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UNITED STATESSECURITIES AND EXCHANGE
COMMISSIONWashington, D.C. 20549



FORM 10-QSB



(Mark One)

|[X ]                                                                                | QUARTERLY REPORT
      UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934
|----------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------
|For the quarterly period ended ___June 30,
      2004______________________________
|                                                                                   
|[ ]                                                                                 | TRANSITION REPORT
      UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT                    
|For the transition period from _________________ to
      _________________        
|                                                                                   
|Commission file
      number
  ___0-30118____________________________________      



EMPYREAN
COMMUNICATIONS 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.)
|------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------



2537 South Gessner,
Suite 114,

Houston, TX
77063

(address of
principal executive offices)





Issuers telephone
number: (713) 260 7236

(Registrant's
telephone number, including area code)





_________________________________________________________________________________(Former
name, former address and former fiscal year, if changed since last report)



Check whether the issuer

> filed all documents and reports required to be filed by Section 13 or
>     15(d) of the Exchange Act during the last 12months(or for such shorter
>     period that the registrant was required to file such reports) andhas been subject to such filing requirements for the past 90 days (X)
>     Yes ( ) No



_As of June 30, 2004 there were 31,765,951* shares of common stock issued and
outstanding

Note: * Does not include 1,150,000 shares "on hold" and awaiting return from
third party

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X
 ]

---



PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Following are the un-audited financial statements for the period ended June
30, 2004:



---



EMPYREAN
COMMUNICATIONS, INC.

(A Development Stage
Company)

CONSOLIDATED BALANCE
SHEET

June 30, 2004









ASSETS

Current Assets

Cash                                                                
$     3,543

============





LIABILITIES AND STOCKHOLDERS'
DEFICIT



LIABILITIES



Current Liabilities

Accounts
Payable                                                
$    14,607

Notes payable to
shareholders                                        
61,049

------------

Total Current
Liabilities                                                
75,656

------------

Commitments and Contingencies



STOCKHOLDERS' DEFICIT



Preferred
stock, $.001 par, 10,000,000 shares

authorized, 10,000,000 shares issued and
outstanding                   
10,000

Common stock,
$.001 par, 50,000,000 shares

authorized, 31,765,951 shares issued and
outstanding                   
31,766

Paid in
capital                                                       
5,445,250

Deficit
accumulated during the development
stage                     
(5,559,129)

------------

Total Stockholders'
Deficit                                        
( 72,113)

------------

Total Liabilities & Stockholders'
Deficit                   
$     3,543

============















---





EMPYREAN
COMMUNICATIONS, INC.

(A Development Stage
Company)

CONSOLIDATED
STATEMENTS OF EXPENSES

Three and Six Months
Ended June 30, 2004 and 2003 and the Period from

October 30, 2000
(Inception) Through June 30, 2004







Three Months               Six Months          Through

Ended June 30,            Ended June 30,       June 30,

2004       2003          2004         2003        2004

----------- -----------  -----------  -----------  ----------

General & Administrative         $
104,500   $ 14,328   $   200,860   $   20,218   $ 3,055,985

Impairment of investment                                                             2,600,000

Gain on forgiveness of debt           -          -             -            -         ( 96,856)

----------- -----------  -----------  -----------  ----------

NET LOSS                     $(104,500 ) $(14,328
) $  (200,860 ) $  (20,218 ) $(5,559,129 )

=========== ===========  ===========  ===========  ===========



Basic and diluted loss)

per share                      $    (.00)  $   (.00 ) $      (.01)  $    
(.00)

Weighted average common

shares outstanding            23,304,413  8,137,380    20,914,303    6,448,918









---







EMPYREAN
COMMUNICATIONS, INC.

(A Development Stage
Company)

CONSOLIDATED
STATEMENTS OF CASH FLOWS

Six Months Ended
June 30, 2004 and 2003 and the Period from

October 30, 2000
(Inception) Through June 30, 2004











Inception

Through

June 30,

2004             2003             2004

---------       ----------       -----------

CASH FLOWS FROM OPERATING
ACTIVITIES

Net loss                                 $ (200,860)    
$  (20,218 )      $(5,559,129 )

Adjustments to reconcile net
loss

to cash used in operating
activities:

Stock issued for services                   222,500         156,000          1,908,425

Stock issued for settlement                    -               -                38,000

Fair value of stock issued in
excess

of debt                                      -               -                   500

Imputed interest                              2,501            -                 6,797

Impairment of investment                       -               -             2,600,000

Gain on forgiveness of debt                    -               -              (
96,856 )

Changes in:

Accounts payable                       ( 33,742 )         4,729          1,026,458

Prepaid expenses                           -           (148,043 )             -

---------       ----------       -----------

NET CASH USED IN OPERATING
ACTIVITIES           ( 9,601 )       ( 7,532 )         ( 75,805 )

---------       ----------       -----------

CASH FLOWS FROM FINANCING
ACTIVITIES

Proceeds from notes payable to

shareholders                               12,865           7,500             83,717

Payments on notes payable to

shareholders                                ( 404 )      ( 10,762 )          (15,169 )

Stock issued for cash                          -             10,800             10,800

---------       ----------       -----------

NET CASH PROVIDED BY FINANCING
ACTIVITIES        12,461           7,538             79,348

---------       ----------       -----------

NET CHANGE (INCREASE/DECREASE)IN
CASH             2,860               6              3,543

Cash balance, beginning                         683             -                 -

---------       ----------       -----------

Cash balance, ending                     $    3,543      $        6        $     3,543

=========       ==========       ===========

NON-CASH DISCLOSURES:

Forgiveness of debt by a related
party   $     -         $      -          $    29,578

Stock issued for accounts payable              -                -              885,417

Stock issued for notes payable                 -                -                7,500







---







EMPYREAN COMMUNICATIONS, INC.

(A Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS





NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of Empyrean
Communications, Inc. ("Empyrean") 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 ("SEC"), and should be read in
conjunction with the audited financial statements and notes thereto contained in
Empyrean's latest annual report filed with the SEC on Form 10KSB. 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 periods presented have been reflected herein. The
results of operations for interim periods are not necessarily indicative of the
results to be expected for the full year. Notes to the financial statements,
which would substantially duplicate the disclosure contained in the audited
financial statements for fiscal year 2003, as reported in the 10KSB, have been
omitted.





NOTE 2 - Equity

In February 2004, Empyrean issued 5,500,000 shares of common stock for
services valued at $112,500. 5,000,000 of the shares with value of $100,000 were
issued to two Empyrean officers.

In June 2004, Empyrean issued 10,000,000 shares to an Empyrean officer in
exchange for services valued at $100,000.





---







Item 2. Management's Plan of Operation.

The company is in its initial stages of development with no revenues or
income and is subject to all the risks inherent in the creation of a new
business. Since the company's principal activities to date have been limited to
organizational activities, prospect development, and acquisition of interest, it
has no record of revenue-producing operations. Consequently, there is no
operating history upon which to base an assumption that the company will be able
to achieve it's business plans

The company's main business focus is to pursue all available avenues in order
to obtain the funding required for its wholly owned subsidiary, Basalt Fiber
Company, to commence the manufacture and sales of continuous basalt fiber and
related products.

In brief, Basalt fiber is the newest fiber application technology available
to the Western Hemisphere. Basalt Fiber can effectively replace fiberglass in
all its applications. It is also stronger, ecologically safer and more cost
effective than fiberglass. As the properties of Basalt Fiber are far superior
than fiber glass, it will command premium prices for all its products. The many
exciting uses of basalt fiber include its application in industry, the military,
local law enforcement and fire safety. Furthermore, Basalt Fiber's superior
strength and advanced thermal properties will aid in the construction of much
stronger and more fire resistant structures. It can also be used to enhance fire
resistant apparel for firefighters and stronger bulletproof vests for law
enforcement personnel.

Principal Product

Liquidity

During the next 12 months, the company will need significant working capital
to fund its business development efforts and to complete the acquisition of
Basalt Specialty Products, Inc. The Company continues to actively pursue
financing from all available sources both in the US and overseas. To serve our
shareholders and other interested parties more efficiently, a company website,
www.epyr.com was launched in mid-July, 2004.

Item 3. Controls and Procedures

As of June 30, 2004, the Company carried out an evaluation of the
effectiveness of the Company's 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 the Company's chief executive officer and chief
financial officer. Based on and as of the date of such evaluation, the
aforementioned officers have concluded that the Company's disclosure controls
and procedures were effective.

The Company also maintains a system of internal accounting controls that is
designed to provide assurance that assets are safeguarded and that transactions
are executed in accordance with management's authorization and properly
recorded. This system is continually reviewed and is augmented by written
policies and procedures, the careful selection and training of qualified
personnel and an internal audit program to monitor its effectiveness. During the
nine-month period ended June 30, 2003, there were no significant changes to this
system of internal controls or in other factors that could significantly affect
those controls.

---



PART II - OTHER INFORMATION

Item 5. Other Information

Board Meetings:

The Board of Directors, at a Special meeting held in Houston, Texas on April
19, 2004, approved the filing of a form S-8 registration for an Employees stock
option plan (ESOP) for common shares to be issued to pay for professional fees
and as compensation for consultants serving the Company.

The following shares were issued:

Mr. Robert L. Lee                     10,000,000 shares for consulting fees of $100,000



Item 6. Exhibits and Reports on Form 8-K.

Exhibit No.     Document                             Location

3(i)                 Articles of Incorporation        Previously Filed

3(ii)                Bylaws                                    Previously filed

31                  President Certification            Included

32                  Section 906 Certification        Included

________________________________________________________________________

Reports on Form 8-K - None

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

EMPYREAN COMMUNICATIONS, INC.





/s/ Robert L. lee  Date:  August 13, 2004

Robert L. Lee, President and Director





/s/ Anthony Fanale  Date:  August 13, 2004

Anthony Fanale, Director

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