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 __June 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.  [  ] Yes     [ X] 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 June 30, 2009, there were 12,008,066 shares of common stock issued and
outstanding Note:
* Includes 22,501 shares on hold and awaiting return from third party     CONTRARY
TO THE RULES OF THE SEC, THE COMPANYS FINANCIAL STATEMENTS INCLUDED IN THIS
FILING HAVE NOT BEEN REVIEWD BY AN INDEPENDENT PUBLIC ACCOUNTANT IN ACCORDANCE
WITH PROFESSIONAL STANDARDS FOR CONDUCTING SUCH REVIEWS. Item
1. Financial Statements. Following
are the unaudited financial statements for the period ended June 30, 2009:  [ehiq2200910qfinal002.gif]   The
accompanying notes are an integral part of these consolidated financial
statements     [ehiq2200910qfinal004.gif]    The
accompanying notes are an integral part of these consolidated financial
statements      [ehiq2200910qfinal006.gif]    The
accompanying notes are an integral part of these consolidated 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 $56,233 through the six months ended June 30, 2009, which increased the
accumulated deficit to $2,327,482 as of June 30, 2009. These conditions raise
substantial doubt about Empyrean's ability to continue as a going concern. The
depressed economy has made it extremely difficult to raise additional capital
but efforts by management to obtain funds through sales of common stock
continue. 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 by a former
consultant before his termination continue to accrue interest at 8% per annum.
The amount of this Note is $19,299 inclusive of accrued interest through June
30, 2009.  During the current period,
Empyrean received advances totaling $43,518 from a former Director of the
companys dormant wholly owned subsidiary, Empyrean Construction, Inc.  The
loan bears interest at 8% per annum and $5,520 has been repaid reducing the
amount payable to $43,518 as of June 30, 2009.   For the period ending June 30,
2009 the total outstanding amount due to IMR, including interest, has increased
minimally to $146,728. This Note incurs interest at the rate of 8% per annum and
is payable on demand.  Advances made by an officer
total $21,884 as of June 30, 2009.  NOTE 4  PROPERTY MORTGAGE
LOAN  During June 2009 the company
obtained a high interest short term mortgage loan of $36,500 by pledging the
unencumbered property in Green Bay Wisconsin owned by its subsidiary Empyrean
Properties, Inc. The net proceeds of this loan of $25,241.13 were used for
working capital.        Item 2.  Management's Discussions and Analysis of
Financial Condition and Results of Operations.  The
company continues to pursue its long-term corporate development plan to become a
profitable diversified holding company. Due to the continuing depressed economy,
however, hardly any progress was made during the quarter.  The unencumbered property at Green Bay, Wisconsin was
mortgaged and the net proceeds of $25,241 used for working capital.  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
4.  Controls and Procedures  As of
June 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 June 30, 2008, 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 a special meeting held in Houston, Texas on June 2, 2009
approved the appointment of Mr. William F. Morris and Mr. Christopher A. Rafael
to the Board of Directors. 2. It
was also approved that Mr. Marco C. Lizarraga be appointed as Chief Operating
Office and that he will serve on a part time basis till the financial position
of the company improves...  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:
December2 , 2009