UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-K





x  ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
fiscal year ended August 31, 2008





 ̈
TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE EXCHANGE ACT





Commission
file number:_________________





Imperiali
Inc.





(Exact
Name Registrant as Specified in Its Charter)





Florida
                
                65-0574887(State
      or Other Jurisdiction of
                
                (I.R.S.
      Employer Identification No.)Incorporation
      or Organization)





222
Lakeview Avenue, Suite 160, West Palm Beach, Florida 33401





(Address
      of Principal Executive Offices)
                  (Zip
      Code)





(Registrant’s
Telephone Number, including Area Code): (561)805-9494





Securities
registered pursuant to Section 12(b) of the Act





Title
      of each class
                  
                  Name
      of each exchange on which registered_________________________
                  
                  _________________________





Securities
registered pursuant to section 12(g) of the Act:





Common
Stock, Par Value $0.001





(Title of
class)




Indicate
by check mark if the Registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.   Yes   ̈    No  x




Indicate
by check mark if the Registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act.    Yes  ̈    No x





Indicate
by check mark whether the registrant (1) has filed all reports to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements for the past
90
days.                   
Yes  ý.    No
 ̈.









Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  ý




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):




Large
Accelerated Filer   ̈    Accelerated
Filer   ̈    Non-Accelerated
filer   ̈    Smaller
reporting company  x




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act of 1934).    Yes   ̈    No  x





On
December 1, 2008 there were 36,961,319
shares outstanding of the registrant’s common stock, $.001 par
value.




2




IMPERIALI,
INC.


FISCAL
YEAR ENDED AUGUST 31, 2008





INDEX
TO FORM 10-K




PagePart
      IItem 1.
                                                                                          Business
                                                                                          4Item 1A.
                                                                                          Risk
      Factors
                                                                                          7Item 2.
                                                                                          Properties
                                                                                          15Item 3.
                                                                                          Legal
      Proceedings
                                                                                          15Item 4.
                                                                                          Submission
      of Matters to a Vote of Security Holders
                                                                                          16Part
      IIItem 5.
                                                                                          Market
      Information
                                                                                          16Item 6.
                                                                                          Selected
      Financial Data
                                                                                          16Item 7.
                                                                                          Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                                                                          16Item 7A.
                                                                                          Quantitative
      and Qualitative Disclosures about Market Risk
                                                                                          19Item 8.
                                                                                          Financial
      Statements and Supplementary Data
                                                                                          19Item 9.
                                                                                          Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                                                                                          36Item 9A.
                                                                                          Controls
      and Procedures
                                                                                          36Item 9B.
                                                                                          Other
      Information
                                                                                          37Part
      IIIItem 10.
                                                                                          Directors
      and Officers and Corporate Governance
                                                                                          37Item 11.
                                                                                          Executive
      Compensation
                                                                                          37Item 12.
                                                                                          Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                                                                                          38Item 13.
                                                                                          Certain
      Relationships and Related Transactions, and Director
      Independence
                                                                                          38Item 14.
                                                                                          Principal
      Accountant Fees and Services
                                                                                          38Part
      IVItem 15.
                                                                                          Exhibits
      and Financial Statement Schedules
                                                                                          38Signatures
                                                                                          
                                                                                          39





Ex-31.1
              Section
      302 Certification of CEOEx-31.2
              Section
      302 Certification of CFOEx-32.1
              Section
      906 Certification of CEOEx-32.2
              Section
      906 Certification of CFO





3




PART
I




ITEM 1.
            BUSINESS





Business
Development





Imperiali, Inc. (the “Company”) was incorporated in
Florida on September 27, 1994 under the name Automated Energy Security
Inc.




From September 1994 through March 1999,
our Company provided energy management services and intelligent security for
residential dwellings, commercial buildings and government facilities. In 1994,
the Company purchased all of the patented technology, software and patents
pending on the Wide Area Energy Savings System known as “TESS” (Total Energy
Security System) from Associated Data Consultants, Inc. In 1998, after Bell
Atlantic (one of our strategic partners) withdrew from the development of TESS
and engaged in litigation with Associated Data, the Company abandoned our
business operations related to TESS.




In March 1999, we changed our name to
New Millennium Development Group, Inc. and our business operations to media and
telecommunications, focusing on connectivity solutions, storage, fiber optic
cable systems, security and the international long distance market. Our plan was
to spearhead a sub sea fiber optic cable system connecting 70 countries around
the globe. In furtherance of the plan the Company entered into Memoranda of
Understanding with 30 countries, completed landing party site and ocean surveys,
arranged long-term financing and selected vendors and subcontractors for fiber
optic cable and equipment. During the process, however, the price of cable
systems skyrocketed, forcing us to reconsider our business plans and
projections. The Company retained the services of an independent consultant who
concluded that not only would increasing cable prices decrease long-term gains,
the rapid development of the internet and Intellectual Property systems would
render obsolete the market for fiber optic cable. Accordingly, in mid 2001 we
shifted our focus away from fiber optic cable systems and concentrated on Voice
over Internet Protocol (VOIP) and related services including high-speed wireless
standard ISP and broadband services; international calling cards; video
conferencing and related IP products.




Failed corporate history, management
infighting, the tragedy of September 11, 2001 and the general economic downturn
especially related to technology, led us to cease business operations in
mid-2002 until mid-2005. However, during this time, Mr. Imperato, the Company’s
Chairman, at the time, and majority shareholder, worked to maintain management
relationships with previous businesses, associates and professionals for the
eventual resurrection of business operations.




In November 2005, we changed our name
to Imperiali, Inc. and commenced operations as a business development company an
investment company and elected to be regulated as a business development by the
Securities and Exchange Commission under the Investment Company Act 1940. As a
business development company, we were primarily be engaged in the business of
furnishing capital and making available managerial assistance to companies that
do not have ready access to capital through conventional financial channels. As
a business development company we were required to comply with numerous
regulatory requirements.





4





On November 19, 2007, our Company
entered into an initial subscription agreement with Kaiser Himmel Corporation
(“Kaiser”) whereby
Kaiser agreed to purchase 10,000,000 shares of our Company’s common stock in
exchange for Kaiser transferring to the Company 1.6 million shares of Sprint
Nextel common stock, which Kaiser indicated was held in the name of Kaiser at
Bank of America. The shares were purportedly restricted until October
2008.





Pursuant to the initial subscription
agreement, (i) Kaiser agreed to provide non-cancellable instructions, along with
all necessary and supporting documents related thereto, to Bank of America to
directly transfer the 1.6 million shares Sprint Nextel stock to our Company’s
stock account upon the expiration of the restrictions in October 2008. Such
shares were valued at $23,800,120; and (ii) our Company agreed to loan Kaiser an
aggregate of $380,000.00 at the current prime interest rate plus 1%, with such
loan due and payable in October 2008. $150,000 was to be transferred to Kaiser
upon execution of the subscription agreement, with the balance to be transferred
to Kaiser within 30 days. Further, the Company agreed to deliver 10,000,000
shares of Company common stock to Kaiser.





On November 22, 2007, our Company
entered into a second subscription agreement with Kaiser whereby Kaiser agreed
to purchase an additional 70,000,000 shares of our Company’s common stock in
exchange for Kaiser transferring to our Company 11.8 million shares of Sprint
Nextel common stock, which Kaiser indicated was held in the name of Kaiser at
Bank of America. These shares were also purportedly restricted until October
2008.





Pursuant to the second subscription
agreement, which was scheduled to close on February 28, 2008, (i) Kaiser agreed
to provide non-cancellable instructions, along with all necessary and supporting
documents related thereto, to Bank of America to directly transfer the 11.8
million shares Sprint Nextel stock to our Company’s stock account upon the
expiration of the restrictions in October 2008. Such shares were valued at
$175,525,880; and (ii) our Company agreed to loan Kaiser an aggregate of
$3,000,000 at the current prime interest rate plus 1%, and to deliver 70,000,000
shares of Company common stock to Kaiser.





Upon closing of both of these
transactions Kaiser acquired 80,000,000 shares of our Company and controlled
62.5% of the Company. Eric Skys, who owned and controlled Kaiser, appointed
himself as our Company’s chief executive officer.





Over the next several months,
management infighting began to occur and the Company’s assets began to
disappear. On or about May 15, 2008, Eric Skys was arrested by the Federal
Bureau of Investigation (FBI). In late July 2008, a New York grand jury indicted
Mr. Skys on charges that he tried to defraud several banks out of millions of
dollars in an elaborate stock sale scheme. Mr. Skys was indicted on three counts
of wire fraud and one count each of securities fraud and bank fraud. According
to the U.S. attorney’s office for the Southern District of New York, Mr. Skys
faces up to 110 years in prison and the greater of a $6 million fine or twice
the gross gain or loss from his offense.





5





Authorities said Mr. Skys contacted
several banks in 2007 claiming he had 13.4 million shares of Sprint Nextel stock
valued at $243,076,000 and he was seeking large sums of money in exchange for
ownership interest in the Sprint Nextel stock. Mr. Skys said Kaiser received the
shares as compensation for computer technology services, according to the court
documents. Authorities also said that Mr. Skys was trying to induce the banks to
give him cash or a loan in exchange for ownership interest in the shares.
Authorities also said that as part of the scheme, Mr. Skys sent the banks
fabricated documents and altered e-mails that showed Kaiser possessed the shares
of Sprint Nextel stock. According to court documents, an FBI investigator
interviewed representatives from Sprint Nextel, who said they never entered into
a multi-million stock agreement with Kaiser.





In connection with Mr. Sky’s arrest,
the FBI seized all of our Company’s data center equipment in Kaiser’s
possession. To date, certain Company funds provided to Kaiser have not been
accounted for, and no Company equipment has been returned to the Company by the
FBI. The Company’s latest audit revealed that the Company loaned approximately
$750,000 to Kaiser.





On May 29, 2008, at a meeting of the
Company’s Board of Directors, the board approved an agreement between the
Company, Kaiser and Imperiali Organization, a company owned and controlled by
Daniel J. Imperato, whereby in exchange for Imperiali Organization assuming the
debt owed to the Company by Kaiser, Kaiser will transfer all of its assets,
including accounts receivable, causes of action, software, hardware, and work in
process for all software projects, prototypes, websites, trademarks, vehicles
and source code, to Imperiali Organization.





On September 1, 2008, Mr. Daniel J.
Imperato, our Company’s majority shareholder, removed the Company’s then current
board of directors and named himself as Interim Non-Executive Chairman Emeritus
of our Company, treasurer and as a member of our board of directors; he also
named Mr. Richard E. Biggs as an additional member of our board of directors. He
then cancelled all 80,000,000 shares of Company stock issued to Kaiser as a
result of Kaiser’s inability to deliver the 13.4 million shares of Sprint Nextel
stock to our Company.





On November 6, 2008, Imperiali, Inc.
filed a Form N-54C with the SEC withdrawing the Company’s election to be
regulated as a business development company pursuant to the Investment Company
Act of 1940.





The Company is now pursuing a business
model whereby it would consolidate its subsidiaries and provide global business
development consulting services (the “New Business Model”).
Specifically, the Company will identify client companies and assist them with
their global expansion, and provide them with business advice and management
expertise related thereto. Under the New Business Model, the Company will at all
times be managed and conduct its activities in such a way as to not act as an
“investment company” subject to regulation under the 1940 Act. Thus, it will not
hold itself out as being engaged primarily in the business of investing,
reinvesting or trading in securities. In addition, the Company will conduct its
business in such a manner as to ensure that it will at no time own or propose to
acquire investment securities having a value exceeding 40 percent of the
Company's total assets at any one time. The Company has recently implemented a
share exchange whereby shareholders of each of the Company’s subsidiaries may
exchange the subsidiary shares for Company shares on a 1:1 basis.





6








ITEM
      1A.
            RISK
      FACTORS





Risk
Factors Related To Our Business





Investing in our common stock is risky.
In addition to the other information in this annual report, you should consider
carefully the following risk factors in evaluating us and our business. If any
of the events described in the following risk factors were to occur, our
business, financial condition or results of operations likely would
suffer.





We
have incurred substantial operating losses since our inception and will continue
to incur substantial operating losses for the foreseeable future.





Since our inception, we have incurred
significant losses and experienced negative cash flow. We anticipate that we
will continue to incur operating losses through at least 2009. Until we fully
implement our New Business Model, we will not be able to generate revenue. We
expect to make significant operating and capital expenditures to implement our
New Business Model. As a result, we will need to generate significant additional
revenue to achieve profitability. We cannot assure you that we will ever achieve
profitability.





These conditions raise substantial
doubt to our auditors about our ability to continue as a going concern. The
attainment of profitable operations is dependent upon future events, including
our ability to obtain adequate financing to fulfill our development activities
and achieving a level of sales adequate to support our Company’s cost
structure.





Our
independent auditors have expressed substantial doubt about our ability to
continue as a going concern.





Our independent auditors have included
an explanatory paragraph in their audit report issued in connection with our
financial statements which states that our significant losses and negative cash
flow during our development stage raise substantial doubt about our ability to
continue as a going concern. Our financial statements do not include any
adjustments that might result from the outcome of this uncertainty. Our ability
to continue as a going concern is dependent upon our ability to successfully
implement our New Business Model and, ultimately, attain profitable operations,
which is dependent upon future events, including obtaining adequate financing to
fulfill our development activities and achieving a level of revenue adequate to
support our cost structure. We cannot assure you that we will be able to secure
the necessary financing and/or equity investment or achieve an adequate sales
level.





7





We
are subject to the risks frequently experienced by early stage
companies.





The likelihood of our success must be
considered in light of the risks frequently encountered by early stage
companies. These risks include our potential inability to:





·
            establish
      sales and marketing capabilities;


·
            establish
      and maintain markets for our potential service
  offerings;


·
            identify,
      attract, retain and motivate qualified
  personnel;


·
            keep
      pace with changes in technology;





Our
future growth will suffer if we do not achieve sufficient market acceptance of
our business services.





Our success depends, in part, upon our
ability to gain market acceptance of our business services. If the markets we
are targeting for our business services fail to accept us, our business will
fail. Achieving market acceptance for our business services will require
marketing efforts and the expenditure of financial and other resources to create
awareness and demand by customers. We may be unable to compete effectively due
to our limited resources and operating history. Also, certain large corporations
may be predisposed against doing business with a company of our limited size and
operating history. Failure to achieve broad acceptance of our business services
and to compete effectively would harm our operating results.





Our
future success will be dependant upon our Company maintaining a high level of
technical expertise.





Technology in our target markets is
undergoing rapid change. To succeed in our target markets, we will have to
establish and maintain a leadership position in the technology supporting those
markets. Accordingly, our success will depend on our ability to:





·
            accurately
      predict the needs of our target markets and develop, in a timely manner,
      the technology required to support those
needs;


·
            provide
      services at a price acceptable to customers and competitive with
      comparable services;


·
            establish
      and effectively defend our intellectual property;
  and


·
            enter
      into relationships with other companies that have developed complementary
      technology into which our services may be
  integrated.





We cannot
assure you that we will be able to achieve any of these objectives.





8





We
will require additional capital to continue to fund our operations and if we do
not obtain additional capital, we may be required to substantially limit our
operations.





Our business does not presently
generate the cash needed to finance our current and anticipated operations. We
will require additional capital to continue to fund our operations in future
periods. We expect that we will need to seek additional funding through public
or private financings, including equity financings, and through other
arrangements, including collaborative arrangements. Poor financial results,
unanticipated expenses or unanticipated opportunities could require additional
financing sooner than we expect. We currently have no plans or arrangements with
respect to the possible acquisition of additional financing and such financing
may be unavailable when we need it or may not be available on acceptable terms.
Additional financing may not be available to us, due to, among other things, our
Company not having a sufficient credit history, income stream, profit level,
asset base eligible to be collateralized, or market for its securities. If we
raise additional funds by issuing equity or convertible debt securities, the
percentage ownership of our existing stockholders may be reduced, and these
securities may have rights superior to those of our common stock. If adequate
funds are not available to satisfy either short-term or long-term capital
requirements, or if planned revenues are not generated, we may be required to
limit our operations substantially. These limitations of operations may include
reductions in capital expenditures and reductions in staff and discretionary
costs.





Our
New Business Model has generated no sales to date and we cannot accurately
estimate future quarterly revenue and operating expenses based on historical
performance.





Our
quarterly operating results may vary significantly based on many factors,
including:





·
            fluctuating
      demand for our potential services and
  technologies;


·
            announcements
      or implementation by our competitors of technological innovations or new
      services;


·
            amount
      and timing of our costs related to our marketing efforts or other
      initiatives;


·
            the
      status of particular development programs and the timing of performance
      under specific development
agreements;


·
            timing
      and amounts relating to the expansion of our
  operations;


·
            announcements
      or implementation by our competitors of technological innovations or new
      services;


·
            our
      ability to enter into key
agreements;


·
            timing
      and amounts relating to the expansion of our
  operations;


·
            costs
      related to possible future acquisitions of technologies or businesses;
      or


·
            economic
      conditions specific to our industry, as well as general economic
      conditions.





Our current and future expense
estimates are based, in large part, on estimates of future revenue, which is
difficult to predict. We expect to make significant operating and capital
expenditures in the area of sales, marketing and administrative systems and
processes. We may be unable to, or may elect not to, adjust spending quickly
enough to offset any unexpected revenue shortfall. If our increased expenses are
not accompanied by increased revenue in the same quarter, our quarterly
operating results would be harmed.





9





We
cannot predict the pace of marketable business services we may offer, and any
inability to generate a sufficient number of marketable services would reduce
our revenues and harm our business.





Our future revenues and profitability
are dependent upon our ability to create marketable business services. Our
product candidates may not result in services having the commercial potential we
anticipate. Any of these factors could reduce our potential commercial sales and
lead to inability to generate revenue and attain profitability.





Our
failure to compete successfully could harm our business.





The markets that we are targeting are
intensely competitive. Most of our present and potential competitors have or may
have substantially greater product capabilities, financial, marketing,
manufacturing and human resources, name recognition and experience than we
have.





As a result, these competitors
may:





·
            succeed
      in developing services that are equal to or superior to our potential
      services or that will achieve greater market acceptance than our potential
      services;


·
            devote
      greater resources to developing, marketing or selling their
      services;


·
            respond
      more quickly to new or emerging technologies or changes in customer
      requirements, which could render our potential services
      obsolete;


·
            introduce
      services that make the continued development of our potential services
      uneconomical;


·
            withstand
      price competition more successfully than we can;
  and


·
            establish
      cooperative relationships among themselves or with third parties that
      enhance their ability to address the needs of our prospective
      customers.





The
failure to compete successfully against these existing or future competitors
could harm our business.





We
may be unable to establish sales and marketing capabilities necessary to
successfully commercialize our potential services.





We currently have limited sales and
marketing capabilities. We will need to either hire sales personnel with
expertise in the markets we intend to address or contract with others to provide
for sales support. Our potential services address different markets and can be
offered through multiple sales channels. Addressing each market effectively will
require sales and marketing resources tailored to the particular market and to
the sales channels that we choose to employ. In addition, the markets in which
we operate are highly complex and technical; we may not have the adequate
expertise to adequately market our services. We may be unable to establish
marketing and sales capabilities necessary to commercialize and gain market
acceptance for our potential services. Co-promotion or other marketing
arrangements with others to commercialize services could significantly limit the
revenues we derive from these services, and these parties may fail to
commercialize such services successfully.





10





We
may be unable to obtain effective intellectual property protection for our
potential services and technology.





We rely on the law of trade secrets to
protect unpatented technology and know-how. We try to protect this technology
and know- how by limiting access to those employees, contractors and strategic
partners with a need to know this information and by entering into
confidentiality agreements with these parties. Any of these parties could breach
the agreements and disclose our trade secrets or confidential information to our
competitors, or these competitors might learn of the information in other ways.
Disclosure of any trade secret not protected by a patent could materially harm
our business.





The
loss of certain of our key personnel, or any inability to attract and retain
additional personnel, could impair our ability to attain our business
objectives.





Our future success depends to a
significant extent on the continued service of our key management personnel,
particularly Mr. Daniel J. Imperato, our Company’s Interim Non-Executive
Chairman Emeritus and treasurer. We currently do not have a written employment
agreement with Mr. Imperato. Accordingly, the loss of the services of Mr.
Imperato would adversely affect our business and our ability to timely
commercialize our services, and impede the attainment of our business
objectives.





Our future success will also depend on
our ability to attract, retain and motivate highly skilled personnel. In
particular, we will need to hire seasoned executive managers to assist us with
marketing and performing our contemplated services. Competition for highly
educated qualified personnel is intense. If we fail to hire and retain a
sufficient number of qualified personnel, we will not be able to attain our
business objectives.





We
may outsource some of our services to third parties and our revenues could
decline if these third parties do not adequately or timely perform their
services and our reputation could suffer if we do not maintain high quality
standards.





We may enter into outsourcing
arrangements with third party service providers and we intend to enter into
agreements with additional corporate partners and other third parties. We expect
to contract with various companies to perform various portions of our service
offerings. If these third parties do not adequately or timely perform their
services, our reputation could be harmed, and our revenues could decline. We
cannot assure you that we will be able to negotiate arrangements with these
third parties on acceptable terms, if at all, or that these arrangements will be
successful in yielding commercially acceptable service performance. If we cannot
maintain our current relationships or establish new arrangements, we will
require additional capital to undertake those activities on our own and will
require expertise that we do not currently possess and that may be difficult to
obtain.





11





We
may be unable to effectively implement new transaction accounting, operational
and financial systems.





To manage the expected growth of our
operations and personnel, we will be required to implement complex transaction
accounting, operational and financial systems, procedures and controls and to
retain personnel experienced in the use of these systems. Deficiencies in the
design and operation of our systems, procedures and controls, including internal
controls, could adversely affect our ability to record, process, summarize and
report material financial information. We cannot assure you that our current and
planned systems, procedures and controls will be adequate to support our future
operations.





Our
failure to effectively manage and support our growth could adversely affect our
business.





Failure to effectively manage and
support our growth could adversely affect our business. The transition from
development stage to a service provider will create significant additional
demands on our infrastructure and will require effective planning and
management. We cannot assure you that our resources will be adequate to support
our future growth. In addition, future expansion will be expensive and will
likely strain our management and other resources. In order to effectively manage
growth, we must:





·
            manage
      in-house our operating and financial control
  systems;


·
            continue
      to develop an effective planning and management process to implement our
      business strategy;


·
            hire,
      train and integrate new personnel in all areas of our business;
      and


·
            expand
      our facilities and increase our capital
  investments.





We cannot assure you that we will be
able to accomplish these tasks effectively or otherwise effectively manage our
growth.





Our
plan to develop relationships with strategic partners may not be
successful.





Part of our business strategy is to
maintain and develop strategic relationships with government agencies and
private firms. For these efforts to be successful, we must identify partners
whose competencies complement ours. We must also successfully enter into
agreements with them on terms attractive to us, and integrate and coordinate
their resources and capabilities with our own. We may be unsuccessful in
entering into agreements with acceptable partners or negotiating favorable terms
in these agreements. Also, we may be unsuccessful in integrating the resources
or capabilities of these partners. In addition, our strategic partners may prove
difficult to work with or less skilled than we originally expected. If we are
unsuccessful in our collaborative efforts, our ability to develop and market
services could be severely limited.





12





If
we establish global operations, we will be subject to various
risks.





Many of the markets that we propose to
address are global and will require us to conduct foreign operations. While the
specific risks that will apply to these activities would depend on the
circumstances, we could become subject to risks relating to foreign currency
fluctuations, political and social unrest, local regulatory systems and varying
standards for the protection of intellectual property. The existence of any of
these risks will complicate our business and may lead to unexpected and adverse
effects on our business. If we are required to conduct significant foreign
operations, we will also need expertise in such operations, which we do not
presently have.





Our
limited operating history makes financial forecasting difficult for us and for
others that may publish estimates of our future financial results.





As a result of our limited operating
history, it is difficult to accurately forecast our revenue and results,
including cost of revenue, research and development expenses, marketing, general
and administrative expenses and other financial and operating data. We have a
limited amount of meaningful historical financial data upon which to base
projected revenue or expenses. We base our current expense levels and estimates
of future expense levels on our operating plans and estimates of future revenue,
and our future expenses will be dependent in large part upon our future levels
of service sales. Sales and results are difficult to forecast because we do not
currently have any commercial customers or government contracts, we are
uncertain of the extent of orders for our services and the mix, volume and
timing of any such orders. As a result, we may be unable to make accurate
financial forecasts of revenue or expenses. Financial analysts and others that
may seek to project our future performance face similar difficulties. This
inability to accurately forecast our revenue and expenses could cause our
financial results to differ materially from any projected financial
results.





Risks Factors Related to
Owning Our Common Stock





Our
Company’s violations of the 1940 Act may cause our Company to incur certain
liabilities that could have a significant impact on our Company’s ability to
continue as a going concern.





In early 2007, our management and
auditors had telephone discussions with the Securities and Exchange Commission
(the “SEC”) concerning our serious compliance failures with respect to certain
provisions of the federal securities laws and related rules, including Article 6
of Regulation S-X and Generally Accepted Accounting Principles (GAAP). In August
2007, and for a period of over a year thereafter, our company began to receive
written correspondences from the SEC relating to our serious compliance failures
with respect to the 1940 Act, in addition to the compliance failures described
above. The SEC also sought clarification with respect to our Company’s agreement
with Kaiser Himmel Corporation. After over eighteen months, our Company remained
non-compliant with certain of the rules and regulations governing the business
and affairs, financial status, and financial reporting items required of
business development companies and reporting companies in general. Our Company’s
violations of the 1940 Act may cause the Company to incur certain liabilities.
Such liabilities can not be estimated by management as of this time. However,
such liabilities, if incurred, could have a significant impact on the Company’s
ability to continue as a going concern. Further, as a result of our Company’s
failure to have appointed a chief compliance officer, we may be deemed to have
violated additional federal securities laws, which could subject our Company to
additional liabilities. These matters could lead to enforcement action by the
SEC. At this time, we are unable to determine whether these matters will lead to
potentially adverse action from the SEC.





13





If
we authorize the issuance of additional securities, existing stockholders may
experience future ownership dilution.





Our Articles of Incorporation provide
that we may issue up to 500,000,000 shares of common stock and 5,000,000 shares
of preferred stock. In the event we issue additional shares of common stock in
connection with our contemplated growth plans or otherwise, our stockholders
will experience future ownership dilution that could adversely affect prevailing
market prices for our common stock.





Our
board of directors has the discretion to assign rights and preferences to our
blank check preferred stock.





Pursuant to our Company’s articles of
incorporation, we are authorized to issue 5,000,000 shares of preferred stock,
and our board of directors has the discretion to assign rights and preferences
to our preferred stock without the approval of our common stockholders. The
rights and preferences of this preferred stock may be superior to the rights and
preferences of our common stock; and the issuance of this preferred stock could
serve to deter or prevent a takeover from a third party. This type of preferred
stock is commonly referred to as “Blank Check Preferred Stock.”





Voting
control of management; management’s ability to control the Company’s affairs and
operations; no disinterested members of the board of directors.





Management of the Company owns
approximately 71% of the issued and outstanding shares of the Company’s common
stock.  The Company’s articles of incorporation do not provide for
cumulative voting for the election of directors. Consequently, management of the
Company is able to elect all of the Company’s directors, appoint officers and
otherwise control the Company’s affairs and operations. Further, the board of
directors currently has no formal committees, such as a compensation committee
or an audit committee, and most likely will not form such committees in the near
future.





No
public trading market for the Company’s securities; no assurance that a public
trading market will develop.





No public trading market for our common
stock exists.  There can be no assurances that a regular trading
market will develop for the shares of common stock or that, if developed, any
such market will be sustained. Trading of the common stock will likely be
conducted through what is customarily known as the over-the-counter bulletin
board. Any market for the common stock which may result will likely be less well
developed than if the common stock were traded on a stock exchange.





14





Likelihood
the Company’s securities will be subject to the SEC’s penny stock regulations;
potential difficulties in reselling securities.





The Company’s securities, if and when
available for trading, will likely be subject to the SEC’s rules that regulate
broker-dealer practices in connection with transactions in “penny stocks.”
Generally, penny stocks are equity securities with a price of less than $5.00
(other than securities registered on certain national securities exchanges or
quoted on the NASDAQ system, provided that current price and volume information
with respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from the rules, to deliver a standardized
risk disclosure document prepared by the SEC that provides information about
penny stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with bid and offer quotations for
the penny stock, the compensation of the broker-dealer and its salesperson in
the transaction, and monthly account statements showing the market value of each
penny stock held in the customer’s account. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
such rules the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchaser’s written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for a stock that becomes subject to the penny stock rules. If the
Company’s common stock becomes subject to the penny stock rules, shareholders
may find it more difficult to resell their shares of common stock.





ITEM 2.
            PROPERTIES





The Company leases approximately 1,000
square feet of space at 529 S. Flagler Drive, Suite 29, West Palm Beach, Florida
33401. The office space is used for sales, administrative offices, and customer
support.





ITEM
      3.
            LEGAL
      PROCEEDINGS





In early 2007, our management and
auditors had telephone discussions with the Securities and Exchange Commission
(the “SEC”) concerning our serious compliance failures with respect to certain
provisions of the federal securities laws and related rules, including Article 6
of Regulation S-X and Generally Accepted Accounting Principles (GAAP). In August
2007, and for a period of over a year thereafter, our company began to receive
written correspondences from the SEC relating to our serious compliance failures
with respect to the 1940 Act, in addition to the compliance failures described
above. The SEC also sought clarification with respect to our Company’s agreement
with Kaiser Himmel Corporation. After over eighteen months, our Company remained
non-compliant with certain of the rules and regulations governing the business
and affairs, financial status, and financial reporting items required of
business development companies and reporting companies in general. Our Company’s
violations of the 1940 Act may cause the Company to incur certain liabilities.
Such liabilities can not be estimated by management as of this time. However,
such liabilities, if incurred, could have a significant impact on the Company’s
ability to continue as a going concern. Further, as a result of our Company’s
failure to have appointed a chief compliance officer, we may be deemed to have
violated additional federal securities laws, which could subject our Company to
additional liabilities. These matters could lead to enforcement action by the
SEC. At this time, we are unable to determine whether these matters will lead to
potentially adverse action from the SEC.





15





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





The information required for this item
is incorporated herein by reference to the Company’s Definitive 14C Information
Statement filed with the U.S. Securities and Exchange Commission on October 17,
2008.





PART
II





ITEM
      5.
            MARKET
      INFORMATION





(a) Market
Information





No public
trading market presently exists for our Common Stock, and we cannot assure you
that a trading market for our Common Stock will ever develop.





(b) Holders





During
the period covered by this report, approximately 500 holders of record held our
Common Stock.





(c) Dividends





No cash
dividends were declared or paid on our Common Stock since our
inception.  No restrictions limit our ability to pay dividends on our
Common Stock.  We do not expect to pay any dividends in the near
future.





(d) Securities
Authorized for Issuance Under Equity Compensation Plans.





Not
applicable.


(e)


(f) Recent
Sales of Unregistered Securities





Not
applicable.





ITEM
      6.
            SELECTED
      FINANCIAL DATA





Not
Applicable.





ITEM
      7.
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS.





16





The following discussion should be read
in conjunction with our unaudited financial statements and notes
thereto.





Forward-Looking
Statements





This annual report contains
forward-looking statements and information relating to us that is based on the
beliefs of our management as well as assumptions made by, and information
currently available to, our management.   When used in this
report, the words "anticipate", "believe", "estimate", "expect", "intend",
"plan" and similar expressions, as they relate to us or our management, are
intended to identify forward-looking statements.  These statements
reflect management's current view of us concerning future events and are subject
to certain risks, uncertainties and assumptions, including among many others: a
general economic downturn; a downturn in the securities markets; federal or
state laws or regulations having an adverse effect on proposed transactions that
we desire to effect; Securities and Exchange Commission regulations which affect
trading in the securities of "penny stocks,"; and other risks and uncertainties.
Should any of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described in this report as anticipated, estimated or expected.  All
forward-looking statements attributable to us are expressly qualified in their
entirety by the forgoing cautionary statement.





Overview





On November 6, 2008, Imperiali, Inc.
filed a Form N-54C with the SEC withdrawing the Company’s election to be
regulated as a business development company pursuant to the Investment Company
Act of 1940.





The Company is now pursuing a business
model whereby it would consolidate its subsidiaries and provide global business
development consulting services (the “New Business Model”).
Specifically, the Company will identify client companies and assist them with
their global expansion, and provide them with business advice and management
expertise related thereto. Under the New Business Model, the Company will at all
times be managed and conduct its activities in such a way as to not act as an
“investment company” subject to regulation under the 1940 Act. Thus, it will not
hold itself out as being engaged primarily in the business of investing,
reinvesting or trading in securities. In addition, the Company will conduct its
business in such a manner as to ensure that it will at no time own or propose to
acquire investment securities having a value exceeding 40 percent of the
Company's total assets at any one time. The Company has recently implemented a
share exchange whereby shareholders of each of the Company’s subsidiaries may
exchange the subsidiary shares for Company shares on a 1:1 basis.








Results
of Operations





Revenue


Revenue
was $365,173 and was primarily derived from Consulting Fees received for
services.





17





Operating
Expenses


For the
year ended August 31, 2008, the Company had a net loss of $545,518. Total
expenses incurred were $911,426 of which $680,000 was the write-off of the
Kaiser Himmel loan, $137,720 was for Employees and Consulting and $93,706 was
for General and Administrative Expense.  General and administrative
expenses related primarily to insurance, telephone, other office costs and costs
associated with being a reporting company.





Liquidity
and Capital Resources


The
Company had cash on hand of $59 at August 31, 2008 and had no other assets to
meet ongoing expenses or debts that may accumulate.  As of such date,
we have an accumulated deficit of $16,427,132.





The
Company has no commitment for any capital expenditure and foresees
none.  However, we will incur routine fees and expenses incident to
our reporting duties as a reporting company, and we will incur expenses in
finding and investigating possible acquisitions and other fees and expenses in
the event we make an acquisition or attempt but are unable to complete an
acquisition.  Our cash requirements for the next twelve months are
relatively modest, principally operational accounting expenses and other
expenses relating to making filings required under the Securities Exchange Act
of 1934 (the "Exchange Act"), which should not exceed $1.7 million in the fiscal
year ending August 31, 2009.  Any travel, lodging or other expenses
which may arise related to finding, investigating and attempting to complete a
combination with one or more potential acquisitions could also amount to
thousands of dollars.





The
Company will only be able to pay future debts and meet operating expenses by
raising additional funds, acquiring a profitable company or otherwise generating
positive cash flow.  As a practical matter, we are unlikely to
generate positive cash flow by any means other than acquiring a company with
such cash flow.  We believe that management members or shareholders
will loan funds to us as needed for operations prior to completion of an
acquisition.  Management and the shareholders are not obligated to
provide funds to us, however, and it is not certain they will always want or be
financially able to do so. Our shareholders and management members who advance
money to us to cover operating expenses will expect to be reimbursed, either by
us or by the company acquired, prior to or at the time of completing a
combination.  We have no intention of borrowing money to reimburse or
pay salaries to any of our officers, directors or shareholders or their
affiliates.





Should
existing management or shareholders refuse to advance needed funds, however, the
Company would be forced to turn to outside parties to either loan money to us or
buy our securities.  There is no assurance whatsoever that we will be
able to raise necessary funds from outside sources.  Such a lack of
funds could result in severe consequences to us, including among
others:





·
            failure
      to make timely filings with the SEC as required by the Exchange Act, which
      also probably would result in suspension of trading or quotation in our
      stock and could result in fines and penalties to us under the Exchange
      Act;




·
            curtailing
      or eliminating our ability to locate and perform suitable investigations
      of potential acquisitions; or




·
            The
      inability to complete a desirable acquisition due to lack of funds to pay
      legal and accounting fees and acquisition-related
  expenses.




18





We hope
to require potential candidate companies to deposit funds with us that we can
use to defray professional fees and travel, lodging and other due diligence
expenses incurred by our management related to finding and investigating a
candidate company and negotiating and consummating a business
combination.  There is no assurance that any potential candidate will
agree to make such a deposit.





Critical
Accounting Policies


Financial
Reporting Release No. 60 of the SEC encourages all companies to include a
discussion of critical accounting policies or methods used in the preparation of
the financial statements. There are no current business operations or revenue
generating activities that give rise to significant assumptions or
estimates.





Our most
critical accounting policies relate to the accounting and disclosure of related
party transactions. Our financial statements filed as part of this report
include a summary of the significant accounting policies and methods used in the
preparation of our financial statements.





ITEM
      7A.
            Quantitative
      and Qualitative Disclosures about Market
Risk





Not Applicable





ITEM
      8.
            Financial
      Statements and Supplementary Data





The
following consolidated financial statements of Imperiali, Inc., prepared in
accordance with Regulation S-X and the Reports of the Independent Registered
Accounting Firm are included in this Item 8:




PageReport
      of Independent Registered Public Accounting Firm
                  
                  20Financial
      Statements:Balance
      Sheets
                  
                  21Statements
      of Operations
                  
                  22Statements
      of Changes in Stockholders' Equity
                  
                  23Statement
      of Investments
                  
                  23Statements
      of Cash Flows
                  
                  24Notes
      to Financial Statements
                  
                  25





19




Larry
O'Donnell, CPA, P.C.


Telephone
      (303) 745-4545
                
                2228
      South Fraser StreetUnit
      1Fax
      (303) 369-9384Email:
      larryodonnellcpa@msn.com
                  80014
                
                Aurora,
      Coloradowww.larryodonnellcpa.com





REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM




Board
of Directors


Imperiali,
Inc.




I
have audited the accompanying balance sheet of Imperiali, Inc. as of August 31,
2008 and 2007, and the related statements of operations, changes in
stockholders' equity and cash flows for the years then ended.  These
financial statements are the responsibility of the Company's
management.  My responsibility is to express an opinion on these
financial statements based on my audits.




I
conducted my audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that I plan and perform the audit 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.  I believe that my audit provides a reasonable basis for
my opinion.




In
my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Imperiali, Inc. as of August 31,
2008 and 2007, and the results of its operations and its cash flows for the
years then ended, in conformity with generally accepted accounting principles in
the United States of America.





Larry
O'Donnell, CPA, P.C.




Aurora,
Colorado





December
12, 2008





20








IMPERIALI,
INC.


Balance
Sheets





August31, 2008
                                              
                                              
                                              August31, 2007RestatedASSETSCurrent
      assets:Cash
                                              
                                              $
                                              59
                                              
                                              
                                              $
                                              189,368Prepaid
      expenses
                                              
                                              
                                              -
                                              
                                              
                                              
                                              9,765Total
      current assets
                                              
                                              $
                                              59
                                              
                                              
                                              $
                                              199,133Fixed
      Assets
                                              
                                              $
                                              1,000
                                              
                                              
                                              $
                                              -Total
      assets
                                              
                                              $
                                              1,059
                                              
                                              
                                              $
                                              199,133LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable and other current liabilities
                                              
                                              $
                                              191
                                              
                                              
                                              $
                                              26,614Note
      payable - related party
                                              
                                              
                                              257,500
                                              
                                              
                                              
                                              -Total
      current liabilities
                                              
                                              $
                                              257,691
                                              
                                              
                                              $
                                              26,614Stockholders'
      equity:Common
      stock; $.001 par value; authorized - 500,000,000 shares; 48,200,986 and
      38,200,986 shares issued and outstanding at August 31,2008 and August 31,
      2007 respectively
                                              
                                              $
                                              48,201
                                              
                                              
                                              $
                                              38,389Additional
      paid in capital
                                              
                                              
                                              16,122,299
                                              
                                              
                                              
                                              16,117,963Accumulated
      deficit
                                              
                                              
                                              (15,881,614
                                              )
                                              
                                              
                                              (11,171,422
                                              )Undistributed
      Earnings
                                              
                                              
                                              (545,518
                                              )
                                              
                                              
                                              (4,812,411
                                              )Total
      shareholders' equity
                                              
                                              $
                                              (256,632
                                              )
                                              
                                              $
                                              172,519Total
      liabilities and shareholders' equity
                                              
                                              $
                                              1,059
                                              
                                              
                                              $
                                              199,133


21




IMPERIALI, INC.


Statement
of Operations


For
the Twelve Months Ended August 31, 2008 and 2007





2008
                      
                      
                      2007RestatedInterest
      and Related Portfolio IncomeConsulting
      income
                      
                      $
                      343,173
                      
                      
                      $
                      -I/C
      income
                      
                      
                      22,000
                      
                      
                      
                      -Interest
      and dividends
                      
                      
                      735
                      
                      
                      
                      8,442Gross
      revenue
                      
                      $
                      365,908
                      
                      
                      $
                      8,442Expenses:Consulting
      and employee costs
                      
                      $
                      (137,720
                      )
                      
                      $
                      (1,131,774
                      )General
      and administrative
                      
                      
                      (93,706
                      )
                      
                      
                      (189,079
                      )Bad
      debt writeoff
                      
                      
                      (680,000
                      )
                      
                      
                      -Total
      Expenses
                      
                      $
                      (911,426
                      )
                      
                      $
                      (1,320,853
                      )Net
      investment income before income taxes
                      
                      $
                      (545,518
                      )
                      
                      $
                      (1,312,411
                      )Income
      tax expense
                      
                      
                      -
                      
                      
                      
                      -Net
      investment income (loss)
                      
                      $
                      (545,518
                      )
                      
                      $
                      (1,312,411
                      )Net
      Realized Gains(losses)
                      
                      
                      -
                      
                      
                      
                      -Net
      Change in unrealized appreciation
                      
                      
                      -
                      
                      
                      
                      (3,500,000
                      )Net
      increase (decrease)in net assets resulting from operations
      (loss)
                      
                      $
                      (545,518
                      )
                      
                      $
                      (4,812,411
                      )Earnings
      (loss) per common share - basic
                      
                      $
                      (0.011
                      )
                      
                      $
                      (0.166
                      )Earnings
      (loss) per common share - diluted
                      
                      $
                      (0.011
                      )
                      
                      $
                      (0.166
                      )Weighted
      avg common shares outstanding - basic
                      
                      
                      48,200,986
                      
                      
                      
                      28,965,486Weighted
      avg common shares outstanding - diluted
                      
                      
                      48,200,986
                      
                      
                      
                      28,965,486




22





IMPERIALI,
INC.


Statement
of Changes in Stockholders' Equity


For
Fiscal Years Ended August 31, 2008 and 2007





Additional
                
                
                AccumulatedShares
                
                
                Amount
                
                
                Paid
      in Capital
                
                
                Deficit
                
                
                TotalBalance,
      August 31, 2006
                
                
                20,358,486
                
                
                $
                20,358
                
                
                $
                11,760,605
                
                
                $
                (11,171,422
                )
                
                $
                609,541Issuance
      of common stock
                
                
                17,842,500
                
                
                
                18,031
                
                
                
                4,357,358
                
                
                
                
                
                
                
                4,375,389Net
      loss for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (4,812,411
                )
                
                
                (4,812,411
                )Balance
      August 31, 2007
                
                
                38,200,986
                
                
                $
                38,389
                
                
                $
                16,117,963
                
                
                $
                (15,983,833
                )
                
                $
                172,519Issuance
      of common stock
                
                
                10,000,000
                
                
                
                9,812
                
                
                
                4,336
                
                
                
                102,219
                
                
                
                116,367Net
      gain for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (545,518
                )
                
                
                (545,518
                )Balance
      August 31, 2008
                
                
                48,200,986
                
                
                $
                48,201
                
                
                $
                16,122,299
                
                
                $
                (16,427,132
                )
                
                $
                (256,632
                )





IMPERIALI,
INC.


Statement
of Investments





Private
      Finance Portfolio Company
                    Investment
                    
                    
                    Cost
                    
                    
                    ValueImperiali
      Organization LLC
                    
                    
                    
                    $
                    -
                    
                    
                    $
                    -I1Telecom
      Services Inc
                    Common
      Stock
                    30,000,000
      Shares
                    
                    
                    -
                    
                    
                    
                    -I1Connect
      Inc
                    Common
      Stock
                    40,000,000
      Shares
                    
                    
                    3,500,000
                    
                    
                    
                    -I1Films
      Inc
                    Common
      Stock
                    5,000,000
      Shares
                    
                    
                    -
                    
                    
                    
                    -Total
                    
                    
                    
                    $
                    3,500,000
                    
                    
                    $
                    -


23




IMPERIALI,
INC.


Statement
of Cash Flows


For
the Fiscal Years ended August 31, 2008 and  2007





2008
                
                
                2007RestatedCash
      flow from operating activities:Net
      increase (decrease) in net assets from operations
                
                $
                (545,518
                )
                
                $
                (4,812,411
                )Adjustments
      to reconcile net income (loss) to net cash provided by (used in) operating
      activities:Write-off
      of Kaiser Himmel loan
                
                
                680,000
                
                
                
                -Other
      assets
                
                
                -
                
                
                
                (9,765
                )Other
      liabilities
                
                
                191
                
                
                
                26,614Net
      cash provided by (used in) operating activities
                
                $
                134,673
                
                
                $
                (4,795,562
                )Cash
      flows from investing activities:Loan
      to Kaiser Himmel
                
                $
                (680,000
                )
                
                $
                -Capital
      expenditures
                
                
                (1,000
                )
                
                
                -Net
      cash used in investing activities
                
                $
                (681,000
                )
                
                $
                -Cash
      flows from financing activitiesProceeds
      from common stock
                
                $
                -
                
                
                $
                875,389Net
      proceeds from related party
                
                
                257,500
                
                
                
                -Investment
      in subsidiary
                
                
                99,518
                
                
                
                -Change
      in net unrealized (increase)/decrease of investments
                
                
                -
                
                
                
                3,500,000Net
      cash provided by (used in) financing activities
                
                $
                357,018
                
                
                $
                4,375,389Net
      increase in cash
                
                $
                (189,309
                )
                
                $
                (420,173
                )Cash
      at beginning of period
                
                
                189,368
                
                
                
                609,541Cash
      at end of period
                
                $
                59
                
                
                $
                189,368




24


NOTES
TO FINANCIAL STATEMENTS





Basis
of presentation:





The
accompanying audited financial statements have been prepared in accordance with
the accounting principles generally accepted in the United States of America for
interim financial information and with the instructions to Form
10-K.  In the opinion of management, all adjustments, consisting of
normal recurring accruals considered necessary for a fair presentation, have
been included.





Note
1. Organization




General
Development of the Business


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




From
September 1994 through March 1999, the Company provided energy management
services and intelligent security for residential dwellings, commercial
buildings and government facilities.  In 1994, the Company purchased
all of the patented technology, software and patents pending on the Wide Area
Energy Savings System known as “TESS” (Total Energy Security System) from
Associated Data Consultants, Inc. In 1998, after Bell Atlantic (one of our
strategic partners) withdrew from the development of TESS and engaged in
litigation with Associated Data, the Company abandoned our business operations
related to TESS.




In March
1999, we changed our name to New Millennium Development Group, Inc. and our
business operations to media and telecommunications, focusing on connectivity
solutions, storage, fiber optic cable systems, security and the international
long distance market.  Our plan was to spearhead a subsea fiber optic
cable system connecting 70 countries around the globe.  In furtherance
of the plan the Company entered into Memoranda of Understanding with 30
countries, completed landing party site and ocean surveys, arranged long-term
financing and selected vendors and subcontractors for fiber optic cable and
equipment.  During the process, however, the price of cable systems
skyrocketed, forcing us to reconsider our business plans and
projections.  The Company retained the services of an independent
consultant who concluded that not only would increasing cable prices decrease
long-term gains, the rapid development of the internet and Intellectual Property
systems would render obsolete the market for fiber optic
cable.  Accordingly, in mid 2001 we shifted our focus away from fiber
optic cable systems and concentrated on Voice over Internet Protocol (VOIP) and
related services including high-speed wireless standard ISP and broadband
services; international calling cards; video conferencing and related IP
products.




Failed
corporate history, management infighting, the tragedy of September 11, 2001 and
the general economic downturn especially related to technology, led us to cease
business operations in mid-2002 until mid-2005. However, during this time, Mr.
Imperato, the Company’s Chairman, at the time, and majority shareholder, worked
to maintain management relationships with previous businesses, associates and
professionals for the eventual resurrection of business
operations.


25




In
November 2005, we changed our name to Imperiali, Inc. and commenced operations
as an investment company.  To date, the activities of our principals
have largely been limited to organizational matters and fund
raising.  We have commenced the private placement of up to 10 million
of the Company's common shares in an offering (the "Offering") exempt from the
registration requirements of the Securities Act of 1933 ("1933 Act") pursuant to
Section 4(2) thereof and Regulation D ("Regulation D") there
under.  At August 31, 2008, the Company’s total assets were $3,699,133
and its net asset value per share (“NAV”) was $.10.  Upon the closing
of the Offering, the Company's common shares will be owned by numerous persons
that are both "accredited investors," as that term is defined in Regulation D,
and "qualified clients" within the meaning of the Investment Advisers Act of
1940 (the "1940 Act").





On
November 6, 2008, Imperiali Inc. filed a Form N-54C “Notification of Withdrawal of
Election to be Subject to Sections 55 through 65 of the Investment Company Act
of 1940, filed pursuant to Section 54© of the Investment Company Act of
1940”.





Imperiali,
Inc.  (the "Company") has changed the
nature of its business so as to  cease
to  be  a  business  development  company,
and  such  change  was
authorized  by  the vote of a majority of its
outstanding  voting securities.  The Company is now pursuing
a business model whereby it would consolidate its subsidiaries and provide
global business development consulting services (the “New Business Model”).
Specifically, the Company will identify client companies and assist them with
their global expansion, and provide them with business advice and management
expertise related thereto. Under the New Business Model, the Company will at all
times be managed and conduct its activities in such a way as to not act as an
“investment company” subject to regulation under the 1940 Act. Thus, it will not
hold itself out as being engaged primarily in the business of investing,
reinvesting or trading in securities. In addition, the Company will conduct its
business in such a manner as to ensure that it will at no time own or propose to
acquire investment securities having a value exceeding 40 percent of the
Company's total assets at any one time.





Note
2. Summary of Significant Accounting Policies





Background


Imperiali,
Inc. (the Company) was formed in Florida on September 27, 1994 as Automated
Energy Security, Inc.  On March 22, 1999 the Company’s name was
changed to New Millennium Development Group, Inc.  On August 24, 2004
the Company’s name was changed to Hercules Global Interests, Inc.





The
Company has been dormant since 2002 and was started up again in the fall of 2005
by Christ Investment Group, LLC, the Company’s business manager and a related
company, which is controlled by the Company’s major shareholder Mr. Daniel
Imperato.  On November 18, 2005 the name of the company was changed to
Imperiali, Inc.





Nature
of Business


Imperiali,
Inc. is a team of global expansion and business development company experts that
are strategically positioned around the globe to identify emerging companies
that wish to align with strategic partners to grow their businesses, and raise
capital for business development and telecommunications
infrastructure.


26





Imperiali
Inc. is a privately held Company with over 475 shareholders (meets the minimum
requirements to enter the public markets).





Inventory


Inventories
are stated at lower of cost or market, with cost generally determined on a
first-in, first-out basis. Currently the Company carries no
inventory.





Depreciation


Depreciation
is calculated using straight-line methods over the estimated useful life of the
equipment, furniture and fixtures.





Income
Taxes


The
Company is recognized as a corporation under the Internal Revenue
Code.  As such, the corporation must report income and expenses
properly on their tax return and pay all the related income taxes.  As
of August 31, 2008 the Company has an approximately $10,200,000 net operating
loss carryover which can be used against future income through
2018.  No provisions for income taxes are provided in these financial
statements since the Company was dormant for the years ending August 31, 2006
and 2005.





Concentration
of Credit Risk


The
Company maintains cash accounts in commercial banks.  Total cash
deposits are secured by the Federal Deposit Insurance Corporation (FDIC) up to a
limit of $100,000 per company.  As of August 31, 2008, some of the
Company’s cash equivalent balances were deposited in accounts with a stock
brokerage firm.





Use
of Estimates


The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures.  Accordingly, actual results could differ from those
estimates.





Cash
and Cash Equivalents


The
Organization considers all highly liquid investments with a maturity of three
months or less when acquired to be cash equivalents.





Recently
Issued Accounting Pronouncements


In
December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business Combinations”
(“SFAS No. 141(R)”).
The objective of SFAS No. 141(R) is to improve reporting by creating
greater consistency in the accounting and financial reporting of business
combinations, resulting in more complete, comparable and relevant information
for investors and other users of financial statements. SFAS No.
141(R) requires the acquiring entity in a business combination to recognize
all (and only) the assets acquired and liabilities assumed in the transaction;
establishes the acquisition-date fair value as the measurement objective for all
assets acquired and liabilities assumed; and requires the acquirer to disclose
to investors and other users all of the information they need to evaluate and
understand the nature and financial effect of the business combination. SFAS No.
141(R) includes both core principles and pertinent application guidance,
eliminating the need for numerous EITF issues and other interpretative guidance,
thereby reducing the complexity of existing GAAP.  SFAS No.
141(R) is effective as of the start of fiscal years beginning after
December 15, 2008. Early adoption is not allowed.   The
adoption of SFAS No. 141(R) will change our accounting treatment for
business combinations on a prospective basis beginning April 1,
2009.


27


In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements” (“SFAS No.
160”).  SFAS No. 160 improves the relevance, comparability, and
transparency of financial information provided to investors by requiring all
entities to report non-controlling (minority) interests in subsidiaries in
the same way—as equity in the consolidated financial statements. Moreover, SFAS
No. 160 eliminates the diversity that currently exists in accounting for
transactions between an entity and non-controlling interests by requiring they
be treated as equity transactions. SFAS No. 160 is effective as of the start of
fiscal years beginning after December 15, 2008. Early adoption is not
allowed.  Since the Company currently has no minority interest, this
standard will have no impact on our financial position, results of operations or
cash flows.




In April
2008, the FASB issued FASB Staff Position (FSP) No. FAS 142-3, “Determination of the Useful Life of
Intangible Assets” (”FSP No. FAS 142-3”).The final FSP amends the
factors that should be considered in developing renewal or extension assumptions
used to determine the useful life of a recognized intangible asset under SFAS
No. 142, “Goodwill and Other
Intangible Assets”.The FSP is intended to improve the consistency
between the useful life of an intangible asset determined under SFAS No. 142 and
the period of expected cash flows used to measure the fair value of the asset
under SFAS No. 141 (revised 2007), “Business Combinations”,and
other US generally accepted accounting principles. The FSP is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. The Company is currently
evaluating the impact FSP No. FAS 142-3 will have on its consolidated financial
statements.





In May
2008, the FASB issued FASB Staff Position (FSP) No. APB 14-1.  This FSP
clarifies that convertible debt instruments that may be settled in cash upon
conversion (including partial cash settlement) are not addressed by paragraph 12
of APB Opinion No. 14, “Accounting for Convertible Debt and
Debt Issued with Stock Purchase Warrants”. Additionally, this FSP
specifies that issuers of such instruments should separately account for the
liability and equity components in a manner that will reflect the entity’s
nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. This FSP is effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within those
fiscal years.  The Company is in the process of evaluating the impacts, if
any, of adopting this FSP.


28


In
June 2008, the FASB ratified the consensus reached by the Emerging Issues
Task Force, EITF Issue No. 07-5, “Determining Whether an Instrument
(or an Embedded Feature) Is Indexed to an Entity’s Own Stock” (“EITF
07-5”). EITF 07-5 addresses how an entity should evaluate whether an instrument
is indexed to its own stock. The consensus is effective for fiscal years (and
interim periods) beginning after December 15, 2008. The consensus must be
applied to outstanding instruments as of the beginning of the fiscal year in
which the consensus is adopted and should be treated as a cumulative-effect
adjustment to the opening balance of retained earnings. Early adoption is not
permitted. The Company is in the process of evaluating the impacts, if any, of
adopting this EITF.





In
October 2008, the FASB issued FSP FAS No. 157-3, “Determining the Fair Value of a
Financial Asset When the Market for That Is Asset Not Active” (“FAS No.
157-3”) with an immediate effective date, including prior periods for which
financial statements have not been issued. FSP FAS No. 157-3 clarifies the
application of fair value in inactive markets and allows for the use of
management’s internal assumptions about future cash flows with appropriately
risk-adjusted discount rates when relevant observable market data does not
exist. The objective of FAS No. 157 has not changed and continues to be the
determination of the price that would be received in an orderly transaction that
is not a forced liquidation or distressed sale at the measurement date. The
adoption of FSP FAS No. 157-3 in the second quarter did not have a material
effect on the Company’s results of operations, financial position or
liquidity.





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





Note
3. Investments





Investments
are carried at Fair Market Value.





Valuation
Policies




Valuation
of Portfolio Investments


On
November 6, 2008, Imperiali Inc. filed a Form N-54C “Notification of Withdrawal of
Election to be Subject to Sections 55 through 65 of the Investment Company Act
of 1940, filed pursuant to Section 54© of the Investment Company Act of
1940”.





Imperiali,
Inc.  (the "Company") has changed the
nature of its business so as to  cease
to  be  a  business  development  company,
and  such  change  was
authorized  by  the vote of a majority of its
outstanding  voting securities.  The Company is now pursuing
a business model whereby it would consolidate its subsidiaries and provide
global business development consulting services (the “New Business Model”).
Specifically, the Company will identify client companies and assist them with
their global expansion, and provide them with business advice and management
expertise related thereto. Under the New Business Model, the Company will at all
times be managed and conduct its activities in such a way as to not act as an
“investment company” subject to regulation under the 1940 Act. Thus, it will not
hold itself out as being engaged primarily in the business of investing,
reinvesting or trading in securities. In addition, the Company will conduct its
business in such a manner as to ensure that it will at no time own or propose to
acquire investment securities having a value exceeding 40 percent of the
Company's total assets at any one time.


29


Equity
Securities


Equity
interests in portfolio companies for which there is no liquid public market are
valued based on the enterprise value of the portfolio company, which is
determined using accepted accounting factors, including net cash flow from
operations of the portfolio company, and other pertinent factors such as recent
offers to purchase a portfolio company’s securities or other liquidation events.
The determined fair values are generally discounted to account for restrictions
on resale and minority control positions.




The value
of our equity interests in public companies for which market quotations are
readily available is based upon the closing public market price for the last day
up to and including the balance sheet date. Securities that carry certain
restrictions on sale are typically valued at a discount from the public market
value of the security.




Dividend
income, if any, is recorded on cumulative preferred equity securities on an
accrual basis to the extent that such amounts are expected to be collected and
on common equity, securities on the record date for private companies or on the
ex-dividend date for publicly traded companies.




Loans
and Debt Securities


It is our
loan policy to only invest in secured and properly collateralized
loans.




For loans
and debt securities, to the extent that the Company invests in them, fair value
generally approximates cost unless the borrower’s condition or external factors
lead to a determination of fair value at a lower amount. When the Company
receives nominal cost warrants or free equity securities (“nominal cost
equity”), we allocate our cost basis in our investment between the debt
securities and the nominal cost equity at the time of origination.  At
that time, the original issue discount basis of the nominal cost equity is
recorded by increasing the cost basis in the equity and decreasing the cost
basis in the related debt securities.




Interest
income is recorded on an accrual basis to the extent that such amounts are
expected to be collected. For loans and debt securities with contractual
payment-in-kind interest, which represents contractual interest accrued and
added to the loan balance that generally becomes due at maturity, we will not
accrue payment-in-kind interest if the portfolio company valuation indicates
that the payment-in-kind interest is not collectible. Loan origination fees,
original issue discount, and market discount are capitalized and then amortized
into interest income using the effective interest method.




The
weighted average yield on loans and debt securities is computed as the (a)
annual stated interest rate earned plus the annual amortization of loan
origination fees, original issue discount and market discount earned on accruing
loans and debt securities, divided by (b) total loans and debt securities at
value. The weighted average yield is computed as of the balance sheet
date.  Prepayment premiums are recorded on loans when
received.


30


Portfolio
Valuation Process


Our
methodology includes the examination of, among other things, the underlying
investment performance, financial condition, and market-changing events that
affect valuation. Because of the type of investments that the Company makes and
the nature of our business, this valuation process requires an analysis of
various factors consistent with the provisions of section (2) of the 1940
Act.




Our
process for determining the fair value for a private finance investment is
applied consistently across our portfolio. The process is as
follows.




·
            First,
      the Company determines the portfolio company’s enterprise value as if the
      Company were to sell it in a “current sale.” In our evaluation process,
      the Company uses the AICPA’s definition of “current sale,” which means an
      “orderly disposition over a reasonable period of time between willing
      parties other than in a forced or liquidation
  sale.”




·
            The
      Company then evaluates the amount of our debt and the position of our debt
      in the portfolio company’s capital
structure.




·
            If
      the enterprise value of the portfolio company is in excess of the amount
      of our last dollar of investment capital given our priority in the capital
      structure, the fair value of our investment will be considered to be our
      cost or perhaps, given the structure of our particular security, greater
      than cost if we are to share in equity
  appreciation.




·
            If
      the enterprise value of the portfolio company is less than our last dollar
      of investment capital in the capital structure, then our investment has
      declined in value and the Company needs to reduce the fair value of our
      investment and incur a charge to our earnings by recognizing unrealized
      depreciation.




Determining
the enterprise value of a portfolio company, as if that portfolio company were
to be sold in a “current sale,” is a very complex process, where we must analyze
the historical and projected financial results of the portfolio company and
analyze the public trading market and private merger and acquisition market to
determine appropriate purchase price multiples. In addition, a reasonable
discount to the value of our securities must also be reflected when the Company
may have restrictions such as vesting periods for warrants or other factors. We
also take into account the collectability of non-cash interest to determine if
the Company will continue to accrue such interest.




Specific
Considerations


The
valuation of illiquid private securities is inherently subjective, and as a
result, the Company intends to exercise good judgment in our evaluation process.
Specifically, we will exercise care to assure that the Company has considered
the position of the portfolio company today and the position of our security
today given the data we have available. We will also exercise care to assure
that the process is not too mechanical; however, there are some specific
considerations to be addressed in our evaluation process. The ultimate goal is a
reasonable estimate of fair value determined in good faith.


31


Typically,
in the private equity business, companies are bought and sold based upon
multiples of EBITDA, cash flow, revenues and in limited instances book value. In
determining a multiple to use for valuation purposes, we will look to private
M&A statistics, reported public trading multiples and industry
practices.  In determining the right multiple, we intend to consider
not only the fact that our portfolio company may be private relative to a peer
group, but also the size and scope of our portfolio company and its specific
strengths and weaknesses. In some cases, when a portfolio company is at EBITDA
breakeven or slightly below but has excellent future prospects, we believe the
best valuation methodology may be a discounted cash flow analysis based upon
future projections. If a portfolio company is distressed, we believe a
liquidation analysis may provide the best indication of enterprise
value.




Discounts on common equity
securities


When
determining the value of common equity securities or warrants to purchase such
securities, we intend to consider what type of discount to apply to the value of
the security if the Company is in a minority position, has restrictions on
resale, has specific concerns about the receptivity of the M&A market to a
specific portfolio company at a certain time and other factors. Generally, we
find that the Company should apply larger discounts when we are new to an
investment, and therefore, we have not yet developed an exit
strategy.  As an investment in the portfolio matures, we intend to
consider whether or not the Company should begin to reduce discounts, especially
if we are generally aware that either we or a controlling shareholder group has
begun to develop an exit strategy.




When we
have begun to develop an exit strategy of the Company is the controlling
shareholder, the discount imposed should generally be less than in the case of a
minority position.  We may still contemplate the need to discount for
the current state of the M&A market or restrictions imposed on us due to our
relationship with management of the portfolio company or other capital
providers.




Note
4. Portfolio





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





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





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





On the
May 31, 2007 management revalued the I1Connect project. The internet search
engine was fully operational.  Based on comparison of other comparable
companies, management revalued the I1Connect project at $40
million.  Due to the uncertainty of the realization of this project,
an unrealized loss had been recognized as of August 31, 2007.


32


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





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





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





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





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





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





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


33





Note 5.Debt





As of
August 31, 2008 the company has debt due of $257,500 to Daniel Imperato a member
of the Board of Directors.





Note
6. Employee Compensation Plans





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





Note
7. Stock Option Plans





The
Company has no Stock Option Plans.


34





Note
8. Financial Highlights –





The table
below lists financial information (unaudited) by quarter for each of the two
fiscal years ending August 31, 2008 and 2007.





First
                      
                      
                      Second
                      
                      
                      Third
                      
                      
                      Fourth
                      
                      
                      Total Year2008Net Revenue
                      
                      $
                      238,689
                      
                      
                      $
                      70,036
                      
                      
                      $
                      50,010
                      
                      
                      $
                      7,173
                      
                      
                      $
                      366,908Operating
      Expenses
                      
                      
                      658,777
                      
                      
                      
                      28,363
                      
                      
                      
                      85,115
                      
                      
                      
                      139,171
                      
                      
                      
                      911,426Net
      Investment Income (Loss)
                      
                      $
                      (420,088
                      )
                      
                      $
                      41,673
                      
                      
                      $
                      (35,105
                      )
                      
                      $
                      (131,998
                      )
                      
                      $
                      (545,518
                      )Basic &
      Diluted  Loss per Common Share
                      
                      $
                      (0.009
                      )
                      
                      $
                      0.001
                      
                      
                      $
                      (0.001
                      )
                      
                      $
                      (0.003
                      )
                      
                      $
                      (0.011
                      )Weighted Average Common Shares Outstanding
                      
                      
                      45,131,686
                      
                      
                      
                      48,200,986
                      
                      
                      
                      48,200,986
                      
                      
                      
                      48,200,986
                      
                      
                      
                      48,200,9862007Net Revenue
                      
                      $
                      4,806
                      
                      
                      $
                      699
                      
                      
                      $
                      1,187
                      
                      
                      $
                      1,750
                      
                      
                      $
                      8,442Operating
      Expenses
                      
                      
                      447,719
                      
                      
                      
                      438,251
                      
                      
                      
                      303,123
                      
                      
                      
                      131,760
                      
                      
                      
                      1,320,853Net
      Realized Loss
                      
                      
                      3,500,000
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      3,500,000Net
      Investment Income (Loss)
                      
                      $
                      (3,942,913
                      )
                      
                      $
                      (437,552
                      )
                      
                      $
                      (301,936
                      )
                      
                      $
                      (130,010
                      )
                      
                      $
                      (4,812,411
                      )Basic &
      Diluted  Loss per Common Share
                      
                      $
                      (0.194
                      )
                      
                      $
                      (0.017
                      )
                      
                      $
                      (0.012
                      )
                      
                      $
                      (0.004
                      )
                      
                      $
                      (0.166
                      )Weighted Average Common Shares Outstanding
                      
                      
                      20,358,486
                      
                      
                      
                      25,809,569
                      
                      
                      
                      25,809,569
                      
                      
                      
                      28,965,486
                      
                      
                      
                      28,965,486





For the
year ended August 31, 2008, the Company had a net loss of $545,518. Total
expenses incurred were $911,426 of which $680,000 was the write-off of the
Kaiser Himmel loan, $137,720 was for Employees and Consulting and $93,706 was
for General and Administrative Expense.  General and administrative
expenses related primarily to insurance, telephone, other office costs and costs
associated with being a reporting company.





Liquidity
and Capital Resources


The
Company had cash on hand of $59 at August 31, 2008 and had no other assets to
meet ongoing expenses or debts that may accumulate.  As of such date,
we have an accumulated deficit of $16,427,132.





The
Company has no commitment for any capital expenditure and foresee
none.  However, the Company will incur routine fees and expenses
incident to our reporting duties as a reporting company, and we will incur
expenses in finding and investigating possible acquisitions and other fees and
expenses in the event we make an acquisition or attempt but are unable to
complete an acquisition.  Our cash requirements for the next twelve
months are relatively modest, principally operational accounting expenses and
other expenses relating to making filings required under the Securities Exchange
Act of 1934 (the "Exchange Act"), which should not exceed $1.7 million in the
fiscal year ending August 31, 2008.  Any travel, lodging or other
expenses which may arise related to finding, investigating and attempting to
complete a combination with one or more potential acquisitions could also amount
to thousands of dollars.


35


ITEM
      9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE




Not
Applicable





Item
      9A.
            CONTROLS
      AND PROCEDURES.





Evaluation
of Disclosure Controls and Procedures





As of the period covered by this
report, the Company evaluated the effectiveness and design and operation of its
disclosure controls and procedures. The Company’s disclosure controls and
procedures are the controls and other procedures that the Company designed to
ensure that it records, processes, summarizes, and reports in a timely manner
the information that it must disclose in reports that the Company files with or
submits to the Securities and Exchange Commission. Daniel J. Imperato, Interim
Non-Executive Chairman Emeritus of the Company reviewed and participated in this
evaluation. Based on this evaluation, the Company made the determination that
its disclosure controls were effective.





Management's
Report on Internal Control Over Financial Reporting





Our management is responsible for
establishing and maintaining adequate internal control over financial reporting,
as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the
supervision and with the participation of management, including Daniel J.
Imperato, Interim Non-Executive Chairman Emeritus of the Company, we conducted
an evaluation of the effectiveness of our internal controls over financial
reporting based on the framework in Internal Control -Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
("COSO"). Based on this evaluation, management has concluded that our internal
control over financial reporting was effective as of the period covered by this
report.





The
Company's internal control over financial reporting includes policies and
procedures that (1) pertain to maintenance of records that, in reasonable
detail, accurately and fairly reflect transactions and dispositions of the
assets of the Company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the Company's assets that could have a
material effect on the financial statements.





This
annual report does not include an attestation report of our Company's registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our Company's registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit our Company to provide only management's report
in this annual report.


36


Limitations
on Controls





Our management, including Daniel J.
Imperato, Interim Non-Executive Chairman Emeritus of the Company, does not
expect that our disclosure controls or our internal control over financial
reporting will prevent or detect all errors and all fraud. A control system, no
matter how well designed and operated, can provide only reasonable, not
absolute, assurance that the control system's objectives will be met. Internal
control over financial reporting is a process that involves human diligence and
compliance and is subject to lapses in judgment and breakdowns resulting from
human failures. In addition, the design of any system of controls is based in
part on certain assumptions about the likelihood of future events, and controls
may become inadequate if conditions change. There can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions.





Changes
to company internal controls





In our opinion, there were no material
changes in our Company's internal controls over financial reporting during our
fourth fiscal quarter that have materially affected, or are reasonably likely to
materially affect, our internal controls over financial reporting.





ITEM
      9B.
            OTHER
      INFORMATION





Not Applicable


PART
III





ITEM
      10.
            DIRECTORS
      AND EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE.





The information required by this Item
10 is incorporated by reference from the Company’s definitive proxy statement to
be filed pursuant to Regulation 14A with the Securities and Exchange Commission
within 120 days after the fiscal year end of the Company covered by this
report.





ITEM
      11.
            EXECUTIVE
      COMPENSATION.





The information required by this Item
11 is incorporated by reference from the Company’s definitive proxy statement to
be filed pursuant to Regulation 14A with the Securities and Exchange Commission
within 120 days after the fiscal year end of the Company covered by this
report.


37


ITEM
      12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS.





The information required by this Item
12 is incorporated by reference from the Company’s definitive proxy statement to
be filed pursuant to Regulation 14A with the Securities and Exchange Commission
within 120 days after the fiscal year end of the Company covered by this
report.





ITEM
      13.
            CERTAIN
      RELATIONSHIPS AND RELATED
TRANSACTIONS.





The information required by this Item
13 is incorporated by reference from the Company’s definitive proxy statement to
be filed pursuant to Regulation 14A with the Securities and Exchange Commission
within 120 days after the fiscal year end of the Company covered by this
report.





ITEM
      14.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES.





The information required by this Item
14 is incorporated by reference from the Company’s definitive proxy statement to
be filed pursuant to Regulation 14A with the Securities and Exchange Commission
within 120 days after the fiscal year end of the Company covered by this
report.




PART
IV





Item
      15.
            EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES





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





31.1
                Certification
      pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act
      of 1934 executed by the Principal Executive Officer of the
      Company31.2
                Certification
      pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act
      of 1934 executed by the Principal Financial Officer of the
      Company32.1
                Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002, executed by the
      Principal Executive Officer of the Company32.2
                Certification
      pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002, executed by the
      Principal Financial Officer of the
Company




38




SIGNATURES
 
 In accordance with the requirements of
the Securities Exchange Act of 1934, the registrant caused this Report on Form
10-KSB to be signed on its behalf by the undersigned, thereunto duly
authorized.
 
 DATE:  December
15, 2008





Imperiali
      Inc.,RegistrantBy
              /s/Daniel
      ImperatoDaniel
      Imperato,Interim
      Non-Executive Chairman EmeritusDirector




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.




By
              /s/Daniel
      ImperatoDaniel
      Imperato,Interim
      Non-Executive Chairman Emeritus,Director


39