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EX-99.4 - CERTIFICATE 18 U.S.C. SECT 1350 JOSEY SAJAN, CFO - Imperial Resources, Inc.certsect906joseysajancfo.htm
EX-99.2 - CERTIFICATE 18 U.S.C. SECT 1350 PAYYAPPILLY, CEO - Imperial Resources, Inc.certsect906jpayyappillyceo.htm
EX-99.3 - CERTIFICATE RULE 13A-14A JOSEY SAJAN, CFO - Imperial Resources, Inc.certrule13a14ajoesysajancfo.htm
EX-99.1 - CERTIFICATE RULE 13A-14A PAYYAPPILLY, CEO - Imperial Resources, Inc.certrule13a14apayyappillyceo.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(X )
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934
   
 
For the quarterly period ended December 31, 2009

 (  )
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934

 
For the transition period form                                                       to
   
 
Commission File number       333-152160 

 
IMPERIAL RESOURCES, INC.
                                                                 (Exact name of registrant as specified in its charter)

          Nevada 
83-0512922                                           
       (State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

Payyappilly House, Thiruthipuram, P.O., Kottapuram Via., 680667 – Ernakulam Dt. Kerala, India
(Address of principal executive offices)

011-91-484-248-6928
(Registrant’s telephone number)

N/A
(Former name, former address and former fiscal year, if changed since last report)

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

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

Large accelerated filer   [   ]                                                                                                           Accelerated filer                    [   ]

Non-accelerated filer     [   ]  (Do not check if a small reporting company)                            Small reporting company     [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)     Yes [  ]   No   [X]
 
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PROCEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  Yes No

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

January 31, 2010:  49,900,000 common shares

 
 
 
 
-1-

 

 

   
Page Number
     
PART 1.
FINANCIAL INFORMATION
 
     
ITEM 1.
Financial Statements (unaudited)
3
     
 
Balance Sheet as at December 31, 2009 and March 31, 2009
4
     
 
Statement of Operations
For the three and nine months ended December 31, 2009 and 2008 and for the period from August 2, 2007 (Date of Inception) to December 31, 2009
 
 
5
     
 
Statement of Changes in Stockholders’ Deficiency
Period from August 2, 2007 (date of inception) to December 31, 2009
 
6
     
 
Statement of Cash Flows
For the nine months ended December 31, 2009 and for the period from August 2, 2007 (Date of Inception) to December 31, 2009
 
7
     
 
Notes to the Financial Statements.
8
     
ITEM 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
12
     
        ITEM 3.
Quantitative and Qualitative Disclosure about Market Risk
23
     
        ITEM 4.
Controls and Procedures
23
     
        ITEM 4T
Controls and Procedures
24
     
PART 11.
OTHER INFORMATION
24
     
ITEM 1.
Legal Proceedings
24
     
        ITEM 1A
Risk Factors
24
     
ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
28
     
ITEM 3.
Defaults Upon Senior Securities
28
     
ITEM 4.
Submission of Matters to a Vote of Security Holders
28
     
ITEM 5.
Other Information
28
     
ITEM 6.
Exhibits
30
     
 
SIGNATURES.
31

 
 
 
-2-

 

 

PART 1 – FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

The accompanying balance sheets of Imperial Resources, Inc. (Pre-exploration stage company) at December 31, 2009 (with comparative figures as at March 31, 2009) and the statements of operations for the three and nine months ended December 31, 2009 and 2008 and from the period from August 2, 2007 (date of inception) through December 31, 2009 and the statements of cash flows for the nine months ended December 31, 2009 and 2008 and from August 2, 2007 (date of inception) to December 31, 2009 have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating results for the three and nine months ended December 31, 2009 are not necessarily indicative of the results that can be expected for the year ending March 31, 2010.



 
 
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IMPERIAL RESOURCES, INC.
(Pre-exploration Stage Company)
BALANCE SHEETS

(Unaudited – Prepared by Management)

 
December 31, 2009
March 31, 2009
     
ASSETS
   
     
CURRENT ASSETS
   
     
Cash
$           57
$         57
     
Total Current Assets
$           57
$         57
     
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
   
     
CURRENT LIABILITIES
   
     
Accounts payable
$    13,787
$  16,568
Accounts payable – related parties
30,314
   20,943
     
Total Current Liabilities
44,101
37,511
     
STOCKHOLDERS’ DEFICIENCY
   
     
Common stock
   
500,000,000 shares authorized, at $0.001 par value;
   
 49,900,000 shares issued and outstanding
49,900
49,900
Capital in excess of par value
25,825
14,125
Deficit accumulated during the pre-exploration stage
(119,769)
(101,479)
     
Total Stockholders’ Deficiency
(44,044)
(37,454)
     
 
$           57
$           57


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


 
 
-4-

 




IMPERIAL RESOURCES, INC.
(Pre-exploration Stage Company)
STATEMENT OF OPERATIONS
For the three and nine months ended December 31, 2009 and 2008 and for the period from August 2, 2007 (date of inception) to December 31, 2009


 
 
Three months ended
December 31, 2009
 
Three months ended
December 31, 2008
 
Nine months ended
December 31, 2009
 
Nine months ended
December 31, 2008
From August 2, 2007
(date of inception)
to Dec. 31, 2009
           
REVENUES
$            -
$            -
$              -
$              -
$             -
           
EXPENSES
         
           
Accounting and audit
1,550
3,050
5,150
9,322
36,068
Consulting
-
-
-
12,500
20,000
Edgarizing
262
788
788
1,995
1,942
Exploration
-
-
-
-
11,217
Filing fees
-
-
-
50
50
Incorporation costs
-
-
-
-
854
Legal
-
-
-
4,238
8,913
Management fees
3,000
3,000
9,000
9,000
27,000
Office
37
79
632
1,078
2,730
Rent
600
600
1,800
1,800
5,400
Telephone
300
300
900
900
2,700
Transfer agent fees
20
-
20
492
1,421
Travel
          -
           -
        -
         -
     1,474
           
NET LOSS FROM OPERATIONS
$   (5,769)
$  (7,817)
$   (18,290)
$    (41,375)
$  (119,769)
           
           
NET LOSS PER COMMON SHARE
         
           
Basic and diluted
$   (0.00)
$  (0.00)
$     (0.00)
$     (0.00)
 
           
AVERAGE OUTSTANDING SHARES
         
           
Basic
49,900,000
49,900,000
49,900,000
49,900,000
 


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

 
 
 
-5-

 

 

IMPERIAL RESOURCES INC.
 (Pre-Exploration Stage Company)

STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

Period from August 2, 2007 (date of inception) to December 31, 2009

(Unaudited – Prepared by Management)

 
      Common
Shares
 
Stock
Amount
Capital in Excess of
Par Value
 
Accumulated     Deficit
         
Balance August 2, 2007
                      -
   $             -
  $             -
  $               -
         
Issuance of common shares on October 31, 2007
   3,000,000
        3,000
                 -
                   -
         
Issuance of common shares on December 31, 2007
      725,500
          752
        36,873
                   -
         
Capital contributions – expenses
                 -
              -
          7,800
                   -
         
Net operating loss for the period from August 7, 2007 to March 31, 2008
                 -
              -
                 -
         (45,549)
         
Balance as at March 31, 2008
   3,752,500
       3,752
        44,673
         (45,549)
Capital contributions – expenses
                 -
              -
        15,600
                   -
         
Net operating loss for the year ended March 31, 2009
                -
              -
                  -
         (55,930)
         
Balance as at March 31, 2009
   3,752,500
       3,752
       60,273
       (101,479)
         
Capital contributions – expenses
                 -
              -
       11,700
                   -
         
Cancellation of common shares
 (2,550,000)
      (2,550)
         2,550
                   -
         
Dividend issues at 65 shares for 1
 78,162,500
      78,163
     (78,163)
                   -
         
Cancellation of common shares
(29,465,000)
    (29,465)
       29,465
                   -
         
Net operation loss for the nine months ended December 31, 2009
                 -
               -
                -
        (18,290)
         
Balance as at December 31, 2009
49,900,000
 $   49,900
   $ 25,825
  $  (119,769)

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



 
-6-

 



IMPERIAL RESOURCES, INC.
(Pre-exploration Stage Company)
STATEMENT OF CASH FLOWS
For the nine months ended December 31, 2009 and 2008 and for the period from August 2, 2007 (date of inception) to December 31, 2009
(Unaudited – Prepared by Management)

 
 
Nine months ended
December 31, 2009
 
Nine months ended
December 31, 2008
From August 2, 2007
(date of inception)  to
December 31,  2009
       
CASH FLOWS FROM OPERATING ACTIVITIES:
     
       
Net loss
$ (18,290)
$   (41,375)
$(119,769)
       
Adjustments to reconcile net loss to net cash provided by operating activities:
     
       
Capital contributions – expenses
11,700
11,700
35,100
Changes in accounts payable
 (2,781)
(3,908)
 13,787
       
Net Cash  Provided (Used) in Operations
(9,371)
(33,583)
(70,882)
       
CASH FLOWS FROM INVESTING ACTIVITIES:
           -
           -
            -
       
CASH FLOWS FROM FINANCING ACTIVITIES
     
       
Proceeds from loan from related party
9,371
15,177
30,314
Proceeds from issuance of common stock
         -
            -
 40,625
       
 
 9,371
    15,177
70,939
       
Net Increase (Decrease) in Cash
-
(18,406)
57
       
Cash at Beginning of Period
      57
18,463
         -
       
CASH AT END OF PERIOD
$       57
$         57
$        57



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



 
-7-

 



IMPERIAL RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
(Unaudited – Prepared by Management)

1.           ORGANIZATION

The Company, Imperial Resources, Inc., was incorporated under the laws of the State of Nevada on August 2, 2007 with the authorized capital stock of 500,000,000 shares at $0.001 par value.

The Company was organized for the purpose of acquiring and exploring mineral properties.  At the report date mineral claims, with unknown reserves, had been acquired.  The Company has not established the existence of a commercially minable ore deposit and therefore has not reached the exploration stage and is considered to be in the pre-exploration stage.

2.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Methods

The Company recognizes income and expenses based on the accrual method of accounting.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

 
Basic and Diluted Net Income (loss) Per Share

 
Basic net income (loss) per share amounts are computed based on the weighted average number of shares actually outstanding.   Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights unless the exercise becomes antidulutive and then only the basic per share amounts are shown in the report.

Evaluation of Long-Lived Assets

The Company periodically reviews its long term assets and makes adjustments, if the carrying value exceeds fair value.

Income Taxes

The Company utilizes the liability method of accounting for income taxes.  Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed.   An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

On December 31, 2009 the Company had a net operating loss carry forward of $119,769 for income tax purposes.  The tax benefit of approximately $36,000 from the loss carry forward has been fully offset by a valuation reserve because the future tax benefit is undeterminable since the Company is unable to establish a predictable projection of operating profits for future years.  Losses will expire during 2030.

 
 
 
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IMPERIAL RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
(Unaudited – Prepared by Management)

2.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Foreign Currency Translations

Part of the transactions of the Company were completed in Canadian dollars and have been translated to US dollars as incurred, at the exchange rate in effect at the time, and therefore, no gain or loss from the translation is recognized.  The functional currency is considered to be US dollars.

Revenue Recognition

Revenue is recognized on the sale and delivery of a product or the completion of a service provided.

Advertising and Market Development

The company expenses advertising and market development costs as incurred.

Financial Instruments

 
The carrying amounts of financial instruments are considered by management to be their fair value due to their short term maturities.

Estimates and Assumptions

Management uses estimates and assumptions in preparing financial statements in accordance with general accepted accounting principles.  Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.   Actual results could vary from the estimates that were assumed in preparing these financial statements.

 
Statement of Cash Flows

 
For the purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.

Unproven Mining Claim Costs

Cost of acquisition, exploration, carrying and retaining unproven properties are expensed as incurred.



 
-9-

 




 
IMPERIAL RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
(Unaudited – Prepared by Management)

2.           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

 
Environmental Requirements

 
At the report date environmental requirements related to the mineral claim acquired are unknown and therefore any estimate of any future cost cannot be made.

Recent Accounting Pronouncements

The Company does not expect that the adoption of other recent accounting pronouncements will have a material impact on its financial statements.

3.           AQUISITION OF MINERAL CLAIM

 
On August 10, 2007, the Company acquired the Bhadrachalam Gold Claim located in the India from Pure Minerals LLC., an unrelated company, for the consideration of $5,000.  The Bhadrachalam Gold Claim is located approximately 22 miles northeast of Pollavarara, India.  Under Indian law, the claim remains in good standing as long as the Company has an interest in it.   There is no annual maintenance fee or minimum exploration work required on the Claim.

4.           SIGNIFICANT TRANSACTIONS WITH RELATED PARTY

Officers-directors and their families have made no interest, demand loans to the Company of $30,314 and have made contributions to capital of $35,100 in the form of expenses paid for the Company.

5.           CAPITAL STOCK

On October 31, 2007, Company completed a private placement consisting of 195,000,000 post dividend common shares sold to directors and officers for a total consideration of $3,000.  On December 31, 2007, the Company completed a private placement of 48,912,500 post dividend common shares a total consideration of $37,625.  On November 3, 2009, the Company issued a stock dividend to shareholders of record whereby the Company issued sixty-five shares of its common stock for each share of common stock held by such investors. Subsequent to December 31, 2009, 165,750,000 post dividend common shares were returned to Treasury and later a further 29,465,000 post dividend common shares were cancelled and returned to Treasury leaving an outstanding balance of 49,900,000 common shares.  The 49,900,000 post dividend common shares are shown as increased from the date of inception.

6.           GOING CONCERN

The Company intends to seek business opportunities that will provide a profit.  However, the Company does not have the working capital necessary to be successful in this effort and to service its debt, which raises substantial doubt about its ability to continue as a going concern.

Continuation of the Company as a going concern is dependent upon obtaining additional working capital and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional loans from related parties, and equity funding, which will enable the Company to operate for the coming year.
 
 
 
 
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IMPERIAL RESOURCES, INC.
(Pre-exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
(Unaudited – Prepared by Management)

7.           SUBSEQUENT EVENTS

a.           Incorporation of wholly-owned subsidiary

On January 8, 2010, the Company incorporated a wholly owned subsidiary in the State of Delaware named Imperial Oil & Gas Inc. (“Imperial Oil”).   On January 16, 2010, the Company appointed Grant Twanow as President and Director of its wholly-owned subsidiary and on January 19, 2010 appointed Neil McPherson to its board of directors.

 
b.         Form 8-K filed on January 22, 2010
 
        For further subsequent events refer to Form 8-K filed on January 22, 2010 with the United States Securities and Exchange Commission and mentioned herein in this Form 10-Q.
 
 
 
-11-

 

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

The following discussion should be read in conjunction with the information contained in the financial statements of Imperial Resources, Inc. (“Imperial”) and the notes which form an integral part of the financial statements which are attached hereto.

The financial statements mentioned above have been prepared in conformity with accounting principles generally accepted in the United States of America and are stated in United States dollars.

Our Business

We were incorporated under the laws of the State of Nevada on August 2, 2007 (date of inception) under the name of Imperial Resources, Inc.  Our fiscal year end is March 31. From inception, our operations have been primarily limited to organizing our company and acquiring our mineral claim.  Our principal office is located at Payyappilly House, Thiruthipuram P.O., Kottapuram Via, 680667 – Ernakulam Dt., Kerala, India.  Our telephone is 011-91-484-248-6928.   We do not have any subsidiaries, affiliated companies or joint venture partners.

On January 8, 2010, the Company incorporated a wholly owned subsidiary in the State of Delaware named Imperial Oil & Gas Inc.   On January 16, 2010, the Company appointed Grant Twanow as President and Director of its wholly-owned subsidiary and on January 19, 2010 appointed Neil McPherson to its board of directors.

Our mineral property, the Bhadrachalam Gold Claim (hereinafter the “Imperial Claim”), is a gold exploration project located 35 km Northeast of Pollavarara, (closest city),  41 km South of the city of Cheria and 45 km Northeast of the city of Khammam, in the District of Andhra Pradesh, India.  We are the registered and beneficial owner of a 100% interest in the Imperial Claim located in Andhra Pradesh, India.  Imperial acquired the Imperial Claim for the sum of $5,000 by purchase from an unrelated vendor, Pune Minerals, LLC. Our business plan is to explore the Imperial Claim for commercially exploitable reserves of valuable minerals.  The Imperial Claim has no proven or probable mineral reserves, and there is no assurance that it contains commercially exploitable reserves of valuable minerals.

We recently commenced our Phase I exploration work on the Imperial Claim. We do not have funds sufficient to complete only Phase 1 of a two-phase exploration program, recommended by our professional geologist, for the Imperial Claim.

Exploration for minerals is a speculative venture necessarily involving substantial risk.  The expenditures to be made by us on our exploration program may not result in the discovery of commercially exploitable reserves of valuable minerals.  The probability of a mineral claim ever having commercially exploitable reserves is extremely remote, and in all probability our mineral claims do not contain any reserves.  Any funds spent on the exploration of these claims will probably be lost.  If we are unable to find reserves of valuable minerals or we cannot remove the minerals because we either do not have the capital to do so, or because it is not economically feasible to do so, then we will cease operations and you will lose your investment.

We anticipate that any additional funding that we require will be in the form of equity financing from the sale of our common stock.  There is no assurance, however, that we will be able to raise sufficient funding from the sale of our common stock.  The risky nature of this enterprise and lack of tangible assets places debt financing beyond the credit-worthiness required by most banks or typical investors of corporate debt until such time as an economically viable mine can be demonstrated.  We do not have any arrangements in place for any future equity financing.  If we are unable to secure additional funding, we will cease or suspend operations.  We have no plans, arrangements or contingencies in place in the event that we cease operations.
 
 
 
-12-

 
 

 
If, on the advice of our independent consulting geologist, Nitesh Varma, we discontinue our exploration of the Imperial Claim, we may seek to acquire other natural resource exploration properties.  Any such acquisition(s) will involve due diligence costs in addition to the acquisition cost.  We will also have an ongoing obligation to maintain our periodic filings with the appropriate regulatory authorities, which will involve legal and accounting costs.  In the event that our available capital is insufficient to acquire an alternative resource property and sustain minimum operations, we will need to secure additional funding or else we will be compelled to discontinue our business.

On January 16, 2010, Imperial Resources, Inc. appointed Grant Twanow as President and Director of its wholly-owned subsidiary, Imperial Oil and Gas, Inc. a Delaware corporation (“Imperial Oil”).  Mr. Twanow is a Petroleum Reservoir Engineering Specialist based in North America with extensive experience in oil and gas joint ventures and operations.  In connection with the appointment, Imperial Oil entered into a Supply of Services Agreement with GNP Resources, Ltd., a company wholly-owned by Mr. Twanow (“GNP”) and Mr. Twanow whereby Mr. Twanow acting on behalf of GNP will provide services to Imperial Oil related to the maintenance and development of Imperial Oil’s oil and gas exploration and development interests. Additionally, Imperial Oil and GNP entered into a Royalty Agreement whereby Imperial Oil agrees to pay GNP a gross overriding royalty of 5% in any lands acquired by Imperial Oil in Prospects procured by GNP or Mr. Twanow.  

On January 19, 2010, Imperial Oil appointed Neil McPherson to its board of directors.  Mr. McPherson has 40 years of experience in the oil and gas industry including all phases and aspects of petroleum land management, hydrocarbon exploration and independent businesses. In connection with the appointment, Imperial Oil entered into a Supply of Services Agreement with Little Eagle Resources Inc., a company wholly-owned by Mr. McPherson (“Little Eagle”) and Mr. McPherson whereby Mr. McPherson acting on behalf of Little Eagle will provide services to Imperial Oil related to the maintenance and development of Imperial Oil’s oil and gas exploration and development interests. Additionally, Imperial Oil and Little Eagle entered into a Royalty Agreement whereby Imperial Oil agrees to pay Little Eagle a gross overriding royalty of 1.5% in any lands acquired by Imperial Oil in the North West Premont Prospect and the Ricinus Area Prospect procured by Little Eagle or Mr. McPherson.  

On January 20, 2010, Coach Capital, LLC (“Coach”) assigned to Imperial Oil, a 14.9% working interest in the oil, gas and mineral leases in the Greater Garwood hydrocarbon exploration project located in Colorado County, Texas (“Project”). The assignment was made subject to the terms and conditions of the leases and that certain unrecorded Participation Agreement dated November 5, 2008 between El Paso E&P Company, L.P. and Baytor Energy LLC, and the Carry Agreement dated October 27, 2009 between Baytor Energy LLC and Coach. 

On January 19, 2010, Imperial Oil borrowed $900,000 from Coach pursuant to a promissory note issued to Coach.  The outstanding balance under the note will accrue interest at 5% per annum and is due in full on January 19, 2013.  If the note and accrued interest are not repaid in full between 1 year and 3 years after January 19, 2010, Coach will be paid 75% of the net production revenue received by Imperial Oil from the Project, excluding the interest in the Cochran #1 well.  If the note and accrued interest are not repaid in full after 3 years from January 19, 2010, Coach will be paid 100% of the net production revenue received by Imperial Oil from the Project, excluding the interest in the Cochran #1 well.

We have earned no revenue since inception.  From August 2, 2007 (inception) through December 31, 2009, we incurred a net loss of $119,769.  Further losses are anticipated in the development of our business.  We have limited financial resources and require additional financing to fund our operations.  These factors raise substantial doubt about our ability to continue as a going concern.  Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to locate commercially exploitable reserves of valuable minerals.

Our officers and directors, other than our two directors of Imperial Oil & Gas, have only recently become interested in natural resource exploration.  Only two of them have any professional training nor technical credentials in the exploration, development, or operation of mines.  We therefore intend to retain qualified persons on a contract basis to perform the exploration of the property as needed.  We do not have any verbal or written agreement regarding the retention of any qualified engineer or geologist for our exploration program.  Nitesh Varma, the professional geologist we hired to outline a work program on the Imperial Claim, has indicated that, subject to availability, he would be prepared to oversee the exploration program, but we have not discussed any terms of such an arrangement.
 
 
 
-13-

 
 

 
We currently have no employees other than our three officers/directors of our Company and the two directors of Imperial Oil & Gas.  We do not intend to hire any employees for the next twelve months and unless and until we have proven mineral reserves.


DESCRIPTION OF BUSINESS AND PROERTY
General

The Company was incorporated under the laws of the State of Nevada on August 2, 2007 under the name of Imperial Resources Inc.   The Company does not have any joint venture partners.

We have not been involved in any bankruptcy, receivership or similar proceedings since inception nor have we been party to a reclassification, merger, consolidation, or purchase or sale of a significant amount of assets not in the ordinary course of business.  We are a pre-exploration stage company engaged in the search for mineral deposits that demonstrate economic feasibility.

Until recently our activities had been confined to the organizational matters described below.

Business Development of Issuer Since Inception

We raised $3,000 in initial seed capital on October 31, 2007 from our directors and officers through the issuance of 3,000,000 common shares.  Monies used to begin the search for and arrange to acquire a mineral property that we consider holds the potential to contain gold were advanced to Imperial by our President James Payyappilly.

In August 2007 we engaged Nitesh Varma, Professional Geologist, to conduct a review and analysis of the Imperial Claim and the previous exploration work undertaken on the property and to recommend a mineral exploration program for the Imperial Claim.  Mr. Varma’s report, summarized below, recommends a three-phase exploration program for the Imperial Claim.

On December 31, 2007 Imperial completed a private placement pursuant to Regulation S of the Securities Act of 1933, whereby 752,500 common shares were sold at the price of $0.05 per share to raise $37,625.

In November 2009 the certain shareholders cancelled a total of 2,550,000 common shares out of the 3,752,500 common shares outstanding at that time by returning the certificates to Treasury.

On November 3, 2009, the Company issued a stock dividend to shareholders of record whereby the Company issued sixty-five shares of its common stock for each share of common stock held by shareholders.

On January 25, 2010, certain shareholders cancelled 29,465,000 post dividend common shares by returning them to Treasury.   With this cancellation the Company has 49,900,000 common shares issued and outstanding.
 
Business
 
We are presently in the pre-exploration stage. We intend to undertake exploration work on the Imperial Claim, located in the sub-district of Khammam, District of Andhra Pradesh, India.
 
 
 
 
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We do not have any ore body and there is no assurance that mineralized material with any commercial value exits on our property.   We have not generated any revenues from our operations.
 
Mineral exploration is typically conducted in phases.  Each subsequent phase of exploration work is recommended by a geologist based upon the results of the most recently completed phase of exploration.
 
To date, we have not conducted any significant exploration work on the Imperial Claim.  We hope to have funds sufficient to complete Phase 1 of a two-phase exploration program recommended for the Imperial Claim.  Our Phase I work is exploratory in nature.  There can be no assurance that a commercially viable mineral deposit, an ore reserve, exists on the Imperial Claim or can be shown to exist unless and until sufficient and appropriate exploration work is carried out and a comprehensive evaluation of such work concludes economic and legal feasibility.   Such work could take many years of exploration and would require expenditure of very substantial amounts of capital, capital we do not presently have and may never be able to raise.
 
Imperial Claim

Imperial is the registered and beneficial owner of a 100% interest in the Imperial Claim, located in Andhra Pradesh, India.

Beneficial ownership of the Imperial Claim confers the rights to the minerals on the Imperial Claim.

The Imperial Claim covers an area of approximately 957.6 hectares (approximately 2,366 acres).

The Imperial Claim was selected for acquisition due to previously recorded exploration work and substantial past gold production in the immediate area of the Imperial.
 
There are no permanent facilities, plants, buildings or equipment currently located on the Imperial Claim.
 
Location, Access, Topographic and Physical Environment
 
The Imperial Claim is located in sub-district of Khammam, Andhra Pradesh, India.  The Imperial Claim is accessible by all-weather government maintained roads and via railway as well.  Approximately 45 kilometers (28 miles) south-west of the claim is the town of Khammam which provides all necessary amenities and supplies including, fuel, helicopter services, hardware, prospecting services and drilling companies.  Electrical power is not required at this stage of exploration.  Gas-powered portable generators could supply any electrical power that might be required in the foreseeable future.
 
The topography and relief of the Imperial Claim is fairly rugged. Tropical mountain forests grow at lower elevations in the northeast corner of the claim and good rock exposure is found along the peaks and ridges in the western portion of the claim. The area has a tropical and humid climate, with an oppressive summer and plentiful seasonal rainfall. The summer season, from March to May, is followed by the south west monsoon from June to September. The north east monsoon lasts from October to November. The Imperial Claim’s exploration season is year-round although oppressive heat and heavy rains through the summer and fall favor late fall and early winter as the preferred exploration seasons

Regional, Local & Property Geology

To the east of the Imperial Claim are intrusives consisting of rocks such as tonalite, monzonite, and gabbro while the property itself is underlain by sediments and volcanics. The intrusive also consist of a large mass of granodiorite near  the western most point of the property.
 
Huge deposits of Semi Precious Garnet deposits occur in Ramapuram, Rudrampur, Sujatha Nagar, Enkur mandals of Khamman district.   These deposits are mostly confined to Forest areas.  Hugh deposits of Semi Precious Garnet deposits occur in Ramapuram, Rudrampur, Sujatha Nagar, Enkur mandals of Khamman district. The hilly terrains and the middle level plain contain crystalline hard rocks such as charnockites, granite gneiss, khondalites, leptynites, metamorphic gneisses with detached occurrences of crystalline limestone, iron ore, quartzo-feldspathic veins and basic intrusive such as dolerites and anorthosites.  Coastal zones contain sedimentary limestones, clay, laterites, heavy mineral sands and silica sands. The hill ranges are sporadically capped with laterites and bauxites of residual nature.  Gypsum and phosphatic nodules occur as sedimentary veins in rocks of the cretaceous age.  Gypsum of secondary replacement occurs in some of the areas adjoining the foothills of the Western Ghats.  Lignite occurs as sedimentary beds of tertiary age.  The Black Granite and other hard rocks are amenable for high polish. These granites occur in most of the districts except the coastal area.
 
 
 
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The principal bedded rocks for the area of Imperial Claim (and for most of India for that matter) are Precambrian rocks which are exposed along a wide axial zone of a broad complex.
 
Gold at the Bayyaram Gold Mine (which, as stated above, is in close proximity to the Imperial Claim) is generally concentrated within extrusive Precambrian rocks in the walls of large volcanic caldera. In general the volcanoes culminate with effluents of hydrothermal solutions that carry precious metals in the form of naked elements, oxides or sulphides.
 
These hydrothermal solutions intrude into the older rocks as quartz veins. These rocks may be broken due to mechanical and chemical weathering into sand size particles and carried by streams and channels. Gold occurs also in these sands as placers.
 
The Varma Report indicates that recent exploration by others, in search for gold occurrence in Andhra Pradesh District, have yielded encouraging results. The Varma Report states that gold belt in sheared gneissic rocks has been found in three sub parallel auriferous load zones in Andhra Pradesh District, where some blocks having 250 to 500 meter length and 1.5 to 2 meters in width, and that these load zones have the potential to have commercial value.
 
Recommended Exploration Work
 
Mr. Nitesh Varma, P. Eng., authored the "Summary of Exploration on the Bhadrachalam Property, Andhra Pradesh, India” dated September 7, 2007 (the “Varma Report”), in which he recommended a phased exploration program to properly evaluate the potential of our property. We must conduct exploration to determine what minerals exist on our property and whether they can be economically extracted and profitably processed. Subject to having funds sufficient to do so we plan to complete Phase I exploration work on the Imperial Claim, in the manner recommended in the Varma Report, to determine the potential for discovering commercially exploitable deposits of gold and/or uranium.
 
As noted in the Varma Report, records indicate the Imperial Claim has seen very limited historical exploration.   However, the locale of our property is well known for numerous productive, commercial gold mineral occurrences.  We do not have any ores or reserves whatsoever at this time on the Imperial Claim. Our planned Phase I work is exploratory in nature.
 
The Varma Report concludes that the Imperial Claim is:
 
-           underlain by the units of the Precambrian rocks that are found at those mineral occurrence sites.  These rocks consisting of cherts and argillites (sediments) and andesitic to basaltic volcanic have been intruded by granodiorite. Structures and mineralization probably related to this intrusion are found throughout the region and occur on the claim. They are associated with all the major mineral occurrences and deposits in the area.
 
-           mineralization found on the claim is consistent with that found associated with zones of extensive mineralization. Past work however has been limited and sporadic and has not tested the potential of the property.
 
 
 
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-           potential for significant amounts of mineralization to be found exists on the property and it merits intensive exploration.
 
The Varma Report recommends a two-phase exploration program to properly evaluate the potential of the claims.   We anticipate, based on the budgets set forth in the Varma Report, that Phase I work will cost approximately $13,600.
 
Assuming Phase I work identifies suitable targets, thus indicating further exploration of the Imperial Claim is warranted, we intend, provided we are able to raise funds to do so, undertake a Phase II geochemical surveying and sampling program at a cost of a further $24,600.    Assuming the results of a Phase II program identify suitable drill targets a Phase III drilling program could be undertaken.  Once again, our ability to conduct Phase III work is subject to our ability to raise funds to do so.  Provided we have the funds available to do so, we intend to complete Phase I work at some point during the late fall of 2010.   Precise timing of the Phase I work will depend upon availability of funds as well as weather conditions on the claim.
 
Phase I work will include establishing a grid and the creation of maps showing the location of all roads in and near the perimeter of the Imperial Claim.  The laying out of a grid and line cutting involves the physical cutting of the underbrush and overlay to establish an actual grid on the ground whereby items can be related one to another more easily and with greater accuracy. When we map, we essentially generate a drawing of the physical features of the land we are interested in as well as a depiction of what may have been found in relation to the boundaries of the property. So we will actually draw a scale map of the area and make notes on it as to the location where anything was found that was of interest or not.  In the process we will also identify any showings which appear to warrant sampling, i.e. any rock formations that appear to warrant our taking soil and rock samples from the claims to a laboratory where a determination of the elemental make up of the sample and the exact concentrations of gold and/or uranium and other indicator minerals can be made.  Based on the Varma Report we expect the costs of Phase I work to total approximately $13,600.
 
Should Phase I results warrant further work and should we be able to raise additional funds (through the issuance of additional shares, debt securities or loan advances from our directors) to undertake additional work on the Imperial Claim, in Phase II (at an estimated cost of a further $24,600) we expect to undertake a geochemical surveying and sampling program.  This work would be designed to compare the relative concentrations of gold and other indicator minerals in samples so the results from different samples can be compared in a more precise manner and plotted on a map to evaluate their significance.  If an apparent mineralized zone(s) is identified and narrowed down to a specific area by the Phase I & II work, we expect (again subject to our ability to raise additional funds to do so, through the issuance of additional treasury shares, debt securities or loan advances from our directors) to diamond drill selected targets to test the apparent mineralized zones.  The cost of a drilling program, if deemed warranted, cannot be accurately estimated until we have the results of Phase I and II programs.
 
The work is phased in such a manner as to allow decision points to ensure that future work has a value and will provide better or additional information as to the viability of the claim. By utilizing a multi-phase work program, at the end of each phase a decision can be made as to whether the phase has provided the necessary information to increase the viability of the project. If the information obtained as a result of any phase indicates that there is no increased probability of finding an economically viable deposit at the end of the project, a determination would be made that the work should cease at that point.
 
Phase II work cannot be undertaken unless and until Imperial is able to raise additional capital as our existing working capital is largely committed to administrative expenses of the Company.  Consequently, if we are unable to raise additional capital we may not be able to undertake any work on the Imperial Claim beyond Phase I. In addition, provided the results of Phase I exploration work prove encouraging, there is no assurance we will be able to raise the capital necessary to conduct the further exploration work contemplated by Phases II.   Should the Phase I work prove unsuccessful in identifying such drill targets, the Company will likely abandon the Imperial Claim and we may have to go out of business.  We have a limited operating history, no reserves and no revenue.  Accordingly, our ability to raise additional funds might be limited.  If we are unable to raise the necessary funds, we would be required to suspend Imperial’s operations and liquidate our company.
 
 
 
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Geology Report
 
Mr. Nitesh Varma, P. Eng. is, and has for more that twenty (20) years been, a registered Professional Geologist in good standing in the Geological Society of India. He is a graduate of the University of Punjab, with degrees in geology (B. Sc.1979; M. Sc. 1983).  He has acted as a geological consultant for a number of Indian mining companies on mineral exploration projects in India and around the world.
 
Management Experience

Our management has no professional training or technical credentials in the exploration, development, and operation of mines.  Consequently, we may not be able to recognize or take advantage of potential acquisition and exploration opportunities in the sector without the aid of qualified geological consultants.  Moreover, with no direct training or experience, our management may not be fully aware of the specific requirements related to working in this industry.  They may make mistakes in their decisions and choices that could cause our operations and ultimate financial success to suffer irreparable harm.

Competitive Factors

The mining industry is highly fragmented and we will be competing with many other exploration companies looking for minerals. We are one of the smallest exploration companies and are an infinitely small participant in the mineral exploration business. While we will generally compete with other exploration companies, there is no competition for the exploration of minerals from our claim.

We are a mineral exploration company. We compete with other mineral exploration companies for financing from a limited number of investors that are prepared to make investments in junior mineral exploration companies.

The presence of competing mineral exploration companies may impact on our ability to raise additional capital in order to fund our exploration programs if investors are of the view that investments in competitors are more attractive based on the merit of the mineral properties under investigation and the price of the investment offered to investors.

We will also be competing with other junior and senior mineral companies for available resources, including, but not limited to, professional geologists, camp staff, mineral exploration supplies and drill rigs.

Location Challenges

We do not expect any major challenges in accessing the Imperial Claim during the initial exploration stages.

Regulations
 
Exploration activities are subject to various national, state, foreign and local laws and regulations in the Republic of India, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We believe that we are in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations passed thereunder in India.
 
Our exploration activities are subject to various federal, state and local laws and regulations governing protection of the environment. These laws are continually changing and, as a general matter, are becoming more restrictive. Our policy is to conduct business in a way that safeguards public health and the environment. We believe that our exploration activities are conducted in material compliance with applicable laws and regulations. Changes to current local, state or federal laws and regulations in the jurisdictions where we operate could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could render certain exploration activities uneconomic.
 
 
 
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Employees

We currently have no employees other our five officers and directors, which included the directors of our wholly owned subsidiary, who have not been paid for their services and will not receive compensation.  We do not have any employment agreements with our directors and officers.  We do not presently have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to our officers and directors.

We do not intend to hire additional employees at this time. Unaffiliated independent contractors that we will hire will conduct all of the work on the property. The independent contractors will be responsible for surveying, geology, engineering, exploration, and excavation. The geologists will evaluate the information derived from the exploration and excavation and the engineers will advise us on the economic feasibility of removing the mineralized material.

OUR COMPANY
 
We are a start-up, pre-exploration stage company, have a limited operating history and have not yet undertaken any exploration activity or generated or realized any revenues from our property, the Imperial Claim.   As our property is in the early stage of exploration there is no reasonable likelihood that revenue can be derived from the property in the foreseeable future.  There can be no assurance that a commercially viable mineral deposit, an ore reserve, exists on the Imperial Claim or can be shown to exist unless and until sufficient and appropriate exploration work is carried out and a comprehensive evaluation of such work concludes economic and legal feasibility.   Such work could take many years of exploration and would require expenditure of very substantial amounts of capital, capital we do not presently have and may never be able to raise.   We have funds sufficient to complete only Phase 1 of a three-phase exploration program recommended for the Imperial Claim.
 
Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. Accordingly, we must raise cash from sources other than the sale of minerals found on the Imperial Claim.  As an exploration stage company we have experienced losses and we expect to continue to experience losses for the foreseeable future.   Our only potential source for cash at this time is investment by others in the Company or loan advances to the Company by our officers or directors.  
 
To meet our need for cash we must raise additional capital.  We will attempt to raise additional money through a private placement, public offering or through loans from our directors and officers.  We have discussed this matter with our officers and directors. However, our officers and directors are unwilling to make any commitments as to the amount of money they are prepared to advance in the future.   We require additional cash to continue operations.  Such operations could take many years of exploration and would require expenditure of very substantial amounts of cash, cash we do not presently have and may never be able to raise.   If we cannot raise this additional cash we will have to abandon our exploration activities and go out of business.
 
We estimate we will require approximately $31,540 in cash over the next twelve months, not including the cost of planned Phase I exploration work for the Imperial Claim nor any funding required by Imperial Oil & Gas.  Our cash on hand will not enable us to continue in business for approximately 12 months.  We will need additional funds either through the sale of additional shares of our common stock or from advances made by our officers or directors.
 
 
 
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Alternatively we may attempt to interest other companies to undertake exploration work on the Imperial Claim through joint venture arrangement or even the sale of part of the Imperial Claim.
 
Since we do not presently have the requisite funds, we are unable to complete Phase I of the recommended exploration program until we raise more money or find a joint venture partner to complete the exploration work.  If we cannot find a joint venture partner and do not raise more money, we will be unable to complete any work recommended by our independent professional engineer.  If we are unable to finance exploration activities, we may have no alternative but to go out of business.
 
We do not intend to hire any employees at this time. Any work undertaken on the property will be conducted by unaffiliated independent contractors that we will hire. The independent contractors will be responsible for surveying, geology, engineering, exploration, and excavation. The geologists will evaluate the information derived from the exploration and excavation and the engineers will advise us on the economic feasibility of removing the mineralized material.
 
Limited Operating History; Need for Additional Capital
 
There is no historical financial information about us upon which to base an evaluation of our performance as an exploration corporation. We are an exploration stage company and have not generated any revenues from our exploration activities. Further, we have not generated any revenues since our formation on August 2, 2007.  We cannot guarantee we will be successful in our exploration activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.
 
To become profitable and competitive, we must invest in the exploration of our property before we start production of any minerals we may find. We must obtain equity or debt financing to provide the capital required to fully implement our phased exploration program.  We have no assurance that financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we will be unable to commence, continue, develop or expand our exploration activities. Even if available, equity financing could result in additional dilution to existing shareholders.
 
Trends
 
We are in the explorations stage, have not generated any revenue and have no prospects of generating any revenue in the foreseeable future.  We are unaware of any known trends, events or uncertainties that have had, or are reasonably likely to have, a material impact on our business or income, either in the long term of short term.
 
Critical Accounting Policies
 
Our discussion and analysis of its financial condition and results of operations, including the discussion on liquidity and capital resources, are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management re-evaluates its estimates and judgments.
 
The going concern basis of presentation assumes we will continue in operation throughout the next fiscal year and into the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. Certain conditions, discussed below, currently exists which raise substantial doubt upon the validity of this assumption. The financial statements do not include any adjustments that might result from the outcome of the uncertainty.
 
Our intended exploration activities are dependent upon our ability to obtain third party financing in the form of debt and equity and ultimately to generate future profitable exploration activity or income from its investments. As of December 31, 2009, we have not generated revenues, and have experienced negative cash flow from minimal exploration activities. We may look to secure additional funds through future debt or equity financings. Such financings may not be available or may not be available on reasonable terms.
 
 
 
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Overview
 
Our financial statements contained herein have been prepared on a going concern basis, which assumes that we will be able to realize our assets and discharge our obligations in the normal course of business. We incurred net losses from operations for the period from inception on August 2, 2007 to December 31, 2009 of $119,769. We did not earn any revenues during the aforementioned period.
 
Our financial statements included in this Form 10-Q have been prepared without any adjustments that would be necessary if we become unable to continue as a going concern and are therefore required to realize upon our assets and discharge our liabilities in other than the normal course of operations.
 
We are presently in the pre-exploration stage and there is no assurance that a commercially viable mineral deposit, a reserve, exits in the Imperial Claim until further exploration work is done and a comprehensive evaluation concludes economic and legal feasibility.  Such work could take many years of exploration and would require expenditure of very substantial amounts of capital, capital we do not presently have and may never be able to raise.  To date, we have not conducted any exploration work on the Imperial Claim.
 
Planned Exploration Program
 
We must conduct exploration to determine what amounts of minerals exist on the Imperial Claim and if such minerals can be economically extracted and profitably processed.
 
Our planned exploration program is designed to efficiently explore and evaluate our property.
 
Subject to raising additional capital, our anticipated exploration costs over the next twelve months on the Imperial Claim are approximately $13,600.  This figure represents the anticipated cost to us of completing the Phase I of the Varma Report.  Should the results of the Phase I work be sufficiently encouraging to justify our undertaking the Phase II program, in order to undertake Phase II (at an estimated cost of $24,600), we will have to raise additional investment capital.
 
 Liquidity and Capital Resources
 
Since inception we have raised the capital through private placements of common stock as follows:
 
As of December 31, 2009 our total assets were $57 and our total liabilities were $44,101 including $30,314 which was owed to related parties.
 
Our non-elective expenses over the next twelve months, assuming Phase I is not undertaken as planned and Imperial Oil & Gas has sufficient funds from its loan to meet its expected expenditure, are expected to be as follows:

Expense
 
   
Accounting and audit
$     8,880
Edgar filing costs
1,155
Filing fees – Nevada; Sec of State
275
Legal fees
5,000
Office and general expenses
1,000
Transfer agent fees
1,500
Estimated expenses for the next twelve months
17,810
Add: Account payable – unrelated parties at December 31, 2009
 13,787
Subtotal:
       31,597
Less: Cash on hand
             57
Estimated funds required over the next twelve months
$    31,540
 
 
 
 
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Our future operations are dependent upon our ability to obtain third party financing in the form of debt and equity and ultimately to generate future profitable operations. As of December 31, 2009, we have not generated revenues, and have experienced negative cash flow from operations. We may look to secure additional funds through future debt, equity financings or advances from our officers and directors. These sources of financing may not be available or may not be available on reasonable terms.
 
Nine months ended December 31, 2009
 
We incurred expenses of $18,290 for the nine months ended December 31, 2009:
 
 
Expenses
For the nine
months ended December 31, 2009
   
Accounting and Audit Fees
$     5,150
Edgaring
788
Management fees (1)
9,000
Office
632
Rent (1)
1,800
Telephone (1)
    900
Transfer agent’s fees
      20
   
Total
$    18,290

(1) The Company does not pay its directors or officers for the service they render to the Company, including the provision of office space and telephone. However, since October 1, 2007 the company has accrued as expenses (i) $1,000/month on account of management fees; (ii) $200/month for rent and, (iii) $100/month for telephone.  These amounts will never be paid to the directors and officers in either cash or shares; however they are included for accounting purposes as expenses and as additions to ‘Capital in Excess of Par Value’ on the Balance Sheet.
 
Balance Sheet

Total cash as at December 31, 2009 was $57.  Our working capital deficiency as of December 31, 2009 was $44,044.  If amounts owed to related parties are excluded there is still a working capital deficit of $13,730.

Our working capital is attributable to the completion of an initial capital contribution on October 31, 2007, which raised $3,000, and a private placement on December 31, 2007, which raised a further $37,625 and funding from our directors.    No revenue was generated during these periods.

Total shareholders’ deficit as of December 31, 2009 was $119,769.  Total shares outstanding as at December 31, 2009 was 49,900,000 when taking into the stock dividend of 65 to 1 and the cancellation of certain shares as mentioned above.

ITEM 3.                      QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

Market Information

There are no common shares subject to outstanding options, warrants or securities convertible into common equity of our Company.
 
The number of shares subject to Rule 144 is 9,900,000   Share certificates representing these shares have the appropriate legend affixed on them.

There are no shares being offered to the public other than indicated in our effective registration statement and no shares have been offered pursuant to an employee benefit plan or dividend reinvestment plan.
 
 
 
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Our shares are traded on the OTCBB.  Although the OTCBB does not have any listing requirements per se, to be eligible for quotation on the OTCBB, we must remain current in our filings with the SEC; being as a minimum Forms 10-Q and 10-K.  Securities already quoted on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do not make their filing during that time.

In the future our common stock trading price might be volatile with wide fluctuations.  Things that could cause wide fluctuations in our trading price of our stock could be due to one of the following or a combination of several of them:

our variations in our operations results, either quarterly or annually;
   
trading patterns and share prices in other exploration companies which our shareholders consider similar to ours;
   
the exploration results on the Bhadrachalam Gold Claim and the new oil and gas claims under agreement with Imperial Oil and Gas, and
   
other events which we have no control over.

In addition, the stock market in general, and the market prices for thinly traded companies in particular, have experienced extreme volatility that often has been unrelated to the operating performance of such companies.  These wide fluctuations may adversely affect the trading price of our shares regardless of our future performance.  In the past, following periods of volatility in the market price of a security, securities class action litigation has often been instituted against such company.  Such litigation, if instituted, whether successful or not, could result in substantial costs and a diversion of management’s attention and resources, which would have a material adverse effect on our business, results of operations and financial conditions.
 
ITEM 4.                      CONTROLS AND PROCEDURES
 
Disclosure Controls and Procedures
 
Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Accounting Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of December 31, 2009 (the “Evaluation Date”). Based on that evaluation, the Principal Executive Officer and Principal Accounting Officer have concluded that these disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.
 
Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Principal Executive Officer and Principal Accounting Officer, to allow timely decisions regarding required disclosure.

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified below, we believe that our financial statements contained in our Quarterly Report on Form 10-Q for the quarter ended December 31, 2009 fairly present our financial condition, results of operations and cash flows in all material respects
 
 
 
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Material Weaknesses
 
Management assessed the effectiveness of our internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:

1.  
Certain entity level controls establishing a “tone at the top” were considered material weaknesses. As of December 31, 2009, our audit committee does not have a “financial expert” and hence there is no individual on the audit committee to advise the directors of financial matters.  There is no policy on fraud. A whistleblower policy is not necessary given the small size of the organization.

2.  
Due to the significant number and magnitude of out-of-period adjustments identified during the year-end closing process, management has concluded that the controls over the period-end financial reporting process were not operating effectively. A material weakness in the period-end financial reporting process could result in us not being able to meet our regulatory filing deadlines and, if not remediated, has the potential to cause a material misstatement or to miss a filing deadline in the future. Management override of existing controls is possible given the small size of the organization and lack of personnel.

3.  
There is no system in place to review and monitor internal control over financial reporting. We maintain an insufficient complement of personnel to carry out ongoing monitoring responsibilities and ensure effective internal control over financial reporting.

ITEM 4T.                      CONTROLS AND PROCEDURES.
 
Changes in Internal Controls
 
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 

PART 11 – OTHER INFORMATION

ITEM 1.                      LEGAL PROCEEDINGS

There are no legal proceedings to which Imperial is a party or its wholly owned subsidiary, Imperial Oil and Gas Inc. and to which the Bhadrachlam Gold Claim is subject, nor to the best of management’s knowledge are any material legal proceedings contemplated.

ITEM 1A                      RISK FACTORS

ANY INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW AND THE OTHER INFORMATION IN THIS FORM 10-Q BEFORE INVESTING IN OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS OCCUR, OUR BUSINESS, OPERATING  RESULTS  AND FINANCIAL CONDITION  COULD  BE  SERIOUSLY HARMED.  INVESTORS MAY LOSE ALL OR PART OF THEIR INVESTMENT IN OUR COMPANY.
 
1.  
Our auditors have issued a going concern opinion and we may not be able to achieve our objectives and may have to suspend or cease exploration activity.
 
Our auditors' report on our March 31, 2009 financial statements expressed an opinion that our Company’s capital resources as of March 31, 2009 are not sufficient to sustain operations or complete our planned activities for the upcoming year unless we complete public offering to raise additional funds.   These conditions raise substantial doubt about our ability to continue as a going concern.   If we do not obtain additional funds there is the distinct possibility that we will no longer be a going concern and will cease to operate which means any persons acquiring shares in our Company will loss their entire investment.
 
 
 
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2.  
Since mineral exploration is a highly speculative venture, anyone purchasing our stock will likely lose their entire investment.
 
Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises.  Exploration for minerals is a speculative venture necessarily involving substantial risk.  The expenditures to be made by us on our exploration program may not result in the discovery of commercially exploitable reserves of valuable minerals.  The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of our mineral claim we plan to undertake. The probability of a mineral claim ever having commercially exploitable reserves is extremely remote, and in all probability our mineral claim does not contain any reserves.  Any funds spent on the exploration of this claim will probably be lost.  Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. We may also become subject to significant liability for pollution, cave-ins or hazards, which we cannot insure or which we may elect not to insure.  In such a case, we would be unable to complete our business plan and our shareholders may lose their entire investment.
 
3.  
If we don't obtain additional financing our business may fail.
 
Our cash on hand is definitely not sufficient to complete even Phase I of the proposed exploration of our mineral claim.  We will need to obtain additional financing in order to complete our business plan.  As of December 31, 2009, we had cash on hand of $57 against $44,101 in current liabilities.  Obtaining additional financing will depend on a number of factors, including market prices for minerals, investor acceptance of our properties, and investor sentiment.  These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. If we are unsuccessful in obtaining additional financing when we need it, our business may fail before we ever become profitable and our shareholders may lose their entire investment.
 
4.  
It is impossible to evaluate the investment merits of our company because we have no operating history.
 
We are a pre-exploration stage company with no operating history upon which an evaluation of our future success or failure can be made.  We were incorporated on August 2, 2007, and have accumulated a net loss of $119,769 against no revenue.  Thus far, our activities have been primarily limited to organizational matters, acquiring our mineral claim, obtaining a geology report and the preparation and filing of a registration statement and completing various Form 10-Ks and 10-Qs.
 
5.  
Market factors in the mining business are out of our control and so we may not be able to profitably sell any minerals that we find.
 
We have no known ore reserves but even if we are successful in locating commercially exploitable reserves of valuable minerals, we can provide no assurance that we will be able to sell such reserves.  Numerous factors beyond our control may affect the marketability of any minerals discovered. These factors include fluctuations in the market price of such minerals due to changes in supply or demand, the proximity and capacity of processing facilities for the discovered minerals, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The precise effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital so that our investors may lose their entire investment.
 
6.  
If we cannot compete successfully with other exploration companies, our exploration program may suffer and our shareholders may lose their investment.
 
Many of the resource exploration stage companies with whom we compete have greater financial and technical resources than we do. Accordingly, these competitors may be able to spend greater amounts on acquisitions of properties of merit and on exploration of their properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of
resource properties.  As a result, our competitors will likely have resource properties of greater quality and interest to prospective investors who may finance additional exploration and to senior exploration stage companies that may purchase resource properties or enter into joint venture agreements with junior exploration stage companies.  This competition could adversely impact our ability to finance the exploration of our mineral property.
 
 
 
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7.  
Since our executive officers do not have technical training or experience in starting, and operating a mineral exploration company there is a higher risk our business will fail.
 
Our executive officers have no experience in mineral exploration and do not have formal training in geology or in the technical aspects of management of a mineral exploration company.  This inexperience presents a higher risk that we will be unable to complete our business plan for the exploration of our mineral claims. In addition, we will have to rely on the technical services of others with expertise in geological exploration in order for us to carry out our planned exploration program. If we are unable to contract for the services of such individuals, it will make it difficult and may be impossible to pursue our business plan. There is thus a higher risk that our operations, earnings and ultimate financial success could suffer irreparable harm and that our investors
will lose all of their investment.
 
8.  
We may not have access to all of the supplies and materials we need to begin exploration which could cause us to delay or suspend exploration activity.
 
Provided we have sufficient funds to carry out exploration activity, competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, such as dynamite, and certain equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials as and when we are able to raise the requisite capital.  If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need.
 
9.  
Since our officers and directors have other business interests, they will be devoting approximately eight hours per month to our operations, which may result in periodic interruptions or suspensions of exploration.
 
Our officers have other outside business activities and will only be devoting approximately eight hours per month to our operations.  As a result, our operations may be sporadic and occur at times that are convenient to our officers.  Consequently, our business activities may be periodically interrupted or suspended.
 
 
10. Because mineral exploration and development activities are inherently risky, we may be exposed to environmental liabilities. If such an event were to occur it may result in a loss of your investment.
 
The business of mineral exploration and extraction involves a high degree of risk. Few properties that are explored are ultimately developed into production. At present, the Imperial Claim, our sole property, does not have a known body of commercial ore. Unusual or unexpected formations, formation pressures, fires, power outages, labor disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labor are other risks involved in extraction operations and the conduct of exploration programs. We do not carry liability insurance with respect to our mineral exploration operations and we may become subject to liability for damage to life and property, environmental damage, cave-ins or hazards. There are also physical risks to the exploration personnel working in the rugged terrain of Andhra Pradesh, often in poor climatic conditions. Previous mining exploration activities may have caused environmental damage to the Imperial Claim. It may be difficult or impossible to assess the extent to which such damage was caused by us or by the activities of previous operators, in which case, any indemnities and exemptions from liability may be ineffective. If the Imperial Claim is found to have commercial quantities of ore, we would be subject to additional risks respecting any development and production activities. Most exploration projects do not result in the discovery of commercially mineable deposits of ore.  
 
 
 
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11.        Since substantially all of our assets, directors and officers are outside the United States it may be difficult for investors to enforce within the United States any judgments obtained against us or any of our officers and directors.
 
Substantially all of our assets are located outside the United States and we do not currently maintain a permanent place of business within the United States.  We were incorporated in the State of Nevada and have an agent for service in Carson City, Nevada.  Our agent for service will accept on our behalf the service of any legal process and any demand or notice authorized by law to be served upon a corporation.  Our agent for service will not, however, accept service on behalf of any of our officers or directors.  All of our directors and officers are residents of India and neither of them have an agent for service in the United States.  Therefore, it may be difficult for investors to enforce within the United States any judgments obtained against us or our officers or
directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.
 
 
12. If we are unable to hire and retain key personnel, we may not be able to implement our business plan and our business will fail.
 
We will compete with other mining companies in the recruitment and retention of qualified managerial and technical employees.  Our success will be largely dependent upon our ability to hire highly qualified personnel.  This is particularly true in highly technical businesses such as mineral exploration. These individuals may be in high demand and we may not be able to attract the staff we need.  In addition, we may not be able to afford the high salaries and fees demanded by qualified personnel, or may lose such employees after they are hired.  Currently, we have not hired any key personnel and we do not intend to do so for the next 12 months and until we have proved mineral reserves.  If we are unable to hire key personnel when needed, our exploration program may be slowed down or suspended.

 
13. There is a limited public market for our shares at the present time and therefore our shareholders may never be able to sell their shares which would result in a total loss of their investment.

Our common shares are quoted on the OTC Bulletin Board (“OTCBB”).   At the present time there is a limited market for our shares and hence our shareholders might not be able to sell their shares in an organized market place unless they sell their shares privately.  If this happens, our shareholders might not receive a price per share which they might have received had there been a public market for our shares.
 
 
14.  Applicable SEC rules governing trading of ‘penny stocks’ limit the liquidity of our common stock which could make it more difficult for our shareholders to sell their shares
 
As the shares of our common stock are ‘penny stock’, many brokers are unwilling to effect transactions in such common stock which can make it difficult for our shareholders to sell their shares of our common stock if a market develops for that common stock.

Our common stock is defined as a ‘penny stock’ pursuant to Rule 3a51-1 pursuant to the Securities Exchange Act of 1934. Penny stock is subject to Rules 15g-1 through 15g-10 of the Securities Exchange Act of 1934.  Those rules require broker-dealers, before effecting transactions in any ‘penny stock’, to:
 
 
 
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                        -  Deliver to the customer, and obtain a written receipt for, a disclosure
                          document;
                        -  Disclose certain price information about the penny stock;
                        -  Disclose the amount of compensation received by the broker-dealer or any
                          associated person of the broker-dealer;
                       -  Send monthly statements to customers with market and price information about the penny stock; and
 
  -  in some circumstances, approve the purchasers account pursuant to certain standards and deliver written statements to the customer with information specified in those   rules.

Rather than comply with those rules, many broker-dealers refuse to enter into penny stock transactions which may make it more difficult for investors to sell their shares of our common stock and thereby liquidate their investments.

 
16. We anticipate the need to sell additional shares of our common stock in the future meaning that there will be a dilution to our existing shareholders resulting in their percentage ownership in the Company being reduced accordingly.

We expect that the only way we will be able to acquire additional funds is through the sale of our common stock.  This will result in a dilution effect to our shareholders whereby their percentage ownership interest in the Company is reduced.  The magnitude of this dilution effect will be determined by the number of shares we will have to issue in the future to obtain the funds required.

ITEM 2.                      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There has been no change in our securities since the fiscal year ended March 31, 2009.

ITEM 3.                      DEFAULTS UPON SENIOR SECURITIES

None

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

There have been no matters brought forth to the securities holders to vote upon during this quarter.

ITEM 5.                      OTHER INFORMATION

a.           Change of Auditors

Effective June 17, 2009, the Board of Directors engaged Madsen & Associates CPA’s Inc., Unit #3 – 684 East Vine Street, Murray, Utah, 84107 as the Independent Registered Public Accountants to audit the Company’s financial statements for the fiscal year ended March 31, 2010 and any interim periods.   During the Company’s two most recent fiscal years and any subsequent period, it did not consult Madsen & Associates CPA’s Inc. or any of its members about the application of accounting principles to any specific transactions or any other matters.  During the Company’s most recent fiscal year ended March 31, 2009, J. Crane & Company, 47 Third Street, Suite 301, Cambridge, Massachusetts, 02141, served as the Independent Registered Public Accountants for the audit of the Company’s financial statements for the fiscal year ended March 31, 2009.    The decision to change accountants was approved by the Board of Directors consisting of James Payyappilly, Josey Sajan and Tessy Francis.

The engagement effective June 17, 2009 of Madsen & Associates CPA’s Inc. as the Independent Registered Public Accountants for the Company necessarily results in the termination or dismissal of the principal accountants which audited the Company’s statements for the fiscal year ended March 31, 2009, J. Crane & Company.   Based on the fees for the fiscal year ended March 31, 2009 and assuming the same fees are applicable for the fiscal year ended March 31, 2010, the fees are greater than the proposed fees of Madsen & Associates CPA’s Inc. for the same work.
 
 
 
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During the Company’s two most recent fiscal years ended March 31, 2009, there were no disagreements between the Company and J. Crane & Company concerning any matters of accounting principles or practices, financial statements disclosure or audit scope or procedures which disagreement, if not resolved to J. Crane & Company’s satisfaction would have caused them to make a reference to the subject matter of the disagreements in connection with their report; there were no reportable events as described in Item 304 (a)(1)(v) of Regulation S-K.

J. Crane & Company’s report dated June 23, 2009 on the Company’s financial statements for the fiscal year ended March 31, 2009 did not contain any adverse opinion or disclaimer of opinion, nor was the report qualified or modified as to uncertainty (other than a going concern uncertainty), audit scope or accounting principles.

The Company provided J. Crane & Company with a copy of the foregoing disclosures and requested from J. Crane & Company a letter addressed to the Commission stating whether J. Crane & Company agrees with the statements made by the Company in response to Item 304(a) of Regulation S-K and, if not, stating the respects in which it does not agree.   J. Crane & Company has verbally indicated they would provide the Company with the above noted letter but as at the date of this Form 10-Q has not done so.  The financial statements included in this Form 10-Q have been reviewed by Madsen & Associates CPA’s Inc.

b.           Incorporation of wholly-owned subsidiary

On January 8, 2010, the Company incorporated a wholly owned subsidiary in the State of Delaware named Imperial Oil & Gas Inc.   On January 16, 2010, the Company appointed Grant Twanow as President and Director of its wholly-owned subsidiary and on January 19, 2010 appointed Neil McPherson to its board of directors.
 
c.           Supply Service Agreements
 
In connection with the appointment of Grant Twanow as President of the wholly-owned subsidiary, Imperial Oil entered into a Supply of Services Agreement with GNP Resources, Ltd.(“GNP”), a company wholly-owned by Mr. Twanow whereby Mr. Twanow acting on behalf of GNP will provide services to Imperial Oil related to the maintenance and development of Imperial Oil’s oil and gas exploration and development interests. Additionally, Imperial Oil and GNP entered into a Royalty Agreement whereby Imperial Oil agrees to pay GNP a gross overriding royalty of 5% in any lands acquired by Imperial Oil in Prospects procured by GNP or Mr. Twanow.  
 
In connection with the appointment of Mr. McPherson to the board of directors, Imperial Oil entered into a Supply of Services Agreement with Little Eagle Resources Inc., a company wholly-owned by Mr. McPherson (“Little Eagle”) whereby Mr. McPherson acting on behalf of Little Eagle will provide services to Imperial Oil related to the maintenance and development of Imperial Oil’s oil and gas exploration and development interests. Additionally, Imperial Oil and Little Eagle entered into a Royalty Agreement whereby Imperial Oil agrees to pay Little Eagle a gross overriding royalty of 1.5% in any lands acquired by Imperial Oil in the North West Premont Prospect and the Ricinus Area Prospect procured by Little Eagle or Mr. McPherson.  
 
d.           Assignment of Agreement
 
On January 20, 2010, Coach Capital, LLC (“Coach”) assigned to Imperial Oil, a 14.9% working interest in the oil, gas and mineral leases in the Greater Garwood hydrocarbon exploration project located in Colorado County, Texas (“Project).  The assignment was made subject to the terms and conditions of the leases and that certain unrecorded Participation Agreement dated November 5, 2008 between El Paso E&P Company, L.P. and Baytor Energy LLC, and the Carry Agreement dated October 27, 2009 between Baytor Energy LLC and Coach.  
 
 
 
 
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e.           Loan of $900,000
 
On January 19, 2010, Imperial Oil borrowed $900,000 from Coach pursuant to a promissory note issued to Coach.  The outstanding balance under the note will accrue interest at 5% per annum and is due in full on January 19, 2013.  If the note and accrued interest are not repaid in full between 1 year and 3 years after January 19, 2010, Coach will be paid 75% of the net production revenue received by Imperial Oil from the Project, excluding the interest in the Cochran #1 well.  If the note and accrued interest are not repaid in full after 3 years from January 19, 2010, Coach will be paid 100% of the net production revenue received by Imperial Oil from the Project, excluding the interest in the Cochran #1 well.
 
ITEM 6.                      EXHIBITS

The following exhibits are included as part of this report by reference:

3.1
 
Certificate of Incorporation (incorporated by reference from Imperial’s Registration Statement on Form S-1 filed on July 7, 2008, Registration No. 333-152160)
     
3.2
 
Articles of Incorporation (incorporated by reference from Imperial’s Registration Statement on Form S-1 filed on July 7, 2008, Registration No. 333-152160)
     
3.3
 
By-laws (incorporated by reference from Imperial’s Registration Statement on Form S-1 filed on July 7, 2008, Registration No. 333-152160)
     
4
 
Specimen Stock Certificate (incorporated by reference from Imperial’s Registration Statement on Form S-1 filed on July 7, 2008, Registration No. 333-152160)
     
10.1
 
Transfer Agent and Registrar Agreement (incorporated by reference from Imperial’s Registration Statement on Form S-1 filed on July 7, 2008, Registration No. 333-152160)



 
 
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SIGNATURES


Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
IMPERIAL RESOURCES, INC.
 
     (Registrant)
   
   
Date:  February 3, 2010
JAMES PAYYAPPILLY                                                      
 
Chief Executive Officer, President and Director
   
Date:  February 3, 2010
JOSEY SAJAN                                                      
 
Chief Financial Officer, Chief Accounting
Officer, Secretary and Director
   
Date:  February 3, 2010
TESSY FRANCIS                                           
 
Vice President and Director


 
 
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