---

UNITED STATESSECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2010

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
EXCHANGE ACT For the transition period from January 31, 2010 to April 30, 2010
Commission File No. 000-52664

MOUNT KNOWLEDGE HOLDINGS, INC. (Exact name of
registrant as specified in its charter)

|Nevada                                           | 98-0534436                          
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     

39555 Orchard Hill Place, Suite 600 PMB 6096, Novi,
Michigan 48375 (Address of principal executive offices) (zip code)

(888) 682-3038 or (248) 893-4538 (Registrants
telephone number, including area code)

N/A (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 has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T

(§232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post such
files).

Yes [  ] No [  ] (does not yet apply to registrant)

---

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 definitions of large accelerated filer, accelerated
filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one):

Large accelerated filer   [  ]
    Accelerated
      filer                   
      [  ]Non-accelerated filer     [  ]
    Smaller reporting company  [X](Do not check if a smaller reporting company)


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 PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after
distribution of securities under a plan confirmed by a court.

Yes [  ] No [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers
classes of common equity as of the latest practicable date:

As of April 30, 2010, there were 85,533,536 shares of common
stock, par value $0.0001, outstanding.

- 2 -

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MOUNT KNOWLEDGE HOLDINGS, INC.(Formerly Auror
Capital Corp.)(A Development Stage Company)

FINANCIAL STATEMENTS

APRIL 30, 2010(Unaudited)(Stated in
U.S. Dollars)

F-1

---

MOUNT KNOWLEDGE HOLDINGS, INC.(Formerly Auror
Capital Corp.)(A Development Stage Company)

BALANCE SHEETS(Unaudited)(Stated in
U.S. Dollars)

|                                                                            |   | APRIL 30 |   |   | OCTOBER 31 |  
|--------------------------------------------------------------------------- | - | -------- | - | - | ---------- | -
|                                                                            |   | 2010     |   |   | 2009       |  
|ASSETS                                                                      |   |          |   |   |            |  
|Current                                                                     |   |          |   |   |            |  
|Cash                                                                        | $ | 175      |   | $ | -          |  
|LIABILITIES                                                                 |   |          |   |   |            |  
|Current                                                                     |   |          |   |   |            |  
|Accounts
      payable and accrued liabilities                              | $ | 5,296    |   | $ | 13,683     |  
|Due to
      related party                                                  |   | 64,000   |   |   | 6,701      |  
|                                                                            |   | 69,296   |   |   | 20,384     |  
|STOCKHOLDERS DEFICIENCY                                                    |   |          |   |   |            |  
|Capital Stock(Note 4)                                                       |   |          |   |   |            |  
|Authorized:                                                                 |   |          |   |   |            |  
|200,000,000 common voting stock with a par
      value of $0.0001 per share |   |          |   |   |            |  
|100,000,000 preferred stock with a par value of
      $0.0001 per share     |   |          |   |   |            |  
|Issued:                                                                     |   |          |   |   |            |  
|85,533,536 common shares
      at April 30, 2010                            |   |          |   |   |            |  
|(2009 
      195,533,536 common shares)                                    |   | 8,553    |   |   | 19,553     |  
|                                                                            |   |          |   |   |            |  
|Additional Paid-In Capital                                                  |   | 80,771   |   |   | 131,951    |  
|Accumulated Other Comprehensive Gain                                        |   | 353      |   |   | 935        |  
|Share Purchase Warrants                                                     |   | 57,180   |   |   | -          |  
|Deficit Accumulated During The
      Exploration Stage                      |   | (151,681 | ) |   | (151,681   | )
|Deficit Accumulated During The
      Development Stage                      |   | (64,297  | ) |   | (21,142    | )
|                                                                            |   | (69,121  | ) |   | (20,384    | )
|                                                                            | $ | 175      |   | $ | -          |  

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

F-2

---

MOUNT KNOWLEDGE HOLDINGS, INC.(Formerly Auror
Capital Corp.)(A Development Stage Company)

STATEMENTS OF OPERATIONS(Unaudited)(Stated in U.S. Dollars)

|                                                    |   |                          |   |   |                  |   |   |             |   |   |             |   |   | CUMULATIVE  |  
|--------------------------------------------------- | - | ------------------------ | - | - | ---------------- | - | - | ----------- | - | - | ----------- | - | - | ----------- | -
|                                                    |   |                          |   |   |                  |   |   |             |   |   |             |   |   | PERIOD FROM |  
|                                                    |   |                          |   |   |                  |   |   |             |   |   |             |   |   | INCEPTION   |  
|                                                    |   |                          |   |   |                  |   |   |             |   |   |             |   |   | MARCH 16    |  
|                                                    |   | THREE
      MONTHS ENDED |   |   | SIX MONTHS ENDED |   |   | 2006 TO     |  
|                                                    |   | APRIL
      30           |   |   | APRIL
      30   |   |   | APRIL 30    |  
|                                                    |   | 2010                     |   |   | 2009             |   |   | 2010        |   |   | 2009        |   |   | 2010        |  
|                                                    |   |                          |   |   |                  |   |   |             |   |   |             |   |   |             |  
|Revenue                                             | $ | -                        |   | $ | -                |   | $ | -           |   | $ | -           |   | $ | -           |  
|                                                    |   |                          |   |   |                  |   |   |             |   |   |             |   |   |             |  
|Expenses                                            |   |                          |   |   |                  |   |   |             |   |   |             |   |   |             |  
|Exploration expenses                                |   | -                        |   |   | -                |   |   | -           |   |   | -           |   |   | 15,313      |  
|Filing and transfer agent fees                      |   | 13,927                   |   |   | 847              |   |   | 15,108      |   |   | 2,020       |   |   | 48,840      |  
|General and administrative                          |   | 1,269                    |   |   | 30               |   |   | 2,441       |   |   | 64          |   |   | 8,748       |  
|Professional fees                                   |   | 13,072                   |   |   | 4,697            |   |   | 25,606      |   |   | 15,734      |   |   | 138,495     |  
|                                                    |   | 28,268                   |   |   | 5,974            |   |   | 43,155      |   |   | 17,818      |   |   | 211,396     |  
|Write Down On
      Mineral Property                |   | -                        |   |   | -                |   |   | -           |   |   | -           |   |   | 4,582       |  
|                                                    |   | 28,268                   |   |   | 5,974            |   |   | 43,155      |   |   | 17,818      |   |   | 215,978     |  
|Net Loss For The Period                             | $ | (28,268                  | ) | $ | (5,974           | ) | $ | (43,155     | ) | $ | (17,818     | ) | $ | (215,978    | )
|                                                    |   |                          |   |   |                  |   |   |             |   |   |             |   |   |             |  
|Net Loss
      During the Exploration Stage         | $ | -                        |   | $ | (5,974           | ) | $ | -           |   | $ | (17,818     | ) | $ | (151,681    | )
|Net Loss During the
      Development Stage         |   | (28,268                  | ) |   | -                |   |   | (43,155     | ) |   | -           |   |   | (64,297     | )
|                                                    | $ | (28,268                  | ) | $ | (5,974           | ) | $ | (43,155     | ) | $ | (17,818     | ) | $ | (215,978    | )
|Basic And Diluted Loss Per Share                    | $ | (0.00                    | ) | $ | (0.00            | ) | $ | (0.00       | ) | $ | (0.00       | ) |   |             |  
|                                                    |   |                          |   |   |                  |   |   |             |   |   |             |   |   |             |  
|Weighted Average Number Of CommonShares Outstanding |   | 85,533,536               |   |   | 156,475,000      |   |   | 133,033,536 |   |   | 156,475,000 |   |   |             |  

STATEMENTS OF COMPREHENSIVE LOSS(Unaudited)(Stated in U.S. Dollars)

|                                        |   |                          |   |   |                        |   |   |          |   |   |         |   |   | CUMULATIVE  |  
|--------------------------------------- | - | ------------------------ | - | - | ---------------------- | - | - | -------- | - | - | ------- | - | - | ----------- | -
|                                        |   |                          |   |   |                        |   |   |          |   |   |         |   |   | PERIOD FROM |  
|                                        |   |                          |   |   |                        |   |   |          |   |   |         |   |   | INCEPTION   |  
|                                        |   |                          |   |   |                        |   |   |          |   |   |         |   |   | MARCH 16    |  
|                                        |   | THREE
      MONTHS ENDED |   |   | SIX
      MONTHS ENDED |   |   | 2006 TO  |  
|                                        |   | APRIL
      30           |   |   | APRIL
      30         |   |   | APRIL 30 |  
|                                        |   | 2010                     |   |   | 2009                   |   |   | 2010     |   |   | 2009    |   |   | 2010        |  
|                                        |   |                          |   |   |                        |   |   |          |   |   |         |   |   |             |  
|Net Loss For
      The Period           | $ | (28,268                  | ) | $ | (5,974                 | ) | $ | (43,155  | ) | $ | (17,818 | ) | $ | (215,978    | )
|                                        |   |                          |   |   |                        |   |   |          |   |   |         |   |   |             |  
|Other
      Comprehensive Gain (Loss)   |   |                          |   |   |                        |   |   |          |   |   |         |   |   |             |  
|Foreign currency translation adjustment |   | -                        |   |   | (2,815                 | ) |   | -        |   |   | (970    | ) |   | 353         |  
|                                        |   |                          |   |   |                        |   |   |          |   |   |         |   |   |             |  
|Total Comprehensive Loss                | $ | (28,268                  | ) | $ | (8,789                 | ) | $ | (43,155  | ) | $ | (18,788 | ) | $ | (215,625    | )

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

F-3

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MOUNT KNOWLEDGE HOLDINGS, INC.(Formerly Auror
Capital Corp.)(A Development Stage Company)

STATEMENTS OF CASH FLOWS(Unaudited)(Stated in U.S. Dollars)

|                                                                           |   |                  |   |   |          |   |   | PERIOD FROM |  
|-------------------------------------------------------------------------- | - | ---------------- | - | - | -------- | - | - | ----------- | -
|                                                                           |   |                  |   |   |          |   |   | INCEPTION   |  
|                                                                           |   |                  |   |   |          |   |   | MARCH 16    |  
|                                                                           |   | SIX MONTHS ENDED |   |   | 2006 TO  |  
|                                                                           |   | APRIL 30         |   |   | APRIL 30 |  
|                                                                           |   | 2010             |   |   | 2009     |   |   | 2010        |  
|                                                                           |   |                  |   |   |          |   |   |             |  
|Cash (Used In) Operating
      Activities                                  |   |                  |   |   |          |   |   |             |  
|Net loss for the
      period                                              | $ | (43,155          | ) | $ | (17,818  | ) | $ | (215,978    | )
|Adjustment to reconcile net loss to net cash used in operating activities: |   |                  |   |   |          |   |   |             |  
|Mineral property write down                                                |   | -                |   |   | -        |   |   | 4,582       |  
|Change in non-cash operating working capital items:                        |   |                  |   |   |          |   |   |             |  
|Accounts payable and accrued liabilities                                   |   | (8,387           | ) |   | (1,400   | ) |   | 5,296       |  
|                                                                           |   | (51,542          | ) |   | (19,218  | ) |   | (206,100    | )
|Cash (Used In) Investing Activity                                          |   |                  |   |   |          |   |   |             |  
|Mineral property acquisition costs                                         |   | -                |   |   | -        |   |   | (4,582      | )
|Cash Provided By Financing Activities                                      |   |                  |   |   |          |   |   |             |  
|(Repurchase and retirement) Issuance of common stock                       |   |                  |   |   |          |   |   |             |  
|                                                                           |   | (5,000           | ) |   | -        |   |   | 146,504     |  
|Advances from related party                                                |   | 57,299           |   |   | 16,426   |   |   | 64,000      |  
|                                                                           |   | 52,299           |   |   | 16,426   |   |   | 210,504     |  
|Foreign Exchange Effect On
      Cash                                      |   | (582             | ) |   | (970     | ) |   | 353         |  
|Increase (Decrease) In Cash                                                |   | 175              |   |   | (3,762   | ) |   | 175         |  
|Cash, Beginning Of Period                                                  |   | -                |   |   | 3,879    |   |   | -           |  
|Cash,
      End Of Period                                                  | $ | 175              |   | $ | 117      |   | $ | 175         |  
|                                                                           |   |                  |   |   |          |   |   |             |  
|Supplemental Disclosure Of Cash Flow
      Information                     |   |                  |   |   |          |   |   |             |  
|Cash paid during the period for:                                           |   |                  |   |   |          |   |   |             |  
|Interest                                                                   | $ | -                |   | $ | -        |   |   |             |  
|Income taxes                                                               | $ | -                |   | $ | -        |   |   |             |  
|                                                                           |   |                  |   |   |          |   |   |             |  
|Non-cash Financing Activities(Note
      4(c))                             |   |                  |   |   |          |   |   |             |  

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

F-4

---

MOUNTKNOWLEDGEHOLDINGS,INC.(FormerlyAurorCapitalCorp.)(ADevelopmentStageCompany)

STATEMENTOFSTOCKHOLDERSDEFICIENCY

PERIODFROMMARCH16, 2006(INCEPTION)TOAPRIL30, 2010(Unaudited)(Statedin U.S.Dollars)

|                                                          |  | COMMON
      STOCK |  |   |            |  |   |                |   |   |                       |   |   | **DEFICIT**       |   |   | **DEFICIT**      |  |   |                      |  
|--------------------------------------------------------- |  | ------------------ |  | - | ---------- |  | - | -------------- | - | - | --------------------- | - | - | ----------------- | - | - | ---------------- |  | - | -------------------- | -
|                                                          |  |                    |  |   |            |  |   |                |   |   |                       |   |   | **ACCUMULATED**   |   |   |                  |  |   | **ACCUMULATED**      |  
|                                                          |  |                    |  |   |            |  |   | ADDITION**AL** |   |   | SHARE                 |   |   | **OTHER**         |   |   | SHARE            |  |   | **DURING
      THE** |  
|                                                          |  |                    |  |   |            |  |   | **PAID-IN**    |   |   | **SUBSCRIPTI****ONS** |   |   | **COMPREHENSIVE** |   |   | **PURCHAS****E** |  |   | **EXPLORATION**      |  
|                                                          |  | **SHARES**         |  |   | **AMOUNT** |  |   | **CAPITAL**    |   |   | **RECEIVED**          |   |   | **(LOSS) GAIN**   |   |   | **WARRANT****S** |  |   | **STAGE**            |  
|                                                          |  |                    |  |   |            |  |   |                |   |   |                       |   |   |                   |   |   |                  |  |   |                      |  
|Opening Balance                                           |  |                    |  |   |            |  |   |                |   |   |                       |   |   |                   |   |   |                  |  |   |                      |  
|March 16, 2006  Stock issued for cash at
      $0.0001   |  | 110,000,000        |  | $ | 11,000     |  | $ | (6,000         | ) | $ | -                     |   | $ | -                 |   | $ | -                |  | $ | -                    |  
|June 26, 2006  Stock issued
      for cash at $0.0017    |  | 38,500,000         |  |   | 3,850      |  |   | 66,150         |   |   | -                     |   |   | -                 |   |   | -                |  |   | -                    |  
|Share subscriptions received                              |  | -                  |  |   | -          |  |   | -              |   |   | 3,000                 |   |   | -                 |   |   | -                |  |   | -                    |  
|Foreign currency translation                              |  | -                  |  |   | -          |  |   | -              |   |   | -                     |   |   | (262              | ) |   | -                |  |   | -                    |  
|Net loss for the period                                   |  | -                  |  |   | -          |  |   | -              |   |   | -                     |   |   | -                 |   |   | -                |  |   | (12,292              | )
|Balance, October 31, 2006                                 |  | 148,500,000        |  |   | 14,850     |  |   | 60,150         |   |   | 3,000                 |   |   | (262              | ) |   | -                |  |   | (12,292              | )
|December 12, 2006  Stock issued for cash at
      $0.004 |  | 5,841,000          |  |   | 585        |  |   | 25,965         |   |   | (3,000                | ) |   | -                 |   |   | -                |  |   | -                    |  
|February 7, 2007  Stock
      issued for cash at $0.0045 |  | 2,134,000          |  |   | 213        |  |   | 9,487          |   |   | -                     |   |   | -                 |   |   | -                |  |   | -                    |  
|Foreign currency translation                              |  | -                  |  |   | -          |  |   | -              |   |   | -                     |   |   | 7,098             |   |   | -                |  |   | -                    |  
|Net loss for the year                                     |  | -                  |  |   | -          |  |   | -              |   |   | -                     |   |   | -                 |   |   |                  |  |   | (63,557              | )
|Balance, October 31, 2007                                 |  | 156,475,000        |  |   | 15,648     |  |   | 95,602         |   |   | -                     |   |   | 6,836             |   |   | -                |  |   | (75,849              | )

F-5

---

MOUNTKNOWLEDGEHOLDINGS,INC.(FormerlyAurorCapitalCorp.)(ADevelopmentStageCompany)

STATEMENTOFSTOCKHOLDERSDEFICIENCY(Continued)

PERIODFROMMARCH16, 2006(INCEPTION)TOAPRIL30, 2010(Unaudited)(Statedin U.S.Dollars)

|                                                       |  |                    |  |   |            |  |   |                |  |   |                   |  |   |                            |   |   |                  |  |   |                      |   |   |                 |   |   |           |  
|------------------------------------------------------ |  | ------------------ |  | - | ---------- |  | - | -------------- |  | - | ----------------- |  | - | -------------------------- | - | - | ---------------- |  | - | -------------------- | - | - | --------------- | - | - | --------- | -
|                                                       |  | COMMON
      STOCK |  |   |            |  |   |                |  |   |                   |  |   | **DEFICIT**                |   |   | **DEFICIT**      |  |   |                      |  
|                                                       |  |                    |  |   |            |  |   |                |  |   |                   |  |   | **ACCUMULATE**D****        |   |   |                  |  |   | **ACCUMULATED**      |   |   | ACCUMULATED     |   |   |           |  
|                                                       |  |                    |  |   |            |  |   | ADDITION**AL** |  |   | SHARE             |  |   | **OTHER**                  |   |   | SHARE            |  |   | DURING THE           |   |   | DURING THE      |   |   |           |  
|                                                       |  |                    |  |   |            |  |   | **PAID-IN**    |  |   | **SUBSCRIPTIONS** |  |   | **COMPREHENSIVE**          |   |   | **PURCHASE**     |  |   | **EXPLORATI** **ON** |   |   | **DEVELOPMENT** |   |   |           |  
|                                                       |  | **SHARES**         |  |   | **AMOUNT** |  |   | **CAPITAL**    |  |   | **RECEIVED**      |  |   | **(LOSS)
      GAIN** **** |   |   | **WARRAN****TS** |  |   | **STAGE**            |   |   | **STAGE**       |   |   | **TOTAL** |  
|                                                       |  |                    |  |   |            |  |   |                |  |   |                   |  |   |                            |   |   |                  |  |   |                      |   |   |                 |   |   |           |  
|Balance, October 31, 2007                              |  | 156,475,000        |  | $ | 15,648     |  | $ | 95,602         |  | $ | -                 |  | $ | 6,836                      |   | $ | -                |  | $ | (75,849              | ) | $ | -               |   | $ | 42,237    |  
|Foreign currency translation                           |  | -                  |  |   | -          |  |   | -              |  |   | -                 |  |   | 465                        |   |   | -                |  |   | -                    |   |   | -               |   |   | 465       |  
|Net loss for the year                                  |  | -                  |  |   | -          |  |   | -              |  |   | -                 |  |   | -                          |   |   | -                |  |   | (53,510              | ) |   | -               |   |   | (53,510   | )
|Balance, October 31, 2008                              |  | 156,475,000        |  |   | 15,648     |  |   | 95,602         |  |   | -                 |  |   | 7,301                      |   |   | -                |  |   | (129,359             | ) |   | -               |   |   | (10,808   | )
|July 27, 2009  Stock issued
      for cash at $0.0005 |  | 6,058,536          |  |   | 605        |  |   | 2,149          |  |   | -                 |  |   | -                          |   |   | -                |  |   | -                    |   |   | -               |   |   | 2,754     |  
|July 27, 2009  Stock issued for cash at
      $0.0011 |  | 33,000,000         |  |   | 3,300      |  |   | 34,200         |  |   | -                 |  |   | -                          |   |   | -                |  |   | -                    |   |   | -               |   |   | 37,500    |  
|Foreign currency translation                           |  | -                  |  |   | -          |  |   | -              |  |   | -                 |  |   | (6,366                     | ) |   | -                |  |   | -                    |   |   | -               |   |   | (6,366    | )
|Net loss for the year                                  |  | -                  |  |   | -          |  |   | -              |  |   | -                 |  |   | -                          |   |   |                  |  |   | (22,322              | ) |   | (21,142         | ) |   | (43,464   | )
|Balance, October 31, 2009                              |  | 195,533,536        |  |   | 19,553     |  |   | 131,951        |  |   | -                 |  |   | 935                        |   |   | -                |  |   | (151,681             | ) |   | (21,142         | ) |   | (20,384   | )

F-6

---

MOUNTKNOWLEDGEHOLDINGS,INC.(FormerlyAurorCapitalCorp.)(ADevelopmentStageCompany)

STATEMENTOFSTOCKHOLDERSDEFICIENCY(Continued)

PERIODFROMMARCH16, 2006(INCEPTION)TOAPRIL30, 2010(Unaudited)(Statedin U.S.Dollars)

|                                                                                        |  |                    |   |   |            |   |   |                |   |   |                       |  |   |                       |   |   |                  |  |   |                     |   |   |                     |   |   |           |  
|--------------------------------------------------------------------------------------- |  | ------------------ | - | - | ---------- | - | - | -------------- | - | - | --------------------- |  | - | --------------------- | - | - | ---------------- |  | - | ------------------- | - | - | ------------------- | - | - | --------- | -
|                                                                                        |  | COMMON
      STOCK |   |   |            |   |   | ****           |   |   |                       |  |   | **DEFICIT**           |   |   | **DEFICIT**      |  |   |                     |  
|                                                                                        |  |                    |   |   |            |   |   |                |   |   |                       |  |   | **ACCUMULATE****D**   |   |   |                  |  |   | **ACCUMULATED**     |   |   | **ACCUMULATED**     |   |   |           |  
|                                                                                        |  |                    |   |   |            |   |   | ADDITION**AL** |   |   | SHARE                 |  |   | OTHER                 |   |   | SHARE            |  |   | DURING THE          |   |   | DURING THE          |   |   |           |  
|                                                                                        |  |                    |   |   |            |   |   | **PAID-IN**    |   |   | **SUBSCRIPTI****ONS** |  |   | **COMPREHENS****IVE** |   |   | **PURCHASE**     |  |   | **EXPLORATI****ON** |   |   | **DEVELOPME****NT** |   |   |           |  
|                                                                                        |  | **SHARES**         |   |   | **AMOUNT** |   |   | **CAPITAL**    |   |   | **RECEIVED**          |  |   | **LOSS**              |   |   | **WARRANT****S** |  |   | **STAGE**           |   |   | **STAGE**           |   |   | **TOTAL** |  
|                                                                                        |  |                    |   |   |            |   |   |                |   |   |                       |  |   |                       |   |   |                  |  |   |                     |   |   |                     |   |   |           |  
|Balance,
      October 31, 2009                                                         |  | 195,533,536        |   | $ | 19,553     |   | $ | 131,951        |   | $ | -                     |  | $ | 935                   |   | $ | -                |  | $ | (151,681            | ) | $ | (21,142             | ) | $ | (20,384   | )
|January 20, 2010  stock
      repurchase and retirement at $0.0001                     |  | (110,000,000       | ) |   | (11,000    | ) |   | 6,000          |   |   | -                     |  |   | -                     |   |   | -                |  |   | -                   |   |   | -                   |   |   | (5,000    | )
|Foreign
      currency translation                                                      |  | -                  |   |   | -          |   |   | -              |   |   | -                     |  |   | (582                  | ) |   | -                |  |   | -                   |   |   | -                   |   |   | (582      | )
|January 21, 2010  fair value
      and deferral of financing costs of warrants granted |  | -                  |   |   | -          |   |   | (57,180        | ) |   | -                     |  |   | -                     |   |   | 57,180           |  |   | -                   |   |   | -                   |   |   | -         |  
|Net loss for
      the period                                                           |  | -                  |   |   | -          |   |   | -              |   |   | -                     |  |   | -                     |   |   | -                |  |   | -                   |   |   | (43,155             | ) |   | (43,155   | )
|Balance, April 30,
      2010                                                           |  | 85,533,536         |   | $ | 8,553      |   | $ | 80,771         |   | $ | -                     |  | $ | 353                   |   | $ | 57,180           |  | $ | (151,681            | ) | $ | (64,297             | ) | $ | (69,121   | )

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

F-7

---

MOUNT KNOWLEDGE HOLDINGS, INC.(Formerly Auror
Capital Corp.)(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

APRIL 30, 2010(Unaudited)(Stated in
U.S. Dollars)

|1. | BASIS OF PRESENTATION AND NATURE OF
    OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Organization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Mount Knowledge Holdings, Inc. (the Company) was
      incorporated as Auror Capital Corp. under the laws of Nevada on March 16,
      2006. On January 25, 2010, the Company filed an amendment and restatement
      to the Articles of Incorporation of the Company with the State of Nevada,
      which were approved by the Board of Directors on October 20, 2009 by
      written consent in lieu of a special meeting in accordance with the Nevada
      Corporation Law, changing its name to Mount Knowledge Holdings, Inc. and
      increasing the number of authorized common and preferred shares.                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company began as an exploration stage company engaged
      in the acquisition and exploration of mineral properties. On January 23,
      2009, the Company decided to abandon its Katrina mineral claim due to
      unsuccessful explorations to date and inability to attract investment
      capital to proceed with further exploration on the claim.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | On July 27, 2009, the Company changed its business
      purpose from a mining and exploration to an educational software
      development and sales company offering innovative and proprietary learning
      software products and teaching services. The Companys principal executive
      offices are now in Novi, Michigan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | On January 21, 2010, the Company executed a new exclusive
      Master Software License Agreement with Mount Knowledge Inc, a corporation
      owned by the Companys founder and present Chairman and director based in
      Ontario, Canada, wherein the Company was granted the exclusive world-wide
      license rights to promote, market and sell any and all of Mount Knowledge
      Incs products, both existing and future. These existing products consist
      of patent pending Real Time Learning and Self Improvement Educational
      System and Method software application referred to as Syntality. The
      Agreement supersedes the Master Product License Agreement executed on or
      before July 27, 2009 and provides updated terms and conditions, including,
      but not limited to new definitions of duties, responsibilities and costs
      to be borne by the respective parties.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The accompanying financial statements have been prepared
      assuming the Company will continue as a going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | As shown in the accompanying financial statements, for
      the period from March 16, 2006 (inception) to April 30, 2010, the Company
      had no revenue and incurred net losses aggregating $215,978. The ability
      of the Company to continue as a going concern is dependent upon its
      ability to obtain financing and become successful in marketing products
      under the license agreement described above. Management has plans to seek
      additional capital through debt, and private and public offerings of its
      common stock. The financial statements do not include any adjustments
      relating to the recoverability and classification of recorded assets, or
      the amounts of and classification of liabilities that might be necessary
      in the event the Company cannot continue in
existence.                                                                             

F-8

---

|1. | BASIS OF PRESENTATION AND NATURE OF OPERATIONS(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The unaudited interim financial statements as of and for
      the six months ended April 30, 2010 reflect all adjustments which, in the
      opinion of management, are necessary to fairly state the Companys
      financial position and the results of its operations for the periods
      presented. These second quarter financial statements should be read in
      conjunction with the Companys financial statements and notes thereto
      included in the Companys October 31, 2009 Form 10-K. The Company assumes
      that the users of the interim financial information herein have read, or
      have access to, the audited financial statements for the preceding period,
      and that the adequacy of additional disclosure needed for a fair
      presentation may be determined in that context. Accordingly, footnote
      disclosures which would substantially duplicate that contained in the
      Companys October 31, 2009 financial statements, have been omitted. The
      results of operations for the six month period ended April 30, 2010 are
      not necessarily indicative of the results for the entire year ending
      October 31, 2010.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING
  POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The financial statements of the Company have been
      prepared in accordance with generally accepted accounting principles in
      the United States. Because a precise determination of many assets and
      liabilities is dependent upon future events, the preparation of financial
      statements for a period necessarily involves the use of estimates which
      have been made using careful judgement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The financial statements have, in managements opinion,
      been properly prepared within reasonable limits of materiality and within
      the framework of the significant accounting policies summarized
    below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| | a) | Development Stage Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The Company became a development stage company during its
      fourth quarter, 2009, as defined by ASC 915 (formerly SFAS 7). The Company
      is devoting substantially all of its present efforts to developing its new
      business. All losses accumulated during the 2009 fourth quarter had been
      considered as part of the Companys development stage
activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | Costs of start up activities, including organizational
      costs, are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | b) | In June 2009, the Financial Accounting Standards Board
      (FASB) issued its final Statement of Financial Accounting Standards
      (SFAS) No. 168, The FASB Accounting Standards Codification and the
      Hierarchy of Generally Accepted Accounting Principles, a replacement of
      FASB Statement No. 162 (SFAS 168). SFAS 168 establishes the FASB
      Accounting Standards Codification (Codification), which officially
      launched July 1, 2009, to become the source of authoritative U.S.
      generally accepted accounting principles (GAAP) recognized by the FASB
      to be applied by non-governmental entities, superseding existing FASB,
      American Institute of Certified Public Accountants (AICPA), Emerging
      Issues Task Force (EITF), and related accounting literature. Rules and
      interpretive releases of the Securities and Exchange Commission (SEC)
      under authority of federal securities laws are also sources of
      authoritative U.S. GAAP for SEC registrants. SFAS 168 recognizes the
      previously issued GAAP pronouncements into accounting topics and displays
      them using a consistent structure.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The subsequent issuances of new standards will be in the
      form of Accounting Standards Updates that will be included in the
      Codification. SFAS 168 is effective for the Company as of the year ended
      October 31, 2009. As the Codification was not intended to change or alter
      existing GAAP, it did not have an impact on the Companys financial
      statements. The only impact was that references to authoritative
      accounting literature are in accordance with the Codification. The Company
      has included in its disclosures the Accounting Standards Codification
      (ASC) cross-reference along side the references to the accounting
      standards issued and adopted prior to the adoption of
  Codification.                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-9

---

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | c)                                                   
|   |                                                      
|   |                                                      
|   |                                                      
|   | d)                                                   
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   | e)                                                   
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   | f)                                                   
|   |                                                      
|   |                                                      

| | i)   | monetary items at the exchange rate prevailing at the
      balance sheet date;                 
| | ---- | ------------------------------------------------------------------------------------------------
| | ii)  | non-monetary items at the historical exchange
  rate;                                           
| | iii) | revenue and expense at the average rate in effect during
      the applicable accounting period.

| |    | Translation adjustments resulting from this process are
      recorded in Stockholders Equity as a component of Accumulated Other
      Comprehensive Income (Loss). Gains and losses arising on translation or
      settlement of foreign currency denominated transactions or balances are
      recorded in the Statement of Operations.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                              
| | g) | Use of Estimates                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                              
| |    | The preparation of financial statements, in conformity
      with generally accepted accounting principles, requires management to make
      estimates and assumptions that affect the amounts reported in the
      financial statements and accompanying disclosures. Actual results may
      differ from the estimates.                 

F-10

---

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)  
|-- | --------------------------------------------
|   |                                             
|   | h)                                          
|   |                                             
|   |                                             
|   |                                             
|   | i)                                          
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|3. | RELATED PARTY TRANSACTIONS AND AMOUNTS
  DUE
|   |                                             
|   | a)                                          
|   |                                             
|   | b)                                          
|   |                                             
|   |                                             
|   |                                             
|4. | SHARE CAPITAL                               
|   |                                             
|   | a)                                          
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|   |                                             
|   |                                             

F-11

---

|4. | SHARE CAPITAL(Continued)
|-- | ------------------------
|   |                         
|   | b)                      
|   |                         
|   |                         
|   |                         
|   |                         
|   |                         
|   | c)                      
|   |                         
|   |                         

| |                                                        |  |              |  |   |                  |  |  | WEIGHTED            | 
| | ------------------------------------------------------ |  | ------------ |  | - | ---------------- |  |  | ------------------- | 
| |                                                        |  |              |  |   | WEIGHT**ED**     |  |  | AVERAGE             | 
| |                                                        |  | **NUMBER**   |  |   | **AVERAG****E**  |  |  | **REMAINING**       | 
| |                                                        |  | **OF**       |  |   | **EXERCIS****E** |  |  | **CONTRACTUA****L** | 
| |                                                        |  | **WARRANTS** |  |   | **PRICE**        |  |  | **LIFE**            | 
| |                                                        |  |              |  |   |                  |  |  |                     | 
| | Balance, March 16, 2006 through October 31,
      2009 |  |              |  |   |                  |  |  |                     | 
| |                                                        |  | -            |  | $ | -                |  |  | -                   | 
| | Granted during the period                              |  |              |  |   |                  |  |  |                     | 
| | January 21, 2010                                       |  | 12,000,000   |  |   | 0.15             |  |  |                     | 
| | January 21, 2010                                       |  | 12,000,000   |  |   | 0.20             |  |  |                     | 
| | January 21, 2010                                       |  | 8,888,888    |  |   | 0.0001           |  |  |                     | 
| |                                                        |  |              |  |   |                  |  |  |                     | 
| | Balance, April 30, 2010                                |  | 32,888,888   |  | $ | 0.13             |  |  | 32.75 months        | 

The following table provides certain
information with respect to the above share purchase warrants that are
outstanding and exercisable at April 30, 2010:

WEIGHTEDWARRANTS
    
    
    AVERAGEOUTSTANDI**NG**
    
    
    REMAINING**EXERCISE**
    
    
    **AND**
    
    
    **CONTRACTU****AL****PRICES**
    
    
    **EXERCISABLE**
    
    
    **LIFE**$
    0.15
    
    
    12,000,000
    
    
    32.75 months$
    0.20
    
    
    12,000,000
    
    
    32.75 months$
    0.0001
    
    
    8,888,888
    
    
    32.75 months32,888,888


F-12

---

|4. | SHARE CAPITAL(Continued)                                                                               
|-- | -------------------------------------------------------------------------------------------------------
|   |                                                                                                        
|   | On January 21, 2010, the Company issued a series of stock
      purchase warrant agreements as follows:

| | i) | with twelve separate parties for the purchase of
      1,000,000 shares of common stock of the Company each (12,000,000 shares
      total) at $0.15 per share exercisable at any time prior to the termination
      date (or 36 months from the stock purchase warrant execution
  date).
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) | Share Purchase Warrants (Continued)
| | -- | -----------------------------------
| |    |                                    
| |    | ii)                                
| |    |                                    
| |    | iii)                               

The fair value of share purchase
warrants, currently exercisable and granted to secure future financings, is
determined using the Black-Scholes option-pricing model. This fair value
amounted to $57,180. The following weighted-average assumptions were used:

| | Expected dividend yield          | 0%      | 
| | -------------------------------- | ------- | 
| | Estimated share price volatility | 120%    | 
| | Risk-free interest rate          | 1.41%   | 
| | Expected life of warrants        | 3 years | 

The Company has no stock option plan
or other dilutive securities.

|5. | COMMITMENTS AND CONTRACTUAL OBLIGATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On January 21, 2010, the Company executed a new exclusive
      Master Software License Agreement with Mount Knowledge Inc., superseding
      the Master Product License Agreement executed on or before July 27, 2009.
      The agreement includes new definitions of duties, responsibilities and
      costs to be borne by the respective parties.                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Specifically, any and all products licensed under the
      Master Software License Agreement will be defined specifically in a
      Statement of Work executed for each respective product describing the
      terms and condition relating to such product or products, including, but
      not limited to, costs, delivery dates, specifications, support, other
      requirements requested by the Company and the respective obligations of
      the parties with respect thereto, as may be agreed upon by the parties
      from time to time during the term of the agreement. Also, the term of the
      agreement was extended to 88 years. The License Agreement may also be
      further extended upon mutual agreement between the parties.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | At April 30, 2010 the Company had no other significant
      commitments or contractual obligations with any parties respecting
      executive compensation, consulting arrangements or other
  matters.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-13

---

|6. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On May 6, 2010, the Board of Directors approved the
      execution of a non-binding Letter of Intent with The Language Key Training
      Ltd., a British Virgin Islands Corporation (the Seller), to purchase the
      collective total of approximately 95% percent or more of the issued and
      outstanding shares of common and preferred stock, including warrants,
      options, and/or any other issued securities of the following (collectively
      referred to as the LK Entities):

The Language Key China, Ltd., a Hong
Kong corporation (the Holding Company) and its wholly-owned subsidiary in
China,

The Language Key China Ltd., a China
corporation, and

The Language Key Training, Ltd., a
Hong Kong Corporation, currently an independent corporation owned by the Seller,
which is to be acquired as a wholly-owned subsidiary of the Holding Company in
this proposed transaction.

The proposed transaction would make all
LK Entities wholly-owned and operated subsidiaries of the Company.

Pursuant to this Letter of Intent, the
Company agreed to the following:

(a) commit to provide a capital
investment into the Holding Company in an amount equal to $1,000,000 within 12
months from the closing date disbursed, as follows:

| | (i)   | a payment in the amount of $200,000 at the closing
      date,                                                                                             
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                            
| | (ii)  | 10 subsequent payments in the amount of $75,000 per
      month, payable on the first day of each month beginning 60 days after the
      closing date, and
| |       |                                                                                                                                                            
| | (iii) | a final payment in the amount of $50,000 in the 12th
      month after the closing date, and                                                               

(b) to have the Holding Company, as
its majority shareholder (post transaction), provide the Seller compensation, at
the closing date, in the form of shares of Series A Convertible Preferred Stock,
in an amount equal to 800,000 shares or such other mutually agreed upon amount
of shares in the Holding Company, upon the terms and conditions to be set forth
in an executed purchase agreement, and a Series A Convertible Preferred Stock
Purchase Agreement, made a part thereof.

The due diligence process is expected
to take approximately 30 days with a definitive agreement or purchase agreement
anticipated to be completed on or before June 30, 2010.

On April 26, 2010, our Board of Directors approved the
execution of a non-binding Letter of Intent to purchase one hundred (100%)
percent of the issued and outstanding shares of Common and Preferred Stock,
including Warrants issued for the right to purchase additional Common or
Preferred Stock of Mount Knowledge USA, Inc, (MTKUSA) from MTKUSAs
Shareholders of record on the date of closing in a proposed Stock Purchase and
Share Exchange Agreement whereby each of the MTKUSA Shareholders would receive
from Mount Knowledge Holdings, Inc (the Company) the same equivalent number of
shares (one-to-one (1:1) basis) (or some other agreed upon amount) in the same
series and/or class of stock as owned and held in MTKUSA. The proposed
transaction would make MTKUSA a wholly-owned subsidiary of the Company.

F-14

---

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

Cautionary Note Regarding Forward-Looking
Statements

The information contained in Item 2 contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Actual results may materially differ from those projected in the forward-looking
statements as a result of certain risks and uncertainties set forth in this
report. Although management believes that the assumptions made and expectations
reflected in the forward-looking statements are reasonable, there is no
assurance that the underlying assumptions will, in fact, prove to be correct or
that actual results will not be different from expectations expressed in this
report.

Forward-looking statements are made based on managements
beliefs, estimates and opinions on the date the statements are made and we
undertake no obligation to update forward-looking statements if these beliefs,
estimates and opinions or other circumstances should change. Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars and all references to
common stock refer to the common shares in our capital stock.

As used in this quarterly report, the terms we, us, our,
and MKHD mean Mount Knowledge Holdings, Inc., unless the context clearly
requires otherwise.

General

We were incorporated as Auror Capital Corp. under the laws of
Nevada on March 16, 2006. We began as an exploration stage company engaged in
the acquisition and exploration of mineral properties. On January 23, 2009, we
decided to abandon our Katrina mineral claim due to our unsuccessful
explorations to date and our inability to attract investment capital to proceed
with further exploration on the claim.

On January 21, 2010, we executed a new exclusive Master
Software License Agreement with Mount Knowledge, Inc. (MtK), a corporation
based out of Ontario, Canada, and its founder, Erwin Sniedzins, wherein the
Company was granted the exclusive world-wide license rights to promote, market
and sell any and all of MtKs products, both existing and future.

On January 25, 2010, we filed an amendment and restatement to
the Articles of Incorporation of the Company with the State of Nevada, which
were approved by the Board of Directors on October 20, 2009 by written consent
in lieu of a special meeting in accordance with the Nevada Corporation Law
changing our name to Mount Knowledge Holdings, Inc. (MKHD or the Company).

On May 6, 2010, our Board of Directors approved the execution
of a non-binding Letter of Intent with THE LANGUAGE KEY TRAINING LTD, a British
Virgin Islands Corporation (the Seller) to purchase the collective total of
approximately ninety-five (95%) percent or more of the issued and outstanding
shares of Common and Preferred Stock, including Warrants, Options, and/or
another issued securities of The Language Key China, Ltd., a Hong Kong
Corporation (the Holding Company) and its wholly-owned subsidiary in China,
The Language Key China Ltd., a China Corporation (the China Subsidiary) and
The Language Key Training, Ltd., a Hong Kong Corporation, currently an
independent corporation owned by the Seller which is to be acquired as a
wholly-owned subsidiary of the Holding Company in this proposed transaction (the
HK Subsidiary), collectively referred to as (the LK Entities). The proposed
transaction would make all LK Entities wholly-owned and operated subsidiaries of
the Company.

- 3-

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On April 26, 2010, our Board of Directors approved the
execution of a non-binding Letter of Intent to purchase onehundred
(100%) percent of the issued and outstanding shares of Common and Preferred
Stock, including Warrants issued for the right to purchase additional Common or
Preferred Stock of Mount Knowledge USA, Inc, (MTKUSA) from MTKUSAs
Shareholders of record on the date of closing in a proposed Stock Purchase and
Share Exchange Agreement whereby each of the MTKUSA Shareholders would receive
from Mount Knowledge Holdings, Inc (the Company) the same equivalent number of
shares (one-to-one (1:1) basis) (or some other agreed upon amount) in the same
series and/or class of stock as owned and held in MTKUSA. The proposed
transaction would make MTKUSA a wholly-owned subsidiary of the Company.

The Companys primary mission is to market, sell and distribute
a proprietary Real Time Self Learning System (RTSL) software application,
referred to as the Knowledge Generator product, domestically and
internationally. The Company foresees the use of the Knowledge Generator
product as a learning solution for individuals, schools, government agencies,
healthcare facilities, and corporations to provide an enhanced and robust
learning tool to assist in new job skill training and continuing education
programs.

We anticipate generating revenues from the marketing and sales
of the Knowledge Generator product utilizing various marketing and distribution
channels and sales strategies. We foresee the primary source of our revenues to
come from the sales of the Knowledge Generator product in China through our
corporate Learning Centers and other distribution channels.

Milestones

Our milestones and objectives over the next 12 months,
beginning in the third quarter of 2010, are significantly dependent on various
factors which the Company may or may not be in control of, including, but not
limited to: (a) obtaining adequate financing to sustain and expand our
operations; (b) the ability to acquire various marketing and distribution
channels in China; (c) launching the Knowledge Generator product in China and
North American markets; (d) completing market-specific product enhancements, (e)
developing new partnerships and distribution channels, (f) launching new sales
strategies, (g) creating new business enterprise applications, (h) acquiring
synergistic business operations to accelerate revenue growth, and, (i)
generating adequate cash flow from the sales of the Knowledge Generator
products worldwide.

Capital & Uses of Proceeds

Capital Needs

To implement our plan of operations, including some or all of
the above described milestones (objectives), we will continue to raise capital
(equity) in an amount up to $2.5 million in the form of a Private Placement or
Offering of our restricted stock over the next 6 month period beginning in the
third quarter of 2010 on terms and conditions to be determined.

We anticipate the need to raise additional capital beyond the
first 6 months of operations, subject to the successful implementation of our
initial milestones over the first 180 days of operations and our revenue growth
cycle thereafter. At this time, management is unable to determine the specific
amounts and terms of such future financings. In addition, we may elect to seek
subsequent interim or bridge financing in the form of debt (corporate loans)
as may be necessary.

Proceeds

We foresee the proceeds from capital raised to be allocated as
follows: (a) market-specific implementation costs; (b) product enhancements; (c)
business development; (d) general and administrative expenses; (e) working
capital; (f) financing costs; and (g) audit/SEC filing fees.

Plan of Operations

Over the 12 months beginning in the third quarter of 2010, we
must raise capital and complete certain milestones as described below.

Background Information

The Knowledge Generator has been under development since early
2002 and has been trialed by hundreds of users in different user settings. In
2007, MtK, Inc. signed its first annual license agreement with various Toronto
District School Board schools for their elementary and high school programs.

- 4 -

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Knowledge Generator is now being used to help students in
literacy improvements, English as a Second Language(ESL), Adult
Professional Accreditation, Teaching of English as a Foreign Language (TOEFL)
preparation and special needs learners, including at-risk students and students
with Downs Syndrome.

In early 2009, MtK, Inc released its first commercial software
application of the Complete English Real Time Self Learning Intelligent
System, now known and marketed as the Knowledge Generator product. Since its
release, MtK, Inc. has received inquiries on the product from various schools,
businesses and potential sales partners throughout Canada and China. This
resulted in the execution of a five year, plus five year, Sales Agent Agreement
with Tianjin You He Trading Co., Ltd. in Tianjin, China in March of 2009.

This exclusive marketing and distribution agreement for China
grants to Tianjin You He Trading Co., Ltd. the rights to distribute the
Knowledge Generator product utilizing various traditional marketing methods, at
Tianjin You He Trading Co., Ltd.s expense, but with support from MtK, Inc to
train initial personnel on product functionality, features, etc., and to assist
in the creation of marketing, branding and product identity tools and sales and
marketing strategy, as needed.

The exclusive Master Software License Agreement executed on
January 21, 2010 with Mount Knowledge, Inc. (MtK), a corporation based out of
Ontario, Canada, and its founder, Erwin Sniedzins, supersedes the Master
Software License Agreement executed on or before July 27, 2009 and provides
updated terms and conditions, including, but not limited to, new definitions of
duties, responsibilities and costs to be borne by the respective parties.

Any and all products licensed under the Master Product License
Agreement will be defined specifically in a Statement of Work executed for each
respective product describing the terms and condition relating to such product
or products, including, but not limited to, costs, delivery dates,
specifications, support, other requirements requested by the Company and the
respective obligations of the parties with respect thereto, as may be agreed
upon by the parties from time to time during the term of the Agreement. Also,
the term of the Agreement has been extended to eighty-eight (88) years. The
License Agreement may also be further extended upon mutual agreement between the
parties.

The Agreement by and between MtK and us does not include
ownership rights to previous marketing and sales or distribution agreements
executed by MtK. However, we are in negotiations with MtK to acquire the rights
to any and all existing agreements, including the Tianjin You He Trading Co.,
Ltd Sales Agent agreement, executed by MtK prior to the execution of our Master
Software License Agreement, which we anticipate completing in 2010.

On April 26, 2010, our Board of Directors approved the
execution of a non-binding Letter of Intent to purchase one hundred (100%)
percent of the issued and outstanding shares of Common and Preferred Stock,
including Warrants issued for the right to purchase additional Common or
Preferred Stock of Mount Knowledge USA, Inc, (MTKUSA) from MTKUSAs
Shareholders of record on the date of closing in a proposed stock purchase
agreement and a share exchange agreement whereby each of the MTKUSA Shareholders
would receive from Mount Knowledge Holdings, Inc (the Company) the same
equivalent number of shares (one-to-one (1:1) basis) (or some other agreed upon
amount) in the same series and/or class of stock as owned and held in MTKUSA.
The proposed transaction would make MTKUSA a wholly-owned subsidiary of the
Company.

On or about September 4, 2009, MTKUSA executed an agreement
with Mount Knowledge, Inc. whereby it acquired by assignment the rights to the
Sales Agency Agreement executed by Mount Knowledge, Inc and Tianjin You He
Trading Co., Ltd. on or about March 8, 2009 in exchange for a certain number of
warrants in MTKUSA.

The Company had anticipated the acquisition of the same Sales
Agency Agreement directly from Mount Knowledge, Inc. according to its business
plan, but was unable to raise the necessary financing in the preceeding nine (9)
months to execute on the terms and conditions of the Sales Agency Agreement and
associated sales efforts in China. The Company may now have the opportunity to
do so due to the proposed acquisition of MTKUSA, and may also capitalize on all
of the sales and marketing efforts of MTKUSA in China to date.

On or about September 16, 2009, MTKUSA initiated a Private
Placement Memorandum (PPM) to raise equity capital in a maximum amount of USD
$1,500,000 at a per share price of $0.15. To date, MKTUSA has raised
approximately $1,100,000 and will continue to raise capital up to the maximum
amount before the closing date of the proposed transaction with the Company. The
funds obtained from the open PPM will continue to support the sales and
marketing efforts in China.

- 5 -

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On May 6, 2010, our Board of Directors approved the execution
of a non-binding Letter of Intent with THELANGUAGE KEY TRAINING LTD, a
British Virgin Islands Corporation (the Seller) to purchase the collective
total of approximately ninety-five (95%) percent or more of the issued and
outstanding shares of Common and Preferred Stock, including Warrants, Options,
and/or another issued securities of The Language Key China, Ltd., a Hong Kong
Corporation (the Holding Company) and its wholly-owned subsidiary in China,
The Language Key China Ltd., a China Corporation (the China Subsidiary) and
The Language Key Training, Ltd., a Hong Kong Corporation, currently an
independent corporation owned by the Seller which is to be acquired as a
wholly-owned subsidiary of the Holding Company in this proposed transaction (the
HK Subsidiary), collectively referred to as (the LK Entities). The proposed
transaction would make all LK Entities wholly-owned and operated subsidiaries of
the Company. However, to date no definitive agreement has been entered into by
the parties and it is possible that the parties may not finalize such agreement.

The Language Key Training Ltd. was set up in Hong Kong in 1994
and is now an established business English and communication skills training
consultancy. In 2002, the company set up The Language Key China Ltd. as a
Wholly-Owned Foreign Enterprise (WOFE) headquartered in Shanghai, and has since
registered branch offices in Beijing and Guangdong. Both entities provide
generic and tailored Business English and Communications Skills courses, Soft
Skills workshops, Executive Coaching and other related services to public and
private sector clients, including government entities in Hong Kong and Mainland
China and many Fortune 500 corporations.

For the year ended December 31, 2009, Language Key,
collectively generated approximately (unaudited) USD $1,600,000 in combined
revenues from its Hong Kong and China operations and is projected to achieve
revenues in excess of (unaudited) USD $2,000,000 for the year ending December
31, 2010.

Future Milestones

Our milestones and objectives over the next 12 months,
beginning in the third quarter of 2010, are significantly dependent on various
factors which the Company may or may not be in control of, including, but not
limited to; (a) obtaining adequate financing to sustain and expand our
operations; (b) acquiring various marketing and distribution channels in China;
(c) successfully launching the Knowledge Generator product in Chinese and North
American markets; (d) completing market-specific product enhancements; (e)
developing new partnerships and distribution channels; (f) launching new sales
strategies; (g) creating new business enterprise applications; (h) acquiring
synergistic business operations to accelerate revenue growth; and (i) generating
adequate cash flow from the sales of Knowledge Generator products worldwide.

The Company anticipates the completion of the following
objectives over the next 12 months, beginning in the third quarter of 2010:

First 90 Days of Operations (Administrative).

In the first 90 days of operations, beginning in the third
quarter of 2010, our primary focus will be to complete necessary administrative
functions, obtain new financing and acquire certain existing marketing and sales
agreements in order to properly position the Company execute its business plan.
These proposed objectives are as follows:

1. Secondary Offering and/or Other Financings. We
intend to initiate a Private Placement or offering for the sale of our
restricted Common Stock in an amount of up to $2,500,000 to commence over the
next 1 to 6 months, subject to the completion of all appropriate regulatory
filings required prior to the commencement of such capital raise. We anticipate
administrative and professional fees to be approximately $125,000, and selling
costs, not to exceed ten percent ($250,000) of the total amount of funds raised.
In order to complete the Private Placement, we may need to seek interim or
bridge financing in the form of debt (corporate loans) and/or convertible
debentures to pay for expenses associated with such an offering, as deemed
necessary by our management.

- 6 -

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2. Acquisition of MTK USA. Pursuant to the
Letter of Intent executed with Mount Knowledge USA, Inc. on April26,
2010, we intend to purchase one hundred (100%) percent of the issued and
outstanding shares of common and preferred stock, including warrants issued for
the right to purchase additional common or preferred stock of Mount Knowledge
USA, Inc, (MTKUSA) from MTKUSAs Shareholders of record on the date of closing
in a proposed stock purchase agreement and share exchange agreement whereby each
of the MTKUSA Shareholders would receive from Mount Knowledge Holdings, Inc (the
Company) the same equivalent number of shares (one-to-one (1:1) basis) (or
some other agreed upon amount) in the same series and/or class of stock as owned
and held in MTKUSA. The proposed transaction would make MTKUSA a wholly-owned
subsidiary of the Company. The due diligence process is expected to take
approximately thirty (30) days, however, management of MTKUSA has requested an
additional thirty (30) days beyond the due diligence period in order to complete
its existing fund raising efforts, with a definitive agreement to be completed
on or before June 30, 2010.

3. Implementation of China Contract. Pursuant to
the acquisition of MTK USA, we may be required to fulfill certain, if not all,
of the contractual obligations of MtK, Inc in the agreement with Tianjin You He
Trading Co., Ltd. These obligations may include, amongst other things,
China-specific product design and packaging, technical support, China-related
educational content consisting of approved stories and exercises, mutually
approved marketing and sales materials and product packaging, a Chinese sales
website, and other miscellaneous items which may be deemed necessary in order to
successfully launch the product in China within the next 3 to 6 months of
operations. We anticipate costs related to the implementation of the China
contract to be approximately $375,000, when acquired.

4. Acquisition of Language Key Training. Pursuant
to the Letter of Intent executed with The Language Key Training, Ltd. on May 6,
2010, we agreed to: (a) commit to provide a capital investment into the Holding
Company in an amount equal to one million (USD $1,000,000) dollars within twelve
(12) months from the Closing Date disbursed as follows: (i) a payment in the
amount of $200,000 at the Closing Date; (ii) ten (10) subsequent montly payments
in the amount of $75,000 payable on the first day of each month beginning sixty
(60) days after the Closing Date; and (iii) a final payment in the amount of
$50,000 in the twelfth (12th) month after the Closing Date; and (b) to have the
Holding Company, as its majority shareholder (post-transaction), provide the
Seller compensation on the Closing Date in the form of shares of Series A
Convertible Preferred Stock in an amount equal to eight hundred thousand
(800,000) shares or such other mutually agreed upon amount of shares in the
Holding Company, upon the terms and conditions to be set forth in an executed
Purchase Agreement, and the Series A Convertible Preferred Stock Purchase
Agreement, made a part thereof. The due diligence process is expected to take
approximately thirty (30) days with a definitive agreement to be completed on or
before June 30, 2010.

5. Business Enterprise Applications. With the
acquisition of Language Key, we foresee the use of the Knowledge Generator
product as a learning solution for schools, government agencies, healthcare
facilities, and corporations to provide an enhanced, interactive learning
program to facilitate new job skills training and continual education programs.
Therefore, we intend to work with MtK, Inc. to develop product-specific
enhancements to the existing Knowledge Generator product for use in various
business applications. It is likely that most of the product enhancements for
business applications will be in the form of client-specific modifications based
upon requests for customized specifications and functionality. As such, we
anticipate that some of the costs for these modifications will be borne by each
respective client. Therefore, it is difficult to accurately determine the
upfront costs attributable to us for any research and development of business
enterprise applications. For that reason, we anticipate a budget of
approximately $50,000 for the beginning stages of such a development program on
a timeframe yet to be determined.

Next 90 days of Operations.

In the next 90 days of operations beginning the fourth quarter
of 2010, we plan to expand our objectives to include new product enhancements
and the development of new partnerships and distribution channels as follows:

1. Product Enhancements for North American
Market. Subject to the successful launch of the Knowledge Generator
software application in China, we plan to commission MtK, Inc. to provide
product enhancements consistent with perceived customer requirements within the
North American marketplace. Most of these enhancements are believed to be in the
form of updated graphics, to enhance the fluidity of the user experience and
interface, and some market-specific content. We anticipate a budget of
approximately $250,000 to complete such product upgrades over a period of 3 to 6
months.

- 7 -

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2. Business Development (Additional Partnerships and
Distribution Channels) . We will also pursue our businessdevelopment efforts in other Asian countries, as well as North American and
various European markets. We anticipate an initial budget of approximately
$150,000 to seek new partnerships and distribution channels commencing sometime
after the first 90 days of operations and continuing for a period of time
thereafter as determined by us, subject to the availability of adequate
financing and ongoing sales results.

Months 6- 12 of Operations.

During the period of 6 to 9 months, we will direct our
marketing efforts towards direct sales opportunities in the form of infomercials
and online membership programs, including the option of bundling our product
with potential technology partners to increase brand awareness and product
reach.

1. Infomercials. We plan to develop infomercials
to assist in creating brand awareness and direct sales revenue, beginning in
China and eventually targeting North America and specific European and Asian
markets. We anticipate an initial budget of approximately $500,000 over a 6 to
12 month period to effectively produce and execute a sales and marketing program
utilizing infomercials commencing at various times in the specific markets we
decide to pursue.

2. Membership Program. We foresee a
web-based e-learning membership program with recurring monthly fee based
revenues as being one of the more important and lucrative long-term revenue
models for us. It is difficult to accurately estimate the total cost involved in
the design and development of this program, including the time required to
implement such a program. We have budgeted $275,000 to pursue the creation and
implementation of this membership program.

3. Technology Partners. We will seek to
identify and develop relationships with globally recognized technology providers
and OEMs to pursue the possibility of bundling the Knowledge Generator product
with established product platforms, including mobile applications (PDA) to
provide the Company with an ancillary revenue stream. We see this as a
potentially significant opportunity to generate revenues, if the Company can
successfully demonstrated the desirability of the Knowledge Generator product
with its initial audience and market(s). We anticipate a budget of approximately
$50,000 to cultivate these types of partnerships when deemed appropriate.

The milestones outlined above represent our objectives for the
purpose of obtaining revenues from the marketing and sales of the Knowledge
Generator product through various marketing and distribution channels.

Although, we have arranged and specified each respective
milestone in a defined order, or timeline, over the next 12 months, beginning
the third quarter of 2010, we may find the need to modify any or all of the
milestones listed, subject to unforeseen circumstances and other contingences
which may require us to alter, in whole, or in part, certain aspects of each
respective milestone in order for us to successfully realize revenue and
ultimately attempt to achieve profitability.

Each milestone many begin at a different time than indicated
and may continue for a shorter or longer period of time than suggested,
depending upon if such milestones have successfully resulted in generating
revenues for us.

Also, each milestone may require more or less capital than
anticipated and may need to be adjusted from time to time. Furthermore, any
adjustments made to the proposed milestones may adversely affect the revenue
potential of each milestone and overall revenues and/or our profitability.

Requirements and Utilization of Funds

Our budget for operations in next six to twelve months is as
follows:

We initially seek to raise $2,500,000 during the upcoming 1 to
6 months, from the sale of our restricted common stock. These monies will be
used to execute on the first six months of milestones such as implementing the
Tianjin You He Trading Co., Ltd. exclusive Sales Agent agreement for China, the
development of product enhancements for the North American market, identifying
and developing additional partnerships and distribution channels, and for
general operating expenses.

We anticipate the need to raise additional capital beyond the
first 6 months of operations, subject to the successful implementation of our
initial milestones over the first 180 days of operations, beginning in the third
quarter of 2010, and our revenue growth cycle thereafter. Management is unable
to determine at this time, the specific amounts and terms of such future
financings. In addition, we may elect to seek subsequent interim or bridge
financing in the form of debt (corporate loans) as may be necessary.

- 8 -

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The breakdown for the estimated utilization of funds is as
follows:

Requirements & Utilization of FundsLanguage Key Growth Capital
    $
    1,000,000Implementation of Existing Agreements
    $
    375,000Product Enhancements
    $
    250,000Business Development
    $
    150,000General and Administrative
    $
    125,000Working Capital
    $
    300,000Financing Costs
    $
    200,000Audit/SEC Filing Fees
    $
    100,000Total
    $
    2,500,000


Financial Condition, Liquidity and Capital Resources

As of April 30, 2010, we had $175 in the bank and our only
assets are intangible and consist of our business plan, a License Agreement,
relationships, and industry contacts. We had limited operations to date and we
did not have any revenues during the three month period ended April 30, 2010. We
are illiquid and need cash infusions from investors and/or current shareholders
to support our proposed marketing and sales operations.

Management believes this amount may not satisfy our cash
requirements for the next 12 months and as such we will need to either raise
additional proceeds and/or our officers and/or directors will need to make
additional financial commitments to our company, neither of which is guaranteed.
We plan to satisfy our future cash requirements, primarily the working capital
required to execute on our objectives, including marketing and sales of our
product, and to offset legal and accounting fees, through financial commitments
from future debt/equity financings, if and when possible.

Management believes that we may generate some sales revenue
within the next twelve (12) months, but that these sales revenues will not
satisfy our cash requirements during that period. We have no committed source
for funds as of this date. No representation is made that any funds will be
available when needed. In the event that funds cannot be raised when needed, we
may not be able to carry out our business plan, may never achieve sales, and
could fail to satisfy our future cash requirements as a result of these
uncertainties.

If we are unsuccessful in raising the additional proceeds from
officers and/or directors, we may then have to seek additional funds through
debt financing, which would be extremely difficult for an early stage company to
secure and may not be available to us. However, if such financing is available,
because we are an early stage company with no operations to date, we would
likely have to pay additional costs associated with high risk loans and be
subject to above market interest rates.

At such time as these funds are required, management would
evaluate the terms of such debt financing and determine whether the business
could sustain operations and growth and manage the debt load. If we cannot raise
additional proceeds via a private placement of our common stock or secure debt
financing we would be required to cease business operations. As a result,
investors in our common stock would lose all of their investment.

The staged development of our business will continue over the
next 12 months. Other than engaging and/or retaining independent consultants to
assist the Company in various administrative and marketing related needs, we do
not anticipate a significant change in the number of our employees, if any,
unless we are able to obtain adequate financing.

Our auditors have issued a going concern opinion. This means
that there is substantial doubt that we can continue as an on-going business for
the next 12 months unless we obtain additional capital to pay our expenses. This
is because we have not generated any revenues and no substantial revenues are
anticipated in the near-term. Accordingly, we must raise cash from sources other
than from the sale of our products. Our only source for cash at this time is
investment by officers and/or directors, of which, such has not been committed
nor can we anticipate that such will be available when needed. We must raise
capital to implement our business strategy and continue operations.

- 9 -

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Results of Operations

The following summary of our results of operations should be
read in conjunction with our unaudited financial statements for the six months
ended April 30, 2010 which are included herein.

Our operating results for the three months and for the six
months ended April 30, 2010 and 2009 are summarized as follows:

|                   |   | Three Months Ended |   |   | Six Months Ended |  
|------------------ | - | ------------------ | - | - | ---------------- | -
|                   |   | April 30,          |   |   | April 30,        |  
|                   |   | 2010               |   |   | 2009             |  
|Revenue            | $ |                    |   | $ |                  |  
|Operating Expenses |   | 28,268             |   |   | 5,974            |  
|Net Loss           | $ | (28,268            | ) | $ | (5,974           | )

Revenues

We have earned minimal revenues to date, and anticipate earning
minimal revenues in the next quarter.

Expenses

Our expenses for the six months ended April 30, 2010 and 2009
are outlined in the table below:

|Filings and Transfer Agent Fee | $ | 13,927 |  | $ | 847   |  | $ | 15,108 |  | $ | 2,020  | 
|------------------------------ | - | ------ |  | - | ----- |  | - | ------ |  | - | ------ | 
|General and Administrative     |   | 1,269  |  |   | 30    |  |   | 2,441  |  |   | 64     | 
|Professional Fees              |   | 13,072 |  |   | 4,697 |  |   | 25,606 |  |   | 15,734 | 
|                               |   |        |  |   |       |  |   |        |  |   |        | 
|Total Expenses                 | $ | 28,268 |  | $ | 5,974 |  | $ | 43,155 |  | $ | 17,818 | 

Professional Fees

Professional fees include our accounting and auditing expenses
incurred in connection with the preparation and audit of our financial
statements and professional fees that we pay to our legal counsel. Our
accounting and auditing expenses were incurred in connection with the
preparation of our audited financial statements and unaudited interim financial
statements and our preparation and filing of a registration statement with the
SEC. Our legal expenses represent amounts paid to legal counsel in connection
with our corporate organization. Legal expenses will be ongoing during fiscal
2010 as we are subject to the reporting obligations of the Securities Exchange
Act of 1934.

Liquidity And Capital Resources

Working Capital

|                          |   |           |   |   |           |   |  |            | 
|------------------------- | - | --------- | - | - | --------- | - |  | ---------- | 
|                          |   | As at     |   |   | As at     |   |  | Percentage | 
|                          |   | April 30, |   |   | April 30, |   |  | Increase / | 
|                          |   | 2010      |   |   | 2009      |   |  | (Decrease) | 
|                          |   |           |   |   |           |   |  |            | 
|Current Assets            | $ | 175       |   | $ | -         |   |  | N/A        | 
|Current Liabilities       | $ | 69,296    |   | $ | 13,683    |   |  | 406.4%     | 
|Working Capital (Deficit) | $ | (69,121   | ) | $ | (13,683   | ) |  | 405.2%     | 

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Cash Flows

|                                      |   | Three Months |   |   |            |  
|------------------------------------- | - | ------------ | - | - | ---------- | -
|                                      |   | Ended        |   |   |            |  
|                                      |   | April 30,    |   |   | Percentage |  
|                                      |   |              |   |   | Increase / |  
|                                      |   | 2010         |   |   | 2009       |  
|Cash (used) in Operating Activities   | $ | (51,542      | ) | $ | (19,218    | )
|Cash provided by Investing Activities | $ | -            |   | $ | -          |  
|Cash provided by Financing Activities | $ | 52,299       |   | $ | 16,426     |  
|Foreign Exchange Effect on Cash       |   | (582         | ) | $ | (970       | )
|Net Increase in Cash                  | $ | 175          |   | $ | (3,762     | )

We anticipate that we will incur approximately $100,000 for
operating expenses, including professional, legal and accounting expenses
associated with our reporting requirements under the Exchange Act during the
next twelve months. Accordingly, we will need to obtain additional financing in
order to complete our business plan.

Cash Used In Operating Activities

We used cash in operating activities in the amount of $51,542
during the six month period ended April 30, 2010 and $19,218 during the six
month period ended April 30, 2009. Cash used in operating activities was funded
by cash from financing activities.

Cash From Investing Activities

No cash was used or provided in investing activities during the
six month period ended April 30, 2010.

Cash from Financing Activities

We generated $52,299 cash from financing activities during the
six month period ended April 30, 2010 and $16,426 during the six months ended
April 30, 2009.

Disclosure of Outstanding Share Data

As of April 30, 2010, we had 85,533,536 shares of common stock
issued and outstanding. We have 32,888,888 warrants outstanding at April 30,
2010. We do not have any options or shares of any other class issued and
outstanding as at the date of this quarterly report.

Going Concern

The financial statements accompanying this report have been
prepared on a going concern basis, which implies that our company will continue
to realize its assets and discharge its liabilities and commitments in the
normal course of business. Our company has not generated revenues since
inception and has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
our company as a going concern is dependent upon the continued financial support
from our shareholders, the ability of our company to obtain necessary equity
financing to achieve our operating objectives, and the attainment of profitable
operations.

As of April 30, 2010, we had accumulated losses of $215,978
since inception. We do not have sufficient working capital to enable us to carry
out our stated plan of operation for the next twelve months. These financial
statements do not include any adjustments to the recoverability and
classification of recorded asset amounts and classification of liabilities that
might be necessary should our company be unable to continue as a going concern.

Due to the uncertainty of our ability to meet our future
operating expenses and the capital expenses in their report on the financial
statements for the year period ended October 31, 2010, our independent auditors
included an explanatory paragraph regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.

- 11 -

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The continuation of our business is dependent upon us raising
additional financial support. The issuance of additional equity securities by us
could result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

Future Financings

We anticipate continuing to rely on equity sales of our common
shares in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing stockholders. There is
no assurance that we will achieve any additional sales of our equity securities
or arrange for debt or other financing to fund our planned activities. There is
no assurance that the Company will able to obtain financing to carry on our
legal, accounting and reporting needs.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to stockholders.

Application of Critical Accounting Estimates

The financial statements of our company have been prepared in
accordance with generally accepted accounting principles in the United States
(GAAP). Because a precise determination of many assets and liabilities is
dependent upon future events, the preparation of financial statements for a
period necessarily involves the use of estimates which have been made using
careful judgment.

The financial statements have been prepared within the
framework of the significant accounting policies summarized below:

a) Exploration Stage Activities and Mineral Property Interests

Until abandonment of its mineral property on January 23, 2009,
the Company was an exploration stage mining company and had not realized any
revenue from its operations. It was primarily engaged in the acquisition,
exploration and development of mining properties.

b) Financial Instruments and Concentration of Risk

The fair value of financial instruments, which consist of cash,
and accounts payable and accrued liabilities, were estimated to approximate
their carrying values due to the immediate or relatively short maturity of these
instruments.

Unless otherwise noted, it is managements opinion that this
Company is not exposed to significant interest or credit risks arising from
these financial instruments.

c) Basic and Diluted Loss Per Share

In accordance with ASC Topic 260, Earnings Per Share
(formerly SFAS 128), the basic loss per common share is computed by dividing net
loss available to common stockholders by the weighted average number of common
shares outstanding. Diluted loss per common share is computed similar to basic
loss per common share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common shares were
dilutive. Diluted earnings per share excludes all dilutive potential shares if
their effect is anti-dilutive.

The Company accounts for common stock purchase warrants at fair
value in accordance with EITF 00  19, Accounting for Derivative Financial
Instruments Indexed to and Practically Settled in, a Companys Own Stock,
(codified in ASC 815, Derivatives and Hedging ). The Black-Scholes option
pricing valuation method is used to determine fair value of these warrants. Use
of this method requires that the Company make assumptions regarding stock
volatility, dividend yields, expected term of the warrants and risk-free rates.

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d) Foreign Currency Translation The Companys functional
currency is now the U.S. dollar. In the fiscal year 2009, the functional
currency was the Canadian dollar.

Transactions in Canadian currency are translated into U.S.
dollars as follows:

| | i)  | monetary items at the exchange rate prevailing at the
      balance sheet date;                 
| | --- | ------------------------------------------------------------------------------------------------
| | iv) | non-monetary items at the historical exchange
  rate;                                           
| | v)  | revenue and expense at the average rate in effect during
      the applicable accounting period.

Translation adjustments resulting from this process are
recorded in Stockholders Equity as a component of Accumulated Other
Comprehensive Income (Loss). Gains and losses arising on translation or
settlement of foreign currency denominated transactions or balances are recorded
in the Statement of Operations.

g) Use of Estimates

The preparation of financial statements, in conformity with
generally accepted accounting principles, requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying disclosures. Actual results may differ from the estimates.

h) Impairment of Long-Lived Assets

Impairment losses on long-lived assets used in operations are
recorded when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets
carrying amount. In such cases, the amount of the impairment is determined based
on the relative fair values of the impaired assets.

i) Treasury Stock

Common stock repurchases are recorded as treasury stock at
cost.

On forward stock split-ups, the number of all common shares
disclosed in the financial statements is adjusted to give retroactive effect to
such recapitalizations.

Recent Accounting Pronouncements

In June 2009, the FASB issued SFAS No. 166, Accounting for
Transfers of Financial Assets (ASC Topic 860) which will require more
information about transfers of financial assets in situations where companies
have continuing exposure to the risk related to transferred financial assets. It
eliminates the concept of a qualifying special purpose entity, changes the
requirements for derecognizing financial assets, and requires additional
disclosure. This guidance is effective for interim and annual periods ending
after November 15, 2009. The Company does not expect the adoption of the
guidance to have a material impact on its financial statements.

In June 2009, the FASB issued SFAS 167, Amendments to FASB
Interpretation No. 46(R) (ASC Topic 810). The guidance is intended to improve
financial reporting by providing additional guidance to companies involved with
variable interest entities and by requiring additional disclosures about a
companys involvement in variable interest entities. This guidance is effective
for interim and annual periods ending after November 15, 2009. The Company does
not expect the adoption of the new accounting guidance to have a material impact
on its financial statements.

In June 2009, the Financial Accounting Standards Board (FASB)
issued its final Statement of Financial Accounting Standards (SFAS) No. 168,
The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles, a replacement of FASB Statement No. 162 (SFAS
168). SFAS 168 establishes the FASB Accounting Standards Codification
(Codification), which officially launched July 1, 2009, to become the source
of authoritative U.S. generally accepted accounting principles (GAAP)
recognized by the FASB to be applied by non-governmental entities, superseding
existing FASB, American Institute of Certified Public Accountants (AICPA),
Emerging Issues Task Force (EITF), and related accounting literature.

Rules and interpretive releases of the Securities and Exchange
Commission (SEC) under authority of federal securities laws are also sources
of authoritative U.S. GAAP for SEC registrants. SFAS 168 recognizes the
previously issued GAAP pronouncements into accounting topics and displays them
using a consistent structure.

- 13 -

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Item 3. Quantitative and Qualitative Disclosures About
Market Risk.

Not Applicable.

Item 4. Controls and Procedures.

Managements evaluation of disclosure controls and
procedures.

As required under the Exchange Act, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures, as of the end of the period covered by this report, being April 30,
2010. We are responsible for establishing and maintaining adequate internal
controls and procedures for the financial reporting of our company. Disclosure
control and procedures are the controls and other procedures that are designed
to ensure that we record, process, summarize and report in a timely manner the
information that we must disclose in reports that we file with or submit to the
SEC. Our management has concluded, based on their evaluation, that as of April
30, 2010, as the result of the material weaknesses described below, our
disclosure controls and procedures were ineffective in providing reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes.

Managements report on internal control over financial
reporting.

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with US GAAP.
Management has concluded that there are material weaknesses in both the design
and operation of the Companys internal controls and procedures for financial
reporting. A material weakness, as defined by SEC rules, is a control
deficiency, or combination of control deficiencies, such that there is a
reasonable possibility that a material misstatement of the annual or interim
financial statements will not be prevented or detected on a timely basis. The
material weaknesses in internal control over financial reporting that were
identified include:

| | i.   | there is a lack of adequate segregation of duties in our
      accounting and financial reporting functions;                                                                                                                                            
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                         
| | ii.  | there is a lack of entity wide controls, including no
      audit committee, and a failure to maintain formalized accounting policies
      and procedures;                                                                                             
| |      |                                                                                                                                                                                                                                                         
| | iii. | senior management has not established and maintained a
      proper tone as to internal control over financial reporting;                                                                                                                             
| |      |                                                                                                                                                                                                                                                         
| | iv.  | there may be a lack of sufficient controls relating to
      user access security levels in our accounting software to restrict access
      to certain financial applications only to employees requiring access to
      complete their job functions.

As a result of the existence of these material weaknesses as of
April 30, 2010, management has concluded that we did not maintain effective
internal control over financial reporting as of April 30, 2010.

While we believe our financial statements included in this
Quarterly Report present fairly, in all material respects, our financial
condition, results of operations and cash flows for the periods presented, as a
result of the material weaknesses in our internal control over financial
reporting, there is a reasonable possibility that material misstatements of the
financial statements including disclosures will not be prevented or detected on
a timely basis.

Remediation

We will engage an independent accounting firm to advise us in
respect of our internal controls over financial reporting, and to provide
accounting counsel on various matters relating thereto. We will continue to
implement further improvements to our internal controls as they are identified.
We will use the criteria and framework set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in the publication Internal
Control-Integrated Framework, an integrated framework for the evaluation of
internal controls, for the evaluation of our internal controls in the future.
Senior management will continue to consult with external experts to assist with
the accounting for complex and non-routine accounting transactions.

-14-

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Changes to Internal Controls and Procedures Over Financial
Reporting

There have been no changes in our internal control over
financial reporting during our fiscal year that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting, except as discussed herein.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material, active or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS.

Not Applicable.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

a) Issued and Outstanding:

On January 20, 2010, the Company executed a Share Cancellation
Agreement with an entity controlled by the Companys former president for the
re-purchase of 110,000,000 shares of the Companys common stock at a price of
$0.0001 per share for a total purchase price of $5,000. The Company also
executed a Return to Treasury Order representing the repurchased stock.

On January 22, 2010, the Company completed a 22-to-1 forward
stock split-up, increasing the number of common shares issued and outstanding.
The financial statements have retro-actively been adjusted to reflect this stock
split-up for all periods presented.

b) Share Purchase Warrants

The Companys share purchase warrant activity for the period
from March 16, 2006 (inception) to April 30, 2010 is as follows:

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ITEM 5. OTHER INFORMATION (continued)

|                                                       |  |            |  |   |          |  |  | WEIGHTED     | 
|------------------------------------------------------ |  | ---------- |  | - | -------- |  |  | ------------ | 
|                                                       |  |            |  |   | WEIGHTED |  |  | AVERAGE      | 
|                                                       |  | NUMBER     |  |   | AVERAGE  |  |  | REMAINING    | 
|                                                       |  | OF         |  |   | EXERCISE |  |  | CONTRACTUAL  | 
|                                                       |  | WARRANTS   |  |   | PRICE    |  |  | LIFE         | 
|                                                       |  |            |  |   |          |  |  |              | 
|Balance, March 16, 2006 through October 31,
      2009 |  | -          |  | $ | -        |  |  | -            | 
|                                                       |  |            |  |   |          |  |  |              | 
|Granted during the period                              |  |            |  |   |          |  |  |              | 
|January 21, 2010                                       |  | 12,000,000 |  |   | 0.15     |  |  |              | 
|January 21, 2010                                       |  | 12,000,000 |  |   | 0.20     |  |  |              | 
|January 21, 2010                                       |  | 8,888,888  |  |   | 0.0001   |  |  |              | 
|                                                       |  |            |  |   |          |  |  |              | 
|Balance, April 30, 2010                                |  | 32,888,888 |  | $ | 0.13     |  |  | 32.75 months | 

The following table provides certain information with respect
to the above share purchase warrants that are outstanding and exercisable at
April 30, 2010:

EXERCISE
    
    
    WARRANTS
    
    
    WEIGHTEDPRICES
    
    
    OUTSTANDING
    
    
    AVERAGEAND
    
    
    REMAININGEXERCISABLE
    
    
    CONTRACTUALLIFE$
    0.15
    
    
    12,000,000
    
    
    32.75 months$
    0.20
    
    
    12,000,000
    
    
    32.75 months$
    0.0001
    
    
    8,888,888
    
    
    32.75 months32,888,888


On January 21, 2010, the Company issued a series of stock
purchase warrant agreements as follows:

| | i)   | with twelve separate parties for the purchase of
      1,000,000 shares of common stock of the Company each (12,000,000 shares
      total) at $0.15 per share exercisable at any time prior to the termination
      date (or 36 months from the stock purchase warrant execution
  date).                  
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                              
| | ii)  | with twelve separate parties for the purchase of
      1,000,000 shares of common stock of the Company each (12,000,000 shares
      total) at $0.20 per share exercisable at any time prior to the termination
      date (or 36 months from the stock purchase warrant execution
  date).                  
| |      |                                                                                                                                                                                                                                                                                                              
| | iii) | for the purchase of 8,888,888 shares of common stock of
      the Company at $0.0001 per share exercisable at any time after the first
      24 months from the date of execution of the warrant and prior to the
      termination date (or 36 months from the stock purchase warrant execution
      date).

b) Share Purchase Warrants (Continued)

The fair value of share purchase warrants, currently
exercisable and granted to secure future financings, is determined using the
Black-Scholes option-pricing model. This fair value amounted to $57,180. The
following weighted-average assumptions were used:

| | Expected dividend yield          | 0%      | 
| | -------------------------------- | ------- | 
| | Estimated share price volatility | 120%    | 
| | Risk-free interest rate          | 1.41%   | 
| | Expected life of warrants        | 3 years | 

The Company has no stock option plan or other dilutive
securities.

- 16 -

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ITEM 6.EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

|Exhibit |                                                                                                                                                      
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                          
|        |                                                                                                                                                      
|3.1     | Articles of Incorporation
      (filed as an exhibit to our Form SB-2 Registration Statement, filed on May
      14, 2007)                           
|3.2     | Bylaws (filed as an exhibit to our Form SB-2
      Registration Statement, filed on May 14, 2007)                                                    
|3.3     | Amended and Restated Bylaws
      (filed as an exhibit to our Quarterly Report on Form 10-QSB, filed on July
      13, 2007)                         
|3.4     | Amended and Restated Articles (filed as an
      exhibit to our Annual Report on Form 10-K, filed on February 10, 2010)                              
|3.5     | Amended and Restated Bylaws
      (filed as an exhibit to our Annual Report on Form 10-K, filed on February
      10, 2010)                          
|14.1    | Code of Ethics (filed as an exhibit to our
      Annual Report on Form 10-KSB filed on February 13, 2008)                                            
|31.1*   | Certification of Chief
      Executive Officer and Chief Financial Officer pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002           
|32.1*   | Certification of Chief Executive Officer and
      Chief Financial Officer pursuant Section 906 Certifications under
      Sarbanes-Oxley Act of 2002
|99.1*   | Audit Committee Charter                                                                                                                              

* Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

MOUNT KNOWLEDGE HOLDINGS, INC.

By

/s/ Daniel
A. CarrDaniel A. Carr President, Treasurer, Chief Executive Officer 
and
Chief Financial Officer (Principal Executive Officer, Principal Accounting

Officer and Principal Financial Officer)

Date:

June 18, 2010

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