash generated  primarily from its financing
activities  and  expects  to  continue  to do so  until  it is able to  generate
sufficient  capital  from its  operating  activities.  The  Company  expects  to
continue to experience substantial working capital requirements.

         As of October 31,  2005,  the Company  had cash of  $1,506,515.  During
fiscal year 2005 the Company executed a management  agreement with Agribiofuels,
LLC and as a  result  we  believe  we  have  sufficient  cash  to  fund  current
operations  through August 2006. The Company's current burn rate is $100,000 per
month.  As the  operations of the Company  continue to ramp up, our burn rate is
expected to increase to $120,000 per month.  There can be no assurance  that the
Company's   operations  will  be  able  to  generate   sufficient  capital  from
operations.  Further, there can be no assurance that the Company will be able to
raise sufficient funds from financings to fund its working capital requirements,
or if financings  occur,  that they would be completed on terms favorable to the
Company.  Failure to raise  necessary  working  capital will cause us to curtail
operations.

         Operating Activities. Cash used in operating activities during the year
ended October 31, 2005, amounted to $1,314,551, an increase of 194%, or $867,403
over the $447,148 of cash used in operating  activities  during fiscal 2004. The
increase primarily consists of a $530,345 increase in loss from operations and a
$435,074 increase in inventory.  Inventory primarily  represents an MST 150 unit
under construction. The MST 150 is self-contained and mobile and can be moved to
a client's site to  demonstrate  the  effectiveness  of the large scale MST 1000
series in resolving  various emulsion or process  applications as well as rented
or sold.

         Investing Activities. Cash used in investing activities during the year
ended October 31, 2005 and 2004, amounted to $4,983.

         Financing  Activities.  The  Company has  financed  its  operating  and
financing  activities  primarily  through  debt and from the proceeds of private
placements of common stock.  During the year ended October 31, 2005, the Company
received proceeds of $950,000,  a decrease of 16%, or $175,000,  compared to the
$1,125,000 received from proceeds of debt in the year ended October 31, 2004.

                                       13
<PAGE>


         During  fiscal  2005  Agribiofuels,  LLC  ("Agribiofuels")  sold thirty
$50,000 Class A membership  interests for $1,500,000.  Agribiofuels is an entity
for which the Company is the manager and in the Company's  judgment it can exert
significant  influence over its policies and decisions although the Company does
not have a controlling interest.

         Subsequent to October 31, 2005  Agribiofuels has sold sixty two $50,000
Class A membership interests for $3,100,000.

                                       14
<PAGE>


ITEM 7   FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm ......................17

Consolidated Financial Statements
---------------------------------

Balance Sheets as of October 31, 2005 and 2004 ...............................18

Statements of Operations for the Years Ended
October 31, 2005 and 2004 ....................................................19

Statements of Stockholders' Deficit for the Years
Ended October 31, 2005 and 2004 ..............................................20

Statements of Cash Flows for the Years
Ended October 31, 2005 and 2004 ..............................................21

Notes to Financial Statements ...........................................23 - 36

                                       15
<PAGE>


                              REPORT OF INDEPENDENT
                        REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors and Stockholders
Imperial Petroleum Recovery Corporation
Houston, Texas

We have  audited  the  accompanying  consolidated  balance  sheets  of  Imperial
Petroleum Recovery  Corporation (the "Company" or "IPRC") as of October 31, 2005
and 2004, and the related consolidated  statements of operations,  stockholders'
deficit,  and cash flows for each of the two years then ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of the Company as of October 31,
2005 and 2004,  and the results of its operations and its cash flows for each of
the two years then ended in  conformity  with  accounting  principles  generally
accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note B to the
financial  statements,  the Company has incurred  significant  losses and has an
accumulated deficit at October 31, 2005 totaling $17,936,113.  In addition,  the
Company had $1,075,442 of debt  obligations  that were past due (Note G), all of
which raise substantial doubt about the Company's ability to continue as a going
concern.  Management's  plans in regards to these matters are also  described in
(Note B). The financial  statements do not include any  adjustments  relating to
the  recoverability  and  classification  of recorded  asset  amounts nor to the
amounts and  classification  of liabilities  that might be necessary  should the
Company be unable to continue as a going concern.



Malone & Bailey, PC
www.malone-bailey.com
Houston, Texas

January 24, 2006

                                       16
<PAGE>


<TABLE>
<CAPTION>
<S>                                                            <C>              <C>
            Imperial Petroleum Recovery Corporation and Subsidiaries
                           CONSOLIDATED BALANCE SHEETS
                                As of October 31

ASSETS                                                             2005             2004
                                                               -------------    -------------
CURRENT ASSETS
  Cash and cash equivalents                                    $  1,506,515     $    412,156
  Trade accounts receivable, net                                      2,000              200
  Inventory (Note C)                                                480,390                -
  Other receivable - employee advances                                1,344            2,500
  Prepaid expenses                                                        -            4,000
                                                               -------------    -------------
        Total current assets                                      1,990,249          418,856
PROPERTY AND EQUIPMENT, net (Note D)                                135,278          251,223
OTHER ASSETS, net of accumulated amortization of $25,613 and
 $20,831, for the years ended 2005 and 2004,respectively             46,316           47,991
                                                               -------------    -------------
  Total assets                                                 $  2,171,843     $    718,070
                                                               =============    =============

   LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
  Trade accounts payable                                       $    568,364     $    756,558
  Other payables - related parties (Note M)                          30,661          123,115
  Accrued liabilities                                               877,716        1,801,853
  Notes payable - related parties (Note E)                                -          375,000
  Bridge note payable (Note F)                                            -        1,725,417
  Current maturities of long-term obligations (Note G)            1,107,889        1,109,743
  Other                                                                   -            1,807
                                                               -------------    -------------
        Total current liabilities                                 2,584,630        5,893,493

  Long-term obligations net of discount, less current
   maturities (Note G)                                            1,057,796        1,186,403
  Guaranteed Investment Contract Liability, (Note J)                      -          394,132
  Securities of Consolidated Subsidiary, (Note K)                 1,320,777                -
                                                               -------------    -------------
        Total liabilities                                         4,963,203        7,474,028
Commitments and contingencies (Note H)
STOCKHOLDERS' DEFICIT (Notes I and L)
  Common stock, par value $0.001; authorized 100,000,000
   shares; issued and outstanding 40,085,029 and 20,845,687
   shares respectively                                               40,085           20,846
  Additional paid-in capital                                     15,104,668       11,762,008
  Accumulated deficit                                           (17,936,113)     (18,538,812)
                                                               -------------    -------------
        Total stockholders' deficit                              (2,791,360)      (6,755,958)
                                                               -------------    -------------
                                                               $  2,171,843     $    718,070
                                                               =============    =============
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       17
<PAGE>


            Imperial Petroleum Recovery Corporation and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                        Year ended October 31,

                                                           2005         2004
                                                       -----------  -----------

Revenues                                               $     5,000  $    30,200
Cost of goods sold                                               -          660
                                                       -----------  -----------
         Gross profit (loss)                                 5,000       29,540
Operating expenses
     Selling, general and administrative expenses        1,064,659      573,498
     Research and development                               30,633            -
     Depreciation and amortization expense                 124,834      140,822
                                                       -----------  -----------
     Total operating expenses                            1,220,126      714,320
                                                       -----------  -----------
         Loss from operations                           (1,215,126)    (684,780)
Other income (expense)
     Interest income                                         2,161           10
     Gain on extinguishment of debt                      2,309,128      678,049
     Gain on disposition of assets                          11,466        3,567
     Loss of Non-Controlling Interests in Consolidated
      Subsidiary                                           179,223            -
     Interest expense                                     (684,153)    (854,077)
                                                       -----------  -----------
          Total Other income (expense)                   1,817,825     (172,451)
Income taxes (Note O)                                            -            -
                                                       -----------  -----------
         Net Income (loss)                             $   602,699  $  (857,231)
                                                       ===========  ===========

Net income (loss) per common share - basic (Note N)    $      0.02  $     (0.04)
Net loss per common share - diluted (Note N)                 (0.00)       (0.04)
                                                       ===========  ===========


Weighted average common shares outstanding - basic      35,574,303   19,067,859
                                                       ===========  ===========
Weighted average common shares outstanding - diluted    42,601,508   19,067,859
                                                       ===========  ===========


        The accompanying notes are an integral part of these statements.

                                       18
<PAGE>


<TABLE>
<CAPTION>
<S>                    <C> <C>                  <C>           <C>            <C>              <C>                <C>
            Imperial Petroleum Recovery Corporation and Subsidiaries

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

                      Years ended October 31, 2005 and 2004

                                                                                Additional                            Total
                                                      Common stock               paid-in                           Stockholders
                                                Shares           Amount          capital         Deficit             Deficit
                                                ------           ------          -------         -------             -------

Balances as of October 31, 2003                 18,867,419    $   18,868     $  11,548,877    $ (17,681,581)     $  (6,113,836)

Issuance of common stock in satisfaction
of debt (Note I)                                   250,000           250            24,750                 -             25,000
Issuance of common stock in satisfaction
of debt (Note I)                                 1,397,389         1,397           152,315                 -            153,712
Issuance of common stock in satisfaction
of debt (Note I)                                   330,879           331            36,066                 -             36,397
Net loss                                                 -             -                 -         (857,231)          (857,231)
                                              -------------   -----------    --------------   ---------------    ---------------
Balances as of October 31, 2004                 20,845,687    $   20,846     $  11,762,008    $ (18,538,812)     $  (6,755,958)
Issuance of common stock in satisfaction
of debt (Note I)                                11,101,900        11,102         1,099,088                 -          1,110,190
Issuance of common stock in satisfaction
of debt (Note I)                                 2,953,205         2,953           292,367                 -            295,320
Issuance of common stock in satisfaction
of Guaranteed Investment Contract Liability
(Note I and J)                                     682,301           682            88,017                 -             88,699
Discount upon issuance of convertible debt
and warrants (Note G and L)                              -             -         1,407,496                 -          1,407,496
Issuance of common stock in satisfaction
of deferred salaries (Note I and M)                461,936           462            45,732                 -             46,194
Issuance of common stock in accordance with
the Restricted Stock Program (Note I and L)      4,040,000         4,040           409,960                 -            414,000
Net Income                                                                                           602,699            602,699
                                              -------------   -----------    --------------   ---------------    ---------------
Balances as of October 31, 2005                 40,085,029    $   40,085     $  15,104,668    $ (17,936,113)     $  (2,791,360)
                                              =============   ===========    ==============   ===============    ===============
</TABLE>


        The accompanying notes are an integral part of these statements.

                                       19
<PAGE>


<TABLE>
<CAPTION>
<S>                                                                   <C>              <C>
            Imperial Petroleum Recovery Corporation and Subsidiaries
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                          Years ended October 31,
                                                                      -------------------------------
                                                                           2005             2004
                                                                      --------------   --------------
Increase (decrease) in cash and cash equivalents

    Cash flows from operating activities:
    Net income (loss)                                                 $     602,699    $   (857,231)

    Adjustments  to  reconcile  net income  (loss)
    to net cash used in operating activities:
      Depreciation and amortization                                         124,834          140,822
      Loss of Non-Controlling Interests in Consolidated Subsidiary        (179,223)                -
      Share-based compensation                                              214,000          200,000
      Discount amortization on 12% secured convertible notes                261,337                -
      Interest accretion on Guaranteed Investment Contract                   73,197          145,778
      Gain on settlement of debt for stock                              (2,148,808)        (675,229)
      Gain on write-off of accounts payable                               (160,320)          (2,821)
      (Gain)/loss on disposal of property and equipment                    (11,466)                -
    Changes in assets and liabilities:
      Trade accounts receivable                                             (1,800)            (200)
      Other receivables, related party                                        1,156
      Inventory                                                           (480,390)                -
      Prepaid & other expenses                                                4,000         (28,500)
      Other assets                                                          (3,107)
      Trade accounts payables                                                19,066         (53,954)
      Other payables, related party                                          19,895            8,913
      Accrued liabilities                                                   350,380          705,274
      Deferred revenue                                                            -         (30,000)
                                                                      --------------   --------------
         Total adjustments                                              (1,917,249)          410,083
                                                                      --------------   --------------
         Net cash used in operating activities                          (1,314,550)        (447,148)
                                                                      --------------   --------------

   Cash flows from investing activities:
      Purchases of property and equipment                                   (7,641)                -
      Proceeds from disposal of property and equipment                        2,658                -
                                                                      --------------   --------------
         Net cash used in investing activities                              (4,983)                -
                                                                      --------------   --------------

Cash flows from financing activities:
      Principal payments on notes payable - related parties                       -        (254,500)
      Proceeds from sales of securities of consolidated subsidiary        1,500,000                -
      Proceeds from sales of convertible note subscriptions                 950,000        1,125,000
      Principal payments on current portion of long-term obligations        (1,807)         (11,528)
      Principal payments on long-term obligations                          (34,301)                -
                                                                      --------------   --------------
         Net cash provided by financing activities                        2,413,892          858,972
                                                                      --------------   --------------
      Net increase (decrease) in cash and cash equivalents                1,094,359          411,824
      Cash and cash equivalents at beginning of period                      412,156              332
                                                                      --------------   --------------
      Cash and cash equivalents at end of period                      $   1,506,515    $     412,156
                                                                      ==============   ==============
   Supplemental disclosure of cash flow information
      Cash paid during the period for
         Interest                                                     $       8,376    $      16,650
         Taxes                                                                    -                -
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       20
<PAGE>


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.   Organization and business activity
     ----------------------------------

     Imperial Petroleum Recovery Corporation, a Nevada corporation, incorporated
in 1982 (the "Company" or "IPRC")  commenced  operations in the fiscal year 1995
and  is  committed  to  developing  and  marketing  a  proprietary   oil  sludge
remediation process and microwave  separation  technology  equipment (MST units)
that use high energy microwaves to separate water, oil and solids. 2. Principles
of consolidation and financial statement presentation

     We  consolidate  entities when we have the ability to control the operating
and financial  decisions and policies of the entity.  The  determination  of our
ability to control or exert  significant  influence over an entity  involves the
use of judgment.  We apply the equity  method of  accounting  where we can exert
significant influence over, but do not control, the policies and decisions of an
entity.  We use the cost  method  of  accounting  where we are  unable  to exert
significant influence over the entity.

     The consolidated  financial  statements include the accounts and operations
of  the  Company,  its  wholly-owned   subsidiary   Petrowave   Corporation  and
Agribiofuels  LLC, an entity that the Company has  consolidated  pursuant to the
guidance in FIN 46(R). Significant  intercompany  transactions and balances have
been eliminated in consolidation.

3.   Use of estimates
     ----------------

     In preparing financial statements in conformity with accounting  principles
generally  accepted in the United  States of America,  management is required to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities and the disclosure of contingent  assets and liabilities at the date
of the  financial  statements  and revenue  and  expenses  during the  reporting
period. Actual results could differ from those estimates.

4.   Cash and cash equivalents
     -------------------------

     The Company considers all highly liquid  investments with original maturity
dates of three months or less when purchased, to be cash equivalents.

5.   Inventories
     -----------

     Inventory  consists  of  components  to be  assembled  into  the  Company's
products as well as costs of Microwave  Separation  Technology  ("MST")  unit(s)
under  production.  Inventory  is  valued  at lower of cost or  market.  Cost is
determined using the first-in, first-out method.

6.   Other assets
     ------------

     Included in other assets are  long-term  deposits and patents.  The cost of
patents is capitalized and amortized to operations on the  straight-line  method
over their estimated useful lives or statutory lives whichever is shorter.

7.   Property and equipment
     ----------------------

     Depreciation  and  amortization  are provided for in amounts  sufficient to
relate the cost of depreciable  assets to operations over their estimated useful
lives.  The  straight-line  method of  depreciation  is followed  for  financial
reporting purposes.

8.   Impairment of long-lived assets
     -------------------------------

     The Company reviews all long-term assets for impairment  whenever events or
changes in  circumstances  indicate that the carrying  amount of such assets may
not be recoverable through undiscounted future cash flows. If an impairment loss
has occurred, such loss is recognized in income.

                                       21
<PAGE>


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED

9.   Other revenue recognition
     -------------------------

     Revenues  from  laboratory  testing and  consulting  agreements  and rental
equipment contracts are recognized in accordance with their terms.

10.  Fair value of financial instruments
     -----------------------------------

     Cash and cash  equivalents,  accounts  payable and accrued  liabilities are
reflected in the financial  statements  at fair value because of the  short-term
maturity  of these  instruments.  Notes  payable to third  parties  and  related
parties as reflected in the financial statements approximate their fair value.

11.  Income taxes
     ------------

     The Company  utilizes the liability  method of accounting for income taxes.
Under the liability  method,  deferred tax assets and liabilities are determined
based on the difference between the financial  statement and tax bases of assets
and liabilities  using enacted tax rates in effect during the years in which the
differences are expected to reverse. An allowance against deferred tax assets is
recorded  in  whole or in part  when it is more  likely  than not that  such tax
benefits will not be realized.

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

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

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


                                       22
<PAGE>


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED


                                                    Fiscal Year Ended October 31


                                                        2005            2004

   Net income (loss) as reported                    $   602,699     $ (857,231)
   Pro forma effect of expensing stock based
   compensation plans using fair value method         (120,000)               -
                                                    -----------     -----------

   Net income, as adjusted                          $   482,699     $ (857,231)
                                                    ===========     ===========

   Basic earnings per common share:
   Net income (loss) as reported                    $      0.02     $    (0.04)
   Pro forma effect of expensing stock based
   compensation plans using fair value method              0.00               -
                                                    -----------     -----------

   Basic earnings per common share, as adjusted     $      0.02     $    (0.04)
                                                    ===========     ===========

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

   Diluted earnings per common share, as adjusted   $    (0.00)     $    (0.04)
                                                    ===========     ===========



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

13.  Income (loss) per common share
     ------------------------------

       The Company  follows the provisions of Statement of Financial  Accounting
Standards No. 128 "Earnings per Share" (SFAS No. 128). SFAS No. 128 requires the
presentation  of basic and diluted  EPS.  Basic EPS are  calculated  by dividing
earnings (loss) available to common shareholders by the weighted-average  number
of common  shares  outstanding  during each  period.  Diluted EPS are  similarly
calculated, except that the weighted-average number of common shares outstanding
includes  common  shares  that may be issued  subject to  existing  rights  with
dilutive potential. In applying SFAS No. 128, the average market price of common
stock shall represent a meaningful average. When potential common shares have an
antidilutive  effect on periods presented,  they are excluded in the computation
of dilutive EPS.

                                       23
<PAGE>


14.    New Accounting Pronouncements
       -----------------------------

     In December  2004, the FASB issued SFAS No.  123(R),  Share-Based  Payment,
which  establishes  standards for  transactions in which an entity exchanges its
equity  instruments for goods or services.  This standard  requires an issuer to
measure the cost of  employee  services  received  in  exchange  for an award of
equity  instruments  based  on the  grant-date  fair  value of the  award.  This
eliminates  the exception to account for such awards using the intrinsic  method
previously  allowable  under APB Opinion No. 25. In March 2005, the SEC released
Staff Accounting Bulletin (SAB) 107, Share-Based Payment,  which expresses views
of the SEC Staff about the application of SFAS No. 123(R). In April 2005 the SEC
issued a rule that SFAS No.  123(R) will be effective  for the first  interim or
annual  reporting period beginning on or after December 15, 2005. The Company is
still evaluating what impact, if any, the adoption of this standard will have.

NOTE B - GOING CONCERN

     The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America,  which
contemplate  continuation  of the  Company as a going  concern.  The Company has
generated   limited   revenue  through  October  31,  2005,  and  has  sustained
substantial losses from operations since inception.  In addition,  as of October
31, 2005,  the  Company's  current  liabilities  exceeded its current  assets by
$594,380,  it had  $1,075,442  of debt  obligations  that were past due,  and an
accumulated  deficit of  $17,917,230.  During fiscal year 2005, the Company used
$1,314,551 of cash in operating  activities,  which was funded primarily through
the issuance of debt, rather than provided by its operations.

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

     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:

     During January of 2004,  the Company hired a new management  team which has
raised $2,175,000 of new capital through October 31, 2005 including  $100,000 of
accounts  payable  to a related  party  which was  forgiven  in  exchange  for a
$100,000 investment in a 12% convertible note.

     In August 2005 the Company signed a management agreement with Agribiofuels,
LLC  ("Agribiofuels")  a related  party to  provide  certain  general  business,
financial  consultation  and advice and management  services to  Agribiofuels in
connection  with the  operation of its business  and to provide  technology  and
training in operating Microwave  Separation  Technology (MST) in the manufacture
of biodiesel product. Per the management  agreement,  Agribiofuels agreed to pay
$75,000 per month from August  through  December 31, 2005 and $120,000 per month
during  the  construction  and  development  period.  As  of  October  31,  2005
Agribiofuels had paid IPRC $50,000 for management  services.  In addition,  once
the biodiesel  facility is operational,  Agribiofuels will pay IPRC a technology
and licensing fee based upon throughput.

     During February 2005, the Company filed for a provisional  patent using MST
in the production of biodiesel and in January,  2006 filed a patent  application
titled,  "Microwave-Enhanced Process to Maximize Biodiesel Production Capacity".
IPRC also  continues  to  participate  in a  research  initiative  with  several
universities  and  research  centers  to  examine  the  MST  technology  in this
application.

                                       24
<PAGE>


     In January  2005,  the Company began to explore the benefits of a strategic
relationship  with a major  engineering,  manufacturing and construction firm to
further promote the Microwave  Separation  Technology  ("MST") throughout the US
and overseas locations. This firm is a world leader in environmental studies and
consulting;  engineering,  design and construction for refinery,  gas processing
applications and petrochemical operations.

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


NOTE C - INVENTORY

     The balance at October 31, 2005 primarily  represents an MST 150 unit under
construction and to a smaller extent consists of components to be assembled into
the Company's  products.  This MST 150 will be self-contained and mobile. It can
be moved to a client's site to demonstrate the effectiveness of the large scale,
MST 1000 series in resolving various emulsion or process applications as well as
rented or sold. As of October 31, 2004 the Company held no inventory.


NOTE D - PROPERTY AND EQUIPMENT

     Property and equipment and estimated useful lives consist of the following:

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

                                         Years          2005          2004
                                      -----------   ------------  ------------
      Furniture and fixtures              1-5       $    24,244   $    25,113
      Machinery and equipment             2-7            84,862        76,352
      Rental equipment                     7            528,963       528,963
      Transportation Equipment            4-7            96,236       117,441
      Leasehold improvements               5             75,836        75,836
      Demonstration unit                   7            211,140       211,140
                                                    ------------  ------------
                                                      1,021,281     1,034,845
      Less accumulated depreciation                   (886,003)     (783,622)
                                                    ------------  ------------
                                                    $   135,278   $   251,223
                                                    ============  ============


                                       25
<PAGE>


NOTE E - NOTES PAYABLE - RELATED PARTIES

     Notes payable consist of the following:

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

                                                          2005          2004
                                                      ------------  -----------
          12% note payable, interest compounded
          daily, to Maya, LLC a related party and
          stockholder, was due in full July 31,
          2001, collateralized by demonstration
          unit. Subsequent to the maturity date,
          interest is being charged at the loan
          default rate of 18%, compounded daily.
          Past due at October 31, 2004 and settled
          in January 2005.
                                                      $         -   $  375,000
                                                      ------------  -----------
                                                      $         -   $  375,000
                                                      ============  ===========

NOTE F - BRIDGE NOTE PAYABLE

     In March of 2002, the Company entered into a private  placement.  In May of
2002 a financing  source on behalf of the Company  completed the minimum funding
($800,000)  requirement  under  a  $2,000,000  private  placement  with  Odyssey
Capital.  The bridge loan is a secured  promissory  note bearing  interest at 12
percent,  compounded monthly, with an initial maturity of December 16, 2002. The
note was extended  twice to December 31, 2003 and then to December 31, 2004. The
debt instruments are convertible at the option of the holder to $0.001 par value
common stock at $0.20 per share  (trading  price  during March of 2002).  In the
event of default,  the  interest  rate on the debt will  increase to the maximum
allowed by law in Texas (18  percent).  The  balance of the bridge  loan for the
years  ended  October  31,  2005 and 2004 was $0 and  $1,725,417,  respectively.
During January 2005 the note of $1,725,417 and accrued interest of $561,048 were
converted into 11,101,900 shares of stock.



                                       26
<PAGE>


NOTE G - LONG-TERM OBLIGATIONS

<TABLE>
<CAPTION>
<S>                                                            <C>           <C>
          Long-term obligations consist of the following:
                                                               ------------  ------------
                                                                   2005          2004
                                                               ------------  ------------

          Security deposit payable to a company relating to
          a prior Marketing Agreement. The note bears
          interest at prime rate plus 4%, compounded daily.
          The interest rate is adjusted annually as of the
          beginning of the year based upon the prime rate at
          the end of the previous calendar year. The
          security deposit was initially due in August
          2003.and pursuant to a forbearance agreement is
          due on December 31, 2005. As of January 20, 2006
          the Company has not made payment although the note
          holder has made no demands.
                                                               $  1,000,000  $  1,000,000
                                                               ------------  ------------

          10% note payable to a corporation, due September
          2003, interest paid in full at date incurred, and
          principal due in full at maturity, not
          collateralized. Note is past due                           75,442        75,442

          11% note to a financial institution, due August
          2005, payments of principal and interest in the
          amount of $418 due monthly, collateralized by
          automobiles                                                     -         4,192

          7.5% note payable to a corporation, due November
          2007, payments of principal and interest of $2,996
          due monthly, collateralized by demo trailer and
          skid.                                                      61,402        91,512

          Convertible notes bearing an interest rate of 12%,
          compounded monthly and a conversion price of $.15
          per share payable to various individuals,
          principal and interest due at maturity.
          Collateralized by liens on the Company's assets.
          Maturity dates are May 26, June 1, and July 26,
          2007. The balance at October 31, 2004 represent
          subscriptions sold.                                     2,175,000     1,125,000

          Less unamortized discount                               1,146,159             -
                                                               ------------  ------------
                                                    Total         2,165,685     2,296,146

          Less current maturities                                 1,107,889     1,109,743
                                                               ------------  ------------
          Long-term portion                                    $  1,057,796  $  1,186,403
                                                               ============  ============
</TABLE>


                             27
<PAGE>


NOTE G - LONG-TERM OBLIGATIONS-CONTINUED

     Scheduled maturities of long-term obligations as of October 31, 2005, are
as follows:

              Year ending October 31,
              -----------------------
                Past Due                       $  1,075,442
                2006                                 32,447
                2007                              1,057,796
                                               -------------
                                               $  2,165,685
                                               =============

NOTE H - COMMITMENTS AND CONTINGENCIES

Lessee leasing
--------------

The Company  leases  office space,  a  manufacturing  and lab facility  under an
operating lease expiring in the year 2006 with monthly payments of approximately
$5,950. Under the operating lease agreement, the Company is required to maintain
property insurance and assume the responsibility for maintaining the property.

     The Company's future minimum lease payments under the operating lease as of
October 31, 2005, are as follows:


                                                  Operating
              Year ending October 31,               Lease
              -----------------------

                2006                           $     17,850
                                                          -
                Thereafter
                                               -------------
              Total minimum lease payments     $     17,850
                                               =============


NOTE I  - STOCKHOLDERS' DEFICIT

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

     During  fiscal  2004,  the  Company  issued  shares of stock of 330,879 and
250,000  in  satisfaction  of  accounts  payable  debt of  $96,780  and  $46,236
respectively.

     Also during fiscal 2004 the Company issued 1,397,389 shares of common stock
and paid $50,000 in settlement of a note payable to a related party in which the
Company retired $239,500 of debt and accrued interest of $254,574.

     During fiscal 2005 the Company issued shares of common stock as follows:
     a.   11,101,900  shares  and  2,953,205  shares  in  satisfaction  of debt,
          $1,725,417 and $375,000 and related  accrued  interest of $561,048 and
          $339,429 respectively.
     b.   4,040,000  shares  in the form of  restricted  stock to  participating
          directors,  officers and  employees in  accordance  with the Company's
          Restricted Stock Program of which 2,000,000  shares  correspond to the
          2004 fiscal year agreement; as further described in Note L.
     c.   682,301 shares to settle the Guaranteed Investment Contract ("GIC") as
          described in Note J.
     d.   461,936  shares  and paid  $19,987  to  settle  $194,028  of  deferred
          salaries owed to current and former employees. This resulted in a gain
          on debt extinguishment of $127,847.

                                       28
<PAGE>


NOTE J - GUARANTEED INVESTMENT CONTRACT

In July  2001,  a  shareholder  and  former  member  of the  Board of  Directors
purchased 200,000 shares of the Company's common stock and a Guaranteed
Investment Contract ("GIC") from the Company for $100,000.  The GIC entitles the
shareholder a 20 times the rate of return over a period of seven years ending in
2008  amounting to  $2,000,000.  The  investment was secured by a third position
lien on certain equipment of the Company. The Company may repay this investment,
which matures on July 18, 2008,  together with the related rate of return earned
to that date,  less the market value of the common stock at the repayment  date,
any time after July 18, 2002.  This  obligation is presented as GIC Liability on
the balance sheet. The difference between the contract redemption amount and the
purchase price was being accreted on a straight-line  basis over seven years and
was being added to the GIC liability less the market value of the 200,000 shares
that were issued.  In April 2005 this GIC agreement was  terminated and settled.
The Company  issued an additional  682,301  shares of common  stock.  The holder
agreed to terminate the GIC and release his lien position.

NOTE K - SECURITIES OF CONSOLIDATED SUBSIDIARY, NET

     Agribiofuels, LLC, a Texas limited liability company ("Agribiofuels") is an
entity in which the Company owns 20% of the members'  equity and a board member,
stockholder of IPRC owns 80% of the members' equity.  The Company is the manager
of  Agribiofuels  as provided by their  management  agreement.  In the Company's
judgment it can exert  significant  influence over the policies and decisions of
Agribiofuels  although  the  Company  does  not  have a  majority  interest.  In
accordance  with the FASB  issued  Financial  Interpretation  (FIN)  No.  46(R),
Consolidation of Variable  Interest  Entities,  an Interpretation of ARB No. 51;
the accounts and operations of Agribiofuels  are included in these  consolidated
financial  statements.  Significant  transactions  with  Agribiofuels  have been
eliminated in consolidation.

     During  fiscal 2005  Agribiofuels  sold thirty  $50,000  Class A membership
interests for $1,500,000.  The portion of  Agribiofuel's  loss attributed to the
other members has been added to the  Consolidated  Statements of Operations  and
thereby excluded from Net Income for the year ended October 31, 2005.

NOTE L - WARRANTS, STOCK OPTIONS & RESTRICTED STOCK PROGRAM

Warrants
--------

     The  Company's  board  of  directors  has the  authority  to sell or  grant
warrants to certain  non-employees.  These warrants are considered  nonqualified
for income tax purposes.

     During fiscal 2005 and 2004 the Company received advances totaling $950,000
and  $1,125,000,  respectively  for of 12%  convertible  notes with 50%  warrant
coverage issued in May 2005. During the year ended October 31, 2005, the Company
issued  7,250,000  warrants in conjunction  with the issuance of 12% convertible
notes.  The warrants  vest  immediately  and have a  weighted-average  remaining
contractual life of 3 years. The exercise price of the warrants is $.15 and they
expire  during fiscal year 2008.  The Company has valued the warrants  issued in
this  transaction  at  approximately  $690,115 using the  Black-Scholes  pricing
model.  This  amount  and a  beneficial  conversion  feature  in the  amount  of
approximately  $717,381  have been  recorded  as  discount on debt and are being
amortized over the life of the debt. The amortization charge for the fiscal year
ended October 31, 2005 is $261,337 The Company evaluated these warrants pursuant
to the guidance provided in EITF 00-19 and SFAS No. 133, and concluded that they
should be accounted for as equity instruments.

                                       29
<PAGE>


     Changes in the Company's warrants are as follows:

<TABLE>
<CAPTION>
<S>                    <C> <C>                            <C>                 <C>                    <C>
                                                                         Exercise         Weighted-average
                                                      Warrants            price            exercise price
                                                  ----------------  -----------------  ---------------------
Outstanding at October 31, 2003                           217,500             $ 3.00                 $ 3.00
     Expired                                              217,500               3.00                   3.00
                                                  ----------------
Outstanding at October 31, 2004                                 -
                                                  ----------------
     Issued                                             7,250,000                .15                    .15
                                                                -
                                                  ----------------
Outstanding and Exercisable at October 31, 2005         7,250,000                .15                    .15
                                                  ================
</TABLE>


Options

     The Company also grants stock options to employees  for services  rendered.
The stock options are also  nonqualified  for income tax  purposes.  Stock-based
compensation is accounted for under Accounting  Principles Board Opinion No. 25,
under  which no  compensation  cost  has been  recognized.  If the  Company  had
recognized  compensation expense based upon fair value at the grant date for the
awards consistent with Financial Accounting Standards No. 123 (FAS 123), the pro
forma adjustments would not be material to the financial statements.

     During 1999, the Company  granted 210,000 stock options to employees with a
strike price of $0.43 per share. The options vest immediately and expire in five
years.  No  compensation  expense was  recognized on the grant date.  All of the
stock options under this plan expired in January 2004.

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


     Changes in the Company's stock options are as follows:

<TABLE>
<CAPTION>
<S>                    <C> <C>                         <C>              <C>                     <C>
                                                                     Exercise       Weighted-average
                                                     Options          price          exercise price
                                                  -------------  ---------------  --------------------
Outstanding at October 31, 2003                        203,023          $ 0.43                  $ 0.43
   Granted                                                   -               -                       -
   Expired                                           (203,023)            0.43                    0.43
                                                  -------------
Outstanding at October 31, 2004                              -
   Granted                                           1,225,000             .20                     .20
                                                  -------------
Outstanding and exercisable at October 31, 2005      1,225,000             .20                     .20
                                                  =============
</TABLE>

                                       30
<PAGE>


NOTE L - WARRANTS, STOCK OPTIONS & RESTRICTED STOCK PROGRAM - CONTINUED

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

     The Company  issues  shares of IPRC common stock in the form of  restricted
stock to participating  directors,  officers and employees. The restricted stock
generally has a vesting period before  issuance  during which time it is subject
to forfeiture if the participants'  employment is terminated.  Once issued,  the
stock  sale  is  restricted  under  rule  144.  Unearned   compensation  expense
associated  with  restricted  stock grants  represents  the market value of IPRC
common  stock at the  dated of grant  and is  recognized  as a charge  to income
ratably over the vesting  period.  During Fiscal year 2004 the Company agreed to
issue  2,000,000  shares with a weighted  average  fair market value of $.10 per
share,  but had not issued any shares as of October 31, 2004.  The  compensation
charge and related  liability  for the year ended October 31, 2004 was $200,000.
These shares were issued during Fiscal year 2005.

     During  Fiscal year 2005 the Company  awarded and issued  2,040,000  shares
with a weighted  average fair market value of $.105 per share.  The compensation
charge for the year ended October 31, 2005 was $214,000.

NOTE M - RELATED PARTY TRANSACTIONS

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

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

     1.   Agribiofuels, LLC.,("Agribiofuels")
          -----------------------------------

     Agribiofuels, LLC., ("Agribiofuels") is an entity in which the Company owns
     a portion of the members'  equity,  a board member  serves as a manager and
     the  major  stockholder  of the  Company  owns a  majority  portion  of the
     members' equity. During fiscal 2005,  Agribiofuels and the Company signed a
     management  agreement  to  provide  certain  general  business,   financial
     consultation  and  advice  and  management   services  to  Agribiofuels  in
     connection with the operation of its business and to provide technology and
     training  in  operating  Microwave  Separation  Technology  ("MST")  in the
     manufacture   of  biodiesel   product.   Per  the   management   agreement,
     Agribiofuels  agreed to pay $75,000 per month from August through  December
     31, 2005 and  $120,000 per month during the  construction  and  development
     period.  As of October  31,  2005  Agribiofuels  had paid IPRC  $50,000 for
     management   services.   In  addition,   once  the  biodiesel  facility  is
     operational,  Agribiofuels  will pay IPRC a technology  and  licensing  fee
     based upon throughput.

     2.   Food Development Corporation
          ----------------------------

     Food Development  Corporation  (FDC), an entity controlled by a stockholder
     and officer of the  Company,  has on occasion  loaned the Company  funds to
     support daily  operations.  During 2003,  FDC loaned $80,000 of which funds
     were used to pay certain employees and consultants. FDC agreed to write off
     said amounts in December  2003.  During 2003 and 2004 FDC made loans to the
     Company in support of the daily operation.  During June of 2003 the Company
     entered  into  an  office   sharing-agreement   with  FDC.  The  amount  of
     reimbursement  accrued and offset  against  loans made by FDC for the years
     ended October 31, 2005 and 2004 was $31,921 and $44,586  respectively.  The
     payable  balances  included in related party  payables were $19,141,  as of
     October 31, 2005 and 2004.

     During  fiscal  2005 the Company  sold two  vehicles to FDC with a net book
     value of $3,535 for cash proceeds of $2,658 and the related party forgiving
     a related  party  payable of  $12,343.  This  resulted in a gain on sale of
     assets of $11,466.

                                       31
<PAGE>


     3.   Management agreement
          --------------------

     During  November  1998,  the Company  entered  into a five year  management
     agreement with a company controlled by a major  stockholder.  The agreement
     calls  for  general   business  and  financial   consultation  and  certain
     management  services to be provided to the Company by the related  party in
     exchange  for an  annual  management  fee  equal  to  five  percent  of the
     Company's   gross   revenues.   The  agreement   ended  in  November  2003.
     Accordingly,  during  2005  and  2004,  the  Company  did  not  record  any
     management  fees in  conjunction  with this  agreement.  The  Company has a
     balance  payable of $73,413 as of October 31, 2004.  The amount owed was in
     dispute so the Company  settled for $100,000 as the  stockholder  agreed to
     invest  the  $100,000  accrued  management  fees and  $100,000  cash in the
     Company's 12% Convertible notes issued in June 2005.

     4.   Employee Benefits
          -----------------

     During 2005 and 2004 an entity owned by Mr.  Springer,  the chief executive
     officer of the Company ("CEO"),  and Mr.  Gaiennie,  the chief financial of
     the company  ("CFO")  provided  benefits to certain  employees  utilizing a
     professional  employment organization ("PEO"). For this service the Company
     paid  $71,243 and  $33,332 in 2005 and 2004,  respectively.  The  employees
     covered were paid a portion of their salaries through the PEO Company. This
     amount was approximately $27,662 and $4,600 in 2005 and 2004, respectively.
     The entity owned by the CEO and CFO had an existing  contract  with the PEO
     as the  Company's  credit made it difficult to purchase  insurance  for its
     employees.   The  $4,000  prepaid  expense  balance  at  October  31,  2004
     represents November 2004 benefits paid in October 2004.

     5.   Employee deferred Salaries
          --------------------------

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

     6.   Other Related Party Payable
          ---------------------------

     During 2003 Mr. Christopher DeClaire,  the Company's former chief executive
     officer made a loan to cover  payroll cost and is owed a balance of $19,821
     as of October 31, 2005 and 2004.  This amount is included in related  party
     payables.  In addition the Mr. C. Brent  Kartchner,  the  Company's  former
     President is owed for $10,747 of  un-reimbursed  expenses as of October 31,
     2005 and 2004.

                                       32
<PAGE>


NOTE N - INCOME (LOSS) PER COMMON SHARE

     The  following  data show the amounts used in computing  basic and dilutive
EPS.

<TABLE>
<CAPTION>
<S>                                                              <C>                   <C>
                                                                         Year ended October 31,
                                                                 -------------------------------------

                                                                        2005                 2004
                                                                 -----------------     ---------------
Net income (loss) per common share - basic and diluted
   Net income, (loss) available to common shareholders - basic   $        602,699      $    (857,231)
   Adjustments to net income for 12% convertible notes                  (697,079)                   -
                                                                 -----------------     ---------------
   Net income (loss) available to common shareholders - diluted  $       (94,380)      $    (857,231)
                                                                 =================     ===============

Common shares outstanding during the entire period                     20,845,687          18,867,419
Weighted average common shares issued during the period                14,728,616             200,440
                                                                 -----------------     ---------------
Weighted average number of common shares used in basic EPS             35,574,303          19,067,859

Dilutive effect of 12% convertible debt                                 5,725,114                   -
Dilutive effect of warrants issued with convertible debt                1,145,023                   -
Dilutive effect of stock options                                          157,068                   -
                                                                 -----------------     ---------------
Total dilutive effect of debt, warrants and options                     7,027,205                   -
                                                                 -----------------     ---------------
Weighted average number of common shares and dilutive potential
common stock used in diluted EPS                                 $     42,601,508      $   19,067,859
                                                                 =================     ===============
Net income (loss) per share - basic                                          0.02              (0.04)
Net income (loss) per share - diluted                            $         (0.00)      $       (0.04)
                                                                 =================     ===============
</TABLE>


     The adjustments for the 12% convertible notes included in Net Income (loss)
diluted  for the year  ended  October  31,  2005  include  adding the 12% stated
interest of  $187,743  adding the  amortized  debt  discount  for the year ended
October 31, 2005 of $261,337 and subtracting  the  unamortized  debt discount of
$1,146,159.

     The dilutive  effect of 12%  convertible  debt,  stock options and warrants
were calculated  using an average per share market price of the common stock for
the time period that the instruments were outstanding  which is considered to be
a reasonable  average  based upon the  application  of SFAS 128. The average per
share market prices used in the  calculations  for the 12% convertible  debt and
warrants was $0.32 and for the stock options was $0.26.

NOTE O - INCOME TAXES

     The  Company  uses the  liability  method,  where  deferred  tax assets and
liabilities  are determined  based on the expected  future tax  consequences  of
temporary differences between the carrying amounts of assets and liabilities for
financial and income tax reporting purposes. As of October 31, 2005, the Company
has generated  approximately  $15,271,383  of net operating  loss  carryforwards
which will expire in the years 2013 through 2025.  Internal Revenue Code section
382 ("Section  382")  restricts the use of these net operating  losses in future
periods if the Company has a  "substantial  change in  ownership"  as defined by
Section 382. The Company has had  significant  equity  transactions  in both the
current and prior  periods.  Due to this equity  activity  and the  restrictions
resulting  under Section 382, most of the Company's NOLs may not be available to
offset future  taxable  income.  The Company has fully reserved the deferred tax
asset resulting from the net operating loss carryforwards.

                                       33
<PAGE>


     For the years ended October 31, deferred tax asset  consisted  primarily of
the following:


                                                    2005               2004
                                               --------------     --------------
        Deferred tax assets
                                               $   5,350,918      $   6,162,058
           Net operating loss carry forward
              Valuation allowance                (5,350,918)        (6,162,058)
                                               --------------     --------------
                                               $           -      $           -
                    Net deferred tax asset
                                               ==============     ==============



NOTE P - SUBSEQUENT EVENTS

     Agribiofuels  has sold sixty two $50,000  Class A membership  interests for
$3,100,000 between October 31, 2005 and January 24, 2006.

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

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


ITEM 8   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE


         None


ITEM 8A  CONTROLS AND PROCEDURES


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

     At the end of the period covered by this Annual Report, the Company carried
out an  evaluation,  under the  supervision  and with the  participation  of its
management,  including its Chief Financial Officer,  of the effectiveness of the
design and operation of Company's disclosure controls and procedures. Based upon
the foregoing, the Company's Chief Executive Officer and Chief Financial Officer
concluded  that,  as of October 31,  2005 and  October  31, 2004 the  disclosure
controls and  procedures  of the Company  were not  effective to ensure that the
information  required to be disclosed in the Company's  Exchange Act reports was
recorded, processed, summarized and reported on a timely basis.

                                       34
<PAGE>


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

     There were no changes in internal  controls over  financial  reporting that
occurred  during the  quarter  ended  January  31,  2006,  that have  materially
affected,  or are reasonably likely to materially  affect,  our internal control
over financial reporting.



ITEM 8B  OTHER INFORMATION


The Company failed to file an 8-K for the following:

     o    In  December,  2005 the  Company  executed an  assignable  contract to
          purchase land and improvements.  Upon the end of the four month option
          period,  the option  payments  of $4,000  will be  applied  toward the
          purchase   price  of  $855,000,   if   applicable.   The  Company  and
          Agribiofuels,  LLC anticipate that a  high-efficiency,  cost effective
          multi-million  gallon/year biodiesel production facility will be built
          on this property, if feasible.

     o    Agribiofuels,  LLC has  sold  sixty  two  $50,000  Class A  membership
          interests  for  $3,100,000  between  October  31, 2005 and January 31,
          2006.

     o    In  October,  2005  Agribiofuels,  LLC  sold  thirty  $50,000  Class A
          membership interests for $1,500,000.

     o    During  fiscal  year 2005 the  Company  granted  and issued  2,040,000
          shares of restricted  stock to participating  directors,  officers and
          employees with a weighted average fair market value of $.105 per share
          and  issued  2,000,000  shares of  restricted  stock to  participating
          officers and employees  that it had  previously  granted during fiscal
          year 2004.

     o    In August 2005,  the Company and  Agribiofuels,  LLC  ("Agribiofuels")
          signed a management  agreement to provide  certain  general  business,
          financial   consultation   and  advice  and  management   services  to
          Agribiofuels  in connection  with the operation of its business and to
          provide  technology  and  training in operating  Microwave  Separation
          Technology  ("MST")  in  the  manufacture  of  biodiesel  product.  In
          conjunction with the management agreement,  the Company received a 20%
          equity  interest  in  Agribiofuels.   Commencing  August  1,  2005  in
          accordance with the management agreement, Agribiofuels shall pay IPRC,
          in consideration of the services rendered by IPRC equal to $75,000 per
          month through Dec. 31, 2005, and $120,000 per month thereafter  during
          the  construction  and  development  period.  In  addition,  once  the
          biodiesel  facility  is  operational,  Agribiofuels  will  pay  IPRC a
          technology and licensing fee based upon throughput.

     o    During June 2005,  the Company  settled with a stockholder a debt that
          resulted from a five year  management  agreement.  The Company settled
          for  $100,000  as the  stockholder  agreed to invest  these  funds and
          $100,000  cash in the  Company's 12%  Convertible  notes.  The Company
          recorded a $26,587 charge to its Statement of Operations.


                                       35
<PAGE>


     o    In fiscal year 2005 and 2004 the Company  issued to investors  secured
          convertible note subscription  agreements that generated cash flows of
          $950,000 and $1,125,000,  respectively.  Subsequently, during May 2005
          the Company issued $2,175,000 of 12% convertible notes in exchange for
          all subscription  agreements.  The notes bear interest at a rate of 12
          percent per annum,  are convertible into the Company's common stock at
          $0.15 per  share  and  mature on  various  dates in  fiscal  2007.  In
          connection  with the notes,  warrants  to  purchase  7,250,000  of the
          Company's  stock  were  simultaneously  issued.  The  warrants  have a
          weighted-average remaining contractual life of 3 years, exercise price
          of $0.15 and expire during fiscal year 2008.

     o    During April 2005,  the Company issued 682,301 shares of stock in full
          settlement of $467,329 Guaranteed Investment Contract,  which resulted
          in a gain on debt extinguishment of $378,630.

     o    In March 2005 the Company  issued  options to  employees  who were not
          executive  officers  totaling  1,225,000 shares with an exercise price
          $0.20.  We issued these new options because the employees held options
          under the 2002 Option  Plan which  became null and void as of November
          1, 2003 because the Company failed to receive stockholder approval for
          the plan. .

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


                                    PART III



ITEM 9   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Directors and Executive Officers

     The following are the  directors,  executive  officers and key employees of
the Company.


Name                    Age                          Position
----                    ---                          --------
Alan B. Springer        61             Chairman and Chief Executive Officer

Edward C. Gaiennie      41         Chief Financial Officer, Secretary-Treasurer,
                                     Principal Accounting Officer and Director

A.V. McGraw             77                           Director

James Hammond           69                           Director

     Alan B.  Springer.  Mr.  Springer  has served as a director  of the Company
since April  2003.  Mr.  Springer  assumed the role of Chairman of the Board and
Chief Executive Officer in January of 2004. From 1998 to 2004 Mr. Springer was a
Managing  Director of Odyssey  Capital,  LLC.  From 1994 to 1998,  Mr.  Springer
served as the Chief  Financial  Officer  for IKON  Office  Solutions  - Document
Services  Division  in  Houston,  Texas.  IKON  Office  Solutions  is an  office
technology  company  providing  total  document  solutions  for many Fortune 500
companies.  From 1968 to 1994 Mr. Springer worked within the U.S.  Department of
Defense,  serving in various  financial  management  positions as the  Financial
Officer of several  strategic  tactical NATO  organizations.  During this period
1978 - 1986 Mr.  Springer was an adjunct  professor in the European  Division of
the University of Maryland in their Business  College.  Mr.  Springer  graduated
from  the  University  of  Akron  with  a  Bachelor  of  Science  in  industrial
engineering  and from the University of Utah with an MBA.  Postgraduate  studies
include the Naval Post Graduate  School in Monterey,  California and the Air War
College in Montgomery, Alabama both during his military career.

                                       36
<PAGE>


     Edward C.  Gaiennie.  Mr.  Gaiennie has served as a director of the Company
since April 2003. He became Principal Accounting Officer,  Secretary,  Treasurer
and Chief  Financial  Officer of the Company in January 2004. From 1999 to 2004,
Mr. Gaiennie was Controller of Odyssey Capital,  LLC and its predecessor Company
ROI Group,  LLC.  Previous to 1999,  Mr.  Gaiennie  was  employed as a certified
public accountant.  Seven of those years were with Price Waterhouse Coopers LLP.
In his  eleven  years of public  accounting  Mr.  Gaiennie  served as a business
advisor  to  high  growth   companies  with  an  emphasis  in  construction  and
manufacturing.  Mr.  Gaiennie  has a Bachelor of Science  degree in business and
accounting from Louisiana State University.

     A.V.  "Buddy"  McGraw.  Mr. McGraw has served as a director  since November
2000.  Since  1977,  he has served as General  Manager and  President  of Centex
Materials,  Inc., a wholly owned subsidiary of Centex Corporation.  In 1991, Mr.
McGraw  co-founded  Phonon  Technologies,  Inc., a small microwave  research and
development company in Houston,  Texas, which later sold its assets to Microwave
Technology Acquisition  Corporation in 1996. Mr. McGraw has previously served as
Chairman of the Board of the Texas  Aggregate  and Concrete  Association  and he
continues to provide consulting services to the construction aggregate and ready
mix concrete industries. A recipient of the Austin, Texas' Distinguished Citizen
Award,  Mr. McGraw has been active in the Texas political  arena, and has proven
to be an effective  negotiator with regulatory  agencies,  energy  corporations,
government authorities,  financial institutions and the transportation industry.
Mr.  McGraw  graduated  from the  University  of Texas at Austin with a business
administration degree.

     James W. Hammond.  Mr. Hammond has served as a director since July 2001. In
1986,  Mr.  Hammond  co-founded  Administaff,  one of the  largest  professional
employer  organizations in the United States.  In 1997, Mr. Hammond retired from
Administaff as a director and as Senior Vice President, after its initial public
offering.  Prior to founding Administaff,  Mr. Hammond held several positions at
Exxon in a wide range of activities including research,  refining, new ventures,
chemicals,  production,  pipelines,  transportation,  sales and  marketing,  and
corporate  planning.  Presently,  he holds management and advisory  positions in
five private  companies  and serves on the Board of Directors of three  national
charities and a university. Mr. Hammond received a Bachelor of Science degree in
chemical  engineering from Virginia Tech and did post graduate work in economics
at the University of Houston.

Audit Committee Matters

     The  Company's  Audit  Committee is  comprised  of James  Hammond and Buddy
McGraw.  The Audit Committee is responsible for, among other things,  overseeing
the Company's  accounting  and financial  reporting  processes and audits of the
Company's  financial  statements.  There are  currently  no members of the Audit
Committee  who  qualify  as an "audit  committee  financial  expert."  There are
currently no members of the Audit Committee who are  "independent" as defined in
federal  securities  laws. The Company intends to add additional  members to the
Board of Directors,  and the Audit Committee,  that would qualify as a financial
expert and as independent. However, the Company cannot assure you as to whether,
or when, they will succeed in

Section 16(a) Beneficial Ownership Reporting Compliance

     Section 16(a) of the Securities  Exchange Act of 1934 (the "Act")  requires
the  Company's  executive  officers  and  directors  and  any  persons  who  own
beneficially more than 10% of the Company's Common Stock to file initial reports
of  ownership  and  changes  in  ownership  with  the  Securities  and  Exchange
Commission  ("SEC") as well as to furnish the  Company  with a copy of each such
report.  Additionally,  SEC  regulations  require the Company to identify in its
proxy statement and Annual Report on Form 10-KSB those  individuals for whom one
or more of these  reports  required  under  Section 16 was not filed on a timely
basis during the most recent fiscal year or prior fiscal years.  To management's
knowledge,  no executive  officers,  directors and 10% stockholders have met the
requirements of Section 16(a) during the fiscal year ended October 31, 2005. Mr.
Springer and Mr. Gaiennie failed to file a Form 4 or Form 5 upon the issuance of
their respective restricted stock rights granted in April 2004 and October 2005.

                                       37
<PAGE>


Code of Ethics

     The  Company  has  adopted  a Code of  Ethics  that  applies  to all of its
directors,  officers  (including its chief  executive  officer,  chief financial
officer,  chief accounting  officer and any person performing similar functions)
and employees.


ITEM 10  EXECUTIVE COMPENSATION

Summary Compensation Table

     The  following  table  sets  forth  certain   information   concerning  the
compensation  paid or  accrued  by IPRC to or on behalf of the  Company's  Chief
Executive  Officer and other  executive  officers for  services  provided in the
fiscal years indicated.

                    SUMMARY COMPENSATION TABLE

                 Name and        Fiscal     Annual Compensation
           Principal Positions    Year
                                                                     Restricted
                                            Salary ($)  Bonus ($)    Stock Award
                                            ----------  ---------    -----------

          Alan B. Springer        2005       $85,946     $30,000     $85,000(1)
          (Chairman and CEO)      2004(2)    $38,500                 $75,000(3)


          Edward C. Gaiennie      2005       $75,603      $8,000     $60,000(4)
          (CFO)                   2004(5)    $38,500                 $35,000(6)


     1.   In  March  2005,  Mr.  Springer  was  granted  the  right  to  850,000
          restricted  shares as part of his  incentive  compensation.  As of the
          fiscal year ended  October,  31, 2005,  Mr.  Springer  held  1,600,000
          shares of  restricted  stock with a value of  $400,000  calculated  by
          using the $0.25 the closing  price of the  Company's  common  stock on
          October 31, 2005.

     2.   Mr. Springer was appointed  Chief  Executive  Officer in January 2004,
          this column  includes Mr.  Springer's  compensation  from January 2004
          until October 31, 2004.

     3.   Mr. Springer was granted the right to 750,000  restricted  shares as a
          part of his incentive  driven  compensation  package which  included a
          lower than market  salary upon the closing of a $1,500,000  financing.
          During the year ended  October 31, 2005,  the financing had closed and
          the restricted shares issued.

     4.   In  March  2005,  Mr.  Gaiennie  was  granted  the  right  to  600,000
          restricted  shares as part of his  incentive  compensation.  As of the
          fiscal year ended October,  31, 2005, Mr. Gaiennie held 950,000 shares
          of restricted  stock with a value of $237,500  calculated by using the
          $0.25 the closing price of the  Company's  common stock on October 31,
          2005.

     5.   Mr. Gaiennie was appointed  Chief  Financial  Officer in January 2004;
          this column  includes Mr.  Gaiennie's  compensation  from January 2004
          until October 31, 2004.

     6.   Mr. Gaiennie was granted the right to 350,000  restricted  shares as a
          part of his incentive  driven  compensation  package which  included a
          lower than market  salary upon the closing of a $1,500,000  financing.
          During the year ended  October 31, 2005,  the financing had closed and
          the restricted shares were issued.

                                       38
<PAGE>


Compensation of Directors

     During the year ended October 31, 2005 the non-employee  directors received
as  compensation  for  services  a total of  150,000  restricted  shares  of the
Company's common stock, 100,000 to Mr. Hammond and 50,000 to Mr. McGraw.

Employment Contracts

     The Company  has not  entered  into  employment  contracts  with any of its
employees.



ITEM 11  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners and Management

     As of March 7, 2006,  40,898,180  shares of common stock were  outstanding.
The following table sets forth, as of March 7, 2006,  certain  information  with
respect to shares  beneficially owned by: (a) each person who is known to be the
beneficial owner of more than 5% of our outstanding  shares of common stock, (b)
each director or nominee for director,  (c) each named executive  officers,  and
(d) all current directors and executive officers as a group.

     Beneficial  ownership has been  determined  in  accordance  with Rule 13d-3
under the  Exchange  Act.  Under this rule,  certain  shares may be deemed to be
beneficially  owned by more than one person (if, for example,  persons share the
power to vote or the power to dispose of the shares).  In  addition,  shares are
deemed  to be  beneficially  owned by a person  if the  person  has the right to
acquire  shares (for example,  upon exercise of an option)  within sixty days of
the date as of which the  information  is provided.  In computing the percentage
ownership of any person, the amount of shares is deemed to include the amount of
shares  beneficially owned by such person by reason of such acquisition  rights.
As a result,  the percentage of outstanding shares of any person as shown in the
following table does not necessarily reflect the person's actual voting power at
any particular date.

     To the  Company's  knowledge,  except as indicated in the footnotes to this
table and pursuant to applicable  community  property laws, the persons named in
the table have sole voting and  investment  power with  respect to all shares of
common  stock shown as  beneficially  owned by them.  The address of each of the
individuals  listed is 1970 S. Starpoint  Drive,  Houston,  Texas 77032,  except
where footnoted.

                                                 SHARES BENEFICIAL OWNED
                                                 -----------------------

BENEFICIAL OWNER                     SHARES OF COMMON STOCK     PERCENT OF CLASS
----------------                     ----------------------     ----------------

Alan B. Springer                          1,682,857(1)                2.7%

Edward C. Gaiennie                        1,032,857(1)                1.7%

James Hammond                             1,270,544(2)                3.1%

A.V. McGraw                                 350,000                    .9%

Rex Lewis (3)                             8,578,205 (4)              20.0%

Don B. Carmichael (5)                    15,767,594 (6)              28.8%

Kirk Kanady(7)                            3,460,179(8)                8.1%

All current directors and executive
officers as a group (4 persons)           4,336,258                  10.6%


                                       39
<PAGE>


     1.   Includes  a total of 82,857  shares  owned by S&G  Associates,  LLC an
          entity jointly controlled by Mr. Springer and Mr. Gaiennie.

     2.   Includes   1,170,544  shares  held  by  Hammond  Family  1994  Limited
          Partnership which Mr. Hammond controls.

     3.   Mr. Lewis'  principal  business address is 2325 A Renaissance Dr., Las
          Vegas,  Nevada 89119. The shares  beneficially  owned by Mr. Lewis are
          held in the name of All Safe, LLC, entities controlled by Mr. Lewis.

     4.   This  includes  $200,000  in  convertible  promissory  notes which are
          convertible  at $0.15 into  1,333,333  shares of stock in  addition to
          holding warrants to purchase another 666,667 shares at $0.15.

     5.   Don  B.  Carmichael's  business  address  is 714 FM  1960W  Suite  107
          Houston, TX 77090.

     6.   Includes  699,764 shares held in DWC Holdings an entity  controlled by
          Mr.  Carmichael.  Mr.  Carmichael holds  convertible  promissory notes
          totaling  $1,400,000  convertible  at $0.15 into  9,333,333  shares of
          stock and  warrants  to  purchase an  additional  4,666,667  shares at
          $0.15.

     7.   Kirk  Kanady's  business  address is P.O. Box 8399 The  Woodlands,  TX
          77387.

     8.   These shares are held by K.K. & P.K. Family,  LP, an entity controlled
          by Mr. Kanady, this includes $200,000 in convertible  promissory notes
          which  are  convertible  at $0.15  into  1,333,333  shares of stock in
          addition to holding  warrants to purchase  another  666,667  shares at
          $0.15.


ITEM 12  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



     Agribiofuels,  LLC, ("Agribiofuels") is an entity in which the Company owns
a portion  of the  members'  equity,  a board  member  serves  as a manager  and
stockholders of the Company own a majority portion of the members' equity as set
forth  below.  During  fiscal  2005,  Agribiofuels  and  the  Company  signed  a
management agreement to provide certain general business, financial consultation
and advice and  management  services  to  Agribiofuels  in  connection  with the
operation of its business  and to provide  technology  and training in operating
MST in the manufacture of biodiesel product.  In conjunction with the management
agreement,   the  Company  received  a  20%  equity  interest  in  Agribiofuels.
Agribiofuels  has paid IPRC $50,000 for services  rendered during the year ended
October 31, 2005 and has agreed to pay $75,000 per month  through  December  31,
2005 and $120,000 per month during the construction and development  period.  In
addition, once the biodiesel facility is operational, Agribiofuels will pay IPRC
a technology and licensing fee based upon throughput.  The majority stockholders
of IPRC,  their ownership and  contribution  ,which are included in Agribiofuels
capital structure are as follows

           Owner                      % Ownership       Contribution
           -----                      -----------       ------------

     Don B. Carmichael                26.1%             $  1,500,000

     Rex Lewis                        34.8%             $  2,000,000

     Kirk Kanady                       5.2%             $    300,000

     M.J. Carmichael
     (mother  of Don B. Carmichael)    8.7%             $    500,000

     IPRC(the Company)                20.0%                 Services

                                       40
<PAGE>


     The Company  issues  shares of IPRC common stock in the form of  restricted
stock to participating  directors,  officers and employees. The restricted stock
generally has a vesting period before  issuance  during which time it is subject
to  forfeiture if the  participants'  services are  terminated.  Once issued the
stock  sale  is  restricted  under  rule  144.  Unearned   compensation  expense
associated  with  restricted  stock grants  represents  the market value of IPRC
common  stock at the date of  grant  and is  recognized  as a charge  to  income
ratably over the vesting  period.  During  fiscal year 2005 and 2004 the Company
issued 2,040,000 and 2,000,000 shares, respectively.

     Food Development  Corporation  (FDC), an entity controlled by a stockholder
and former  officer of the  Company,  during  2004 made loans to the  Company in
support of daily  operations.  During June of 2003 the Company  entered  into an
office- sharing-agreement with FDC, which ended in September 2005. The amount of
reimbursement  accrued and offset  against loans made by FDC for the years ended
October 31, 2005 and 2004 was $31,921 and $44,586 respectively.

     On January  19,  2001,  the Company  borrowed  $375,000  from Maya,  LLC, a
company  controlled by a former officer and majority  shareholder.  The loan was
funded in March  2001 and is  secured by the MST  Demonstration  Unit  currently
located at the Company's  business office in Houston,  Texas. The loan currently
accrues interest at a rate of eighteen percent (18%) per annum and is payable on
demand. During January 2005 the Company settled the note and accrued interest of
$743,538 by issuing 2,953,205 shares of the Company Common Stock.

     From April 2001 through  September 2001, the Company borrowed $219,500 from
Scott Hensel, a former member of the Board of Directors.  The loans were used to
fund  operations  and accrued  interest  at a rate of 20% per annum.  They had a
staggered  maturity  schedule.  Mr. Hensel  loaned an additional  $20,000 to the
Company in December  2001 under the  agreement  at an  interest  rate of 20% per
annum. The loan is in default  therefore the interest rate was increased to 24%.
The Company settled the notes and accrued interest by paying $50,000 and issuing
1,397,389 shares of the Company's Common Stock during the year ended October 31,
2004.

     In July 2001,  Paul Howarth loaned the Company  $222,399 and $26,595 during
September and October 2001. The loans,  which accrued  interest at a rate of 20%
per annum,  began to accrue  interest  at a default  rate of 24% per annum after
December 31, 2001.  In connection  with these loans,  the Company (a) executed a
pledge  agreement  wherein IPRC  pledged 100% of the shares of its  wholly-owned
subsidiary,  Petrowave,  Inc. and any other  subsidiaries the Company forms, and
(b) granted Mr. Howarth a lien on its patents and  trademarks.  During August of
2004 the Company  settled the entire  promissory  note of $258,994  plus accrued
interest of $254,779 for a cash payment of $200,000.

ITEM 13  EXHIBITS AND REPORTS ON FORM 8-K

   (a)  The following exhibits are to be filed as part of the annual report:


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

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

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

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

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

                                       41
<PAGE>


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

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

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

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


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


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

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

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

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

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

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

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

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

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

        10.18   Commercial  Contract,   between  the  Company  and  Dayton  Rice
                Milling, Inc., dated December 9, 2005.

                                       42
<PAGE>


        10.19   Second  Forbearance  Agreement,  dated January 1, 2006,  between
                IPRC and the successor in interest to Mobil.

        21.1    Subsidiaries of Registrant (incorporated by reference to Exhibit
                21.1 to the Company's 10K filed with the  Commission of December
                1, 2005).

        31.1    Certification of Alan Springer.

        31.2    Certification of Edward Gaiennie.

        32.1    Certification for Sarbanes-Oxley Act of Alan Springer.

        32.2    Certification for Sarbanes-Oxley Act of Edward Gaiennie.

ITEM 14  PRINCIPAL ACCOUNTANT FEES AND SERVICES


     Malone & Bailey,  PC, are the  Company's  independent  auditors  engaged to
examine the  financial  statements  of the  Company  for the fiscal  years ended
October 31,  2005 and 2004.  Malone & Bailey,  PC has  performed  the  following
services and has been paid the following fees for these fiscal years:

Audit Fees

     Malone & Bailey,  PC was paid aggregate fees of  approximately  $32,000 for
the fiscal year ended October 31, 2005 for  professional  services for the audit
of our  annual  financial  statements  and  for  the  reviews  of the  financial
statements included in each of our fiscal year quarterly reports on Form 10-QSB.

     In addition,  Malone & Bailey, PC were paid aggregate fees of approximately
$49,000 for the fiscal  years ended  October 31, 2003 and 2004 for  professional
services rendered for the audits of the Company's annual consolidated  financial
statements.

Audit Related Fees

     Malone & Bailey,  PC was not paid any additional  fees for the fiscal years
ended October 31, 2005 and 2004 for assurance  and related  services  reasonably
related to the performance of the audit of the Company's  consolidated financial
statements.

Tax Fees

     Malone & Bailey,  PC was not paid any  aggregate  fees for the fiscal years
ended  October  31, 2005 and 2004 for  professional  services  rendered  for tax
compliance, tax advice and tax planning.

Other Fees

     Malone & Bailey, PC was paid no other fees for professional services during
the fiscal years ended October 31, 2005 and 2004.

                                       43
<PAGE>


                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned,  thereunto
duly authorized.

                                   IMPERIAL PETROLEUM RECOVERY CORPORATION


                                   By:
                                      ------------------------------------------
                                      Alan Springer, Chairman and Chief
                                      Executive Officer

                                   Date:    March 20, 2006

         In accordance with Section 13 or 15(d) of the Exchange Act, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

      Signature                         Title                       Date
      ---------                         -----                       ----

___________________________     Chairman of the Board            March 20, 2006
Alan Springer                   and Chief Executive Officer


                                Vice President,                  March 20, 2006
___________________________     Chief Financial Officer,
Edward C. Gaiennie              Principal Accounting Officer
                                and Director


___________________________     Director                         March 20, 2006
James Hammond


___________________________     Director                         March 20, 2006
A.V. McGraw


                                       44
<PAGE>


                     IMPERIAL PETROLEUM RECOVERY CORPORATION

                          Exhibit Index to Form 10-KSB


     Exhibit No.                  Identification of Exhibit
     -----------                  -------------------------


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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       45
<PAGE>


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

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

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

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

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

        10.18   Commercial  Contract,   between  the  Company  and  Dayton  Rice
                Milling, Inc., dated December 9, 2005.

        10.19   Second  Forbearance  Agreement,  dated January 1, 2006,  between
                IPRC and the successor in interest to Mobil.

        21.1    Subsidiaries of Registrant

        31.1    Certification of Alan Springer.

        31.2    Certification of Edward Gaiennie.

        32.1    Certification for Sarbanes-Oxley Act of Alan Springer.

        32.2    Certification for Sarbanes-Oxley Act of Edward Gaiennie.



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