**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-KSB**





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





For
      the
      fiscal year ended August 31, 2007





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








**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)





**777
      South Flagler Drive, Suite 800W**


**West
      Palm Beach, Florida 33401**





(Address
      of Principal Executive Offices)





**(561)805-9494**


(Issuer’s
      Telephone Number, including Area Code)





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





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, of a non-accelerated filer. See definition of “accelerated
      filer” and “large accelerated filer” in Rule 12b-2 of the exchange
      Act.


**o** Large **** Accelerated
      Filer  **o** Accelerated
      Filer  **x** Non-Accelerated
      Filer





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




On
      August
      31, 2007 there were 38,200,986 shares outstanding of the registrant’s common
      stock, $.001 par value.













**PART
      I.**





**Item
      1. Financial Statements and Supplementary Data**




**IMPERIALI,
      INC.**




**Financial
      Statements**




**August
      31, 2006**




2


**IMPERIALI,
      INC.**




**Financial
      Statements**




**Table
      of Contents**




**Page**Report
                of Independent Registered Public Accounting Firm
            
            
            F-1Financial
                Statements:Balance
                Sheets
            
            
            F-2Statements
                of Operations
            
            
            F-3Statements
                of Changes in Stockholders' DeficitStatements
                of Cash Flows
            
            
            F-7Notes
                to Financial Statements
            
            
            F-8
                - F-17




3


**Larry
      O'Donnell, CPA, P.C.**


**2228
      South Fraser Street, Unit I**


**Aurora,
      Colorado 80014**


**Telephone
      (303) 745-4545**




**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,
      2007 and 2006, and the related statements of operations, changes in
      stockholders' deficit 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 audits provide 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,
      2007 and 2006, 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**




****October**
      22, 2007**




F-1




**IMPERIALI,
      INC.**


**Balance
      Sheets**


**August
      31, 2007 and August 31, 2006**





As of August
              31,
                2007
            
            As of August
              31,
                2006**ASSETS**Portfolio
                At Value:Private
                FinanceCompanies
                more than 25% owned (cost: 2007 - $3,500,000; 2006
                - $3,500,000)
            
            $
            -
            
            $
            -Current
                assets:Cash
            
            $
            189,368
            
            $
            609,541Prepaid
                Expenses
            
            $
            9,765
            
            $
            -Total
                current assets
            
            $
            199,133
            
            $
            609,541Note
                receviable
            
            $
            -
            
            $
            -Total
                assets
            
            $
            199,133
            
            $
            609,541**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                liabilities:Accounts
                payable and other current liabilities
            
            $
            26,614
            
            $
            -Total
                current liabilities
            
            $
            26,614
            
            $
            -Stockholders'
                equity:Common
                  stock; $.001 par value; authorized - 500,000,000 shares; 38,200,986
                  and
                  20,358,486shares issued and outstanding at August 31, 2007 and
                  August 31,
                  2006 respectively
            
            $
            38,389
            
            $
            25,358Additional
                paid in capital
            
            $
            16,117,963
            
            $
            15,255,605Accumulated
                deficit
            
            $
            (11,171,422
            )
            $
            (11,171,422
            )Undistributed
                Earnings
            
            $
            (4,812,411
            )
            $
            -Total
                shareholders' equity
            
            $
            172,519
            
            $
            609,541Total
                liabilities and shareholders' equity
            
            $
            199,133
            
            $
            609,541




F-2




**IMPERIALI,
      INC.**


**Statement
      of Operations**





For
                the Twelve MonthsEnded
                August 31,2007
            
            2006Interest
                and Related Portfolio Income:
            
            $
            -
            
            $
            -Interest
                and dividends
            
            $
            6,692
            
            $
            -Expenses:Employees
                and Consulting
            
            $
            (1,022,630
            )
            $
            (520,496
            )General
                and administrative
            
            $
            (166,463
            )
            $
            (99,624
            )Total
                Expenses
            
            $
            (1,189,093
            )
            $
            (620,120
            )Net
                investment income before income taxes
            
            $
            (1,182,401
            )
            $
            (620,120
            )Income
                tax expense
            
            $
            -
            
            $
            -Net
                investment income
            
            $
            (1,182,401
            )
            $
            (620,120
            )Net
                Realized Gains(losses)
            
            $
            -
            
            $
            -Net
                Change in unrealized appreciation
            
            $
            (3,500,000
            )
            $
            -Net
                increase in net assets resulting from operations
                (loss)
            
            $
            (4,682,401
            )
            $
            (620,120
            )Earnings
                (loss) per common share - basic
            
            $
            (0.162
            )
            $
            (0.029
            )Earnings
                (loss) per common share - diluted
            
            $
            (0.162
            )
            $
            (0.029
            )Weighted
                avg common shares out. - basic
            
            
            28,965,486
            
            
            21,193,524Weighted
                avg common shares out. - diluted
            
            
            28,965,486
            
            
            21,193,524




F-3




**IMPERIALI,
      INC.**


**Statement
      of Change in Net Assets**




For the Twelve
              Months Ended
              August 31,
              2007
            
            For the Twelve
              Months Ended
              August 31,
              2006Operations:Net
                Investment Income
            
            $
            (4,812,411
            )
            $
            (1,008,855
            )Net
                Realized Gains (losses)
            
            $
            -
            
            $
            -Net
                Change in unrealized appreciation
            
            $
            3,500,000
            
            $
            -Shareholder
                Distributions:Common
                Stock Dividends
            
            $
            -
            
            $
            -Capital
                share transactions:Sales
                of Common Stock
            
            $
            875,389
            
            $
            1,618,396Total
                Increase in Net Assets
            
            $
            (437,022
            )
            $
            609,541Net
                assets at beginning of period
            
            $
            4,109,541
            
            $
            -Net
                assets at end of period
            
            $
            3,672,519
            
            $
            609,541Net
                asset value per common share
            
            $
            0.10
            
            $
            0.02Common
                shares outstanding at the end of period
            
            
            38,200,986
            
            
            25,358,486




F-4






Additional
              
              AccumulatedShares
              
              Amount
              
              Paid
                  in Capital
              
              Deficit
              
              TotalBalance,
                  August 31, 2005
              
              
              17,995,986
              
              
              17,996
              
              
              10,144,467
              
              
              (10,162,567
              )
              
              (104
              )Issuance
                  of common stock
              
              
              2,362,500
              
              
              2,362
              
              
              1,616,138
              
              
              
              
              
              1,618,500Net
                  loss for the year
              
              
              
              
              
              
              
              
              
              
              
              (1,008,855
              )
              
              (1,008,855
              )Balance
                  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
                  gain for the year
              
              
              
              
              
              
              
              
              
              
              
              (4,812,411
              )
              
              (4,812,411
              )Balance
                  August 31, 2007
              
              
              38,200,986
              
              
              38,389
              
              
              16,117,963
              
              
              (15,983,833
              )
              
              172,519




F-5


**IMPERIALI,
      INC.**


**Statement
      of Investments**




Private Finance Portfolio Company
            
            Investment
            
            
            
            Cost
            
            ValueImperiali Organization LLC
            
            
            
            
            
            
            
            $
            -
            
            $
            -I1Telecom Services Inc
            
            
            Common Stock
            
            
            30,000,000 Shares
            
            $
            -
            
            $
            30,000,000I1Connect Inc
            
            
            Common Stock
            
            
            40,000,000 Shares
            
            $
            3,500,000
            
            $
            40,000,000I1Films Inc
            
            
            Common Stock
            
            
            5,000,000 Shares
            
            $
            -
            
            $
            -Total
            
            
            
            
            
            
            
            $
            33,500,000
            
            $
            70,000,000





See Footnotes for Explanation of Valuation


Full value of investments is not recognized on the Balance Sheet.




F-6





**IMPERIALI, INC.**


**Statement of Cash Flows**




For the Twelve
              Months Ended
              August 31,
              2007
            
            For the Twelve
              Months Ended
              August 31,
              2006Cash flow from operating activities:Net increase
                (decrease) in net assets from operations
            
            $
            (4,812,411
            )
            $
            (1,008,855
            )Adjustments
                to reconcile net income (loss) tonet cash provided by operation activities:
            
            $
            16,849
            
            $
            (104
            )Change
                in net unrealized (increase) decrease of
                investments
            
            $
            3,500,000
            
            $
            -Net cash used by operating activities
            
            $
            (1,295,562
            )
            $
            (1,008,959
            )Cash flows from investing activities:Net cash used in investing activities
            
            $
            -
            
            $
            -Cash flows from finanancing activitiesProceeds from common stock
            
            $
            875,389
            
            $
            1,618,500Net cash provided by financing activities
            
            $
            875,389
            
            $
            1,618,500Net increase in cash
            
            $
            (420,173
            )
            $
            609,541Cash at beginning of period
            
            $
            609,541
            
            $
            -Cash at end of period
            
            $
            189,368
            
            $
            609,541





F-7




**ITEM
      2. 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-KSB. 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




We
      were
      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 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 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") thereunder. At August 31, 2007, 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"),




F-8





**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.





Imperiali
      Inc. is a privately held Business Development Company (BDC) with over 475
      shareholders (meets the minimum requirements to enter the public markets).
      A BDC
      is a special type of Investment Company designated by the Securities and
      Exchange Commission (SEC). This network comprises Imperiali Inc.’s Global
      Advisory Team. By being able to invest and/or loan capital and advise, Imperiali
      Inc. is able to monitor and, in most cases, influence events utilizing the
      tools
      and leverage that this business model affords; thus endeavoring to mitigate
      risk
      and safeguard investments, with the idea of creating shareholder value.




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, 2006 the Company has an
      approximately $8,200,000 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, 2007, some of the Company’s cash
      equivalent balances were deposited in accounts with a stock brokerage firm.
      The
      amount of cash not insured by the FDIC equals approximately
      $160,000.




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.




F-9




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
      February 2006, the FASB issued SFAS No. 155. This Statement amends FASB
      Statements No. 133, Accounting for Derivative Instruments and Hedging
      Activities, and No. 140, Accounting for Transfers and Servicing of Financial
      Assets and Extinguishments of Liabilities *.* This
      Statement resolves issues addressed in Statement 133 Implementation Issue No.
      D1, “Application of Statement 133 to Beneficial Interests in Securitized
      Financial Assets.” The Company does not expect  application of SFAS No. 155
      to have a material affect on its financial statements.




In
      March
      2006, the FASB issued SFAS No. 156. This Statement amends FASB Statement No.
      140, Accounting for Transfers and Servicing of Financial Assets and
      Extinguishments of Liabilities, with respect to the accounting for separately
      recognized servicing assets and servicing liabilities. This 
Statement  is effective as of the beginning of its first fiscal year that
      begins after September 15, 2006. An entity should apply the requirements for
      recognition and initial measurement of servicing assets and servicing
      liabilities prospectively to all transactions after the effective date of this
      Statement. The Company does not expect  application of SFAS No. 156 to have
      a material affect on its financial statements.




In
      June
      2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in
      Income Taxes - An Interpretation of FASB Statement No. 109, (FIN 48). FIN 48
      clarifies the accounting for uncertainty in income taxes recognized in an
      enterprise's financial statements in accordance with FASB Statement No. 109,
      Accounting for Income Taxes. FIN 48 also prescribes a recognition threshold
      and
      measurement attribute for the financial statement recognition and measurement
      of
      a tax position taken or expected to be taken in a tax return that results in
      a
      tax benefit. Additionally, FIN 48 provides guidance on de-recognition, income
      statement classification of interest and penalties, accounting in interim
      periods, disclosure, and transition. This interpretation is effective for the
      Company for its fiscal year ending June 30, 2008. The Company has not yet
      evaluated the effect that the application of FIN 48 may have, if any, on its
      future results of operations and financial condition.




In
      September 2006 the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS No.
      157 defines fair value, establishes a framework for measuring fair value in
      accordance with generally accepted accounting principles and expands fair value
      disclosure requirements. SFAS No. 157 applies whenever another accounting
      standard requires (or permits) assets or liabilities to be measured at fair
      value, but does not expand the use of fair value to new circumstances. SFAS
      No.
      157 is effective beginning in 2008. The Company has not yet determined the
      effect SFAS No. 157 will have on its financial statements.




In
      September 2006 the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Post Retirement Plans”. SFAS No. 158 requires the
      Company to recognize the funded status of its post retirement plans on the
      balance sheet and recognize as a component of accumulated other comprehensive
      income the gains and losses, prior service costs or credits that occur during
      the financial year but are not recognized as components of the Company’s pension
      costs This  Statement  is effective as of the beginning of its first
      fiscal year that begins after December 15, 2008. The Company does not
      expect  application of SFAS No. 156 to have a material affect on its
      financial statements.




F-10




In
      February 2007 the FASB issued SFAS No. 159, “The Fair Value Option for Financial
      Assets and Financial Liabilities – Including
      an
      amendment of FASB Statement No. 115”. SFAS No. 159 permits entities to choose to
      measure many financial instruments and certain other items at fair value. The
      amendment to SFAS No. 115 applies to all entities with investments in
      available-for-sale or trading securities. The statement is effective for fiscal
      years beginning after November 15, 2007. The Company has not yet determined
      the
      effect SFAS No. 159 will have on its financial statements.




**Note
      3. Investments** :





Investments
      are carried at Fair Market Value.





Valuation
      Policies




Valuation
      of Portfolio Investments




As
      a
      Business Development Company, our business plan calls for us to invest primarily
      in illiquid securities issued by private companies (“Private Investments”) (we
      are required to invest at least an aggregate of 70% of our assets Private
      Investments and in companies listed on the OTCBB). Private Investments are
      generally subject to restrictions on resale and generally have no established
      trading market. The Company values our Private Investments at fair value as
      determined in good faith by our Board of Directors in accordance with our
      valuation policy. That policy calls for the determination of fair value at
“the
      amount for which an investment could be sold in an orderly disposition over
      a
      reasonable period of time between willing parties other than in a forced or
      liquidation sale.” Our valuation policy may require subjective judgments. Our
      determination of fair value may possibly differ materially from the value
      realized on an actual sale. Our valuation policy is intended to provide a
      consistent basis for establishing the fair value of the portfolio. The Company
      will record unrealized depreciation on investments when we believe that an
      asset
      has been impaired and full collection for the loan or realization of an equity
      security is doubtful. Conversely, the Company will record unrealized
      appreciation if we have a clear indication that the underlying portfolio company
      appreciates and, therefore, our security has appreciated. Under this valuation
      policy, the Company sets valuations based on policies consistent with Section
      2(a) of the 1940 Act. The value of investments in public securities is
      determined using quoted market prices discounted for restrictions on
      resale.




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.




F-11




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.




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 valuation 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.




F-12




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 valuation 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 valuation process. The ultimate goal
      is a
      reasonable estimate of fair value determined in good faith.




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 and was effective June 26, 2006 the shares
      were issued September 11, 2006.




F-13




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
      dollars. Due to the uncertainty of the realization of this project, an
      unrealized loss has 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 $40,000,000.




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 $40,000,000
      valuation.




Additionally,
      Imperiali, Inc reentered the telecommunications business. The telecommunications
      project is now a going concern. Imperiali, Inc. valued the telecom project
      at
      $30,000,000 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 dollars.




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 $250,000,000. The projects must be funded
      to
      proceed forward with the business plan to realize the $250,000,000
      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.




F-14




**Note
      5. Debt** –
      As of August 31,
      2007 the company has no debt.





**Note
      6: Guaranteed Commitments:** The
      Company leases approximately 688 square feet of space at 777 S Flagler Drive,
      Suite 800W, West Palm Beach, Florida USA 33401. The office space is used for
      sales, administrative offices, and customer support.





**Note
      7. Employee Compensation Plans**– The
      Company has no Defined Benefit or Defined Contribution Pension
      Plans.





**Note
      8. Stock Option Plans**– The
      Company has no Stock Option Plans.




F-15




Note
      9.
      Financial Highlights -





Year
                Ended
            
            Year
                EndedAug.
                31,
            
            Aug.
                31,2007
            
            2006Per
                share informationNet
                asset value, beginning of period
            
            
            0.16
            
            
            0.00Share
                dilution
            
            
            (0.05
            )Net
                investment income (loss) (1)
            
            
            (0.03
            )
            
            (0.05
            )Net
                realized and unrealized gain (loss) (1)
            
            
            0.00
            
            
            0.13Net
                  increase (decrease) in net assetsresulting
                  from operations (1)
            
            
            (0.08
            )
            
            0.08Issuance
                  of common stock, warrantsand
                  other new equity (1)
            
            
            0.02
            
            
            0.08Net
                asset (deficit) value, end of period
            
            
            0.10
            
            
            0.16Per
                share market value, end of period (2)
            
            
            N/A
            
            
            N/ATotal
                Return Based Upon Net Asset Value
            
            
            -53
            %
            
            NCRatios
                and Supplemental DataNet
                assets, end of period
            
            
            3,699,133
            
            
            4,109,541Common
                shares outstanding at end of period
            
            
            38,200,986
            
            
            25,358,486Ratio
                of expenses to average net assets (3)
            
            
            27
            %
            
            25
            %Ratio
                  of net increase (decrease) in net assets fromoperations
                  to average net assets (3)
            
            
            -27
            %
            
            61
            %Average
                Debt Outstanding
            
            
            0
            
            
            0Average
                Debt per Share
            
            
            0
            
            
            0





(1)
            Calculated
                based on number of common shares outstanding at year
                end.




(2)
            Not
                applicable - prior to public trading of
                shares




(3)
              Annualized
                  for interim period




LAST
      QUARTER 2007 - During the quarter ended August 31, 2007, our Net Investment
      Income incurred a net loss of $36,630,010. Of this figure $36,500,000 was the
      result of unrealized losses. Total expenses incurred were $131,760 of which
      $109,144 were for Employees and Consulting and $22,616 were for General and
      Administrative Expense. General and administrative expenses related primarily
      to
      rent, salaries, telephone, other office costs and costs associated with being
      a
      reporting company.




F-16




Liquidity
      and Capital Resources





We
      had
      cash on hand of $189,368 at August 31, 2007 and had no other assets to meet
      ongoing expenses or debts that may accumulate. As of such date, we have an
      accumulated deficit of $12,483,833. For the year ended August 31, 2007 we had
      expenses totaling $ 1,320,853.





We
      have
      no commitment for any capital expenditure and foresee 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
      $2,500,000 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.




**Note
      10 Hedging Activities** :
      The
      Company did not engage in Hedging Activity.




**Note
      11 Litigation** :
      The
      Company has no lawsuits pending.




F-17




**ITEM
      3. MANAGEMENT'S DISCUSSION and ANALYSIS or PLAN of
      OPERATIONS.**





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





**Forward-Looking
      Statements**





This
      quarterly 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**





Our
      investment objective is to generate both current income and capital appreciation
      to deliver superior, risk adjusted returns to investors through investment
      in
      the debt and equity securities of privately and publicly held micro-cap
      companies (market capitalization below $50 million) that are based in the U.S.
      and that offer products and services that can be successfully expanded, marketed
      and sold in commercially viable international markets. Our principals’
experience combines economic and financial analysis with expertise in business
      strategy and planning, market and demand forecasting, policy analysis, and
      technology development strategy. They have worked on a variety of matters,
      such
      as mergers and acquisitions, new product introductions, strategy and capital
      investment decisions, the outcomes of which often have significant implications
      or consequences for the parties involved. We will offer our portfolio companies
      a wide array of services such as strategy development, performance improvement,
      corporate portfolio analysis, market demand and new product strategies,
      evaluation of intellectual property and other assets and competition analysis.
      Matters such as these often require independent analysis, and as a result,
      companies (such as our portfolio companies) must outsource this work to outside
      experts. We expect that our portfolio companies will turn to us because we
      can
      provide qualified economic and financial experts to address a wide variety
      of
      matters.





**Plan
      of Operation**





In
      addition to our internal Company resources, we believe that we will be able
      to
      provide such advice and assistance by using our extensive international network
      of agents and affiliates, located in many countries and regions and spanning
      more than five continents. This network, which we refer to as Imperiali Inc.’s
      Global Advisory Team, is able to monitor and in some cases influence events,
      prudently utilizing the tools and leverage that the portfolio company’s business
      model affords, endeavoring to mitigate risks and safeguard investments, with
      the
      idea of protecting the Company’s shareholders’ interest.




4




We
      are
      regulated as a business development company under the 1940 Act. As a business
      development company, we intend to focus primarily on micro-cap companies with
      sales of $25-$50 million and a strong domestic presence, with a key product
      or
      service that is globally marketable.  Micro-cap companies (market
      capitalization below $50 million) are more likely than larger companies to
      focus
      on innovative products and services. Due to the high cost of competition on
      a
      global scale, these micro-caps are losing market share. They may not have the
      advertising dollars to compete, may lack access to long-term debt financing
      for
      expansion and manufacturing and, more generally, they lack the experience and
      contacts to access new global markets.




We
      view
      this problem for micro-cap companies to be an opportunity for us to assist
      them
      with the competitive edge they require, to expand and to grow top-line revenues.
      Extending the assistance of Company management personnel by the use of our
      Global Advisory Team, we can assist our portfolio companies expand globally,
      identify capital and political resources, adapt to local customs and operating
      requirements in international markets, access new consumers, new sources of
      materials and remote manufacturing options, and generally make the best possible
      business decisions.




We
      favor
      companies that present opportunities for superior performance through internal
      growth, product or geographic expansion, the completion of complementary add-on
      acquisitions, or industry consolidations. We would prefer to be a majority
      investor, without a fixed time horizon for the liquidation of our investments.
      We may continue to provide capital for add-on acquisitions that help build
      value
      after the initial closing.




Once
      we
      have identified a target portfolio company, we will conduct our due diligence,
      and, as appropriate, determine whether to either (i) invest and advise or (ii)
      merely advise the portfolio company for a fee. Once we have decided to advise
      the portfolio company, we can distribute the portfolio company’s business plan
      or other corporate literature to our agents and affiliates in over 70 countries.
      Based upon the feedback from the various local agents and their local markets,
      we will determine how to proceed to assist the portfolio company in pursuing
      and
      executing viable growth opportunities and strategies in the countries where
      our
      business contacts have indicated clear business interest and market viability.
      Methods of expansion we may recommend to our portfolio companies include, but
      are not limited to, strategic partnering, joint venture, licensing with royalty
      agreement, regional distribution networks, regionalized manufacturing, and
      entry
      into the public markets.




In
      addition to investing in and assisting portfolio companies, we will have
      opportunities created through our relationship with the Imperiali Organization,
      which has contractually agreed to serve as the development team for Imperiali
      Inc. The Imperiali Organization has an ongoing series of projects which have
      (or
      may have) application to the global marketplace.  Through an agreement
      between Imperiali Organization and the Company, we will have the first right
      of
      refusal on any and all projects created and developed by the Imperiali
      Organization.




In
      summary, as a business development company Imperiali Inc. looks to globalize
      and
      grow viable micro-cap companies by investing in them and/or advising them by
      utilizing our international teams, residing in many international markets and
      who have the intellectual, cultural, financial, political and operational
      capabilities, combined with a global vision, to connect growing companies to
      the
      world’s markets.




This
      plan
      of operation has been adopted in order to attempt to create value for our
      shareholders. For further information on our plan of operation and business,
      see
      Form 10 filed January 18, 2007.





**Results
      of Operations**





LAST
      QUARTER 2007 - During the quarter ended August 31, 2007, our Net Investment
      Income incurred a net loss of $36,630,010. Of this figure $36,500,000 was the
      result of unrealized losses. Total expenses incurred were $131,760 of which
      $109,144 were for Employees and Consulting and $22,616 were for General and
      Administrative Expense. General and administrative expenses related primarily
      to
      rent, salaries, telephone, other office costs and costs associated with being
      a
      reporting company.




5





***Liquidity
      and Capital Resources***





We
      had
      cash on hand of $189,368 at August 31, 2007 and had no other assets to meet
      ongoing expenses or debts that may accumulate. As of such date, we have an
      accumulated deficit of $12,483,833. For the twelve months ended August 31,
      2007
      we had expenses totaling $ 1,320,853.





We
      have
      no commitment for any capital expenditure and foresee 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
      $2,500,000 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.





We
      will
      only be able to pay our 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,
      we
      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




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




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.




6





*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.





**Risk
      Factors that May Affect Future Operating Results**





You
      should carefully consider the risks described below before making an investment
      decision. The risks and uncertainties described below are not the only ones
      facing our Company. Additional risks and uncertainties not presently known
      to us
      or what we currently deem immaterial may also impair our business operations.
      If
      any of the following risks actually occur, our business, financial condition,
      or
      results of operations could be materially adversely affected. In such case,
      the
      trading price of our common stock could decline and you could lose all or part
      of your investment. You should also refer to the other information about us
      contained in this Form 10, including our financial statements and related
      notes.





**We
      have only a minimal operating history.**




Our
      operations are subject to all the risks inherent in any new business, including
      the risk that the Company will not achieve its investment objective and that
      its
      net asset value could decline substantially. Although we have identified, on
      a
      preliminary basis, certain micro-cap companies in which we may be interested
      in
      investing, the Company anticipates that it will take up to 90 days after the
      completion of the Offering to invest substantially all of the net proceeds
      received by the Company from the Offering due to the time necessary to complete
      our due diligence, evaluate, structure, negotiate, and close suitable
      investments. In the interim, the Company will invest in temporary investments,
      such as cash and cash equivalents, U.S. government securities and other high
      quality debt investments that mature in one year or less from the date of
      investment, which will earn yields substantially lower than the interest income
      anticipated from investments in portfolio companies. If the expenses of the
      Company exceed the return on the temporary investments, the equity capital
      of
      the Company will be eroded. Additionally, the Company may not be able to pay
      any
      dividends during this period or such dividends may be substantially lower than
      the dividends the Company expects to pay when its portfolio is fully
      invested.




**Competition
      could hurt our business.**




Many
      entities, including public and private funds, commercial and investment banks,
      commercial financing companies, business development companies and insurance
      companies will compete with the Company to make the types of investments that
      it
      plans to make in micro-cap companies. Many of these competitors are
      substantially larger, have considerably greater financial, technical and
      marketing resources than the Company will have and offer a wider array of
      financial services. For example, some competitors may have a lower cost of
      funds
      and access to funding sources that are not available to the Company. In
      addition, some competitors may have higher risk tolerances or different risk
      assessments, which could allow them to consider a wider variety of investments
      and establish more relationships. Many competitors are not subject to the
      regulatory restrictions that the 1940 Act will impose on the Company as a
      business development company or the restrictions that the Code will impose
      on
      the Company as a regulated investment company. Some competitors may make loans
      with interest rates that are lower than the rates the Company wishes to offer.
      The competitive pressures the Company faces may have a material adverse effect
      on our business, financial condition and results of operations. Also, as a
      result of this competition, the Company may not be able to take advantage of
      attractive investment opportunities from time to time, and can offer no
      assurance that it will be able to identify and make investments that are
      consistent with our investment objective. We have not finally determined any
      potential investments for the Company's portfolio, although the Company's
      competitors are likely to have identified and begun to pursue potential
      investments in which the Company may be interested.




7




**We
      are dependent on a key person.**




Daniel
      J.
      Imperato has principally conducted the development stage activities of the
      Company. Although he is not an employee of the Company, the loss of his services
      as Chairman Emeritus could negatively affect the Company. The Company has
      purchased “key man” life insurance on the life of Mr. Imperato.




**We
      anticipate future capital needs but have no certain source of
      add** **itional
      financing.**




Our
      capital requirements will be significant. Management believes that the net
      proceeds of the Offering should suffice to fund operations and our business
      plan
      for a period of 12 months if the maximum number of shares is sold. However,
      no
      assurance can be given that such proceeds will in fact be sufficient to fund
      operations for such period. The Company has no commitments for long-term
      financing. There can be no assurance that such financing will be available
      on
      favorable terms or at all.




**We
      may face leverage risk.**




The
      Company may borrow money or issue debt securities to leverage its capital
      structure. If the Company does so:




·
            The
                Company's common shares will be exposed to incremental risk of loss.
                In
                these circumstances, a decrease in the value of the Company's investments
                would have a greater negative impact on the value of its common shares
                than if it did not use leverage.




·
            Adverse
                changes in interest rates could reduce or eliminate the incremental
                income
                the Company expects to make with the proceeds of any
                leverage.




·
            The
                Company's ability to pay dividends on its common shares will be restricted
                if its asset coverage ratio is not at least 200% and any amounts
                used to
                service indebtedness would not be available for such
                dividends.




·
            It
                is likely that such securities will be governed by an indenture or
                other
                instrument containing covenants restricting the Company's operating
                flexibility.




·
            The
                Company, and indirectly its shareholders, will bear the cost of issuing
                and paying interest on such
                securities.




**We
      depend upon key employees to generate revenue.**




We
      are an
      economic and business development firm that will apply analytic techniques
      and
      industry knowledge to various investments in a broad range of portfolio
      companies. Accordingly, our success depends heavily on the efforts, abilities,
      business generation capabilities, and project execution capabilities of our
      employees. In particular, our employees’ personal relationships with our
      portfolio companies are a critical element in obtaining and maintaining
      portfolio companies’ investments. If the Company loses the services of any
      employee or if our employees fail to generate business or otherwise fail to
      perform effectively, that loss or failure could adversely affect our revenues
      and results of operations.




8





**Much
      of our business plan depends on our non-employee experts.**




The
      Company depends on our relationships with members of our Global Advisory Teams
      and our non-employee consultants to execute our business plan. We believe that
      these people are highly regarded in their fields and locales and that each
      offers a combination of knowledge, experience, and expertise that would be
      very
      difficult to replace. We also believe that the Company will be able to secure
      some investments in portfolio companies and attract other professionals to
      join
      our team in part because the Company can offer the services of these experts.
      Most of these experts can limit their relationships with us at any time for
      any
      or no reason.




**Our
      failure to manage growth successfully could adversely affect our revenues and
      results of operations**




We
      anticipate that providing global services will require that we open additional
      offices. Opening and managing new offices often requires extensive management
      supervision and increases our overall selling, general, and administrative
      expenses. Expansion creates new and increased management, investment, and
      training responsibilities for our employees. Expansion also increases the
      demands on our internal systems, procedures, and controls, and on our
      managerial, administrative, financial, marketing, and other resources. Any
      failure on our part to manage growth successfully could adversely affect our
      revenues and results of operations.





**Maintaining
      our professional reputation is crucial to our future success**




Our
      ability to secure new investments and hire qualified persons as employees
      depends heavily on our overall reputation as well as the individual reputations
      of our employees, the members of our Global Advisory Teams and our non-employee
      consultants. Because we expect that in the future the Company will obtain a
      majority of our new investments from existing portfolio companies or from
      referrals by those portfolio companies, any portfolio company that is
      dissatisfied with our performance on a single matter could seriously impair
      our
      ability to secure new investments. Given the frequently high-profile nature
      of
      the matters on which the Company will work, any factor that diminishes our
      reputation or the reputations of any of our employees, the members of our Global
      Advisory Teams and our non-employee consultants could make it substantially
      more
      difficult for us to compete successfully for both new investments and qualified
      persons to hire as employees.




**Our
      investments may result in professional liability**




Our
      services will typically involve difficult analytical assignments and carry
      risks
      of professional and other liability. Many of our investments will involve
      matters that could have a severe impact on a portfolio company’s business, cause
      the portfolio company to lose significant amounts of money, or prevent the
      portfolio company from pursuing desirable business opportunities. Accordingly,
      if a portfolio company is dissatisfied with our performance, that company could
      threaten or bring litigation in order to recover damages or to contest its
      obligation to pay our fees. Litigation alleging that we performed negligently
      or
      otherwise breached our obligations to a portfolio company could expose us to
      significant liabilities and tarnish our reputation.




**Our
        common stock has no prior trading market or liquidity, and the Company cannot
        assure you that any trading market will develop.**
  Prior
        to
        the date of this Registration Statement, there has not been any established
        trading market for our common stock. If the Company can qualify, we will
        attempt
        to register our shares for trading on the American Stock Exchange, although
        the
        Company cannot assure you as to the timing of that application or the likelihood
        of it being accepted. If the application is accepted, we cannot predict the
        extent to which investor interest will lead to the development of an active,
        liquid trading market. Active trading markets generally result in lower price
        volatility and more efficient execution of buy and sell orders for
        investors.




9




**The
      Company is a business development company status that requires us to comply
      with
      significant regulatory requirements.**




The
      Company is registered with the Securities and Exchange Commission as a Business
      Development Company under the 1940 Act and is subject to Sections 54 through
      65
      of said Act. Being subject to the business development company provisions
      requires us to meet significant numbers of regulatory and financial requirements
      as discussed in Item 1(c) — Regulation
      of the
      Company. Compliance with these regulations is expensive and may create financial
      problems for us in the future. These laws and regulations, as well as their
      interpretation, may be changed from time to time. Accordingly, any change in
      these laws or regulations could have a material adverse effect on our
      business.




If
      the
      Company does not remain a business development company, the Company might be
      regulated as a closed-end investment company under the 1940 Act, which would
      decrease our operating flexibility. The Company cannot assure you that the
      Company will successfully retain our business development company
      status.




**The
      Company’s election to be and qualification to be treated as a regulated
      investment company presents tax risks.**




To
      maintain its qualification as a regulated investment company under the Code,
      which is required in order for the Company to distribute its income without
      tax
      at the Company level, the Company must meet certain income source, asset
      diversification and annual distribution requirements. Satisfying these
      requirements may require the Company to take actions it would not otherwise
      take, such as selling investments at unattractive prices to satisfy
      diversification, distribution or source of income requirements. In addition,
      while the Company is authorized to borrow funds in order to make distributions,
      under the 1940 Act it is not permitted to make distributions to shareholders
      while its debt obligations and other senior securities are outstanding unless
      certain "asset coverage" tests are met. If the Company fails to qualify as
      a
      regulated investment company for any reason and becomes or remains subject
      to
      corporate income tax, the resulting corporate taxes could substantially reduce
      its net assets, the amount of income available for distribution and the amount
      of its distributions. Such a failure would have a material adverse effect on
      the
      Company and its shareholders.




For
      U.S.
      federal income tax purposes, the Company will include in income certain amounts
      that it has not yet received in cash, such as original issue discount, which
      may
      arise if the Company invests in zero coupon securities, deferred interest
      securities or certain other securities, or if the Company receives warrants
      in
      connection with the making of a loan or possibly in other circumstances. Such
      original issue discount, which could but is not expected to be significant
      relative to the Company's overall investment activities, generally will be
      included in income before the Company receives any corresponding cash payments.
      The Company also may be required to include in income certain other amounts
      that
      the Company will not receive in cash.




Since
      in
      certain cases the Company may recognize income before or without receiving
      cash
      representing such income, it may have difficulty making distributions in the
      amounts necessary to satisfy the requirements for maintaining regulated
      investment company status and for avoiding income and excise taxes. Accordingly,
      the Company may have to sell some of its investments at times we would not
      consider advantageous, raise additional debt or equity capital or reduce new
      investment originations to meet these distribution requirements. If the Company
      is not able to obtain cash from other sources, the Company may fail to qualify
      as a regulated investment company and thus be subject to corporate-level income
      tax. Such a failure would have a material adverse effect on the Company and
      its
      shareholders.




10




**BUSINESS
      DEVELOPMENT COMPANY RISKS**




**Investing
      in small and growth stage companies is inheren** **tly
      risky.**




Investments
      in micro-cap companies and growth stage companies offer the opportunity for
      significant gains. However, each investment involves a high degree of business
      and financial risk that can result in substantial losses,
      including:




·
            These
                companies may have limited financial resources and may be unable
                to meet
                their obligations under their securities that the Company holds,
                which may
                be accompanied by deterioration in the value of any
                collateral.




·
            They
                typically have shorter operating histories, narrower product lines
                and
                smaller market shares than larger businesses, which tend to render
                them
                more vulnerable to competitors' actions and market conditions, as
                well as
                general economic downturns.




·
            They
                are more likely to depend on the management talents and efforts of
                a small
                group of persons; therefore, the death, disability, resignation or
                termination of one or more of these persons could have a material
                adverse
                impact on the portfolio company and, in turn, on the
                Company.




·
            They
                generally have less predictable operating results, may from time
                to time
                be parties to litigation, may be engaged in rapidly changing businesses
                with products subject to a substantial risk of obsolescence, and
                may
                require substantial additional capital to support their operations,
                finance expansion or maintain their competitive
                position.




·
            They
                may cease to be treated as private companies for purposes of the
                regulatory restrictions applicable to the Company, in which case
                the
                Company may not be able to invest additional amounts in
                them.




·
            Little
                public information exists about these companies. The greater difficulty
                in
                making a fully informed investment decision raises the risk of misjudging
                the credit quality of the company, and the Company may lose money
                on its
                investments.




**Investing
      in small and growth stage companies presents valuation difficulties.**




A
      large
      percentage of the Company's portfolio investments will be in the form of
      securities that are not publicly traded. The fair value of securities and other
      investments that are not publicly traded may not be readily determinable. The
      Company will value these securities at least quarterly at fair value as
      determined in good faith by the Board of Directors, possibly with the assistance
      of an independent valuation firm. However, because fair valuations, and
      particularly fair valuations of private securities and private companies, are
      inherently uncertain, may fluctuate over short periods of time and are often
      based to a large extent on estimates, comparisons and qualitative evaluations
      of
      private information, the Company's determinations of fair value may differ
      materially from the values that would have been determined if a ready market
      for
      these securities existed. This could make it more difficult for investors to
      accurately value the Company's portfolio investments and could lead to
      under-valuation or over-valuation of its common shares.




11




**Portfolio
      companies are likely to need a** **dditional
      funding.**




The
      Company expects that many portfolio companies will require additional financing
      to satisfy their working capital requirements. The amount of additional
      financing needed will depend upon the maturity and objectives of the particular
      company. Each round of venture financing, whether from us or other investors,
      is
      typically intended to provide a portfolio company with enough capital to reach
      the next major valuation milestone. If the funds provided are not sufficient,
      a
      portfolio company may have to raise additional capital at a price unfavorable
      to
      the existing investors. The availability of capital is generally a function
      of
      capital market conditions that are beyond the control of any portfolio company.
      The Company cannot assure you that our management or the managements of
      portfolio companies will be able to predict accurately the future capital
      requirements necessary for success or those additional funds will be available
      to portfolio companies from any source. If funding is not available, some
      portfolio companies may be forced to cease operations.




**Business
      development companies’ investments are generally illiquid** .




The
      Company expects to make the majority of our investments in micro-cap companies
      and growth stage companies. Substantially all of the securities of such
      portfolio companies will be subject to legal and other restrictions on resale
      or
      will otherwise be less liquid than publicly traded securities. The illiquidity
      of these investments may make it difficult for the Company to sell such
      investments if the need arises. In addition, if the Company is required to
      liquidate all or a portion of its portfolio quickly, it may realize
      significantly less than the value at which it has previously recorded such
      investments. In addition, the Company may face other restrictions on its ability
      to liquidate an investment in a portfolio company to the extent that it has
      material non-public information regarding such portfolio company.




**Business
      development companies generally require substantial amounts of time to realize
      the benefits from investments** .




The
      Company anticipates that there will be a significant period of time ranging
      from
      one to three years before the Company has obtained funding and completed the
      initial selection of portfolio companies for our first round of equity
      investments. Venture capital investments typically take from four to eight
      years
      from the date of initial investment to reach a state of maturity at which
      liquidation can be considered practical. In light of the foregoing, it is
      unlikely that any significant distributions of the proceeds from the liquidation
      of equity investments will be made for several years after inception, if at
      all.




**The
      Company has not made any commitments to**  **any
      prospective portfolio companies** .




Because
      the Company has not made any commitments to any prospective portfolio company,
      investors will not have an opportunity to carefully evaluate any of the
      portfolio companies that the Company may eventually invest in and such
      evaluation will be entirely dependent upon our management for selecting and
      negotiating with these portfolio companies. The Company cannot assure you that
      we will successfully negotiate a transaction with a portfolio
      company.




**Portfolio
      companies may be more sensitive to economic recessions or downturns.**




Many
      of
      the Company's portfolio companies may be susceptible to economic slowdowns
      or
      recessions and may be unable to repay loans or pay dividends during these
      periods. Therefore, the Company's non-performing assets are likely to increase
      and the value of its portfolio is likely to decrease during these periods.
      Adverse economic conditions also may decrease the value of collateral securing
      some of the Company's loans and the value of its equity investments. Economic
      slowdowns or recessions could lead to financial losses in its portfolio and
      a
      decrease in revenues, net income and assets. Unfavorable economic conditions
      also could increase funding costs, limit access to the capital markets or result
      in a decision by lenders not to extend credit to the Company. These events
      could
      prevent the Company from increasing investments and harm its operating
      results.




12




A
      portfolio company's failure to satisfy financial or operating covenants could
      lead to defaults and, potentially, termination of its loans and foreclosure
      on
      its secured assets, which could trigger cross-defaults under other agreements
      and jeopardize the portfolio company's ability to meet its obligations under
      the
      debt or equity securities that the Company holds. The Company may need to incur
      additional expenses to seek recovery upon default or to negotiate new terms
      with
      a defaulting portfolio company. In addition, if one of the Company's portfolio
      companies were to go bankrupt, even though the Company may have structured
      its
      interest as senior debt, depending on the facts and circumstances, including
      the
      extent to which the Company actually provided significant managerial assistance
      to that portfolio company, a bankruptcy court might re-characterize the
      Company's debt holding and subordinate all or a portion of our claim to that
      of
      other creditors.




**Our
      investment decisions may present industry, sector and issuer risk.**




The
      Company may, from time to time, invest a substantial portion of its assets
      in
      the securities of issuers in any single industry or sector of the economy or
      in
      only a few issuers. The Company cannot predict the industries or sectors in
      which its investment strategy may cause it to concentrate and cannot predict
      the
      level of its diversification among issuers, although over time the Company
      anticipates investing in a minimum of 15 to 20 issuers to ensure it satisfies
      diversification requirements for qualification as a regulated investment company
      for U.S. federal income tax purposes. Concentration of the Company's assets
      in
      an industry or sector may present more risks than if it were broadly diversified
      over numerous industries and sectors of the economy. A downturn in an industry
      or sector in which the Company is concentrated would have a larger impact on
      us
      than on a company that does not concentrate in industry or sector. As a result
      of investing a greater portion of the Company's assets in the securities of
      a
      smaller number of issuers, the Company would be classified as a non-diversified
      company under the 1940 Act. The Company may be more vulnerable to events
      affecting a single issuer or industry and therefore subject to greater
      volatility than a company whose investments are more broadly diversified.
      Accordingly, an investment in the Company may present greater risk than an
      investment in a diversified company. Furthermore, we have not made and do not
      intend to make any determination as to the allocation of assets among different
      classes of securities. Consequently, at any point in time the Company may be
      highly concentrated in a single type of asset and events which affect a
      particular asset class disproportionately could have an equally disproportionate
      effect on the Company.




**There
      may be changes in laws or regulations governing portfolio companies.**




The
      Company's portfolio companies will be subject to regulation by laws at the
      local, state and federal level and, to the extent that we are successful in
      expanding our portfolio companies’ operations globally, the laws of foreign
      countries as well. These laws and regulations, as well as their interpretation,
      may be changed from time to time. Any change in these laws or regulations,
      or
      any failure to comply with them by the Company's portfolio companies, could
      have
      a material adverse affect on the Company's business.




13




**ITEM
      4.**  **CONTROLS
      and PROCEDURES.**





Within
      90
      days of the filing of this Form 10-K, an evaluation was carried out by Charles
      A. Fiscina, our Chief Financial Officer, of the effectiveness of our disclosure
      controls and procedures. Disclosure controls and procedures are procedures
      that
      are designed with the objective of ensuring that information required to be
      disclosed in our reports filed under the Securities Exchange Act of 1934, such
      as this Form 10-K, is recorded, processed, summarized and reported within the
      time period specified in the Securities and Exchange Commission's rules and
      forms. Based on that evaluation, Mr. Fiscina concluded that as of December
      10,
      2007, and as of the date that the evaluation of the effectiveness of our
      disclosure controls and procedures was completed, our disclosure controls and
      procedures were effective to satisfy the objectives for which they are
      intended.





There
      were no changes in our internal control over financial reporting identified
      in
      connection with the evaluation performed that occurred during the fiscal quarter
      covered by this report that has materially affected or is reasonably likely
      to
      materially affect, our internal control over financial reporting.




**PART
      II.**  **OTHER
      INFORMATION**





**ITEM
      5.**  **EXHIBITS
      and REPORTS on FORM 8-K.**





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





31
            Certification
                of Chief Executive Officer, President filed pursuant to Section 302
                of the
                Sarbanes-Oxley Act of 2002





32
            Certification
                of Chief Executive Officer, President furnished pursuant to 18 U.S.C.
                Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
                Act
                of 2002





(b)
            REPORTS
                ON FORM 8-K. None





14





**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:
      November 28, 2007





**Imperiali
                Inc**By
            /s/
                Daniel ImperatoDaniel Imperato, Interim Chief Executive Officer




15