UNITED STATESSECURITIES AND EXCHANGE
COMMISSIONWashington, D.C. 20549 FORM 10-Q  (Mark One)
[X ]
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934For
the quarterly period ended __September 30, 2009_[
   ]
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACTFor
the transition period from _________________ to
_________________Commission
file number ___0-30118____ EMPYREAN
HOLDINGS INC. (exact
name of small business issuer as specified in its charter)  ___NEVADA_____________________________________(State
or other jurisdiction of incorporation or organization)
_88-0413417________________ (IRS Employer
Identification No.)  11200
Westheimer Rd., Suite 900 Houston,
TX 77042 (address
of principal executive offices)  Registrants telephone number: (713) 243 8731 (Registrants telephone number, including area code)  (Former
name, former address and former fiscal year, if changed since last report) Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or 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.  [X] Yes     [  ] No Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
 See the definitions of large accelerated filer, accelerated filer and
smaller reporting company in Rule 12b-2 of the Exchange Act. Large
accelerated filer [  ] Accelerated
filer [  ] Non-accelerated
filer [  ] (Do not check if a smaller reporting company) Smaller
reporting company [X] Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes
  (__) No (X) As
of Sept 30, 2009, there were 22,008,066 shares of common stock issued and
outstanding    CONTRARY TO THE RULES OF
THE SEC, THE COMPANYS FINANCIAL STATEMENTS INCLUDED IN THIS FILING HAVE NOT
BEEN REVIEWED BY AN INDEPENDENT PUBLIC ACCOUNTANT IN ACCORDANCE WITH
PROFESSIONAL STANDARDS FOR CONDUCTING SUCH REVIEWS. PART I  FINANCIAL INFORMATION Item
1. Financial Statements. Following
are the unaudited financial statements for the period ended September 30,
2008: [ehiq3200910qfinal002.gif]  See accompanying
notes to unaudited financial statements.      [ehiq3200910qfinal004.gif]   See accompanying
notes to unaudited financial statements.      [ehiq3200910qfinal006.gif]   See accompanying
notes to unaudited financial statements.     EMPYREAN HOLDINGS,
INC. (A
Development Stage Company) NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)   NOTE 1 - BASIS OF
PRESENTATION  The accompanying unaudited
interim financial statements of Empyrean Holdings, Inc. have been prepared in
accordance with accounting principles generally accepted in the United States of
America and the rules of the Securities and Exchange Commission, and should be
read in conjunction with Empyreans unaudited 2008 year end financial statements
contained in the 10-K.  In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
financial position and the results of operations for the interim period have
been reflected herein.  The results of operations for interim periods are,
however, not necessarily indicative of the results to be expected for the full
year.  NOTE 2
- GOING CONCERN As
shown in the accompanying financial statements, Empyrean has incurred net losses
of $(174,169) through the nine months ended September 30, 2009, which increased
the accumulated deficit to _as of September 30, 2009. These conditions raise
substantial doubt about Empyrean's ability to continue as a going concern.
Management is working diligently to raise additional capital through sales of
common stock as well as seeking financing from third parties. The financial
statements do not include any adjustments that might be necessary if Empyrean is
unable to continue as a going concern.  NOTE 3 - NOTES PAYABLE 
RELATED PARTY  Advances made to the Company by
a former consultant before his termination, continue to accrue interest at 8%
per annum. The amount of this note is $19,600 inclusive of accrued interest
through September 30, 2009.  During the current period,
Empyrean received advances totaling $43,518 from a former Director of the
companys wholly owned subsidiary, Empyrean Construction, Inc.  The loan
bears interest at 8% per annum and $43,518 has been repaid reducing the amount
payable to $0 as of September 30, 2009.  The outstanding amount due to
IMR,LLC  including interest has increased  to $146,728 till the end of
September 2009 This Note incurs interest at the rate of 8% per annum and is
payable on demand.  Advances made by an officer
total $7,884 as of September 30, 2009.  NOTE 5-SALE OF PROPERTY  During July 2009 agreement was
reached with the Wisconsin Department of Transportation (WI DOT) for an early
buyout of the Green Bay, Wisconsin property that they were intending to acquire
for a road project.  The company accepted the fair
market value of $102,000 offered by WI DOT and the sale was finalized during
August 2009. The net proceeds received after deduction for the full settlement
of the outstanding amount on the mortgage and the payment of all back property
taxes was $63,201. A large portion of these proceeds was used to repay a $25,000
loan from an investor that included a high penalty for delayed payment and the
rest was utilized as working capital.     NOTE 6-PURCHASE OF PROPERTY During
July 2009 the Company finalized a Purchase and Sale agreement with the Terri A.
Hourigan 2003 Revocable Trust dated May 23, 2003  for the purchase of real
property located at 118 N. Patterson, Santa Barbara, California 93111 which is
in the development stage for $5,800,000 (Five million eight hundred thousand
dollars). An
Option for this purchase was finalized at the same time and payment of the
purchase price will be 30 (Thirty) days from the time the option is exercised on
the completion of the recordation of the Final Map for the property. The
completion is projected to be at the end of 2010 and provisions in the Option
allow for the extension of the closing date by the company making extension
option deposits to the Seller.  NOTE 7-SALE OF
EQUITY  During July 2009
5,200,000 restricted common shares were sold through a Private Placement to an
investor. A warrant that expires on July 12, 2010 for the purchase of a further
5,200,000 shares were also issued to this investor.  As part of the
terms for finalizing the option and sale and purchase agreement with the owner
of real property mentioned above, 5,000,000 restricted common shares were
issued. The company has the right to purchase these shares for $50,000 no later
than 6 months from the date of issue.    Item 2.  Management's Discussions and Analysis of
Financial Condition and Results of Operations.  FORWARD-LOOKING
STATEMENT NOTICE This Form 10-Q contains
certain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. For this purpose any statements contained in this
Form 10-Q that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, words such as "may,"
"will," "expect," "believe," "anticipate," "estimate" or "continue" or
comparable terminology are intended to identify forward-looking statements.
These statements by their nature involve substantial risks and uncertainties,
and actual results may differ materially depending on a variety of factors, many
of which are not within our control. These factors include but are not limited
to economic conditions generally and in the industries in which we may
participate; competition within our chosen industry, including competition from
much larger competitors; technological advances and failure to successfully
develop business relationships.  PLAN
OF OPERATION  No
progress was also made to file the Companys periodic reports in a form
sufficient to enable it to be relisted on the OTCBB. As soon as sufficient funds
are obtained, the Company intends to amend and re-file its periodic reports,
work towards being relisted and to finalize an S-1 registration. This will allow
it to utilize the $10 million Equity Line of Credit available from Dutchess.  Liquidity  During
the next 12 months, significant working capital will be needed to recommence the
companys development plans that have been be set back by the difficulty in
financing.  To try
and raise the interim financing needed, a Private Placement offering has been
finalized for stock sales to accredited investors There can be no guarantee,
however, that the interim financing needed to amend and re-file the Companys
SEC filings, and to complete the S-1 filing will be obtained in a timely manner  These factors and the current recession raise substantial
doubts about the Companys ability to continue as a going concern.  Holders
of Company stock may be faced with the inability to liquidate part or all of
their investment on terms which are profitable. An investment in Companys stock
is highly speculative, and investors must be prepared to lose some or all of
their investment.  ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not required by
smaller reporting companies.  Item
4.  Controls and Procedures  As of
 September 30, 2009, we carried out an evaluation of the effectiveness of
our disclosure controls and procedures (as defined by Rule 13a-14(c) under the
Securities Exchange Act of 1934) under the supervision and with the
participation of our chief executive officer and chief financial officer.
 Based on and as of the date of such evaluation, the aforementioned
officers have concluded that our disclosure controls and procedures are not
effective for timely gathering, analyzing and disclosing the information we are
required to disclose in our reports filed under the Securities Exchange Act of
1934, as amended. There were no changes in our internal control over financial
reporting (as defined in Rules 13a-15(F) and 15d-15(f) under the 1934 Act)
during the period ended September 30, 2009, that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.     PART II
 OTHER INFORMATION  Item
5. Other information  Board
meetings.  1. The
Board of Directors at the two meetings held during August 2009 approved (a) the
appointment of Mr.William F. Morris as the Executive Architect and Project
Manager for the residential development   project at Santa Barbara,
California and (b) the consulting fees for the company that prepared all the
agreements and documents for the Private Placement being offered by the
company.    Item
6. Exhibits  Exhibit
No. Document Location  3(i) Articles
of Incorporation Previously
Filed  3(ii) Bylaws Previously
filed  31.1 Section
302 Certification Included  32.1 Section
906 Certification Included  _______________________________________________________________________   SIGNATURES Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.  EMPYREAN HOLDINGS,
INC.    /s/ Robert L. Lee Robert L. Lee, President
and Director Date:
December 2, 2009